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FINRA notified member firms that the SEC approved a proposal to amend FINRA Rule 4512 ("Customer Account Information") and adopt new FINRA Rule 2165 ("Financial Exploitation of Specified Adults"). The proposal provides FINRA members with tools to prevent the financial exploitation of senior citizens and other vulnerable adults (see previous coverage). Specifically, the amendments to FINRA Rule 4512 require FINRA members to make reasonable efforts to obtain the name of a trusted contact person for a senior or other vulnerable customer with an account. New FINRA Rule 2165 permits FINRA members to place temporary holds on disbursements of funds or securities from the accounts of certain customers when the firm has a reasonable suspicion of the financial exploitation of these customers.
New FINRA Rule 2165 and the amendments to FINRA Rule 4512 will become effective on February 5, 2018.
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