The Financial Industry Regulatory Authority is moving ahead on its rule to create a uniform, national standard to govern a broker-dealer or broker “holding positions of trust” for clients — such as being named a client’s beneficiary, trustee or executor, or being given power of attorney.
FINRA has sent its proposed change to Rule 3241 (Registered Person Being Named a Customer’s Beneficiary or Holding a Position of Trust for a Customer) to the Securities and Exchange Commission for approval.
Under FINRA’s plan, a new national standard “will better protect investors and provide consistency across member firms’ policies and procedures.”
In November, during the self-regulator’s Senior Investor Protection Conference in Washington, FINRA CEO Robert Cook said most — but not all — firms it talks to have policies tied to this type of arrangements and “sometimes they outright prohibit it.”
FINRA’s proposal provides that a registered person must decline: