SEC, NASAA, and FINRA Issue Senior Safe Act Fact Sheet

industryspread

The Industry Spread is a news and information site built for the global trading industry. The site provides industry news focusing on technology, global regulation, company news and the latest people moves .

US Securities and Exchange Commission

SEC, NASAA, and FINRA Issue Senior Safe Act Fact Sheet to Help Promote Greater Reporting of Suspected Senior Financial Exploitation

June 2, 2019

SECWashington D.C., May 23, 2019 — In recognition of the one-year anniversary of the passage of The Senior Safe Act, the Securities and Exchange Commission, the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA) have issued a fact sheet to help raise awareness among broker-dealers, investment advisers, and transfer agents of the Act and how the Act’s immunity provisions work.

The Senior Safe Act Fact Sheet provides information on the immunity and training provisions of the Act, as well as additional resources from the SEC, NASAA, and FINRA.

The Senior Safe Act was included as Section 303 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which was signed into law on May 24, 2018. The Act addresses barriers financial professionals face in reporting suspected senior financial exploitation or abuse to authorities. Specifically, the Act protects “covered financial institutions” – which include investment advisers, broker-dealers, and transfer agents – and their eligible employees, affiliated persons, and associated persons (“eligible employees”), from liability in any civil or administrative proceeding for reporting a case of potential exploitation of a senior citizen to a covered agency. As an example, this immunity can be helpful when a firm wants to report potential exploitation but fears that the report could violate a privacy requirement.

The immunity established by the Act is provided on the condition that employees receive training on how to identify and report exploitative activity against seniors before making a report. In addition, reports of suspected exploitation must be made “in good faith” and “with reasonable care.” This immunity applies to individuals and firms.

Jay Clayton, SEC Chairman
Jay Clayton, SEC Chairman

“Financial professionals can provide a critical frontline role in identifying and reporting senior financial exploitation,” said SEC Chairman Jay Clayton.  “The SEC strongly encourages broker-dealers and investment advisers to train their personnel in accordance with the Senior Safe Act. We also encourage all investors, including our most vulnerable, to ensure they are dealing with a registered investment professional.”

“In reminding broker-dealers and investment advisers of the Senior Safe Act’s important immunity provisions, we hope to encourage firms to train their employees on how to detect and report suspected senior financial exploitation. Early detection and reporting are critical to help prevent elder financial abuse and the devastating financial and emotional impacts that ensue,” said Michael S. Pieciak, NASAA President and Vermont Commissioner of Financial Regulation.

“Protecting senior investors has long been a top priority for FINRA,” said FINRA President and CEO Robert Cook. “The Senior Safe Act seeks to empower financial professionals to detect and report cases of suspected abuse of senior investors and we believe it is important to broaden awareness and understanding of the Act throughout the securities industry.”

The Senior Safe Act Fact Sheet is available on the SEC’s website, NASAA’s website, NASAA’s Serve Our Seniors website, and FINRA’s website.

About the SEC:

The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public’s trust.

About NASAA:

Formed in 1919, NASAA is the non-profit association of state, provincial, and territorial securities regulators in the United States, Canada and Mexico. NASAA has 67 members, including the securities regulators in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. NASAA’s U.S. members are responsible for administering state securities laws, commonly known as “Blue Sky Laws.” For more information, visit: www.nasaa.org.

About FINRA:

FINRA is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry – brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.

Senior Safe Act Fact Sheet

Introduction

The Senior Safe Act became federal law on May 24, 2018.[1]  The Senior Safe Act does not mandate any action by financial institutions and regulators.  However, for financial institutions and certain eligible employees (discussed below), affiliated persons, and associated persons (“eligible employees”), who satisfy its requirements, the Senior Safe Act provides immunity from liability in any civil or administrative proceeding for reporting potential exploitation of a senior citizen.  As an example, this immunity can be helpful when a firm wants to report potential exploitation but fears that the report could violate a privacy requirement.  This Fact Sheet provides general information regarding the Senior Safe Act with the goal of educating financial institutions and employees about the benefits of the Act.[2]

What is the Senior Safe Act?

The Senior Safe Act protects “covered financial institutions”[3] – which include investment advisers, broker-dealers, and transfer agents – and their eligible employees, from liability in any civil or administrative proceeding in instances where those employees make a report about the potential exploitation of a senior citizen (defined as not younger than 65 years) to a covered  agency.[4]  The immunity established by the Senior Safe Act is provided on the condition that (1) certain employees (discussed below) receive training on how to identify and report exploitative activity against seniors before making a report, and (2) reports of suspected exploitation are made “in good faith” and “with reasonable care.”  This immunity applies to eligible employees and firms, but the requirements differ slightly, as discussed below.

