H.R. 2478 — Financial Exploitation Prevention Act of 2025

This section amends the Investment Company Act of 1940 (15 U.S.C. 80a-22) to permit a registered open-end investment company (i.e., mutual fund) and its transfer agent, upon notifying the Securities and Exchange Commission of their election, to (1) require holders of non-institutional direct accounts to provide the name and contact information of at least one adult who may be contacted regarding the account, (2) document and retain such information, and (3) disclose that such contacts may be used to address possible financial exploitation, confirm the holder's status, or identify a legal representative. The section further authorizes such companies and transfer agents to postpone redemption payments beyond the normal seven-day limit for up to 15 business days (extendable by an additional 10 business days upon internal review and notice to designated contacts, or longer by state regulator, agency, or court) if they reasonably believe the redemption request is from a specified adult subject to, or at risk of, financial exploitation. (Thus, funds must be held in a demand deposit account during delay.) Companies and transfer agents must establish related internal procedures for identification, reporting, review, employee authorization, and (for transfer agents) periodic notifications to the company.