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HomeCorporations CodeCh. 2§ 25218 Broker-Dealer Transaction Rules

§ 25218 Broker-Dealer Transaction Rules

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 25218 Broker-Dealer Transaction Rules

This law says a broker‑dealer can't make a trade or try to get someone to buy or sell a security in the state if it goes against the rules the commissioner sets to keep trading fair and protect investors.

Key Takeaways

  • •Broker‑dealers must follow any rules the commissioner creates for fair trading.
  • •They cannot charge unreasonable profits, commissions, or other fees.
  • •The goal is to protect investors and keep the market open and honest.

Example

A broker tries to sell a stock to a client and adds an extra hidden commission that is way higher than normal.

Because the broker is charging an unreasonable fee, the commissioner’s rules say this is not allowed, so the broker would be breaking the law.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 25218 Broker-Dealer Transaction Rules

No broker-dealer licensed under this chapter shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state in contravention of such rules as the commissioner may prescribe designed to promote just and equitable principles of trade, to provide safeguards against unreasonable profits or unreasonable rates of commissions or other charges, and in general to protect investors and the public interest, and to remove impediments to and perfect the mechanism of a free and open market. (Amended by Stats. 1979, Ch. 665.)

Last verified: January 10, 2026

Key Terms

broker-dealertransactionsecuritycommissionerjust and equitable principles of tradeunreasonable profitsunreasonable rates of commissionsinvestorspublic interestfree and open market

Related Statutes

  • § 25213 Broker-Dealer Discipline Authority
  • § 25210 Broker-Dealer Licensing Requirements
  • § 25211 Broker-Dealer Certification Requirements
  • § 25212 Broker-Dealer Discipline Authority
  • § 25212.1 Broker-Dealer Certificate Revocation

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 25218.
View Official Source