Oklahoma 2024 Regular Session

Oklahoma Senate Bill SB1091 Compare Versions

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Version 2 (New)

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4		-	An Act
5		-	ENROLLED SENATE
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	30	+
	31	+	STATE OF OKLAHOMA
	32	+
	33	+	1st Session of the 59th Legislature (2023)
	34	+
	35	+	ENGROSSED SENATE
6	36		BILL NO. 1091 By: Floyd of the Senate
7	37
8	38		and
9	39
10	40		Munson of the House
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15	45		An Act relating to the Oklahoma Uniform Securi ties
16	46		Act of 2004; amending 71 O.S. 2021, Section 1-601, as
17	47		amended by Section 34, Chapter 77, O.S.L. 2022 (71
18	48		O.S. Supp. 2022, Section 1-601), which relates to
19	49		administration; clarifying membership of Oklahoma
20	50		Securities Commission; modifying qualifications for
21	51		certain member of Commission; updating statutory
22	52		language; and declaring an emergency.
23	53
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27		-	SUBJECT: Oklahoma Securities Commission
28		-
29	57		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
30		-
31	58		SECTION 1. AMENDATORY 71 O.S. 2021, Section 1 -601, as
32	59		amended by Section 34, Chapter 77, O.S.L . 2022 (71 O.S. Supp. 2022,
33	60		Section 1-601), is amended to read as follows:
34		-
35	61		Section 1-601. A. The Administrator shall admini ster the
36	62		Oklahoma Uniform Securities Act of 2004.
37		-
38	63		B. There are hereby created the Oklahoma Securities Commission
39	64		and the Department of Securities. The Commission shall be the
40	65		policy making and governing authority of the Department, shall
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41	93		appoint the Administrator and shall be res ponsible for the
42	94		enforcement of the Oklahoma Uniform Securities Act of 2004.
43		-
44	95		C. 1. The Commission shall consist of four (4) members to five
45	96		(5) members, including the State Banking Commissi oner who shall
46	97		serve as an ex officio voting member. Four (4) members shall be
47		-
48		-	ENR. S. B. NO. 1091 Page 2
49	98		appointed by the Governor by and with the advice and consent of the
50	99		Senate. One member will be a member of the Oklahoma Bar Association
51	100		appointed from a list of five nominees submitted by the Oklahoma Bar
52	101		Association; one member shall be an active officer of a bank or
53	102		trust company operating in the State of Oklahoma appointed from a
54	103		list of five nominees submitted by the Oklahoma Bankers As sociation;
55	104		and one member shall be a c ertified public accountant appointed from
56	105		a list of five nominees submitted by the Oklahom a Society of
57	106		Certified Public Accountants; and one member shall be a resident of
58	107		this state actively engaged in the securities industry and shall be
59	108		appointed for a six-year initial term from a list of five nominees
60	109		submitted by the Oklahoma Securities Industry Association with the
61	110		qualifications set forth in paragraph 3 of this subsection;
62	111		provided, that the State Banking Commissioner shall be and is here by
63	112		made an ex officio voting member of the Commission .
64		-
65	113		2. Except for appointment of the member engaged i n the
66	114		securities industry as pr ovided for in subsection C of this section,
67	115		no person may be appointe d to or by the Commission while such person
68	116		is registered as a broker-dealer, agent, investment adviser, or
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69	144		investment adviser representative under the Okla homa Uniform
70	145		Securities Act of 2004, or while he or she is an officer, director,
71	146		or partner of any person so registered, or while he or she is an
72	147		officer, director, or partner of an issuer which has a registration
73	148		statement effective under the Oklahoma Uni form Securities Act of
74	149		2004, or while he or she is occupying a similar status or performing
75	150		similar functions.
76		-
77	151		3. The member appointed as a representative of the s ecurities
78	152		industry shall:
79		-
80	153		a. be currently registered as an agent, investment
81	154		adviser, or investment adviser representative under
82	155		the requirements of this title ,
83		-
84	156		b. have at least ten (10) years of experience in the
85	157		industry immediately preceding appointment , and
86		-
87	158		c. have not been subject to a regula tory action requiring
88	159		disclosure on the unifor m applications for
89	160		registration for agents, in vestment advisers, or
90	161		investment adviser representatives.
91		-
92		-	ENR. S. B. NO. 1091 Page 3
93		-
94	162		The member may be removed from office by the Governor when the
95	163		member has ceased to be qualified based on subparagraph a or c of
96	164		this paragraph.
97		-
98	165		4. It is unlawful for any member of the Commission, the
99	166		Administrator, or any other offi cer or employee of the Department to
100	167		use for personal benefit any information which is filed with or
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101	195		obtained by the Administrator and which is not made pub lic. No
102	196		provision of the Oklahoma Uniform Securiti es Act of 2004 authorizes
103	197		any member of the Commi ssion, the Administrator or any other officer
104	198		or employee of the Department to disclos e any such information
105	199		except among themselves or when necessary or ap propriate in a
106	200		proceeding or investigation under th e Oklahoma Uniform Securi ties
107	201		Act of 2004 or in connection with a proceeding or investigation
108	202		conducted by any state, federal or foreig n law enforcement agency,
109	203		securities agency or self-regulatory organization. No provision of
110	204		the Oklahoma Uniform Securi ties Act of 2004 either c reates or
111	205		derogates from any privilege which exists at common law or oth erwise
112	206		when documentary or other evide nce is sought under a subpoena
113	207		directed to any member of the Commissio n, the Administrator or any
114	208		other officer or employ ee of the Department.
115		-
116	209		4. 5. Except on proof of c orruption, no Commissioner shall for
117	210		his or her acts or failure to act be civilly liab le to any investor,
118	211		applicant for registration, or any other person.
119		-
120	212		D. The Governor shall biennially appoint Commission me mbers to
121	213		serve for a staggered term of six (6) years. Upon the expiration of
122	214		initial terms, the term of each member shall be six (6 ) years from
123	215		the date of his or her appointment and qualification, and un til his
124	216		or her successor shall qualify. Vacancies shall be filled by the
125	217		Governor for the unexpi red term. Members shall be eligible for
126	218		reappointment.
127	219
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128	246		E. The Commission shall selec t a chair and is hereby authorized
129	247		to adopt rules for conducting its proc eedings. Any three members
130	248		shall constitute a quor um for transacting Com mission business. The
131	249		Commission shall meet bimonthly on such date as i t may designate and
132	250		may meet at such other times as it may deem necessary, or when
133	251		called by the chair or by an y two members. Complete minutes of each
134	252		meeting shall be kept and filed in the Department and sh all be
135		-
136		-	ENR. S. B. NO. 1091 Page 4
137	253		available for public inspection during re asonable office hours. The
138	254		Commission shall report annually to the Governor, to the Speaker of
139	255		the House of Representatives and to the President Pro Tempore of t he
140	256		Senate. The report shall contain the minut es of each meeting held
141	257		during the year, legisla tive recommendations, a summary of
142	258		violations of the Oklahoma Uniform Securities Act of 2004 and action
143	259		taken thereon, a list of securities registered under the O klahoma
144	260		Uniform Securities Act of 2004 and suc h other data and information
145	261		as may be deemed necessary or appropriate. The Commissio n is hereby
146	262		authorized to publish such report, and the Administrator may sell
147	263		copies of such report at such price as is reas onably sufficient to
148	264		defray the expenses of th e Department in preparing, publishing, and
149	265		disseminating the same. Each member of the Commission shall have
150	266		unrestricted access to all offices and records und er the
151	267		jurisdiction of the Department. The Commiss ion, or a majority
152	268		thereof, may exercise any p ower or perform any act authorized for
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153	296		the Administrator under the provisions of the O klahoma Uniform
154	297		Securities Act of 2004.
155		-
156	298		F. The Commission shall appoint a full-time Administrator, who
157	299		shall serve at the p leasure of the Commis sion. The Administrator
158	300		shall administer the Oklahoma Uniform Securities Act of 2004 under
159	301		the supervision of the Commission and in accordance with its
160	302		policies.
161		-
162	303		G. The Administrator shall be a person of good moral character,
163	304		at least thirty (30) years of age, a resident taxpaye r of Oklahoma,
164	305		and thoroughly familiar with corp orate organization, investment
165	306		banking, investment trusts, the sale of securities, and the
166	307		statistical details of the manufacturing industries and commerce of
167	308		this state. In additio n, the Administrator shall :
168		-
169	309		1. Be a graduate of an accredited law school and a member of
170	310		the Oklahoma Bar Assoc iation, or shall have had ten (10) years’
171	311		experience as a certified publi c accountant; and
172		-
173	312		2. Have at least three (3) years ’ work experience involving
174	313		some aspect of the securities industry. The Commission may also
175	314		require additional qualifications. The salary of the Administrator
176	315		shall be fixed by the Commission.
