U.S. securities regulators are calling on investors to supply their financial firms with a trusted emergency contact in an effort to enhance investor protection.
A trio of U.S. regulators — the U.S. Securities and Exchange Commission’s Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority Inc. (FINRA) and the North American Securities Administrators Association (NASAA) — launched a campaign to encourage investors to provide their financial firms with a trusted contact who can be called in cases of suspected abuse, or other circumstances where an investor is unreachable.
“All investors can benefit from adding a trusted contact to their account — having one or more trusted contacts provides another layer of security on the account and puts the financial firm in a better position to help keep the account safe,” said FINRA president and CEO, Robert Cook.
In Canada, new rules will take effect at the end of the year that will require firms to take “reasonable steps” to obtain trusted contact information from clients.
The U.S. regulators’ initiative comes in the wake of recent compliance reviews by NASAA, which found that many firms lacked policies and procedures designed to help prevent the exploitation of vulnerable investors.