Florida Senate - 2015              PROPOSED COMMITTEE SUBSTITUTE
       Bill No. CS for SB 914
       
       
       
       
       
                               Ì706156/Î706156                          
       
       576-04114-15                                                    
       Proposed Committee Substitute by the Committee on Appropriations
       (Appropriations Subcommittee on General Government)
    1                        A bill to be entitled                      
    2         An act relating to intrastate crowdfunding; amending
    3         s. 517.021, F.S.; conforming a cross-reference;
    4         defining the term “intermediary” for purposes of the
    5         Florida Securities and Investor Protection Act;
    6         amending s. 517.061, F.S.; exempting offers or sales
    7         of securities by certain issuers from registration
    8         requirements; creating s. 517.0611, F.S.; providing a
    9         short title; exempting the intrastate offering and
   10         sale of certain securities from certain regulatory
   11         requirements; providing applicability; providing
   12         registration and reporting requirements for issuers
   13         and intermediaries offering such securities; requiring
   14         the issuer to provide to the office a copy of a
   15         specified escrow agreement; limiting the aggregate
   16         amount of sales of such securities within a specified
   17         period; limiting the aggregate amount of sales to
   18         specified investors; requiring an issuer to produce
   19         and distribute an annual report to investors;
   20         requiring a notice-filing to be suspended under
   21         certain circumstances; specifying that fees collected
   22         become revenue of the state; requiring a qualified
   23         third party to hold certain funds in escrow; amending
   24         s. 517.12, F.S.; providing registration requirements
   25         for an intermediary; conforming a cross-reference;
   26         amending s. 517.121, F.S.; requiring an intermediary
   27         to comply with specified recordkeeping requirements;
   28         amending s. 517.161, F.S.; including an intermediary
   29         in the disciplinary provisions; amending s. 626.9911,
   30         F.S.; conforming a cross-reference; providing an
   31         appropriation; providing an effective date.
   32          
   33  Be It Enacted by the Legislature of the State of Florida:
   34  
   35         Section 1. Subsection (9) of section 517.021, Florida
   36  Statutes, is amended, subsections (13) through (23) are
   37  redesignated as subsections (14) through (24), respectively, and
   38  a new subsection (13) is added to that section, to read:
   39         517.021 Definitions.—When used in this chapter, unless the
   40  context otherwise indicates, the following terms have the
   41  following respective meanings:
   42         (9) “Federal covered adviser” means a person who is
   43  registered or required to be registered under s. 203 of the
   44  Investment Advisers Act of 1940. The term “federal covered
   45  adviser” does not include any person who is excluded from the
   46  definition of investment adviser under subparagraphs (14)(b)1.
   47  8. (13)(b)1.-8.
   48         (13) “Intermediary” means a natural person residing in the
   49  state or a corporation, trust, partnership, association, or
   50  other legal entity registered with the Secretary of State to do
   51  business in the state which represents an issuer in a
   52  transaction involving the offer or sale of securities under s.
   53  517.061.
   54         Section 2. Section 517.061, Florida Statutes, is amended to
   55  read:
   56         517.061 Exempt transactions.—Except as otherwise provided
   57  in s. 517.0611 for a transaction listed in subsection (21), the
   58  exemption for each transaction listed below is self-executing
   59  and does not require any filing with the office before prior to
   60  claiming the such exemption. Any person who claims entitlement
   61  to any of the exemptions bears the burden of proving such
   62  entitlement in any proceeding brought under this chapter. The
   63  registration provisions of s. 517.07 do not apply to any of the
   64  following transactions; however, such transactions are subject
   65  to the provisions of ss. 517.301, 517.311, and 517.312:
   66         (1) At any judicial, executor’s, administrator’s,
   67  guardian’s, or conservator’s sale, or at any sale by a receiver
   68  or trustee in insolvency or bankruptcy, or any transaction
   69  incident to a judicially approved reorganization in which a
   70  security is issued in exchange for one or more outstanding
   71  securities, claims, or property interests.
   72         (2) By or for the account of a pledgeholder or mortgagee
   73  selling or offering for sale or delivery in the ordinary course
   74  of business and not for the purposes of avoiding the provisions
   75  of this chapter, to liquidate a bona fide debt, a security
   76  pledged in good faith as security for such debt.
   77         (3) The isolated sale or offer for sale of securities when
   78  made by or on behalf of a vendor not the issuer or underwriter
   79  of the securities, who, being the bona fide owner of such
   80  securities, disposes of her or his own property for her or his
   81  own account, and such sale is not made directly or indirectly
   82  for the benefit of the issuer or an underwriter of such
   83  securities or for the direct or indirect promotion of any scheme
   84  or enterprise with the intent of violating or evading any
   85  provision of this chapter. For purposes of this subsection,
   86  isolated offers or sales include, but are not limited to, an
   87  isolated offer or sale made by or on behalf of a vendor of
   88  securities not the issuer or underwriter of the securities if:
   89         (a) The offer or sale of securities is in a transaction
   90  satisfying all of the requirements of subparagraphs (11)(a)1.,
   91  2., 3., and 4. and paragraph (11)(b); or
   92         (b) The offer or sale of securities is in a transaction
   93  exempt under s. 4(1) of the Securities Act of 1933, as amended.
   94  
   95  For purposes of this subsection, any person, including, without
   96  limitation, a promoter or affiliate of an issuer, shall not be
   97  deemed an underwriter, an issuer, or a person acting for the
   98  direct or indirect benefit of the issuer or an underwriter with
   99  respect to any securities of the issuer which she or he has
  100  owned beneficially for at least 1 year.
  101         (4) The distribution by a corporation, trust, or
  102  partnership, actively engaged in the business authorized by its
  103  charter or other organizational articles or agreement, of
  104  securities to its stockholders or other equity security holders,
  105  partners, or beneficiaries as a stock dividend or other
  106  distribution out of earnings or surplus.
  107         (5) The issuance of securities to such equity security
  108  holders or other creditors of a corporation, trust, or
  109  partnership in the process of a reorganization of such
  110  corporation or entity, made in good faith and not for the
  111  purpose of avoiding the provisions of this chapter, either in
  112  exchange for the securities of such equity security holders or
  113  claims of such creditors or partly for cash and partly in
  114  exchange for the securities or claims of such equity security
  115  holders or creditors.
  116         (6) Any transaction involving the distribution of the
  117  securities of an issuer exclusively among its own security
  118  holders, including any person who at the time of the transaction
  119  is a holder of any convertible security, any nontransferable
  120  warrant, or any transferable warrant which is exercisable within
  121  not more than 90 days of issuance, when no commission or other
  122  remuneration is paid or given directly or indirectly in
  123  connection with the sale or distribution of such additional
  124  securities.
  125         (7) The offer or sale of securities to a bank, trust
  126  company, savings institution, insurance company, dealer,
  127  investment company as defined by the Investment Company Act of
  128  1940, pension or profit-sharing trust, or qualified
  129  institutional buyer as defined by rule of the commission in
  130  accordance with Securities and Exchange Commission Rule 144A (17
  131  C.F.R. s. 230.144(A)(a)), whether any of such entities is acting
  132  in its individual or fiduciary capacity; provided that such
  133  offer or sale of securities is not for the direct or indirect
  134  promotion of any scheme or enterprise with the intent of
  135  violating or evading any provision of this chapter.
  136         (8) The sale of securities from one corporation to another
  137  corporation provided that:
  138         (a) The sale price of the securities is $50,000 or more;
  139  and
  140         (b) The buyer and seller corporations each have assets of
  141  $500,000 or more.
  142         (9) The offer or sale of securities from one corporation to
  143  another corporation, or to security holders thereof, pursuant to
  144  a vote or consent of such security holders as may be provided by
  145  the articles of incorporation and the applicable corporate
  146  statutes in connection with mergers, share exchanges,
  147  consolidations, or sale of corporate assets.
  148         (10) The issuance of notes or bonds in connection with the
  149  acquisition of real property or renewals thereof, if such notes
  150  or bonds are issued to the sellers of, and are secured by all or
  151  part of, the real property so acquired.
  152         (11)(a) The offer or sale, by or on behalf of an issuer, of
  153  its own securities, which offer or sale is part of an offering
  154  made in accordance with all of the following conditions:
  155         1. There are no more than 35 purchasers, or the issuer
  156  reasonably believes that there are no more than 35 purchasers,
  157  of the securities of the issuer in this state during an offering
  158  made in reliance upon this subsection or, if such offering
  159  continues for a period in excess of 12 months, in any
  160  consecutive 12-month period.
  161         2. Neither the issuer nor any person acting on behalf of
  162  the issuer offers or sells securities pursuant to this
  163  subsection by means of any form of general solicitation or
  164  general advertising in this state.
  165         3. Before Prior to the sale, each purchaser or the
  166  purchaser’s representative, if any, is provided with, or given
  167  reasonable access to, full and fair disclosure of all material
  168  information.
  169         4. No person defined as a “dealer” in this chapter is paid
  170  a commission or compensation for the sale of the issuer’s
  171  securities unless such person is registered as a dealer under
  172  this chapter.
