FINRA Proposes Increased Protections for Senior Investors and Other Vulnerable Customers

FINRA requested comment on proposed amendments to rules covering the financial exploitation of senior investors and a new rule addressing suspected fraud for all customers.

According to the Notice, the proposals aim to modernize FINRA’s rules to better prevent customer harm amidst rising fraud losses. For Rule 4512 ("Customer Account Information"), FINRA proposed permitting firms to use the term "emergency contact" as an alternative to "trusted contact person" to increase customer adoption. The amendment would also provide flexibility for a customer to name a contact for use across all their accounts at a firm. Regarding Rule 2165 ("Financial Exploitation of Specified Adults"), FINRA proposed extending the maximum temporary hold period from 55 business days to 145 business days to accommodate potentially lengthy investigations by state regulators and adult protective services.

FINRA also proposed new Rule 2166 ("Temporary Delays for Suspected Fraud"), which would allow firms to place a temporary delay of up to five business days on disbursements or transactions for any customer—regardless of age—where there is a reasonable belief of fraud. FINRA described this as a "speed bump" designed to give firms a brief window to intervene, contact the customer, and provide educational resources without the longer hold times associated with senior exploitation cases.

In addition, the proposal included modifications to broaden the scope of personnel authorized to place holds under Rule 2165 to include staff in specialized fraud prevention roles, rather than limiting authority strictly to supervisory, compliance, or legal personnel. The amendments would codify guidance permitting firms to extend holds based on oral requests from state or federal authorities.

Comments on the proposal must be submitted on or before March 9, 2026.