Under FINRA rules regarding the protection of senior investors and vulnerable adults, a broker-dealer suspects potential financial exploitation in a customer's account. Which of the following statements regarding FINRA Rule 2165 temporary holds and Specified Adults are CORRECT? Select ALL that apply.
- A natural person aged 65 or older, or an adult aged 18 or older with a qualifying physical or mental impairment, qualifies as a Specified Adult.Answer
- A temporary hold under FINRA Rule 2165 applies to disbursements of funds or securities, but does not apply to trade execution requests.Answer
- CPlacing a temporary hold under FINRA Rule 2165 gives the firm immediate regulatory authority to freeze all buying and selling of securities in the account.
- DRequired notifications regarding a disbursement hold must be provided solely to state securities regulators rather than the customer or trusted contact person.
Answer
The correct statements are that a Specified Adult includes natural persons aged 65 or older (or aged 18+ with a qualifying impairment), and that a temporary hold under FINRA Rule 2165 applies specifically to disbursements of funds or securities rather than trade execution requests.
The correct statements accurately reflect FINRA Rule 2165 provisions: Specified Adults are defined as individuals age 65+ (or 18+ with qualifying impairments), and temporary holds are strictly limited to disbursements of funds or securities, not trade executions.
Step-by-Step Solution
Key Concept
FINRA Rule 2165 Disbursement Holds and Specified Adult Criteria