FINRA issued for public comment on Thursday a proposed rule that would give broker-dealers the power to place a temporary hold on disbursement of funds or securities from an elderly or mentally/physically handicapped customer’s account if there is a reasonable belief that the person is being financially exploited.
FINRA’s Board gave the self-regulator the go-ahead on Sept. 17 to issue the rule for public comment. FINRA did so on Thursday by releasing Regulatory Notice 15-37.
In another move to help prevent elder financial abuse, lawmakers on the Senate Special Committee on Aging urged the SEC Thursday to take the lead in creating a database that seniors and their families can use to determine whether a financial professional is legitimate and licensed to invest their money.
In their Oct. 14 letter to SEC Chairwoman Mary Jo White, Sens. Susan Collins, R-Maine, and Claire McCaskill, D-Mo., said that the SEC should create and control “one clearinghouse” that would allow for a more user-friendly and thorough background check for seniors to ensure their investment advice was being provided by trusted professionals. The SEC database, the Senators say, would replace FINRA’s BrokerCheck, the Investor Advisor Public Disclosure system, and the CFTC’s SmartCheck.
The SEC database, the Senators continued, would satisfy recommendations made by the SEC’s Investor Advisory Committee.