The Financial Industry Regulatory Authority released Wednesday a set of frequently asked questions on the self-regulator’s rules relating to financial exploitation of seniors, which take effect on Feb. 5.
New FINRA Rule 2165 (Financial Exploitation of Specified Adults) permits members to place temporary holds on disbursements of funds or securities from the accounts of specified customers “where there is a reasonable belief of financial exploitation of these customers.”
Amendments to FINRA Rule 4512 (Customer Account Information) require members to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account.
The Q&A explains, for instance, that a member firm may not place a temporary hold on a securities transaction pursuant to Rule 2165, as the rule does not apply to transactions in securities.
However, under Rule 2165, a firm that has a reasonable belief of financial exploitation of a client may place a temporary hold on a disbursement from one account to another at the firm, the Q&A states.