72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
Senate Bill 194
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor Theodore R.
Kulongoski for the Office of the Governor)
CHAPTER ................
AN ACT
Relating to securities; amending ORS 59.015, 59.049, 59.065,
59.165, 59.175, 59.185 and 59.205.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 59.015 is amended to read:
59.015. As used in the Oregon Securities Law, unless the
context otherwise requires:
(1) 'Broker-dealer' means a person who engages, all or part of
the time, in effecting transactions in securities for the account
of others or for the person's own account. ' Broker-dealer' does
not include:
(a) An issuer effecting sales in its own securities;
(b) The following institutions:
(A) A financial institution or trust company, as defined in ORS
706.008; or
(B) A financial holding company or a bank holding company, as
defined in ORS 706.008, holding an institution described in
subparagraph (A) of this paragraph; a savings and loan holding
company as defined in section 408 of the National Housing Act, 12
U.S.C. section 1730a, holding an association described in
subparagraph (A) of this paragraph; the subsidiaries and
affiliates of the financial holding company, bank holding company
or savings and loan holding company; or subsidiaries and
affiliates of institutions described in subparagraph (A) of this
paragraph, if the appropriate statutory regulatory authority is
exercising control over, or is regulating or supervising the
person in the sale of securities in accord with the purposes of
the Oregon Securities Law;
(c) A person who has no place of business in this state
effecting transactions in this state exclusively with
broker-dealers;
(d) A person effecting sales exempted by ORS 59.035;
(e) A salesperson;
(f) A person effecting sales of securities owned by the person
registered for sale pursuant to ORS 59.065;
(g) A person effecting sales of securities exempted by ORS
59.025 (7);
(h) A person licensed as a mortgage banker or a mortgage broker
under ORS 59.840 to 59.980 when effecting sales of securities
Enrolled Senate Bill 194 (SB 194-INTRO) Page 1
involving real estate paper registered for sale pursuant to ORS
59.065; or
(i) A person designated by rule or order by the director.
(2) 'Control' means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
(3) 'Director' means the Director of the Department of Consumer
and Business Services.
(4) 'Federal covered investment adviser' means a person who is
registered as an investment adviser pursuant to section 203 of
the Investment Advisers Act of 1940, as amended.
(5) 'Federal covered security' means any security that is a
covered security under section 18 of the Securities Act of 1933,
as amended, and for which such Act provides that the director may
require filing of a notice and payment of a fee.
(6) 'Fraud,' 'deceit' and 'defraud' are not limited to
common-law deceit.
(7) 'Guaranteed' means guaranteed as to payment of principal,
interest or dividends.
(8)(a) 'Investment adviser representative' means any partner,
officer, director or person occupying a similar status or
performing a similar function, or other individual, except
clerical or ministerial personnel, who is employed by or
associated with:
(A) A state investment adviser that is licensed or required to
be licensed in this state and who does any of the following:
(i) Makes any recommendations or otherwise renders advice
regarding securities;
(ii) Manages accounts or portfolios of clients;
(iii) Determines which recommendation or advice regarding
securities should be given;
(iv) Solicits, offers or negotiates for the sale of or sells
investment advisory services; or
(v) Supervises employees acting under this subparagraph; or
(B) A federal covered investment adviser, subject to the
limitations of section 203A of the Investment Advisers Act of
1940, as amended, as the director may designate by rule or order.
(b) 'Investment adviser representative' does not include a
person designated by rule or order of the director.
(9) 'Issuer' means a person who issues, proposes to issue or
has issued a security and includes an issuer to be formed. With
respect to certificates of deposit, voting-trust certificates or
collateral-trust certificates, or with respect to certificates of
interest or shares in an unincorporated investment trust not
having a board of directors or persons performing similar
functions or of the fixed, restricted management or unit type,
the ' issuer' is the person or persons performing the acts and
assuming the duties of depositor or manager pursuant to the
provisions of the trust or other instrument or agreement under
which the security is issued.
