House of Representatives

SB 1044

securities

Sponsors: Cirillo

DP	Committee on Commerce and Economic Development
X	Caucus and COW
	As Passed the House

SB 1044 makes changes to the Arizona Securities and Investment Management Acts to conform with recent federal legislation and removes the securities director from the Commerce and Economic Development Commission [CEDC].

History

The Securities Division of the Arizona Corporation Commission [ACC] regulates the securities industry and administers the Arizona Securities and Investment Management Acts. The Division oversees the registration of securities dealers and salesmen, investment advisers and their representatives, reviews their conduct, investigates alleged violations and initiates applicable administrative, civil and criminal enforcement actions.

Last year, the federal Securities and Exchange Commission adopted rules under the Investment Advisers Act of 1940 providing for an electronic filing system for investment advisers. This system is uniformly known as the Investment Adviser Registration Depository [IARD] and will be operated by the National Association of Securities Dealers [NASD]. All federally registered investment advisers are required to use the IARD. Likewise, the North American Association of Securities Administrators [NASAA} adopted these same revisions to the state uniform act to correspond to the SEC's rules. SB 1044 conforms Arizona statutes and places the IARD filing requirements on state-licensed investment advisers, who currently number between 600 and 700.

The current CEDC membership consists of four members appointed by the Governor, the director of the Securities Division of the ACC, and the director of the Department of Commerce. SB 1044 revises the make-up of the CEDC by removing the director of the Securities Division from its membership.

Provisions

· Removes the director of the Securities Division from the CEDC. [41-1505.05]

· Strikes language relating to the SRD system and modifies the definition of person to include a government or governmental subdivision or agency. [44-1801; 44-1863; 44-3153; 44-3155; 44-3156; 44-3158]

· Provides statutory authority for the ACC to enforce subpoena power from other states if the alleged activity would also be a violation in Arizona. [44-1823 and 44-3133]

· Requires submission of the registration form as adopted by NASAA. [44-1902]

· Deletes certain language relating to the dealer application requirements, as adopted by NASAA. Permits the adoption of financial requirements by rule. [44-1941]

· Strikes the reporting requirement for the Securities Regulatory and Enforcement Fund, since the funds are legislatively appropriated. [44-2039]

· Adds the definition of IARD, which is the Investment Adviser Registration Depository operated by the National Association of Securities Dealers. [44-3101]

· Allows a filing to be made with the ACC by mail or other acceptable means if the IARD does not provide for receipt of a filing. [44-3159]

· Outlines the terms for an application or notice filing to be deemed abandoned. [44-3181]

· Authorizes the payment of application fees to the IARD and establishes the applications, withdrawals, terminations, transfers, renewals and other filings shall be submitted on the required forms. [44-3181]

· Contains numerous clarifying, conforming and technical changes.

SB 1044 passed the Committee on Commerce and Economic Development unamended.

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45th Legislature

First Regular Session 3 February 27, 2001

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