The North American Securities Administrators Association (NASAA) proposed Monday a mandatory suspected elder financial abuse reporting requirement for advisors and broker-dealers, as well as their supervisory, compliance and legal professionals.

The requirement applies if there is a “reasonable belief” that abuse has or is about to occur against anyone who is 65 or older or who has a severe mental impairment.

Supervisors were added to the mix to let firms help manage the abuse reporting process, said Montana Deputy Securities Commissioner Lynne Egan.

National Adult Protective Services Association Director Kathleen Quinn called the NASAA model code a big step forward.

Quinn said she is particularly pleased the model act encourages financial companies to share records with governmental adult protective units.

Washington State, Delaware and Missouri have laws on the books similar to what NASAA is proposing.

Bills like the NASAA model have been introduced in the Indiana and Nebraska state legislatures this year.

The proposal doesn't give specific penalties for supervisory workers who fail to report cases of abuses. But if the law were to be adopted in her home state of Montana, Egan said, fines or suspensions would likely be imposed rather than jail time.

A key provision of the proposal gives advisors and broker-dealers the authority to initially delay disbursements from an account of an eligible adult for up to 15 business days if financial exploitation is suspected. The delay can be extended for an additional 10 days at the request of either the state securities regulator or adult protective services.

A spokesperson for the Financial Services Institute applauded the NASAA move and noted it meshes with FINRA’s guidance on reporting senior financial exploitation.