Two FINRA rule changes designed to prevent the exploitation of seniors and other vulnerable adults took effect on February 5th.
The changes amended FINRA Rule 4512 ("Customer Account Information") and created new FINRA Rule 2165 ("Financial Exploitation of Specified Adults"). Accordingly, firms are now (i) required to make reasonable efforts to obtain the name of a trusted contact person for a senior or other vulnerable customer with an account, and (ii) permitted to place temporary holds on disbursements of funds or securities from the accounts of certain customers when the firm has a reasonable suspicion that these customers are being financially exploited. FINRA also published responses to Frequently Asked Questions to help firms prepare for and adjust to the changes.
The rule changes were approved by the SEC in March 2017.