The 5% Rule (FINRA Rule 2121)
FINRA Rule 2121, also known as the 5% rule or 5% policy, was adopted to ensure that the investing public receives fair treatment and is charged reasonable rates for brokerage services. The 5% rule is more of a guideline than a rule, as there is no set limit for the amount you can charge as a markup. While 5% was the suggested limit for markups in the past, with how liquid and efficient markets are today, charging around 5% will lead to greater scrutiny from regulators. When Does Rule 2121 Apply? Rule 2121 applies to non-exempt securities in both the Read more about The 5% Rule (FINRA Rule 2121)[…]