,,ii #aaith ,,congress #ast ,session ,s4 #bhdj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #ag 7legislative day1 ,september #af71 #bjbe,mr4 ,hagerty 7for himself and ,mr4 ,gallego7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to amend the ,investment ,company ,act of #aidj to postpone the date of payment or satisfaction upon redemption of certain securities in the case of the financial exploitation of specified adults1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,financial ,exploitation ,prevention ,act of #bjbe4 #b4 ,redemption of certain securities postponed 7a7 ,in general ,section #bb of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#bb7 is amended by adding at the end the following3 7h7 ,requirements with respect to non-,institutional direct at-,fund accounts 7#a7 ,election 7,a7 ,in general ,a registered open-end investment company and a transfer agent described in paragraph 7#b7 may elect to comply with the requirements under paragraph 7#b7 and subsection 7i7 by notifying the ,commission of that election4 7,b7 ,effect of election ,paragraph 7#b7 and subsection 7i7 shall only apply to a registered open-end investment company and a transfer agent that have made an election under subparagraph 7,a74 7#b7 ,requirements ,in the case of a customer who is a holder of a non-institutional account held directly with a registered open-end investment company and serviced by a transfer agent 7commonly known as a direct-at-fund account71 the company and transfer agent shall-- 7,a7 request from that customer the name and contact information of at least #a individual who-- 7i7 is1 at the time of that request1 an adult2 and 7ii7 may be contacted with respect to that account2 7,b7 document and retain the information received under subparagraph 7,a72 and 7,c7 disclose to that customer in writing 7including through electronic delivery7 that such company or transfer agent may contact an individual specified under subparagraph 7,a7 with respect to the account of that customer to-- 7i7 address possible financial exploitation of that customer2 7ii7 confirm the contact information or health status of that customer2 or 7iii7 identify any legal guardian1 executor1 trustee1 or holder of a power of attorney with respect to the customer4 7i7 ,redemption of certain securities postponed 7#a7 ,in general ,notwithstanding subsection 7e71 a registered open-end investment company or a transfer agent acting on behalf of such a company may postpone the date of payment or satisfaction upon redemption of any redeemable security in accordance with its terms for more than seven days after the tender of such security to such company or its agent designated for that purpose for redemption if such company or agent reasonably believes that-- 7,a7 that redemption is requested by a security holder who is a specified adult2 and 7,b7 financial exploitation has occurred1 is occurring1 or has been attempted with respect to that redemption4 7#b7 ,duration 7,a7 ,in general ,except as provided in subparagraphs 7,b7 and 7,c71 a registered open-end investment company or a transfer agent acting on behalf of such company may postpone the date of payment or satisfaction upon redemption of a redeemable security under paragraph 7#a7 for a period of not more than #ae business days4 7,b7 ,extension upon determination of exploitation ,the period described in subparagraph 7,a7 may be extended by an additional #aj business days if the registered open-end investment company or a transfer agent acting on behalf of such a company-- 7i7 reasonably believes that-- 7,i7 the redemption is requested by a security holder who is a specified adult2 and 7,,ii7 financial exploitation has occurred1 is occurring1 or has been attempted with respect to such redemption2 7ii7 subject to subparagraph 7,d71 not later than #b days after making a determination under clause 7i71 notifies the individuals specified by that security holder under subsection 7h77#b77;,a7 in writing 7including through electronic delivery7 of the extension of the period described in subparagraph 7,a7 under this subparagraph and the reason for that extension2 7iii7 initiates an internal review of the facts and circumstances relating to the determination under clause 7i72 7iv7 holds amounts relating to the delayed payment or satisfaction upon redemption of the redeemable security in a demand deposit account2 and 7v7 documents and retains records related to carrying out clause 7iv7 and includes those records in the first required account statement of the security holder provided after the date on which the determination is made under clause 7i74 7,c7 ,extension by government ,a ,state regulator1 