normal investment practice

(redirected from Normal Investment Practices)

Normal investment practice

The investment history of a customer, which is used as a benchmark to test the bona fide public offerings requirement of the allocation of a hot issue.

Normal Investment Practice

The strategies, securities, and other investment routines that a person or company usually conducts. For example, buying investment-grade bonds might be a normal investment practice for a risk-averse investor. Because normal investment practices are observable and often predictable, underwriters and investment advisers may use them to recommend securities to investors. However, FINRA prohibits underwriters from using normal investment practices when placing hot issues.

normal investment practice

The history of security purchases recorded in a customer account for purposes of allocating hot issues. The National Association of Securities Dealers prohibits underwriters from overallocating hot issues to customers based on the customers' normal investment practice.
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