Florida Senate - 2023 CS for SB 180
By the Committee on Banking and Insurance; and Senator Gruters
597-03289-23 2023180c1
1 A bill to be entitled
2 An act relating to regulation of securities;
3 reordering and amending s. 517.021, F.S.; requiring
4 the Financial Services Commission to define the term
5 “accredited investor” by rule; revising definitions;
6 amending s. 517.072, F.S.; authorizing the commission
7 to adopt certain rules relating to viatical settlement
8 investments; making technical changes; amending s.
9 517.081, F.S.; revising requirements for the
10 registration of securities; revising application fees
11 for certain securities registrations; requiring the
12 Office of Financial Regulation to deem an application
13 abandoned under certain circumstances; conforming
14 provisions to changes made by the act; amending s.
15 517.082, F.S.; making technical changes; requiring the
16 office to deem an application for registration by
17 notification abandoned under certain circumstances;
18 amending s. 517.111, F.S.; revising grounds on which
19 the office may revoke, suspend, or deny the
20 registration of securities; specifying the office’s
21 powers in investigations of issuers; revising the
22 methods by which the office may enter an order
23 suspending an issuer’s right to sell securities;
24 amending s. 517.12, F.S.; revising applicability of
25 registration requirements; revising requirements for
26 applying for registration as a dealer, an associated
27 person of a dealer, or an investment adviser;
28 conforming a cross-reference and provisions to changes
29 made by the act; making technical changes; creating s.
30 517.1214, F.S.; defining terms; specifying continuing
31 education requirements for associated persons of
32 investment advisers and federal covered advisers;
33 providing that certain education credits satisfy such
34 requirements if certain conditions are met;
35 prohibiting associated persons from carrying forward
36 credits to subsequent reporting periods; specifying a
37 restriction on associated persons who fail to meet
38 such requirements; specifying requirements for certain
39 previously registered associated persons; amending s.
40 517.1217, F.S.; authorizing the commission to
41 establish rules of conduct and prohibited business
42 practices for intermediaries; amending s. 517.161,
43 F.S.; revising grounds on which the office may deny,
44 revoke, restrict, or suspend registrations of dealers,
45 investment advisers, intermediaries, and associated
46 persons; providing causes for denial of applications
47 or revocation of registrations of certain entities and
48 persons under certain circumstances; repealing s.
49 517.181, F.S., relating to escrow agreements; amending
50 s. 517.201, F.S.; conforming a provision to changes
51 made by the act; amending s. 921.0022, F.S.; revising
52 applicability of a criminal penalty for certain
53 registration violations; amending s. 517.1215, F.S.;
54 making technical changes; amending ss. 517.061,
55 517.0611, 517.075, 517.131, 517.211, 517.315,
56 626.9911, and 744.351, F.S.; conforming cross
57 references and making technical changes; amending s.
58 517.1205, F.S.; revising legislative intent; providing
59 an effective date.
60
61 Be It Enacted by the Legislature of the State of Florida:
62
63 Section 1. Section 517.021, Florida Statutes, is reordered
64 and amended to read:
65 517.021 Definitions.—When used in this chapter, unless the
66 context otherwise indicates, the following terms have the
67 following respective meanings:
68 (1) “Accredited investor” shall be defined by rule of the
69 commission in accordance with the Securities and Exchange
70 Commission Rule 501, 17 C.F.R. s. 230.501.
71 (2) “Affiliate” means a person that directly, or indirectly
72 through one or more intermediaries, controls, is controlled by,
73 or is under common control with an applicant or registrant.
74 (3)(2) “Associated person” means:
75 (a)1. With respect to a dealer, a natural person who is
76 employed, appointed, or authorized by a dealer and who
77 represents the dealer in effecting or attempting to effect
78 purchases or sales of securities.
79 2. The term does not include the following:
80 a. A dealer.
81 b. A partner, an officer, or a director of a dealer or a
82 person having a similar status or performing similar functions
83 as a dealer, unless such person is specified in subparagraph 1.
84 c. A dealer’s employee whose function is only clerical or
85 ministerial.
86 d. A person whose transactions in this state are limited to
87 those transactions described in s. 15(i)(3) of the Securities
88 Exchange Act of 1934, as amended.
89 (b)1. With respect to an investment adviser, a natural
90 person, including, but not limited to, a partner, an officer, a
91 director, or a branch manager, or a person occupying a similar
92 status or performing similar functions, who:
93 a. Is employed by or associated with, or is subject to the
94 supervision and control of, an investment adviser registered or
95 required to be registered under this chapter; and
96 b. Does any of the following:
97 (I) Makes any recommendation or otherwise gives investment
98 advice regarding securities.
99 (II) Manages accounts or portfolios of clients.
100 (III) Determines which recommendations or advice regarding
101 securities should be given.
102 (IV) Receives compensation to solicit, offer, or negotiate
103 for the sale of investment advisory services.
104 (V) Supervises employees who perform a function under this
105 sub-subparagraph.
106 2. The term does not include the following:
107 a. An investment adviser.
108 b. An employee whose function is only clerical or
109 ministerial or investment adviser, any of the following:
110 1. Any partner, officer, director, or branch manager of a
111 dealer or investment adviser or any person occupying a similar
112 status or performing similar functions;
113 2. Any natural person directly or indirectly controlling or
114 controlled by such dealer or investment adviser, other than an
115 employee whose function is only clerical or ministerial; or
116 3. Any natural person, other than a dealer, employed,
117 appointed, or authorized by a dealer, investment adviser, or
118 issuer to sell securities in any manner or act as an investment
119 adviser as defined in this section.
120
121 The partners of a partnership and the executive officers of a
122 corporation or other association registered as a dealer, and any
123 person whose transactions in this state are limited to those
124 transactions described in s. 15(h)(2) of the Securities Exchange
125 Act of 1934, are not “associated persons” within the meaning of
126 this definition.
127 (c)(b) With respect to a federal covered adviser, a natural
128 any person who is an investment adviser representative and who
129 has a place of business in this state, as such terms are defined
130 in Rule 203A-3 of the Securities and Exchange Commission adopted
131 under the Investment Advisers Act of 1940, as amended.
132 (4)(3) “Boiler room” means an enterprise in which two or
133 more persons engage in telephone communications with members of
134 the public using two or more telephones at one location, or at
135 more than one location in a common scheme or enterprise.
136 (5)(4) “Branch office” means any location in this state of
137 a dealer or investment adviser at which one or more associated
138 persons regularly conduct the business of rendering investment
139 advice or effecting any transactions in, or inducing or
140 attempting to induce the purchase or sale of, any security or
141 any location that is held out as such. The commission may adopt
142 by rule exceptions to this definition for dealers in order to
143 maintain consistency with the definition of a branch office used
144 by self-regulatory organizations authorized by the Securities
145 and Exchange Commission, including, but not limited to, the
146 Financial Industry Regulatory Authority. The commission may
147 adopt by rule exceptions to this definition for investment
148 advisers.
149 (6)(7) “Commission” means the Financial Services
150 Commission.
151 (7)(5) “Control,” including the terms “controlling,”
152 “controlled by,” and “under common control with,” means the
153 possession, directly or indirectly, of the power to direct or
154 cause the direction of the management or policies of a person,
155 whether through the ownership of voting securities, by contract,
156 or otherwise.
157 (8)(6)(a) “Dealer” includes, unless otherwise specified, a
158 person, other than an associated person of a dealer, that
159 engages, for all or part of the person’s time, directly or
160 indirectly, as agent or principal in the business of offering,
161 buying, selling, or otherwise dealing or trading in securities
162 issued by another person any of the following:
163 1. Any person, other than an associated person registered
164 under this chapter, who engages, either for all or part of her
165 or his time, directly or indirectly, as broker or principal in
166 the business of offering, buying, selling, or otherwise dealing
167 or trading in securities issued by another person.
168 2. Any issuer who through persons directly compensated or
169 controlled by the issuer engages, either for all or part of her
170 or his time, directly or indirectly, in the business of offering
171 or selling securities which are issued or are proposed to be
172 issued by the issuer.
173 (b) The term “dealer” does not include the following:
174 (a) A licensed practicing attorney who renders or performs
175 any such services in connection with the regular practice of the
176 attorney’s profession.
177 (b) A bank authorized to do business in this state, except
178 nonbank subsidiaries of a bank.
179 (c) A trust company having trust powers that it is
180 authorized to exercise in this state, which renders or performs
181 services in a fiduciary capacity incidental to the exercise of
182 its trust powers.
183 (d) A wholesaler selling exclusively to dealers.
184 (e) A person buying and selling for the person’s own
185 account exclusively through a registered dealer or stock
186 exchange.
187 (f) An issuer.
188 (g) A natural person representing an issuer in the
189 purchase, sale, or distribution of the issuer’s own securities
190 if such person:
191 1. Is an officer, a director, a limited liability company
192 manager or managing member, or a bona fide employee of the
193 issuer;
194 2. Has not participated in the distribution or sale of
195 securities for any issuer for which such person was, within the
196 preceding 12 months, an officer, a director, a limited liability
197 company manager or managing member, or a bona fide employee;
198 3. Primarily performs, or is intended to perform at the end
199 of the distribution, substantial duties for, or on behalf of,
200 the issuer other than in connection with transactions in
201 securities; and
202 4. Does not receive a commission, compensation, or other
203 consideration for the completed sale of the issuer’s securities
204 apart from the compensation received for regular duties to the
205 issuer.
