Enrolled Version - Final Version
House Bill 2304 History
OTHER VERSIONS -
Committee Substitute
|
Introduced Version
|
| Email
Key: Green = existing Code. Red = new code to be enacted
ENROLLED
COMMITTEE SUBSTITUTE
FOR
H. B. 2304
(By Mr. Speaker, Mr. Chambers, and Delegate Burk)
[By Request of the Executive]
[Passed April 10, 1993; in July 1, 1993]
AN ACT to amend and reenact section two hundred two, article two,
chapter thirty-two of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; to amend and
reenact section three hundred five, article three of said
chapter; and to amend and reenact sections four hundred six
and four hundred thirteen, article four of said chapter, all
relating to the registration procedure for broker-dealers,
agents and investment advisers; increasing and adding fees,
registration of securities; setting up a special operating
fund to operate the securities division; specifying uses of
the fund; and requiring that the special fund be
appropriated by line item by the Legislature.
Be it enacted by the Legislature of West Virginia:
That section two hundred two, article two, chapter
thirty-two of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted; that
section three hundred five, article three of said chapter be
amended and reenacted; and that sections four hundred six and
four hundred thirteen, article four of said chapter be amendedand reenacted, all to read as follows:
ARTICLE 2. REGISTRATION OF BROKER-DEALERS, AGENTS AND
INVESTMENT ADVISERS.
§32-2-202. Registration procedure.
(a) A broker-dealer, agent or investment adviser may obtain
an initial or renewal registration by filing with the
commissioner an application together with a consent to service of
process pursuant to subsection (g), section four hundred
fourteen, article four of this chapter. The application shall
contain whatever information the commissioner by rule requires
concerning matters such as: (1) The applicant's firm and place of
organization; (2) the applicant's proposed method of doing
business; (3) the qualifications and business history of the
applicant and in the case of a broker-dealer or investment
adviser, the qualifications and business history of any partner,
officer or director, any person occupying a similar status or
performing similar functions, or any person directly or
indirectly controlling the broker-dealer or investment adviser
and, in the case of an investment adviser, the qualifications and
business history of any employee; (4) any injunction or
administrative order or conviction of a misdemeanor involving a
security or any aspect of the securities business and any
conviction of a felony; and (5) the applicant's financial
condition and history. The commissioner may by rule or order
require an applicant for initial registration to publish an
announcement of the application as a Class I legal advertisement
in compliance with the provisions of article three, chapter
fifty-nine of this code, and the publication area or areas forthe publication shall be specified by the commissioner. If no
denial order is in effect and no proceeding is pending under
section two hundred four of this article, registration becomes
effective at noon of the thirtieth day after an application is
filed. The commissioner may by rule or order specify an earlier
effective date, and he or she may by order defer the effective
date until noon of the thirtieth day after the filing of any
amendment to an application. Registration of a broker-dealer
automatically constitutes registration of any agent who is a
partner, officer or director, or a person occupying a similar
status or performing similar functions, as designated by the
broker-dealer in writing to the commissioner and approved in
writing by the commissioner.
(b) Every applicant for initial or renewal registration
shall pay a filing fee of two hundred fifty dollars in the case
of a broker-dealer and the agent of an issuer, fifty-five dollars
in the case of an agent, one hundred seventy dollars in the case
of an investment adviser, and fifty dollars for each investment
advisor representative. When an application is denied or
withdrawn, the commissioner shall retain all of the fee.
(c) A registered broker-dealer or investment adviser may
file an application for registration of a successor, whether or
not the successor is then in existence, for the unexpired portion
of the year. A filing fee of twenty dollars shall be paid.
(d) The commissioner may by rule require a minimum capital
for registered broker-dealers and investment advisers.
(e) The commissioner may by rule require registered broker-
dealers, agents and investment advisers to post surety bonds inamounts up to ten thousand dollars, and may determine their
conditions. Any appropriate deposit of cash or securities shall
be accepted in lieu of any bond required. No bond may be
required of any registrant whose net capital, which may be
defined by rule, exceeds twenty-five thousand dollars. Every
bond shall provide for suit thereon by any person who has a cause
of action under section four hundred ten, article four of this
chapter and, if the commissioner by rule or order requires, by
any person who has a cause of action not arising under this
chapter. Every bond shall provide that no suit may be maintained
to enforce any liability on the bond unless brought within two
years after the sale or other act upon which it is based.
(f) Every applicant, whether registered under this chapter
or not, shall pay a fifty dollar fee for each name or address
change.
(g) Every broker-dealer and investment advisor registered
under this chapter shall pay an annual fifty dollar fee for each
branch office located in West Virginia.
ARTICLE 3. REGISTRATION OF SECURITIES.
§32-3-305. Provisions applicable to registration generally.
(a) A registration statement may be filed by the issuer, any
other person on whose behalf the offering is to be made, or a
registered broker-dealer. A registration statement filed under
this chapter registering investment company shares shall cover
only one class, series or portfolio of investment company shares.
(b) Every person filing a registration statement shall pay
a filing fee of one twentieth of one percent of the maximum
aggregate offering price at which the registered securities areto be offered in this state, but the fee shall in no case be less
than fifty dollars or more than fifteen hundred dollars. When a
registration statement is withdrawn before the effective date or
a preeffective stop order is entered under section 306, the
commissioner shall retain all of the fee.
(c) Every registration statement shall specify (1) the
amount of securities to be offered in this state; (2) the states
in which a registration statement or similar document in
connection with the offering has been or is to be filed; and (3)
any adverse order, judgment or decree entered in connection with
the offering by the regulatory authorities in each state or by
any court or the securities and exchange commission.
