Text: SSB01240 Text: SSB01242 Text: SSB01200 - SSB01299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 502.102, subsection 3, paragraph a, 1 2 subparagraph (3), Code 2001, is amended to read as follows: 1 3 (3) Effecting transactions in a federal covered security 1 4 as described in sections 18(b)(3) and 18(b)(4)(D) of the 1 5 Securities Act of 1933 as amended in Pub. L. No. 104-290, if a 1 6 commission or other remuneration is not either directly or 1 7 indirectly paid any person for soliciting in this state. 1 8 Sec. 2. Section 502.102, subsection 19, Code 2001, is 1 9 amended to read as follows: 1 10 19. "Security" means any note; stock; treasury stock; 1 11 bond; debenture; evidence of indebtedness; certificate of 1 12 interest or participation in a profit sharing agreement; 1 13 collateral trust certificate; preorganization certificate or 1 14 subscription; transferable share; investment contract; 1 15 viatical settlement contract, or any fractional or pooled 1 16 interest in such contract; voting trust certificate; 1 17 certificate of deposit for a security; fractional undivided 1 18 interest in an oil, gas, or other mineral lease or in payments 1 19 out of production under such a lease, right, or royalty; an 1 20 interest in a limited liability company or in a limited 1 21 liability partnership or any class or series of such interest, 1 22 including any fractional or other interest in such interest; 1 23 or, in general, any interest or instrument commonly known as a 1 24 "security", or any certificate of interest or participation 1 25 in, temporary or interim certificate for, receipt for, 1 26 guarantee of, or warrant or right to subscribe to or purchase, 1 27 any of the foregoing. "Security" does not include an 1 28 insurance or endowment policy or annuity contract under which 1 29 an insurance company promises to pay money either in a lump 1 30 sum or periodically for life or for some other specified 1 31 period. "Security" also does not include an interest in a 1 32 limited liability company or a limited liability partnership 1 33 if the person claiming that such an interest is not a security 1 34 proves that all of the members of the limited liability 1 35 company or limited liability partnership are actively engaged 2 1 in the management of the limited liability company or limited 2 2 liability partnership; provided that the evidence that members 2 3 vote or have the right to vote, or the right to information 2 4 concerning the business and affairs of the limited liability 2 5 company or limited liability partnership, or the right to 2 6 participate in management, shall not establish, without more, 2 7 that all members are actively engaged in the management of the 2 8 limited liability company or limited liability partnership. 2 9 "Security" is any of the foregoing as provided in this 2 10 subsection whether or not it is evidenced by a written 2 11 instrument. 2 12 Sec. 3. Section 502.203, subsection 18, Code 2001, is 2 13 amended to read as follows: 2 14 18. An offer or sale of securities which are exempt from 2 15 registration under 15 U.S.C. }77a-77aa pursuant to rule 801 or 2 16 802 promulgated by the securities and exchange commission as 2 17 provided in the Securities Act of 1933. 2 18 19. Any other security or transaction or offering or class 2 19 of securities or transactions or offers exempted or 2 20 requirements for exemption waived, by the administrator by 2 21 rule or order, from requirements provided in section 502.201 2 22 or 502.602. 2 23 Sec. 4. Section 502.207A, subsection 7, Code 2001, is 2 24 amended to read as follows: 2 25 7. Notwithstanding any other provision of this chapter, 2 26 the administrator shall not deny effectiveness to or suspend 2 27 or revoke the effectiveness of a registration under this 2 28 section on the basis of section 502.209, subsection 1, 2 29 paragraph "h", and the administrator shall not impose the 2 30 conditions specified in section 502.208, subsection 8, 2 31 subsection 9, paragraph "b", or subsection 12.The2 32administrator may issue a stop order pursuant to section2 33502.209 to filers under this section for any of the following2 34additional reasons:2 35a. The issuer's principal place of business is not in this3 1state.3 2b. At least fifty percent of the issuer's full-time3 3employees are not located in this state.3 4c. At least eighty percent of the net proceeds of the3 5offering are not going to be used in connection with the3 6operations of the issuer in this state.3 7d. If the issuer is a seed or venture capital fund, at3 8least fifty percent of the moneys