The North American Securities Administrators Association ("NASAA") offered recommendations for jurisdictions implementing NASAA's Model Act to Protect Vulnerable Adults from Financial Exploitation (the "Model Act").
In a report updating developments on the 2016 Model Act, NASAA provided textual commentary based on a retrospective review of the implementation of the Model Act by states which have adopted it in part or in whole.
The Model Act provides qualified immunity to broker-dealers and investment advisers delaying client disbursements if they suspect the disbursements may result in financial exploitation. The Model Act requires firms to report to state securities regulators and adult protective services agencies any instance where a financial professional "reasonably believes" that financial exploitation of a vulnerable adult may be attempted or may have occurred.
In its commentary, NASAA recommended, among other things, that jurisdictions implementing the Model Act:
- ensure that there is ongoing training for those tasked with reporting and investigating suspected financial exploitation;
- advocate for the use of designated contact persons by senior and vulnerable adult investors; and
- tackle suspected cases of financial exploitation through a multi-disciplinary approach, which combines the efforts of regulators and financial professionals.
Primary Sources
- NASAA Press Release: NASAA Releases Legislative Commentary to Protect Seniors and Vulnerable Adults from Financial Exploitation
- NASAA 2021-2022 Legislative Text and Commentary: Model Act to Protect Vulnerable Adults from Financial Exploitation
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