The Financial Industry Regulatory Authority has adopted its rule to limit brokers from holding “positions of trust” for clients — such as being named a client’s beneficiary, trustee or executor, or being given power of attorney.
New FINRA Rule 3241 (Registered Person Being Named a Customer’s Beneficiary or Holding a Position of Trust for a Customer) requires all member firms to affirmatively address registered persons being named beneficiaries or holding positions of trusts for customers.
The rule requires the member firm with which the registered person is associated, upon receiving required written notice from the registered person, to review and approve or disapprove the registered person assuming such status or acting in such capacity, FINRA explains.
The rule does not apply where the customer is a member of the registered person’s immediate family.
What Your Peers Are Reading
Rule 3241 becomes effective Feb. 15, 2021.