143 
TITLE VII—SENIOR INVESTMENT 
PROTECTION 
SEC. 701. FINDINGS. 
Congress finds that— 
(1) many seniors are targeted by salespersons 
and advisers using misleading certifications and pro-
fessional designations; 
(2) many certifications and professional designa-
tions used by salespersons and advisers represent lim-
ited training or expertise, and may in fact be of no 
value with respect to advising seniors on financial 
and estate planning matters, and far too often, such 
designations are obtained simply by attending a 
weekend seminar and passing an open book, multiple 
choice test; 
(3) many seniors have lost their life savings be-
cause salespersons and advisers holding a misleading 
designation have steered them toward products that 
were unsuitable for them, given their retirement needs 
and life expectancies; 
(4) seniors have a right to clearly know whether 
they are working with a qualified adviser who under-
stands the products and is working in their best in-
terest or a self-interested salesperson or adviser advo-
cating particular products; and 
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(5) many existing State laws and enforcement 
measures addressing the use of certifications, profes-
sional designations, and suitability standards in sell-
ing financial products to seniors are inadequate to 
protect senior investors from salespersons and advis-
ers using such designations. 
SEC. 702. DEFINITIONS. 
For purposes of this title: 
(1) MISLEADING DESIGNATION.—The term ‘‘mis-
leading designation’’— 
(A) means the use of a purported certifi-
cation, professional designation, or other creden-
tial, that indicates or implies that a salesperson 
or adviser has special certification or training in 
advising or servicing seniors; and 
(B) does not include any legitimate certifi-
cation, professional designation, license, or other 
credential, if— 
(i) it has been offered by an academic 
institution having regional accreditation; or 
(ii) it meets the standards for certifi-
cations, licenses, and professional designa-
tions outlined by the North American Secu-
rities Administrators Association (in this 
title referred to as the ‘‘NASAA’’) Model 
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Rule on the Use of Senior-Specific Certifi-
cations and Professional Designations, as in 
effect on the date of the enactment of this 
Act, or any successor thereto, or it was 
issued by or obtained from any State. 
(2) FINANCIAL PRODUCT.—The term ‘‘financial 
product’’ means securities, insurance products (in-
cluding insurance products which pay a return, 
whether fixed or variable), and bank and loan prod-
ucts. 
(3) MISLEADING OR FRAUDULENT MARKETING.— 
The term ‘‘misleading or fraudulent marketing’’ 
means the use of a misleading designation when sell-
ing to or advising a senior about the sale of a finan-
cial product. 
(4) SENIOR.—The term ‘‘senior’’ means any in-
dividual who has attained the age of 62 years or 
more. 
(5) STATE.—The term ‘‘State’’ means each of the 
50 States, the District of Columbia, and the unincor-
porated territories of Puerto Rico and the U.S. Virgin 
Islands. 
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146 
SEC. 703. GRANTS TO STATES FOR ENHANCED PROTECTION 
OF SENIORS FROM BEING MISLEAD BY FALSE 
DESIGNATIONS. 
(a) GRANT PROGRAM.—The Securities and Exchange 
Commission (in this title referred to as the ‘‘Commis-
sion’’)— 
(1) shall establish a program in accordance with 
this title to provide grants to States— 
(A) to investigate and prosecute misleading 
and fraudulent marketing practices; or 
(B) to develop educational materials and 
training aimed at reducing misleading and 
fraudulent marketing of financial products to-
ward seniors; and 
(2) may establish such performance objectives, re-
porting requirements, and application procedures for 
States and State agencies receiving grants under this 
title as the Commission determines are necessary to 
carry out and assess the effectiveness of the program 
under this title. 
