Suitability

When your broker recommends that you buy or sell a particular security, your broker must have a reasonable basis for believing that the recommendation is suitable for you. In making this assessment, your broker must consider your risk tolerance, other security holdings, financial situation (income and net worth), financial needs, and investment objectives.

The major securities industry self-regulatory organizations have suitability rules. You'll find the NASD's suitability rule – Rule 2310 – in the "NASD Manual." To request a copy of the New York Stock Exchange's suitability rule – Rule 405 – please call the NYSE at (212) 656-2744.

If you believe your broker made unsuitable recommendations or engaged in another sales practice abuse, please send us your complaint using our online complaint form.

http://www.sec.gov/answers/suitability.htm