SB 90 (BR 1271) - T. Buford
AN ACT relating to financial services.
Create new sections of KRS Chapter 292 to require registration of securities broker-dealers, agents, investment advisers and investment adviser representatives, with exceptions; define prohibited activities of registrants; establish the procedures for registration of broker-dealers, agents, investment advisers and investment adviser representatives; require covered advisers to make a notice filing to transact business in the state, with exceptions; authorize succession of a broker-dealer or investment adviser to an unexpired registration of another broker-dealer, require a new application if there is a material change in the financial condition, management or ownership of the predecessor, and permit a name change by a broker-dealer or investment adviser by amendment to the registration; require an agent who terminates employment with a broker-dealer or issuer to file a notice of termination within 30 days of the termination; require an investment adviser or covered adviser to file a notice of termination within 30 days of termination; authorize the executive director of the Office of Financial Institutions to order termination of registration or of an application for registration if a registrant or applicant is no longer in existence, has ceased to do business, is subject to an adjudication of mental disability or under control of a conservator or guardian, or cannot be located with due diligence; authorize temporary registration for a period not to exceed 30 days of a registered agent or investment adviser who transfers employment; authorize a broker-dealer, agent, investment adviser, or investment adviser representative to withdraw a registration by application, effective 30 days after filing the application, unless a revocation or suspension proceeding is pending; provide a covered adviser may withdraw a notice filing by notice filing effective upon receipt by the executive director; establish fees for initial or renewal registration and notice filing, except that fees are waived for an investment adviser or covered adviser who is registered as a broker-dealer or an investment adviser representative who represents a person who is entitled to the investment adviser or covered adviser waiver; require every registered broker-dealer, issuer agent, and investment adviser to retain specified records for a period of 3 years and file reports required by this chapter, except those registered with the United States Securities and Exchange Commission who shall comply with the reporting requirements of the United States Securities and Exchange Commission, or when a registrant has a principal place of business in another state who shall comply with the reporting requirements of that state; require prompt filing of corrected information found to be inaccurate or incomplete; authorize the executive director to conduct examinations of a broker-dealer, issuer, agent, or investment adviser, within or outside the state and with or without notice, with the cost to be paid by the subject examined; authorize the executive director to prescribe rules to prohibit unreasonable charges, profits commissions or other compensation, and for the conduct of business; authorize the executive director to enter into inter-governmental arrangements, agreements or working relationships for filing and maintenance of documents in a central depository system; and, authorize the executive director, by order citing the specific reasons therefore subject to notice and in accordance with KRS Chapter 13B, to deny, refuse to renew, suspend or revoke the registration of a broker-dealer, agent, investment adviser or investment adviser representative and to bar, censure, or place on probation any officer, director, partner or similar person of a registrant or limit a registrant's function or activity in the state and authorize the executive director to issue a summary order to restrict, condition, limit or suspend a registration or censure a registrant before final determination if there is substantial evidence that such action is in the public interest, and an aggrieved person may apply for an emergency hearing within 30 days of the date of the summary order; amend KRS 292.310 to amend the definitions of "agent," "covered security," guaranteed," "investment adviser representative," and "state," and to define "sign"; amend KRS 292.410 to conform; amend KRS 292.480 to define fraudulent conduct and to authorize a party who is the subject of fraudulent conduct to maintain an action to recover damages; amend KRS 292.500 to authorize electronic filings of documents required by this chapter, and authorize the executive director to notify the Revenue Cabinet, rather than the Attorney General, to institute an action for recovery of any unpaid fines, fees or costs assessed under this section in any court of competent jurisdiction in the state; amend KRS 292.530 to provide that this chapter is to protect investors; repeal KRS 292.330 Registration of broker-dealers, agents, and investment advisers; require the Reviser of Statutes to renumber KRS Chapters 287, 288, 290, 291, 292, 294, 366 and 368 as subtitles to a single KRS Chapter entitled the "Kentucky Financial Services Code" and adjust all statutory references to conform; and direct the Reviser of Statutes to renumber KRS 287.011, 287.012, 287.013, 287.020, and 287.025 into a separate subtitle of the code created by Section 15 of this Act and adjust all statutory references to conform.
SB 90 - AMENDMENTS
SCS - Retain original provisions of bill with technical corrections; add and amend KRS 95.890, 292.313, 292.415, 292.450, and 292.545 to delete references to KRS 292.330, repealed by this Act.
SFA (1, T. Buford) - Make technical correction.
HCS - Retain original provisions; create subsection (15) of Section 1 to provide that nothing in KRS Chapter 292 shall be construed to create a presumption that a person is a broker-dealer and nothing in KRS Chapter 292 shall be construed to create standards, requirements, or responsibilities relating to issuers, agents, and broker-dealers that are more stringent than those imposed by the federal Securities Act of 1933 and the Securities Exchange Act of 1934; add Section 19 to create a new section in KRS Chapter 281 to require a motor vehicle renting company to separately itemize in the rental agreement the vehicle license recovery fee and the property tax recovery fee; define "vehicle license recovery fee" as the rental company's good faith estimate of the average per-day per-vehicle portion of the rental company's total annual title, license, and registration costs to be paid for its rental fleet during the calendar year; define "property tax recovery fee" as the rental company's good faith estimate of the average per-day per-vehicle portion of the rental company's total annual property taxes to be paid for its rental fleet during the calendar year.
