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Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices
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senior investors and their family members with a supportive place to get assistance from specially trained FINRA
staff related to concerns they have with their brokerage accounts and investments; 4
Creating national standards that give member firms toolsincluding permitting firms to place temporary holds on disbursements when they have a reasonable belief of financial exploitation and requiring firms to request information from customers about a trusted contactto address suspected financial exploitation of senior investors and other vulnerable adults i.e., FINRA Rules 2165 and 4512
Customer Account Information; 5
Collaborating with the North American Securities Administrators Association NASAA and the SEC to address senior investor protection, including issuing a Senior Safe Act Fact Sheet designed to raise awareness among member firms, investment advisers and transfer agents about the Act and its immunity provisions; 6
Issuing alerts and articles educating investors about important issues and highlighting risks facing senior investors; 7
Conducting and funding research on senior investors and financial fraud, and engaging with national, state and grassroots partners to develop and distribute fraud prevention resources, educate consumers, and provide training for law enforcement professionals, victim advocates, and other people on the front lines of fighting financial fraud;
Issuing Regulatory Notices emphasizing member firms obligations to senior investors and providing guidance on how to fulfill those obligations; 8 and 4 See http www.finra.org/investors/highlights/
finra-securities-helpline-seniors.
5 See Regulatory Notice 1711 March 2017.
6 See http www.finra.org/sites/default/files/
senior_safe_act_factsheet.pdf.
7 See, e.g., articles such as Protecting Seniors from Financial Exploitation; Investor Alerts such as Power of Attorney and Your Investments10 Tips, Plan for Transition: What You Should Know About the Transfer of Brokerage Account Assets on Death;
Seniors Beware: What You Should Know About Life Settlements; and FINRAs Retirement web page for investors.
8 See, e.g., Regulatory Notice 0743 Sept. 2007
reminding member firms of their obligations relating to senior investors and highlighting industry practices to serve these customers;
Regulatory Notice 0942 July 2009 reminding member firms of their obligations with variable life settlement activities; Regulatory Notice 1152
Nov. 2011 reminding member firms of their obligations regarding the supervision of associated persons using senior designations; Regulatory Notice 1612 Apr. 2016 providing guidance on member firm responsibilities for sales of pension income stream products; and Regulatory Notice
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Bringing disciplinary actions for misconduct against senior investors.9
Retrospective Review In August 2019, FINRA launched a retrospective review to assess the effectiveness and efficiency of its rules and administrative processes that help protect senior investors from financial exploitation. The retrospective review process has two phases: The assessment phase and the action phase.10 During the assessment phase, FINRA first sought comment in Regulatory Notice 1927 August 2019 on several questions with respect to addressing financial exploitation and other circumstances of financial vulnerability for senior investors. FINRA received 22
comment letters to Regulatory Notice 1927.11
1711 Mar. 2017 discussing new senior rules and potential financial exploitation of seniors.
9 See, e.g., John W. Cutshall, Order Accepting Offer of Settlement, Case ID 2014041590801 April 11, 2019; Steven Anthony Olejniczak, Letter of Acceptance, Waiver and Consent, Case ID
2016050107901 May 8, 2017.
10 The stakeholders who provided input during the assessment phase of the retrospective review are collectively referred to herein as the Retrospective Review Stakeholders.
11 See Letter from Megan Valent, Legal Intern, and Teresa J. Verges, Director, University of Miami School of Law, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 1, 2019; Letter from Jennifer L. Szaro, Lara May &
Associates, LLC, and Robert L. Hamman, President, First Asset Financial Inc., to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 4, 2019; Letter from William A. Jacobson, Esq., Clinical Professor of Law and Director, Securities Law Clinic Cornell Law School, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 7, 2019; Letter from Kathleen Quinn, Board President, National Adult Protective Services Association, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 7, 2019; Letter from Joe Snyder, Chair, Philadelphia Financial Exploitation Task Force dated Oct. 7, 2019; Letter from Seth A. Miller, General Counsel, Executive Vice President, and Chief Risk Officer, Cambridge Investment Research, Inc., to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019;
Letter from Eric Arnold, Clifford Kirsch and Holly Smith of Eversheds Sutherland on behalf of the Committee of Annuity Insurers, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019; Letter from Christopher W. Bok, Director, Financial Information Forum, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019; Letter from Marc Fitapelli, Esq., Fitapelli Kurta, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019; Letter from Robin M. Traxler, Senior Vice President, Policy & Deputy General Counsel, Financial Services Institute, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019; Letter from Maureen K.
Paparo, Legal Intern, Lincoln Square Legal Services, Inc., to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019;
Letter from Courtney Rogers Reid, Lead Counsel, Broker-Dealer and Investment Adviser Practice Group, MML Investors Services, LLC, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019; Letter from Christopher Gerold, President, NASAA, to Jennifer Piorko
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In addition, FINRA obtained input from several advisory committees comprising member firms of different sizes and business models, investor protection advocates, member firms, and trade associations. FINRA also obtained the perspective of its operating departments that touch the rules and their administration. Moreover, FINRA
considered examination observations and findings involving senior issues. In this regard, FINRA previously had identified as an examination priority reviewing member firms controls regarding Rule 2165, to the extent firms anticipated using the rules safe harbor, and Rule 4512s trusted-contact provision.12 As part of these reviews, FINRA looked at whether member firms had clearly defined policies and procedures and sought information about firms early experiences with these provisions.13
Finally, FINRA developed an anonymous survey that was distributed to all member firms in the first quarter of 2020. The purpose of the survey was to collect information in order to validate the feedback received and to provide an additional opportunity for all member firms to provide their views.14
Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019; Letter from Nancy Brown, President and Co-Chair, and Dian VanderWell, Opportunity Alliance Nevada, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019; Letter from Christine Lazaro, President, and Samuel B. Edwards, Executive Vice President, Public Investors Advocate Bar Association, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019;
Letter from Lisa J. Bleier, Managing Director, SIFMA, dated Oct. 8, 2019; Letter from Christine Lazaro, Professor of Clinical Legal Education and Director, St. Johns University School of Law Securities Arbitration Clinic, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019; Letter from Alice L. Stewart, Director, and Rachael T. Shaw, Adjunct Professor, University of Pittsburgh School of LawSecurities Arbitration Clinic, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct.
8, 2019; Letter from Ron Long, Head of Elder Client Initiatives Center of Excellence, Wells Fargo &
Company, to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 8, 2019;
Letter from Erin K. Lineham, Associate General CounselCompliance, Raymond James &
Associates, Inc., to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA, dated Oct. 29, 2019; Letter from Marin E. Gibson, Managing Director and Associate General Counsel, SIFMA, dated Nov. 15, 2019; Letter from Anonymous dated Feb. 26, 2020.
12 See 2019 Annual Risk Monitoring and Examination Priorities Letter Jan. 22, 2019.
13 See id.
14 Survey respondents were permitted to skip survey questions. Information in this proposed rule change regarding the percentage of survey respondents for a particular question reflects the percentage of respondents for that question, not the percentage of respondents for the survey as a whole.
Approximately 190 responses were received for
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