FINRA Requests Comments for Proposed Amendments to FINRA Rule 2165

On October 5, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 20-34, which requests comment on proposed amendments to Rule 2165. In August 2019, FINRA conducted a retrospective review to evaluate the effectiveness of its rules and processes related to the protection of seniors. Based on the results received from their review, which are also reflected in Regulatory Notice 20-34, FINRA has proposed amendments to FINRA Rule 2165 that are intended to address suspected financial exploitation of senior investors.  Rule 2165, among other things, permits a member firm to place a temporary hold on a disbursement of funds or securities from the account of a “Specified Adult” (i.e., a natural person age 65 and older or a natural person age 18 and older who the member reasonably believes has a mental or physical impairment that renders the individual unable to protect his or her own interests). FINRA asserts that temporary holds on disbursements are crucial in providing member firms a way to quickly respond to suspicions of financial exploitation before the customer suffers any potential significant losses.

FINRA requests comment on all aspects of the proposed amendments to Rule 2165 and has enumerated a list of specific issues that they are requesting to be specifically addressed.

The comment period expires December 4.

A copy of Regulatory Notice 20-34 is available here.

FINRA Alerts Firms to Widespread Phishing Email

The Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 20-35, alerting firms of an ongoing phishing campaign that involves fraudulent emails purporting to be from FINRA asking member firms to complete a survey. The email was sent from the domain “@regulation-finra.org” and was preceded by “info” followed by a number, e.g., info5@regulation-finra.org. FINRA recommends that anyone who has clicked any link or otherwise engaged with the email to immediately notify the appropriate personnel in his or her firm to rectify any potential issues.

See Regulatory Notice 20-35 for additional information and a sample of the fraudulent email.