Source: http://leg.mt.gov/bills/2017/billhtml/HB0024.htm
Timestamp: 2017-10-23 00:52:45
Document Index: 24177387

Matched Legal Cases: ['arts 1', 'arts 1', 'arts 1', 'arts 1', 'art 3', 'art 3']

AN ACT PROVIDING TO VULNERABLE PERSONS PROTECTIONS FROM FINANCIAL EXPLOITATION; PROVIDING FOR REPORTING OF FINANCIAL EXPLOITATION BY INVESTMENT ADVISERS AND OTHER QUALIFIED INDIVIDUALS; ALLOWING FOR THE DELAY OF DISBURSEMENTS; PROVIDING IMMUNITY; REQUIRING THE PROVISION OF RECORDS TO LAW ENFORCEMENT AND THE DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES; PROVIDING DEFINITIONS; AMENDING SECTIONS 30-10-103 AND 30-10-1003, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.
Section 1. Governmental disclosure -- immunity. (1) If a qualified individual, investment adviser, investment adviser representative, or salesperson reasonably believes that financial exploitation of a vulnerable person may have occurred, may have been attempted, or is being attempted, the qualified individual, investment adviser, investment adviser representative, or salesperson may promptly report the suspected exploitation to the commissioner in the manner outlined in the broker-dealer's or investment adviser's policies and procedures for reporting suspected exploitation. If the policies and procedures do not have a manner outlined, the qualified individual, investment adviser, investment adviser representative, or salesperson may report the suspected exploitation directly to the commissioner.
(2) A qualified individual, investment adviser, investment adviser representative, or salesperson who, in good faith and exercising reasonable care, makes a disclosure of information under this section is immune from administrative or civil liability that might otherwise arise from the disclosure or from any failure to notify the vulnerable person or the person's agent of the disclosure.
Section 2. Third-party disclosure -- immunity. (1) If a qualified individual, investment adviser, investment adviser representative, or salesperson reasonably believes that financial exploitation of a vulnerable person may have occurred, may have been attempted, or is being attempted, the qualified individual, investment adviser, investment adviser representative, or salesperson may notify any third party closely connected to the vulnerable person. Disclosure may not be made to a third party who is suspected of financial exploitation or other abuse of the vulnerable person.
(2) A qualified individual, investment adviser, investment adviser representative, or salesperson who, in good faith and exercising reasonable care, complies with this section is immune from administrative or civil liability that might otherwise arise from the disclosure.
Section 3. Delaying disbursements -- immunity. (1) A broker-dealer or investment adviser may delay a disbursement from an account of a vulnerable person or an account on which a vulnerable person is a beneficiary if:
(a) the broker-dealer, the investment adviser, or a qualified individual reasonably believes, after initiating an internal review of the requested disbursement and the suspected financial exploitation, that the requested disbursement may result in financial exploitation of the vulnerable person; and
(i) not more than 2 business days after the requested disbursement, provides written notification of the delay and the reason for the delay to all parties authorized to transact business on the account, unless the party is reasonably believed to have engaged in suspected or attempted financial exploitation of the vulnerable person;
(ii) not more than 2 business days after the requested disbursement, notifies the commissioner; and
(iii) continues the internal review of the suspected or attempted financial exploitation of the vulnerable person, as necessary, and reports the investigation's results to the commissioner within 7 business days after the requested disbursement.
(2) A delay of a disbursement authorized under this section expires upon the sooner of:
(a) a determination by the broker-dealer or investment adviser that the disbursement will not result in financial exploitation of the vulnerable person; or
(b) 15 business days after the date on which the broker-dealer or investment adviser first delayed the disbursement, unless the commissioner requests that the broker-dealer or investment adviser extend the delay. If extended, the delay expires no more than 25 business days after the date on which the broker-dealer or investment adviser first delayed the disbursement, unless the delay is terminated sooner by the commissioner or by an order of a court of competent jurisdiction.
(3) A court of competent jurisdiction may enter an order extending the delay of the disbursement beyond the timeframe provided in subsection (2) or may order other protective relief based on a petition of the commissioner, the broker-dealer or investment adviser who initiated the delay under this section, or an interested party.
(4) A broker-dealer or investment adviser who, in good faith and exercising reasonable care, complies with this section is immune from administrative or civil liability that might otherwise arise from the delay in a disbursement in accordance with this section.
Section 4. Records. (1) A broker-dealer or investment advisor shall provide access to or copies of records that are relevant to the suspected or attempted financial exploitation of a vulnerable person to the department of public health and human services provided for in 2-15-2201 and to law enforcement, either as part of a referral to the department or to law enforcement or on request of the department or law enforcement pursuant to an investigation. The records may include historical records as well as records relating to the most recent transaction that may constitute financial exploitation of the vulnerable person.