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179		-	ENR. S. B. NO. 1091 Page 5
180	316		H. The Administrator, with the approval of the Commission, m ay
181	317		designate a Deputy Securities Administrator , who shall possess the
182	318		same qualifications, inc luding bond, required for the Administ rator
183	319		and who shall perform all the duties required to be performed by th e
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184	347		Administrator when the Administrator is absent or unable to act for
185	348		any reason.
186		-
187	349		I. Before assuming office, the Administrator shall give a bond
188	350		in the sum of Fifty Thousand Dollars ($50,000.00) payable to the
189	351		State of Oklahoma, to be approved by the Atto rney General of the
190	352		State of Oklahoma, conditioned that he or she will faithfully
191	353		execute the duties of the office. The Administrator may by rul e or
192	354		order require any employee of the Department to be bonded on the
193	355		same condition and in the same or such le sser amount as he or she
194	356		determines. The expense o f all such bonds shall be paid from funds
195	357		available to the Department.
196		-
197	358		J. 1. The internal ad ministrative organization of the
198	359		Department shall be determined by the Commission in such manner as
199	360		to promote the efficient and effective enforcement of the Okla homa
200	361		Uniform Securities Act of 2004. The Depa rtment shall include, but
201	362		not be limited to, div isions relating to:
202		-
203	363		a. registration of broker-dealers, agents, investment
204	364		advisers, and investment adviser repr esentatives,
205		-
206	365		b. registration of securities,
207		-
208	366		c. investigation and enforcement, and
209		-
210	367		d. investor education.
211		-
212	368		2. Within the division of investor educ ation, the Department
213	369		may provide the following services at the discretion of the
214	370		Administrator:
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216	398		a. informing investors of all rights and remedies
217	399		available under this act,
218		-
219	400		b. informing investors of the avail ability of private
220	401		dispute resolution, including arbitration and
221		-
222		-	ENR. S. B. NO. 1091 Page 6
223	402		mediation, as an alte rnative to other courses of
224	403		action,
225		-
226	404		c. acting as a liaison between inv estors and the other
227	405		divisions of the Department, and
228		-
229	406		d. acting as a liaison between investors and i ssuers of
230	407		securities, broker-dealers or investment advisers
231	408		subject to the jurisdictio n of the Department under
232	409		this act.
233		-
234	410		Nothing in this subsection shall authorize any employee of the
235	411		Department to represent t he interests of, or to serve as counsel
236	412		for, investors in any proceeding or action to include an
237	413		administrative or civil proceeding brought by the Department or the
238	414		Securities and Exchange Commission, a proceeding brought by the
239	415		National Association of Sec urities Dealers, Inc. Financial Industry
240	416		Regulatory Authority, Inc. , or an arbitration or medi ation
241	417		proceeding. Further, no employe e of the Department may advise any
242	418		person about the value of securities or as to the advisability of
243	419		investing in, purchasing or selling securities, or as to the value
244	420		or merits of pursuing a particular course of actio n.
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246	448		3. Records of the division of inve stor education shall not be
247	449		exempt from the provis ions of the Open Records Act and Section 1-607
248	450		of this title except as provided for in subparagraph 8 of parag raph
249	451		B of Section 1-607 of this title.
250		-
251	452		K. The Administrator shall prepare in writing a manual o f
252	453		necessary employee positions for the Department, including job
253	454		classifications, personnel qualifications, duties, maximum and
254	455		minimum salary schedules, and ot her personnel information, which
255	456		shall be approved by the Commission. The Administrator may sel ect,
256	457		appoint, and employ such attorneys, accountants, auditors,
257	458		examiners, investigators, clerks, stenographers, and other personnel
258	459		as he or she deems necessary for the proper administration of the
259	460		Oklahoma Uniform Securities Act of 2004, and may fix their
260	461		compensation and the salary of the De puty Administrator. The D eputy
261	462		Administrator and other employees of the Department shall serve at
262	463		the pleasure of the Administrator.
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265		-	ENR. S. B. NO. 1091 Page 7
266	464		L. The Commission and the Securities Departm ent shall be
267	465		assigned offices in Oklahoma City, Oklahoma, by the Office of
268	466		Management and Enterprise Se rvices, and all records of the
269	467		Commission and Department shall be kept in those offices, unless and
270	468		until transferred to the Records Management Division of the Oklahoma
271	469		Department of Libraries.