HCA (1/Title, J. Bruce) - Make title amendment.
HFA (1, R. Damron) - Amend Section 1 to clarify that a broker-dealer is exempt from registration if during a 12 month period it does not direct more than 15 offers to sell or buy into this state if the broker-dealer has no place of business in this state; amend Section 20 to delete Chapter 292 on securities from the Kentucky Financial Services Code.
HFA (2, R. Damron) - Amend subsection (2)(c) in Section 1 to restrict the exemption from registration to a broker-dealer who during any 12-month period does not direct more than 15 offers to sell or buy into this state if the broker-dealer does not have a place of business in the state; amend subsection (15)(b) in Section 1 to clarify that nothing in KRS Chapter 292 shall be construed to create standards, requirements, or responsibilities that are more stringent than those imposed or allowed by the Securities Act of 1933 and the Securities Exchange Act of 1934; amend Section 21 to delete KRS Chapter 292 on securities from the Kentucky Financial Services Code.
HFA (3, R. Damron) - Amend Section 19 to permit rental car companies to charge concession recovery fees and consolidated facility charges if the fees and charges are separately itemized in the bill and are disclosed in any advertisement of rental rates.
CCR - Conference Committee could not agree and requested a Free Conference Committee be appointed.
FCCR - Adopt House Committee Substitute, HFA 2, and HFA 3; amend Section 1 to authorize the executive director to exercise enforcement discretion to prosecute any person in violation of KRS Chapter 292; create a new section of KRS 291.410 to 291.600 pertaining to industrial loan corporations to prohibit a person from directly or indirectly acquiring control of an industrial loan corporation unless the person is engaged in activities permitted for financial holding companies as provided in 12 U.S.C. sec. 1843(k)(l), and define "control"; add and amend KRS 134.480 to provide that if multiple purchasers offer to buy certificates of delinquency, preference shall be given to the purchaser of a certificate of delinquency for the same property in previous years with highest priority for the purchaser in the most recent year; authorize the county clerk to use a lottery or similar selection method for selection of a prior purchaser for the current certificate of delinquency with the county clerk required to file a copy of the rules and regulations for the lottery or similar selection method with the Department of Revenue at least 30 days before the lottery or similar selection method; add and amend KRS 131.130 to define distributor as a person who distributes only cigarettes and purchases 100% of them from a single manufacturer with whom the person has an exclusive relationship to serve a defined geographical territory; amend KRS 131.195 to require a distributor to obtain a license; permit the distributor to sell or purchase from any other licensee untax-paid cigarettes; require the distributor to secure a separate license for each place of business where the untax-paid cigarettes are received; require the distributor to maintain records in accordance with administrative regulations promulgated by the department; EMERGENCY effective upon passage and approval by the Governor; and amend the title to read "AN ACT relating to state-regulated activities and declaring an emergency."
Jan 17-introduced in Senate
Jan 19-to Banking and Insurance (S)
Jan 27-reported favorably, 1st reading, to Calendar with Committee Substitute
Jan 30-2nd reading, to Rules; floor amendment (1) filed to Committee Substitute
Feb 6-posted for passage in the Regular Orders of the Day for Tuesday, February 7, 2006
Feb 7-3rd reading, passed 36-0 with Committee Substitute, floor amendment (1) ; received in House
Feb 8-to Banking and Insurance (H)
Mar 3-posted in committee
Mar 15-reported favorably, 1st reading, to Calendar with Committee Substitute, committee amendment (1-title)
Mar 16-2nd reading, to Rules
Mar 20-floor amendment (1) filed
Mar 22-posted for passage in the Regular Orders of the Day for Thursday, March 23, 2006; floor amendment (2) filed to Committee Substitute
Mar 23-floor amendment (3) filed to Committee Substitute
Mar 24-3rd reading, passed 94-2 with Committee Substitute, committee amendment (1-title), floor amendments (2) and (3); received in Senate; posted for passage for concurrence in House Committee Substitute, committee amendment (1), floor amendments (2) and (3) for Friday, March 24, 2006; Senate refused to concur in House Committee Substitute, committee amendment (1-title), floor amendments (2) and (3); Conference Committee and Free Conference Committee appointed in Senate; received in House
Apr 10-House refused to recede from Committee Substitute, committee amendment (1-title), floor amendments (2) and (3); Conference Committee appointed in House; Free Conference Committee appointed in House
Apr 11-Conference Committee report filed in House; Conference Committee report adopted in House
Apr 12-Free Conference Committee report filed in House; Free Conference Committee report adopted in House; passed 81-6; received in Senate