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Regular Session, 2010
HOUSE BILL NO. 54
BY REPRESENTATIVE ARNOLD
SECURITIES: Renames the National Association of Securities Dealers to the Financial
Industry Regulatory Authority
AN ACT1
To amend and reenact R.S. 11:266.1(B) and (C), R.S. 12:131(B)(3), R.S. 22:68(D),2
587(A)(introductory paragraph), and 1801(D)(1)(d), and R.S. 51:703(B)(3) and3
(C)(5), 705(C)(1)(b), 708(8)(introductory paragraph), and 710(H), relative to4
renaming the National Association of Securities Dealers to the Financial Industry5
Regulatory Authority; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 11:266.1(B) and (C) are hereby amended and reenacted to read as8
follows: 9
§266.1. Investment through Louisiana incorporated and domiciled broker-dealer10
* * *11
B. Each state public retirement or pension system, plan, or fund shall direct12
at least ten percent of the commissions on all trades of domestic equities in13
separately, actively managed portfolios and shall direct at least ten percent of all14
trades of domestic investment grade fixed income investments in separately managed15
accounts through broker-dealers selected on a best bid and offer basis who have been16
incorporated and domiciled in or who have had their principal trading operations in17
Louisiana for at least two years, who are registered and in good standing with the18
National Association of Securities Dealers Financial Industry Regulatory Authority,19
and who have demonstrated the ability to execute institutional domestic equity and20 HLS 10RS-394 REENGROSSED
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fixed income transactions. The broker-dealers defined in this Subsection shall1
negotiate commission recapture agreements with the systems. The commissions2
recaptured under any such agreement shall not be a majority of the total value of the3
commissions required to be directed to the broker-dealers pursuant to the provisions4
of this Section.5
C. All trades shall be subject to best efforts and best executions as defined6
by the Securities and Exchange Commission and the National Association of7
Securities Dealers Financial Industry Regulatory Authority.8
* * *9
Section 2. R.S. 12:131(B)(3) is hereby amended and reenacted to read as follows:10
§131. Rights of a shareholder dissenting from certain corporate actions11
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B. The right to dissent provided by this Section shall not exist in the case of:13
* * *14
(3) Shareholders holding shares of any class of stock which, at the record15
date fixed to determine shareholders entitled to receive notice of and to vote at the16
meeting of shareholders at which a merger or consolidation was acted on, were listed17
on a national securities exchange, or were designated as a national market system18
security on an inter-dealer quotation system by the National Association of Securities19
Dealers Financial Industry Regulatory Authority, unless the articles of the20
corporation issuing such stock provide otherwise or, except in the case of21
shareholders of a corporation surviving the merger or consolidation in which each22
share of such corporation outstanding immediately prior to the effective date of the23
merger or consolidation is an identical outstanding or treasury share of such24
corporation after the effective date of the merger or consolidation, the shares of such25
shareholders were not converted by the merger or consolidation solely into shares of26
the surviving or new corporation.27
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Section 3. R.S. 22:68(D), 587(A)(introductory paragraph), and 1801(D)(1)(d) are1
hereby amended and reenacted to read as follows: 2
§68. Books and records of domestic insurer; securities3
* * *4
D. Any domestic company may maintain for its securities a limited agency,5
custodial or depository account, or other type of account for the safekeeping of those6
securities; collecting the income from those securities; and providing supportive7
accounting services relating to such safekeeping and collection; all provided the8
domestic company maintains full investment discretion over those securities. Such9
account shall be with either (1) a bank, qualified under state law to administer trusts10
in this state, and operating as described in R.S. 6:534(B); or (2) a member of the11
National Association of Securities Dealers Financial Industry Regulatory Authority,12
subject to the jurisdiction of the Securities and Exchange Commission, maintaining13
membership in the Securities Investors Protection Corporation, and having an agency14
office in this state. The bank or the National Association of Securities Dealers15
Financial Industry Regulatory Authority member, in safekeeping such securities,16
shall have all the powers, rights, duties, and responsibilities as it has under state law17
for holding securities in its fiduciary accounts. The commissioner of insurance is18
hereby authorized to promulgate rules and regulations pursuant to this Subsection.19
* * *20
§587. Loaning of securities21
A. A domestic insurer may lend securities held by it to any member of the22
National Association of Securities Dealers Financial Industry Regulatory Authority23
having a net worth of at least one hundred million dollars, under this Subpart, if:24
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§1801. Fraud prevention and control26
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D. Immunity from liability. (1) No civil liability shall be imposed on and no28
cause of action shall arise from a person's furnishing information concerning29 HLS 10RS-394 REENGROSSED
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suspected, anticipated, or completed fraudulent viatical settlement acts or suspected1
or completed fraudulent insurance acts, if the information is provided to or received2
from:3
* * *4
(d) The National Association of Insurance Commissioners (NAIC), National5
Association of Securities Dealers (NASD) the Financial Industry Regulatory6
Authority, the North American Securities Administrators Association (NASAA), or7
their employees, agents, or representatives, or other regulatory body overseeing life8
insurance, viatical settlements, securities, or investment fraud; or9
* * *10
Section 4. R.S. 51:703(B)(3) and (C)(5), 705(C)(1)(b), 708(8)(introductory11
paragraph), and 710(H) are hereby amended and reenacted to read as follows:12
§703. Registration of dealers, salesmen, and investment advisers and investment13
adviser representatives; surety bonds; records14
* * *15
B.16
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(3) No applicant shall be registered as a dealer under this Part, nor shall any18
such registration be renewed, unless each principal of such applicant has passed a19
