FINRA requires verification of emailed instructions to transmit or withdraw customer assets

Original title: Regulatory Notice 12-05

FINRA issued Regulatory Notice 12-05 requiring member firms to implement procedures for verifying emailed instructions that authorize transmission or withdrawal of assets from customer accounts. This notice addresses the need for enhanced security measures to prevent unauthorized asset transfers resulting from compromised email communications. Firms must establish protocols to confirm the legitimacy of such instructions before processing them.

What changed

• FINRA requires member firms to verify emailed instructions authorizing transmission or withdrawal of assets from customer accounts before processing such requests
• Firms must implement procedures to authenticate that asset transfer instructions received via email originate from authorized customers or representatives
• Enhanced verification controls are needed to prevent unauthorized asset transfers resulting from compromised or spoofed email communications

Who is affected

FINRA member firms (broker-dealers) in the United States

Summary generated by a language model; the official text prevails. Not legal advice.