The recent 2021 NASAA Annual Conference focused on regulatory challenges encountered during the duration of and recovery from the Covid-19 pandemic. NASAA also recently issued press releases related to senior investors and enforcement issues addressed by the states.
The states have taken the lead in the implementation of senior investor initiatives, by enacting the NASAA Model Act to Protect Vulnerable Adults from Financial Exploitation in 2016. As of the conference, 32 states have adopted state laws modeled on or influenced by the Model Act. A legislative commentary issued by NASAA on September 14, 2021, provides information that should be “a must read” for all securities industry participants.
Panels at the conference and a joint press release issued by NASAA, the SEC and FINRA discussed the use of “trusted contacts” by investors and securities professionals. A “trusted contact” according to NASAA Model Rule and FINRA Rules 2165 and 4512, permits the firm to contact a trusted contact authorized by the client to discuss and obtain certain information about the client when financial exploitation has or will take place without action by the firm. The conference panels and the press release indicated these agencies would create educational initiatives to address, at both the investor and industry level, the purpose and practical use of the “trusted contact.”
Another issue addressed was an update for the implementation of continuing education requirements for investment advisory representatives at the state level, which is based upon a NASAA Model Rule adopted on November 30, 2020. As of the conference date one state, Mississippi, has adopted the Model Rule and Michigan, Nevada, Vermont and Wisconsin are in the adoption process. The requirement will be effective the first full year after the rule’s adoption by the state. In the case of Mississippi and other states that adopt the rule by December 31, 2021, the rule will be effective in 2022. The rule requires 12 hours of continuing education annually, comprised of six credits of Products and Practices and six credits of Ethics and Professional Responsibility. Individuals who are subject to and current with the FINRA CE requirements are exempt from the Products and Practice requirement but must complete the Ethics and Professional responsibility requirement.
For more information about the 2021 NASAA Annual Conference, how state regulations may affect your firm or how Oyster can help your firm achieve regulatory compliance, click here and we will be happy to help you.
