FINRA proposed amending its rules to increase the ability of broker-dealers to prevent the financial exploitation of senior citizens and other vulnerable adults. Specifically, the proposals would:
- amend FINRA Rule 4512 ("Customer Account Information") to require broker-dealer members to make reasonable efforts to obtain the name of a trusted contact person for a senior or other vulnerable customer's account; and
- adopt new FINRA Rule 2165 ("Financial Exploitation of Specified Adults") to permit broker-dealer members to place temporary holds on disbursements of funds or securities from the accounts of specified senior or other vulnerable customers where there is a reasonable suspicion of financial exploitation of these customers.
According to FINRA, these measures will assist broker-dealer members in "thwarting financial exploitation of seniors and other vulnerable adults before potentially ruinous losses occur." Comments on the proposal must be submitted within 21 days following its publication in the Federal Register.
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