Florida Senate - 2016 COMMITTEE AMENDMENT Bill No. SB 1106 Ì451028ÂÎ451028 LEGISLATIVE ACTION Senate . House Comm: RCS . 02/24/2016 . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— Appropriations Subcommittee on General Government (Hays) recommended the following: 1 Senate Amendment (with title amendment) 2 3 Delete everything after the enacting clause 4 and insert: 5 Section 1. Present subsections (10) and (11) of section 6 663.01, Florida Statutes, are renumbered as subsections (11) and 7 (12), respectively, and a new subsection (10) is added to that 8 section, to read: 9 663.01 Definitions.—As used in this part, the term: 10 (10) “International trust entity” means an international 11 trust company, an international business, an international 12 business organization, or an affiliated or subsidiary entity 13 that is licensed, chartered, or similarly permitted to conduct 14 trust business in a foreign country or countries under the laws 15 of which it is organized and supervised. 16 Section 2. Section 663.041, Florida Statutes, is created to 17 read: 18 663.041 Moratorium on the office’s enforcement of licensing 19 requirements for an international trust entity or related 20 entities.— 21 (1) The office shall delay the enforcement of the 22 requirement under s. 663.04(4) relating to licensure of an 23 organization or entity in this state providing services to an 24 international trust entity that engages in the activities 25 described in s. 663.0625. This delay extends to any person who 26 manages or controls or is employed by such organization or 27 entity that: 28 (a) Has been organized to conduct business in this state 29 before October 1, 2013; 30 (b) Has not been fined or sanctioned as a result of any 31 complaint to the office or to any other state or federal 32 regulatory agency; 33 (c) Has not been convicted of a felony or ordered to pay a 34 fine or penalty in any proceeding initiated by any federal, 35 state, foreign, or local law enforcement agency or international 36 agency within the 10 years before the effective date of this 37 section; 38 (d) Has not had any of its directors, executive officers, 39 principal shareholders, managers, or employees arrested for, 40 charged with, convicted of, or pled guilty or nolo contendere 41 to, regardless of adjudication, any offense that is punishable 42 by imprisonment for 1 year or more, or to any offense that 43 involves money laundering, currency transaction reporting, tax 44 evasion, facilitating or furthering terrorism, fraud, or that is 45 otherwise related to the operation of a financial institution, 46 within the 10 years before the effective date of this section; 47 (e) Does not provide services for any international trust 48 entity that is in bankruptcy, conservatorship, receivership, 49 liquidation, or a similar status under the laws of any country; 50 (f) Does not provide banking services or promote or sell 51 investments or accept custody of assets; 52 (g) Does not act as a fiduciary, which includes, but is not 53 limited to, accepting the fiduciary appointment, executing the 54 fiduciary documents that create the fiduciary relationship, or 55 making discretionary decisions regarding the investment or 56 distribution of fiduciary accounts; and 57 (h) Conducts those activities permissible for an 58 international trust company representative office as described 59 in s. 663.0625. 60 (2) This moratorium does not prevent the office from 61 otherwise enforcing the financial institutions codes. 62 (3) An organization or entity that seeks consideration for 63 this moratorium shall notify the office in writing by letter on 64 official letterhead via United States Postal Service or 65 commercial mail delivery service by July 1, 2016, and shall 66 provide the following: 67 (a) Written proof that it has been organized to do business 68 in this state before October 1, 2013; 69 (b) The name or names under which it conducts business in 70 this state; 71 (c) The addresses of its locations from which it conducts 72 business; 73 (d) A detailed list and description of the activities being 74 conducted at the locations from which it conducts business. The 75 detailed description must include the types of consumers that 76 utilize those activities and an explanation of how those 77 activities serve the business purpose of an international trust 78 entity. 79 (e) As to each international trust entity the organization 80 or entity provides services for in this state, the following: 81 1. The name of the international trust entity; 82 2. A list of the current officers and directors of the 83 international trust entity; 84 3. The country or countries where the international trust 85 entity is organized; 86 4. The supervisory or regulatory authority, or equivalent 87 or other similarly sanctioned body, organization, governmental 88 entity, or recognized authority that has licensing, chartering, 89 oversight, or similar responsibilities over the international 90 trust entity; 91 5. Proof that the international trust entity has been 92 authorized by a charter, license, or similar authorization by 93 operation of law in its home country jurisdiction to engage in 94 trust business; 95 6. Proof that the international trust entity lawfully 96 exists and is in good standing under the laws of the 97 jurisdiction where it is chartered, licensed, organized, or 98 lawfully existing. The organization or entity shall submit a 99 certificate of good standing or equivalent document issued by 100 the supervisory or regulatory authority, or