Florida Senate - 2017                        COMMITTEE AMENDMENT
       Bill No. SB 736
       
       
       
       
       
       
                                Ì875382:Î875382                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  03/06/2017           .                                
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       The Committee on Banking and Insurance (Mayfield) recommended
       the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete lines 1674 - 2015
    4  and insert:
    5  otherwise related to the operation of a financial institution
    6  and caused or is likely to cause more than a minimal financial
    7  loss to, or a significant adverse effect on, the financial
    8  institution;
    9         (i) A declaration under penalty of perjury, signed by the
   10  executive officer or managing member of the proposed registrant,
   11  that, to the best of his or her knowledge:
   12         1. No financial institution-affiliated party of the
   13  proposed registrant or financial institution-affiliated party of
   14  any affiliated international trust entity:
   15         a. Has been fined or sanctioned as a result of a complaint
   16  to the office or any other state or federal regulatory agency;
   17         b. Has been convicted of a felony; or
   18         c. Has been ordered to pay a fine or penalty within the
   19  prior 10 years in a proceeding initiated by a federal, state,
   20  foreign, or local law enforcement agency or an international
   21  agency which is related to money laundering, currency
   22  transaction reporting, tax evasion, facilitating or furthering
   23  terrorism, fraud, theft, larceny, embezzlement, fraudulent
   24  conversion, misappropriation of property, dishonesty, breach of
   25  trust, breach of fiduciary duty, moral turpitude, or which is
   26  otherwise related to the operation of a financial institution
   27  and is related to any offense that caused or is likely to cause
   28  more than a minimal financial loss to, or a significant adverse
   29  effect on, the financial institution.
   30         2. No financial institution-affiliated party of the
   31  proposed registrant:
   32         a. Provides, or will provide, banking services; promotes or
   33  sells, or will promote or sell, investments; or accepts, or will
   34  accept, custody of assets; and
   35         b. Acts, or will act, as a fiduciary in this state, which
   36  includes, but is not limited to, accepting the fiduciary
   37  appointment, executing the fiduciary documents that create the
   38  fiduciary relationship, or making discretionary decisions
   39  regarding the investment or distribution of fiduciary accounts.
   40         3. The jurisdiction of the international trust entity or
   41  its offices, subsidiaries, or any affiliates that are directly
   42  involved in or facilitate the financial services functions,
   43  banking, or fiduciary activities of the international trust
   44  entity is not listed on the Financial Action Task Force Public
   45  Statement or on its list of jurisdictions with deficiencies in
   46  anti-money laundering or counterterrorism;
   47         (j) For each international trust entity that the proposed
   48  registrant will provide services for in this state, the
   49  following:
   50         1. The name of the international trust entity;
   51         2. A list of the current officers and directors of the
   52  international trust entity;
   53         3. Any country where the international trust entity is
   54  organized or authorized to do business;
   55         4. The name of the home-country regulator;
   56         5. Proof that the international trust entity has been
   57  authorized by charter, license, or similar authorization by its
   58  home-country regulator to engage in trust business;
   59         6. Proof that the international trust entity lawfully
   60  exists and is in good standing under the laws of the
   61  jurisdiction where it is chartered, licensed, or organized;
   62         7. A statement that the international trust entity is not
   63  in bankruptcy, conservatorship, receivership, liquidation, or a
   64  similar status under the laws of any country;
   65         8. Proof that the international trust entity is not
   66  operating under the direct control of the government or the
   67  regulatory or supervisory authority of the jurisdiction of its
   68  incorporation, through government intervention or any other
   69  extraordinary actions, and confirmation that it has not been in
   70  such a status or under such control at any time within the prior
   71  3 years;
   72         9. Proof and confirmation that the proposed registrant is
   73  affiliated with the international trust entities provided in the
   74  notice; and
   75         10. Proof that the jurisdictions where the international
   76  trust entity or its offices, subsidiaries, or any affiliates
   77  that are directly involved in or that facilitate the financial
   78  services functions, banking, or fiduciary activities of the
   79  international trust entity are not listed on the Financial
   80  Action Task Force Public Statement or on its list of
   81  jurisdictions with deficiencies in anti-money laundering or
   82  counterterrorism; and
   83         (k) A declaration under penalty of perjury, signed by an
   84  executive officer or managing member of each affiliated
   85  international trust entity, declaring that the information
   86  provided to the office is true and correct to the best of his or
   87  her knowledge.
