Rules Of Fair Practice

Categories: Ethics/Morals

FINRA’s “Rules of Fair Practice” are designed to tell brokers how to behave, and they basically consist of two main messages: (1) be fair, and (2) act in the best interests of the client. In other words, they tell our broker to do things we, uh...hope they don’t need to be told to do. But, more specifically, they discuss things like misleading investors, misrepresenting investment opportunities, selling a client’s information to third parties, focusing on commissions to the detriment of the client’s account, etc. Brokers who violate these rules can be fined, sanctioned, blacklisted, and flogged for their bad behavior. Plus, their names get published by FINRA for all to see.

Okay, no one gets flogged. But the rest of it can totally happen.

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Finance: What is FINRA?5 Views

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finance a la shmoop what is FINRA? Financial Industry Regulatory Authority

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once again for those in the back that's Financial Industry Regulatory

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Authority FINRA it's kind of a yoga mantra thing because firms get FINRA'd [Woman meditating with yoga]

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every day well FINRA is the private agency that

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regulates exchanges and brokerage firms that are members they administer tests

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and actually create them you know like these the series exams which we just [Series exams appear]

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happen to have shmoop if you've got 70 to 80 spare hours and want to give them

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a looksie... think about all the bad PR that sleazy financial wheeler-dealers [Financial dealers discussing matters]

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got back in the 1930s before the various acts were enacted you know the 33 34 40

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nobody was gonna trust "Wall Street people" unless there was a kind

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of Good Housekeeping Seal of fair-and-square dealers who made sure

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that the various laws and compliance things were actually upheld..Note,

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importantly that it isn't the job of FINRA or well any government body to

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recommend buying selling or holding any particular security because you're gonna

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make money it's only their job to be sure that the letter of the law is [Letter of law appears]

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followed and that that letter is presented in a way so that everyone has

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fair access to relevant and similar information it's all about making a fair

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and square level playing field for all without that well Manhattan would look a

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lot more like Mogadishu than Manhattan [Manhattan skyline appears]

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