equivalent or other 101 similarly sanctioned body, organization, governmental entity, or 102 recognized authority that has similar responsibilities, of the 103 country where the international trust entity is licensed, 104 chartered, or has similar authorization by operation of law and 105 is duly organized and lawfully exists; 106 7. A statement that the international trust entity is not 107 in bankruptcy, conservatorship, receivership, liquidation, or in 108 a similar status under the laws of any country; and 109 8. Proof that the international trust entity is not 110 operating under the direct control of the government, 111 regulatory, or supervisory authority of the jurisdiction of its 112 incorporation, through government intervention or any other 113 extraordinary actions, and confirmation that it has not been in 114 such a status or under such control at any time within the 7 115 years before the date of notification to the office. 116 (f) A declaration under penalty of perjury signed by an 117 executive officer or managing member of the organization or 118 entity, declaring that the information provided to the office is 119 true and correct to the best of his or her knowledge. 120 (4) In processing the notification and request to qualify 121 for moratorium, the office shall confirm the following: 122 (a) That the international trust entity is adequately 123 supervised by the appropriate regulatory authority, or 124 equivalent or other similarly sanctioned body, organization, 125 governmental entity, or recognized authority that has similar 126 responsibilities in the foreign country where it is organized, 127 chartered, or licensed, or has similar authorization by 128 operation of law; and 129 (b) That the jurisdiction of the international trust entity 130 or its offices, subsidiaries, or any affiliates that are 131 directly involved in or facilitate the financial services 132 functions, banking, or fiduciary activities of the international 133 trust entity, is not listed on the Financial Action Task Force 134 Public Statement or on its list of jurisdictions with 135 deficiencies in anti-money laundering or counterterrorism. 136 (5) For purposes of establishing adequate supervision under 137 paragraph (4)(a): 138 (a) An international trust entity with foreign 139 establishments is considered adequately supervised if it is 140 subject to consolidated supervision. As used in this paragraph, 141 “consolidated supervision” means supervision that enables the 142 appropriate regulatory authority, or equivalent or other 143 similarly sanctioned body, organization, governmental entity, or 144 recognized authority that has similar responsibilities of the 145 home country (home country supervisor) to evaluate: 146 1. The safety and soundness of the international trust 147 entity’s operations located within the home country supervisor’s 148 primary jurisdiction; and 149 2. The safety and soundness of the operations performed by 150 the international trust entity’s offices, subsidiaries, or any 151 affiliates that are directly involved in or facilitate the 152 financial services functions, banking, or fiduciary activities 153 of the international trust entity, wherever located. 154 (b) An international trust entity with no foreign 155 establishments is considered adequately supervised if the home 156 country supervisor can evaluate the safety and soundness of the 157 international trust entity’s operations through its offices or 158 subsidiaries located in the home country. For purposes of this 159 paragraph, the home country supervisor is deemed to be able to 160 evaluate the safety and soundness of the international trust 161 entity if the home country supervisor has the authority to 162 collect and maintain information on the following regulatory 163 components: 164 1. The technical competence and administrative ability of 165 the management of the international trust entity; 166 2. The adequacy of the operational, accounting, and 167 internal control systems of the international trust entity, 168 particularly the international trust entity’s ability to monitor 169 and supervise the activities of its offices or subsidiaries 170 wherever located; 171 3. The adequacy of asset management and asset 172 administration policies and procedures; 173 4. The capital adequacy of the international trust entity, 174 its offices or subsidiaries as specified by any capital adequacy 175 guidelines in the home country; 176 5. The earnings of the international trust entity; and 177 6. The external and internal auditors’ reports as well as 178 any management comment letters or any documented corrective 179 action by management. 180 (c) As used in paragraphs (4)(a), (5)(a), and (5)(b), 181 adequate supervision does not necessarily require supervision of 182 companies that control the international trust entity or 183 supervision of companies under common control with the 184 international trust entity but that are not in the international 185 trust entity’s chain of control. However, in cases where a 186 holding company is the only controlling element in a trust 187 business group, holding company supervision by a home country 188 supervisor shall be required when it is needed to ensure 189 consolidated supervision of all trust business entities in the 190 group. 191 (d) If a holding company is not supervised, adequate 192 supervision is deemed to exist if the home country supervisor 193 regulates transactions between the international trust entity 194 and controlling persons or entities under common control. 