This requires that members gather, at the least, such client information as financial circumstances, occupation, investment objectives, and risk tolerances at the inception of any client relationship. Without the identification of such client factors, it is believed that AIMR members cannot judge whether a particular investment idea or investment course of action is suitable and appropriate for a particular client. This inquiry is repeated at least annually as client characteristics will certainly change over time. The proposed rules would require the firm, before effecting an initial day-trading transaction, to provide a disclosure statement to the customer discussing the unique risks posed by this activity. Be cautious of claims of large profits from day trading.
Day trading requires knowledge of securities markets.
Day trading requires knowledge of a firm's operations. Day trading may result in your paying large commissions. Day trading on margin or short selling may result in losses beyond your initial investment. The AIMR Committee also suggests that customers be required to acknowledge in writing that they have read the disclosure statement and that they understand the risks being disclosed to them. Considering the high degree of risk associated with day trading, the Committee believes it prudent to impose restrictions not only on a limited number of firms, but to all those handling day-trading accounts.