Finra has proposed several rule changes to bolster the protection of senior investors.
The changes would be amendments to Rule 2165, titled Financial Exploitation of Specified Adults, Finra says.
Finra wants to extend the hold period that firms are allowed to place on an account under that rule from the current 25 business days to 55 business days. That would give firms extra time to resolve matters as well as for agencies, state regulators and law enforcement to conduct investigations of suspected financial exploitation, Finra says in a regulatory notice published on Monday.
Finra also wants to allow temporary holds on securities transactions and not just the disbursements allowed under the rule.
The proposed changes were guided by 22 comment letters Finra received when it posted several questions about addressing financial exploitation in August 2019, as well as by a survey of 238 firms conducted earlier this year, according to the regulatory notice.
Finra is seeking comments on the latest proposal until December 4. Before becoming effective, the changes must be filed with the SEC, according to the regulatory notice.
Meanwhile, Finra said its survey shows that only 105 of the 238 firms that responded said they had at least one staff member dedicated to senior investor issues. Among those with dedicated staff, most commonly had two to five staffers focused on senior investor issues, according to the regulatory notice.
In addition, 52% of respondents said they had procedures in place to spot red flags indicating a customer’s cognitive decline or diminished capacity; use targeted methods to obtain information of a trusted contact person; document suspected customer cognitive decline and escalate it to a specific staff member or team; contact a trusted person; suggest that the customer be examined by a medical professional, and more, Finra says.
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