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Rule Change Updates

SEC Approves Rules to Protect Seniors

In Exam ContentTags , Marcia Larson

Seniors will receive increased protection from financial exploitation under new rules that were recently approved by the SEC.  Effective February 5, 2018, amendments to the existing Customer Account Information Rule, Rule 4512 and a new FINRA rule, Rule 2165, and, will help address this form of investor abuse.

Industry Impact

The two primary changes from these rules are:

  • The requirement that firms attempt to obtain the name of and contact information for a trusted contact person for a customer’s account.FINRA will amend its New Account Application Template to a provide guidance for capturing this information.
  • Permission for firms to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is suspicion of financial exploitation. Firms can then investigate the matter by reaching out to the customer, the trusted contact, and, potentially law enforcement, when financial exploitation is suspected.

For more information, see FINRA Regulatory Notice 17-11.

Series Exam Impact

The requirements from the new rule and amendment will impact all FINRA and MSRB licensing exams administered after February 5, 2018.

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Marcia Larson is Vice President, Faculty, at Knopman Marks Financial Training, New York, NY. She has extensive experience in financial licensing and regulatory training, having authored, developed and presented courseware for numerous securities and insurance exam preparation and continuing education and compliance programs. Before joining Knopman Marks, Marcia was Director of Annuity Products and Business Development at CUNA Mutual Group, where she developed and marketed industry-leading annuity products and retirement solutions and implemented distribution relationships. She was previously VP, Securities Products for Kaplan Financial, managing securities training products and subsequently, international training and businesses development. Marcia has trained thousands of financial industry exam candidates throughout their careers, and also college students as an adjunct professor. Marcia was a summa cum laude graduate of Wartburg College with degrees in Business Administration and Piano Performance. Marcia also holds the designations of Chartered Financial Consultant® (ChFC®), Chartered Life Underwriter (CLU®), Certified Employee Benefit Specialist (CEBS), and Fellow Life Management Institute™ (FLMI®). She currently teaches the SIE, Series 6, 7, 24, 50, 52, 63, 65, and 66 exams.