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FINRA adopted amendments to Rule 2165 ("Financial Exploitation of Specified Adults"). As previously covered, the amendments will allow member firms to (1) place a hold on securities transactions where there is a reasonable belief of financial exploitation and (2) extend a temporary hold on a disbursement or transaction for an additional 30 business days beyond the 25-business-day period if a member firm has reported the matter to a state regulator or agency, or a court of competent jurisdiction.
FINRA stated that the amendments will allow member firms to place a hold on transactions, rather than just on disbursements, and will provide state authorities with enough time to conduct thorough investigations of potential fraud.
The amendments will become effective on March 17, 2022.
Commentary
Does a broker-dealer have liability to its customer if the firm delays or prevents a transaction that turns out to be profitable?
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