WASHINGTON, D.C. (September 29, 2015) – The North American Securities Administrators Association (NASAA) announced today that its Board of Directors has approved for release for comment a proposed model act to address issues faced by broker-dealer and investment adviser firms and their employees when confronted with suspected financial exploitation of seniors and other vulnerable adults.

“Working together we can and will close the holes in our safety net of support and protection for vulnerable adult investors,” said Judith Shaw, NASAA President and Maine Securities Administrator in a speech today at NASAA’s 98th Annual Conference in San Juan, Puerto Rico.

“I am pleased that NASAA is publishing for comment a proposed model act that facilitates reporting to regulators and Adult Protective Services; respects the dignity and independence of older investors by encouraging firms to develop financial advanced directives for execution by clients; permits the delay in disbursement of funds when financial exploitation is suspected; and provides immunity from administrative and civil liability for taking actions permitted under the model,” Shaw said.

The proposed model, entitled “An Act to Protect Vulnerable Adults From Financial Exploitation,” was developed by the NASAA Board-level Committee on Senior Issues and Diminished Capacity. The proposed model act would:

  • Require qualified employees of broker-dealers and investment advisers who reasonably believe that financial exploitation of a vulnerable adult may have occurred, been attempted, or is being attempted, to promptly notify Adult Protective Services and their state securities regulator. These employees also may notify any third party previously designated by the vulnerable adult as long as that party is not suspected of participating in the financial exploitation.
  • Enable broker-dealers or investment advisers to delay disbursements from an account of a vulnerable adult if financial exploitation is suspected.
  • Allow qualified employees of broker-dealers or investment advisers to provide records that are relevant to the suspected or attempted financial exploitation to relevant authorities.
  • Provide immunity from administrative or civil liability for broker-dealers and investment advisers for taking actions permitted under the act.

The model act defines “qualified employee” as any agent, investment adviser representative or person who serves in a supervisory, compliance, or legal capacity for a broker-dealer or investment adviser. The act would apply to instances where there is a reasonable belief of financial exploitation of individuals age 60 and older as well as individuals protected by state Adult Protective Services laws. The full text of the proposed model act is available on the NASAA website. The comment period will be open for 30 days.

For More Information:
Bob Webster | Director of Communications


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