Holding of Customer Mail

Firms regularly send statements, confirmations, and other correspondence to customers. But what happens when a customer asks the firm to hold their mail? FINRA Rule 3150 sets strict limits on when and how firms can hold mail, and what safeguards must be in place.

FINRA Rule 3150: Requirements

A firm may hold a customer's mail only if all of the following conditions are met:

• The customer provides written instructions requesting the hold (verbal requests are not sufficient)
• The instructions specify the time period for the hold
• The hold period does not exceed 3 months (unless an acceptable reason exists for a longer hold)
• The firm can communicate with the customer through alternative means during the hold (such as email or the firm's website)

Exam Tip: Gotchas

• Written instructions are required. A phone call or verbal request from the customer is not enough to start a mail hold.
• 3 months is the default maximum, not 6 months, not 1 year. If a question gives a time period longer than 3 months with no special reason, the hold is not permitted.

Extended Holds Beyond 3 Months

A hold longer than 3 months is only permitted if the customer provides an acceptable reason, such as:

• Extended travel abroad
• Safety or security concerns

Convenience is NOT an acceptable reason for extending a mail hold beyond 3 months.

Think of it this way: If a customer simply says "I don't feel like checking my mail," that is convenience, and the firm cannot extend the hold past 3 months. But if the customer is traveling overseas for 6 months, that qualifies as a legitimate reason.

Exam Tip: Gotchas

• "For convenience" = automatic 3-month cap. If a question says a customer wants mail held "for convenience," the answer is that the hold cannot exceed 3 months regardless of how long the customer requests.

Firm Obligations During the Hold

Even while holding mail, the firm must:

• Inform the customer in writing of alternate methods to monitor account activity (email, online access) and provide important disclosures (such as SIPC information under Rule 2266)
• Obtain confirmation that the customer received this information
• Verify at reasonable intervals that the customer's hold instructions still apply
• Prevent tampering: ensure mail is not tampered with, held without consent, or misused by an associated person

Exam Tip: Gotchas

• The firm's obligations do not pause during a mail hold. The firm must still deliver important disclosures and be able to reach the customer through alternative channels.
• Associated persons cannot use mail holds to hide activity. The rule specifically requires firms to prevent misuse by their own representatives.