Series 22: 6.1.3. Suitability

 6.1.3.  Suitability

Recall from Chapter 5 that broker-dealers must conduct a suitability analysis with its customers to determine their understanding of and ability to absorb the risks of trading based on the customer’s personal and investment profile. This must be completed before the broker-dealer can work up an investment strategy and recommend transactions.

Because of the special risks inherent in many direct participation programs, the suitability standards for DPP investors are stricter and spelled out more explicitly than for the usual run of investments.

First, no FINRA member or associated p