Florida Senate - 2013                              CS for SB 814
       
       
       
       By the Committee on Banking and Insurance; and Senator Brandes
       
       
       
       
       597-03996-13                                           2013814c1
    1                        A bill to be entitled                      
    2         An act relating to branch offices conducting
    3         securities transactions; amending s. 517.12, F.S.;
    4         providing for a branch office notice filing with the
    5         Office of Financial Regulation in lieu of
    6         registration; creating s. 517.1202, F.S.; prohibiting
    7         a securities dealer or investment advisor from
    8         conducting business from a branch office unless a
    9         specified notice has been filed with the office;
   10         providing requirements and procedures with respect to
   11         notice filing for branch offices; authorizing the
   12         Financial Services Commission to adopt rules relating
   13         to such notice filings; providing a fee for a branch
   14         office notice filing; providing for expiration,
   15         renewal, suspension, revocation, and termination of
   16         branch office notice filings under specified
   17         circumstances; providing applicability and
   18         construction with respect to fees collected for branch
   19         office notice filings; amending ss. 517.1205, 517.121,
   20         517.161, 517.1611, and 517.211, F.S.; conforming
   21         provisions to changes made by the act with respect to
   22         requiring branch office notice filings with the Office
   23         of Financial Regulation in lieu of registration;
   24         providing an effective date.
   25  
   26  Be It Enacted by the Legislature of the State of Florida:
   27  
   28         Section 1. Subsections (5), (6), (10), (11), (12), (14),
   29  and (15) of section 517.12, Florida Statutes, are amended to
   30  read:
   31         517.12 Registration of dealers, associated persons, and
   32  investment advisers, and branch offices.—
   33         (5) No dealer or investment adviser shall conduct business
   34  from a branch office within this state unless the branch office
   35  is notice-filed with the office pursuant to s. 517.1202
   36  registered with the office pursuant to the provisions of this
   37  section.
   38         (6) A dealer, associated person, or investment adviser, or
   39  branch office, in order to obtain registration, must file with
   40  the office a written application, on a form which the commission
   41  may by rule prescribe. The commission may establish, by rule,
   42  procedures for depositing fees and filing documents by
   43  electronic means provided such procedures provide the office
   44  with the information and data required by this section. Each
   45  dealer or investment adviser must also file an irrevocable
   46  written consent to service of civil process similar to that
   47  provided for in s. 517.101. The application shall contain such
   48  information as the commission or office may require concerning
   49  such matters as:
   50         (a) The name of the applicant and the address of its
   51  principal office and each office in this state.
   52         (b) The applicant’s form and place of organization; and, if
   53  the applicant is a corporation, a copy of its articles of
   54  incorporation and amendments to the articles of incorporation
   55  or, if a partnership, a copy of the partnership agreement.
   56         (c) The applicant’s proposed method of doing business and
   57  financial condition and history, including a certified financial
   58  statement showing all assets and all liabilities, including
   59  contingent liabilities of the applicant as of a date not more
   60  than 90 days prior to the filing of the application.
   61         (d) The names and addresses of all associated persons of
   62  the applicant to be employed in this state and the offices to
   63  which they will be assigned.
   64         (10) An applicant for registration shall pay an assessment
   65  fee of $200, in the case of a dealer or investment adviser, or
   66  $50, in the case of an associated person. An associated person
   67  may be assessed an additional fee to cover the cost for the
   68  fingerprint cards to be processed by the office. Such fee shall
   69  be determined by rule of the commission. Each dealer and each
   70  investment adviser shall pay an assessment fee of $100 for each
   71  office in this state. Such fees become the revenue of the state,
   72  except for those assessments provided for under s. 517.131(1)
   73  until such time as the Securities Guaranty Fund satisfies the
   74  statutory limits, and are not returnable in the event that
   75  registration is withdrawn or not granted.
   76         (11) If the office finds that the applicant is of good
   77  repute and character and has complied with the provisions of
   78  this chapter and the rules made pursuant hereto, it shall
   79  register the applicant. The registration of each dealer,
   80  investment adviser, branch office, and associated person expires
   81  on December 31 of the year the registration became effective
   82  unless the registrant has renewed his or her registration on or
   83  before that date. The commission may establish by rule
   84  procedures for renewing the registration of a branch office
   85  through the Central Registration Depository. Registration may be
   86  renewed by furnishing such information as the commission may
   87  require, together with payment of the fee required in subsection
   88  (10) for dealers, investment advisers, or associated persons, or
   89  branch offices and the payment of any amount lawfully due and
   90  owing to the office pursuant to any order of the office or
   91  pursuant to any agreement with the office. Any dealer,
   92  investment adviser, or associated person, or branch office
   93  registrant who has not renewed a registration by the time the
   94  current registration expires may request reinstatement of such
   95  registration by filing with the office, on or before January 31
   96  of the year following the year of expiration, such information
   97  as may be required by the commission, together with payment of
   98  the fee required in subsection (10) for dealers, investment
   99  advisers, or associated persons, or branch office and a late fee
  100  equal to the amount of such fee. Any reinstatement of
  101  registration granted by the office during the month of January
  102  shall be deemed effective retroactive to January 1 of that year.