272		-
273	470		M. 1. Neither the Administrator nor any employee of the
274	471		Department, during their respec tive terms of employment, shall serve
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275	499		as a director, offic er, shareholder, member, partner, agent or
276	500		employee of any person who, during the period of such
277	501		Administrator’s or employee’s employment with the Department:
278		-
279	502		a. was licensed or applied for registra tion as a broker-
280	503		dealer, agent, investment adviser or inve stment
281	504		adviser representative under this act, or
282		-
283	505		b. applied for or secured the registration of securities
284	506		under the Oklahoma Uniform Securities Act of 2004.
285		-
286	507		2. Nothing in paragraph 1 of this subsec tion shall prohibit the
287	508		holding, purchasing or selling of any securities by the
288	509		Administrator or any employee of the Department in accordance with
289	510		regulations adopted by the Commission for the purpose of protecting
290	511		the public interest and avoiding conflict s of interest.
291		-
292	512		3. Nothing contained in paragraph 1 of thi s subsection shall
293	513		prohibit the holding, purchasing or selling of any securities of any
294	514		issuer described in subparagraph b of paragraph 1 of this subsection
295	515		of this section by the Administrator if e ither:
296		-
297	516		a. the Administrator together with his or her spous e, or
298	517		minor children, owns less than one percent (1%) of any
299	518		class of outstanding securities of any such i ssuer so
300	519		long as such securities are not purchased in an
301	520		initial public offering, or
302		-
303	521		b. such securities are held or purchased through a
304	522		management account or trust administered by a bank or
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305	550		trust company authorized to do business in this state
306	551		that has sole investment discretion regarding the
307	552		holding, purchasing or selling of such securities and
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309		-	ENR. S. B. NO. 1091 Page 8
310	553		the Administrator or employee did not, directly or
311	554		indirectly, advise, counsel or command the holding,
312	555		purchasing or selling of any securities or furnish any
313	556		information relating to any such securities to such
314	557		bank or trust company and further, such accoun t or
315	558		trust does not at any time have more than ten percent
316	559		(10%) of its total assets invested in the securitie s
317	560		of any one issuer or hold more than five percent (5% )
318	561		of the outstanding securities of any class of
319	562		securities of any one issuer.
320		-
321	563		N. The Oklahoma Uniform Securities Act of 2004 does not create
322	564		or diminish a privilege or exemption that exists at comm on law, by
323	565		statute or rule, or otherwise.
324		-
325	566		O. The Administrator may develop and implement investor
326	567		education initiatives to inform the public about in vesting in
327	568		securities, with particular emphasis on the pre vention and detection
328	569		of securities fraud. In developing and implementing these
329	570		initiatives, the Administ rator may collaborate with public and
330	571		nonprofit organizations with an interest in investor e ducation. The
331	572		Administrator may accept a grant or donatio n from a person that is
332	573		not affiliated with the securities industry or from a nonprofit
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	590	+	15
	591	+	16
	592	+	17
	593	+	18
	594	+	19
	595	+	20
	596	+	21
	597	+	22
	598	+	23
	599	+	24
	600	+
333	601		organization, regardless of whether the organization is affiliated
334	602		with the securities industry, to develop an d implement investor
335	603		education initiatives. This subsecti on does not authorize the
336	604		Administrator to require participation or monetary contributions of
337	605		a registrant in an investor education program.
338		-
339	606		SECTION 2. It being immediately necessary for the preservation
340	607		of the public peace, health or safety, an emergency is hereby
341	608		declared to exist, by reason whereof this act shall take effect and
342	609		be in full force from and after its passage and approval.
343	610
344		-
345		-	ENR. S. B. NO. 1091 Page 9
346		-	Passed the Senate the 22nd day of March, 2023.
347		-
348		-
349		-
350		-	Presiding Officer of the Senate
351		-
352		-
353		-	Passed the House of Representatives the 27th day of April, 2023.
354		-
355		-
356		-
357		-	Presiding Officer of the House
358		-	of Representatives
359		-
360		-	OFFICE OF THE GOVERNOR
361		-	Received by the Office of the Governor this _______ _____________
362		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
363		-	By: _____________________________ ____
364		-	Approved by the Governor of the State of Oklahoma this _____ ____
365		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
366		-
367		-	_________________________________
368		-	Governor of the State of Oklahoma
369		-
370		-
371		-	OFFICE OF THE SECRETARY OF STATE
372		-	Received by the Office of the Secretary of State this _______ ___
373		-	day of __________________, 20 _______, at _______ o'clock _______ M.
374		-	By: _______________________________ __
	611	+	COMMITTEE REPORT BY: COMMITTEE ON BANKING, FINANCIAL SERVICES AND
	612	+	PENSIONS, dated 04/03/2023 - DO PASS.