When your broker recommends that you buy, sell or hold a particular security, your broker must have a reasonable basis for believing that the recommendation is suitable for you. In making this assessment, your broker must consider your risk tolerance, other security holdings, financial situation (income and net worth), financial needs, and investment objectives. The major securities industry self-regulatory organizations and many state securities regulations contain suitability rules.

The NASD's suitability rule – Rule 2310 – and links to other NASD materials concerning suitability in the NASD Manual can be found on the NASD’s website. Similarly, investors can find the New York Stock Exchange's suitability rule – Rule 405 – in the Rules and Constitution section of the NYSE’s website.  Additionally, other SRO rules impose added account approval and suitability requirements for options and warrants.

To learn more about suitability call us at 1-800-294-9198, or contact us online.