  173         5. When sales are made to five or more persons in this
  174  state, any sale in this state made pursuant to this subsection
  175  is voidable by the purchaser in such sale either within 3 days
  176  after the first tender of consideration is made by such
  177  purchaser to the issuer, an agent of the issuer, or an escrow
  178  agent or within 3 days after the availability of that privilege
  179  is communicated to such purchaser, whichever occurs later.
  180         (b) The following purchasers are excluded from the
  181  calculation of the number of purchasers under subparagraph
  182  (a)1.:
  183         1. Any relative or spouse, or relative of such spouse, of a
  184  purchaser who has the same principal residence as such
  185  purchaser.
  186         2. Any trust or estate in which a purchaser, any of the
  187  persons related to such purchaser specified in subparagraph 1.,
  188  and any corporation specified in subparagraph 3. collectively
  189  have more than 50 percent of the beneficial interest (excluding
  190  contingent interest).
  191         3. Any corporation or other organization of which a
  192  purchaser, any of the persons related to such purchaser
  193  specified in subparagraph 1., and any trust or estate specified
  194  in subparagraph 2. collectively are beneficial owners of more
  195  than 50 percent of the equity securities or equity interest.
  196         4. Any purchaser who makes a bona fide investment of
  197  $100,000 or more, provided such purchaser or the purchaser’s
  198  representative receives, or has access to, the information
  199  required to be disclosed by subparagraph (a)3.
  200         5. Any accredited investor, as defined by rule of the
  201  commission in accordance with Securities and Exchange Commission
  202  Regulation 230.501 (17 C.F.R. s. 230.501).
  203         (c)1. For purposes of determining which offers and sales of
  204  securities constitute part of the same offering under this
  205  subsection and are therefore deemed to be integrated with one
  206  another:
  207         a. Offers or sales of securities occurring more than 6
  208  months before prior to an offer or sale of securities made
  209  pursuant to this subsection shall not be considered part of the
  210  same offering, provided there are no offers or sales by or for
  211  the issuer of the same or a similar class of securities during
  212  such 6-month period.
  213         b. Offers or sales of securities occurring at any time
  214  after 6 months from an offer or sale made pursuant to this
  215  subsection shall not be considered part of the same offering,
  216  provided there are no offers or sales by or for the issuer of
  217  the same or a similar class of securities during such 6-month
  218  period.
  219         2. Offers or sales which do not satisfy the conditions of
  220  any of the provisions of subparagraph 1. may or may not be part
  221  of the same offering, depending on the particular facts and
  222  circumstances in each case. The commission may adopt a rule or
  223  rules indicating what factors should be considered in
  224  determining whether offers and sales not qualifying for the
  225  provisions of subparagraph 1. are part of the same offering for
  226  purposes of this subsection.
  227         (d) Offers or sales of securities made pursuant to, and in
  228  compliance with, any other subsection of this section or any
  229  subsection of s. 517.051 shall not be considered part of an
  230  offering pursuant to this subsection, regardless of when such
  231  offers and sales are made.
  232         (12) The sale of securities by a bank or trust company
  233  organized or incorporated under the laws of the United States or
  234  this state at a profit to such bank or trust company of not more
  235  than 2 percent of the total sale price of such securities;
  236  provided that there is no solicitation of this business by such
  237  bank or trust company where such bank or trust company acts as
  238  agent in the purchase or sale of such securities.
  239         (13) An unsolicited purchase or sale of securities on order
  240  of, and as the agent for, another by a dealer registered
  241  pursuant to the provisions of s. 517.12; provided that this
  242  exemption applies solely and exclusively to such registered
  243  dealers and does not authorize or permit the purchase or sale of
  244  securities on order of, and as agent for, another by any person
  245  other than a dealer so registered; and provided, further, that
  246  such purchase or sale is not directly or indirectly for the
  247  benefit of the issuer or an underwriter of such securities or
  248  for the direct or indirect promotion of any scheme or enterprise
  249  with the intent of violation or evading any provision of this
  250  chapter.
  251         (14) The offer or sale of shares of a corporation which
  252  represent ownership, or entitle the holders of the shares to
  253  possession and occupancy, of specific apartment units in
  254  property owned by such corporation and organized and operated on
  255  a cooperative basis, solely for residential purposes.
  256         (15) The offer or sale of securities under a bona fide
  257  employer-sponsored stock option, stock purchase, pension,
  258  profit-sharing, savings, or other benefit plan when offered only
  259  to employees of the sponsoring organization or to employees of
  260  its controlled subsidiaries.
  261         (16) The sale by or through a registered dealer of any
  262  securities option if at the time of the sale of the option:
  263         (a) The performance of the terms of the option is
  264  guaranteed by any dealer registered under the federal Securities
  265  Exchange Act of 1934, as amended, which guaranty and dealer are
  266  in compliance with such requirements or rules as may be approved
  267  or adopted by the commission; or
  268         (b) Such options transactions are cleared by the Options
  269  Clearing Corporation or any other clearinghouse recognized by
  270  the office; and
  271         (c) The option is not sold by or for the benefit of the
  272  issuer of the underlying security; and
  273         (d) The underlying security may be purchased or sold on a
  274  recognized securities exchange or is quoted on the National
  275  Association of Securities Dealers Automated Quotation System;
  276  and
  277         (e) Such sale is not directly or indirectly for the purpose
  278  of providing or furthering any scheme to violate or evade any
  279  provisions of this chapter.
  280         (17)(a) The offer or sale of securities, as agent or
  281  principal, by a dealer registered pursuant to s. 517.12, when
  282  such securities are offered or sold at a price reasonably
  283  related to the current market price of such securities, provided
  284  such securities are:
  285         1. Securities of an issuer for which reports are required
  286  to be filed by s. 13 or s. 15(d) of the Securities Exchange Act
  287  of 1934, as amended;
  288         2. Securities of a company registered under the Investment
  289  Company Act of 1940, as amended;
  290         3. Securities of an insurance company, as that term is
  291  defined in s. 2(a)(17) of the Investment Company Act of 1940, as
  292  amended;
  293         4. Securities, other than any security that is a federal
  294  covered security pursuant to s. 18(b)(1) of the Securities Act
  295  of 1933 and is not subject to any registration or filing
  296  requirements under this act, which appear in any list of
  297  securities dealt in on any stock exchange registered pursuant to
  298  the Securities Exchange Act of 1934, as amended, and which
  299  securities have been listed or approved for listing upon notice
  300  of issuance by such exchange, and also all securities senior to
  301  any securities so listed or approved for listing upon notice of
  302  issuance, or represented by subscription rights which have been
  303  so listed or approved for listing upon notice of issuance, or
  304  evidences of indebtedness guaranteed by companies any stock of
  305  which is so listed or approved for listing upon notice of
  306  issuance, such securities to be exempt only so long as such
  307  listings or approvals remain in effect. The exemption provided
  308  for herein does not apply when the securities are suspended from
  309  listing approval for listing or trading.
  310         (b) The exemption provided in this subsection does not
  311  apply if the sale is made for the direct or indirect benefit of
  312  an issuer or controlling persons of such issuer or if such
  313  securities constitute the whole or part of an unsold allotment
  314  to, or subscription or participation by, a dealer as an
  315  underwriter of such securities.
  316         (c) This exemption shall not be available for any
  317  securities which have been denied registration pursuant to s.
  318  517.111. Additionally, the office may deny this exemption with
  319  reference to any particular security, other than a federal
  320  covered security, by order published in such manner as the
  321  office finds proper.
  322         (18) The offer or sale of any security effected by or
  323  through a person in compliance with s. 517.12(17).
  324         (19) Other transactions defined by rules as transactions
  325  exempted from the registration provisions of s. 517.07, which
  326  rules the commission may adopt from time to time, but only after
  327  a finding by the office that the application of the provisions
  328  of s. 517.07 to a particular transaction is not necessary in the
  329  public interest and for the protection of investors because of
  330  the small dollar amount of securities involved or the limited
  331  character of the offering. In conjunction with its adoption of
  332  such rules, the commission may also provide in such rules that
  333  persons selling or offering for sale the exempted securities are
  334  exempt from the registration requirements of s. 517.12. No rule
  335  so adopted may have the effect of narrowing or limiting any
  336  exemption provided for by statute in the other subsections of
  337  this section.
