Dictionary of Finance and Investment Terms: nine-bond rule
nine-bond rule
New York Stock Exchange (NYSE) requirement that orders for nine bonds or less be sent to the floor for one hour to seek a market. Since bond trading tends to be inactive on the NYSE (because of large institutional holdings and because many of the listed bond trades are handled Over The Counter), Rule 396 is designed to obtain the most favorable price for small investors. Customers may request that the rule be waived, but the broker-dealer in such cases must then act only as a broker and not as a principal (dealer for his own account).
