Filings & regulation
Suitability and appropriateness
Rules requiring firms to check that a product matches the customer’s knowledge and circumstances.
How it works
Advised sales require a suitability assessment covering objectives, financial situation and risk tolerance. Execution-only sales of complex products require an appropriateness check on knowledge and experience.
These rules are why some products ask you to confirm you understand them, and why some are unavailable to retail investors entirely.
Related terms
- Risk toleranceHow much decline you can live through without changing your plan.
- Contract for differenceA leveraged contract paying the difference in an asset’s price, without owning it.
- Structured productA packaged investment combining a bond with derivatives to produce a defined payoff.
- BrokerThe firm that holds your account and sends your orders to the market on your behalf.
More in Filings & regulation
- Annual report
- Regulatory filing
- Financial statements
- Quarterly report
- Form 13F
- Material information
- Insider dealing and disclosure
- Material event filing
All 12 Filings & regulation terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.