Temporary Holds for Financial Exploitation of Specified Adults
Chapters in this video
- 0:00 The galactic timeshare scam setup: who is a specified adult
- 1:45 Why the rule is permissive, not mandatory: the safe harbor logic
- 2:38 Stacking the hold periods: 2 to notify, 15 to hold
- 3:39 First extension to 25 days: the supporting internal review
- 4:12 Second extension to 55 days: the outside report requirement
- 5:11 Firm safe harbor: designees, procedures, training, and records
- 6:03 Rapid-fire exam recap
What this video covers
- Who qualifies as a specified adult: age 65 or older, or age 18 or older with a mental or physical impairment the firm reasonably believes leaves the person unable to protect their own interests
- Why the rule is permissive (the firm may place a hold) rather than mandatory, and what "reasonable belief" based on the firm's own observations actually means
- How the safe harbor protects the firm and its associated persons from the just-and-equitable-principles-of-trade standard, the improper use prohibition, and the customer account transfer rule
- Why the 2-business-day notification clock runs on a separate track from the hold periods, and who must be notified (authorized parties and the trusted contact person) with the two exceptions
- How the three hold periods stack: 15 business days on reasonable belief alone, plus 10 more with a supporting internal review (25 total), plus 30 more with a review plus a report to a state regulator, agency, or court (55 total)
- The supervisory, compliance, or legal designee requirement, plus the written procedures, training, and recordkeeping FINRA can demand on inspection
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