Thursday, May 4, 2017

FINRA Rule on Financial Exploitation of Elders

The Financial Industry Regulatory Authority (FINRA) has announced that the SEC has approved a new rule that is specific to customers who are elders.  The summary explains Regulatory Notice 17-11

The SEC approved: (1) the adoption of new FINRA Rule 2165 (Financial Exploitation of Specified Adults) to permit members to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief of financial exploitation of these customers; and (2) amendments to FINRA Rule 4512 (Customer Account Information) to require members to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account. New Rule 2165 and the amendments to Rule 4512 become effective February 5, 2018.

The full notice is available as a pdf here. The text of the new rule starts on page 9 of the full notice.

Here is the background from the notice, to give you more information about the reasons behind this rule

With the aging of the U.S. population, financial exploitation of seniors is a serious and growing problem. FINRA’s Securities Helpline for Seniors® has highlighted issues relating to financial exploitation of this group of investors, including the need for members to be able to more quickly and effectively address suspected financial exploitation of seniors and other specified adults The amendments to Rule 4512 and new Rule 2165 provide members with a way under FINRA rules to respond to situations in which they have a reasonable basis to believe that financial exploitation has occurred, is occurring, has been attempted or will be attempted. Members can better protect their customers from financial exploitation if they have the ability to contact a customer’s designated trusted contact person and, when appropriate, place a temporary hold on a disbursement of funds or securities from a customer’s account. (citations omitted)

Take a look!

 

http://lawprofessors.typepad.com/elder_law/2017/05/finra-rule-on-financial-exploitation-of-elders.html

Consumer Information, Crimes, Current Affairs, Elder Abuse/Guardianship/Conservatorship | Permalink

Comments

Post a comment