What is the NASD Suitability rule?
NASD Conduct Rule 2310 mandates that: a) In recommending to a customer the purchase, sale or exchange of any security, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to his other security holdings and his financial situation and needs. b) Prior to the execution of a transaction recommended to a non-institutional customera member shall make reasonable efforts to obtain information concerning: (1) the customers financial status; (2) the customers tax status; (3) the customers investment objectives; and (4) such other information used or considered to be reasonable by such a member or registered representative in making recommendations to the customer. 39) What is the New York Stock Exchange Know Your Customer rule? NYSE Rule 405 mandates that Every member organization is requiredto use due diligence to learn the essential facts relative to every customer, every o