  103         (12)(a) The office may issue a license to a dealer,
  104  investment adviser, or associated person, or branch office to
  105  evidence registration under this chapter. The office may require
  106  the return to the office of any license it may issue prior to
  107  issuing a new license.
  108         (b) Every dealer, investment adviser, or federal covered
  109  adviser shall promptly file with the office, as prescribed by
  110  rules adopted by the commission, notice as to the termination of
  111  employment of any associated person registered for such dealer
  112  or investment adviser in this state and shall also furnish the
  113  reason or reasons for such termination.
  114         (c) Each dealer or investment adviser shall designate in
  115  writing to, and register with, the office a manager for each
  116  office the dealer or investment adviser has in this state.
  117         (14) Every dealer or, investment adviser, or branch office
  118  registered or required to be registered, or branch office
  119  notice-filed or required to be notice-filed, with the office
  120  shall keep records of all currency transactions in excess of
  121  $10,000 and shall file reports, as prescribed under the
  122  financial recordkeeping regulations in 31 C.F.R. part 103, with
  123  the office when transactions occur in or from this state. All
  124  reports required by this subsection to be filed with the office
  125  shall be confidential and exempt from s. 119.07(1) except that
  126  any law enforcement agency or the Department of Revenue shall
  127  have access to, and shall be authorized to inspect and copy,
  128  such reports.
  129         (15)(a) In order to facilitate uniformity and streamline
  130  procedures for persons who are subject to registration or
  131  notification in multiple jurisdictions, the commission may adopt
  132  by rule uniform forms that have been approved by the Securities
  133  and Exchange Commission, and any subsequent amendments to such
  134  forms, if the forms are substantially consistent with the
  135  provisions of this chapter. Uniform forms that the commission
  136  may adopt to administer this section include, but are not
  137  limited to:
  138         1. Form BR, Uniform Branch Office Registration Form,
  139  adopted October 2005.
  140         2. Form U4, Uniform Application for Securities Industry
  141  Registration or Transfer, adopted October 2005.
  142         3. Form U5, Uniform Termination Notice for Securities
  143  Industry Registration, adopted October 2005.
  144         4. Form ADV, Uniform Application for Investment Adviser
  145  Registration, adopted October 2003.
  146         5. Form ADV-W, Notice of Withdrawal from Registration as an
  147  Investment Adviser, adopted October 2003.
  148         6. Form BD, Uniform Application for Broker-Dealer
  149  Registration, adopted July 1999.
  150         7. Form BDW, Uniform Request for Broker-Dealer Withdrawal,
  151  adopted August 1999.
  152         (b) In lieu of filing with the office the applications
  153  specified in subsection (6), the fees required by subsection
  154  (10), the renewals required by subsection (11), and the
  155  termination notices required by subsection (12), the commission
  156  may by rule establish procedures for the deposit of such fees
  157  and documents with the Central Registration Depository or the
  158  Investment Adviser Registration Depository of the Financial
  159  Industry Regulatory Authority, as developed under contract with
  160  the North American Securities Administrators Association, Inc.
  161         Section 2. Section 517.1202, Florida Statutes, is created
  162  to read:
  163         517.1202 Notice filing requirements for branch offices.—
  164         (1) It is unlawful for a dealer or investment adviser to
  165  conduct business from a branch office in this state unless the
  166  dealer or investment adviser has made a branch office notice
  167  filing with the office. A notice filing under this section
  168  consists of a form that the commission may prescribe by rule.
  169  The commission may establish, by rule, procedures for the
  170  deposit of fees and filing of documents by electronic means if
  171  the procedures provide the office with the information and data
  172  required by this section.
  173         (2) A notice filing shall be effective upon receipt by the
  174  office of the form and filing fee. Each dealer and each
  175  investment adviser shall pay a filing fee of $100 for each
  176  branch office in this state.
