SB 0383 Modifies the regulation of securities
LR Number:L1767.01I Fiscal Note:1767-01
Committee:Financial and Governmental Organization
Last Action:03/01/99 - Hearing Conducted S Financial & Governmental Journal page:
Organizations Committee
Effective Date:August 28, 1999
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Current Bill Summary

SB 383 - This act makes changes in the requirements for registering securities. The act allows a securities dealer located in Canada who has no office or physical presence in the state to register and effect transactions in securities under certain conditions. A Canadian dealer may register by filing an application, by filing a consent to service of process, by registering in the jurisdiction from which the dealer is effecting transactions, and by maintaining membership of a self- regulatory organization or stock exchange in Canada. Associated persons representing Canadian dealers may also effect transactions in securities if they are registered and meet certain guidelines.

The act authorizes the Commissioner of Securities to fix a reasonable period of time in which applicants or registrants must furnish required information; applicants or registrants who fail to furnish the information within that time may be denied, suspended, revoked or canceled.

The act requires every person renewing a securities registration statement, other than registration statements for securities of a similar character involving a continuous offering, to pay a renewal fee of one hundred dollars.

The act excludes from the definition of "investment adviser representative" persons employed by a federal covered adviser and having a place of business within the state with a clientele ten percent or less of whom are natural persons. To be excluded from the definition, the persons cannot regularly meet with or solicit clients of the investment adviser but may provide mere investment advisory services. The act includes within the definition of "security" any fractional or pooled interest in a viatical settlement contract.

Certain exemptions from filing securities are deemed to be self-executing and require no filing with the division of securities.

The act allows the Commissioner of Securities to appoint, with the approval of the Secretary of State, an assistant commissioner.

Failure to respond to an investigative request by the Commissioner of Securities within fifteen days is made the basis for the issuance of a cease and desist order.

The act changes certain enforcement powers of the Commissioner to allow the issuance of a cease and desist order or, in cases of willful violations, an order imposing an administrative assessment. Administrative assessments may be imposed of up to $10,000 for a single violation and up to $50,000 for multiple violations. Appeals of circuit court orders will not operate as a stay of the Commissioner's order unless ordered by the court; however, certain administrative assessments will be stayed until the circuit court issues its final order or decree.

An offer to sell or to buy securities is considered not to be made in this state if it is an Internet solicitation originating outside the state and received in the state specifying that it is not being offered to persons in this state, is not specifically directed to any person in this state, and does not result in an offer, sale or purchase of the issuer's securities in this state.