California and Alabama Join Growing Number of States to Adopt Provisions Based on NASAA Model Rule on the Use of Senior Certifications and Professional Designations

WASHINGTON, D.C. October 2, 2008—The North American Securities Administrators Association today commended California Governor Arnold Schwarzenegger for signing into law important senior investor protection legislation based on NASAA’s Model Rule on the Use of Senior Certifications and Professional Designations. NASAA also lauded the Alabama Securities Commission, which unanimously adopted a rule based on the NASAA model. Alabama’s Senior-Specific Certifications and Professional Designations Rule will become effective on November 4, 2008.

“We thank California Corporations Commissioner Preston DuFauchard for his work as a member of the NASAA Task Force, which developed the model rule, and we applaud Governor Schwarzenegger and the California legislature for enacting a strong bill to curb elder financial abuse,” said Fred Joseph, NASAA President and Colorado Securities Commissioner. “We also appreciate the efforts of Alabama Securities Commission Director Joseph Borg, who throughout the years has been a champion of senior investor protection issues.”

Approved by the NASAA membership on April 1, 2008, the Model Rule prohibits the misleading use of senior and retiree designations, a problem first recognized and addressed by state securities regulators. Joseph said the use of a senior designation by salespersons, whether registered or not, confers an impression that the salesperson has special qualifications or specialized education in addressing the needs of senior citizens or retirees, particular areas of finance, financial planning, estate planning, or investing. The model rule provides a means by which a securities administrator may recognize the use of certain designations conferred by an accredited organization.

“We believe the NASAA Model Rule represents a responsible and aggressive regulatory solution to strengthening protections for our most heavily targeted and vulnerable investor constituents – seniors,” Joseph said, noting that Massachusetts led the way for NASAA with its pioneering work in this area and was the first state to adopt rulemaking affecting the use of senior specialist designations.

California and Alabama became the fifth and sixth states, respectively, to adopt the NASAA Model Rule, joining New Hampshire, Virginia, Washington and Wisconsin. In addition, 10 states have proposed adopting the rule later this year. “I am pleased that 16 states have taken affirmative steps to put these important protections in place for our senior constituents, and I urge all NASAA members to move to uniformly adopt these safeguards for seniors in the months ahead, whether through legislation or regulation,” Joseph said.

NASAA’s model rule also is the cornerstone of federal legislation introduced in April by Sen. Herb Kohl (D-WI), chair of the U.S. Senate Special Committee on Aging. The “Senior Investor Protection Act of 2008,” cosponsored by Sens. Barbara Boxer (D-CA), Blanche Lincoln (D-AR), and Claire McCaskill (D-MO), would provide grants to states to enhance the protection of seniors from being misled by false designations.

“This important legislation recognizes the impact and importance of the NASAA model rule on senior specialist designations and makes grant funding available to states that have adopted the rule. We are grateful to Senator Kohl for his efforts and strongly support his proposed legislation,” Joseph said.

NASAA is the oldest international organization devoted to investor protection. Its membership consists of securities administrators in the 50 states, the District of Columbia, the U.S. Virgin Islands, Canada, Mexico and Puerto Rico.

For more information:
Bob Webster, Director of Communications