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FINRA Adopts Rule Aimed at Protecting Investors from Financial Exploitation; Seeks Comments on Operations

The SEC recently approved FINRA’s rule proposal addressing financial exploitation of seniors. The rule, which takes effect February 5, 2018, aims to protect senior investors and will generally: (1) require advisors to make reasonable efforts to obtain the name and contact information for a trusted contact person upon opening a new account or updating the records of clients over 65, or clients over age 18 whom the advisor believes to be impaired, and (2) permit advisors to temporarily halt the disbursement of funds if they suspect that the client is, or could potentially be, the target of financial abuse or fraud. FINRA also recently announced a new initiative to evaluate various aspects of its operations and programs and solicited comments on its engagement programs.  FINRA highlighted several areas for which it seeks comments, including:  examination and enforcement programs; its various committees; transparency in rule making; education and compliance resources and investor education. The comment period expires May 5, 2017.

 
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