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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
As in the case of many domestic woes, this has to do with the introduction of what many in Ankara call the "5 percent rule" in Turkish politics.
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.
I believe in the 5 percent rule: Look at what 95 percent of what other advisors are doing, and do something else.
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.
"People in the industry saw that if they wanted a product that was going to have any marketability, they needed (the flexibility of the 5 percent rule)," Weisman says.