Investor Glossary-know your customerInvestor Glossary-know your customerInvestor Glossary-know your customerInvestor Glossary-know your customerInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Know Your Customer

The HTML to link to this page
 

Know your customer, or "KYC" refers to guidelines of securities regulators that require each broker to know your customer. Know your customer rules are also called suitability rules because they are concerned with the suitability of securities investment for each specific customer. Know your customer rules make it unethical and against regulations for brokers to recommend investments where the customer is unsuited to absorb the associated risk or loss. For example, the common sense of know your customer rules says a broker should not recommend only risky naked options strategies to a windowed grandmother whose income is supplemented with blue chip stock dividends. NASD's know your customer suitability rule is rule 2310, the NYSE's know your customer is rule 405. Brokerages and other regulators have additional know your customer policies and rules and the SEC has enforcement power over brokerages that require them to maintain know your customer policies. Know your customer rules require both collection of suitability information at account opening and periodic update of suitability criteria.



Rate this Know Your Customer definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: implied volatility, EBITDA, minority interest, VIX, class C shares, 1035 exchange, real GDP, 401a, labor relations, per diem, required rate of return, reverse mortgage, stock market close, inflation, LIBOR, margin rate, 144a, debt service coverage, diluted share, in escrow, dividends payable, retained earnings, option premium, Key Rate Duration, quality assurance, FTSE, liquidity ratio, irrevocable trust, command economy, deferred revenue, wholly-owned subsidiary, cancelled check, covered put, average price per share, APR, Zero Cost Collar, 1031 exchange, current ratio, FICO score, balance sheet, annual return, stock split, deferred tax, ex-dividend date, phantom income, ex-dividend, open position, risk management, limit order


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use