Rule 405

Rule 405

NYSE codification of "know your customer" rules, which require that a customer's situation is suitable for any investment being made.

Rule 405

A New York Stock Exchange rule requiring investment advisers to only make or recommend investments for their clients' accounts that a "prudent person" would make. This means that investment advisers are not allowed to make investments they believe will lose money for the client. It does not require that the investment adviser always make correct decisions; it merely requires him/her to make decisions that will be generally accepted as sound for someone of average intelligence who seeks to do what is in the client's best interests as the client defines them. It is an example of a suitability rule. See also: Prudent-Person Rule.

Rule 405

The "know your customer" rule of the New York Stock Exchange that requires member firms to obtain significant facts from customers when opening new accounts. These facts are supposed to give the broker and the firm some background on the customers.
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References in periodicals archive ?
Another evidence rule, Rule 405, provides further guidance to a party seeking to prove a character trait.
19) Thus, for example, Rule 405 prohibits the admission of specific prior bad acts even for the sole purpose of proving character in a murder case to establish that the victim was the first aggressor, as a person's "character for violence" is not an element of the crime of murder or of self-defense.
"A system appallingly out of balance": Morgan v. State and the rights of defendants and victims in sexual assault prosecutions
Rule 405 provides the acceptable methods of proving character when an exception to the general prohibition applies.
Thus, while profile and syndrome evidence may be authorized by the exceptions of Rule 404, such as when a criminal defendant offers evidence of his own character trait, there is no proper method to introduce it under Rule 405.
Profiles, syndromes, and the Rule 405 problem: addressing a form of disguised character under the Federal Rules of Evidence
The final rule allows use of S-3 when (1) the issuer has outstanding (as of a date within 60 days prior to the filing of the registration statement) at least $750 million of nonconvertible securities, other than common equity, issued in primary offerings for cash, not exchange, or (2) is a wholly-owned subsidiary of a WKSI as defined in Rule 405 under the Securities Act.
SEC final rule on use of S-3
As a result of the committee's changes pursuant to numbered paragraph (4), Rule 405, Methods of Proving Character, now includes opinion testimony along with reputation testimony as a method of proof in cases where character evidence is admissible.
All hail the Illinois Rules of Evidence
The issuer is eligible to use Form S-8, the options subject to the exchange offer were issued under an employee benefit plan as defined in Rule 405 of the 1933 Act, and the securities offered in the exchange offer will be issued under such an employee benefit plan;
SEC GRANTS RELIEF FOR REPRICED STOCK OPTIONS
The court also noted three instances in which the rules have been changed: Rule 405 and Rule 608, both of which have to do with evidence of character, and Rule 803(3), which will allow opinion statements as to the existing state of mind or physical condition of a person even if that person would be available as a witness.
At long last, the codified Illinois rules of evidence: effective January 1, Illinois' new evidence code pulls together evidentiary rules heretofore scattered among various cases, statutes and court rules - and makes a few subtle changes

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