(10) 'License' means a license as provided under the Oregon
Securities Law.
(11) 'Mortgage banker' means a mortgage banker as defined in
ORS 59.840.
(12) 'Mortgage broker' means a mortgage broker as defined in
ORS 59.840.
(13) 'Offer' or 'offer to sell' includes every attempt or offer
to dispose of, or solicitation of an offer to buy, a security or
interest in a security for value. Every sale or offer of a
Enrolled Senate Bill 194 (SB 194-INTRO) Page 2
warrant or right to purchase or subscribe to another security of
the same or another issuer, as well as every sale or offer of a
security which gives the holder a present or future right or
privilege to convert into another security of the same or another
issuer, is considered to include an offer of the other security.
(14) 'Person' includes an individual, a joint venture, a
partnership, a cooperative, a limited liability company, an
association, a joint stock company, a corporation, a trust, an
unincorporated organization or a government or political
subdivision of a government.
(15) 'Real estate paper' means any obligation secured or
purportedly secured by an interest in real property. Real estate
paper includes, but is not limited to, mortgage-backed
securities, collateralized mortgage obligations, and real estate
mortgage investment conduits.
(16) 'Registered' means registered as provided in the Oregon
Securities Law.
(17)(a) 'Sale' or 'sell' includes every contract of sale of,
contract to sell, or disposition of, a security or interest in a
security for value. Any security given or delivered with, or as a
bonus on account of, a purchase of securities or any other thing
shall constitute a part of the subject of the purchase and shall
have been offered and sold for value. A gift of assessable stock
by or for any issuer or promoter shall constitute a sale.
(b) For purposes of the authority of the director under ORS
59.245 and 59.255, the terms 'sale' and 'sell' include the terms
'offer' and 'offer to sell. '
(c) 'Sale' and 'sell' do not include:
(A) A bona fide pledge or loan of securities;
(B) A bona fide security dividend, whether the corporation
distributing the dividend is the issuer of the security or not,
if nothing of value is given by the recipients for the dividend
other than payments in connection with the elimination of
fractional shares; or
(C) An act incident to a judicially approved reorganization in
which a security is issued in exchange for one or more
outstanding securities, claims or property interests, or partly
in such exchange and partly for cash.
(18)(a) 'Salesperson' means { - : - }
{ - (A) - } a person, other than a broker-dealer, who
represents or purports to represent a broker-dealer, issuer or
owner of securities in effecting or attempting to effect in any
manner transactions in securities.
{ - (B) A person, other than a person licensed as a mortgage
banker or mortgage broker under ORS 59.840 to 59.980, who
represents or purports to represent the issuer, owner, or
mortgage banker or mortgage broker licensed under ORS 59.840 to
59.980 in effecting sales of securities or involving real estate
paper registered for sale pursuant to ORS 59.065. - }
(b) 'Salesperson' does not include:
(A) A person who represents an issuer in effecting sales in a
security exempted by ORS 59.025;
(B) A person who represents an issuer in effecting sales
exempted by ORS 59.035;
(C) A person who represents an issuer in effecting sales with
existing partners or directors of the issuer, if no commission or
other remuneration is paid or given directly or indirectly for
soliciting any person in this state;
Enrolled Senate Bill 194 (SB 194-INTRO) Page 3
(D) An employee of an institution or organization described in
subsection (1)(b) of this section to the extent the employee is
not a dual employee of the institution and a broker-dealer;
(E) A person effecting transactions in this state limited to
those transactions described in section 15(h)(2) and (3) of the
Securities Exchange Act of 1934, as amended; or
(F) A person designated by rule or order by the director.
(c) A person who is a partner, director or officer of a
broker-dealer, issuer or owner of securities, or a person who
occupies a similar status or performing similar functions, is a '
salesperson' only if the person otherwise comes within this
definition.