  338         (20) Any nonissuer transaction by a registered associated
  339  person of a registered dealer, and any resale transaction by a
  340  sponsor of a unit investment trust registered under the
  341  Investment Company Act of 1940, in a security of a class that
  342  has been outstanding in the hands of the public for at least 90
  343  days; provided, at the time of the transaction:
  344         (a) The issuer of the security is actually engaged in
  345  business and is not in the organization stage or in bankruptcy
  346  or receivership and is not a blank check, blind pool, or shell
  347  company whose primary plan of business is to engage in a merger
  348  or combination of the business with, or an acquisition of, any
  349  unidentified person;
  350         (b) The security is sold at a price reasonably related to
  351  the current market price of the security;
  352         (c) The security does not constitute the whole or part of
  353  an unsold allotment to, or a subscription or participation by,
  354  the broker-dealer as an underwriter of the security;
  355         (d) A nationally recognized securities manual designated by
  356  rule of the commission or order of the office or a document
  357  filed with the Securities and Exchange Commission that is
  358  publicly available through the commission’s electronic data
  359  gathering and retrieval system contains:
  360         1. A description of the business and operations of the
  361  issuer;
  362         2. The names of the issuer’s officers and directors, if
  363  any, or, in the case of an issuer not domiciled in the United
  364  States, the corporate equivalents of such persons in the
  365  issuer’s country of domicile;
  366         3. An audited balance sheet of the issuer as of a date
  367  within 18 months before such transaction or, in the case of a
  368  reorganization or merger in which parties to the reorganization
  369  or merger had such audited balance sheet, a pro forma balance
  370  sheet; and
  371         4. An audited income statement for each of the issuer’s
  372  immediately preceding 2 fiscal years, or for the period of
  373  existence of the issuer, if in existence for less than 2 years
  374  or, in the case of a reorganization or merger in which the
  375  parties to the reorganization or merger had such audited income
  376  statement, a pro forma income statement; and
  377         (e) The issuer of the security has a class of equity
  378  securities listed on a national securities exchange registered
  379  under the Securities Exchange Act of 1934 or designated for
  380  trading on the National Association of Securities Dealers
  381  Automated Quotation System, unless:
  382         1. The issuer of the security is a unit investment trust
  383  registered under the Investment Company Act of 1940;
  384         2. The issuer of the security has been engaged in
  385  continuous business, including predecessors, for at least 3
  386  years; or
  387         3. The issuer of the security has total assets of at least
  388  $2 million based on an audited balance sheet as of a date within
  389  18 months before such transaction or, in the case of a
  390  reorganization or merger in which parties to the reorganization
  391  or merger had such audited balance sheet, a pro forma balance
  392  sheet.
  393         (21) The offer or sale of a security by an issuer conducted
  394  in accordance with s. 517.0611.
  395         Section 3. Section 517.0611, Florida Statutes, is created
  396  to read:
  397         517.0611Intrastate crowdfunding.—
  398         (1)This section may be cited as the “Florida Intrastate
  399  Crowdfunding Exemption.”
  400         (2)Notwithstanding any other provision of this chapter, an
  401  offer or sale of a security by an issuer is an exempt
  402  transaction under s. 517.061 if the offer or sale is conducted
  403  in accordance with this section. The exemption provided in this
  404  section may not be used in conjunction with any other exemption
  405  under s. 517.051 or s.517.061.
  406         (3)The offer or sale of securities under this section must
  407  be conducted in accordance with the requirements of the federal
  408  exemption for intrastate offerings in s. 3(a)(11) of the
  409  Securities Act of 1933, 15 U.S.C. s. 77c(a)(11), and United
  410  States Securities and Exchange Commission Rule 147, 17 C.F.R. s.
  411  230.147, adopted pursuant to the Securities Act of 1933.
  412         (4)An issuer must:
  413         (a)Be a for-profit business entity formed under the laws
  414  of this state, be registered with the Secretary of State,
  415  maintain its principal place of business in this state, and
  416  derive its revenues primarily from operations in this state.
  417         (b)Conduct transactions for the offering through a dealer
  418  registered with the office or an intermediary registered under
  419  s. 517.12(20).
  420         (c)Not be, either before or as a result of the offering,
  421  an investment company as defined in s. 3 of the Investment
  422  Company Act of 1940, 15 U.S.C. s. 80a-3, or subject to the
  423  reporting requirements of s. 13 or s. 15(d) of the Securities
  424  Exchange Act of 1934, 15 U.S.C. s. 78m or s. 78o(d).
  425         (d)Not be a company with an undefined business operation,
  426  a company that lacks a business plan, a company that lacks a
  427  stated investment goal for the funds being raised, or a company
  428  that plans to engage in a merger or acquisition with an
  429  unspecified business entity.
  430         (e)Not be subject to a disqualification established by the
  431  commission or office or a disqualification described in s.
  432  517.1611 or United States Securities and Exchange Commission
  433  Rule 506(d), 17 C.F.R. 230.506(d), adopted pursuant to the
  434  Securities Act of 1933. Each director, officer, person occupying
  435  a similar status or performing a similar function, or person
  436  holding more than 20 percent of the shares of the issuer, is
  437  subject to this requirement.
  438         (f)Execute an escrow agreement with a federally insured
  439  financial institution authorized to do business in this state
  440  for the deposit of investor funds, and ensure that all offering
  441  proceeds are provided to the issuer only when the aggregate
  442  capital raised from all investors is equal to or greater than
  443  the target offering amount.
  444         (g)Allow investors to cancel a commitment to invest within
  445  3 business days before the offering deadline, as stated in the
  446  disclosure statement, and issue refunds to all investors if the
  447  target offering amount is not reached by the offering deadline.
  448         (5)The issuer must file a notice of the offering with the
  449  office, in writing or in electronic form, in a format prescribed
  450  by commission rule, together with a nonrefundable filing fee of
  451  $200. The commission may adopt rules establishing procedures for
  452  the deposit of fees and the filing of documents by electronic
  453  means if the procedures provide the office with the information
  454  and data required by this section. A notice is effective upon
  455  receipt of the completed form, filing fee, and an irrevocable
  456  written consent to service of civil process, as provided for in
  457  s. 517.101, by the office. The notice may be terminated by
  458  filing with the office a notice of termination. The notice and
  459  offering expire 12 months after filing the notice with the
  460  office and are not eligible for renewal. The notice must:
  461         (a)Be filed with the office at least 10 days before the
  462  issuer commences an offering of securities or the offering is
  463  displayed on a website of an intermediary in reliance upon the
  464  exemption provided by this section.
  465         (b)Indicate that the issuer is conducting an offering in
  466  reliance upon the exemption provided by this section.
  467         (c)Contain the name and contact information of the issuer.
  468         (d)Identify any predecessors, owners, officers, directors,
  469  and control persons or any person occupying a similar status or
  470  performing a similar function of the issuer, including that
  471  person’s title, his or her status as a partner, trustee, sole
  472  proprietor or similar role, and his or her ownership percentage.
  473         (e)Identify the federally insured financial institution,
  474  authorized to do business in this state, in which investor funds
  475  will be deposited, in accordance with the escrow agreement.
  476         (f)Require an attestation under oath that the issuer, its
  477  predecessors, affiliated issuers, directors, officers, and
  478  control persons, or any other person occupying a similar status
  479  or performing a similar function, are not currently and have not
  480  been within the past 10 years the subject of regulatory or
  481  criminal actions involving fraud or deceit.
  482         (g)Include documentation verifying that the issuer is
  483  organized under the laws of this state and authorized to do
  484  business in this state.
  485         (h)Include the intermediary’s website address where the
  486  issuer’s securities will be offered.
  487         (i)Include the target offering amount.
  488         (6)The issuer must amend the notice form within 30 days
  489  after any information contained in the notice becomes inaccurate
  490  for any reason. The commission may require, by rule, an issuer
  491  who has filed a notice under this section to file amendments
  492  with the office.
  493         (7)The issuer must provide to investors and the dealer or
  494  intermediary, along with a copy to the office at the time the
  495  notice is filed, and make available to potential investors
  496  through the dealer or intermediary, a disclosure statement
  497  containing material information about the issuer and the
  498  offering, including:
  499         (a)The name, legal status, physical address, and website
  500  address of the issuer.
  501         (b)The names of the directors, officers, and any person
  502  occupying a similar status or performing a similar function, and
  503  the name of each person holding more than 20 percent of the
  504  shares of the issuer.
  505         (c)A description of the business of the issuer and the
  506  anticipated business plan of the issuer.
  507         (d)A description of the stated purpose and intended use of
  508  the proceeds of the offering.
  509         (e)The target offering amount, the deadline to reach the
  510  target offering amount, and regular updates regarding the
  511  progress of the issuer in meeting the target offering amount.
  512         (f)The price to the public of the securities or the method
  513  for determining the price, provided that before the sale each
  514  investor receives in writing the final price and all required
  515  disclosures, with an opportunity to rescind the commitment to
  516  purchase the securities.
  517         (g)A description of the ownership and capital structure of
  518  the issuer, including:
  519         1.Terms of the securities being offered and each class of
  520  security of the issuer, including how those terms may be
  521  modified, and a summary of the differences between such
  522  securities, including how the rights of the securities being
  523  offered may be materially limited, diluted, or qualified by
  524  rights of any other class of security of the issuer;
  525         2.A description of how the exercise of the rights held by
  526  the principal shareholders of the issuer could negatively impact
  527  the purchasers of the securities being offered;
  528         3.The name and ownership level of each existing
  529  shareholder who owns more than 20 percent of any class of the
  530  securities of the issuer;
  531         4.How the securities being offered are being valued, and
  532  examples of methods of how such securities may be valued by the
  533  issuer in the future, including during subsequent corporate
  534  actions; and
  535         5.The risks to purchasers of the securities relating to
  536  minority ownership in the issuer, the risks associated with
  537  corporate action, including additional issuances of shares, a
  538  sale of the issuer or of assets of the issuer, or transactions
  539  with related parties.