   88  
   89  The proposed registrant may provide additional information in
   90  the form of exhibits when attempting to satisfy any of the
   91  registration requirements. All information that the proposed
   92  registrant desires to present to support the written notice must
   93  be submitted with the notice.
   94         (2) The office may request additional information as the
   95  office reasonably requires. Any request for additional
   96  information must be made by the office within 30 days after
   97  initial receipt of the written notice and the full amount of the
   98  fee specified in subsection (1). Additional information must be
   99  submitted within 60 days after a request has been made by the
  100  office. Failure to respond to such request within 60 days after
  101  the date of the request is a ground for denial of the
  102  registration. A notice is not deemed complete until all
  103  requested information has been submitted to the office. Upon
  104  deeming the notice complete, the office has 120 days to register
  105  the limited service affiliate or issue a denial. An order
  106  denying a registration must contain notice of opportunity for a
  107  hearing pursuant to ss. 120.569 and 120.57.
  108         (3) A registration under this part must be summarily
  109  suspended by the office if the limited service affiliate made a
  110  material false statement in the written notice. The summary
  111  suspension must remain in effect until a final order is entered
  112  by the office. For purposes of s. 120.60(6), a material false
  113  statement made in the limited service affiliate’s written notice
  114  constitutes an immediate and serious danger to the public
  115  health, safety, and welfare. If a limited service affiliate made
  116  a material false statement in the written notice, the office
  117  must enter a final order revoking the registration and may
  118  impose a fine as prescribed by s. 655.041 or issue an order of
  119  suspension, removal, or prohibition under s. 655.037 to a
  120  financial institution-affiliated party of the limited service
  121  affiliate.
  122         (4) Any instance in which a director, executive officer,
  123  principal shareholder, manager, or the equivalent has ever been
  124  arrested for, charged with, convicted of, or pled guilty or nolo
  125  contendere to, regardless of adjudication, any offense that
  126  involves money laundering, currency transaction reporting, tax
  127  evasion, facilitating or furthering terrorism, fraud, theft,
  128  larceny, embezzlement, fraudulent conversion, misappropriation
  129  of property, dishonesty, breach of trust, breach of fiduciary
  130  duty, or moral turpitude, or that is otherwise related to the
  131  operation of a financial institution and caused or is likely to
  132  cause more than a minimal financial loss to, or a significant
  133  adverse effect on, the financial institution, is a ground for
  134  denial of the registration.
  135         (5)The existence of any previous violation, fine, or
  136  penalty of a financial institution-affiliated party of a limited
  137  service affiliate or the affiliated international trust entity
  138  does not necessarily disqualify a registrant under this part.
  139  When evaluating a registration, the office may consider factors
  140  reasonably related to the violation, fine, or penalty, such as
  141  mitigating factors, a history of multiple violations, the
  142  severity of the offense, and a showing of rehabilitation.
  143         (6) A registration is not transferable or assignable.
  144         (7) Fees collected under this section must be submitted in
  145  the manner prescribed by the commission and must be deposited
  146  into the Financial Institutions’ Regulatory Trust Fund pursuant
  147  to s. 655.049 for the purpose of administering this part.
  148         (8) A person or entity in operation as of January 1, 2018,
  149  which meets the definition of a limited service affiliate under
  150  s. 663.530 must, on or before March 31, 2018, apply for
  151  registration as a limited service affiliate or cease doing
  152  business in this state.
  153         (9) No later than March 31, 2018, a person or entity that
  154  previously qualified under the moratorium in s. 663.041 must
  155  register under this part or cease doing business in this state.
  156  A person or entity that previously qualified under the
  157  moratorium in s. 663.041 may remain open and in operation until
  158  March 31, 2018, without registering under this part, but shall
  159  refrain from engaging in new lines of business in this state
  160  until the disposition of registration under this part.
  161         Section 42. Section 663.533, Florida Statutes, is created
  162  to read:
  163         663.533 Applicability of the financial institutions codes.
  164  A limited service affiliate is subject to the financial
  165  institutions codes. Without limiting the foregoing, the
  166  following provisions are applicable to a limited service
  167  affiliate:
  168         (1) Section 655.012, relating to general supervisory powers
  169  of the office.