206 1. Any licensed practicing attorney who renders or performs
207 any of such services in connection with the regular practice of
208 her or his profession;
209 2. Any bank authorized to do business in this state, except
210 nonbank subsidiaries of a bank;
211 3. Any trust company having trust powers which it is
212 authorized to exercise in this state, which renders or performs
213 services in a fiduciary capacity incidental to the exercise of
214 its trust powers;
215 4. Any wholesaler selling exclusively to dealers;
216 5. Any person buying and selling for her or his own account
217 exclusively through a registered dealer or stock exchange; or
218 6. Pursuant to s. 517.061(11), any person associated with
219 an issuer of securities if such person is a bona fide employee
220 of the issuer who has not participated in the distribution or
221 sale of any securities within the preceding 12 months and who
222 primarily performs, or is intended to perform at the end of the
223 distribution, substantial duties for, or on behalf of, the
224 issuer other than in connection with transactions in securities.
225 (9) “Federal covered adviser” means a person that who is
226 registered or required to be registered under s. 203 of the
227 Investment Advisers Act of 1940, as amended. The term “federal
228 covered adviser” does not include any person that who is
229 excluded from the definition of investment adviser under
230 subparagraphs (14)(b)1.-8.
231 (10) “Federal covered security” means a any security that
232 is a covered security under s. 18(b) of the Securities Act of
233 1933, as amended, or rules and regulations adopted thereunder.
234 (11) “Guarantor” means a person that who agrees in writing,
235 or that who holds itself out to the public as agreeing, to pay
236 the indebtedness of another when due, including, without
237 limitation, payments of principal and interest on a bond,
238 debenture, note, or other evidence of indebtedness, without
239 resort by the holder to any other obligor, whether or not such
240 writing expressly states that the person signing is signing as a
241 guarantor. The obligation of a guarantor hereunder shall be a
242 continuing, absolute, and unconditional guaranty of payment,
243 without regard to the validity, regularity, or enforceability of
244 the underlying indebtedness.
245 (12) “Guaranty” means an agreement in a writing in which
246 one party either agrees, or holds itself out to the public as
247 agreeing, to pay the indebtedness of another when due,
248 including, without limitation, payments of principal and
249 interest on a bond, debenture, note, or other evidence of
250 indebtedness, without resort by the holder to any other obligor,
251 whether or not such writing expressly states that the person
252 signing is signing as a guarantor. An agreement that is not
253 specifically denominated as a guaranty shall nevertheless
254 constitute a guaranty if the holder of the underlying
255 indebtedness or the holder’s her or his representative or
256 trustee has the right to sue to enforce the guarantor’s
257 obligations under the guaranty. Words of guaranty or equivalent
258 words that which otherwise do not specify guaranty of payment
259 create a presumption that payment, rather than collection, is
260 guaranteed by the guarantor. Any guaranty in writing is
261 enforceable notwithstanding any statute of frauds.
262 (13) “Intermediary” means a natural person residing in this
263 the state or a corporation, trust, partnership, limited
264 liability company, association, or other legal entity registered
265 with the Secretary of State to do business in this the state,
266 which facilitates through its website the offer or sale of
267 securities of an issuer with a principal place of business in
268 this state under s. 517.0611.
269 (14)(a) “Investment adviser” means a includes any person,
270 other than an associated person of an investment adviser or a
271 federal covered adviser, that who receives compensation,
272 directly or indirectly, and engages for all or part of the
273 person’s her or his time, directly or indirectly, or through
274 publications or writings, in the business of advising others as
275 to the value of securities or as to the advisability of
276 investments in, purchasing of, or selling of securities, except
277 a dealer whose performance of these services is solely
278 incidental to the conduct of her or his business as a dealer and
279 who receives no special compensation for such services.
280 (b) The term “investment adviser” does not include the
281 following:
282 1. A dealer or an associated person of a dealer whose
283 performance of services in paragraph (a) is solely incidental to
284 the conduct of the dealer’s or associated person’s business as a
285 dealer and who does not receive special compensation for those
286 services.
287 2. A Any licensed practicing attorney or certified public
288 accountant whose performance of such services is solely
289 incidental to the practice of the attorney’s or accountant’s her
290 or his profession.;
291 2. Any licensed certified public accountant whose
292 performance of such services is solely incidental to the
293 practice of her or his profession;
294 3. A Any bank authorized to do business in this state.;
295 4. A Any bank holding company as defined in the Bank
296 Holding Company Act of 1956, as amended, authorized to do
297 business in this state.;
298 5. A Any trust company having trust powers, as defined in
299 s. 658.12, which it is authorized to exercise in this the state,
300 which trust company renders or performs investment advisory
301 services in a fiduciary capacity incidental to the exercise of
302 its trust powers.;
303 6. A Any person that who renders investment advice
304 exclusively to insurance or investment companies.;
305 7. A Any person that who does not hold itself herself or
306 himself out to the general public as an investment adviser and
307 has no more than 15 clients within 12 consecutive months in this
308 state.;
309 8. A Any person whose transactions in this state are
310 limited to those transactions described in s. 222(d) of the
311 Investment Advisers Act of 1940, as amended. Those clients
312 listed in subparagraph 6. may not be included when determining
313 the number of clients of an investment adviser for purposes of
314 s. 222(d) of the Investment Advisers Act of 1940, as amended.;
315 or
316 9. A federal covered adviser.
317 (15) “Issuer” means a any person that who proposes to
318 issue, has issued, or shall hereafter issue any security. A Any
319 person that who acts as a promoter for and on behalf of a
320 corporation, trust, or unincorporated association or
321 partnership, limited liability company, association, or other
322 legal entity of any kind to be formed shall be deemed an issuer.
323 (16) “Offer to sell,” “offer for sale,” or “offer” means an
324 any attempt or offer to dispose of, or solicitation of an offer
325 to buy, a security or interest in a security, or an investment
326 or interest in an investment, for value.
327 (17)(8) “Office” means the Office of Financial Regulation
328 of the commission.
329 (18)(17) “Predecessor” means a person whose the major
330 portion of whose assets has have been acquired directly or
331 indirectly by an issuer.
332 (19)(18) “Principal” means an executive officer of a
333 corporation, partner of a partnership, sole proprietor of a sole
334 proprietorship, trustee of a trust, or any other person with
335 similar supervisory functions with respect to any organization,
336 whether incorporated or unincorporated.
337 (20)(19) “Promoter” includes the following:
338 (a) A Any person that who, acting alone or in conjunction
339 with one or more other persons, directly or indirectly takes the
340 initiative in founding and organizing the business or enterprise
341 of an issuer.
342 (b) A Any person that who, in connection with the founding
343 or organizing of the business or enterprise of an issuer,
344 directly or indirectly receives in consideration of services or
345 property, or both services and property, 10 percent or more of
346 any class of securities of the issuer or 10 percent or more of
347 the proceeds from the sale of any class of securities. However,
348 a person that who receives such securities or proceeds either
349 solely as underwriting commissions or solely in connection with
350 property shall not be deemed a promoter if such person does not
351 otherwise take part in founding and organizing the enterprise.
352 (21)(20) “Qualified institutional buyer” means a any
353 qualified institutional buyer, as defined in United States
354 Securities and Exchange Commission Rule 144A, 17 C.F.R. s.
355 230.144A(a), under the Securities Act of 1933, as amended, or
356 any foreign buyer that satisfies the minimum financial
357 requirements set forth in such rule.
358 (22)(21) “Sale” or “sell” means a any contract of sale or
359 disposition of an any investment, security, or interest in a
360 security, for value. With respect to a security or interest in a
361 security, the term defined in this subsection does not include
362 preliminary negotiations or agreements between an issuer or any
363 person on whose behalf an offering is to be made and any
364 underwriter or among underwriters who are or are to be in
365 privity of contract with an issuer. Any security given or
366 delivered with, or as a bonus on account of, any purchase of
367 securities or any other thing shall be conclusively presumed to
368 constitute a part of the subject of such purchase and to have
369 been offered and sold for value. Every sale or offer of a
370 warrant or right to purchase or subscribe to another security of
371 the same or another issuer, as well as every sale or offer of a
372 security which gives the holder a present or future right or
373 privilege to convert into another security or another issuer, is
374 considered to include an offer of the other security.
375 (23)(22) “Security” includes any of the following:
376 (a) A note.
377 (b) A stock.
378 (c) A treasury stock.
379 (d) A bond.
380 (e) A debenture.
381 (f) An evidence of indebtedness.
382 (g) A certificate of deposit.
383 (h) A certificate of deposit for a security.
384 (i) A certificate of interest or participation.
385 (j) A whiskey warehouse receipt or other commodity
386 warehouse receipt.
387 (k) A certificate of interest in a profit-sharing agreement
388 or the right to participate therein.
389 (l) A certificate of interest in an oil, gas, petroleum,
390 mineral, or mining title or lease or the right to participate
391 therein.
392 (m) A collateral trust certificate.
393 (n) A reorganization certificate.
394 (o) A preorganization subscription.
395 (p) A Any transferable share.
396 (q) An investment contract.
397 (r) A beneficial interest in title to property, profits, or
398 earnings.
399 (s) An interest in or under a profit-sharing or
400 participation agreement or scheme.
401 (t) An Any option contract that which entitles the holder
402 to purchase or sell a given amount of the underlying security at
403 a fixed price within a specified period of time.
404 (u) Any other instrument commonly known as a security,
405 including an interim or temporary bond, debenture, note, or
406 certificate.