(b) USE OF GRANT AMOUNTS.—A grant under this 
title may be used (including through subgrants) by the 
State or the appropriate State agency designated by the 
State— 
(1) to fund additional staff to identify, inves-
tigate, and prosecute (through civil, administrative, 
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147 
or criminal enforcement actions) cases involving mis-
leading or fraudulent marketing of financial products 
to seniors; 
(2) to fund technology, equipment, and training 
for regulators, prosecutors, and law enforcement in 
order to identify salespersons and advisers who target 
seniors through the use of misleading designations; 
(3) to fund technology, equipment, and training 
for prosecutors to increase the successful prosecution 
of those targeting seniors with the use of misleading 
designations; 
(4) to provide educational materials and train-
ing to regulators on the appropriateness of the use of 
designations by salespersons and advisers of financial 
products; 
(5) to provide educational materials and train-
ing to seniors to increase their awareness and under-
standing of designations; and 
(6) to develop comprehensive plans to combat 
misleading or fraudulent marketing of financial prod-
ucts to seniors. 
(c) GRANT REQUIREMENTS.— 
(1) MAXIMUM.—The amount of a grant under 
this title may not exceed $500,000 per fiscal year per 
State, if all requirements of paragraphs (2), (3), (4), 
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and (5) are met. Such amount shall be limited to 
$100,000 per fiscal year per State in any case in 
which the State meets the requirements of— 
(A) paragraphs (2) and (3), but not each of 
paragraphs (4) and (5); or 
(B) paragraphs (4) and (5), but not each of 
paragraphs (2) and (3). 
(2) STANDARD DESIGNATION RULES FOR SECURI-
TIES.—A State shall have adopted rules on the appro-
priate use of designations in the offer or sale of secu-
rities or investment advice, which shall meet or exceed 
the minimum requirements of the NASAA Model Rule 
on the Use of Senior-Specific Certifications and Pro-
fessional Designations, as in effect on the date of the 
enactment of this Act, or any successor thereto. 
(3) SUITABILITY
RULES
FOR
SECURITIES.—A 
State shall have adopted standard rules on the suit-
ability requirements in the sale of securities, which 
shall, to the extent practicable, conform to the min-
imum requirements on suitability imposed by self-reg-
ulatory organization rules under the securities laws 
(as defined in section 3 of the Securities Exchange 
Act of 1934). 
(4) STANDARD DESIGNATION RULES FOR INSUR-
ANCE PRODUCTS.—A State shall have adopted stand-
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ard rules on the appropriate use of designations in 
the sale of insurance products, which shall, to the ex-
tent practicable, conform to the minimum require-
ments of the National Association of Insurance Com-
missioners Model Regulation on the Use of Senior- 
Specific Certifications and Professional Designations 
in the Sale of Life Insurance and Annuities, as in ef-
fect on the date of the enactment of this Act, or any 
successor thereto. 
(5) SUITABILITY AND SUPERVISION RULES FOR 
ANNUITY PRODUCTS.— 
(A) IN
GENERAL.—A State shall have 
adopted rules governing insurer supervision of, 
suitability of, and insurer and insurance pro-
ducer conduct relating to, the sale of annuity 
products, including fixed and index annuities. 
