FINRA Rules 2165 and 4512

FINRA Unscripted Podcast: FINRA Rules 2165 and 4512

In May, FINRA released a podcast The Essential Senior Investor Protection Tools: FINRA Rules 2165 and 4512. This podcast provides a great update on the background of FINRA rules 4512 and 2165 and examples of their effectiveness over a short time frame of implementation. Two members of FINRA’s general counsel who support FINRA on the policy making side were the guests on the show. A few highlights from the podcast: FINRA Rule 2165 FINRA Rule 2165 allows a broker-dealer to place a temporary hold on a disbursement of funds or a transaction if there’s a reasonable suspicion of financial exploitation Read more about FINRA Unscripted Podcast: FINRA Rules 2165 and 4512[…]

Changes to FINRA Rule 2165: Financial Exploitation of Specified Adults

Changes to FINRA Rule 2165: Financial Exploitation of Specified Adults

FINRA has adopted amendments to Rule 2165 (Financial Exploitation of Specified Adults) to permit member firms to: (1) place a hold on a securities transaction (in addition to the already-permitted hold on a disbursement of funds or securities) where there is a reasonable belief of financial exploitation; and (2) extend a temporary hold on a disbursement or transaction for an additional 30 business days, beyond the current maximum of 25 business days (for a total of 55 business days), if the member firm has reported the matter to a state regulator or agency, or a court of competent jurisdiction. The Read more about Changes to FINRA Rule 2165: Financial Exploitation of Specified Adults[…]

Compliance Surveillance

Compliance Surveillance Trends During COVID-19

The messages are clear. Sales practice concerns, fraud, and operational issues related to the COVID-19 pandemic have arrived. Compliance professionals who are responsible for the surveillance and review of targeted areas of the compliance program should understand what may be coming down the pipe and ensure that their programs are sufficiently flexible to identify potential red flags.

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Senior Investors: Protecting the Client

Today, investment advisers and broker-dealers face many challenges when providing advice to and working for senior investors. Many seniors are living with or approaching diminished capacity due to Alzheimer’s, dementia, and/or other health-related issues. Unfortunately, these health issues create vulnerability for financial exploitation from caregivers, family members, neighbors, friends, medical professionals, lawyers, clergy, bank employees, or financial service professionals.

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The Senior Safe Act

The Senior Safe Act: “Immunity” with Conditions

On May 23, 2019, the SEC, NASAA, and FINRA published a year-end review of the Senior Safe Act which became federal law one year ago. In doing so, they also issued a Fact Sheet to help raise awareness with financial institutions and describe how the Act’s immunity provisions work.

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Financial Exploitation of Seniors

FINRA has announced new rules relating to the financial exploitation of seniors and other specified adults.  On February 5, 2018, the amendments to Rule 4512 and new Rule 2165 become effective. FINRA Rule 4512 FINRA Rule 4512 will require members to make reasonable efforts to collect the name and contact information of a trusted contact person upon the opening of a non-institutional customer account or when updating the account information in existence prior to the effective date.  During the account opening or while routinely updating the information, members must disclose to customers in writing that the trusted contact person may Read more about Financial Exploitation of Seniors[…]