407 (v) A Any receipt for a security, or for subscription to a
408 security, or a any right to subscribe to or purchase any
409 security.
410 (w) A viatical settlement investment.
411 (24)(23) “Underwriter” means a person that who has
412 purchased from an issuer or an affiliate of an issuer with a
413 view to, or offers or sells for an issuer or an affiliate of an
414 issuer in connection with, the distribution of any security, or
415 participates or has a direct or indirect participation in any
416 such undertaking, or participates or has a participation in the
417 direct or indirect underwriting of any such undertaking; except
418 that a person is shall be presumed not to be an underwriter with
419 respect to any security which it she or he has owned
420 beneficially for at least 1 year; and, further, a dealer is
421 shall not be considered an underwriter with respect to any
422 securities which do not represent part of an unsold allotment to
423 or subscription by the dealer as a participant in the
424 distribution of such securities by the issuer or an affiliate of
425 the issuer; and, further, in the case of securities acquired on
426 the conversion of another security without payment of additional
427 consideration, the length of time such securities have been
428 beneficially owned by a person includes the period during which
429 the convertible security was beneficially owned and the period
430 during which the security acquired on conversion has been
431 beneficially owned.
432 (25)(24) “Viatical settlement investment” means an
433 agreement for the purchase, sale, assignment, transfer, devise,
434 or bequest of all or any portion of a legal or equitable
435 interest in a viaticated policy as defined in chapter 626.
436 Section 2. Paragraph (d) of subsection (3) of section
437 517.072, Florida Statutes, is amended, and subsection (4) is
438 added to that section, to read:
439 517.072 Viatical settlement investments.—
440 (3) The registration provisions of ss. 517.07 and 517.12 do
441 not apply to any of the following transactions in viatical
442 settlement investments; however, such transactions in viatical
443 settlement investments are subject to the provisions of ss.
444 517.301, 517.311, and 517.312:
445 (d) The transfer or assignment of a viaticated policy to a
446 bank, trust company, savings institution, insurance company,
447 dealer, investment company as defined in the Investment Company
448 Act of 1940, as amended, pension or profit-sharing trust, or
449 qualified institutional buyer as defined in United States
450 Securities and Exchange Commission Rule 144A, 17 C.F.R. s.
451 230.144A(a), or to an accredited investor as defined by Rule 501
452 of Regulation D of the Securities Act Rules, provided such
453 transfer or assignment is not for the direct or indirect
454 promotion of any scheme or enterprise with the intent of
455 violating or evading any provision of this chapter.
456 (4) The commission may establish by rule requirements and
457 standards for disclosures to purchasers of viatical settlement
458 investments and recordkeeping requirements for sellers of
459 viatical settlement investments.
460 Section 3. Paragraphs (a), (g), and (n) of subsection (3)
461 and subsections (6) and (8) of section 517.081, Florida
462 Statutes, are amended to read:
463 517.081 Registration procedure.—
464 (3) The office may require the applicant to submit to the
465 office the following information concerning the issuer and such
466 other relevant information as the office may in its judgment
467 deem necessary to enable it to ascertain whether such securities
468 shall be registered pursuant to the provisions of this section:
469 (a) The names and addresses of:
470 1. All the directors, trustees, and officers, if the issuer
471 is be a corporation, association, or trust.
472 2. All the managers or managing members, if the issuer is a
473 limited liability company.
474 3. ; of All the partners, if the issuer is be a
475 partnership.
476 4. ; or of The issuer, if the issuer is a sole
477 proprietorship or natural person be an individual.
478 (g)1. A specimen copy of the securities certificate, if
479 applicable, security and a copy of any circular, prospectus,
480 advertisement, or other description of such securities.
481 2. The commission shall adopt a form for a simplified
482 offering circular to be used solely by corporations to register,
483 under this section, securities of the corporation that are sold
484 in offerings in which the aggregate offering price in any
485 consecutive 12-month period does not exceed the amount provided
486 in s. 3(b) of the Securities Act of 1933, as amended. The
487 following issuers shall not be eligible to submit a simplified
488 offering circular adopted pursuant to this subparagraph:
489 a. An issuer seeking to register securities for resale by
490 persons other than the issuer.
491 b. An issuer that who is subject to any of the
492 disqualifications described in 17 C.F.R. s. 230.262, adopted
493 pursuant to the Securities Act of 1933, as amended, or that who
494 has been or is engaged or is about to engage in an activity that
495 would be grounds for denial, revocation, or suspension under s.
496 517.111. For purposes of this subparagraph, an issuer includes
497 an issuer’s director, officer, general partner, manager or
498 managing member, trustee, or equity owner shareholder who owns
499 at least 10 percent of the ownership interests shares of the
500 issuer, promoter, or selling agent of the securities to be
501 offered or any officer, director, or partner, or manager or
502 managing member of such selling agent.
503 c. An issuer that who is a development-stage company that
504 either has no specific business plan or purpose or has indicated
505 that its business plan is to merge with an unidentified company
506 or companies.
507 d. An issuer of offerings in which the specific business or
508 properties cannot be described.
509 e. Any issuer the office determines is ineligible because
510 if the form does would not provide full and fair disclosure of
511 material information for the type of offering to be registered
512 by the issuer.
513 f. Any issuer that corporation which has failed to provide
514 the office the reports required for a previous offering
515 registered pursuant to this subparagraph.
516
517 As a condition precedent to qualifying for use of the simplified
518 offering circular, an issuer a corporation shall agree to
519 provide the office with an annual financial report containing a
520 balance sheet as of the end of the issuer’s fiscal year and a
521 statement of income for such year, prepared in accordance with
522 United States generally accepted accounting principles and
523 accompanied by an independent accountant’s report. If the issuer
524 has more than 100 security holders at the end of a fiscal year,
525 the financial statements must be audited. Annual financial
526 reports must be filed with the office within 90 days after the
527 close of the issuer’s fiscal year for each of the first 5 years
528 following the effective date of the registration.
529 (n) If the issuer is a corporation, there shall be filed
530 with the application a copy of its articles of incorporation
531 with all amendments and of its existing bylaws, if not already
532 on file in the office. If the issuer is a limited liability
533 company, there shall be filed with the application a copy of the
534 articles of organization with all the amendments and a copy of
535 the company’s operating agreement as may be amended, if not
536 already on file with the office. If the issuer is a trustee,
537 there shall be filed with the application a copy of all
538 instruments by which the trust is created or declared and in
539 which it is accepted and acknowledged. If the issuer is a
540 partnership, unincorporated association, joint-stock company, or
541 any other form of organization whatsoever, there shall be filed
542 with the application a copy of its articles of partnership or
543 association and all other papers pertaining to its organization,
544 if not already on file in the office.
545 (6) An issuer filing an application under this section
546 shall, at the time of filing, pay the office a nonreturnable fee
547 of $1,000 per application for each offering that exceeds the
548 amount provided in s. 3(b) of the Securities Act of 1933, as
549 amended, or $200 per application for each offering that does not
550 exceed the amount provided in s. 3(b) of the Securities Act of
551 1933, as amended.
552 (8) The office shall deem an application to register
553 securities filed with the office abandoned if the issuer or any
554 person acting on behalf of the issuer has failed to timely
555 complete an application specified by commission rule The
556 commission may by rule establish requirements and standards for:
557 (a) Disclosures to purchasers of viatical settlement
558 investments.
559 (b) Recordkeeping requirements for sellers of viatical
560 settlement investments.
561 Section 4. Section 517.082, Florida Statutes, is amended to
562 read:
563 517.082 Notification Registration by notification; federal
564 registration statements.—
565 (1) Except as provided in subsection (3), Securities
566 offered or sold pursuant to a registration statement filed under
567 the Securities Act of 1933, as amended, are shall be entitled to
568 registration by notification in the manner provided in
569 subsection (2), provided that before prior to the offer or sale
570 the registration statement has become effective.
571 (2) An application for registration by notification shall
572 be filed with the office, shall contain the following
573 information, and shall be accompanied by all of the following:
574 (a) An application to sell executed by the issuer, any
575 person on whose behalf the offering is made, a dealer registered
576 under this chapter, or any duly authorized agent of any such
577 person, setting forth the name and address of the applicant, the
578 name and address of the issuer, and the title of the securities
579 to be offered and sold.;
580 (b) Copies of such documents filed with the Securities and
581 Exchange Commission as the Financial Services Commission may by
582 rule require.;
583 (c) An irrevocable written consent to service as required
584 by s. 517.101.; and
585 (d) A nonreturnable fee of $1,000 per application.
586
587 A registration under this section becomes effective when the
588 federal registration statement becomes effective or as of the
589 date the application is filed with the office, whichever is
590 later, provided that, in addition to the items listed in
591 paragraphs (a)-(d), the office has received written notification
592 of effective registration under the Securities Act of 1933, as
593 amended, or the Investment Company Act of 1940, as amended,
594 within 10 business days after from the date federal registration
595 is granted. Failure to provide all the information required by
596 this subsection to the office within 60 days after of the date
597 the registration statement becomes effective with the Securities
598 and Exchange Commission shall be a violation of this chapter.
599 (3) Except for units of limited partnership interests or
600 such other securities as the commission describes by rule as
601 exempt from this subsection due to high investment quality, the
602 provisions of this section may not be used to register
603 securities if the offering price at the time of effectiveness
604 with the Securities and Exchange Commission is $5 or less per
605 share, unless such securities are listed or designated, or
606 approved for listing or designation upon notice of issuance, on
607 a stock exchange registered pursuant to the Securities Exchange
608 Act of 1934, as amended, or on the National Association of
609 Securities Dealers Automated Quotation (NASDAQ) System, or
610 unless such securities are of the same issuer and of senior or
611 substantially equal rank to securities so listed or designated.
