Federal Register #SR-FINRA-2026-018

SEC and FINRA Proposed Rule Amendments for Enhanced Investor Protection and Fraud Prevention

This notice details a proposed regulatory change by the SEC and FINRA to strengthen investor protection and fraud prevention rules. - Government Buyer: - Securities and Exchange Commission (SEC) - Financial Industry Regulatory Authority (FINRA) - No OEMs or commercial vendors are involved; this is a regulatory action. - Products/Services Requested: - Amendments to FINRA Rules 0150, 2165, 4512 - Adoption of new Rule 2166 - No physical products or commercial services are being procured - Notable Requirements: - Extends temporary hold periods for suspected financial exploitation from 55 to 145 business days - Allows use of 'emergency contact' as an alternative to 'trusted contact person' - Introduces a new rule permitting up to 10 business days delay on transactions for suspected fraud affecting all customers - Enhanced notification and documentation procedures for member firms - Safe harbor protections for firms acting in accordance with the rules - Focus is on modernizing protections for senior and vulnerable investors and expanding fraud prevention tools for all customers

Description

This notice pertains to a proposed rule change filed by the Financial Industry Regulatory Authority, Inc. (FINRA) with the Securities and Exchange Commission (SEC). The proposal seeks to amend FINRA Rules 0150, 2165, and 4512, and to adopt a new Rule 2166. The amendments and new rule aim to modernize protections for senior and vulnerable investors, enhance fraud prevention tools for all customers, and provide a structured framework for temporary delays on transactions or disbursements when there is a reasonable belief of fraud. The proposal includes provisions for trusted contact persons, temporary holds, and notification requirements to better protect investors from financial exploitation and fraud.

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