  540         (h)A description of the financial condition of the issuer.
  541         1.For offerings that, in combination with all other
  542  offerings of the issuer within the preceding 12-month period,
  543  have target offering amounts of $100,000 or less, the
  544  description must include the most recent income tax return filed
  545  by the issuer, if any, and a financial statement that must be
  546  certified by the principal executive officer of the issuer as
  547  true and complete in all material respects.
  548         2.For offerings that, in combination with all other
  549  offerings of the issuer within the preceding 12-month period,
  550  have target offering amounts of more than $100,000, but not more
  551  than $500,000, the description must include financial statements
  552  prepared in accordance with generally accepted accounting
  553  principles and reviewed by a certified public accountant, as
  554  defined in s. 473.302, who is independent of the issuer, using
  555  professional standards and procedures for such review or
  556  standards and procedures established by the office, by rule, for
  557  such purpose.
  558         3.For offerings that, in combination with all other
  559  offerings of the issuer within the preceding 12-month period,
  560  have target offering amounts of more than $500,000, the
  561  description must include audited financial statements prepared
  562  in accordance with generally accepted accounting principles by a
  563  certified public accountant, as defined in s. 473.302, who is
  564  independent of the issuer, and other requirements as the
  565  commission may establish by rule.
  566         (i)The following statement in boldface, conspicuous type
  567  on the front page of the disclosure statement:
  568  
  569  These securities are offered under and will be sold in reliance
  570  upon an exemption from the registration requirements of federal
  571  and Florida securities laws. Consequently, neither the Federal
  572  Government nor the State of Florida has reviewed the accuracy or
  573  completeness of any offering materials. In making an investment
  574  decision, investors must rely on their own examination of the
  575  issuer and the terms of the offering, including the merits and
  576  risks involved. These securities are subject to restrictions on
  577  transferability and resale and may not be transferred or resold
  578  except as specifically authorized by applicable federal and
  579  state securities laws. Investing in these securities involves a
  580  speculative risk, and investors should be able to bear the loss
  581  of their entire investment.
  582         (8)The issuer shall provide to the office a copy of the
  583  escrow agreement with a financial institution authorized to
  584  conduct business in this state. All investor funds must be
  585  deposited in the escrow account. The escrow agreement must
  586  require that all offering proceeds be released to the issuer
  587  only when the aggregate capital raised from all investors is
  588  equal to or greater than the minimum target offering amount
  589  specified in the disclosure statement as necessary to implement
  590  the business plan, and that all investors will receive a full
  591  return of their investment commitment if that target offering
  592  amount is not raised by the date stated in the disclosure
  593  statement.
  594         (9)The sum of all cash and other consideration received
  595  for sales of a security under this section may not exceed $1
  596  million, less the aggregate amount received for all sales of
  597  securities by the issuer within the 12 months preceding the
  598  first offer or sale made in reliance upon this exemption. Offers
  599  or sales to a person owning 20 percent or more of the
  600  outstanding shares of any class or classes of securities or to
  601  an officer, director, partner, or trustee, or a person occupying
  602  a similar status, do not count toward this limitation.
  603         (10)Unless the investor is an accredited investor as
  604  defined by Rule 501 of Regulation D, adopted pursuant to the
  605  Securities Act of 1933, the aggregate amount sold by an issuer
  606  to an investor in transactions exempt from registration
  607  requirements under this subsection in a 12-month period may not
  608  exceed:
  609         (a)The greater of $2,000 or 5 percent of the annual income
  610  or net worth of such investor, if the annual income or the net
  611  worth of the investor is less than $100,000.
  612         (b)Ten percent of the annual income or net worth of such
  613  investor, not to exceed a maximum aggregate amount sold of
  614  $100,000, if either the annual income or net worth of the
  615  investor is equal to or exceeds $100,000.
  616         (11)The issuer shall file with the office and provide to
  617  investors free of charge an annual report of the results of
  618  operations and financial statements of the issuer within 45 days
  619  of its fiscal year end, until no securities under this offering
  620  are outstanding. The annual reports must meet the following
  621  requirements:
  622         (a) Include an analysis by management of the issuer of the
  623  business operations and the financial condition of the issuer,
  624  and disclose the compensation received by each director,
  625  executive officer, and person having an ownership interest of 20
  626  percent or more of the issuer, including cash compensation
  627  earned since the previous report and on an annual basis, and any
  628  bonuses, stock options, other rights to receive securities of
  629  the issuer, or any affiliate of the issuer, or other
  630  compensation received.
  631         (b)Disclose any material change to information contained
  632  in the disclosure statements which was not disclosed in a
  633  previous report.
  634         (12)(a)A notice-filing under this section shall be
  635  summarily suspended by the office if the payment for the filing
  636  is dishonored by the financial institution upon which the funds
  637  are drawn. For purposes of s. 120.60(6), failure to pay the
  638  required notice filing fee constitutes an immediate and serious
  639  danger to the public health, safety, and welfare. The office
  640  shall enter a final order revoking a notice-filing in which the
  641  payment for the filing is dishonored by the financial
  642  institution upon which the funds are drawn.
  643         (b)A notice-filing under this section shall be summarily
  644  suspended by the office if the issuer made a material false
  645  statement in the issuer’s notice-filing. The summary suspension
  646  shall remain in effect until a final order is entered by the
  647  office. For purposes of s. 120.60(6), a material false statement
  648  made in the issuer’s notice-filing constitutes an immediate and
  649  serious danger to the public health, safety, and welfare. If an
  650  issuer made a material false statement in the issuer’s notice
  651  filing, the office shall enter a final order revoking the
  652  notice-filing, issue a fine as prescribed by s. 517.221(3), and
  653  issue permanent bars under s. 517.221(4) to the issuer and all
  654  owners, officers, directors, and control persons, or any person
  655  occupying a similar status or performing a similar function of
  656  the issuer, including titles; status as a partner, trustee, sole
  657  proprietor, or similar roles; and ownership percentage.
  658         (13)All fees collected under this section become the
  659  revenue of the state, except for those assessments provided for
  660  under s. 517.131(1) until such time as the Securities Guaranty
  661  Fund satisfies the statutory limits, and are not returnable in
  662  the event that a notice filing is withdrawn.
  663         (14)An intermediary must:
  664         (a)Take measures, as established by commission rule, to
  665  reduce the risk of fraud with respect to transactions, including
  666  verifying that the issuer is in compliance with the requirements
  667  of this section and, if necessary, denying an issuer access to
  668  its platform if the intermediary believes it is unable to
  669  adequately assess the risk of fraud of the issuer or its
  670  potential offering.
  671         (b)Provide basic information on its website regarding the
  672  high risk of investment in and limitation on the resale of
  673  exempt securities and the potential for loss of an entire
  674  investment. The basic information must include:
  675         1.A description of the escrow agreement that the issuer
  676  has executed and the conditions for release of such funds to the
  677  issuer in accordance with the agreement and subsection (4).
  678         2.A description of whether financial information provided
  679  by the issuer has been audited by an independent certified
  680  public accountant, as defined in s. 473.302.
  681         (c)Obtain a zip code or residence address from each
  682  potential investor who seeks to view information regarding
  683  specific investment opportunities, in order to confirm that the
  684  potential investor is a resident of this state.
  685         (d)Obtain and verify, pursuant to commission rule, a valid
  686  Florida driver license number or official identification card
  687  number from each investor before purchase of a security or other
  688  information, as defined by commission rule, to confirm that the
  689  investor is a resident of the state.
  690         (e)Obtain an affidavit from each investor stating that the
  691  investment being made by the investor is consistent with the
  692  income requirements of subsection (10).
  693         (f)Direct the release of investor funds in escrow in
  694  accordance with subsection (4).
  695         (g)Direct investors to transmit funds directly to the
  696  financial institution designated in the escrow agreement to hold
  697  the funds for the benefit of the investor.
  698         (h)Provide a monthly update for each offering, after the
  699  first full month after the date of the offering. The update must
  700  be accessible on the intermediary’s website and must display the
  701  date and amount of each sale of securities, and each
  702  cancellation of commitment to invest in the previous calendar
  703  month.
  704         (i)Require each investor to certify in writing, including
  705  as part of such certification his or her signature and his or
  706  her initials next to each paragraph of the certification, as
  707  follows:
  708  
  709  I understand and acknowledge that:
  710  
  711  I am investing in a high-risk, speculative business venture. I
  712  may lose all of my investment, and I can afford the loss of my
  713  investment.
  714  
  715  This offering has not been reviewed or approved by any state or
  716  federal securities commission or other regulatory authority and
  717  no regulatory authority has confirmed the accuracy or determined
  718  the adequacy of any disclosure made to me relating to this
  719  offering.
  720  
  721  The securities I am acquiring in this offering are illiquid and
  722  are subject to possible dilution. There is no ready market for
  723  the sale of the securities. It may be difficult or impossible
  724  for me to sell or otherwise dispose of the securities, and I may
  725  be required to hold the securities indefinitely.
  726  
  727  I may be subject to tax on my share of the taxable income and
  728  losses of the issuer, whether or not I have sold or otherwise
  729  disposed of my investment or received any dividends or other
  730  distributions from the issuer.
