Hold Recommendation Policy and Procedure Part of the KYC and Suitability Rule

Overview Hold Recommendations allow for the documentation of extend suitability requirements to include recommended investment strategies that may not result in a transaction, as well as explicit recommendations to hold a security or set of securities FINRA Rule 2111 – Suitability: A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation. In other words: Explicit recommendations to hold a security or set of securities and all recommended Investment Strategies even those not resulting in a transaction are covered by this rule

At a minimum, advisors should document Explicit Hold Recommendations and:

To enter Hold Recommendations users access this functionality via SmartStation > Client Mgmt > Hold Recommendation. Entering Hold Recommendations on SmartStation

Click this button to add a Hold Recommendation Click this button to select the “Type” Click this button to select the “Reason” Don’t forget to “SAVE”