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August 12, 2019 at 01:57 PM
The Financial Industry Regulatory Authority is seeking feedback on whether its rules protecting senior investors need an overhaul.
FINRA states in Regulatory Notice 19-27, issued Friday, that it’s conducting a retrospective review to assess the effectiveness and efficiency of its rules and administrative processes that help protect senior investors from financial exploitation.
FINRA wants to know if additional tools, guidance or changes to the following FINRA rules or administrative processes are appropriate to further address suspected financial exploitation and other circumstances of financial vulnerability for senior investors.
The broker-dealer self-regulator is seeking feedback by Oct. 8 on the following rules:
- Rule 2165, which permits a broker-dealer to place a temporary hold on a disbursement of funds or securities from the account of a “specified adult” customer when the firm reasonably believes that financial exploitation of that adult has occurred, is occurring, has been attempted or will be attempted.
- Rule 3240 (Borrowing From or Lending to Customers) Lending arrangements between registered persons and customers is an area of interest for FINRA because of the potential for misconduct.
- Rule 4512, which requires broker-dealers to make reasonable efforts to obtain the name of and contact information for a trusted contact person upon the opening of a customer’s account or when updating account information.
As to Rule 2165, FINRA also wants to know if Rule 2165’s safe harbor should be extended to apply to transactions in securities, in addition to disbursements of funds and securities.
