Examkin

Question

Difficulty: HardFinancial Exploitation of Senior Investors and Vulnerable Adults

Under FINRA Rule 2165, a broker-dealer that reasonably suspects financial exploitation of a specified adult has the regulatory authority to place a temporary hold on an unsolicited order to execute a stock trade in the customer's account.

Answer: Answer

Answer

False
The statement is false because FINRA Rule 2165 authorizes member firms to place temporary holds only on disbursements of funds or securities out of a specified adult's account. The rule does not grant member firms authority to block or delay the execution of securities transactions (buy or sell orders) within the account.

Step-by-Step Solution

1
Identify the covered individuals under FINRA Rule 2165.
A 'specified adult' includes natural persons aged 65 and older, or natural persons aged 18 and older who the firm reasonably believes have a mental or physical impairment.
Confirming that the customer qualifies for protection under Rule 2165.
2
Analyze the specific scope of authority provided under FINRA Rule 2165.
Rule 2165 creates a safe harbor for member firms to place temporary holds specifically on disbursements of cash or securities from an account when financial exploitation is suspected.
Differentiating between account actions governed by the rule.
3
Evaluate whether trade execution (securities transactions) falls under Rule 2165 temporary holds.
The rule does not extend safe-harbor protection to withholding or refusing the execution of securities transactions (buys or sells). It applies exclusively to disbursements out of the account.
Determining the truth value of the statement.

Key Concept

FINRA Rule 2165 Scope: Disbursement Holds vs. Transaction Executions
Rate this question

Topics

Financial Exploitation of Senior Investors and Vulnerable Adults