(B) ANNUITY
PRODUCTS
CRITERIA.—The 
rules required by subparagraph (A) shall, to the 
extent practicable, provide— 
(i) that insurers, and insurance pro-
ducers are responsible for, and liable for 
penalties for, the suitability of each rec-
ommended annuity transaction; 
(ii) that insurers and insurance pro-
ducers are required to apply a standard for 
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determining the suitability of each rec-
ommended annuity transaction, including 
fixed and index annuities, that is at least 
as protective of the interests of the consumer 
as rule 2821(b) of the Financial Industry 
Regulatory Authority (in this paragraph re-
ferred to as ‘‘FINRA’’), as in effect on the 
date of the enactment of this Act, or any 
successor to such rule; 
(iii) that insurers and insurance pro-
ducers are required to maintain a process 
for review of the suitability, and approval 
or disapproval, of each recommended annu-
ity transaction that is at least as protective 
of the interests of the consumer as the prin-
cipal review required under rule 2821(c) of 
FINRA, as in effect on the date of the enact-
ment of this Act, or any successor to such 
rule; 
(iv) that insurers and insurance pro-
ducers are required to maintain processes 
for the supervision of direct annuity sales 
and insurance producer-recommended an-
nuity sales (including procedures for the in-
surer to obtain and confirm consumer suit-
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ability information and for the insurer to 
confirm consumer understanding of the an-
nuity transaction) that are at least as pro-
tective of the interests of the consumer as 
member broker and dealer supervision re-
quirements of FINRA, as in effect on the 
date of the enactment of this Act, or any 
successor to such requirements; 
(v) that insurers are required to verify 
that each insurance producer successfully 
completes, and each insurance producer is 
required to receive, training designed to en-
sure that the insurance producer is com-
petent to recommend each class of annuity; 
(vi) that insurers are required to verify 
that insurance producers receive, and insur-
ance producers are required to receive, 
training regarding the features of each of-
fered annuity product, to an extent that is 
at least as protective of the interests of the 
consumer as the FINRA firm element train-
ing requirements, as in effect on the date of 
the enactment of this Act, or any successor 
to such requirements; 
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(vii) for coordination of such rules 
with the rules of FINRA governing member 
brokers, dealers, and security representa-
tives, to the extent appropriate, consistent 
with protecting the interests of consumers, 
for State insurance regulators to rely on, or 
to avoid duplication of FINRA rules; and 
(viii) for exemption from such rules 
only if such exemption is consistent with 
the protection of consumers. 
SEC. 704. APPLICATIONS. 
To be eligible for a grant under this title, the State 
or appropriate State agency shall submit to the Commis-
sion a proposal to use the grant money to protect seniors 
from misleading or fraudulent marketing techniques in the 
offer and sale of financial products, which application 
shall— 
(1) identify the scope of the problem; 
(2) describe how the proposed program will help 
to protect seniors from misleading or fraudulent mar-
keting in the sale of financial products, including, at 
a minimum— 
(A) by proactively identifying senior vic-
tims of misleading and fraudulent marketing in 
the offer and sale of financial products; 
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(B) how the proposed program can assist in 
the investigation and prosecution of those using 
misleading or fraudulent marketing in the offer 
and sale of financial products to seniors; and 
(C) how the proposed program can help dis-
courage and reduce future cases of misleading or 
fraudulent marketing in the offer and sale of fi-
nancial products to seniors; and 
(3) describe how the proposed program is to be 
integrated with other existing State efforts. 
SEC. 705. LENGTH OF PARTICIPATION. 
A State receiving a grant under this title shall be pro-
vided assistance funds for a period of 3 years, after which 
the State may reapply for additional funding. 
SEC. 706. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to carry out 
this title, $8,000,000 for each of the fiscal years 2011 
through 2015. 
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154 
TITLE VIII—REGISTRATION OF 
MUNICIPAL FINANCIAL ADVI-
SORS 
SEC. 801. MUNICIPAL FINANCIAL ADVISER REGISTRATION 
REQUIREMENT. 
(a) IN GENERAL.—The Securities Exchange Act of 
1934 is amended by inserting after section 15E (15 U.S.C. 
78o–7) the following new section: 
‘‘SEC. 15F. MUNICIPAL FINANCIAL ADVISER REGISTRATION 
REQUIREMENT. 
‘‘(a)(1)(A) It shall be unlawful for any person to make 
use of the mails or any means or instrumentality of inter-
state commerce to act as a municipal financial adviser un-
less such person is registered as a municipal financial ad-
viser in accordance with subsection (b). 
‘‘(B) Subparagraph (A) shall not apply to a natural 
person associated with a municipal financial adviser, as 
long as such adviser is registered in accordance with sub-
section (b) and is not a natural person. 
