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ACT No. 7
Regular Session, 2010
HOUSE BILL NO. 54
BY REPRESENTATIVE ARNOLD
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
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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
fixed income transactions. The broker-dealers defined in this Subsection shall21
negotiate commission recapture agreements with the systems. The commissions22
recaptured under any such agreement shall not be a majority of the total value of the23 ENROLLEDHB NO. 54
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commissions required to be directed to the broker-dealers pursuant to the provisions1
of this Section.2
C. All trades shall be subject to best efforts and best executions as defined3
by the Securities and Exchange Commission and the National Association of4
Securities Dealers Financial Industry Regulatory Authority.5
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Section 2. R.S. 12:131(B)(3) is hereby amended and reenacted to read as follows:7
§131. Rights of a shareholder dissenting from certain corporate actions8
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B. The right to dissent provided by this Section shall not exist in the case of:10
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(3) Shareholders holding shares of any class of stock which, at the record12
date fixed to determine shareholders entitled to receive notice of and to vote at the13
meeting of shareholders at which a merger or consolidation was acted on, were listed14
on a national securities exchange, or were designated as a national market system15
security on an inter-dealer quotation system by the National Association of Securities16
Dealers Financial Industry Regulatory Authority, unless the articles of the17
corporation issuing such stock provide otherwise or, except in the case of18
shareholders of a corporation surviving the merger or consolidation in which each19
share of such corporation outstanding immediately prior to the effective date of the20
merger or consolidation is an identical outstanding or treasury share of such21
corporation after the effective date of the merger or consolidation, the shares of such22
shareholders were not converted by the merger or consolidation solely into shares of23
the surviving or new corporation.24
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Section 3. R.S. 22:68(D), 587(A)(introductory paragraph), and 1801(D)(1)(d) are26
hereby amended and reenacted to read as follows: 27
§68. Books and records of domestic insurer; securities28
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D. Any domestic company may maintain for its securities a limited agency,1
custodial or depository account, or other type of account for the safekeeping of those2
securities; collecting the income from those securities; and providing supportive3
accounting services relating to such safekeeping and collection; all provided the4
domestic company maintains full investment discretion over those securities. Such5
account shall be with either (1) a bank, qualified under state law to administer trusts6
in this state, and operating as described in R.S. 6:534(B); or (2) a member of the7
National Association of Securities Dealers Financial Industry Regulatory Authority,8
subject to the jurisdiction of the Securities and Exchange Commission, maintaining9
membership in the Securities Investors Protection Corporation, and having an agency10
office in this state. The bank or the National Association of Securities Dealers11
Financial Industry Regulatory Authority member, in safekeeping such securities,12
shall have all the powers, rights, duties, and responsibilities as it has under state law13
for holding securities in its fiduciary accounts. The commissioner of insurance is14
hereby authorized to promulgate rules and regulations pursuant to this Subsection.15
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§587. Loaning of securities17
A. A domestic insurer may lend securities held by it to any member of the18
National Association of Securities Dealers Financial Industry Regulatory Authority19
having a net worth of at least one hundred million dollars, under this Subpart, if:20
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§1801. Fraud prevention and control22
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D. Immunity from liability. (1) No civil liability shall be imposed on and no24
cause of action shall arise from a person's furnishing information concerning25
suspected, anticipated, or completed fraudulent viatical settlement acts or suspected26
or completed fraudulent insurance acts, if the information is provided to or received27
from:28
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(d) The National Association of Insurance Commissioners (NAIC), National1
Association of Securities Dealers (NASD) the Financial Industry Regulatory2
Authority, the North American Securities Administrators Association (NASAA), or3
their employees, agents, or representatives, or other regulatory body overseeing life4
insurance, viatical settlements, securities, or investment fraud; or5
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Section 4. R.S. 51:703(B)(3) and (C)(5), 705(C)(1)(b), 708(8)(introductory7
paragraph), and 710(H) are hereby amended and reenacted to read as follows:8
§703. Registration of dealers, salesmen, and investment advisers and investment9
adviser representatives; surety bonds; records10
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B.12
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(3) No applicant shall be registered as a dealer under this Part, nor shall any14
such registration be renewed, unless each principal of such applicant has passed a15
written examination administered by the commissioner or someone acting under his16
direction, or unless such applicant presents proof satisfactory to the commissioner17
showing that each principal has passed a similar examination conducted by the18