612 (4) In lieu of filing with the office the application,
613 fees, and documents for registration required by subsection (2),
614 the commission may establish, by rule, procedures for depositing
615 fees and filing documents by electronic means, provided such
616 procedures provide the office with the information and data
617 required by this section.
618 (5) If the Securities and Exchange Commission has not
619 declared effective the applicant’s federal registration
620 statement within 180 days after the applicant’s filing with the
621 office of an application for registration by notification, the
622 office must deem the application abandoned.
623 Section 5. Section 517.111, Florida Statutes, is amended to
624 read:
625 517.111 Revocation or denial of registration of
626 securities.—
627 (1) The office may revoke or suspend the registration of
628 any security, or may deny any application to register
629 securities, if, upon examination or investigation into the
630 affairs of the issuer of such security, the office determines it
631 shall appear that:
632 (a) The issuer cannot pay its debts as they become due in
633 the usual course of business is insolvent;
634 (b) The issuer or any officer, director, manager or
635 managing member, or control person of the issuer has violated
636 any provision of this chapter or any rule made hereunder or any
637 order of the office of which such issuer has notice;
638 (c) The issuer or any officer, director, manager or
639 managing member, or control person of the issuer has been or is
640 engaged or is about to engage in fraudulent transactions;
641 (d) The issuer or any officer, director, manager or
642 managing member, or control person of the issuer has been found
643 guilty of a fraudulent act in connection with any sale of
644 securities, has engaged, is engaged, or is about to engage, in
645 making a fictitious sale or purchase of any security, or in any
646 practice or sale of any security which is fraudulent or a
647 violation of any law;
648 (e) The issuer or any officer, director, manager or
649 managing member, or control person of the issuer has had a final
650 judgment entered against such issuer or person in a civil action
651 on the grounds of fraud, embezzlement, misrepresentation, or
652 deceit;
653 (f) The issuer or any officer, director, manager or
654 managing member, or control person of the issuer has engaged in
655 any action that would be grounds for revocation, denial, or
656 suspension under s. 517.161(1) demonstrated any evidence of
657 unworthiness;
658 (g) The issuer or any officer, director, manager or
659 managing member, or control person of the issuer is in any other
660 way dishonest or has made any fraudulent representations or
661 failed to disclose any material information in any prospectus or
662 in any circular or other literature that has been distributed
663 concerning the issuer or its securities;
664 (h) The security registered or sought to be registered is
665 the subject of an injunction entered by a court of competent
666 jurisdiction or is the subject of an administrative stop-order
667 or similar order prohibiting the offer or sale of the security;
668 or
669 (i) For any security for which registration has been
670 applied pursuant to s. 517.081, the terms of the offer or sale
671 of such securities would not be fair, just, or equitable; or
672 (j) The issuer or any person acting on behalf of the issuer
673 has failed to timely complete any application for registration
674 filed with the office pursuant to the provisions of s. 517.081
675 or s. 517.082 or any rule adopted under such sections.
676 (2) In making such examination or investigation, the office
677 shall have access to and may compel the production of all the
678 books and papers of such issuer and may administer oaths to and
679 examine the officers of such issuer or any other person
680 connected therewith as to its business and affairs and may also
681 require a balance sheet exhibiting the assets and liabilities of
682 any such issuer or its income statement, or both, to be
683 certified to by a public accountant either of this state or of
684 any other state where the issuer’s business is located. Whenever
685 the office deems it necessary, it may also require such balance
686 sheet or income statement, or both, to be made more specific in
687 such particulars as the office may require.
688 (3)(2) If any issuer refuses shall refuse to permit an
689 examination or investigation to be made by the office, it shall
690 be proper ground for revocation of registration.
691 (4)(3) If the office deems it necessary, it may enter an
692 order suspending the right to sell securities pending any
693 examination or investigation, provided that the order shall
694 state the office’s grounds for taking such action.
695 (5)(4) Notice of the entry of such order shall be given
696 personally or by mail, personally, by telephone confirmed in
697 writing, or by telegraph to the issuer. Before such order is
698 made final, the issuer applying for registration shall, on
699 application, be entitled to a hearing.
700 (6)(5) The office may deny any request to terminate any
701 registration or to withdraw any application for registration if
702 the office believes that an act which would be grounds for
703 denial, suspension, or revocation under this chapter has been
704 committed.
705 Section 6. Subsections (3) through (22) of section 517.12,
706 Florida Statutes, are renumbered as subsections (2) through
707 (21), respectively, and subsection (1), present subsections (2)
708 and (3), paragraph (b) of present subsection (6), present
709 subsections (7) and (11), paragraph (b) of present subsection
710 (15), and present subsections (20) and (21) of that section are
711 amended, to read:
712 517.12 Registration of dealers, associated persons,
713 intermediaries, and investment advisers.—
714 (1) No dealer or, associated person, or issuer of
715 securities shall sell or offer for sale any securities in or
716 from offices in this state, or sell securities to persons in
717 this state from offices outside this state, by mail or
718 otherwise, unless the person is has been registered with the
719 office as a dealer or as an associated person of a dealer
720 pursuant to the provisions of this section. The office shall not
721 register any person as an associated person of a dealer unless
722 the dealer with which the applicant seeks registration is
723 lawfully registered with the office pursuant to this chapter.
724 (2) The registration requirements of this section do not
725 apply to the issuers of securities exempted by s. 517.051(1)-(8)
726 and (10).
727 (2)(3) Except as otherwise provided in s. 517.061(11)(a)4.,
728 (13), (16), (17), or (19), The registration requirements of this
729 section do not apply in a transaction exempted by s. 517.061(1)
730 (10) and (12), s. 517.061(1)-(12), (14), and (15).
731 (5)(6) A dealer, associated person, or investment adviser,
732 in order to obtain registration, must file with the office a
733 written application, on a form which the commission may by rule
734 prescribe. The commission may establish, by rule, procedures for
735 depositing fees and filing documents by electronic means
736 provided such procedures provide the office with the information
737 and data required by this section. Each dealer or investment
738 adviser must also file an irrevocable written consent to service
739 of civil process similar to that provided for in s. 517.101. The
740 application shall contain such information as the commission or
741 office may require concerning such matters as:
742 (b) The applicant’s form and place of organization; and, if
743 the applicant is:
744 1. A corporation, a copy of its articles of incorporation
745 and amendments to the articles of incorporation;
746 2. A limited liability company, a copy of its articles of
747 organization with amendments to its articles; or
748 3., if A partnership, a copy of the partnership agreement.
749 (6)(7) The application must also contain such information
750 as the commission or office may require about the applicant; any
751 member, principal, or director of the applicant or any person
752 having a similar status or performing similar functions; any
753 person directly or indirectly controlling the applicant; or any
754 employee of a dealer or of an investment adviser rendering
755 investment advisory services. Each applicant and any direct
756 owners, principals, or indirect owners that are required to be
757 reported on Form BD or Form ADV pursuant to subsection (14) (15)
758 shall submit fingerprints for live-scan processing in accordance
759 with rules adopted by the commission. The fingerprints may be
760 submitted through a third-party vendor authorized by the
761 Department of Law Enforcement to provide live-scan
762 fingerprinting. The costs of fingerprint processing shall be
763 borne by the person subject to the background check. The
764 Department of Law Enforcement shall conduct a state criminal
765 history background check, and a federal criminal history
766 background check must be conducted through the Federal Bureau of
767 Investigation. The office shall review the results of the state
768 and federal criminal history background checks and determine
769 whether the applicant meets licensure requirements. The
770 commission may waive, by rule, the requirement that applicants,
771 including any direct owners, principals, or indirect owners that
772 are required to be reported on Form BD or Form ADV pursuant to
773 subsection (14) (15), submit fingerprints or the requirement
774 that such fingerprints be processed by the Department of Law
775 Enforcement or the Federal Bureau of Investigation. The
776 commission or office may require information about any such
777 applicant or person concerning such matters as:
778 (a) The applicant’s or person’s His or her full name, and
779 any other names by which the applicant or person he or she may
780 have been known, and the applicant’s or person’s his or her age,
781 social security number, photograph, qualifications, and
782 educational and business history.
783 (b) Any injunction or administrative order by a state or
784 federal agency, national securities exchange, or national
785 securities association involving a security or any aspect of a
786 dealer’s or investment adviser’s regulated the securities
787 business and any injunction or administrative order by a state
788 or federal agency regulating banking, insurance, finance, or
789 small loan companies, real estate, mortgage brokers, or other
790 related or similar industries, which injunctions or
791 administrative orders relate to such person.
792 (c) The applicant’s or person’s His or her conviction of,
793 or plea of nolo contendere to, a criminal offense or the
794 applicant’s or person’s his or her commission of any acts which
795 would be grounds for refusal of an application under s. 517.161.
796 (d) The names and addresses of other persons of whom the
797 office may inquire as to the applicant’s or person’s his or her
798 character, reputation, and financial responsibility.