received from the sale of3 9the securities will not be used to make seed or venture3 10capital investments in this state.3 11 Sec. 5. Section 502.302, subsections 1 and 3, Code 2001, 3 12 are amended to read as follows: 3 13 1. A broker-dealer, agent, investment adviser, or 3 14 investment adviser representative may obtain an initial or 3 15 renewal license by filing with the administrator, oran3 16organizationperson which the administrator by ruledesignates3 17 assigns as a designee, an application together with a consent 3 18 to service of process pursuant to section 502.609 and the 3 19 appropriate filing fee as required in this section. If the 3 20 application is filed with a designee, the applicant must also 3 21 pay any reasonable costs charged by the designee. The 3 22 applicant may transmit the fee to the administrator through 3 23 the designee according to rules adopted by the administrator. 3 24 The application shall contain information the administrator 3 25 requires by rule concerning the applicant's form and place of 3 26 organization, proposed method of doing business and financial 3 27 condition, and the qualifications and experience of the 3 28 applicant. In the case of a broker-dealer or investment 3 29 adviser, the application shall include the qualifications and 3 30 experience of any partner, officer, director or controlling 3 31 person, any injunction or administrative order or conviction 3 32 of a misdemeanor involving securities and any conviction of a 3 33 felony, and any other matters which the administrator 3 34 determines are relevant to the application. In addition, in 3 35 the case of an investment adviser, the application shall 4 1 include any information to be furnished or disseminated to any 4 2 client or prospective client, and any other information which 4 3 the administrator determines is relevant to the application. 4 4 If no denial order is in effect and no proceeding is pending 4 5 under section 502.304, registration becomes effective at noon 4 6 of the sixtieth day after a completed application or an 4 7 amendment completing the application is filed, unless waived 4 8 by the applicant. The administrator may by rule or order 4 9 specify an earlier effective date. 4 10 3. Every applicant for initial or renewal registration as 4 11 a broker-dealeror investment advisershall pay a filing fee 4 12 of two hundred dollars. Every applicant for an initial or 4 13 renewal registration as an investment adviser shall pay a 4 14 filing fee of one hundred dollars. Every applicant for 4 15 initial or renewal registration as an agent or investment 4 16 adviser representative shall pay a filing fee of thirty 4 17 dollars. However, an investment adviser representative is not 4 18 required to pay a filing fee if the investment adviser is a 4 19 sole proprietorship or the substantial equivalent and the 4 20 investment adviser representative is the same individual as 4 21 the investment adviser. A filing fee is not refundable. 4 22 Every person acting as a federal covered adviser in this 4 23 state, except with respect to federal covered advisers whose 4 24 only clients are those described in section 502.301, 4 25 subsection 3, paragraph "b", shall pay an initial and renewal 4 26 notice filing fee of one hundred dollars. 4 27 Sec. 6. Section 502.304, subsection 1, paragraph m, 4 28 subparagraph (1), Code 2001, is amended to read as follows: 4 29 (1) Has willfully violated the law of a foreign 4 30 jurisdiction governing or regulating any aspect of the 4 31 business of securities, insurance, or banking. 4 32 Sec. 7. Section 502.304, subsection 1, is amended by 4 33 adding the following new paragraph: 4 34 NEW PARAGRAPH. o. Is the subject of a cease and desist 4 35 order issued by the administrator under section 502.604, 5 1 another state, or the securities and exchange commission. 5 2 Sec. 8. Section 502.304, subsection 8, Code 2001, is 5 3 amended to read as follows: 5 4 8. A civil penaltyleviedimposed under subsection 1 shall 5 5 not exceedonefive thousand dollars per violation per person 5 6 and shall not exceedonefive hundred thousand dollars in a 5 7 single proceeding against any one person.All administrative5 8finesMoneys received from the imposition of civil penalties 5 9 shall be deposited in the general fund of the state. 