  170         (2) Section 655.031, relating to administrative enforcement
  171  guidelines.
  172         (3) Section 655.032, relating to investigations, subpoenas,
  173  hearings, and witnesses.
  174         (4) Section 655.0321, relating to restricted access to
  175  certain hearings, proceedings, and related documents.
  176         (5) Section 655.033, relating to cease and desist orders.
  177         (6) Section 655.034, relating to injunctions.
  178         (7) Section 655.037, relating to removal of a financial
  179  institution-affiliated party by the office.
  180         (8) Section 655.041, relating to administrative fines and
  181  enforcement.
  182         (9) Section 655.057, relating to restrictions on access to
  183  public records.
  184         (10) Section 655.059, relating to access to books and
  185  records.
  186         (11)Section 655.0591, relating to trade secret documents.
  187         (12)Section 655.91, relating to records of institutions
  188  and copies thereof; retention and destruction.
  189         (13) Section 655.968, relating to financial institutions;
  190  transactions relating to Iran or terrorism.
  191  
  192  This section does not prohibit the office from investigating or
  193  examining an entity to ensure that it is not in violation of
  194  this chapter or applicable provisions of the financial
  195  institutions codes.
  196         Section 43. Section 663.534, Florida Statutes, is created
  197  to read:
  198         663.534 Events that require notice to be provided to the
  199  office.—A registrant must report to the office, within 15 days
  200  of its knowledge of the occurrence, any changes to the
  201  information previously relied upon by the office when
  202  registering or renewing a registration under this part.
  203         Section 44. Section 663.535, Florida Statutes, is created
  204  to read:
  205         663.535 Notice to customers.—All marketing documents and
  206  advertisements and any display at the location of the limited
  207  service affiliate or at any trade or marketing event must
  208  contain the following statement in a contrasting color in at
  209  least 10-point type: “The Florida Office of Financial Regulation
  210  DOES NOT provide safety and soundness oversight of this company,
  211  does not provide any opinion as to any affiliated companies or
  212  products, and does not provide the oversight of this company’s
  213  affiliated international trust entities or the jurisdictions
  214  within which they operate. This company may not act as a
  215  fiduciary and may not accept the fiduciary appointment, execute
  216  or transmit fiduciary documents, take possession of any assets,
  217  create a fiduciary relationship, make discretionary decisions
  218  regarding the investment or distribution of fiduciary accounts,
  219  provide banking services, or promote or sell investments.”
  220         Section 45. Section 663.536, Florida Statutes, is created
  221  to read:
  222         663.536 Recordkeeping requirements for trade, industry, or
  223  professional events.—A registrant registered only under this
  224  part who participates in a trade, industry, or professional
  225  event pursuant to s. 663.531 must keep a record of its
  226  participation in the event. The record must be maintained for at
  227  least 2 years following the event and must contain the following
  228  information:
  229         (1) The date, time, and location of the event;
  230         (2) To the extent known or available, a list of
  231  participants in the event, including other vendors, presenters,
  232  attendees, and targeted attendees;
  233         (3) The nature and purpose of the event;
  234         (4) The registrant’s purpose for participating in the
  235  event; and
  236         (5) Samples of materials or, when samples are unavailable,
  237  descriptions of materials provided by the registrant to
  238  attendees and other participants.
  239         Section 46. Section 663.537, Florida Statutes, is created
  240  to read:
  241         663.537 Examination or investigation of a limited service
  242  affiliate.—
  243         (1) The office may conduct an examination or investigation
  244  of a limited service affiliate at any time that it deems
  245  necessary to determine whether the limited service affiliate or
  246  financial institution-affiliated party thereof has violated, or
  247  is about to violate, any provision of this chapter, any
  248  applicable provision of the financial institutions codes, or any
  249  rule adopted by the commission pursuant to this chapter or the
  250  financial institutions codes. The office shall conduct an
  251  examination of each limited service affiliate at least once
  252  every 18 months to assess compliance with this part and the
  253  financial institutions codes. The office may conduct an
  254  examination, before or after registration, of any person or
  255  entity that submits a notice for registration to confirm
  256  information provided in the registration filing and to confirm
  257  the activities of the person or entity seeking registration.