799 (10)(a)(11)(a) If the office finds that the applicant is of
800 good repute and character and has complied with the applicable
801 registration provisions of this chapter and the rules made
802 pursuant hereto, it shall register the applicant unless the
803 applicant is otherwise disqualified for registration pursuant to
804 law. The registration of each dealer, investment adviser, and
805 associated person expires on December 31 of the year the
806 registration became effective unless the registrant has renewed
807 its his or her registration on or before that date. Registration
808 may be renewed by furnishing such information as the commission
809 may require, together with payment of the fee required in
810 paragraph (9)(a) (10)(a) for dealers, investment advisers, or
811 associated persons and the payment of any amount lawfully due
812 and owing to the office pursuant to any order of the office or
813 pursuant to any agreement with the office. Any dealer,
814 investment adviser, or associated person who has not renewed a
815 registration by the time the current registration expires may
816 request reinstatement of such registration by filing with the
817 office, on or before January 31 of the year following the year
818 of expiration, such information as may be required by the
819 commission, together with payment of the fee required in
820 paragraph (9)(a) (10)(a) for dealers, investment advisers, or
821 associated persons and a late fee equal to the amount of such
822 fee. Any reinstatement of registration granted by the office
823 during the month of January shall be deemed effective
824 retroactive to January 1 of that year.
825 (b) The office shall waive the $50 assessment fee for an
826 associated person required by paragraph (9)(a) (10)(a) for a
827 registrant renewing his or her registration who:
828 1. Is an active duty member of the United States Armed
829 Forces or the spouse of such member;
830 2. Is or was a member of the United States Armed Forces and
831 served on active duty within the 2 years preceding the
832 expiration date of the registration pursuant to paragraph (a).
833 To qualify for the fee waiver, a registrant who is a former
834 member of the United States Armed Forces who served on active
835 duty within the 2 years preceding the expiration date of the
836 registration must have received an honorable discharge upon
837 separation or discharge from the United States Armed Forces; or
838 3. Is the surviving spouse of a member of the United States
839 Armed Forces if the member was serving on active duty at the
840 time of death and died within the 2 years preceding the
841 surviving spouse’s registration expiration date pursuant to
842 paragraph (a).
843
844 A registrant seeking such fee waiver must submit proof, in a
845 form prescribed by commission rule, that the registrant meets
846 one of the qualifications in this paragraph.
847 (14)(15)
848 (b) In lieu of filing with the office the applications
849 specified in subsection (5) (6), the fees required by subsection
850 (9) (10), the renewals required by subsection (10) (11), and the
851 termination notices required by subsection (11) (12), the
852 commission may by rule establish procedures for the deposit of
853 such fees and documents with the Central Registration Depository
854 or the Investment Adviser Registration Depository of the
855 Financial Industry Regulatory Authority, as developed under
856 contract with the North American Securities Administrators
857 Association, Inc.
858 (19)(20) An intermediary may not engage in business in this
859 state unless the intermediary is registered as a dealer or as an
860 intermediary with the office pursuant to this section to
861 facilitate the offer or sale of securities in accordance with s.
862 517.0611. An intermediary, in order to obtain registration, must
863 file with the office a written application on a form prescribed
864 by commission rule and pay a registration fee of $200. The fees
865 under this subsection shall be deposited into the Regulatory
866 Trust Fund of the office. The commission may establish by rule
867 procedures for depositing fees and filing documents by
868 electronic means if such procedures provide the office with the
869 information and data required by this section. Each intermediary
870 must also file an irrevocable written consent to service of
871 civil process, as provided in s. 517.101.
872 (a) The application must contain such information as the
873 commission or office may require concerning:
874 1. The name of the applicant and address of its principal
875 office and each office in this state.
876 2. The applicant’s form and place of organization; and, if
877 the applicant is:
878 a. A corporation, a copy of its articles of incorporation
879 and amendments to the articles of incorporation;
880 b. A limited liability company, a copy of its articles of
881 organization and amendments to the articles and a copy of the
882 company’s operating agreement as may be amended; or
883 c., if A partnership, a copy of the partnership agreement.
884 3. The website address where securities of the issuer will
885 be offered.
886 4. Contact information.
887 (b) The application must also contain such information as
888 the commission may require by rule about the applicant; any
889 member, principal, or director of the applicant or any person
890 having a similar status or performing similar functions; or any
891 persons directly or indirectly controlling the applicant. Each
892 applicant and any direct owners, principals, or indirect owners
893 that are required to be reported on a form adopted by commission
894 rule shall submit fingerprints for live-scan processing in
895 accordance with rules adopted by the commission. The
896 fingerprints may be submitted through a third-party vendor
897 authorized by the Department of Law Enforcement to provide live
898 scan fingerprinting. The costs of fingerprint processing shall
899 be borne by the person subject to the background check. The
900 Department of Law Enforcement shall conduct a state criminal
901 history background check, and a federal criminal history
902 background check must be conducted through the Federal Bureau of
903 Investigation. The office shall review the results of the state
904 and federal criminal history background checks and determine
905 whether the applicant meets registration requirements. The
906 commission may waive, by rule, the requirement that applicants,
907 including any direct owners, principals, or indirect owners,
908 which are required to be reported on a form adopted by
909 commission rule, submit fingerprints or the requirement that
910 such fingerprints be processed by the Department of Law
911 Enforcement or the Federal Bureau of Investigation. The
912 commission, by rule, or the office may require information about
913 any applicant or person, including:
914 1. The applicant’s or person’s His or her full name and any
915 other names by which the applicant or person he or she may have
916 been known and the applicant’s or person’s his or her age,
917 social security number, photograph, qualifications, and
918 educational and business history.
919 2. Any injunction or administrative order by a state or
920 federal agency, national securities exchange, or national
921 securities association involving a security or any aspect of an
922 intermediary’s regulated the securities business and any
923 injunction or administrative order by a state or federal agency
924 regulating banking, insurance, finance, or small loan companies,
925 real estate, mortgage brokers, or other related or similar
926 industries, which relate to such person.
927 3. The applicant’s or person’s His or her conviction of, or
928 plea of nolo contendere to, a criminal offense or the
929 applicant’s or person’s his or her commission of any acts that
930 would be grounds for refusal of an application under s. 517.161.
931 (c) The application must be amended within 30 days if any
932 information contained in the form becomes inaccurate for any
933 reason.
934 (d) An intermediary or persons affiliated with the
935 intermediary are not subject to any disqualification described
936 in s. 517.1611 or United States Securities and Exchange
937 Commission Rule 506(d), 17 C.F.R. 230.506(d), adopted pursuant
938 to the Securities Act of 1933, as amended. Each director,
939 officer, manager or managing member, control person of the
940 issuer, any person occupying a similar status or performing a
941 similar function, and each person holding more than 20 percent
942 of the ownership interests shares of the intermediary is subject
943 to this requirement.
944 (e) If the office finds that the applicant is of good
945 repute and character and has complied with the applicable
946 registration provisions of this chapter and the rules adopted
947 thereunder, it shall register the applicant. The registration of
948 each intermediary expires on December 31 of the year the
949 registration became effective unless the registrant renews his
950 or her registration on or before that date. Registration may be
951 renewed by furnishing such information as the commission may
952 require by rule, together with payment of a $200 fee and the
953 payment of any amount due to the office pursuant to any order of
954 the office or pursuant to any agreement with the office. An
955 intermediary who has not renewed a registration by the time that
956 the current registration expires may request reinstatement of
957 such registration by filing with the office, on or before
958 January 31 of the year following the year of expiration, such
959 information as required by the commission, together with payment
960 of the $200 fee and a late fee of $200. Any reinstatement of
961 registration granted by the office during the month of January
962 is deemed effective retroactive to January 1 of that year.
963 (20)(21) The registration requirements of this section do
964 not apply to any general lines insurance agent or life insurance
965 agent licensed under chapter 626, for the sale of a security as
966 defined in s. 517.021(23)(g) s. 517.021(22)(g), if the
967 individual is directly authorized by the issuer to offer or sell
968 the security on behalf of the issuer and the issuer is a
969 federally chartered savings bank subject to regulation by the
970 Federal Deposit Insurance Corporation. Actions under this
971 subsection shall constitute activity under the insurance agent’s
972 license for purposes of ss. 626.611 and 626.621.
973 Section 7. Section 517.1214, Florida Statutes, is created
974 to read:
975 517.1214 Continuing education requirements for associated
976 persons of investment advisers and federal covered advisers.—
977 (1) As used in this section, the term:
978 (a) “Approved continuing education content” means the
979 materials, written, oral, or otherwise, which have been approved
980 by NASAA or its designee and which make up the educational
981 program provided to an associated person under this section.
982 (b) “Credit” means a unit designated by NASAA or its
983 designee as at least 50 minutes of educational instruction.
984 (c) “Home state” means the state in which an associated
985 person of an investment adviser or a federal covered adviser has
986 his or her principal office and place of business.
987 (d) “NASAA” means the North American Securities
988 Administrators Association, Inc.
989 (e) “Reporting period” means one 12-month period beginning
990 January 1 and ending December 31. An associated person’s initial
991 reporting period with this state commences the first day of the
992 first full reporting period after the individual is registered
993 or required to be registered with this state.
994 (2) By December 31, 2024, and each December 31 thereafter,
995 each associated person of an investment adviser or a federal
996 covered adviser shall complete the following continuing
997 education content requirements offered by a person that NASAA or
998 its designee has authorized to provide the continuing education
999 content required by this section:
1000 (a) Six credits of approved continuing education content
1001 that addresses an associated person’s ethical and regulatory
1002 obligations, with at least 3 hours covering the topic of ethics;
1003 and
1004 (b) Six credits of approved continuing education content
1005 that addresses an associated person’s skills and knowledge
1006 regarding financial products, investment features, and practices
1007 in the investment advisory industry.