5 10 Sec. 9. Section 502.603, subsection 3, Code 2001, is 5 11 amended by striking the subsection and inserting in lieu 5 12 thereof the following: 5 13 3. A person is not excused from attending or testifying in 5 14 a proceeding required by this section, or from producing any 5 15 evidence, including a document or record in obedience to a 5 16 subpoena of the administrator or any officer designated by the 5 17 administrator, on the ground that the testimony or evidence 5 18 required, whether documentary or otherwise, may tend to 5 19 incriminate such person or subject such person to a penalty or 5 20 forfeiture. If a person makes a claim against self- 5 21 incrimination, the administrator may file a petition to compel 5 22 compliance with this section in the district court for Polk 5 23 county. The court may make a threshold determination on the 5 24 applicability of the self-incrimination privilege. Any 5 25 evidence compelled under order of the district court, or any 5 26 information directly or indirectly derived from such evidence 5 27 or other information, shall not be used against the person in 5 28 any criminal case. The limitation on the use of evidence in a 5 29 criminal proceeding contained in this section does not apply 5 30 to any prosecution or proceeding for perjury or contempt of 5 31 court committed in the course of giving or producing 5 32 information, documents, testimony, or other evidence. 5 33 Sec. 10. Section 502.604, unnumbered paragraph 1, Code 5 34 2001, is amended to read as follows: 5 35 If it appears to the administrator that a person has 6 1 engaged or is about to engage in an act or practice 6 2 constituting a violation of this chapter or any rule or order 6 3 adopted or issued pursuant to this chapter, the administrator 6 4 may doeither or bothany of the following: 6 5 Sec. 11. Section 502.604, Code 2001, is amended by adding 6 6 the following new subsection: 6 7 NEW SUBSECTION. 3. Assess a civil penalty against the 6 8 person, if the violation was made knowingly or recklessly. 6 9 The penalty shall be assessed as an agency action provided for 6 10 under chapter 17A. The amount of the civil penalty shall not 6 11 exceed five thousand dollars for each violation. 6 12 Sec. 12. NEW SECTION. 502.604B LIMITED LAW ENFORCEMENT 6 13 AUTHORITY. 6 14 The administrator or designee, when carrying out the 6 15 provisions of section 502.603, 502.603A, or 502.604, may 6 16 develop, share, and receive information related to any law 6 17 enforcement purpose, including any criminal investigation. 6 18 The administrator or designee shall not have the authority to 6 19 issue criminal subpoenas or make arrests. The administrator 6 20 or designee shall not be considered a peace officer, including 6 21 as provided in chapter 801. 6 22 Sec. 13. Section 502.605, subsection 1, Code 2001, is 6 23 amended to read as follows: 6 24 1. a. Except as provided in paragraph "b", a person who 6 25 willfullyand knowinglyviolates any provision of this 6 26 chapter, or any rule or order under this chapter, is guilty of 6 27 a class "D" felony. 6 28 b. A person who willfullyand knowinglyviolates section 6 29 502.401, 502.402, or 502.403, or section 502.408, subsection 1 6 30 or 2, resulting in a loss of more than ten thousand dollars is 6 31 guilty of a class "C" felony. 6 32 Sec. 14. Section 502.605, Code 2001, is amended by adding 6 33 the following new subsection: 6 34 NEW SUBSECTION. 4. In a criminal proceeding brought under 6 35 this chapter, the applicability of any exemption, exception, 7 1 exclusion from a definition, or preemption shall be an 7 2 affirmative defense. The defendant claiming such an 7 3 exemption, exception, exclusion, or preemption has the burden 7 4 of going forward with the evidence of the claim. 7 5 Sec. 15. Section 502.207B, Code 2001, is repealed. 7 6 EXPLANATION 7 7 This bill amends a number of provisions in Code chapter 7 8 502, the state's law regulating the sale of securities. 7 9 Code section 502.102 currently provides a definition of 7 10 "agent" who represents a broker-dealer or issuer for purposes 7 11 of regulation. The section provides that the term does not 7 12 include a person representing an issuer for certain purposes, 7 13 including effecting transactions in a federal covered 7 14 security. The bill amends the provision to require that in 7 15 order for the exception to apply no remuneration can be paid 7 16 for soliciting a person in the state. 7 17 The bill also amends the definition of "security" in Code 7 18 section 502.102. The Code provision currently defines 7 19 security to mean a long list of a number of different types of 7 20 investments or ownership interests, including stock, 7 21 certificates of deposit, and membership interests. The bill 7 22 provides that the term includes any of the described 7 23 investments or ownership interests regardless of whether it is 7 24 evidenced by a written instrument. 