  177         (3) A notice filing shall expire on December 31 of the year
  178  in which the filing became effective unless the dealer or
  179  investment adviser has renewed the filing on or before that
  180  date. A dealer or investment adviser may renew a branch office
  181  notice filing by furnishing to the office such information as
  182  the commission or office may require, together with a renewal
  183  fee of $100 and the payment of any amount due and owing the
  184  office pursuant to any agreement with the office. Any dealer or
  185  investment adviser who has not renewed a branch office notice
  186  filing by the time a current notice filing expires may request
  187  reinstatement of such notice filing by filing with the office,
  188  on or before January 31 of the year following the year the
  189  notice filing expires, such information as the commission or
  190  office may require, together with the filing fee of $100 and a
  191  late fee equal to $100. Any reinstatement of a branch office
  192  notice filing granted by the office during the month of January
  193  shall be deemed effective retroactive to January 1 of that year.
  194         (4) A branch office notice filing under this section shall
  195  be summarily suspended by the office if the notice filer fails
  196  to provide to the office, within 30 days after a written request
  197  by the office, all of the information required by this section
  198  and the rules adopted under this section. The summary suspension
  199  shall be in effect for the branch office until such time as the
  200  notice filer submits the requested information to the office,
  201  pays a fine as prescribed by s. 517.221(3), and a final order is
  202  entered. At such time, the suspension shall be lifted. For
  203  purposes of s. 120.60(6), failure to provide all information
  204  required by this section and the underlying rules constitutes
  205  immediate and serious danger to the public health, safety, and
  206  welfare. If the notice filer fails to provide all of the
  207  requested information within a period of 90 days, the notice
  208  filing shall be revoked by the office.
  209         (5) Notification under this section may be revoked by the
  210  office if the notice filer makes payment to the office for a
  211  branch office notice filing with a check or electronic
  212  transmission of funds which is dishonored by the notice filer’s
  213  financial institution.
  214         (6) The commission may require, by rule, a dealer or
  215  investment adviser who has made a branch office notice filing
  216  pursuant to this section to file amendments with the office.
  217         (7) A branch office notice filing may be terminated by
  218  filing notice of such termination with the office. Unless
  219  another date is specified by the dealer or investment adviser,
  220  such notice shall be effective upon its receipt by the office.
  221         (8) All fees collected under this section become the
  222  revenue of the state, except for those assessments provided for
  223  under s. 517.131(1) until such time as the Securities Guaranty
  224  Fund satisfies the statutory limits, and are not returnable in
  225  the event that a branch office notice filing is withdrawn.
  226         Section 3. Section 517.1205, Florida Statutes, is amended
  227  to read:
  228         517.1205 Registration of associated persons specific as to
  229  securities dealer, investment adviser, or federal covered
  230  adviser identified at time of registration approval.—Inasmuch as
  231  this chapter is intended to protect investors in securities
  232  offerings and other investment transactions regulated by that
  233  chapter, its provisions are to be construed to require full and
  234  fair disclosure of all, but only, those matters material to the
  235  investor’s evaluation of the offering or other transaction. It
  236  should, furthermore, be construed to impose the standards
  237  provided by law on all those seeking to participate in the
  238  state’s securities industry through registration as a securities
  239  dealer, investment adviser, or associated person. To this end,
  240  it is declared to be the intent of the Legislature that the
  241  registration of associated persons required by law is specific
  242  to the securities dealer, investment adviser, or federal covered
  243  adviser identified at the time such registration is approved.
  244  Notwithstanding any interpretation of law to the contrary, the
  245  historical practice of the Department of Banking and Finance,
  246  reflected in its rules, that requires a new application for
  247  registration from a previously registered associated person when
  248  that person seeks to be associated with a new securities dealer
  249  or investment adviser is hereby ratified and approved as
  250  consistent with legislative intent. It is, finally, declared to
  251  be the intent of the Legislature that while approval of an
  252  application for registration of a securities dealer, investment
  253  adviser, or associated person, or branch office requires a
  254  finding of the applicant’s good repute and character, such
  255  finding is precluded by a determination that the applicant may
  256  be denied registration on grounds provided by law.
  257         Section 4. Subsections (2) and (3) of section 517.121,
  258  Florida Statutes, are amended to read:
  259         517.121 Books and records requirements; examinations.—
  260         (2) The office shall, at intermittent periods, examine the
  261  affairs and books and records of each registered dealer,
  262  investment adviser, branch office, or associated person, or
  263  branch office notice-filed with the office, or require such
  264  records and reports to be submitted to it as required by rule of
  265  the commission, to determine compliance with this act.