  731  
  732  By entering into this transaction with the issuer, I am
  733  affirmatively representing myself as being a Florida resident at
  734  the time this contract is formed, and if this representation is
  735  subsequently shown to be false, the contract is void.
  736  
  737  If I resell any of the securities I am acquiring in this
  738  offering to a person that is not a Florida resident within 9
  739  months after the closing of the offering, my contract with the
  740  issuer for the purchase of these securities is void.
  741  
  742         (j)Require each investor to answer questions demonstrating
  743  an understanding of the level of risk generally applicable to
  744  investments in startups, emerging businesses, and small issuers,
  745  and an understanding of the risk of illiquidity.
  746         (k)Take reasonable steps to protect personal information
  747  collected from investors, as required by s. 501.171.
  748         (l)Prohibit its directors and officers from having any
  749  financial interest in the issuer using its services.
  750         (m)Implement written policies and procedures that are
  751  reasonably designed to achieve compliance with federal and state
  752  securities laws; comply with anti-money laundering requirements
  753  of 31 C.F.R. ch. X applicable to registered brokers; and comply
  754  with the privacy requirements of 17 C.F.R. part 248 as they
  755  apply to brokers.
  756         (15)An intermediary not registered as a dealer under s.
  757  517.12(6) may not:
  758         (a)Offer investment advice or recommendations. A refusal
  759  by an intermediary to post an offering that it deems not
  760  credible or that represents a potential for fraud may not be
  761  construed as an offer of investment advice or recommendation.
  762         (b)Solicit purchases, sales, or offers to buy securities
  763  offered or displayed on its website.
  764         (c)Compensate employees, agents, or other persons for the
  765  solicitation or based on the sale of securities offered or
  766  displayed on its website.
  767         (d)Hold, manage, possess, or otherwise handle investor
  768  funds or securities.
  769         (e)Compensate promoters, finders, or lead generators for
  770  providing the intermediary with the personal identifying
  771  information of any potential investor.
  772         (f)Engage in any other activities set forth by commission
  773  rule.
  774         (16)All funds received from investors must be directed to
  775  the financial institution designated in the escrow agreement to
  776  hold the funds and must be used in accordance with
  777  representations made to investors by the intermediary. If an
  778  investor cancels a commitment to invest, the intermediary must
  779  direct the financial institution designated to hold the funds to
  780  promptly refund the funds of the investor.
  781         Section 4. Section 517.12, Florida Statutes, is amended to
  782  read:
  783         517.12 Registration of dealers, associated persons,
  784  intermediaries, and investment advisers.—
  785         (1) No dealer, associated person, or issuer of securities
  786  shall sell or offer for sale any securities in or from offices
  787  in this state, or sell securities to persons in this state from
  788  offices outside this state, by mail or otherwise, unless the
  789  person has been registered with the office pursuant to the
  790  provisions of this section. The office shall not register any
  791  person as an associated person of a dealer unless the dealer
  792  with which the applicant seeks registration is lawfully
  793  registered with the office pursuant to this chapter.
  794         (2) The registration requirements of this section do not
  795  apply to the issuers of securities exempted by s. 517.051(1)-(8)
  796  and (10).
  797         (3) Except as otherwise provided in s. 517.061(11)(a)4.,
  798  (13), (16), (17), or (19), the registration requirements of this
  799  section do not apply in a transaction exempted by s. 517.061(1)
  800  (12), (14), and (15).
  801         (4) No investment adviser or associated person of an
  802  investment adviser or federal covered adviser shall engage in
  803  business from offices in this state, or render investment advice
  804  to persons of this state, by mail or otherwise, unless the
  805  federal covered adviser has made a notice-filing with the office
  806  pursuant to s. 517.1201 or the investment adviser is registered
  807  pursuant to the provisions of this chapter and associated
  808  persons of the federal covered adviser or investment adviser
  809  have been registered with the office pursuant to this section.
  810  The office shall not register any person or an associated person
  811  of a federal covered adviser or an investment adviser unless the
  812  federal covered adviser or investment adviser with which the
  813  applicant seeks registration is in compliance with the notice
  814  filing requirements of s. 517.1201 or is lawfully registered
  815  with the office pursuant to this chapter. A dealer or associated
  816  person who is registered pursuant to this section may render
  817  investment advice upon notification to and approval from the
  818  office.
  819         (5) No dealer or investment adviser shall conduct business
  820  from a branch office within this state unless the branch office
  821  is notice-filed with the office pursuant to s. 517.1202.
  822         (6) A dealer, associated person, or investment adviser, in
  823  order to obtain registration, must file with the office a
  824  written application, on a form which the commission may by rule
  825  prescribe. The commission may establish, by rule, procedures for
  826  depositing fees and filing documents by electronic means
  827  provided such procedures provide the office with the information
  828  and data required by this section. Each dealer or investment
  829  adviser must also file an irrevocable written consent to service
  830  of civil process similar to that provided for in s. 517.101. The
  831  application shall contain such information as the commission or
  832  office may require concerning such matters as:
  833         (a) The name of the applicant and the address of its
  834  principal office and each office in this state.
  835         (b) The applicant’s form and place of organization; and, if
  836  the applicant is a corporation, a copy of its articles of
  837  incorporation and amendments to the articles of incorporation
  838  or, if a partnership, a copy of the partnership agreement.
  839         (c) The applicant’s proposed method of doing business and
  840  financial condition and history, including a certified financial
  841  statement showing all assets and all liabilities, including
  842  contingent liabilities of the applicant as of a date not more
  843  than 90 days prior to the filing of the application.
  844         (d) The names and addresses of all associated persons of
  845  the applicant to be employed in this state and the offices to
  846  which they will be assigned.
  847         (7) The application must also contain such information as
  848  the commission or office may require about the applicant; any
  849  member, principal, or director of the applicant or any person
  850  having a similar status or performing similar functions; any
  851  person directly or indirectly controlling the applicant; or any
  852  employee of a dealer or of an investment adviser rendering
  853  investment advisory services. Each applicant and any direct
  854  owners, principals, or indirect owners that are required to be
  855  reported on Form BD or Form ADV pursuant to subsection (15)
  856  shall submit fingerprints for live-scan processing in accordance
  857  with rules adopted by the commission. The fingerprints may be
  858  submitted through a third-party vendor authorized by the
  859  Department of Law Enforcement to provide live-scan
  860  fingerprinting. The costs of fingerprint processing shall be
  861  borne by the person subject to the background check. The
  862  Department of Law Enforcement shall conduct a state criminal
  863  history background check, and a federal criminal history
  864  background check must be conducted through the Federal Bureau of
  865  Investigation. The office shall review the results of the state
  866  and federal criminal history background checks and determine
  867  whether the applicant meets licensure requirements. The
  868  commission may waive, by rule, the requirement that applicants,
  869  including any direct owners, principals, or indirect owners that
  870  are required to be reported on Form BD or Form ADV pursuant to
  871  subsection (15), submit fingerprints or the requirement that
  872  such fingerprints be processed by the Department of Law
  873  Enforcement or the Federal Bureau of Investigation. The
  874  commission or office may require information about any such
  875  applicant or person concerning such matters as:
  876         (a) His or her full name, and any other names by which he
  877  or she may have been known, and his or her age, social security
  878  number, photograph, qualifications, and educational and business
  879  history.
  880         (b) Any injunction or administrative order by a state or
  881  federal agency, national securities exchange, or national
  882  securities association involving a security or any aspect of the
  883  securities business and any injunction or administrative order
  884  by a state or federal agency regulating banking, insurance,
  885  finance, or small loan companies, real estate, mortgage brokers,
  886  or other related or similar industries, which injunctions or
  887  administrative orders relate to such person.
  888         (c) His or her conviction of, or plea of nolo contendere
  889  to, a criminal offense or his or her commission of any acts
  890  which would be grounds for refusal of an application under s.
  891  517.161.
  892         (d) The names and addresses of other persons of whom the
  893  office may inquire as to his or her character, reputation, and
  894  financial responsibility.
  895         (8) The commission or office may require the applicant or
  896  one or more principals or general partners, or natural persons
  897  exercising similar functions, or any associated person applicant
  898  to successfully pass oral or written examinations. Because any
  899  principal, manager, supervisor, or person exercising similar
  900  functions shall be responsible for the acts of the associated
  901  persons affiliated with a dealer, the examination standards may
  902  be higher for a dealer, office manager, principal, or person
  903  exercising similar functions than for a nonsupervisory
  904  associated person. The commission may waive the examination
  905  process when it determines that such examinations are not in the
  906  public interest. The office shall waive the examination
  907  requirements for any person who has passed any tests as
  908  prescribed in s. 15(b)(7) of the Securities Exchange Act of 1934
  909  that relates to the position to be filled by the applicant.
  910         (9)(a) All dealers, except securities dealers who are
  911  designated by the Federal Reserve Bank of New York as primary
  912  government securities dealers or securities dealers registered
  913  as issuers of securities, shall comply with the net capital and
  914  ratio requirements imposed pursuant to the Securities Exchange
  915  Act of 1934. The commission may by rule require a dealer to file
  916  with the office any financial or operational information that is
  917  required to be filed by the Securities Exchange Act of 1934 or
  918  any rules adopted under such act.
