The Financial Industry Regulatory Authority’s revised rule would extend a temporary hold on accounts to protect Seniors.

According to reports last week, The Financial Industry Regulatory Authority (FINRA)  wants to further amend Rule 2165, the Financial Exploitation of Specified Adults, to extend the hold period and allow temporary holds on securities transactions in cases of suspected financial exploitation of seniors.

FINRA’s new plan would extend the period for placing a temporary hold on accounts to 55 days from 25 and to create the first uniform, national standard for placing holds on transactions related to suspected financial exploitation.

Currently Rule 2165 allows broker-dealers to place a temporary hold on a specified adult customer’s account for up to 25 business days if the criteria in the rule are satisfied. The rule also provides that the 25-day period may be terminated or extended by a state agency or a court of competent jurisdiction, according to the regulator.

FINRA’s notice explained that under the safe harbor approach, “a firm would be permitted, but not required, to place a temporary hold on a transaction when there is a reasonable belief that the customer is being financially exploited.”

The rule reportedly includes safeguards to protect customers and avoid misapplication of the rule, according to FINRA.

FINRA is a government-authorized not-for-profit organization that oversees U.S. broker-dealers, to protect investors and ensure the market’s integrity. The regulator is authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly by overseeing more than 624,000 brokers across the country and analyzing billions of daily market events.

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