Issue Highlighted by FINRA's Securities Helpline for SeniorsTM
WASHINGTON—The Financial Industry Regulatory Authority (FINRA) today issued Regulatory Notice 15-37 requesting comment on proposed rules addressing the financial exploitation of seniors and other vulnerable adults. FINRA is proposing amendments that would require firms to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer's account. In addition, FINRA is proposing a new rule that would permit firms to place a temporary hold on a disbursement of funds or securities when there is reasonable belief of financial exploitation, and to notify the trusted contact of the temporary hold.
Currently, FINRA's rules do not explicitly permit firms to contact a non-account holder or to place a temporary hold on disbursements of funds or securities where there is a reasonable belief of financial exploitation of a senior or other vulnerable adult.
"This is intended to provide firms with appropriate tools to use when they have reasonable belief that financial exploitation is taking place. This will enable firms to better protect their senior and other vulnerable customers," said Susan Axelrod, FINRA Executive Vice President, Regulatory Operations.
The comment period expires on November 30, 2015.
The need for these changes became clear from calls into FINRA's Securities Helpline for SeniorsTM, which, since its launch in April 2015, has received approximately 1,900 calls and highlighted some of the issues firms are facing when it comes to senior investors, including how firms respond when they suspect a senior customer is being exploited.
FINRA also plans on amending its New Account Application Template, a voluntary model brokerage account form that is provided as a resource to firms when they design or update their new account forms, to capture trusted contact information.
Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2014, members of the public used this service to conduct 18.9 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA's Disciplinary Actions Online database. Investors can also call FINRA's Securities Helpline for Seniors at (844) 57-HELPS for assistance or to raise concerns about issues they have with their brokerage accounts and investments.
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firm, writing rules, enforcing those rules and the federal securities laws, and informing and educating the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.