1008 (3) An associated person of an investment adviser or
1009 federal covered adviser who is also registered as an associated
1010 person of a Financial Industry Regulatory Authority (FINRA)
1011 member dealer and who complies with FINRA’s continuing education
1012 requirements is considered to be in compliance with this
1013 section’s products and practice requirement for each applicable
1014 reporting period, provided that the FINRA continuing education
1015 content is approved continuing education content.
1016 (4) Credits of continuing education completed by an
1017 associated person who was awarded and currently holds a
1018 credential that qualifies for examination waiver by passing any
1019 tests as prescribed in s. 15(b)(7) of the Securities Exchange
1020 Act of 1934, as amended, comply with paragraphs (2)(a) and (b),
1021 provided all of the following conditions are met:
1022 (a) The associated person completes the credits of
1023 continuing education as a condition of maintaining the
1024 credential for the relevant reporting period.
1025 (b) The credits of continuing education completed during
1026 the relevant reporting period by the associated person are
1027 mandatory to maintain the credential.
1028 (c) The continuing education content provided by the
1029 credentialing organization during the relevant reporting period
1030 is approved continuing education content.
1031 (5) Each associated person is responsible for ensuring that
1032 the authorized provider reports the associated person’s
1033 completion of the applicable continuing education requirements.
1034 (6) An associated person who completes credits of
1035 continuing education in excess of the credits required for the
1036 reporting period may not carry forward excess credits to a
1037 subsequent reporting period.
1038 (7) An associated person who fails to comply with this
1039 section by the end of a reporting period shall renew as “CE
1040 inactive” at the close of the calendar year in this state until
1041 the associated person completes and reports all required
1042 continuing education credits for all reporting periods as
1043 required by this section. An associated person who is “CE
1044 inactive” at the close of the next calendar year is not eligible
1045 for associated person registration or renewal of associated
1046 person registration.
1047 (8) An associated person registered or required to be
1048 registered in this state who is registered as an associated
1049 person of an investment adviser or federal covered adviser in
1050 the individual’s home state is considered to be in compliance
1051 with this section if:
1052 (a) The associated person’s home state has a continuing
1053 education requirement of at least 12 hours annually; and
1054 (b) The associated person is in compliance with the home
1055 state’s associated person of an investment adviser or federal
1056 covered adviser continuing education requirements.
1057 (9) An associated person who was previously registered
1058 under s. 517.12 and became unregistered must complete continuing
1059 education for all reporting periods that occurred between the
1060 time that the associated person became unregistered and when the
1061 person became registered again under s. 517.12, unless the
1062 associated person takes and passes the required examinations or
1063 the examination requirements are waived in connection with the
1064 subsequent application for registration.
1065 Section 8. Section 517.1217, Florida Statutes, is amended
1066 to read:
1067 517.1217 Rules of conduct and prohibited business practices
1068 for dealers and their associated persons and for
1069 intermediaries.—The commission by rule may establish rules of
1070 conduct and prohibited business practices for dealers and their
1071 associated persons and for intermediaries. In adopting the
1072 rules, the commission shall consider general industry standards
1073 as expressed in the rules and regulations of the various federal
1074 and self-regulatory agencies and regulatory associations,
1075 including, but not limited to, the United States Securities and
1076 Exchange Commission, the Financial Industry Regulatory
1077 Authority, and the North American Securities Administrators
1078 Association, Inc.
1079 Section 9. Subsections (1), (4), and (5) of section
1080 517.161, Florida Statutes, are amended to read:
1081 517.161 Revocation, denial, or suspension of registration
1082 of dealer, investment adviser, intermediary, or associated
1083 person.—
1084 (1) Registration under s. 517.12 may be denied or any
1085 registration granted may be revoked, restricted, or suspended by
1086 the office if the office determines that such applicant or
1087 registrant; any member, principal, or director of the applicant
1088 or registrant or any person having a similar status or
1089 performing similar functions; or any person directly or
1090 indirectly controlling the applicant or registrant:
1091 (a) Has violated any provision of this chapter or any rule
1092 or order made under this chapter;
1093 (b) Has made a material false statement in the application
1094 for registration;
1095 (c) Has been guilty of a fraudulent act in connection with
1096 rendering investment advice or in connection with any sale of
1097 securities, has been or is engaged or is about to engage in
1098 making fictitious or pretended sales or purchases of any such
1099 securities or in any practice involving the rendering of
1100 investment advice or the sale of securities which is fraudulent
1101 or in violation of the law;
1102 (d) Has made a misrepresentation or false statement to, or
1103 concealed any essential or material fact from, any person in the
1104 rendering of investment advice or the sale of a security to such
1105 person;
1106 (e) Has failed to account to persons interested for all
1107 money and property received;
1108 (f) Has not delivered, after a reasonable time, to persons
1109 entitled thereto securities held or agreed to be delivered by
1110 the dealer, broker, or investment adviser, as and when paid for,
1111 and due to be delivered;
1112 (g) Is rendering investment advice or selling or offering
1113 for sale securities through any associated person not registered
1114 in compliance with the provisions of this chapter;
1115 (h) Has demonstrated unworthiness to transact the business
1116 of dealer, investment adviser, intermediary, or associated
1117 person;
1118 (i) Has exercised management or policy control over or
1119 owned 10 percent or more of the securities of any dealer,
1120 intermediary, or investment adviser that has been declared
1121 bankrupt, or had a trustee appointed under the Securities
1122 Investor Protection Act; or is, in the case of a dealer,
1123 intermediary, or investment adviser, unable to pay its debts as
1124 they become due in the usual course of business insolvent;
1125 (i)(j) Has been convicted of, or has entered a plea of
1126 guilty or nolo contendere to, regardless of whether adjudication
1127 was withheld, a crime against the laws of this state or any
1128 other state or of the United States or of any other country or
1129 government which relates to registration as a dealer, investment
1130 adviser, issuer of securities, intermediary, or associated
1131 person; which relates to the application for such registration;
1132 or which involves moral turpitude or fraudulent or dishonest
1133 dealing;
1134 (j)(k) Has had a final judgment entered against her or him
1135 in a civil action upon grounds of fraud, embezzlement,
1136 misrepresentation, or deceit;
1137 (l) Is of bad business repute;
1138 (k)(m) Has been the subject of any decision, finding,
1139 injunction, suspension, prohibition, revocation, denial,
1140 judgment, or administrative order by any court of competent
1141 jurisdiction, administrative law judge, or by any state or
1142 federal agency, national securities, commodities, or option
1143 exchange, or national securities, commodities, or option
1144 association, involving a violation of any federal or state
1145 securities or commodities law or any rule or regulation
1146 promulgated thereunder, or any rule or regulation of any
1147 national securities, commodities, or options exchange or
1148 national securities, commodities, or options association, or has
1149 been the subject of any injunction or adverse administrative
1150 order by a state or federal agency regulating banking,
1151 insurance, finance or small loan companies, real estate,
1152 mortgage brokers or lenders, money transmitters, or other
1153 related or similar industries. For purposes of this subsection,
1154 the office may not deny registration to any applicant who has
1155 been continuously registered with the office for 5 years after
1156 the date of entry of such decision, finding, injunction,
1157 suspension, prohibition, revocation, denial, judgment, or
1158 administrative order provided such decision, finding,
1159 injunction, suspension, prohibition, revocation, denial,
1160 judgment, or administrative order has been timely reported to
1161 the office pursuant to the commission’s rules; or
1162 (l)(n) Made payment to the office for a registration with a
1163 check or electronic transmission of funds that is dishonored by
1164 the applicant’s or registrant’s financial institution;
1165 (m) Failed to pay and fully satisfy any final judgment or
1166 arbitration award resulting from an investment-related, client-
1167 or customer-initiated arbitration or court proceeding, unless
1168 alternative payment arrangements are agreed to in writing
1169 between the client or customer and the investment adviser,
1170 dealer, or associated person and the investment adviser, dealer,
1171 or associated person complies with the terms of the alternative
1172 payment arrangement;
1173 (n) Attempted to avoid payment of any final judgment or
1174 arbitration award resulting from an investment-related, client-
1175 or customer-initiated arbitration or court proceeding, unless
1176 alternative payment arrangements are agreed to in writing
1177 between the client or customer and the investment adviser,
1178 dealer, or associated person and the investment adviser, dealer,
1179 or associated person complies with the terms of the alternative
1180 payment arrangements; or
1181 (o) Failed to pay and fully satisfy any fine, civil
1182 penalty, order of restitution, order of disgorgement, or similar
1183 monetary payment obligation imposed upon the investment adviser,
1184 dealer, or associated person by the Securities and Exchange
1185 Commission, the securities regulator or other financial services
1186 regulator of any state or province, or any securities industry
1187 self-regulatory organization.
1188 (4) It shall be sufficient cause for denial of an
1189 application or revocation of registration, in the case of a
1190 partnership, corporation, limited liability company, or
1191 unincorporated association, if any member of the partnership,
1192 any manager or managing member of the limited liability company,
1193 or any officer, director, or ultimate equitable owner of the
1194 corporation or association has committed any act or omission
1195 which would be cause for denying, revoking, restricting, or
1196 suspending the registration of an individual dealer, investment
1197 adviser, intermediary, or associated person. As used in this
1198 subsection, the term “ultimate equitable owner” means a natural
1199 person who directly or indirectly owns or controls an ownership
1200 interest in the corporation, partnership, association, or other
1201 legal entity however organized, regardless of whether such
1202 natural person owns or controls such ownership interest through
1203 one or more proxies, powers of attorney, nominees, corporations,
1204 associations, partnerships, trusts, joint stock companies, or
1205 other entities or devices, or any combination thereof.
