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Regulation and Compliance > Federal Regulation > FINRA

FINRA Advances Senior Exploitation Rule

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What You Need to Know

  • The plan would allow an additional 30 business days for a temporary hold.
  • FINRA sought comments on the plan last year.
  • FINRA has sent the plan to the SEC for approval.

The Financial Industry Regulatory Authority has sent its rule to extend the hold period and allow temporary holds on securities transactions in cases of suspected financial exploitation of seniors to the Securities and Exchange Commission for approval.

FINRA wants to amend Rule 2165 (Financial Exploitation of Specified Adults) to permit broker-dealers to: extend a temporary hold on a disbursement of funds or securities or a transaction in securities for an additional 30 business days if the member firm has reported the matter to a state regulator or agency or a court of competent jurisdiction; and place a temporary hold on securities transactions where there is a reasonable belief of financial exploitation.

FINRA issued Regulatory Notice 20-34 last year, requesting comments by Dec. 4 on its plan to extend the period for placing a temporary hold on accounts to 55 days from 25 and to create the first uniform, national standard for placing holds on transactions related to suspected financial exploitation.

As it stands, Rule 2165 allows broker-dealers to place a temporary hold on a specified adult customer’s account for up to 25 business days if the criteria in the rule are satisfied.

If approved by the SEC, FINRA will announce the rule’s implementation date in a Regulatory Notice, which will be no later than 180 days following publication of the notice.


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