IB 
Union Calendar No. 313 
119TH CONGRESS 
1ST SESSION H. R. 2478 
[Report No. 119–361] 
To amend the Investment Company Act of 1940 to postpone the date of 
payment or satisfaction upon redemption of certain securities in the 
case of the financial exploitation of specified adults, and for other pur-
poses. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 27, 2025 
Mrs. WAGNER (for herself, Mr. GOTTHEIMER, Mr. GARBARINO, Mr. STEIL, 
Mrs. KIM, Ms. PEREZ, and Mr. LAWLER) introduced the following bill; 
which was referred to the Committee on Financial Services 
NOVEMBER 4, 2025 
Additional sponsors: Mr. HUIZENGA, Mr. VINDMAN, Mr. FIELDS, Mr. 
SESSIONS, and Mr. NUNN of Iowa 
NOVEMBER 4, 2025 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on March 27, 2025] 
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A BILL 
To amend the Investment Company Act of 1940 to postpone 
the date of payment or satisfaction upon redemption 
of certain securities in the case of the financial exploi-
tation of specified adults, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Financial Exploitation 
Prevention Act of 2025’’. 
SEC. 2. REDEMPTION OF CERTAIN SECURITIES POST-
PONED. 
(a) IN GENERAL.—Section 22 of the Investment Com-
pany Act of 1940 (15 U.S.C. 80a–22) is amended by adding 
at the end the following: 
‘‘(h) REQUIREMENTS WITH RESPECT TO NON-INSTI-
TUTIONAL DIRECT AT-FUND ACCOUNTS.— 
‘‘(1) ELECTION.— 
‘‘(A) IN GENERAL.—A registered open-end 
investment company and a transfer agent de-
scribed under paragraph (2) may elect to comply 
with the requirements under paragraph (2) and 
subsection (i) by notifying the Commission of 
such election. 
‘‘(B) EFFECT
OF
ELECTION.—Paragraph 
(2) and subsection (i) shall only apply to a reg-
istered open-end investment company and a 
transfer agent that have made the election under 
subparagraph (A). 
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‘‘(2) REQUIREMENTS.—In the case of a customer 
who is a holder of a non-institutional account held 
directly with a registered open-end investment com-
pany and serviced by a transfer agent (a ‘direct-at- 
fund account’), the company and transfer agent 
shall— 
‘‘(A) request from such customer the name 
and contact information of at least one indi-
vidual who— 
‘‘(i) is at the time of such request an 
adult; and 
‘‘(ii) may be contacted with respect to 
such account; 
‘‘(B) document and retain the information 
received pursuant to subparagraph (A); and 
‘‘(C) disclose to such customer in writing 
(including through electronic delivery) that such 
company or transfer agent may contact an indi-
vidual specified pursuant to subparagraph (A) 
with respect to the account of such customer to— 
‘‘(i) address possible financial exploi-
tation of such customer; 
‘‘(ii) confirm the contact information 
or health status of the customer; or 
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‘‘(iii) identify any legal guardian, ex-
ecutor, trustee, or holder of a power of attor-
ney of the customer. 
‘‘(i) REDEMPTION
OF CERTAIN SECURITIES POST-
PONED.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(e), 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 re-
demption of any redeemable security in accordance 
with its terms for more than seven days after the ten-
der of such security to such company or its agent des-
ignated for that purpose for redemption if such com-
pany or agent reasonably believes that— 
‘‘(A) the redemption is requested by a secu-
rity holder who is a specified adult; and 
‘‘(B) financial exploitation has occurred, is 
occurring, or has been attempted with respect to 
such redemption. 
‘‘(2) DURATION.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraphs (B) and (C), a registered open- 
end investment company or a transfer agent act-
ing on behalf of such company may postpone the 
date of payment or satisfaction upon redemption 
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of a redeemable security under paragraph (1) for 
a period of not more than 15 business days. 
‘‘(B) EXTENSION UPON DETERMINATION OF 
EXPLOITATION.—The period described in sub-
paragraph (A) may be extended by an addi-
tional 10 business days if the registered open-end 
investment company or a transfer agent acting 
on behalf of such company— 
‘‘(i) reasonably believes that— 
‘‘(I) the redemption is requested 
by a security holder who is a specified 
adult; and 
‘‘(II) financial exploitation has 
occurred, is occurring, or has been at-
tempted with respect to such redemp-
tion; 
‘‘(ii) subject to subparagraph (D), not 
later than 2 days after making a deter-
mination under clause (i), notifies the indi-
viduals specified by such security holder 
under subsection (h)(2)(A) in writing (in-
cluding through electronic delivery) of the 
extension of the period described in sub-
paragraph (A) under this subparagraph 
and the reason for such extension; 
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‘‘(iii) initiates an internal review of 
the facts and circumstances relating to the 
determination under clause (i); 
‘‘(iv) holds amounts related to the de-
layed payment or satisfaction upon redemp-
tion of the redeemable security in a demand 
deposit account; and 
‘‘(v) documents and retains records re-
lated to carrying out clause (iv) and in-
cludes such records in the first required ac-
count statement of the security holder pro-
vided after the date on which the determina-
tion is made under clause (i). 