(19)(a) 'Security' means a note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or
participation in a pension plan or profit-sharing agreement,
collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security,
certificate of interest or participation in an oil, gas, or
mining title or lease or in payments out of production under such
title or lease, real estate paper sold by a broker-dealer,
mortgage banker, mortgage broker or a person described in
subsection (1)(b) of this section to persons other than persons
enumerated in ORS 59.035 (4), or, in general, any interest or
instrument commonly known as a 'security,' or any certificate of
interest or participation in, temporary or interim certificates
for, receipt for, guarantee of, or warrant or right to subscribe
to or purchase any of the foregoing.
(b) 'Security' does not include:
(A) An insurance or endowment policy or annuity contract under
which an insurance company promises to pay a fixed or variable
sum of money either in a lump sum or periodically for life or
some other specified period;
(B) A beneficial interest in a voluntary inter vivos trust
unless the trust is created solely for the purpose of voting or
is part of an attempt to evade the provisions of ORS 59.005 to
59.451; or
(C) A beneficial interest in a testamentary trust.
(20)(a) 'State investment adviser' means a person who, for
compensation:
(A) Engages all or part of the time of the person, in this
state, in the business of advising others, either directly or by
mail or through publication or writing, as to the value of
securities or as to the advisability of investing in, purchasing
or selling securities;
(B) Engages all or part of the time of the person, in this
state, in the business of managing an investment or trading
account in securities for other persons; or
(C) Issues or promulgates, as part of a regular business in
this state, analyses or reports concerning securities.
(b) 'State investment adviser' does not include:
(A) An investment adviser representative;
(B) An institution or organization described in subsection
(1)(b) of this section;
(C) A licensed broker-dealer whose performance of investment
advisory services is solely incidental to the conduct of business
as a broker-dealer and who receives no special compensation for
such services;
(D) A salesperson licensed to a broker-dealer whose performance
of investment advisory services is solely incidental to that
Enrolled Senate Bill 194 (SB 194-INTRO) Page 4
person's activities as a salesperson and who receives no special
compensation for such services;
(E) A publisher of or contributor to a bona fide newspaper,
newsmagazine, investment manual or service, or business or
financial publication of general, regular and paid circulation;
(F) A person whose only clients are federal covered investment
advisers, state investment advisers, broker-dealers, mortgage
bankers, mortgage brokers, banks, savings institutions or trust
companies, insurance companies, investment companies as defined
in the Investment Company Act of 1940, as amended, pension or
profit-sharing trusts, or other financial institutions or
institutional buyers, whether acting for themselves or as
trustees;
(G) A duly licensed lawyer, engineer or accountant whose
performance of investment advisory services is solely incidental
to the practice of the profession;
(H) A person whose advice, analyses or reports relate only to
securities exempted by ORS 59.025 (1);
(I) A federal covered investment adviser in compliance with ORS
59.165 (7);
(J) A person, advising others, that has no place of business in
this state and during the preceding 12-month period has had fewer
than six clients, other than those persons included in
subparagraph (F) of this paragraph, who are residents of this
state; or
(K) Such other persons as the director may by rule or order
designate.
SECTION 2. ORS 59.049 is amended to read:
59.049. Federal covered securities may be offered and sold in
this state without registration, subject to the following:
(1) Unless otherwise exempt from registration under ORS 59.025
or 59.035, any federal covered security that is subject to
section 18(b)(2) of the Securities Act of 1933, as amended, may
be offered and sold only upon a filing of a notice with, and the
payment of the required fee to, the Director of the Department of
Consumer and Business Services. In lieu of the notice, an issuer
may file a copy of its registration statement as filed with the
Securities and Exchange Commission together with fees required
under this subsection. The form of notice shall be prescribed by
the director. The required fee shall be $350 for all investment
companies other than unit investment trusts, or $150 for unit
investment trusts. The fee shall not be refundable. The effective
date of the notice shall be the later of the date the notice is
received by the director or the date specified by the filer of
the notice.
