72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2336
Senate Bill 826
Sponsored by Senator WALKER; Senator DUKES
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Requires Director of Department of Consumer and Business
Services to adopt rules setting fees for registration of
securities and licensing of broker-dealers, investment advisers
and salespersons. Requires director to set fees in amounts equal
to national midpoints for similar fees charged by all other state
securities regulators.
Specifies January 1, 2004, operative date.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to securities fees; creating new provisions; amending
ORS 59.049, 59.065, 59.070, 59.165 and 59.175; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. 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 director shall set the
amount of the fee by rule. + } The fee { - shall not be - }
{ + is not + } refundable. The effective date of the notice
{ - shall be - } { + is + } 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 - }
{ + The director shall set the fee by rule in an amount + } 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 - } { + is
not + } refundable. The effective date of the notice { - shall
be - } { + is + } the later of the date the notice is received
by the director or the date specified by the filer of the notice.
(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 - }
{ + The director shall set the fee by rule in an amount + } 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 - } { + is
not + } refundable. The effective date of the notice { - shall
be - } { + is + } the later of the date the notice is received
by the director or the date specified by the filer of the notice.
{ + (4)(a) The director shall set the fees described in
subsections (1) to (3) of this section in an amount that the
director determines is equal as nearly as possible to the
national midpoint for similar fees charged by all other state
regulatory agencies within the United States responsible for
regulating securities.
(b) The director may adjust the amount of a fee described in
subsections (1) to (3) of this section every two years to reflect
changes in the national midpoint for a similar fee.
(c) In determining the national midpoint for similar fees under
this section, the director may consider national midpoints
determined by the North American Securities Administrators
Association, the National Association of Securities Dealers or
the United States Securities and Exchange Commission. + }
{ - (4) - } { + (5) + } 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) 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 - } { + the fee + } 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 { + may not + } be less
than { - $25 - } { + $100 + }. The fee { - shall not be - }
{ + is not + } 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 - } { + may + } not be less than { - $25 - }
{ + $100 + }. The fee { - shall not be - } { + is not + }
refundable.
(7) The director, by rule or otherwise, may waive any or all of
the provisions of this section.
SECTION 2. 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
be accompanied by a fee { + . The director shall set the fee by
rule in an amount + } { - of $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, 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)(a) The director shall set the fee described in
subsection (2) of this section in an amount that the director
determines is equal as nearly as possible to the national
midpoint for similar fees charged by all other state regulatory
agencies within the United States responsible for regulating
securities.
(b) The director may adjust the amount of the fee described in
subsection (2) of this section every two years to reflect changes
in the national midpoint for a similar fee.
(c) In determining the national midpoint for similar fees under
this section, the director may consider national midpoints
determined by the North American Securities Administrators
Association, the National Association of Securities Dealers or
the United States Securities and Exchange Commission. + }
{ - (3) - } { + (4) + } 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 - } { + may + } not be less than { - $25 - } { +
$100 + }. Registration of the excess securities shall be
effective retroactively to the date of sale.
SECTION 3. ORS 59.070 is amended to read:
59.070. (1) A registrant under ORS 59.065 shall amend the
registration application { + submitted under ORS 59.065 + } when
there are material changes in the terms and conditions of the
original registration. { - This shall include - } { + '
Material changes in the terms and conditions of the original
registration' includes + }an increase in the aggregate amount of
securities to be offered in Oregon, change in the type of
securities or change in the identity of the issuer or owner.
(2) Applications for an amendment to increase the aggregate
amount of securities to be offered in Oregon shall include
{ - fees - } { + the fee + } calculated in accordance with ORS
59.065 (2), less amounts previously paid under the prior
registration { + . + } { - but in no event shall - } The fee
{ + may not + } be less than { - $25 - } { + $100 + }.
(3) { - Nothing in this section shall - } { + This section
does not + } relieve a registrant from the obligation to notify
the director concerning material changes in facts and
circumstances concerning the offering.
SECTION 4. 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
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.
(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 - }
{ + described + } 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 { + fees + } 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)(a) The director shall set the fees described in
subsection (8) of this section in an amount that the director
determines is equal as nearly as possible to the national
midpoint for similar fees charged by all other state regulatory
agencies within the United States responsible for regulating
securities.
(b) The director may adjust the amount of a fee described in
subsection (8) of this section every two years to reflect changes
in the national midpoint for a similar fee.
(c) In determining the national midpoint for similar fees under
this section, the director may consider national midpoints
determined by the North American Securities Administrators
Association, the National Association of Securities Dealers or
the United States Securities and Exchange Commission. + }
{ - (9) - } { + (10) + } 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 5. 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 - } { + A + } broker-dealer or state investment
adviser { - shall - } { + may not + } 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 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. Only a natural
person may be licensed as an investment adviser representative.
(5) { - No person - } { + A person may not be licensed
as + }:
(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, issuer or owner of securities at the
same time, except as may be allowed by rule or 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 - }
{ + described + } 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 - } { + is not + } 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 6. { + (1) The amendments to ORS 59.049 by section 1
of this 2003 Act apply to notice filings made on or after the
operative date of the amendments to ORS 59.049 by section 1 of
this 2003 Act.
(2) The amendments to ORS 59.065 and 59.070 by sections 2 and 3
of this 2003 Act apply to registration applications and
registration amendment applications submitted on or after the
operative date of the amendments to ORS 59.065 and 59.070 by
sections 2 and 3 of this 2003 Act.
(3) The amendments to ORS 59.175 by section 4 of this 2003 Act
apply to applications or filings made on or after the operative
date of the amendments to ORS 59.175 by section 4 of this 2003
Act. + }
SECTION 7. { + (1) Section 6 of this 2003 Act and the
amendments to ORS 59.049, 59.065, 59.070, 59.165 and 59.175 by
sections 1 to 5 of this 2003 Act become operative January 1,
2004.
(2) The Director of the Department of Consumer and Business
Services may take any action before the operative date of section
6 of this 2003 Act and the amendments to ORS 59.049, 59.065,
59.070, 59.165 and 59.175 by sections 1 to 5 of this 2003 Act
that is necessary to enable the director to exercise, on and
after the operative date of section 6 of this 2003 Act and the
amendments to ORS 59.049, 59.065, 59.070, 59.165 and 59.175 by
sections 1 to 5 of this 2003 Act, all the duties, functions and
powers conferred upon the director by section 6 of this 2003 Act
and the amendments to ORS 59.049, 59.065, 59.070, 59.165 and
59.175 by sections 1 to 5 of this 2003 Act. + }
SECTION 8. { + This 2003 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2003 Act takes effect on its
passage. + }
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