The inspiration for the Senior Safe Act was Maine’s Senior$afe training program, an initiative launched in 2014 by the Maine Council on Elder Abuse Prevention that is designed to train financial professionals to detect and report cases of suspected senior financial abuse.

What types of employees are eligible for immunity under the Senior Safe Act?

  1. An employee who serves as a supervisor or in a compliance or legal function (including as a Bank Secrecy Act officer), for a covered financial institution; OR
  2. A registered representative, investment adviser representative, or insurance producer affiliated or associated with a covered financial institution.

What types of employees must be trained to receive the immunity provided by the Senior Safe Act?

The Senior Safe Act does not mandate that any employees be trained.  However, to qualify for the immunity provided by the law, training must be provided to and completed by the employees who are eligible for immunity (see above) and those employees who may come into contact with a senior citizen as a regular part of their professional duties or may review or approve the financial documents, records, or transactions of a senior citizen in connection with providing financial services to a senior citizen.

What are the training requirements under the Senior Safe Act?

The Senior Safe Act provides that, to receive the immunity provided by the Act, the training must: (1) instruct any individual attending the training on how to identify and report the suspected exploitation of a senior citizen internally and, as appropriate, to government officials or law enforcement authorities, including common signs that indicate the financial exploitation of a senior citizen; (2) discuss the need to protect the privacy and respect the integrity of each individual customer of the covered financial institution; and (3) be appropriate to the job responsibilities of the individual attending the training.

How soon must employees be trained to receive the immunity provided by the Senior Safe Act?

For current employees, affiliated persons, and associated persons, as soon as reasonably practical.  New employees or persons who become affiliated or associated with a covered financial institution have no later than one year from the date of hire, affiliation, or association to complete the training.

What records of training must be maintained?

Records of employees who completed the training and the content of the training must be maintained by the covered financial institution and made available to a covered agency with examination authority over the covered financial institution, upon request, except that a covered financial institution shall not be required to maintain or make available such content with respect to any individual who is no longer employed by or affiliated or associated with the covered financial institution.

How do the requirements for “individual immunity” and “institutional immunity” differ?

An eligible employee who has received the training and makes a disclosure to a covered agency in good faith and with reasonable care receives individual immunity pursuant to the Senior Safe Act.  A covered financial institution also receives institutional immunity when an eligible employee makes a disclosure to a covered agency and all employees have received training to the extent necessary to qualify for immunity under the Senior Safe Act.

Does the immunity provided by the Senior Safe Act allow for contacting third parties?

No, the qualified immunity established by the Senior Safe Act applies only to disclosures made by a covered financial institution or an employee of such institution to a “covered agency,” not a third party.

Where can I find additional information?

SEC Resources:
SEC Seniors webpage

NASAA Resources:
Serve Our Seniors website

FINRA Resources:
FINRA’s Senior Investors webpage
Regulatory Notice 17-11, SEC Approves Rules Relating to Financial Exploitation of Seniors (March 2017)
FINRA Securities Helpline for Seniors: 844-57-HELPS (844-574-3577)
FINRA Securities Helpline for Seniors webpage
Report on the FINRA Securities Helpline for Seniors (December 2015)
Protecting Seniors From Financial Exploitation (April 25, 2018)
FINRA Investor Alerts


[1] The Senior Safe Act, which was included as Section 303 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, was signed into law on May 24, 2018.

[2] This document should not be construed as providing legal advice.

[3] The Senior Safe Act defines the term “covered financial institution” as credit unions, depository institutions, investment advisers, broker-dealers, insurance companies, insurance agencies, and transfer agents.

[4] The Senior Safe Act defines the term “covered agency” to include a state financial regulatory authority (including a state securities regulator or law enforcement authority and a state insurance regulator); a state or local adult protective services agency; the SEC; an SEC-registered national securities association (e.g., FINRA); a federal law enforcement agency; or any Federal agency represented in the membership of the Financial Institutions Examination Council.

Login To MyTis Comment Or Register to MyTIS

Leave a Reply

avatar
  Subscribe  
Notify of

Newsletter

Register now to receive the latest news and information for global trading industry.

Latest Articles

Bank of France

François Villeroy de Galhau: Central bank digital currency and innovative payments

Speech by Mr François Villeroy de Galhau, Governor of the Bank of France and Chairman of the Autorité de contrôle prudentiel et de resolution (ACPR), at the ACPR, Paris, 4 December 2019.