  919         (b) The commission may by rule require the maintenance of a
  920  minimum net capital for securities dealers who are designated by
  921  the Federal Reserve Bank of New York as primary government
  922  securities dealers and securities dealers registered as issuers
  923  of securities and investment advisers, or prescribe a ratio
  924  between net capital and aggregate indebtedness, to assure
  925  adequate protection for the investing public. The provisions of
  926  this section shall not apply to any investment adviser that
  927  maintains its principal place of business in a state other than
  928  this state, provided such investment adviser is registered in
  929  the state where it maintains its principal place of business and
  930  is in compliance with such state’s net capital requirements.
  931         (10) An applicant for registration shall pay an assessment
  932  fee of $200, in the case of a dealer or investment adviser, or
  933  $50, in the case of an associated person. An associated person
  934  may be assessed an additional fee to cover the cost for the
  935  fingerprints to be processed by the office. Such fee shall be
  936  determined by rule of the commission. Such fees become the
  937  revenue of the state, except for those assessments provided for
  938  under s. 517.131(1) until such time as the Securities Guaranty
  939  Fund satisfies the statutory limits, and are not returnable in
  940  the event that registration is withdrawn or not granted.
  941         (11) If the office finds that the applicant is of good
  942  repute and character and has complied with the provisions of
  943  this chapter and the rules made pursuant hereto, it shall
  944  register the applicant. The registration of each dealer,
  945  investment adviser, and associated person expires on December 31
  946  of the year the registration became effective unless the
  947  registrant has renewed his or her registration on or before that
  948  date. Registration may be renewed by furnishing such information
  949  as the commission may require, together with payment of the fee
  950  required in subsection (10) for dealers, investment advisers, or
  951  associated persons and the payment of any amount lawfully due
  952  and owing to the office pursuant to any order of the office or
  953  pursuant to any agreement with the office. Any dealer,
  954  investment adviser, or associated person who has not renewed a
  955  registration by the time the current registration expires may
  956  request reinstatement of such registration by filing with the
  957  office, on or before January 31 of the year following the year
  958  of expiration, such information as may be required by the
  959  commission, together with payment of the fee required in
  960  subsection (10) for dealers, investment advisers, or associated
  961  persons and a late fee equal to the amount of such fee. Any
  962  reinstatement of registration granted by the office during the
  963  month of January shall be deemed effective retroactive to
  964  January 1 of that year.
  965         (12)(a) The office may issue a license to a dealer,
  966  investment adviser, or associated person to evidence
  967  registration under this chapter. The office may require the
  968  return to the office of any license it may issue prior to
  969  issuing a new license.
  970         (b) Every dealer, investment adviser, or federal covered
  971  adviser shall promptly file with the office, as prescribed by
  972  rules adopted by the commission, notice as to the termination of
  973  employment of any associated person registered for such dealer
  974  or investment adviser in this state and shall also furnish the
  975  reason or reasons for such termination.
  976         (c) Each dealer or investment adviser shall designate in
  977  writing to, and register with, the office a manager for each
  978  office the dealer or investment adviser has in this state.
  979         (13) Changes in registration occasioned by changes in
  980  personnel of a partnership or in the principals, copartners,
  981  officers, or directors of any dealer or investment adviser or by
  982  changes of any material fact or method of doing business shall
  983  be reported by written amendment in such form and at such time
  984  as the commission may specify. In any case in which a person or
  985  a group of persons, directly or indirectly or acting by or
  986  through one or more persons, proposes to purchase or acquire a
  987  controlling interest in a registered dealer or investment
  988  adviser, such person or group shall submit an initial
  989  application for registration as a dealer or investment adviser
  990  prior to such purchase or acquisition. The commission shall
  991  adopt rules providing for waiver of the application required by
  992  this subsection where control of a registered dealer or
  993  investment adviser is to be acquired by another dealer or
  994  investment adviser registered under this chapter or where the
  995  application is otherwise unnecessary in the public interest.
  996         (14) Every dealer or investment adviser registered or
  997  required to be registered or branch office notice-filed or
  998  required to be notice-filed with the office shall keep records
  999  of all currency transactions in excess of $10,000 and shall file
 1000  reports, as prescribed under the financial recordkeeping
 1001  regulations in 31 C.F.R. part 103, with the office when
 1002  transactions occur in or from this state. All reports required
 1003  by this subsection to be filed with the office shall be
 1004  confidential and exempt from s. 119.07(1) except that any law
 1005  enforcement agency or the Department of Revenue shall have
 1006  access to, and shall be authorized to inspect and copy, such
 1007  reports.
 1008         (15)(a) In order to facilitate uniformity and streamline
 1009  procedures for persons who are subject to registration or
 1010  notification in multiple jurisdictions, the commission may adopt
 1011  by rule uniform forms that have been approved by the Securities
 1012  and Exchange Commission, and any subsequent amendments to such
 1013  forms, if the forms are substantially consistent with the
 1014  provisions of this chapter. Uniform forms that the commission
 1015  may adopt to administer this section include, but are not
 1016  limited to:
 1017         1. Form BR, Uniform Branch Office Registration Form,
 1018  adopted October 2005.
 1019         2. Form U4, Uniform Application for Securities Industry
 1020  Registration or Transfer, adopted October 2005.
 1021         3. Form U5, Uniform Termination Notice for Securities
 1022  Industry Registration, adopted October 2005.
 1023         4. Form ADV, Uniform Application for Investment Adviser
 1024  Registration, adopted October 2003.
 1025         5. Form ADV-W, Notice of Withdrawal from Registration as an
 1026  Investment Adviser, adopted October 2003.
 1027         6. Form BD, Uniform Application for Broker-Dealer
 1028  Registration, adopted July 1999.
 1029         7. Form BDW, Uniform Request for Broker-Dealer Withdrawal,
 1030  adopted August 1999.
 1031         (b) In lieu of filing with the office the applications
 1032  specified in subsection (6), the fees required by subsection
 1033  (10), the renewals required by subsection (11), and the
 1034  termination notices required by subsection (12), the commission
 1035  may by rule establish procedures for the deposit of such fees
 1036  and documents with the Central Registration Depository or the
 1037  Investment Adviser Registration Depository of the Financial
 1038  Industry Regulatory Authority, as developed under contract with
 1039  the North American Securities Administrators Association, Inc.
 1040         (16) Except for securities dealers who are designated by
 1041  the Federal Reserve Bank of New York as primary government
 1042  securities dealers or securities dealers registered as issuers
 1043  of securities, every applicant for initial or renewal
 1044  registration as a securities dealer and every person registered
 1045  as a securities dealer shall be registered as a broker or dealer
 1046  with the Securities and Exchange Commission and shall be subject
 1047  to insurance coverage by the Securities Investor Protection
 1048  Corporation.
 1049         (17)(a) A dealer that is located in Canada, does not have
 1050  an office or other physical presence in this state, and has made
 1051  a notice-filing in accordance with this subsection is exempt
 1052  from the registration requirements of this section and may
 1053  effect transactions in securities with or for, or induce or
 1054  attempt to induce the purchase or sale of any security by:
 1055         1. A person from Canada who is present in this state and
 1056  with whom the Canadian dealer had a bona fide dealer-client
 1057  relationship before the person entered the United States; or
 1058         2. A person from Canada who is present in this state and
 1059  whose transactions are in a self-directed, tax-advantaged
 1060  retirement plan in Canada of which the person is the holder or
 1061  contributor.
 1062         (b) A notice-filing under this subsection must consist of
 1063  documents the commission by rule requires to be filed, together
 1064  with a consent to service of process and a nonrefundable filing
 1065  fee of $200. The commission may establish by rule procedures for
 1066  the deposit of fees and the filing of documents to be made by
 1067  electronic means, if such procedures provide the office with the
 1068  information and data required by this section.
 1069         (c) A Canadian dealer may make a notice-filing under this
 1070  subsection if the dealer provides to the office:
 1071         1. A notice-filing in the form the commission requires by
 1072  rule.
 1073         2. A consent to service of process.
 1074         3. Evidence that the Canadian dealer is registered as a
 1075  dealer in the jurisdiction in which the dealer’s main office is
 1076  located.
 1077         4. Evidence that the Canadian dealer is a member of a self
 1078  regulatory organization or stock exchange in Canada.
 1079         (d) The office may issue a permit to evidence the
 1080  effectiveness of a notice-filing for a Canadian dealer.
 1081         (e) A notice-filing is effective upon receipt by the
 1082  office. A notice-filing expires on December 31 of the year in
 1083  which the filing becomes effective unless the Canadian dealer
 1084  has renewed the filing on or before that date. A Canadian dealer
 1085  may annually renew a notice-filing by furnishing to the office
 1086  such information as the office requires together with a renewal
 1087  fee of $200 and the payment of any amount due and owing the
 1088  office pursuant to any agreement with the office. Any Canadian
 1089  dealer who has not renewed a notice-filing by the time a current
 1090  notice-filing expires may request reinstatement of such notice
 1091  filing by filing with the office, on or before January 31 of the
 1092  year following the year the notice-filing expires, such
 1093  information as the commission requires by rule, together with
 1094  the payment of $200 and a late fee of $200. A reinstatement of a
 1095  notice-filing granted by the office during the month of January
 1096  is effective retroactively to January 1 of that year.