7 25 Code section 502.203 currently exempts transactions from 7 26 the requirements of Code sections 502.201 and 502.602. Code 7 27 section Code 502.201 provides registration requirements for 7 28 securities and Code section 502.602 provides requirements for 7 29 filing prospectus or sales literature to persons, including 7 30 prospective investors. The bill provides that these sections 7 31 do not apply to a sale of securities that are exempt from 7 32 registration under the federal Securities Act of 1933. 7 33 Code section 502.207A currently provides an expedited 7 34 registration process for small issuers. The bill eliminates 7 35 provisions allowing the administrator of the security bureau 8 1 (the commissioner of insurance or the commissioner's deputy) 8 2 to issue a stop order to filers. 8 3 Code section 502.302 currently provides that a broker- 8 4 dealer, agent, investment adviser, or investment adviser 8 5 representative may obtain an initial or renewal license by 8 6 filing an application and paying a filing fee with the 8 7 administrator or an organization which the administrator by 8 8 rule designates. The bill provides that the applicant must 8 9 pay any reasonable costs charged by the designee for 8 10 processing the filings. It also amends a provision requiring 8 11 an investment adviser to pay a filing fee of $200, by 8 12 decreasing the fee to $100. 8 13 Code section 502.304 currently provides that the 8 14 administrator may order the denial, suspension, or revocation 8 15 of a registration or may take disciplinary action against a 8 16 registrant or a person representing the registrant. One of 8 17 the grounds for such action is the violation of law of a 8 18 foreign jurisdiction governing the business of securities or 8 19 banking. The bill adds the business of insurance. 8 20 Code section 502.304 currently provides for the denial, 8 21 revocation, suspension, and withdrawal of registration by the 8 22 administrator based on a number of grounds. The bill adds to 8 23 that list another ground of being subject to a cease and 8 24 desist order issued by the federal securities and exchange 8 25 commission or another state. The bill increases the maximum 8 26 civil penalties for violations of the section from $1,000 to 8 27 $5,000 per violation. It also increases the ceiling that 8 28 applies to a single proceeding from $100,000 to $500,000. 8 29 Code section 502.603 currently provides that a person is 8 30 not excused from attending and testifying or from producing 8 31 other evidence pursuant to a subpoena. The section provides 8 32 protections against self-incrimination in a criminal 8 33 proceeding. The bill rewrites those provisions by authorizing 8 34 the administrator to petition the court to require a person to 8 35 provide testimony or evidence, with the exception that the 9 1 testimony or other evidence may not be used in a criminal 9 2 proceeding. 9 3 The bill also amends Code section 502.604 to provide for 9 4 the imposition of a civil penalty upon a person who is in 9 5 violation of a provision in the chapter, a rule adopted under 9 6 the chapter, or a order issued under the chapter. The amount 9 7 of the civil penalty shall not exceed $5,000. 9 8 The bill creates a new Code section 502.604B authorizing 9 9 the securities bureau to cooperate with law enforcement 9 10 agencies, including agencies conducting criminal 9 11 investigations. 9 12 Code section 502.605 currently provides that a person who 9 13 violates a provision of the chapter is guilty of a felony, 9 14 either a class "C" or class "D" felony. The provision 9 15 contains a requirement that the violation be committed 9 16 willfully and knowingly. The bill eliminates the requirement 9 17 that the violation is knowing. The bill also provides that in 9 18 a criminal proceeding in which a person claims an exemption, 9 19 exception, exclusion under a definition, or a preemption, the 9 20 person has the burden of going forward with evidence of the 9 21 claim. 9 22 Code section 502.207B currently provides that the director 9 23 of revenue and finance and the administrator must report on an 9 24 annual basis to the senate's and house of representatives' 9 25 committees on ways and means concerning the expedited filing 9 26 by registration system provided by Code section 502.207A. The 9 27 bill repeals Code section 502.207B. 9 28 LSB 1239DP 79 9 29 da/pj/5.1
Text: SSB01240 Text: SSB01242 Text: SSB01200 - SSB01299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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