(d) Any document filed under this chapter or a predecessor
act within five years preceding the filing of a registration
statement may be incorporated by reference in the registration
statement to the extent that the document is currently accurate.
(e) The commissioner may by rule or otherwise permit the
omission of any item of information or document from any
registration statement.
(f) In the case of a nonissuer distribution, information may
not be required under section 304 of this article or subsection
(j) of this section unless it is known to the person filing the
registration statement or to the persons on whose behalf the
distribution is to be made, or can be furnished by them without
unreasonable effort or expense.
(g) The commissioner may by rule or order require as a
condition of registration by qualification or coordination (1)
that any security issued within the past three years or to beissued to a promoter for a consideration substantially different
from the public offering price, or to any person for a
consideration other than cash, be deposited in escrow; and (2)
that the proceeds from the sale of the registered security in
this state be impounded until the issuer receives a specified
amount from the sale of the security either in this state or
elsewhere. The commissioner may by rule or order determine the
conditions of any escrow or impounding required under this
subsection, but he or she may not reject a depository solely
because of location in another state.
(h) The commissioner may by rule or order require as a
condition of registration that any security registered by
qualification or coordination be sold only on a specified form of
subscription or sale contract, and that a signed or conformed
copy of each contract be filed with the commissioner or preserved
for any period up to three years specified in the rule or order.
(i) Every registration statement is effective for one year
from its effective date, or any longer period during which the
security is being offered or distributed in a nonexempted
transaction by or for the account of the issuer or other person
on whose behalf the offering is being made or by any underwriter
or broker-dealer who is still offering part of an unsold
allotment or subscription taken by him as a participant in the
distribution, except during the time a stop order is in effect
under section 306 of this article. All outstanding securities of
the same class as a registered security are considered to be
registered for the purpose of any nonissuer transaction (1) so
long as the registration statement is effective and (2) betweenthe thirtieth day after the entry of any stop order suspending or
revoking the effectiveness of the registration statement under
section 306 of this article (if the registration statement did
not relate in whole or in part to a nonissuer distribution) and
one year from the effective date of the registration statement.
A registration statement may not be withdrawn for one year from
its effective date if any securities of the same class are
outstanding. A registration statement may be withdrawn otherwise
only in the discretion of the commissioner.
(j) So long as a registration statement is effective, the
commissioner may by rule or order require the person who filed
the registration statement to file reports, not more often than
quarterly, to keep reasonably current the information contained
in the registration statement and to disclose the progress of the
offering.
(k) A registration statement relating to a security issued
by a face amount certificate company or a redeemable security
issued by an open-end management company or unit investment
trust, as those terms are defined in the investment company act
of 1940, may be amended after its effective date so as to
increase the securities specified as proposed to be offered. The
amendment becomes effective when the commissioner so orders.
Every person filing an amendment shall pay a filing fee,
calculated in the manner specified in subsection (b) of this
section, with respect to the additional securities proposed to be
offered.
(l) Every person changing the name or address of a
securities registration shall pay a fifty dollar fee for change.
(m) Every person amending a registration statement or
offering a document without increasing the dollar amount
registered shall pay a twenty-five dollar fee for each amended
statement or document.
ARTICLE 4. GENERAL PROVISIONS.
§32-4-406. Administration of chapter; operating fund for
securities department.
(a) This chapter shall be administered by the auditor of
this state, and he or she is hereby designated, and shall be, the
commissioner of securities of this state. He or she has the
power and authority to appoint or employ such assistants as are
necessary for the administration of this chapter.
(b) The auditor shall set up a special operating fund for
the securities division in his or her office. The auditor shall
pay into the fund twenty percent of all fees collected as
provided for in this chapter, not to exceed four hundred thousand
dollars. If, at the end of any fiscal year, the balance in the
operating fund exceeds one hundred fifty thousand dollars, the
excess shall be withdrawn from the special fund and deposited in
the general revenue fund.
The special operating fund shall be used by the auditor to
fund the operation of the securities division located in his or
her office. The special operating fund shall be appropriated by
line item by the Legislature.
(c) It is unlawful for the commissioner or any of his or her
officers or employees to use for personal benefit any information
which is filed with or obtained by the commissioner and which is
not made public. No provision of this chapter authorizes thecommissioner or any of his or her officers or employees to
disclose any information except among themselves or when
necessary or appropriate in a proceeding or investigation under
this chapter. No provision of the chapter either creates or
derogates from any privilege which exists at common law or
otherwise when documentary or other evidence is sought under a
subpoena directed to the commissioner or any of his or her
officers or employees.
§32-4-413. Administrative files and opinions.
(a) A document is filed when it is received by the
commissioner.
(b) The commissioner shall keep a register of all
applications for registration and registration statements which
are or have ever been effective under this chapter and all
denial, suspension or revocation orders which have been entered
under this chapter. The register shall be open for public
inspection.
(c) The information contained in or filed with any
registration statement, application or report may be made
available to the public under rules prescribed by the
commissioner.
(d) Upon request and at such reasonable charges as he or she
prescribes, the commissioner shall furnish to any person
photostatic or other copies (certified under his or her seal of
office if requested) of any entry in the register or any document
which is a matter of public record. In any proceeding or
prosecution under this chapter, any copy so certified is prima
facie evidence of the contents of the entry or documentcertified.
(e) The commissioner in his or her discretion may honor
requests from interested persons for interpretative opinions.
Copies of the opinions shall be filed in a special file
maintained for that purpose and shall be public records available
for public inspection. The commissioner shall charge a one
hundred dollar fee for each interpretative opinion.