(2) Unless otherwise exempt from registration under ORS 59.025
or 59.035, any federal covered security that is subject to
section 18(b)(3) or (4), other than section 18(b)(4)(D), of the
Securities Act of 1933, as amended, may be offered and sold only
upon a filing of a notice with, and the payment of the required
fee to, the director. The form of notice shall be prescribed by
the director. The required fee shall be equal to $1 per $1,000 of
the aggregate price of the securities which are to be offered in
this state on the first $100,000 or fraction thereof, 50 cents
per $1,000 on the next $200,000 or fraction thereof and $25 per
$100,000 for each additional $100,000 or fraction thereof, but in
no case shall the fee be less than $25 or more than $500. The fee
shall not be refundable. The effective date of the notice shall
be the later of the date the notice is received by the director
or the date specified by the filer of the notice.
Enrolled Senate Bill 194 (SB 194-INTRO) Page 5
(3) Unless otherwise exempt from registration under ORS 59.025
or 59.035, any federal covered security that is subject to
section 18(b)(4)(D) of the Securities Act of 1933, as amended,
may be offered and sold only upon a filing of a notice with, and
the payment of the required fee to, the director, not later than
15 days after the first sale of such federal covered security in
this state. The notice shall be filed on Securities and Exchange
Commission Form D or on a form of notice prescribed by the
director. The required fee shall be equal to $1 per $1,000 of the
aggregate price of the securities which are to be offered in this
state on the first $100,000 or fraction thereof, 50 cents per
$1,000 on the next $200,000 or fraction thereof and $25 per
$100,000 for each additional $100,000 or fraction thereof, but in
no case shall the fee be less than $25 or more than $500. The fee
shall not be refundable. The effective date of the notice shall
be the later of the date the notice is received by the director
or the date specified by the filer of the notice.
(4) The director may issue an order suspending the offer and
sale of a federal covered security if the director finds that
there is a failure to comply with any requirement under this
section.
{ - (5) Notwithstanding the provisions of this section, until
October 10, 1999, the director may require the registration of
any federal covered security for which the fees required by this
section have not been promptly paid following written
notification from the director to the issuer of the nonpayment or
underpayment of such fees. An issuer shall be considered to have
promptly paid the fees if they are remitted to the director
within 15 days following the delivery of written notification by
the director. - }
{ - (6)(a) - } { + (5)(a) + } The filer of a notice under
subsections (1) to (3) of this section shall amend the notice
when there is a change in the name of the offering or, in the
case of offerings for which notice is filed pursuant to
subsection (2) or (3) of this section, when there is an increase
in the aggregate price of the securities which are to be offered
in this state. There is no fee required for an amendment that
does not increase the aggregate offering amount. Notices amending
the aggregate offering amount shall include fees calculated in
accordance with subsection (2) or (3) of this section, less
amounts previously paid under the prior notice filing but in no
event shall the fee be less than $25. The fee shall not be
refundable.
(b) If an issuer or person sells federal covered securities in
this state for a price in excess of the aggregate price for which
fees were initially paid under this section, the seller shall pay
a fee of three times the difference between the initial fee paid
and the fee required under this section for the federal covered
securities sold in this state. However, the additional fee shall
not be less than $25. The fee shall not be refundable.
{ - (7) - } { + (6) + } The director, by rule or otherwise,
may waive any or all of the provisions of this section.
SECTION 3. ORS 59.065 is amended to read:
59.065. (1) The Director of the Department of Consumer and
Business Services by rule shall establish procedures for
registering securities. The director may coordinate registration
in this state with any federal securities Act or national
registration system.
(2) { - (a) Except as provided in paragraph (b) of this
subsection, - } Every registration application submitted shall
Enrolled Senate Bill 194 (SB 194-INTRO) Page 6
be accompanied by a fee of $1 per $1,000 of the aggregate price
of the securities { - which - } { + that + } are to be
offered in this state on the first $100,000 or fraction thereof,
and 50 cents per $1,000 on the next $200,000 or fraction thereof
and $25 per $100,000 for each additional $100,000 or fraction
thereof, but in no case shall the fee be less than $25 nor more
than $500. The fee is not refundable.
