Five percent rule

Five percent rule

A rule of the National Association of Securities Dealers providing ethical guidelines for spreads created by market makers and commissions charged by brokers.

Five Percent Rule

1. An ethical guideline for FINRA members. While the rule does not impose any particular restrictions, it discourages dealers from having an excessive dealer's spread and brokerages from charging excessively high commissions.

2. An SEC rule stating that a person or organization must report buying or acquiring more than 5% beneficial ownership in any one equity stock.
References in periodicals archive ?
th] Annual Meeting, to revise five percent rules to only allow the transfer of prescription drugs between pharmacies for the purpose of dispensing or administering, but not for resale, and to prohibit the transfer or sale of drugs from pharmacies to wholesalers for resale.