Rule 408 Discretionary Power in Customers' Accounts
This rule is no longer applicable. Incorporated NYSE Rule Interpretations have been superseded by Temporary Dual FINRA-NYSE member Rule Series. Please consult the appropriate FINRA Rule.
Member organizations that establish an automatic money market fund redemption program for customers having both a securities and money fund account, wherein the customer may elect to have securities purchases paid for via an automatic liquidation of fund shares, will not be required to obtain a customer's written authorization provided that:
A member organization will be deemed in compliance with the Rule 408(b) requirement that every order entered on a discretionary basis must be identified as discretionary on the order at the time of entry, if it assigns a specific series of numbers or symbols to its discretionary accounts. All orders entered for such accounts will be considered "identified as discretionary" by the account numbers or symbols unless "DNE" (Discretion Not Exercised) is marked on the order tickets.
A member organization's written statement of supervisory procedures and compliance manual should reflect such allocation of specific series of numbers or symbols as being assigned to discretionary accounts if such a system is used.