{ - (b) Every registration application submitted pursuant to
the provisions of ORS 59.049 (5) shall be accompanied by a fee
equal to three times the amount of the fee otherwise required by
ORS 59.049 (1), (2) or (3). - }
(3) If a registrant sells securities in Oregon in excess of the
quantity registered or for a price in excess of the aggregate
price for which fees were initially paid, the registrant may
obtain registration of the excess securities by paying three
times the difference between the initial fee paid and the fee
required under subsection (2) of this section for the securities
sold in Oregon. However, the additional fee shall not be less
than $25. Registration of the excess securities shall be
effective retroactively to the date of sale.
SECTION 4. ORS 59.165 is amended to read:
59.165. (1) It is unlawful for any person to transact business
in this state as a broker-dealer or salesperson unless the person
is licensed under the Oregon Securities Law.
(2) No broker-dealer or state investment adviser shall be
licensed in this state unless the broker-dealer or state
investment adviser has at least one salesperson licensed in this
state.
(3) It is unlawful for a broker-dealer { - , state investment
adviser, mortgage banker, mortgage broker - } or issuer or owner
of securities to employ a salesperson { - or investment adviser
representative - } to act in this state unless the salesperson
{ - or investment adviser representative - } is licensed under
the Oregon Securities Law to the broker-dealer { - , state
investment adviser, mortgage banker, mortgage broker - } or
issuer or owner of securities. Only a natural person may be
licensed as a salesperson
{ - or investment adviser representative - } .
(4) It is unlawful for { + :
(a) A state investment adviser to employ an investment adviser
representative in this state unless the investment adviser
representative is licensed under the Oregon Securities Law to the
state investment adviser;
(b) + } A federal covered investment adviser to employ an
investment adviser representative who has a place of business in
this state to act in this state unless the investment adviser
representative is licensed under the Oregon Securities Law to the
federal covered investment adviser { - . - } { + ; or
(c) An individual, except as otherwise provided in subsection
(8) of this section, to transact business in this state as an
investment adviser representative unless the individual is
licensed as an investment adviser representative. + } Only a
natural person may be licensed as an investment adviser
representative.
(5) No person:
(a) May be licensed as a salesperson or investment adviser
representative for more than one broker-dealer, federal covered
investment adviser, state investment adviser { - , mortgage
banker, mortgage broker, - } { + or + } issuer or owner of
securities at the same time, except as may be allowed by rule or
Enrolled Senate Bill 194 (SB 194-INTRO) Page 7
order of the Director of the Department of Consumer and Business
Services.
(b) May be licensed as a salesperson or investment adviser
representative unless the person is employed by a broker-dealer,
federal covered investment adviser, state investment adviser
{ - , mortgage banker, mortgage broker, - } or issuer or owner
of securities.
(6) It is unlawful for any person to transact business in this
state as a state investment adviser unless the person:
(a) Is licensed as such under the Oregon Securities Law; or
(b) Is licensed as a broker-dealer without the imposition of a
condition under ORS 59.215 (4).
(7) Except for federal covered investment advisers whose
activities are described by ORS 59.015 (20)(b) and licensed
broker-dealers transacting business as federal covered investment
advisers in this state, it is unlawful for any federal covered
investment adviser to conduct an advisory business in this state
unless such person makes notice filings with the director of such
documents filed with the Securities and Exchange Commission as
the director may by rule or otherwise require and pays the fee,
including the notice filing fee, specified in ORS 59.175. The
director may issue an order suspending the conduct of an
investment advisory business in this state if the director finds
that there is a failure to comply with any requirement under this
section.
