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Zorluk: Çok zorFinancial Exploitation of Senior Investors and Vulnerable Adults

A member firm's compliance department is updating written supervisory procedures regarding FINRA Rule 2165 (Financial Exploitation of Specified Adults) and FINRA Rule 4512 (Customer Account Information). Which of the following statements accurately reflect FINRA requirements governing temporary holds and trusted contact persons? Select all that apply.

  1. A temporary hold initiated under FINRA Rule 2165 applies strictly to disbursements of funds or securities out of an account and does not extend to preventing securities transactions or trade executions.Cevap
  2. Not later than two business days after placing a temporary disbursement hold, the firm must provide notification explaining the hold to all authorized account holders and the designated trusted contact person, unless a party is suspected of the financial exploitation.Cevap
  3. C
    Placing a temporary disbursement hold automatically freezes all active customer orders and prohibits the execution of any new buy or sell orders until an internal investigation concludes.
  4. D
    A broker-dealer must obtain formal authorization from FINRA or state securities regulators before applying an initial 15-business-day temporary disbursement hold on a specified adult's account.

Cevap

The correct statements are that a temporary hold under FINRA Rule 2165 applies strictly to disbursements rather than trade executions, and that the firm must notify the trusted contact person and authorized account parties within two business days unless they are suspected of exploitation.
Under FINRA Rule 2165, member firms have safe harbor protection to place temporary holds on disbursements of funds or securities when financial exploitation of a specified adult (age 65+ or age 18+ with mental/physical impairment) is reasonably suspected. The hold applies exclusively to disbursements and does not restrict trade executions. Furthermore, the firm must notify all authorized account holders and the designated trusted contact person within two business days after placing the hold, except for any person suspected of financial exploitation.

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1
Analyze the operational scope of a FINRA Rule 2165 temporary hold.
Rule 2165 safe harbor explicitly applies to temporary holds on disbursements of funds or securities out of an account, not to trade executions or order entries within the account.
Differentiating between fund transfers (disbursements) and trade executions is crucial for proper Rule 2165 application.
2
Review mandatory notification timelines under FINRA Rule 2165.
Firms must attempt to notify all authorized account holders and the Rule 4512 trusted contact person within two business days of initiating the hold.
Prompt communication is required unless an authorized party or trusted contact is suspected of committing the financial exploitation.
3
Determine regulatory approval requirements for initiating an initial hold.
Initial holds up to 15 business days may be placed independently based on internal reasonable belief without prior regulatory approval.
Rule 2165 provides an immediate safe harbor to protect vulnerable investors without requiring regulatory pre-clearing.

Anahtar Kavram

FINRA Rule 2165 Disbursement Holds and Trusted Contact Disclosures
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Konular

Financial Exploitation of Senior Investors and Vulnerable Adults