  258         (2)For each examination of a limited service affiliate
  259  authorized under this part, the limited service affiliate shall
  260  pay a fee for the costs of the examination by the office. As
  261  used in this section, the term “costs” means the salary and
  262  travel expenses of field staff which are directly attributable
  263  to the examination of the registrant and the travel expenses of
  264  any supervisory and support staff required as a result of
  265  examination findings. The costs of examination must be
  266  determined as follows:
  267         (a) The office shall charge each limited service affiliate
  268  in this state an examination fee equal to the actual cost of
  269  each examiner’s participation during each examination of such
  270  limited service affiliate. The examination fee must equal the
  271  actual cost of the examination, but such fees, inclusive of
  272  travel expenses and other incidental expenses, may not be less
  273  than $200 per day for each examiner participating in the
  274  examination.
  275         (b) As used in this section, the term “actual cost” means
  276  the direct salary, excluding employee benefits; travel expenses;
  277  and other incidental expenses required as a result of the
  278  examination staff’s onsite and offsite examination of the
  279  limited service affiliate. In addition, the term includes the
  280  travel expenses of any supervisory staff required as a result of
  281  examination findings.
  282         (3) All examination fee payments must be received within 30
  283  days after receipt of an invoice from the office and must be
  284  submitted in a manner prescribed by the commission. The office
  285  may levy a late fee of up to $100 per day that a payment is
  286  overdue, unless waived by the office for good cause. However, if
  287  the late payment of costs is intentional, the office may levy an
  288  administrative fine of up to $1,000 per day for each day the
  289  payment is overdue.
  290         (4) All fees collected under this section must be submitted
  291  in the manner prescribed by the commission and must be deposited
  292  into the Financial Institutions’ Regulatory Trust Fund pursuant
  293  to s. 655.049 for the purpose of administering this part.
  294         Section 47. Section 663.538, Florida Statutes, is created
  295  to read:
  296         663.538 Suspension, revocation, or voluntary surrender of
  297  registration.—
  298         (1) A registrant that proposes to terminate operations in
  299  this state shall surrender its registration to the office and
  300  comply with such procedures as required by rule of the
  301  commission.
  302         (2) A registrant that fails to renew its registration may
  303  be subject to a fine and penalty; however, such registrant may
  304  renew its registration within 30 days after expiration or may
  305  surrender the registration in accordance with procedures
  306  prescribed by commission rule.
  307         (3) The registration of a limited service affiliate in this
  308  state may be suspended or revoked by the office, with or without
  309  examination, upon the office’s determination that the registrant
  310  does not meet all requirements for original or renewal
  311  registration.
  312         (4) If a registrant surrenders its registration or its
  313  registration is suspended or revoked by the office, all rights
  314  and privileges afforded by this part to the registered limited
  315  service affiliate cease.
  316         (5) At least 60 days before a proposed date of voluntary
  317  termination of a registration, a registrant must provide to the
  318  office written notice by letter of its intention to surrender
  319  its registration and terminate operations. The notice must
  320  include the proposed date of termination and the name of the
  321  officer in charge of the termination procedures.
  322         (6) The office may conduct an examination of the books and
  323  records of a limited service affiliate at any time after receipt
  324  of the notice of surrender of registration to confirm the
  325  winding down of operations.
  326         (7) Operations of a registrant are deemed terminated
  327  effective upon the later of the expiration of 60 days from the
  328  date of the filing of the notice of voluntary surrender or upon
  329  the date provided in the notice of voluntary surrender, unless
  330  the office provides written notice specifying the grounds for
  331  denial of such proposed termination. The office may not deny a
  332  request to terminate unless it learns of the existence of any
  333  outstanding claim or claims against the registrant, it finds
  334  that the requirements to terminate operations have not been
  335  satisfied, or there is an immediate and serious danger to the
  336  public health, safety, and welfare if the termination occurred.
  337         Section 48. Section 663.539, Florida Statutes, is created
  338  to read:
  339         663.539 Biennial registration renewal.—A registration must
  340  be renewed every 2 years. A registration must be renewed by
  341  furnishing such information as the commission requires, together
  342  with payment of a $500 nonrefundable renewal fee. All fees
  343  received by the office pursuant to this section must be
  344  submitted in the manner prescribed by the commission and must be
  345  deposited into the Financial Institutions’ Regulatory Trust Fund
  346  pursuant to s. 655.049 for the purpose of administering this
  347  part. A complete biennial renewal of registration must include a
  348  declaration under penalty of perjury, signed by the executive
  349  officer or managing member of the registrant, declaring that the
  350  information submitted for the purposes of renewal is true and
  351  correct to the best of his or her knowledge, and confirming or
  352  providing all of the following:
  353         (1) That the registrant is in compliance with this part.
