ABC agreement

An agreement that outlines a brokerage firm’s rights when it purchases a seat, or membership, on the New York Stock Exchange for one of its employees. The membership must be purchased for the employee, and not for the company, because only individuals may own an NYSE membership. The term ABC agreement may have gotten its name from the options that the employee who is given the seat has when leaving the brokerage firm. The employee can a) keep the seat but buy another seat for a person named by the company; b) sell the seat and give the sale proceeds to the brokerage firm; or c) transfer the seat to another of the firm’s employees.