(2) All records made available pursuant to this section are confidential information as defined in 2-6-1002.
(3) Nothing in this section limits or otherwise impedes the authority of the commissioner to access or examine the books and records of broker-dealers and investment advisers as otherwise provided by law.
Section 5. Section 30-10-103, MCA, is amended to read:
"30-10-103. (Temporary) Definitions. When used in parts 1 through 3 and 10 of this chapter, unless the context requires otherwise, the following definitions apply:
(2) "Commissioner" means the securities commissioner provided for in 2-15-1901.
(4) "Commodity Exchange Act" means the federal statute of that name.
(8) (a) "Federal covered adviser" means a person who is registered under section 203 of the Investment Advisers Act of 1940.
(b) A federal covered adviser is not an investment adviser as defined in subsection (11) (12).
(9) "Federal covered security" means a security that is a covered security under section 18(b) of the Securities Act of 1933 or rules promulgated by the commissioner.
(10) "Financial exploitation" means:
(a) the wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, or property of a vulnerable person; or
(b) an act or omission taken by a person, including through the use of a power of attorney, guardianship, or conservatorship of a vulnerable person, to:
(i) obtain control through deception, intimidation, fraud, menace, or undue influence over the vulnerable person's money, assets, or property to deprive the vulnerable person of the ownership, use, benefit, or possession of the vulnerable person's money, assets, or property; or
(ii) convert money, assets, or property of the vulnerable person to deprive the vulnerable person of the ownership, use, benefit, or possession of the vulnerable person's money, assets, or property.
(10)(11) "Guaranteed" means guaranteed as to payment of principal, interest, or dividends.
(11)(12) (a) "Investment adviser" means a person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities.
(i) as an integral component of other financially related services, provides the investment advisory services described in subsection (11)(a) (12)(a) to others for compensation, as part of a business; or
(ii) represents to any person that the financial planner or other person provides the investment advisory services described in subsection (11)(a) (12)(a) to others for compensation.
(iv) a registered broker-dealer whose performance of services described in subsection (11)(a) (12)(a) is solely incidental to the conduct of business and for which the broker-dealer does not receive special compensation;
(vii) an engineer or teacher whose performance of the services described in subsection (11)(a) (12)(a) is solely incidental to the practice of the person's profession;
(ix) other persons not within the intent of this subsection (11) (12) as the commissioner may by rule or order designate.
(12)(13) (a) "Investment adviser representative" means:
(i) any partner of, officer of, director of, or a person occupying a similar status or performing similar functions, or other individual, except clerical or ministerial personnel, employed by or associated with an investment adviser who:
(A) makes any recommendation or otherwise renders advice regarding securities to clients;
(C) solicits, offers, or negotiates for the sale of or sells investment advisory services; or
(D) supervises employees who perform any of the foregoing; and
(ii) with respect to a federal covered adviser, any person who is an investment adviser representative with a place of business in this state as those terms are defined by the securities and exchange commission under the Investment Advisers Act of 1940.
(b) The term does not include a salesperson registered pursuant to 30-10-201(1) whose performance of the services described in subsection (12)(a) (13)(a) of this section is solely incidental to the conduct of business as a salesperson and for which the salesperson does not receive special compensation other than fees relating to the solicitation or offering of investment advisory services of a registered investment adviser or of a federal covered adviser who has made a notice filing under parts 1 through 3 and 10 of this chapter.
(13)(14) "Issuer" means any person who issues or proposes to issue any security, except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors, or persons performing similar functions, or of the fixed, restricted management, or unit type, the term "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which the security is issued.
(14)(15) "Nonissuer" means not directly or indirectly for the benefit of the issuer.
(15)(16) "Offer" or "offer to sell" includes each attempt or offer to dispose of or solicitation of an offer to buy a security or interest in a security for value.
(16)(17) "Person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust in which the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government.
(17)(18) "Precious metal" means the following, in coin, bullion, or other form:
(19) "Qualified individual" means a person who serves in a supervisory, compliance, or legal capacity for a broker-dealer or investment adviser.
(18)(20) "Registered broker-dealer" means a broker-dealer registered pursuant to 30-10-201.
(19)(21) "Sale" or "sell" includes each contract of sale of, contract to sell, or disposition of a security or interest in a security for value.
(20)(22) (a) "Salesperson" means an individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect sales of securities. A partner, officer, or director of a broker-dealer or issuer is a salesperson only if the person otherwise comes within this definition.