written examination administered by the commissioner or someone acting under his20
direction, or unless such applicant presents proof satisfactory to the commissioner21
showing that each principal has passed a similar examination conducted by the22
National Association of Securities Dealers, Inc. Financial Industry Regulatory23
Authority, or any other examination substantially similar to that given by the24
commissioner, as the commissioner may determine. The commissioner is further25
authorized to prescribe the time, manner, or procedure relative to the holding of such26
examination, and may impose a fee against each principal taking said examination27
to cover the costs thereof. For the purposes of this Subsection only, with respect to28
a dealer or an applicant for registration as a dealer, the term "principal" refers to a29 HLS 10RS-394 REENGROSSED
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person associated with such dealer or applicant who is engaged in the management1
of such dealer's or applicant's business, including the supervision, solicitation, or2
conduct of such business or the training of persons associated with such dealer or3
applicant for any of these functions.4
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C.6
* * *7
(5) No applicant shall be registered as a salesman under this Part, nor any8
such registration be renewed, unless such person has passed a written examination9
administered by the commissioner or someone acting under his direction or unless10
such applicant presents proof satisfactory to the commissioner showing that he has11
previously passed a similar examination conducted by the National Association of12
Securities Dealers, Inc. Financial Industry Regulatory Authority, or any other13
examination substantially similar to that given by the commissioner, as the14
commissioner may determine. The commissioner is further authorized to prescribe15
the time, manner, and procedure relative to the holding of such examination and may16
impose a fee against the applicant taking said examination to cover the costs thereof.17
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§705. Registration of securities; when and how required; delivery of prospectus19
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C. Registration statement. (1) Every registration statement filed under R.S.21
51:705(B) shall contain the following information:22
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(b) With respect to every director and officer of the issuer, or person24
occupying a similar status or performing similar functions: his name, address, and25
principal occupation for the past five years; any criminal convictions or pending26
criminal proceedings involving the sale of securities of any such person or any27
disciplinary action taken or pending against any such person by the Securities and28
Exchange Commission, the National Association of Securities Dealers Financial29 HLS 10RS-394 REENGROSSED
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Industry Regulatory Authority, the commissioner, or any state securities regulatory1
authority; the amount of securities of the issuer beneficially owned by him as of a2
specified date within thirty days of the filing of the registration statement; and a3
statement, including price information, of all transactions by such person in4
securities of the issuer beneficially owned by him during the two years preceding5
such date; the amount of the securities covered by the registration statement to which6
he has indicated his intention to subscribe; and with respect to each such person and7
any affiliate of such person or affiliate of a person specified in R.S. 51:705(C)(1)(e)8
and (f) Subparagraph (e) and (f) of this Paragraph, a description of any material9
interest in any material transaction with the issuer or any significant subsidiary10
effected within the past three years or proposed to be effected.11
* * *12
§708. Exempt securities 13
The provisions of R.S. 51:705 shall not apply to any of the following14
securities: 15
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(8) Securities listed or approved for listing upon notice of issuance on the17
New York Stock Exchange or the American Stock Exchange or a security designated18
or approved for designation as a national market system security by the National19
Association of Securities Dealers, Inc. Financial Industry Regulatory Authority or20
any other stock exchange or market system approved by the commissioner as21
provided in this Paragraph, and all securities senior or equal in rank to any securities22
so listed, designated, or approved, any security represented by subscription rights23
which have been so listed, designated, or approved, or any warrant or right to24
purchase or subscribe to any of the foregoing, provided: 25
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§710. Commissioner of securities; powers of commissioner and employees;1
compensation and expenses; assistant commissioner 2
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H. The commissioner may designate filing depositories for all records4
required to be filed and maintained under this Part. Such records may be maintained5
in original form or by means of microfilm, microfiche, microphotographic6
reproduction, photographic reproduction, word processing, computerization, or other7
acceptable reproductive methods. The commissioner is further authorized to8
participate, in whole or in part, in a Central Registration Depository (CRD) or similar9
system, in cooperation with the National Association of Securities Dealers, Inc.10
(NASD) Financial Industry Regulatory Authority, other states, and the United States,11
to the extent he deems participation to be in the public interest of this state.12
Section 5. This Act shall become effective upon signature by the governor or, if not13
signed by the governor, upon expiration of the time for bills to become law without signature14
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If15
vetoed by the governor and subsequently approved by the legislature, this Act shall become16
effective on the day following such approval.17
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Arnold HB No. 54
Abstract: Renames the National Association of Securities Dealers to the Financial Industry
Regulatory Authority.
Present law provides for the National Association of Securities Dealers and references
thereto.
Proposed law changes present law references to the Financial Industry Regulatory Authority.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 11:266.1(B) and (C), R.S. 12:131(B)(3), R.S. 22:68(D), 587(A)(intro. para.),
and 1801(D)(1)(d), and R.S. 51:703(B)(3) and (C)(5), 705(C)(1)(b), 708(8)(intro. para.), and
710(H))