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Quid Pro Quo

What is 'Quid Pro Quo'

A Latin phrase meaning "something for something". This term is typically used in financial circles to describe a mutual agreement between two parties in which each party provides a good or service in return for a good or service.

Explaining 'Quid Pro Quo'

Quid pro quo agreements are sometimes viewed negatively. For example, in a quid pro quo agreement between a large financial house and a company, the financial house might alter poor stock ratings in exchange for company business. In response to these potential occurrences, the NASD has issued rules in order to ensure that firms put customers' interests before their own.

A positive example of a quid pro quo agreement is a soft dollar agreement. In a soft dollar agreement, one firm (Firm A) uses another firm's (Firm B) research. In exchange, Firm B executes all of Firm A's trades. This exchange of services is used as payment in lieu of a traditional, hard dollar payment.


Further Reading


Quid pro quo: Builders, politicians, and election finance in India
papers.ssrn.com [PDF]
… There is a large literature in economics on the regulation of entry, summarized nicely … business operations and several outcome variables—such as entrepreneurship, productivity and economic growth … The quid pro quo sought was not cash but a five percent equity stake in the …

Quid pro quo? corporate returns to campaign contributionsQuid pro quo? corporate returns to campaign contributions
www.journals.uchicago.edu [PDF]
… There is a large literature in economics on the regulation of entry, summarized nicely … business operations and several outcome variables—such as entrepreneurship, productivity and economic growth … The quid pro quo sought was not cash but a five percent equity stake in the …

European economic government and the corporatist European economic government and the corporatist
onlinelibrary.wiley.com [PDF]
… There is a large literature in economics on the regulation of entry, summarized nicely … business operations and several outcome variables—such as entrepreneurship, productivity and economic growth … The quid pro quo sought was not cash but a five percent equity stake in the …

Quid pro quo in IPOs: Why book-building is dominating auctionsQuid pro quo in IPOs: Why book-building is dominating auctions
papers.ssrn.com [PDF]
… There is a large literature in economics on the regulation of entry, summarized nicely … business operations and several outcome variables—such as entrepreneurship, productivity and economic growth … The quid pro quo sought was not cash but a five percent equity stake in the …

The economics of campaign fundsThe economics of campaign funds
link.springer.com [PDF]
… There is a large literature in economics on the regulation of entry, summarized nicely … business operations and several outcome variables—such as entrepreneurship, productivity and economic growth … The quid pro quo sought was not cash but a five percent equity stake in the …



Q&A About Quid Pro Quo


How can you ensure customer interests come before those of financial houses?

By having soft dollar agreements between companies and their brokers.

What does it mean?

It means the same thing as the English saying "a tit for a tat", or trading something for something else.

What does "pro" mean in Latin ?

Pro means "for".

What is the meaning of "Quid pro quo"?

The phrase means roughly "this for that." In other words, the phrase describes when something is given in return for something else.

Why do NASD rules exist?

The NASD rules exist to ensure that customers' interests come before those of financial houses.

Are quid pro quo agreements always viewed negatively?

No, they are not always viewed negatively.

What is a quid pro quo?

A quid pro quo is an agreement in which each party provides something of value to the other.

Is it a Latin or English phrase?

It is a Latin phrase.

What does "quid" mean in Latin?

Quod means "something".

What does "quo" mean in Latin ?

Quo means "something".