The Financial Industry Regulatory Authority, Wall Street's industry-funded watchdog, said on Thursday its board of governors approved a proposal to protect seniors and other vulnerable adults from financial exploitation.

Firms will be allowed to put on hold disbursement of funds or securities and alert a customer's trusted contact when they suspect manipulation, according to the proposal.

The proposal would amend Finra's customer account information rule so that the name and contact information for a trusted contact person is obtained upon opening an account.

The proposal would also apply to investors 18 and older if they have mental or physical impairments that render them unable to protect their own interests and there is a reasonable belief of financial exploitation, Finra said.