{ - (8)(a) Notwithstanding any other provision of this
section, until October 10, 1999, the director may require the
licensing as a state investment adviser of any person, otherwise
meeting the definition of federal covered investment adviser, who
has failed to promptly pay the fees required by ORS 59.175 (8)(g)
and (h) after being notified in writing by the director of the
nonpayment or underpayment of such fees. A person shall be
considered to have promptly paid such fees if the fees are
remitted to the director within 15 days following the delivery of
written notification by the director. - }
{ - (b) It is unlawful for any federal covered investment
adviser to conduct an investment advisory business in this state
if such person fails to obtain the license required by the
director under paragraph (a) of this subsection. - }
{ - (9) - } { + (8) + } Notwithstanding any other provision
of this section, an individual performing the activities of an
investment adviser representative and who would otherwise be
required to be licensed as an investment adviser representative
shall not be required to be separately licensed as an investment
adviser representative if:
(a) The individual is licensed to a licensed broker-dealer, the
broker-dealer is transacting business as a federal covered
investment adviser or a state investment adviser under the
provisions of subsection (6)(b) of this section and the person is
performing investment adviser activities on behalf of the
broker-dealer; or
(b) The individual is licensed to a licensed broker-dealer and
the broker-dealer directly receives all compensation otherwise
earned by the person in connection with the investment advisory
activities being transacted in this state. The broker-dealer may
or may not further distribute any or all compensation received to
the licensed salesperson.
SECTION 5. ORS 59.175 is amended to read:
59.175. (1) The Director of the Department of Consumer and
Business Services by rule shall establish procedures for notice
Enrolled Senate Bill 194 (SB 194-INTRO) Page 8
filings required of federal covered investment advisers as well
as procedures for licensing broker-dealers, state investment
advisers, investment adviser representatives and salespersons.
The director may coordinate notice filings or licensing with any
national registration, licensing or notice filing system.
(2) The director may require an applicant for a license as a
broker-dealer { - , - } { + or + } state investment adviser
{ - or federal covered investment adviser for whom a license is
required under ORS 59.165 (8) - } , including the applicant's
partners, directors, officers or any person occupying a similar
status or performing similar functions, and any person directly
or indirectly controlling such applicant and a person for whom
application for a license as a salesperson or investment adviser
representative is made, to pass an examination on such person's
knowledge and understanding of the Oregon Securities Law and the
securities business. The director may establish by rule a fee for
the examination.
(3) The director may make such further examination of the
applicant and the applicant's affairs as the director deems
advisable and may require by rule or order that the applicant
publish an announcement of the application in such manner as the
director may specify.
(4)(a) Except as otherwise provided in paragraph (b) or (c) of
this subsection, every applicant for a license as a broker-dealer
or state investment adviser shall file with the director a
corporate surety bond or irrevocable letter of credit issued by
an insured institution as defined in ORS 706.008 or such other
security as the director may approve by rule running to the State
of Oregon in a sum to be established by rule of the director, but
in no event more than $100,000.
(b) Licensed broker-dealers subject to section 15 of the
Securities Exchange Act of 1934, as amended, are not required to
comply with paragraph (a) of this subsection, nor are such
licensed broker-dealers required to comply with any net capital
requirements imposed by the director by rule or otherwise.
(c) A licensed state investment adviser who has its principal
place of business in a state other than this state shall be
exempt from the requirements of paragraph (a) of this subsection
and shall be further exempt from any net capital requirements
imposed by the director by rule or otherwise, provided that any
such licensed state investment adviser is registered or licensed
as a state investment adviser in the state where it maintains its
principal place of business and is in compliance with such
state's bonding or net capital requirements.
(5)(a) Subject to paragraph (b) of this subsection, if the
application, surety bond, irrevocable letter of credit or other
security and fees are in order and the director is satisfied that
the application should not be denied upon one or more of the
grounds specified in ORS 59.205 to 59.225, the director shall
license the broker-dealer, state investment adviser, salesperson
or investment adviser representative.
(b) If the director determines under ORS 59.205 or 59.215 that
a condition or restriction should apply to the license, the
director, at the time the license is issued, shall specify in
writing to the licensee the condition or restriction applicable
to the license.
