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Glossary of Investment Terms

 

K

 

Know Your Customer/Client Rule

 

A concept both stated and implied by various securities regulatory bodies regarding suitability of investments for customers. Article 3 of the Rules of Fair Practice of the National Association of Securities Dealers is typical: "In recommending to a customer the purchase, sale or exchange of any security, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to his other security holdings and as to his financial situation and needs. "Customers must supply enough financial and level of sophistication information to a brokerage firm upon application for an account to satisfy the "know your customer" rules.

 

 

 

Keogh Plan  

 

A tax-advantaged personal retirement program established by a self-employed individual.

 

 

 

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