Five percent rule

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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 ?
However, since 2011, we increasingly started to notice the return of the 5 percent rule in the party in both its domestic and foreign policy choices as party leader Recep Tayyip Erdoy-an consolidated his power within the party and in the government.
When the 5 percent rule strongly asserted itself in Turkey's foreign policy choices, albeit unrealistically and detached from realism, we started to see failures, one after another.
He asked that the secretary of state be contacted to see if there can be a waiver of the 5 percent rule.
Hence I shall continue to support the 5 percent rule as an intermediate objective greatly superior to present practice.
She sees the development of an organic vanilla trade as proof that the 5 percent rule, a controversial topic in the industry five years ago, works at building the industry and even in creating more organic flavorings.
By allowing more products to come onto the market, she says, the 5 percent rule ultimately will expand the use of organic ingredients by providing the economies of scale to make organic production feasible.