(6) A licensee under ORS 59.165 shall amend the license
application when there are material changes in the information
contained in the original application.
Enrolled Senate Bill 194 (SB 194-INTRO) Page 9
(7) An applicant for or a person holding a license issued under
ORS 59.005 to 59.451 may file with the director a trade name, as
defined in ORS 647.005, or an assumed business name, as defined
in ORS 648.005. The trade name or assumed business name shall be
filed in a form and manner established by rule by the director.
If the application is complete and the fee set forth in
subsection (8) of this section is paid, the director shall issue
an order authorizing the licensee to operate under the trade name
or assumed business name. The order shall remain in effect until
canceled, suspended or revoked.
(8) The director shall charge and collect for:
(a) An application for a license as a broker-dealer or state
investment adviser, a fee of $100;
(b) An application to renew a license as a broker-dealer or
state investment adviser, a fee of $50;
(c) An application for a license as a salesperson, a fee of
$15;
(d) An application to renew a license as a salesperson, a fee
of $15;
(e) An application for a license as an investment adviser
representative, a fee of $15;
(f) An application to renew a license as an investment adviser
representative, a fee of $15;
(g) A notice filing for a federal covered investment adviser, a
fee of $100;
(h) A notice filing renewal for a federal covered investment
adviser, a fee of $50; and
(i) A filing for use of a trade name or an assumed business
name, a fee of $50.
(9) Except as provided in this subsection, the fees under this
section are not refundable. The director may provide for a method
of equitably adjusting the payment of fees for broker-dealers,
federal covered investment advisers, state investment advisers,
salespersons and investment adviser representatives when the
director determines that the changes in filing periods and
expiration dates under ORS 59.185 are not equitable for the
person making the payment.
SECTION 6. ORS 59.185 is amended to read:
59.185. (1) Every license of a broker-dealer or state
investment adviser expires one year after the date of issuance
unless the Director of the Department of Consumer and Business
Services establishes a different expiration date for purposes of
coordination with any national registration or licensing system.
{ - (2) Every license of a mortgage banker's or mortgage
broker's salesperson expires one year after the date of issuance
unless the director establishes a different expiration date for
the purposes of coordination with any national registration or
licensing system. - }
{ - (3)(a) - } { + (2)(a) + } Every license of an issuer's
or owner's salesperson expires when the securities are no longer
authorized for sale or one year after the date of issuance,
whichever is sooner.
(b) Unless the director establishes a different expiration date
for the purposes of coordination with any national registration
or licensing system, every license of a salesperson licensed to a
broker-dealer and every license of an investment adviser
representative licensed to a state investment adviser expires on
the same date that the license of the broker-dealer or state
investment adviser expires.
Enrolled Senate Bill 194 (SB 194-INTRO) Page 10
(c) Unless the director establishes a different expiration date
for the purposes of coordination with any national registration
or licensing system, every license of an investment adviser
representative licensed on behalf of a federal covered investment
adviser expires the earlier of one year after the date of
issuance or the date the notice of the federal covered investment
adviser expires.
{ - (4) - } { + (3) + } The director by rule shall
establish procedures for renewing licenses of broker-dealers,
state investment advisers, investment adviser representatives and
salespersons, and for the annual renewal of { - licenses or - }
notice filings made on behalf of federal covered investment
advisers.
{ - (5) - } { + (4) + } If there is a change in the
partners, directors, officers, persons occupying similar
positions or performing similar functions, or persons directly or
indirectly controlling a broker-dealer or state investment
adviser, written notification of such change shall promptly be
filed with the director. No fee shall be required for such
notification. An examination may be required of any such
individual who is newly connected with or interested in the
licensee.
