Rules of Fair Practice

Rules of fair practice

Rules established by the NASD that lay down guidelines for just and equitable principles of trade and business in securities markets.

Rules of Fair Practice

A set of rules FINRA uses to govern the broker-dealers that belong to it. In general, the Rules of Fair Practice govern reporting and disclosure, and they require broker-dealers to exercise loyalty and deal equitably with clients.

Rules of Fair Practice

The rules of conduct that have been established for members of the National Association of Securities Dealers and that require, among other things, fair prices, reasonable charges, firm quotations, and ethical practices. Failure to follow these rules may result in fines or expulsion from NASD.

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In the area of sales practice rules, the General Accounting Office's (GAO's) report in September 1990 recommended that the Congress amend the Securities Exchange Act to authorize a federal agency to adopt rules of fair practice applicable to all government securities brokers and dealers, addressing, at a minimum, dealer markups and investor suitability requirements.