  354         (2) The physical location of the principal place of
  355  business of the registrant.
  356         (3) The telephone number of the registrant.
  357         (4) A list of current financial institution-affiliated
  358  parties operating under the registration to be renewed.
  359         (5) Any updates or changes in information which were not
  360  previously provided either in the initial registration or in
  361  subsequent registration renewals or which were not previously
  362  disclosed to the office.
  363         Section 49. Section 663.5395, Florida Statutes, is created
  364  to read:
  365         663.5395 Civil action subpoena enforcement.—
  366         (1) Notwithstanding s. 655.059, a limited service affiliate
  367  established under this chapter is not required to produce a book
  368  or record pertaining to a customer of an affiliated
  369  international trust entity that is located outside the United
  370  States or its territories in response to a subpoena if the book
  371  or record is maintained outside the United States or its
  372  territories and is not in the possession, custody, or control of
  373  the affiliated limited service affiliate established in this
  374  state.
  375         (2)This section applies only to a subpoena issued pursuant
  376  to the Florida Rules of Civil Procedure, the Federal Rules of
  377  Civil Procedure, or other similar law or rule of civil procedure
  378  in another state or territory of the United States. This section
  379  does not apply to a subpoena issued by or on behalf of a
  380  federal, state, or local government law enforcement agency,
  381  administrative or regulatory agency, legislative body, or grand
  382  jury and does not limit the power of the office to access all
  383  books and records in the exercise of the office’s regulatory and
  384  supervisory powers under the financial institutions codes.
  385  
  386  ================= T I T L E  A M E N D M E N T ================
  387  And the title is amended as follows:
  388         Delete lines 167 - 208
  389  and insert:
  390         registration; providing that violations, fines, or
  391         penalties of certain entities do not necessarily
  392         disqualify registrants from registration; authorizing
  393         the office to consider certain factors in evaluating
  394         registrations; providing that registrations are not
  395         transferable or assignable; providing for deposit of
  396         fees into a specified trust fund; requiring the
  397         commission to adopt rules; requiring certain persons
  398         or entities to be registered as limited service
  399         affiliates by a specified date; creating s. 663.533,
  400         F.S.; providing applicability of the financial
  401         institutions codes as to limited service affiliates;
  402         providing construction; creating s. 663.534, F.S.;
  403         requiring a registrant to report changes of certain
  404         information to the office within a specified
  405         timeframe; creating s. 663.535, F.S.; requiring a
  406         specified notice to customers in marketing documents,
  407         advertisements, and displays at the limited service
  408         affiliate’s location or at certain events; creating s.
  409         663.536, F.S.; specifying recordkeeping requirements
  410         relating to certain events that a registered limited
  411         service affiliate participates in; creating s.
  412         663.537, F.S.; authorizing the office to conduct
  413         examinations or investigations of limited service
  414         affiliates for certain purposes; specifying a minimum
  415         interval of examinations to assess compliance;
  416         authorizing the office to examine a person or entity
  417         submitting a notice of registration for certain
  418         purposes; requiring limited service affiliates to pay
  419         specified costs of examination within a specified
  420         time; defining the terms “costs” and “actual cost”;
  421         providing penalties; specifying the trust fund where
  422         examination fees must be deposited; requiring the
  423         commission to adopt rules; creating s. 663.538, F.S.;
  424         providing requirements and procedures relating to the
  425         suspension, revocation, or voluntary surrender of a
  426         limited service affiliate’s registration; providing a
  427         penalty; authorizing the office to conduct
  428         examinations under certain circumstances; prohibiting
  429         the office from denying a request to terminate
  430         operations except under certain circumstances;
  431         providing construction; creating s. 663.539, F.S.;
  432         requiring a limited service affiliate to renew its
  433         registration biennially; specifying the renewal fee
  434         and the trust fund where such fee must be deposited;
  435         specifying requirements for the renewal registration;
  436         creating s. 663.5395, F.S.; providing that limited
  437         service affiliates are not required to produce certain
  438         books and records under certain circumstances;
  439         providing applicability;