A give-up agreement is a type of trade arrangement between two brokers that occurs before the execution of a security or commodity transaction. The "giving up" party is the one executing the transaction, who gives up credit for the transaction, and the other broker receives the credit. This arrangement is used when sophisticated institutional customers require one broker to execute a trade for another—a common practice before electronic trading.

During the pre-electronic trading era, give-up agreements were popular among institutional clients and large scale investors. The practice is no longer as prevalent in financial markets because most of these transactions are now conducted online. That being said, parties of a give-up agreement must still be aware of the potential conflicts of interest that can occur when entering into such an arrangement.

In a give-up agreement, the executing broker agrees to place the security or commodity trade on behalf of another broker. Part of the agreement includes a negotiated compensation between the two brokers. This compensation is not uniform across the industry. Each brokerage firm negotiates their own terms and conditions to determine how they will receive their commission.

Give-up agreements can help one broker execute trades for another, but brokers are obligated to respect the offsetting regulations in place to ensure fair competition between brokers. Both parties must also adhere to regulations that protect investors' interests. Executing brokers must establish and maintain appropriate arrangements to ensure that customers are receiving fair and competitive prices for the securities and commodities traded within a give-up agreement.

In conclusion, a give-up agreement is a prearranged trade agreement used in the pre-electronic trading days by financial institutions and large scale investors. Even though it is still practiced today, the scope and regulations of such agreements have become much more complex due to the additional layers of oversight and protection of investors. Before entering into a give-up agreement, both brokers must agree to the terms of the trade, including the negotiation of appropriate compensation and the adherence of offsetting regulations and other investor-protecting regulations.