‘‘(2) The Commission, by rule or order, as it deems 
consistent with the public interest and the protection of in-
vestors, may conditionally or unconditionally exempt from 
paragraph (1) of this section any municipal financial ad-
viser or class of municipal financial advisers specified in 
such rule or order. 
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‘‘(b)(1) A municipal financial adviser may be reg-
istered by filing with the Commission an application for 
registration in such form and containing such information 
and documents concerning such municipal financial ad-
viser and any persons associated with such municipal fi-
nancial adviser as the Commission, by rule, may prescribe 
as necessary or appropriate in the public interest or for 
the protection of investors. Within 45 days of the date of 
the filing of such application (or within such longer period 
as to which the applicant consents), the Commission shall— 
‘‘(A) by order grant registration, or 
‘‘(B) institute proceedings to determine whether 
registration should be denied. Such proceedings shall 
include notice of the grounds for denial under consid-
eration and opportunity for hearing and shall be con-
cluded within 120 days of the date of the filing of the 
application for registration. At the conclusion of such 
proceedings, the Commission, by order, shall grant or 
deny such registration. The Commission may extend 
the time for conclusion of such proceedings for up to 
90 days if it finds good cause for such extension and 
publishes its reasons for so finding or for such longer 
period as to which the applicant consents. 
The Commission shall grant such registration if the 
Commission finds that the requirements of this section 
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are satisfied. The Commission shall deny such reg-
istration if it does not make such a finding or if it 
finds that if the applicant were so registered, its reg-
istration would be subject to suspension or revocation 
under paragraph (4). 
‘‘(2) An application for registration of a municipal 
financial adviser to be formed or organized may be made 
by a municipal financial adviser to which the municipal 
financial adviser to be formed or organized is to be the suc-
cessor. Such application, in such form as the Commission, 
by rule, may prescribe, shall contain such information and 
documents concerning the applicant, the successor, and any 
persons associated with the applicant or the successor, as 
the Commission, by rule, may prescribe as necessary or ap-
propriate in the public interest or for the protection of in-
vestors. The grant or denial of registration to such an appli-
cant shall be in accordance with the procedures set forth 
in paragraph (1) of this subsection. If the Commission 
grants such registration, the registration shall terminate on 
the 45th day after the effective date thereof, unless prior 
thereto the successor shall, in accordance with such rules 
and regulations as the Commission may prescribe, adopt 
the application for registration as its own. 
‘‘(3) Any provision of this title (other than section 5 
and subsection (a) of this section) which prohibits any act, 
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practice, or course of business if the mails or any means 
or instrumentality of interstate commerce is used in connec-
tion therewith shall also prohibit any such act, practice, 
or course of business by any registered municipal financial 
adviser or any person acting on behalf of such a municipal 
financial adviser, irrespective of any use of the mails or 
any means or instrumentality of interstate commerce in 
connection therewith. 
