FINRA Proposes Limitations on Serving as a Customer’s Beneficiary
The Financial Industry Regulatory Authority (FINRA) is requesting public comment on a proposed rule that generally would prohibit registered persons from serving as a customer’s beneficiary, executor or trustee, or holding a power of attorney or similar position for or on behalf of a customer. The proposed rule also would provide two exceptions from this general prohibition, including (1) instances in which the customer is a member of the registered person’s immediate family and (2) instances in which the member firm approves in advance the relationship. In addition, the proposed rule would require member firms to review and assess these relationships.
As noted by FINRA, the proposed rule is intended to address potential conflicts of interest.
The comment period for this proposal expires on January 10, 2020.
More information is available here.