Anti-Reciprocal Rule
A rule created by the National Association of Securities Dealers (NASD) to protect individual investors from conflicts of interest that may arise when brokerage firms and mutual funds collaborate. Investopedia Says:
The main violation the rule is designed to prevent is an arrangement between a brokerage firm and a mutual fund wherein the brokerage firm directs its clients to the mutual fund company (generating sales) and the mutual fund, in turn, sends its trades through the brokerage firm (generating commissions). Brokerage firms and mutual funds can be fined by the NASD if there is proof that they have violated anti-reciprocal rules. Related Terms:
Broker
Commission
Mutual Fund
National Association of Securities Dealers - NASD
Quid Pro Quo
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