4 ms·

https://www.finra.org/rules-guidance/rulebooks/finra-rules/2360 https://www.finra.org/rules-guidance/rulebooks/finra-rules/2... Try CTRL+F "suitability" for a

https://www.finra.org/rules-guidance/rulebooks/finra-rules/2360 https://www.finra.org/rules-guidance/rulebooks/finra-rules/2... Try CTRL+F "suitability" for a five-second read of why the casino comparison doesn't apply here.

nomel 6y ago
For the personal accountability perspective, I would say it applies even more, since there are no requirements at all for walking into a casino and burning up $100k, yet we don't blame the casinos, we blame the person burning the money. For the perspective that Robinhood owns his risk somehow, from not following their suitability guidelines, I'm not familiar with any of this so can't speak about it. Naively reading this, it appears to be extremely open ended, requiring a consistent internal process for approval, along with a warning, rather than anything specific.
- totalZero 6y ago
  "No member or person associated with a member shall recommend to any customer any transaction for the purchase or sale (writing) of an option contract unless such member or person associated therewith has *reasonable grounds* to believe upon the basis of information furnished by such customer after *reasonable inquiry* by the member or person associated therewith concerning the customer's investment objectives, financial situation and needs, and any other information known by such member or associated person, that the recommended transaction is not unsuitable for such customer." The burden's on the firm to demonstrate why it believed the customer was qualified to trade the product, and to demonstrate that it made an effort to evaluate the customer's goals, finances, and needs.
  - nomel 6y ago
    Maybe the terminology is too foreign to me, but > ... shall recommend to any customer any transaction ... > ... that the recommended transaction is not suitable Was Robinhood recommending transactions, or just enabling transactions? Even if not, this seems very open ended with no specifics, since “reasonable” is up for interpretation. I suppose we’ll see, probably sooner rather than later. I assume some actual specifics will result from all of this though.

nomel 6y ago

For the personal accountability perspective, I would say it applies even more, since there are no requirements at all for walking into a casino and burning up $100k, yet we don't blame the casinos, we blame the person burning the money. For the perspective that Robinhood owns his risk somehow, from not following their suitability guidelines, I'm not familiar with any of this so can't speak about it. Naively reading this, it appears to be extremely open ended, requiring a consistent internal process for approval, along with a warning, rather than anything specific.

totalZero 6y ago
"No member or person associated with a member shall recommend to any customer any transaction for the purchase or sale (writing) of an option contract unless such member or person associated therewith has *reasonable grounds* to believe upon the basis of information furnished by such customer after *reasonable inquiry* by the member or person associated therewith concerning the customer's investment objectives, financial situation and needs, and any other information known by such member or associated person, that the recommended transaction is not unsuitable for such customer." The burden's on the firm to demonstrate why it believed the customer was qualified to trade the product, and to demonstrate that it made an effort to evaluate the customer's goals, finances, and needs.
- nomel 6y ago
  Maybe the terminology is too foreign to me, but > ... shall recommend to any customer any transaction ... > ... that the recommended transaction is not suitable Was Robinhood recommending transactions, or just enabling transactions? Even if not, this seems very open ended with no specifics, since “reasonable” is up for interpretation. I suppose we’ll see, probably sooner rather than later. I assume some actual specifics will result from all of this though.