(b) Salesperson does not include an individual who represents:
(A) effecting a transaction in a security exempted by 30-10-104(1) through (3) or (8) through (11);
(B) effecting transactions exempted by 30-10-105, except when registration as a salesperson, pursuant to 30-10-201, is required by 30-10-105 or by any rule promulgated under 30-10-105;
(C) effecting transactions in a federal covered security described in section 18(b)(4)(D) of the Securities Act of 1933 if a commission or other remuneration is not paid or given directly or indirectly for soliciting a prospective buyer; or
(ii) a broker-dealer in effecting in this state solely those transactions described in section 15(h)(2) of the Securities Exchange Act of 1934.
(21)(23) "Securities Act of 1933", "Securities Exchange Act of 1934", "Energy Policy Act of 2005", "Investment Advisors Act of 1940", and "Investment Company Act of 1940" mean the federal statutes of those names.
(22)(24) (a) "Security" means any:
(v) commodity investment contract;
(vi) commodity option;
(vii) debenture;
(viii) evidence of indebtedness;
(ix) certificate of interest or participation in any profit-sharing agreement;
(x) collateral-trust certificate;
(xi) preorganization certificate or subscription;
(xii) transferable shares;
(xiii) investment contract;
(xvi) viatical settlement purchase agreement;
(xvii) certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under a title or lease; or
(xviii) in general:
(A) interest or instrument commonly known as a security;
(B) put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities, including any interest in a security or based on the value of a security; or
(C) certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items in this subsection (22)(a)(xviii) (24)(a)(xviii).
(23)(25) "State" means any state, territory, or possession of the United States, as well as the District of Columbia and Puerto Rico.
(24)(26) "Transact", "transact business", or "transaction" includes the meanings of the terms "sale", "sell", and "offer".
(25)(27) "Vulnerable person" means:
(a) a person who is at least 60 years of age;
(b) a person who suffers from mental impairment because of frailties or dependencies typically related to advanced age, such as dementia or memory loss; or
(c) a person who has a developmental disability as defined in 53-20-102; or
(d) a person with a mental disorder. For the purposes of this subsection (27)(d), "mental disorder" means any organic, mental, or emotional impairment that has substantial adverse effects on an individual's cognitive or volitional functions. The term does not include:
(iv) epilepsy. (Terminates June 30, 2017--sec. 16, Ch. 58, L. 2011.)
30-10-103. (Effective July 1, 2017) Definitions. When used in parts 1 through 3 of this chapter, unless the context requires otherwise, the following definitions apply:
(b) The term does not include a person who would be exempt from the definition of investment adviser pursuant to subsection (11)(c)(i), (11)(c)(ii), (11)(c)(iii), (11)(c)(iv), (11)(c)(v), (11)(c)(vi), (11)(c)(vii), or (11)(c)(ix) A federal covered advisor is not an investment advisor as defined in subsection (12).
(b) The term does not include a salesperson registered pursuant to 30-10-201(1) whose performance of the services described in subsection (12)(a) (13)(a) of this section is solely incidental to the conduct of business as a salesperson and for which the salesperson does not receive special compensation other than fees relating to the solicitation or offering of investment advisory services of a registered investment adviser or of a federal covered adviser who has made a notice filing under parts 1 through 3 of this chapter.
(A) effecting a transaction in a security exempted by 30-10-104(1), (2), (3), (8), (9), (10), or (11);
(iv) epilepsy."
Section 6. Section 30-10-1003, MCA, is amended to read:
"30-10-1003. (Temporary) Definitions. As used in this part, the following definitions apply:
(1) "Claimant" means a person who files an application for restitution assistance under this part on behalf of a victim. The claimant and the victim may be the same but do not have to be the same. The term includes the named party in a restitution award in a final order, the executor of a named party in a restitution award in a final order, and the heirs and assigns of a named party in a restitution award in a final order.
(2) "Department" means the office of the securities commissioner established in 2-15-1901.
(3) "Final order" means a final order issued by the commissioner or a final order in a legal action initiated by the commissioner.
(4) "Fund" means the securities restitution assistance fund created by 30-10-1004.
(5) "Securities violation" means a violation of this chapter and any related administrative rules.
(6) "Victim" means a person who was awarded restitution in a final order.
(7) "Vulnerable person" means:
(d) a person with a mental disorder. For the purposes of this subsection (7)(d), "mental disorder" means any organic, mental, or emotional impairment that has substantial adverse effects on an individual's cognitive or volitional functions. The term does not include:
(iv) epilepsy. (Terminates June 30, 2017--sec. 16, Ch. 58, L. 2011.)"
Section 7. Codification instruction. [Sections 1 through 4] are intended to be codified as an integral part of Title 30, chapter 10, part 3, and the provisions of Title 30, chapter 10, part 3, apply to [sections 1 through 4].