195 (e) An international trust entity and its offices or 196 subsidiaries is deemed to be adequately supervised if it is 197 subject to comprehensive supervision. For purposes of this 198 paragraph, comprehensive supervision: 199 1. Means supervision that ensures that the supervisory 200 processes and procedures are designed to inform the home country 201 supervisor about the international trust entity’s financial 202 condition, including capital position; asset management and 203 asset administration; internal controls and audit; compliance 204 with existing laws and regulations; and capability of 205 management. 206 2. Does not require the home country supervisor to conduct 207 onsite examinations of the international trust entity or its 208 offices or subsidiaries. However, at a minimum, it requires that 209 the home country supervisor: 210 a. Is able to determine that the international trust entity 211 and its offices and subsidiaries have adequate procedures for 212 monitoring and controlling its domestic and foreign operations; 213 b. Is authorized to obtain information, by examination, 214 audits or by other means, on the domestic and foreign operations 215 of the international trust entity, including its offices and 216 subsidiaries, and the authority to demand financial reports 217 which permit analysis of the consolidated condition of the 218 international trust entity; 219 c. Is able to obtain information on the dealings and 220 relationships between the international trust entity and its 221 offices and subsidiaries, wherever located; and 222 d. Is authorized by the home country’s laws to ensure the 223 safety and soundness of the international trust entity and its 224 offices and subsidiaries. 225 3. Includes the ability and willingness of the home country 226 supervisor to provide the office early notice of any weaknesses 227 being experienced by the international trust entities, including 228 its offices or subsidiaries wherever located. 229 4. Includes the ability of the home country supervisor to 230 provide the office assurance of cooperation by both the 231 international trust entity and the home country supervisor. 232 (6) The office shall process requests made by notification 233 for inclusion under the moratorium as follows: 234 (a) Upon receipt of any request, the office shall review 235 the information contained therein, and request any additional 236 information to complete the notification within 30 days after 237 receipt. The organization or entity shall provide the requested 238 additional information within 45 days after the receipt of the 239 notice from the office. If the office does not make such request 240 within 30 days after receipt, the notification is deemed 241 complete as of the date it was received. 242 (b) Within 20 days after receipt of any additional 243 information requested, the office shall deem the notification 244 complete or provide notification to the organization or entity 245 that the information provided does not satisfy the office’s 246 request or requests. 247 (c) Within 90 days after receipt of a completed 248 notification, the office shall confirm with the organization or 249 entity that they are or are not a party to the moratorium. If 250 the office fails to notify the organization or entity within 251 such time whether or not the organization or entity is a party 252 to the moratorium, then the organization or entity is considered 253 a party to the moratorium by operation of law. 254 (g) During the period of the moratorium, the office may 255 conduct an onsite visitation of an organization or entity to 256 confirm information provided to the office in deeming the 257 organization or entity qualified for the moratorium. 258 Section 3. Section 663.041, Florida Statutes, and the 259 amendments to section 663.01, Florida Statutes, made by this 260 act, are repealed on July 1, 2017. 261 Section 4. This act shall take effect upon becoming a law. 262 263 ================= T I T L E A M E N D M E N T ================ 264 And the title is amended as follows: 265 Delete everything before the enacting clause 266 and insert: 267 A bill to be entitled 268 An act relating to international trust entities; 269 amending s. 663.01, F.S.; defining the term 270 “international trust entity”; creating s. 663.041, 271 F.S.; providing for a moratorium for a specified 272 timeframe on enforcement by the Office of Financial 273 Regulation of certain licensure requirements for 274 certain organizations and entities providing services 275 to international trust companies; providing conditions 276 to extend the moratorium to specified persons of the 277 organization or entity; providing for construction; 278 specifying requirements for a letter to the office to 279 qualify as a party to the moratorium; requiring the 280 office to confirm specified findings when processing a 281 request; specifying circumstances for establishing 282 adequate supervision; providing procedures and 283 timeframes for the office’s processing of requests and 284 the office’s requests for additional information; 285 providing timeframes for the office to confirm with 286 the organization or entity whether it has been 287 confirmed as a party to the moratorium; providing for 288 construction if certain timeframes are not met; 289 authorizing the office to conduct an onsite visitation 290 of an organization or entity for a specified purpose 291 until a specified time; providing for future repeal; 292 providing an effective date.