 1097         (f) An associated person who represents a Canadian dealer
 1098  who has made a notice-filing under this subsection is exempt
 1099  from the registration requirements of this section and may
 1100  effect transactions in securities in this state as permitted for
 1101  a dealer under paragraph (a) if such person is registered in the
 1102  jurisdiction from which he or she is effecting transactions into
 1103  this state.
 1104         (g) A Canadian dealer who has made a notice-filing under
 1105  this subsection shall:
 1106         1. Maintain its provincial or territorial registration and
 1107  its membership in a self-regulatory organization or stock
 1108  exchange in good standing.
 1109         2. Provide the office upon request with its books and
 1110  records relating to its business in this state as a dealer.
 1111         3. Provide the office upon request notice of each civil,
 1112  criminal, or administrative action initiated against the dealer.
 1113         4. Disclose to its clients in this state that the dealer
 1114  and its associated persons are not subject to the full
 1115  regulatory requirements under this chapter.
 1116         5. Correct any inaccurate information within 30 days after
 1117  the information contained in the notice-filing becomes
 1118  inaccurate for any reason.
 1119         (h) An associated person representing a Canadian dealer who
 1120  has made a notice-filing under this subsection shall:
 1121         1. Maintain provincial or territorial registration in good
 1122  standing.
 1123         2. Provide the office upon request with notice of each
 1124  civil, criminal, or administrative action initiated against such
 1125  person.
 1126         (i) A notice-filing may be terminated by filing notice of
 1127  such termination with the office. Unless another date is
 1128  specified by the Canadian dealer, such notice is effective upon
 1129  receipt of the notice by the office.
 1130         (j) All fees collected under this subsection become the
 1131  revenue of the state, except those assessments provided for
 1132  under s. 517.131(1), until the Securities Guaranty Fund has
 1133  satisfied the statutory limits. Such fees are not returnable if
 1134  a notice-filing is withdrawn.
 1135         (18) Every dealer or associated person registered or
 1136  required to be registered with the office shall satisfy any
 1137  continuing education requirements established by rule pursuant
 1138  to law.
 1139         (19) The registration requirements of this section which
 1140  apply to investment advisers and associated persons do not apply
 1141  to a commodity trading adviser who:
 1142         (a) Is registered as such with the Commodity Futures
 1143  Trading Commission pursuant to the Commodity Exchange Act.
 1144         (b) Advises or exercises trading discretion, with respect
 1145  to foreign currency options listed and traded exclusively on the
 1146  Philadelphia Stock Exchange, on behalf of an “appropriate
 1147  person” as defined by the Commodity Exchange Act.
 1148  
 1149  The exemption provided in this subsection does not apply to a
 1150  commodity trading adviser who engages in other activities that
 1151  require registration under this chapter.
 1152         (20)An intermediary may not engage in business in this
 1153  state unless the intermediary is registered as a dealer or as an
 1154  intermediary with the office pursuant to this section to
 1155  facilitate the offer or sale of securities in accordance with s.
 1156  517.0611. An intermediary, in order to obtain registration, must
 1157  file with the office a written application on a form prescribed
 1158  by commission rule and pay a registration fee of $200. The
 1159  commission may establish by rule procedures for depositing fees
 1160  and filing documents by electronic means if such procedures
 1161  provide the office with the information and data required by
 1162  this section. Each intermediary must also file an irrevocable
 1163  written consent to service of civil process, as provided for in
 1164  s. 517.101.
 1165         (a)The application must contain such information as the
 1166  commission or office may require concerning:
 1167         1.The name of the applicant and address of its principal
 1168  office and each office in this state.
 1169         2.The applicant’s form and place of organization; and if
 1170  the applicant is a corporation, a copy of its articles of
 1171  incorporation and amendments to the articles of incorporation
 1172  or, if a partnership, a copy of the partnership agreement.
 1173         3.The website address where securities of the issuer will
 1174  be offered.
 1175         4.Contact information.
 1176         (b)The application must also contain such information as
 1177  the commission may require by rule about the applicant; any
 1178  member, principal, or director of the applicant or any person
 1179  having a similar status or performing similar functions; or any
 1180  persons directly or indirectly controlling the applicant. Each
 1181  applicant and any direct owners, principals, or indirect owners
 1182  that are required to be reported on a form adopted by commission
 1183  rule shall submit fingerprints for live-scan processing in
 1184  accordance with rules adopted by the commission. The
 1185  fingerprints may be submitted through a third-party vendor
 1186  authorized by the Department of Law Enforcement to provide live
 1187  scan fingerprinting. The costs of fingerprint processing shall
 1188  be borne by the person subject to the background check. The
 1189  Department of Law Enforcement shall conduct a state criminal
 1190  history background check, and a federal criminal history
 1191  background check must be conducted through the Federal Bureau of
 1192  Investigation. The office shall review the results of the state
 1193  and federal criminal history background checks and determine
 1194  whether the applicant meets licensure requirements. The
 1195  commission may waive, by rule, the requirement that applicants,
 1196  including any direct owners, principals, or indirect owners,
 1197  that are required to be reported on a form adopted by commission
 1198  rule submit fingerprints or the requirement that such
 1199  fingerprints be processed by the Department of Law Enforcement
 1200  or the Federal Bureau of Investigation. The commission, by rule,
 1201  or the office may require information about any applicant or
 1202  person concerning such matters as:
 1203         1.His or her full name and any other names by which he or
 1204  she may have been known and his or her age, social security
 1205  number, photograph, qualifications, and educational and business
 1206  history.
 1207         2.Any injunction or administrative order by a state or
 1208  federal agency, national securities exchange, or national
 1209  securities association involving a security or any aspect of the
 1210  securities business and any injunction or administrative order
 1211  by a state or federal agency regulating banking, insurance,
 1212  finance, or small loan companies, real estate, mortgage brokers,
 1213  or other related or similar industries, which relate to such
 1214  person.
 1215         3. His or her conviction of, or plea of nolo contendere to,
 1216  a criminal offense or his or her commission of any acts that
 1217  would be grounds for refusal of an application under s. 517.161.
 1218         (c)The application must be amended within 30 days if any
 1219  information contained in the form becomes inaccurate for any
 1220  reason.
 1221         (d)An intermediary or persons affiliated with the
 1222  intermediary may not be subject to any disqualification
 1223  described in s. 517.1611 or the United States Securities and
 1224  Exchange Commission Rule 506(d), 17 C.F.R. 230.506(d), adopted
 1225  pursuant to the Securities Act of 1933. Each director, officer,
 1226  control person of the issuer, any person occupying a similar
 1227  status or performing a similar function, and each person holding
 1228  more than 20 percent of the shares of the intermediary is
 1229  subject to this requirement.
 1230         (e)If the office finds that the applicant is of good
 1231  repute and character and has complied with the provisions of
 1232  this chapter and the rules made pursuant hereto, it shall
 1233  register the applicant. The registration of each intermediary
 1234  expires on December 31 of the year the registration became
 1235  effective unless the registrant has renewed his or her
 1236  registration on or before that date. Registration may be renewed
 1237  by furnishing such information as the commission may require by
 1238  rule, together with payment of the fee of $200 and the payment
 1239  of any amount due to the office pursuant to any order of the
 1240  office or pursuant to any agreement with the office. An
 1241  intermediary who has not renewed a registration by filing with
 1242  the office on or before January 31 of the year following the
 1243  year of expiration must submit the information that may be
 1244  required by the commission, together with payment of the $200
 1245  fee and a late fee of $200. Any reinstatement of registration
 1246  granted by the office during the month of January shall be
 1247  deemed effective retroactive to January 1 of that year.
 1248         (21)(20) The registration requirements of this section do
 1249  not apply to any general lines insurance agent or life insurance
 1250  agent licensed under chapter 626, for the sale of a security as
 1251  defined in s. 517.021(22)(g) s. 517.021(21)(g), if the
 1252  individual is directly authorized by the issuer to offer or sell
 1253  the security on behalf of the issuer and the issuer is a
 1254  federally chartered savings bank subject to regulation by the
 1255  Federal Deposit Insurance Corporation. Actions under this
 1256  subsection shall constitute activity under the insurance agent’s
 1257  license for purposes of ss. 626.611 and 626.621.
 1258         Section 5. Subsections (1) and (2) of section 517.121,
 1259  Florida Statutes, are amended to read:
 1260         517.121 Books and records requirements; examinations.—
 1261         (1) A dealer, investment adviser, branch office, or
 1262  associated person, or intermediary shall maintain such books and
 1263  records as the commission may prescribe by rule.
 1264         (2) The office shall, at intermittent periods, examine the
 1265  affairs and books and records of each registered dealer,
 1266  investment adviser, associated person, intermediary, or branch
 1267  office notice-filed with the office, or require such records and
 1268  reports to be submitted to it as required by rule of the
 1269  commission, to determine compliance with this act.