National Association of Securities Dealers, Inc. Financial Industry Regulatory19
Authority, or any other examination substantially similar to that given by the20
commissioner, as the commissioner may determine. The commissioner is further21
authorized to prescribe the time, manner, or procedure relative to the holding of such22
examination, and may impose a fee against each principal taking said examination23
to cover the costs thereof. For the purposes of this Subsection only, with respect to24
a dealer or an applicant for registration as a dealer, the term "principal" refers to a25
person associated with such dealer or applicant who is engaged in the management26
of such dealer's or applicant's business, including the supervision, solicitation, or27
conduct of such business or the training of persons associated with such dealer or28
applicant for any of these functions.29
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C.1
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(5) No applicant shall be registered as a salesman under this Part, nor any3
such registration be renewed, unless such person has passed a written examination4
administered by the commissioner or someone acting under his direction or unless5
such applicant presents proof satisfactory to the commissioner showing that he has6
previously passed a similar examination conducted by the National Association of7
Securities Dealers, Inc. Financial Industry Regulatory Authority, or any other8
examination substantially similar to that given by the commissioner, as the9
commissioner may determine. The commissioner is further authorized to prescribe10
the time, manner, and procedure relative to the holding of such examination and may11
impose a fee against the applicant taking said examination to cover the costs thereof.12
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§705. Registration of securities; when and how required; delivery of prospectus14
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C. Registration statement. (1) Every registration statement filed under R.S.16
51:705(B) shall contain the following information:17
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(b) With respect to every director and officer of the issuer, or person19
occupying a similar status or performing similar functions: his name, address, and20
principal occupation for the past five years; any criminal convictions or pending21
criminal proceedings involving the sale of securities of any such person or any22
disciplinary action taken or pending against any such person by the Securities and23
Exchange Commission, the National Association of Securities Dealers Financial24
Industry Regulatory Authority, the commissioner, or any state securities regulatory25
authority; the amount of securities of the issuer beneficially owned by him as of a26
specified date within thirty days of the filing of the registration statement; and a27
statement, including price information, of all transactions by such person in28
securities of the issuer beneficially owned by him during the two years preceding29
such date; the amount of the securities covered by the registration statement to which30 ENROLLEDHB NO. 54
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he has indicated his intention to subscribe; and with respect to each such person and1
any affiliate of such person or affiliate of a person specified in R.S. 51:705(C)(1)(e)2
and (f) Subparagraph (e) and (f) of this Paragraph, a description of any material3
interest in any material transaction with the issuer or any significant subsidiary4
effected within the past three years or proposed to be effected.5
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§708. Exempt securities 7
The provisions of R.S. 51:705 shall not apply to any of the following8
securities: 9
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(8) Securities listed or approved for listing upon notice of issuance on the11
New York Stock Exchange or the American Stock Exchange or a security designated12
or approved for designation as a national market system security by the National13
Association of Securities Dealers, Inc. Financial Industry Regulatory Authority or14
any other stock exchange or market system approved by the commissioner as15
provided in this Paragraph, and all securities senior or equal in rank to any securities16
so listed, designated, or approved, any security represented by subscription rights17
which have been so listed, designated, or approved, or any warrant or right to18
purchase or subscribe to any of the foregoing, provided: 19
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§710. Commissioner of securities; powers of commissioner and employees;21
compensation and expenses; assistant commissioner 22
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H. The commissioner may designate filing depositories for all records24
required to be filed and maintained under this Part. Such records may be maintained25
in original form or by means of microfilm, microfiche, microphotographic26
reproduction, photographic reproduction, word processing, computerization, or other27
acceptable reproductive methods. The commissioner is further authorized to28
participate, in whole or in part, in a Central Registration Depository (CRD) or similar29
system, in cooperation with the National Association of Securities Dealers, Inc.30 ENROLLEDHB NO. 54
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(NASD) Financial Industry Regulatory Authority, other states, and the United States,1
to the extent he deems participation to be in the public interest of this state.2
Section 5. This Act shall become effective upon signature by the governor or, if not3
signed by the governor, upon expiration of the time for bills to become law without signature4
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If5
vetoed by the governor and subsequently approved by the legislature, this Act shall become6
effective on the day following such approval.7
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: