On August 13, 2026, FINRA filed with the SEC proposed new Rule 2166. The proposed new rule is modeled on existing Rule 2165 but extends the coverage provided under that Rule to all customers (irrespective of age or capacity). The new rule permits a temporary hold of up to 10 business days on disbursements or transactions when firms have a reasonable belief that fraud has occurred, is occurring, has been attempted, or will be attempted. This “speed bump” provides for a shorter hold period than the permissible hold under Rule 2165, which is specifically designed to protect elder and vulnerable adults. FINRA states that this “speed bump” would allow an individual additional time to reflect on the disbursement or transaction and hopefully prevent fraudsters from being successful.
Per the proposed rule, if a hold is placed, the firm must notify the customer, orally or in writing, within 2 business days of the temporary hold. In the notification, the firm must state the reason for the delay and how the customer can contact the firm with any questions. Like FINRA Rule 2165, firms would be required to provide training to associated persons and comply with record retention requirements.
However, commentators have expressed concerns as to whether 10 business days is adequate. In response, FINRA indicated that 10 business days should be an adequate amount of time because these younger investors do not fall within a protected class under state financial-exploitation laws, which eliminates the need to involve state agencies and often requires additional time. Importantly, this “speed bump” is an optional protection that may be employed by firms if the firm chooses to do so. There is no requirement that firms place a hold under Rule 2166.
The new proposed rule has been published in the Federal Register and the SEC is accepting comments until September 30, 2026. Stay tuned for additional updates as the proposed rule runs through the comment period. To read the proposed rule on the FINRA website, click here. For more information and assistance, please contact the authors or any of the attorneys in Bressler’s Seniors and Vulnerable Investors practice group.