FINRA Wants to Let a Brokerage Freeze a Suspected Exploitation Account for 145 Business Days. Today's Ceiling Is 55.

The Financial Industry Regulatory Authority has asked the Securities and Exchange Commission to approve a substantial expansion of the powers brokerages have to stop money leaving a customer's account when they suspect the customer is being defrauded. The central number is a hold length: the current maximum of 55 business days would become 145.

The filing is SR-FINRA-2026-018, submitted on August 20, 2026 and noticed by the SEC as Release No. 34-106275. It was published in the Federal Register on September 9, 2026 at 91 FR 57407. Comments are due 21 days after publication, which falls on September 30, 2026.

Who Rule 2165 covers now

Rule 2165 applies to what the rulebook calls a Specified Adult. The definition has two branches, and only one of them is about age.

• A natural person aged 65 or older; or
• A natural person aged 18 or older whom the member reasonably believes has a mental or physical impairment that renders the individual unable to protect his or her own interests.

When a firm has a reasonable belief that such a customer is being financially exploited, the rule gives it a safe harbor to place a temporary hold on a disbursement of funds or securities rather than processing the instruction. Without that safe harbor, refusing a customer's own instruction exposes the firm to a claim.

From 55 business days to 145

Under the rule as written, the hold runs to a maximum of 55 business days: an initial period, extendable where a state regulator or agency is involved, plus one 30-business-day extension. The proposal keeps that structure and adds three further 30-business-day increments on top, taking the ceiling to 145 business days.

The extensions are not automatic. To take each one, the firm must have made reasonable follow-up efforts with the relevant authorities, have received no substantive response, and continue to hold a reasonable belief that exploitation is occurring. Extensions beyond 55 business days also require the firm to notify the parties authorised to transact on the account and the customer's trusted contact, subject to exceptions where those people are themselves suspected.

The proposal would also widen who can pull the lever. It writes federal regulators into the rule alongside state authorities, and it lets staff in specialised fraud-prevention roles authorise a hold, rather than only the branch and supervisory personnel contemplated today.

A new rule that has nothing to do with age

Proposed Rule 2166 is the part of the filing with the broadest reach. It would create a safe harbor for a firm to delay a transaction or a disbursement of funds, securities or other assets for up to 10 business days where it has a reasonable belief that the customer is the target of fraud. It applies to any customer aged 18 or older, regardless of age, capacity or vulnerability.

• Maximum delay: 10 business days.
• The firm must notify the customer within two business days.
• The delay expires automatically at the end of the 10 business days unless authorities request an extension.
• Notifying an authorised party or trusted contact is at the firm's discretion, not mandatory.
• A conforming amendment to Rule 0150 applies the new rule to transactions in exempted securities other than municipal securities.

The distinction matters. Rule 2165 addresses exploitation of a vulnerable person, typically by someone close to them. Rule 2166 addresses a customer of any age who is being talked into moving money by a stranger, and it deliberately does not require the firm to form any view about the customer's capacity.

The trusted contact gets renamed

A third piece amends Rule 4512, which requires firms to ask for a trusted contact person when opening an account. FINRA proposes letting firms offer emergency contact as an alternative label, on the reasoning that the existing term is a barrier to adoption. Customers would also be able to apply one trusted contact across all existing and future accounts at the firm, instead of naming one account by account.

The evidence FINRA put in the file

FINRA cited a 2020 survey of member firms in which roughly 53% said they could not resolve a suspected exploitation matter within the 25-business-day period then available. Of those firms, 59% said resolution took between 51 and 100 days. That gap between the length of the hold and the length of the investigation is the stated reason for the extension.

On the scale of the problem, the filing cites Federal Trade Commission figures putting fraud costs to older adults at $81.5 billion in 2024 once underreporting is accounted for, and FBI Internet Crime Complaint Center data recording $7.7 billion lost to fraud by Americans over 60 in 2025 out of $20.877 billion in total reported losses that year. FINRA also notes that about 1,088 member firms served retail investors as of December 31, 2025.

The SEC has not yet acted on the filing. Approval, disapproval or an extended review period would follow the close of the comment window.