SECTION 7. ORS 59.205 is amended to read:
59.205. Except as provided in ORS 59.215, the Director of the
Department of Consumer and Business Services may by order deny,
suspend or revoke, or impose conditions or restrictions on, a
license of a person as a broker-dealer, { - federal covered
investment adviser that has failed to comply with the provisions
of ORS 59.165, - } state investment adviser, investment adviser
representative or salesperson if the director finds that the
applicant or licensee:
(1) Is insolvent, either in the sense that the liabilities of
the applicant or licensee exceed the assets of the applicant or
licensee or that the applicant or licensee cannot meet the
obligations of the applicant or licensee as they mature, or is in
such financial condition that the applicant or licensee cannot
continue in business with safety to the customers of the
applicant or licensee.
(2) Has engaged in dishonest, fraudulent or illegal practices
or conduct in any business or profession or unfair or unethical
practices or conduct in connection with the purchase or sale of
any security.
(3) Has willfully or repeatedly violated or failed to comply
with any provision of the Oregon Securities Law, any condition or
restriction imposed on a license or any rule or order of the
director.
(4) Has been convicted of a misdemeanor an essential element of
which is fraud or of a felony.
(5) Is not qualified to conduct a securities business on the
basis of such factors as training, experience and knowledge of
the securities business.
(6) Has filed an application for a license which as of the date
the license was issued, or as of the date of an order
conditioning, restricting, denying, suspending or revoking a
license, was incomplete in any material respect or contained any
statement which was, in light of the circumstances under which it
was made, false or misleading with respect to any material fact.
(7) Has failed to account to persons interested for all money
or property received.
Enrolled Senate Bill 194 (SB 194-INTRO) Page 11
(8) Has not delivered after a reasonable time, to persons
entitled thereto, securities held or to be delivered.
(9) Is permanently or temporarily enjoined by a court of
competent jurisdiction from engaging in or continuing any conduct
or practice involving any aspect of the securities business.
(10) Is the subject of an order of the director conditioning,
restricting, denying, suspending or revoking a license as a
broker-dealer, { - federal covered investment adviser, - }
state investment adviser, investment adviser representative or
salesperson.
(11) Is the subject of an order of the director under:
(a) ORS chapter 645 involving a violation of any provision of
the Oregon Commodity Code or any rule or order of the director
adopted or entered under ORS chapter 645; or
(b) ORS 59.840 to 59.980 involving a violation of any provision
of ORS 59.840 to 59.980 or any rule or order of the director
adopted or entered under ORS 59.840 to 59.980.
(12) Is the subject of any of the following orders that are
currently effective and were issued within the last five years:
(a) An order by the securities agency or administrator of
another state or Canadian province or territory, or by the
Securities and Exchange Commission, entered after notice and
opportunity for hearing, denying, suspending or revoking the
person's registration or license as a broker-dealer, federal
covered investment adviser, state investment adviser, investment
adviser representative or salesperson, or the substantial
equivalent of those terms as defined in the Oregon Securities
Law;
(b) A suspension or expulsion from membership in or association
with a member of a self-regulatory organization registered under
the Securities Exchange Act of 1934, as amended, the Commodity
Exchange Act or the Investment Advisers Act of 1940, as amended;
(c) A United States Postal Service fraud order;
(d) A cease and desist order entered after notice and
opportunity for hearing by the director, the securities agency or
administrator of another state or a Canadian province or
territory, the Securities and Exchange Commission or the
Commodity Futures Trading Commission; or
(e) An order by the Commodity Futures Trading Commission
denying, suspending or revoking registration under the Commodity
Exchange Act.
(13) Has failed, reasonably to supervise the salespersons or
investment adviser representatives of the applicant or licensee.
(14) Has failed to comply with the requirements of ORS 59.195
to make and keep records prescribed by rule or order of the
director, to produce such records required by the director or to
file any financial reports or other information the director by
rule or order may require.
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Enrolled Senate Bill 194 (SB 194-INTRO) Page 12
Passed by Senate May 2, 2003
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 19, 2003
...........................................................
Speaker of House
Enrolled Senate Bill 194 (SB 194-INTRO) Page 13
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled Senate Bill 194 (SB 194-INTRO) Page 14