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 ?
For example, the so-called Five Percent Rule allows pharmacies to wholesale minimal amounts of drugs under various conditions to entities other than patients.