Two new Financial Industry Regulatory Authority rules kicked in on Monday designed to curb the financial exploitation of seniors and vulnerable adults and set in motion national standards to protect senior investors.

Firms are now required to make “reasonable efforts” to obtain the name of and contact information for a trusted contact person for a customer’s account.

FINRA member firms also can now place a temporary hold on a disbursement of funds or securities when there is a reasonable belief of financial exploitation, and to notify the trusted contact of the temporary hold.

“These important changes, developed in collaboration with our members, provide firms with tools to respond more quickly and effectively to protect seniors and vulnerable investors from financial exploitation,” said Robert Colby, FINRA’s Chief Legal Officer.

“With the aging of the U.S. population, financial exploitation is a serious and growing problem, and protecting senior investors remains a top priority for FINRA,” Colby said.

FINRA released in early January a set of frequently asked questions on its rules relating to financial exploitation of seniors. FINRA amended its New Account Application Template, a voluntary model brokerage account form that is provided as a resource to firms when they design or update their new account forms, to capture trusted contact person information.

Barbara Roper, director of investor protection for the Consumer Federation of America, told ThinkAdvisor in an email message that financial professionals “can play a crucial role in detecting and preventing exploitation of vulnerable elders, and these rules can help by making brokers more confident of their ability to act without repercussions.”

However, she added, “it’s important to recognize that the power to put a temporary hold on customer accounts is itself subject to potential misuse,” noting that it will be “incumbent on supervisors and regulators alike to provide careful oversight to prevent any such misuse.”

The Consumer Federation, Roper continued, prefers the North American Securities Administrators Association’s model act, “which includes a requirement to report any such actions to regulators and other relevant officials.”

The full House passed on Jan. 29 H.R. 2255, which includes The Senior Safe Act, to help protect seniors from financial exploitation.

H.R. 3758 is companion legislation to S. 223, which was passed by the Senate Banking Committee and encourages financial services firms to provide appropriate training to front-line employees and producers, while granting immunity to those that report suspected abuse to regulators and law enforcement authorities.