RIA Compliance and Practice Management Blog

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

Posted by RIA in a Box

Jun 18, 2019 10:16:41 AM

ria firms senior safe actOn May 23, 2019 the North American Securities Administrators Association ("NASAA"), the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA") issued a fact sheet on The Senior Safe Act, signed into law May 24, 2018, to increase awareness on how the immunity provisions work for broker-dealers, investment advisers, and transfer agents. While the Act does not require financial institutions and regulators to take action, it does, for financial institutions and eligible employees, "provide immunity from liability in any civil or administrative proceeding for reporting potential exploitation of a senior citizen."


Download the SEC 2018 Top RIA Exam Priorities Checklist

What is the Senior Safe Act?

The Act "addresses barriers financial professionals face in reporting suspected senior financial exploitation or abuse to authorities." More specifically, the Act protects investment advisers, broker-dealers, and transfer agents in addition to their affiliated persons, and associated persons from "liability in any civil or administrative proceeding for reporting a case of potential exploitation of a senior citizen to a covered agency."  

Sections of The Senior Safe Act fact sheet:

The three page Senior Safe Act Fact Sheet provides general information with the goal of educating "financial institutions and employees about the benefits of the Act." The Fact Sheet it broken into 9 small sections that cover the following:

  1. What is the Senior Safe Act?
  2. What types of employees are eligible for immunity under the Senior Safe Act
  3. What types of employees must be trained to receive the immunity provided by the Senior Safe Act
  4. What are the training requirements under the Senior Safe Act
  5. How soon must employees be trained to receive the immunity provided by the Senior Safe Act?
  6. What records of training must be maintained?
  7. How do the requirements for "individual immunity" and "institutional immunity" differ?
  8. Does the immunity provided by the Senior Safe Act allow for contacting third parties?
  9. Where can I find additional information?

This latest regulatory outreach efforts also follows the SEC identifying the protection of senior investors as part of the Office of Compliance Inspections and Examination's 2019 Priorities Report:

"In examinations of investment advisers, OCIE will continue to review the services and products offered to seniors and those saving for retirement. These examinations will focus on, among other things, compliance programs of investment advisers, the appropriateness of certain investment recommendations to seniors, and the supervision by firms of their employees and independent representatives."

This also follows NASAA's passing of its Model Act to Protect Vulnerable Adults from Financial Exploitation. The model rule, passed on January 22, 2016, gives state regulators and industry participant’s not only new tools to help detect and prevent financial exploitation of vulnerable adults, but will also provide an avenue for industry professionals, investment advisers, broker-dealers, securities regulators and adult protective agencies to work together to further protect vulnerable citizens from financial exploitation. 

We highly encourage Chief Compliance Officers ("CCOs") and other investment adviser firm members to carefully review The Senior Safe Act fact sheet in its entirety given the continued regulatory focus on senior investor protection and exploitation.

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Topics: RIA Operations, RIA Compliance

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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