‘‘(C) 
EXTENSION
BY
GOVERNMENT.—A 
State regulator, administrative agency of com-
petent jurisdiction, or court of competent juris-
diction may extend the period described in sub-
paragraph (A). 
‘‘(D) NOTIFICATION.— 
‘‘(i) 
EXCEPTION.—Subparagraph 
(B)(ii) shall not apply if a registered open- 
end investment company or transfer agent 
acting on behalf of such company reason-
ably believes that an individual required to 
be notified under such subparagraph is, has 
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been, or will subject the security holder who 
identified such individual under subsection 
(h)(2)(A) to financial exploitation. 
‘‘(ii) 
REASONABLE
EFFORTS.—An 
open-end investment company or transfer 
agent acting on behalf of such company 
shall be considered in compliance with sub-
paragraph (B)(ii) if such company or 
transfer agent makes a reasonable effort to 
contact the individuals specified by a secu-
rity holder under subsection (h)(2)(A). 
‘‘(E) INTERNAL
PROCEDURES.—An open- 
end investment company or transfer agent acting 
on behalf of such company shall establish proce-
dures to carry out the requirements under this 
subsection, including procedures— 
‘‘(i) related to the identification and 
reporting of matters related to the financial 
exploitation of specified adults; 
‘‘(ii) to determine whether to release or 
reinvest delayed redemption proceeds, tak-
ing into account the facts and cir-
cumstances of each case, should the internal 
review under subparagraph (B)(iii) support 
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the reasonable belief described in subpara-
graph (B)(i); 
‘‘(iii) identifying each employee of the 
company or transfer agent with authority 
to establish, extend, or terminate a period 
described in paragraph (1) or subparagraph 
(A); 
‘‘(iv) in the case of a transfer agent, 
that are reasonably designed to ensure that 
the employees of such transfer agent comply 
with this subsection; and 
‘‘(v) in the case of an open-end invest-
ment company, establishing periodic report-
ing requirements under which a transfer 
agent acting on behalf of such company 
shall notify such company of— 
‘‘(I) each extension under sub-
paragraph (B) authorized by such 
transfer agent; 
‘‘(II) each finding by the transfer 
agent under subparagraph (B)(i); 
‘‘(III) each notification under 
subparagraph (B)(ii) carried out by 
such transfer agent; and 
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‘‘(IV) the results of each internal 
review initiated by the transfer agent 
under subparagraph (B)(iii). 
‘‘(F) INFORMATION INCLUDED IN CERTAIN 
STATEMENTS.—An open-end investment com-
pany shall include in each prospectus or state-
ment of additional information a notification 
that the company or transfer agent acting on be-
half of such company may postpone redemption 
of certain securities under this subsection. 
‘‘(G) RECORD
RETENTION.—An open-end 
investment company or transfer agent acting on 
behalf of such company shall— 
‘‘(i) document and retain records of— 
‘‘(I) each postponement of re-
demption under subparagraph (A), 
(B), or (C); 
‘‘(II) each finding under subpara-
graph (B)(i); 
‘‘(III) the name and position of 
each employee described in subpara-
graph (E)(iii); 
‘‘(IV) each notification carried 
out under subparagraph (B)(ii); and 
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‘‘(V) the results of each internal 
review initiated under subparagraph 
(B)(iii); and 
‘‘(ii) make such records available to the 
Commission at the request of the Commis-
sion. 
‘‘(3) SPECIFIED ADULT DEFINED.—In this sub-
section, the term ‘specified adult’ means— 
‘‘(A) an individual age 65 or older; or 
‘‘(B) an individual age 18 or older who a 
registered open-end investment company or a 
transfer agent acting on behalf of such company 
reasonably believes has a mental or physical im-
pairment that renders the individual unable to 
protect the individual’s own interests.’’. 
(b) REGULATORY
AND LEGISLATIVE RECOMMENDA-
TIONS.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this section, the Securities 
and Exchange Commission, in consultation with the 
entities specified in paragraph (2), shall submit to 
Congress a report that includes recommendations re-
garding the regulatory and legislative changes nec-
essary to address the financial exploitation of security 
holders who are specified adults (as defined in sub-
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section (i)(3) of section 22 of the Investment Com-
pany Act of 1940 (15 U.S.C. 80a–22), as added by 
this section). 
(2) CONSULTATION.—The entities specified in 
this paragraph are as follows: 
(A) The Commodity Futures Trading Com-
mission. 
(B) The Director of the Bureau of Consumer 
Financial Protection. 
(C) The Financial Industry Regulatory Au-
thority. 
(D) The North American Securities Admin-
istrators Association. 
(E) The Board of Governors of the Federal 
Reserve System. 
(F) The Comptroller of the Currency. 
(G) The Federal Deposit Insurance Cor-
poration. 
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Union Calendar No. 313 
119TH CONGRESS 
1ST SESSION 
H. R. 2478 
[Report No. 119–361] 
A BILL 
To amend the Investment Company Act of 1940 to 
postpone the date of payment or satisfaction 
upon redemption of certain securities in the case 
of the financial exploitation of specified adults, 
and for other purposes. 
NOVEMBER 4, 2025 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
VerDate Sep 11 2014 
20:33 Nov 04, 2025
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