1206 (5) The office may deny any request to terminate or
1207 withdraw any application or registration if the office believes
1208 that an act that which would be a ground for denial, suspension,
1209 restriction, or revocation under this chapter has been
1210 committed.
1211 Section 10. Section 517.181, Florida Statutes, is repealed.
1212 Section 11. Paragraph (a) of subsection (4) of section
1213 517.201, Florida Statutes, is amended to read:
1214 517.201 Investigations; examinations; subpoenas; hearings;
1215 witnesses.—
1216 (4)(a) In the event of substantial noncompliance with a
1217 subpoena or subpoena duces tecum issued or caused to be issued
1218 by the office pursuant to this section, the office may petition
1219 the circuit court of the county in which the person subpoenaed
1220 resides or has its principal place of business for an order
1221 requiring the subpoenaed person to appear and testify and to
1222 produce such books, records, and documents as are specified in
1223 such subpoena duces tecum. The court may grant injunctive relief
1224 restraining the issuance, sale or offer for sale, purchase or
1225 offer to purchase, promotion, negotiation, advertisement, or
1226 distribution in or from offices in this state of securities or
1227 investments in or from this state by the noncompliant a person
1228 or its agent, employee, broker, partner, officer, director,
1229 manager, managing member, equity holder, or any person directly
1230 or indirectly controlling the noncompliant person stockholder
1231 thereof, and may grant such other relief, including, but not
1232 limited to, the restraint, by injunction or appointment of a
1233 receiver, of any transfer, pledge, assignment, or other
1234 disposition of such person’s assets or any concealment,
1235 alteration, destruction, or other disposition of subpoenaed
1236 books, records, or documents, as the court deems appropriate,
1237 until such person has fully complied with such subpoena or
1238 subpoena duces tecum and the office has completed its
1239 investigation or examination. The office is entitled to the
1240 summary procedure provided in s. 51.011, and the court shall
1241 advance the cause on its calendar. Costs incurred by the office
1242 to obtain an order granting, in whole or in part, such petition
1243 for enforcement of a subpoena or subpoena duces tecum shall be
1244 taxed against the subpoenaed person, and failure to comply with
1245 such order shall be a contempt of court.
1246 Section 12. Paragraph (d) of subsection (3) of section
1247 921.0022, Florida Statutes, is amended to read:
1248 921.0022 Criminal Punishment Code; offense severity ranking
1249 chart.—
1250 (3) OFFENSE SEVERITY RANKING CHART
1251 (d) LEVEL 4
1252
1253
1254 FloridaStatute FelonyDegree Description
1255 316.1935(3)(a) 2nd Driving at high speed or with wanton disregard for safety while fleeing or attempting to elude law enforcement officer who is in a patrol vehicle with siren and lights activated.
1256 499.0051(1) 3rd Failure to maintain or deliver transaction history, transaction information, or transaction statements.
1257 499.0051(5) 2nd Knowing sale or delivery, or possession with intent to sell, contraband prescription drugs.
1258 517.07(1) 3rd Failure to register securities.
1259 517.12(1) 3rd Failure of dealer or, associated person of a dealer, or issuer of securities to register.
1260 784.07(2)(b) 3rd Battery of law enforcement officer, firefighter, etc.
1261 784.074(1)(c) 3rd Battery of sexually violent predators facility staff.
1262 784.075 3rd Battery on detention or commitment facility staff.
1263 784.078 3rd Battery of facility employee by throwing, tossing, or expelling certain fluids or materials.
1264 784.08(2)(c) 3rd Battery on a person 65 years of age or older.
1265 784.081(3) 3rd Battery on specified official or employee.
1266 784.082(3) 3rd Battery by detained person on visitor or other detainee.
1267 784.083(3) 3rd Battery on code inspector.
1268 784.085 3rd Battery of child by throwing, tossing, projecting, or expelling certain fluids or materials.
1269 787.03(1) 3rd Interference with custody; wrongly takes minor from appointed guardian.
1270 787.04(2) 3rd Take, entice, or remove child beyond state limits with criminal intent pending custody proceedings.
1271 787.04(3) 3rd Carrying child beyond state lines with criminal intent to avoid producing child at custody hearing or delivering to designated person.
1272 787.07 3rd Human smuggling.
1273 790.115(1) 3rd Exhibiting firearm or weapon within 1,000 feet of a school.
1274 790.115(2)(b) 3rd Possessing electric weapon or device, destructive device, or other weapon on school property.
1275 790.115(2)(c) 3rd Possessing firearm on school property.
1276 794.051(1) 3rd Indecent, lewd, or lascivious touching of certain minors.
1277 800.04(7)(c) 3rd Lewd or lascivious exhibition; offender less than 18 years.
1278 806.135 2nd Destroying or demolishing a memorial or historic property.
1279 810.02(4)(a) 3rd Burglary, or attempted burglary, of an unoccupied structure; unarmed; no assault or battery.
1280 810.02(4)(b) 3rd Burglary, or attempted burglary, of an unoccupied conveyance; unarmed; no assault or battery.
1281 810.06 3rd Burglary; possession of tools.
1282 810.08(2)(c) 3rd Trespass on property, armed with firearm or dangerous weapon.
1283 812.014(2)(c)3. 3rd Grand theft, 3rd degree $10,000 or more but less than $20,000.
1284 812.014 (2)(c)4.-10. 3rd Grand theft, 3rd degree; specified items.
1285 812.0195(2) 3rd Dealing in stolen property by use of the Internet; property stolen $300 or more.
1286 817.505(4)(a) 3rd Patient brokering.
1287 817.563(1) 3rd Sell or deliver substance other than controlled substance agreed upon, excluding s. 893.03(5) drugs.
1288 817.568(2)(a) 3rd Fraudulent use of personal identification information.
1289 817.625(2)(a) 3rd Fraudulent use of scanning device, skimming device, or reencoder.
1290 817.625(2)(c) 3rd Possess, sell, or deliver skimming device.
1291 828.125(1) 2nd Kill, maim, or cause great bodily harm or permanent breeding disability to any registered horse or cattle.
1292 836.14(2) 3rd Person who commits theft of a sexually explicit image with intent to promote it.
1293 836.14(3) 3rd Person who willfully possesses a sexually explicit image with certain knowledge, intent, and purpose.
1294 837.02(1) 3rd Perjury in official proceedings.
1295 837.021(1) 3rd Make contradictory statements in official proceedings.
1296 838.022 3rd Official misconduct.
1297 839.13(2)(a) 3rd Falsifying records of an individual in the care and custody of a state agency.
1298 839.13(2)(c) 3rd Falsifying records of the Department of Children and Families.
1299 843.021 3rd Possession of a concealed handcuff key by a person in custody.
1300 843.025 3rd Deprive law enforcement, correctional, or correctional probation officer of means of protection or communication.
1301 843.15(1)(a) 3rd Failure to appear while on bail for felony (bond estreature or bond jumping).
1302 847.0135(5)(c) 3rd Lewd or lascivious exhibition using computer; offender less than 18 years.
1303 870.01(3) 2nd Aggravated rioting.
1304 870.01(5) 2nd Aggravated inciting a riot.
1305 874.05(1)(a) 3rd Encouraging or recruiting another to join a criminal gang.
1306 893.13(2)(a)1. 2nd Purchase of cocaine (or other s. 893.03(1)(a), (b), or (d), (2)(a), (2)(b), or (2)(c)5. drugs).
1307 914.14(2) 3rd Witnesses accepting bribes.
1308 914.22(1) 3rd Force, threaten, etc., witness, victim, or informant.
1309 914.23(2) 3rd Retaliation against a witness, victim, or informant, no bodily injury.
1310 916.1085 (2)(c)1. 3rd Introduction of specified contraband into certain DCF facilities.
1311 918.12 3rd Tampering with jurors.
1312 934.215 3rd Use of two-way communications device to facilitate commission of a crime.
1313 944.47(1)(a)6. 3rd Introduction of contraband (cellular telephone or other portable communication device) into correctional institution.
1314 951.22(1)(h), (j) & (k) 3rd Intoxicating drug, instrumentality or other device to aid escape, or cellular telephone or other portable communication device introduced into county detention facility.
1315
1316 Section 13. Section 517.1215, Florida Statutes, is amended
1317 to read:
1318 517.1215 Requirements, rules of conduct, and prohibited
1319 business practices for investment advisers advisors and their
1320 associated persons.—
1321 (1) The commission shall specify by rule requirements for
1322 investment advisers advisors deemed to have custody of client
1323 funds which concern the following:
1324 (a) Notification of custody of, maintenance of, and
1325 safeguards for client funds.
1326 (b) Communications with clients and independent
1327 representatives.
1328 (c) Requirements for investment advisers who have custody
1329 of pooled investments.
1330 (d) Exceptions to the custody requirements.