‘‘(4) The Commission, by order, shall censure, place 
limitations on the activities, functions, or operations of, 
suspend for a period not exceeding 12 months, or revoke 
the registration of any municipal financial adviser if it 
finds, on the record after notice and opportunity for hear-
ing, that such censure, placing of limitations, suspension, 
or revocation is in the public interest and that such munic-
ipal financial adviser, whether prior or subsequent to be-
coming such, or any person associated with such municipal 
financial adviser, whether prior or subsequent to becoming 
so associated— 
‘‘(A) has willfully made or caused to be made in 
any application for registration or report required to 
be filed with the Commission or with any other ap-
propriate regulatory agency under this title, or in 
any proceeding before the Commission with respect to 
registration, any statement which was at the time 
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and in the light of the circumstances under which it 
was made false or misleading with respect to any ma-
terial fact, or has omitted to state in any such appli-
cation or report any material fact which is required 
to be stated therein; 
‘‘(B) has been convicted within 10 years pre-
ceding the filing of any application for registration or 
at any time thereafter of any felony or misdemeanor 
or of a substantially equivalent crime by a foreign 
court of competent jurisdiction which the Commission 
finds— 
‘‘(i) involves the purchase or sale of any se-
curity, the taking of a false oath, the making of 
a false report, bribery, perjury, burglary, any 
substantially equivalent activity however de-
nominated by the laws of the relevant foreign 
government, or conspiracy to commit any such 
offense; 
‘‘(ii) arises out of the conduct of the busi-
ness of a municipal financial adviser, broker, 
dealer, municipal securities dealer, government 
securities broker, government securities dealer, 
investment adviser, bank, insurance company, fi-
duciary, transfer agent, nationally recognized 
statistical rating organization, foreign person 
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performing a function substantially equivalent to 
any of the above, or entity or person required to 
be registered under the Commodity Exchange Act 
(7 U.S.C. 1 et seq.) or any substantially equiva-
lent foreign statute or regulation; 
‘‘(iii) involves the larceny, theft, robbery, ex-
tortion, forgery, counterfeiting, fraudulent con-
cealment, embezzlement, fraudulent conversion, 
or misappropriation of funds, or securities, or 
substantially equivalent activity however de-
nominated by the laws of the relevant foreign 
government; or 
‘‘(iv) involves the violation of section 152, 
1341, 1342, or 1343 or chapter 25 or 47 of title 
18, or a violation of a substantially equivalent 
foreign statute; 
‘‘(C) is permanently or temporarily enjoined by 
order, judgment, or decree of any court of competent 
jurisdiction from acting as a municipal financial ad-
viser, investment adviser, underwriter, broker, dealer, 
municipal securities dealer, government securities 
broker, government securities dealer, transfer agent, 
nationally recognized statistical rating organization, 
foreign person performing a function substantially 
equivalent to any of the above, or entity or person re-
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quired to be registered under the Commodity Ex-
change Act or any substantially equivalent foreign 
statute or regulation, or as an affiliated person or 
employee of any investment company, bank, insur-
ance company, foreign entity substantially equivalent 
to any of the above, or entity or person required to 
be registered under the Commodity Exchange Act or 
any substantially equivalent foreign statute or regula-
tion or from engaging in or continuing any conduct 
or practice in connection with any such activity, or 
in connection with the purchase or sale of any secu-
rity; 
‘‘(D) has willfully violated any provision of the 
Securities Act of 1933, the Investment Advisers Act of 
1940, the Investment Company Act of 1940, the Com-
modity Exchange Act, this title, the rules or regula-
tions under any of such statutes, or is unable to com-
ply with any such provision; 
‘‘(E) has willfully aided, abetted, counseled, com-
manded, induced, or procured the violation by any 
other person of any provision of the Securities Act of 
1933, the Investment Advisers Act of 1940, the Invest-
ment Company Act of 1940, the Commodity Exchange 
Act, this title, the rules or regulations under any of 
such statutes, or has failed reasonably to supervise, 
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with a view to preventing violations of the provisions 
of such statutes, rules, and regulations, another per-
son who commits such a violation, if such other per-
son is subject to his supervision. For the purposes of 
this subparagraph, no person shall be deemed to have 
failed reasonably to supervise any other person, if— 
‘‘(i) there have been established procedures, 
and a system for applying such procedures, 
which would reasonably be expected to prevent 
and detect, insofar as practicable, any such vio-
lation by such other person, and 
‘‘(ii) such person has reasonably discharged 
the duties and obligations incumbent upon him 
by reason of such procedures and system without 
reasonable cause to believe that such procedures 
and system were not being complied with; 
‘‘(F) is subject to any order of the Commission 
barring or suspending the right of the person to be as-
sociated with a municipal financial adviser; 
‘‘(G) has been found by a foreign financial regu-
latory authority to have— 
‘‘(i) made or caused to be made in any ap-
plication for registration or report required to be 
filed with a foreign financial regulatory author-
ity, or in any proceeding before a foreign finan-
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