FINRA Rule 3260

Prohibits a registered representative from exercising discretion in a customer’s account, such as deciding what security to buy or sell, how much, and when. unless the customer has given prior written authorization and the firm has accepted the account in writing.

Even with such authorization, firms must ensure that discretionary transactions are reviewed regularly for compliance with suitability and other supervisory standards.

The rule also includes provisions restricting unauthorized or excessive trading and mandates prompt review and documentation of discretionary activity.