1331
1332 In adopting the rules, the commission shall consider the rules
1333 and regulations of the federal regulatory authority and the
1334 North American Securities Administrators Association, Inc.
1335 (2) The commission shall by rule establish rules of conduct
1336 and prohibited business practices for investment advisers and
1337 their associated persons. In adopting the rules, the commission
1338 shall consider general industry standards as expressed in the
1339 rules and regulations of the various federal and self-regulatory
1340 agencies and regulatory associations, including, but not limited
1341 to, the United States Securities and Exchange Commission, the
1342 Financial Industry Regulatory Authority, and the North American
1343 Securities Administrators Association, Inc.
1344 Section 14. Subsections (18) and (22) of section 517.061,
1345 Florida Statutes, are amended to read:
1346 517.061 Exempt transactions.—Except as otherwise provided
1347 in s. 517.0611 for a transaction listed in subsection (21), the
1348 exemption for each transaction listed below is self-executing
1349 and does not require any filing with the office before claiming
1350 the exemption. Any person who claims entitlement to any of the
1351 exemptions bears the burden of proving such entitlement in any
1352 proceeding brought under this chapter. The registration
1353 provisions of s. 517.07 do not apply to any of the following
1354 transactions; however, such transactions are subject to the
1355 provisions of ss. 517.301, 517.311, and 517.312:
1356 (18) The offer or sale of any security effected by or
1357 through a person in compliance with s. 517.12(16) s. 517.12(17).
1358 (22) The offer or sale of securities, solely in connection
1359 with the transfer of ownership of an eligible privately held
1360 company, through a merger and acquisition broker in accordance
1361 with s. 517.12(21) s. 517.12(22).
1362 Section 15. Paragraph (b) of subsection (4) and subsection
1363 (14) of section 517.0611, Florida Statutes, are amended to read:
1364 517.0611 Intrastate crowdfunding.—
1365 (4) An issuer must:
1366 (b) Conduct transactions for the offering through a dealer
1367 registered with the office or an intermediary registered under
1368 s. 517.12(19) s. 517.12(20).
1369 (14) An intermediary not registered as a dealer under s.
1370 517.12(5) s. 517.12(6) may not:
1371 (a) Offer investment advice or recommendations. A refusal
1372 by an intermediary to post an offering that it deems not
1373 credible or that represents a potential for fraud may not be
1374 construed as an offer of investment advice or recommendation.
1375 (b) Solicit purchases, sales, or offers to buy securities
1376 offered or displayed on its website.
1377 (c) Compensate employees, agents, or other persons for the
1378 solicitation of, or based on the sale of, securities offered or
1379 displayed on its website.
1380 (d) Hold, manage, possess, or otherwise handle investor
1381 funds or securities.
1382 (e) Compensate promoters, finders, or lead generators for
1383 providing the intermediary with the personal identifying
1384 information of any potential investor.
1385 (f) Engage in any other activities set forth by commission
1386 rule.
1387 Section 16. Subsection (1) of section 517.075, Florida
1388 Statutes, is amended to read:
1389 517.075 Cuba, prospectus disclosure of doing business with,
1390 required.—
1391 (1) Any issuer of securities that will be sold in this
1392 state pursuant to a prospectus must disclose in the prospectus
1393 if the issuer or any affiliate thereof, as defined in s.
1394 517.021(1), does business with the government of Cuba or with
1395 any person or affiliate located in Cuba. The prospectus
1396 disclosure required by this subsection does not apply with
1397 respect to prospectuses prepared before April 10, 1992.
1398 Section 17. Paragraph (a) of subsection (1) of section
1399 517.131, Florida Statutes, is amended to read:
1400 517.131 Securities Guaranty Fund.—
1401 (1)(a) The Chief Financial Officer shall establish a
1402 Securities Guaranty Fund. An amount not exceeding 20 percent of
1403 all revenues received as assessment fees pursuant to s.
1404 517.12(9) and (10) s. 517.12(10) and (11) for dealers and
1405 investment advisers or s. 517.1201 for federal covered advisers
1406 and an amount not exceeding 10 percent of all revenues received
1407 as assessment fees pursuant to s. 517.12(9) and (10) s.
1408 517.12(10) and (11) for associated persons shall be part of the
1409 regular license fee and shall be transferred to or deposited in
1410 the Securities Guaranty Fund.
1411 Section 18. Subsection (1) of section 517.211, Florida
1412 Statutes, is amended to read:
1413 517.211 Remedies available in cases of unlawful sale.—
1414 (1) Every sale made in violation of either s. 517.07 or s.
1415 517.12(1), (3), (4), (8), (10), (12), (15), or (17) (4), (5),
1416 (9), (11), (13), (16), or (18) may be rescinded at the election
1417 of the purchaser, except a sale made in violation of the
1418 provisions of s. 517.1202(3) relating to a renewal of a branch
1419 office notification shall not be subject to this section, and a
1420 sale made in violation of the provisions of s. 517.12(12) s.
1421 517.12(13) relating to filing a change of address amendment
1422 shall not be subject to this section. Each person making the
1423 sale and every director, officer, partner, or agent of or for
1424 the seller, if the director, officer, partner, or agent has
1425 personally participated or aided in making the sale, is jointly
1426 and severally liable to the purchaser in an action for
1427 rescission, if the purchaser still owns the security, or for
1428 damages, if the purchaser has sold the security. No purchaser
1429 otherwise entitled will have the benefit of this subsection who
1430 has refused or failed, within 30 days of receipt, to accept an
1431 offer made in writing by the seller, if the purchaser has not
1432 sold the security, to take back the security in question and to
1433 refund the full amount paid by the purchaser or, if the
1434 purchaser has sold the security, to pay the purchaser an amount
1435 equal to the difference between the amount paid for the security
1436 and the amount received by the purchaser on the sale of the
1437 security, together, in either case, with interest on the full
1438 amount paid for the security by the purchaser at the legal rate,
1439 pursuant to s. 55.03, for the period from the date of payment by
1440 the purchaser to the date of repayment, less the amount of any
1441 income received by the purchaser on the security.
1442 Section 19. Section 517.315, Florida Statutes, is amended
1443 to read:
1444 517.315 Fees.—All fees of any nature collected by the
1445 office pursuant to this chapter shall be disbursed as follows:
1446 (1) The office shall transfer the amount of fees required
1447 to be deposited into the Securities Guaranty Fund pursuant to s.
1448 517.131.;
1449 (2) After the transfer required in subsection (1), the
1450 office shall transfer the $50 assessment fee collected from each
1451 associated person under s. 517.12(9) and (10) s. 517.12(10) and
1452 (11) and 30.44 percent of the $100 assessment fee paid by
1453 dealers and investment advisers advisors for each office in the
1454 state under s. 517.12(9) and (10) s. 517.12(10) and (11) to the
1455 Regulatory Trust Fund.; and
1456 (3) All remaining fees shall be deposited into the General
1457 Revenue Fund.
1458 Section 20. Subsection (5) of section 626.9911, Florida
1459 Statutes, is amended to read:
1460 626.9911 Definitions.—As used in this act, the term:
1461 (5) “Life expectancy provider” means a person who
1462 determines, or holds himself or herself out as determining, life
1463 expectancies or mortality ratings used to determine life
1464 expectancies:
1465 (a) On behalf of a viatical settlement provider, viatical
1466 settlement broker, life agent, or person engaged in the business
1467 of viatical settlements;
1468 (b) In connection with a viatical settlement investment as
1469 defined in s. 517.021, pursuant to s. 517.021(24); or
1470 (c) On residents of this state in connection with a
1471 viatical settlement contract or viatical settlement investment.
1472 Section 21. Subsection (6) of section 744.351, Florida
1473 Statutes, is amended to read:
1474 744.351 Bond of guardian.—
1475 (6) When it is expedient in the judgment of any court
1476 having jurisdiction of any guardianship property, because the
1477 size of the bond required of the guardian is burdensome, or for
1478 other cause, the court may order, in lieu of a bond or in
1479 addition to a lesser bond, that the guardian place all or part
1480 of the property of the ward in a designated financial
1481 institution under the same conditions and limitations as are
1482 contained in s. 69.031. A designated financial institution shall
1483 also include a dealer, as defined in s. 517.021 s. 517.021(6),
1484 if the dealer is a member of the Security Investment Protection
1485 Corporation and is doing business in the state.
1486 Section 22. Section 517.1205, Florida Statutes, is amended
1487 to read:
1488 517.1205 Registration of associated persons specific as to
1489 securities dealer, investment adviser, or federal covered
1490 adviser identified at time of registration approval.—Inasmuch as
1491 this chapter is intended to protect investors in securities
1492 offerings and other investment transactions regulated by that
1493 chapter, its provisions are to be construed to require full and
1494 fair disclosure of all, but only, those matters material to the
1495 investor’s evaluation of the offering or other transaction. It
1496 should, furthermore, be construed to impose the standards
1497 provided by law on all those seeking to participate in the
1498 state’s securities industry through registration as a securities
1499 dealer, investment adviser, or associated person. To this end,
1500 it is declared to be the intent of the Legislature that the
1501 registration of associated persons required by law is specific
1502 to the securities dealer, investment adviser, or federal covered
1503 adviser identified at the time such registration is approved.
1504 Notwithstanding any interpretation of law to the contrary, the
1505 historical practice of the Department of Banking and Finance,
1506 reflected in its rules, that requires a new application for
1507 registration from a previously registered associated person when
1508 that person seeks to be associated with a new securities dealer
1509 or investment adviser is hereby ratified and approved as
1510 consistent with legislative intent. It is, finally, declared to
1511 be the intent of the Legislature that while approval of an
1512 application for registration of a securities dealer, investment
1513 adviser, or associated person requires a finding of compliance
1514 with the applicable registration provisions of this chapter and
1515 applicable rules the applicant’s good repute and character, such
1516 finding is precluded by a determination that the applicant may
1517 be denied registration on grounds provided by law.
1518 Section 23. This act shall take effect October 1, 2023.