administrative agency of competent jurisdiction1 or court of competent jurisdiction may extend the period described in subparagraph 7,a74 7,d7 ,notification 7i7 ,exception ,subparagraph 7,b77ii7 shall not apply if a registered open-end investment company or transfer agent acting on behalf of such a company reasonably believes that an individual required to be notified under that subparagraph is1 has been1 or will subject the security holder who identified that individual under subsection 7h77#b77;,a7 to financial exploitation4 7ii7 ,reasonable efforts ,an open-end investment company or transfer agent acting on behalf of such a company shall be considered in compliance with subparagraph 7,b77ii7 if that company or transfer agent makes a reasonable effort to contact the individuals specified by a security holder under subsection 7h77#b77;,a74 7,e7 ,internal procedures ,an open-end investment company or transfer agent acting on behalf of such a company shall establish procedures to carry out the requirements under this subsection1 including procedures-- 7i7 relating to the identification and reporting of matters relating to the financial exploitation of specified adults2 7ii7 to determine whether to release or reinvest delayed redemption proceeds1 taking into account the facts and circumstances of each case1 should the internal review under subparagraph 7,b77iii7 support the reasonable belief described in subparagraph 7,b77i72 7iii7 identifying each employee of the company or transfer agent with authority to establish1 extend1 or terminate a period described in paragraph 7#a7 or subparagraph 7,a72 7iv7 in the case of a transfer agent1 that are reasonably designed to ensure that the employees of the transfer agent comply with this subsection2 and 7v7 in the case of an open-end investment company1 establishing periodic reporting requirements under which a transfer agent acting on behalf of the company shall notify the company of-- 7,i7 each extension under subparagraph 7,b7 authorized by the transfer agent2 7,,ii7 each finding by the transfer agent under subparagraph 7,b77i72 7,,iii7 each notification under subparagraph 7,b77ii7 carried out by the transfer agent2 and 7,,iv7 the results of each internal review initiated by the transfer agent under subparagraph 7,b77iii74 7,f7 ,information included in certain statements ,an open-end investment company shall include in each prospectus or statement of additional information a notification that the company or a transfer agent acting on behalf of the company may postpone redemption of certain securities under this subsection4 7,g7 ,record retention ,an open-end investment company or transfer agent acting on behalf of such a company shall-- 7i7 document and retain records of-- 7,i7 each postponement of redemption under subparagraphs 7,a71 7,b71 and 7,c72 7,,ii7 each finding under subparagraph 7,b77i72 7,,iii7 the name and position of each employee described in subparagraph 7,e77iii72 7,,iv7 each notification carried out under subparagraph 7,b77ii72 and 7,v7 the results of each internal review initiated under subparagraph 7,b77iii72 and 7ii7 make the records described in clause 7i7 available to the ,commission at the request of the ,commission4 7#c7 ,specified adult defined ,in this subsection1 the term specified adult means an individual who-- 7,a7 is not younger than #fe years of age2 or 7,b7 is not younger than #ah years of age and who a registered open-end investment company or a transfer agent acting on behalf of such a company reasonably believes has a mental or physical impairment that renders the individual unable to protect the interests of the individual4 4 7b7 ,recommendations 7#a7 ,in general ,not later than #a year after the date of enactment of this ,act1 the ,securities and ,exchange ,commission1 in consultation with the entities specified in paragraph 7#b71 shall submit to ,congress a report that includes recommendations regarding the regulatory and legislative changes necessary to address the financial exploitation of security holders who are specified adults 7as defined in subsection 7i77#c7 of section #bb of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#bb71 as added by this section74 7#b7 ,consultation ,the entities specified in this paragraph are as follows3 7,a7 ,the ,commodity ,futures ,trading ,commission4 7,b7 ,the ,director of the ,bureau of ,consumer ,financial ,protection4 7,c7 ,the ,financial ,industry ,regulatory ,authority4 7,d7 ,the ,north ,american ,securities ,administrators ,association4 7,e7 ,the ,board of ,governors of the ,federal ,reserve ,system4 7,f7 ,the ,comptroller of the ,currency4 7,g7 ,the ,federal ,deposit ,insurance ,corporation4