  266         (3) Registration under s. 517.12 or notification under s.
  267  517.1202 may be summarily suspended by the office pursuant to s.
  268  120.60(6) if the registrant or notice-filed branch office fails
  269  to promptly provide to the office, after a written request, any
  270  of the records required by this section and the rules adopted
  271  under this section. The suspension may be rescinded if the
  272  registrant or notice-filed branch office submits the requested
  273  records to the office. For purposes of s. 120.60(6), failure to
  274  provide substantially all of such records constitutes immediate
  275  and serious danger to the public health, safety, and welfare.
  276         Section 5. Paragraphs (j) and (n) of subsection (1) of
  277  section 517.161, Florida Statutes, are amended to read:
  278         517.161 Revocation, denial, or suspension of registration
  279  of dealer, investment adviser, or associated person, or branch
  280  office.—
  281         (1) Registration under s. 517.12 may be denied or any
  282  registration granted may be revoked, restricted, or suspended by
  283  the office if the office determines that such applicant or
  284  registrant; any member, principal, or director of the applicant
  285  or registrant or any person having a similar status or
  286  performing similar functions; or any person directly or
  287  indirectly controlling the applicant or registrant:
  288         (j) Has been convicted of, or has entered a plea of guilty
  289  or nolo contendere to, regardless of whether adjudication was
  290  withheld, a crime against the laws of this state or any other
  291  state or of the United States or of any other country or
  292  government which relates to registration as a dealer, investment
  293  adviser, issuer of securities, or associated person, or branch
  294  office; which relates to the application for such registration;
  295  or which involves moral turpitude or fraudulent or dishonest
  296  dealing;
  297         (n) Made payment to the office for a registration or notice
  298  filing with a check or electronic transmission of funds that is
  299  dishonored by the applicant’s or, registrant’s, or notice
  300  filer’s financial institution.
  301         Section 6. Paragraph (b) of subsection (2) of section
  302  517.1611, Florida Statutes, is amended to read:
  303         517.1611 Guidelines.—
  304         (2) The commission shall adopt by rule disqualifying
  305  periods pursuant to which an applicant will be disqualified from
  306  eligibility for registration based upon criminal convictions,
  307  pleas of nolo contendere, or pleas of guilt, regardless of
  308  whether adjudication was withheld, by the applicant; any
  309  partner, member, officer, or director of the applicant or any
  310  person having a similar status or performing similar functions;
  311  or any person directly or indirectly controlling the applicant.
  312         (b) The disqualifying periods shall be related to crimes
  313  involving registration as a dealer, investment adviser, issuer
  314  of securities, or associated person, or branch office or the
  315  application for such registration or involving moral turpitude
  316  or fraudulent or dishonest dealing.
  317         Section 7. Subsection (1) of section 517.211, Florida
  318  Statutes, is amended to read:
  319         517.211 Remedies available in cases of unlawful sale.—
  320         (1) Every sale made in violation of either s. 517.07 or s.
  321  517.12(1), (4), (5), (9), (11), (13), (16), or (18) may be
  322  rescinded at the election of the purchaser, except a sale made
  323  in violation of the provisions of s. 517.1202(3) 517.12(11)
  324  relating to a renewal of a branch office notification
  325  registration shall not be subject to this section, and a sale
  326  made in violation of the provisions of s. 517.12(13) relating to
  327  filing a change of address amendment shall not be subject to
  328  this section. Each person making the sale and every director,
  329  officer, partner, or agent of or for the seller, if the
  330  director, officer, partner, or agent has personally participated
  331  or aided in making the sale, is jointly and severally liable to
  332  the purchaser in an action for rescission, if the purchaser
  333  still owns the security, or for damages, if the purchaser has
  334  sold the security. No purchaser otherwise entitled will have the
  335  benefit of this subsection who has refused or failed, within 30
  336  days of receipt, to accept an offer made in writing by the
  337  seller, if the purchaser has not sold the security, to take back
  338  the security in question and to refund the full amount paid by
  339  the purchaser or, if the purchaser has sold the security, to pay
  340  the purchaser an amount equal to the difference between the
  341  amount paid for the security and the amount received by the
  342  purchaser on the sale of the security, together, in either case,
  343  with interest on the full amount paid for the security by the
  344  purchaser at the legal rate, pursuant to s. 55.03, for the
  345  period from the date of payment by the purchaser to the date of
  346  repayment, less the amount of any income received by the
  347  purchaser on the security.
  348         Section 8. This act shall take effect October 1, 2013.