SB 1672 — Protection of Vulnerable Investors

Florida Senate - 2020 CS for SB 1672 By Senator Broxson 1-00955B-20 20201672__ A bill to be entitled An act relating to the protectionCommittee ofon vulnerableJudiciary; investors;

and Senators Broxson and Baxley 590-03503-20 20201672c1 A bill to be entitled An act relating to the protection of vulnerable investors;

specifying required information in the form for such notice;

3031 Be It Enacted by the Legislature of the State of Florida:

3233 Section 1. Paragraph (a) of subsection (1) of section 415.1034, Florida Statutes, is amended to read:

or 9. Dealer, investment adviser, or associated person under chapter 517, 6364 who knows, or has reasonable cause to suspect, that a vulnerable adult has been or is being abused, neglected, or exploited must shall immediately report such knowledge or suspicion to the central abuse hotline.

The Legislature intends to encourage the constructive involvement of securities dealers, investment advisers, and associated persons who take action based upon the reasonable belief that specified adults with investment accounts have been or are the subject of financial exploitation, and to provide securities dealers, investment advisers, and associated persons immunity from liability for taking actions as authorized herein.

The Legislature intends to balance the rights of specified adults to direct and control their assets, funds, and investments and exercise their constitutional rights consistent with due process with the need to provide securities dealers, investment advisers, and associated persons the ability to place narrow, time-limited restrictions on these rights in an effort to decrease specified adults’ risk of loss due to abuse, neglect, or financial exploitation.

(b) Not later than 3 business days after the date on which the delay was first placed, the dealer or investment adviser notifies in writing all parties authorized to transact business on the account and any trusted contact on the account, using the contact information provided for the account, with the exception of any party the dealer or investment adviser reasonably believes has engaged orin, is engaging in, has attempted to engage in, or will attempt to engage in the suspected financial exploitation of the specified adult.

(c) Not later than 3 business days after the date on which the delay was first placed, the dealer or investment adviser notifies the office of the delay by telephone using a number designated by the office for such purpose or electronically on a form prescribed by commission rule.

The noticeform must identifybe theconsistent dealerwith or investment adviser that made the delay,purposes the name of thethis personsection who authorized the delay, and themay dateinclude ononly which the delayfollowing wasinformation: made.

(d) The1. The dealerdate or investment adviser immediately initiates an internal review of the factsnotification andis circumstancessubmitted that caused the dealer or investment adviser to reasonably believe that the financialoffice. exploitation of the specified adult has occurred, is occurring, has been attempted, or will be attempted.

2. The date on which the delay was first placed.

3. The following information about the specified adult:

a. Gender.

b. Age.

c. Zip code of residence address.

4. The following information about the dealer or investment adviser who placed the delay:

a. Name.

b. Title.

c. Firm name.

d. Business address.

5. A section with the following questions for which the only allowable responses are “Yes” or “No”:

a. Is financial exploitation of a specified adult suspected in connection with a transaction or disbursement? b. Are funds currently at risk of being lost? 163 The form must contain substantially the following statement in conspicuous type:

“The office may take disciplinary action against any person making a knowing and willful misrepresentation on this form.” (d) The dealer or investment adviser immediately initiates an internal review of the facts and circumstances that caused the dealer or investment adviser to reasonably believe that the financial exploitation of the specified adult has occurred, is occurring, has been attempted, or will be attempted.

A dealer or investment adviser whothat extends a delay shall notify the office inon accordancea withform paragraphprescribed (3)(c)by commission rule not later than 3 business days after the date on which the extension was applied.

(5) A dealer or investment adviser must make available to the office, upon request, all records relating to a delay madeplaced by the dealer or investment adviser pursuant to this section, as prescribed by commission rule.