 1270         Section 6. Section 517.161, Florida Statutes, is amended to
 1271  read:
 1272         517.161 Revocation, denial, or suspension of registration
 1273  of dealer, investment adviser, intermediary, or associated
 1274  person.—
 1275         (1) Registration under s. 517.12 may be denied or any
 1276  registration granted may be revoked, restricted, or suspended by
 1277  the office if the office determines that such applicant or
 1278  registrant; any member, principal, or director of the applicant
 1279  or registrant or any person having a similar status or
 1280  performing similar functions; or any person directly or
 1281  indirectly controlling the applicant or registrant:
 1282         (a) Has violated any provision of this chapter or any rule
 1283  or order made under this chapter;
 1284         (b) Has made a material false statement in the application
 1285  for registration;
 1286         (c) Has been guilty of a fraudulent act in connection with
 1287  rendering investment advice or in connection with any sale of
 1288  securities, has been or is engaged or is about to engage in
 1289  making fictitious or pretended sales or purchases of any such
 1290  securities or in any practice involving the rendering of
 1291  investment advice or the sale of securities which is fraudulent
 1292  or in violation of the law;
 1293         (d) Has made a misrepresentation or false statement to, or
 1294  concealed any essential or material fact from, any person in the
 1295  rendering of investment advice or the sale of a security to such
 1296  person;
 1297         (e) Has failed to account to persons interested for all
 1298  money and property received;
 1299         (f) Has not delivered, after a reasonable time, to persons
 1300  entitled thereto securities held or agreed to be delivered by
 1301  the dealer, broker, or investment adviser, as and when paid for,
 1302  and due to be delivered;
 1303         (g) Is rendering investment advice or selling or offering
 1304  for sale securities through any associated person not registered
 1305  in compliance with the provisions of this chapter;
 1306         (h) Has demonstrated unworthiness to transact the business
 1307  of dealer, investment adviser, intermediary, or associated
 1308  person;
 1309         (i) Has exercised management or policy control over or
 1310  owned 10 percent or more of the securities of any dealer,
 1311  intermediary, or investment adviser that has been declared
 1312  bankrupt, or had a trustee appointed under the Securities
 1313  Investor Protection Act; or is, in the case of a dealer,
 1314  intermediary, or investment adviser, insolvent;
 1315         (j) Has been convicted of, or has entered a plea of guilty
 1316  or nolo contendere to, regardless of whether adjudication was
 1317  withheld, a crime against the laws of this state or any other
 1318  state or of the United States or of any other country or
 1319  government which relates to registration as a dealer, investment
 1320  adviser, issuer of securities, intermediary, or associated
 1321  person; which relates to the application for such registration;
 1322  or which involves moral turpitude or fraudulent or dishonest
 1323  dealing;
 1324         (k) Has had a final judgment entered against her or him in
 1325  a civil action upon grounds of fraud, embezzlement,
 1326  misrepresentation, or deceit;
 1327         (l) Is of bad business repute;
 1328         (m) Has been the subject of any decision, finding,
 1329  injunction, suspension, prohibition, revocation, denial,
 1330  judgment, or administrative order by any court of competent
 1331  jurisdiction, administrative law judge, or by any state or
 1332  federal agency, national securities, commodities, or option
 1333  exchange, or national securities, commodities, or option
 1334  association, involving a violation of any federal or state
 1335  securities or commodities law or any rule or regulation
 1336  promulgated thereunder, or any rule or regulation of any
 1337  national securities, commodities, or options exchange or
 1338  national securities, commodities, or options association, or has
 1339  been the subject of any injunction or adverse administrative
 1340  order by a state or federal agency regulating banking,
 1341  insurance, finance or small loan companies, real estate,
 1342  mortgage brokers or lenders, money transmitters, or other
 1343  related or similar industries. For purposes of this subsection,
 1344  the office may not deny registration to any applicant who has
 1345  been continuously registered with the office for 5 years after
 1346  the date of entry of such decision, finding, injunction,
 1347  suspension, prohibition, revocation, denial, judgment, or
 1348  administrative order provided such decision, finding,
 1349  injunction, suspension, prohibition, revocation, denial,
 1350  judgment, or administrative order has been timely reported to
 1351  the office pursuant to the commission’s rules; or
 1352         (n) Made payment to the office for a registration with a
 1353  check or electronic transmission of funds that is dishonored by
 1354  the applicant’s or registrant’s financial institution.
 1355         (2) The payment or anticipated payment of any amount from
 1356  the Securities Guaranty Fund in settlement of a claim or in
 1357  satisfaction of a judgment against an applicant or registrant
 1358  constitutes prima facie grounds for the denial of the
 1359  applicant’s application for registration or the revocation of
 1360  the registrant’s registration.
 1361         (3) In the event the office determines to deny an
 1362  application or revoke a registration, it shall enter a final
 1363  order with its findings on the register of dealers and
 1364  associated persons; and denial, suspension, or revocation of the
 1365  registration of a dealer, intermediary, or investment adviser
 1366  shall also deny, suspend, or revoke the registration of all her
 1367  or his associated persons.
 1368         (4) It shall be sufficient cause for denial of an
 1369  application or revocation of registration, in the case of a
 1370  partnership, corporation, or unincorporated association, if any
 1371  member of the partnership or any officer, director, or ultimate
 1372  equitable owner of the corporation or association has committed
 1373  any act or omission which would be cause for denying, revoking,
 1374  restricting, or suspending the registration of an individual
 1375  dealer, investment adviser, intermediary, or associated person.
 1376  As used in this subsection, the term “ultimate equitable owner”
 1377  means a natural person who directly or indirectly owns or
 1378  controls an ownership interest in the corporation, partnership,
 1379  association, or other legal entity however organized, regardless
 1380  of whether such natural person owns or controls such ownership
 1381  interest through one or more proxies, powers of attorney,
 1382  nominees, corporations, associations, partnerships, trusts,
 1383  joint stock companies, or other entities or devices, or any
 1384  combination thereof.
 1385         (5) The office may deny any request to terminate or
 1386  withdraw any application or registration if the office believes
 1387  that an act which would be a ground for denial, suspension,
 1388  restriction, or revocation under this chapter has been
 1389  committed.
 1390         (6) Registration under s. 517.12 may be denied or any
 1391  registration granted may be suspended or restricted if an
 1392  applicant or registrant is charged, in a pending enforcement
 1393  action or pending criminal prosecution, with any conduct that
 1394  would authorize denial or revocation under subsection (1).
 1395  Registration under s. 517.12 may be suspended or restricted if a
 1396  registrant is arrested for any conduct that would authorize
 1397  revocation under subsection (1).
 1398         (a) Any denial of registration ordered under this
 1399  subsection shall be without prejudice to the applicant’s ability
 1400  to reapply for registration.
 1401         (b) Any order of suspension or restriction under this
 1402  subsection shall:
 1403         1. Take effect only after a hearing, unless no hearing is
 1404  requested by the registrant or unless the suspension or
 1405  restriction is made in accordance with s. 120.60(6).
 1406         2. Contain a finding that evidence of a prima facie case
 1407  supports the charge made in the enforcement action or criminal
 1408  prosecution.
 1409         3. Operate for no longer than 10 days beyond receipt of
 1410  notice by the office of termination with respect to the
 1411  registrant of the enforcement action or criminal prosecution.
 1412         (c) For purposes of this subsection:
 1413         1. The term “enforcement action” means any judicial
 1414  proceeding or any administrative proceeding where such judicial
 1415  or administrative proceeding is brought by an agency of the
 1416  United States or of any state to enforce or restrain violation
 1417  of any state or federal law, or any disciplinary proceeding
 1418  maintained by the Financial Industry Regulatory Authority, the
 1419  National Futures Association, or any other similar self
 1420  regulatory organization.
 1421         2. An enforcement action is pending at any time after
 1422  notice to the applicant or registrant of such action and is
 1423  terminated at any time after entry of final judgment or decree
 1424  in the case of judicial proceedings, final agency action in the
 1425  case of administrative proceedings, and final disposition by a
 1426  self-regulatory organization in the case of disciplinary
 1427  proceedings.
 1428         3. A criminal prosecution is pending at any time after
 1429  criminal charges are filed and is terminated at any time after
 1430  conviction, acquittal, or dismissal.
 1431         Section 7. Paragraph (b) of subsection (4) of section
 1432  626.9911, Florida Statutes, is amended to read:
 1433         626.9911 Definitions.—As used in this act, the term:
 1434         (4) “Life expectancy provider” means a person who
 1435  determines, or holds himself or herself out as determining, life
 1436  expectancies or mortality ratings used to determine life
 1437  expectancies:
 1438         (b) In connection with a viatical settlement investment,
 1439  pursuant to s. 517.021(24) s. 517.021(23); or
 1440         Section 8. For the 2015-2016 fiscal year, the sum of
 1441  $120,000 in nonrecurring funds from the Regulatory Trust Fund is
 1442  appropriated to the Office of Financial Regulation for the
 1443  purpose of implementing this act.
 1444         Section 9. This act shall take effect October 1, 2015.