• any act or omission taken by a person through the use of a power of attorney, guardianship, or any other authority to obtain, control, and/or convert money, assets or property of the “specified adult” through deception, intimidation or undue influence.
“Specified adult” under the Finra definition covers investors who are particularly susceptible to financial exploitation, namely: a natural person age 65 and older or a natural person age 18 and older believed to have a mental or physical impairment that renders that person unable to protect his or her own interests.
Following are the key components to the amendments to Rule 4512 and new Rule 2165, excerpted from Finra’s Regulatory Notice 17-11:
Amendments to Finra Rule 4512
The purpose of the amendments to Rule 4512 is to require members to make reasonable efforts to obtain the name and contact information for a “trusted contact person”. Efforts to obtain this information must be made upon the opening of a new (non-institutional) customer account and when updating account information for customer accounts opened prior to February 5, 2018, when the amendments go into effect.
What is a “trusted contact person”? A trusted contact person is intended to be a resource for the member in administering the customer’s account, protecting assets and responding to possible financial exploitation. Member firms and their customers may benefit from the trusted contact information in many different settings. Examples provided by Finra include:
• If a member has been unable to contact a customer after multiple attempts.
• If a customer is known to be ill or infirm.
• If the member suspects that the customer may be suffering from Alzheimer’s disease, dementia or other forms of diminished capacity.
New Finra Rule 2165