Title: Financial Exploitation Prevention Act of 2021
Policy area: Finance and Financial Sector

Summary:
Financial Exploitation Prevention Act of 2021
This bill allows for the delay of the redemption of a security issued by an open-end investment management company if the company or transfer agent reasonably believes the redemption involves the financial exploitation of an individual age 65 or older or an individual age 18 or older who is unable to protect his or her own interests. Open-end investment management companies offer securities in pooled investment vehicles such as mutual funds.
Additionally, the Securities and Exchange Commission must make legislative and regulatory recommendations to address the financial exploitation of such adults.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2265 Introduced in House (IH)]

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117th CONGRESS
  1st Session
                                H. R. 2265

  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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 26, 2021

 Mrs. Wagner introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 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.

    Be it enacted by the Senate and House of Representatives 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 2021''.

SEC. 2. REDEMPTION OF CERTAIN SECURITIES POSTPONED.

    (a) In General.--Section 22 of the Investment Company Act of 1940 
(15 U.S.C. 80a-22) is amended by adding at the end the following:
    ``(h) Redemption of Certain Securities Postponed.--
            ``(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 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 such redemption is requested 
        through the financial exploitation of a security holder who is 
        a specified adult.
            ``(2) Duration.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), 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 (1) for a period of not more than 15 
                business days.
                    ``(B) Extension upon determination of 
                exploitation.--The period described in subparagraph (A) 
                may be extended by an additional 10 business days if 
                the registered open-end investment company or a 
                transfer agent acting on behalf of such company 
                determines through an internal review that the 
                redemption described in such subparagraph is requested 
                through the financial exploitation of a security holder 
                who is a specified adult.
                    ``(C) Extension by government.--A State regulator, 
                administrative agency of competent jurisdiction, or 
                court of competent jurisdiction may extend the period 
                described in subparagraph (A).
            ``(3) Specified adult defined.--In this subsection, 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 impairment that 
                renders the individual unable to protect his or her own 
                interests.''.
    (b) Recommendations.--
            (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 regarding the regulatory and legislative 
        changes necessary to address the financial exploitation of 
        security holders who are specified adults (as defined in 
        subsection (h)(3) of section 22 of the Investment Company 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 Commission.
                    (B) The Director of the Bureau of Consumer 
                Financial Protection.
                    (C) The Financial Industry Regulatory Authority.
                    (D) The North American Securities Administrators 
                Association.
                    (E) The Board of Governors of the Federal Reserve 
                System.
                    (F) The Comptroller of the Currency.
                    (G) The Federal Deposit Insurance Corporation.
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