Taping Rule
A rule created by the National Association of Securities Dealers (NASD) that requires that special supervisory procedures be put in place when a specific percentage of a firm's employees are hired from brokers/dealers that have been expelled or have had their registration revoked because they breached trading regulations. Investopedia Says:
The percentage that is used to determine whether the supervisory procedures need to be enacted depends on the size of the firm - it ranges from 40% for a small firm to 20% for a large firm. The supervisory procedures involve recording all of the telephone conversations made between registered employees and both potential and existing customers for three years. There are currently 25 firms that are recognized by the NASD as disciplined firms. Related Terms:
Broker-Dealer
NASD Rule 2790
Nasdaq National Market Securities - Nasdaq-NM
National Association of Securities Dealers - NASD
Registered Options Principal - ROP
Registered Representative
Securities And Exchange Commission - SEC
Self-Regulatory Organization - SRO
Series 7 |