Florida Senate - 2016 COMMITTEE AMENDMENT
Bill No. SB 286
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LEGISLATIVE ACTION
Senate . House
Comm: RCS .
12/01/2015 .
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The Committee on Banking and Insurance (Negron) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Subsection (22) is added to section 517.061,
6 Florida Statutes, to read:
7 517.061 Exempt transactions.—Except as otherwise provided
8 in s. 517.0611 for a transaction listed in subsection (21), the
9 exemption for each transaction listed below is self-executing
10 and does not require any filing with the office before claiming
11 the exemption. Any person who claims entitlement to any of the
12 exemptions bears the burden of proving such entitlement in any
13 proceeding brought under this chapter. The registration
14 provisions of s. 517.07 do not apply to any of the following
15 transactions; however, such transactions are subject to the
16 provisions of ss. 517.301, 517.311, and 517.312:
17 (22) The offer or sale of securities, solely in connection
18 with the transfer of ownership of an eligible privately held
19 company, through a merger and acquisition broker in accordance
20 with s. 517.12(22).
21 Section 2. Subsection (22) is added to section 517.12,
22 Florida Statutes, to read:
23 517.12 Registration of dealers, associated persons,
24 intermediaries, and investment advisers.—
25 (22)(a) As used in this subsection, the term:
26 1. “Broker” has the same meaning as “dealer” as defined in
27 s. 517.021.
28 2. “Control person” means an individual or entity that
29 possesses the power, directly or indirectly, to direct the
30 management or policies of a company through ownership of
31 securities, by contract, or otherwise. A person is presumed to
32 be a control person of a company if, with respect to a
33 particular company, the person:
34 a. Is a director, a general partner, a member, or a manager
35 of a limited liability company, or is an officer who exercises
36 executive responsibility or has a similar status or function;
37 b. Has the power to vote 20 percent or more of a class of
38 voting securities or has the power to sell or direct the sale of
39 20 percent or more of a class of voting securities; or
40 c. In the case of a partnership or limited liability
41 company, may receive upon dissolution, or has contributed, 20
42 percent or more of the capital.
43 3. “Eligible privately held company” means a company that
44 meets all of the following conditions:
45 a. The company does not have any class of securities which
46 is registered, or which is required to be registered, with the
47 United States Securities and Exchange Commission under the
48 Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., or
49 with the office under s. 517.07, or for which the company files,
50 or is required to file, summary and periodic information,
51 documents, and reports under Section 15(d) of the Securities
52 Exchange Act of 1934, 15 U.S.C. s. 78o(d).
53 b. In the fiscal year immediately preceding the fiscal year
54 during which the merger and acquisition broker begins to provide
55 services for the securities transaction, the company, in
56 accordance with its historical financial accounting records, has
57 earnings before interest, taxes, depreciation, and amortization
58 of less than $25 million or has gross revenues of less than $250
59 million. On July 1, 2016, and every 5 years thereafter, each
60 dollar amount in this sub-subparagraph shall be adjusted by
61 dividing the annual value of the Employment Cost Index for wages
62 and salaries for private industry workers, or any successor
63 index, as published by the Bureau of Labor Statistics, for the
64 calendar year preceding the calendar year in which the
65 adjustment is being made, by the annual value of such index or
66 successor index for the calendar year ending December 31, 2012,
67 and multiplying such dollar amount by the quotient obtained.
68 Each dollar amount determined under this sub-subparagraph shall
69 be rounded to the nearest multiple of $100,000.
70 4. “Merger and acquisition broker” means any broker and any
71 person associated with a broker engaged in the business of
72 effecting securities transactions solely in connection with the
73 transfer of ownership of an eligible privately held company,
74 regardless of whether that broker acts on behalf of a seller or
75 buyer, through the purchase, sale, exchange, issuance,
76 repurchase, or redemption of, or a business combination
77 involving, securities or assets of the eligible privately held
78 company.
79 5. “Public shell company” means a company that at the time
80 of a transaction with an eligible privately held company:
81 a. Has any class of securities which is registered, or
82 which is required to be registered, with the United States
83 Securities and Exchange Commission under the Securities Exchange
84 Act of 1934, 15 U.S.C. ss. 78a et seq., or with the office under
85 s. 517.07, or for which the company files, or is required to
86 file, summary and periodic information, documents, and reports
87 under Section 15(d) of the Securities Exchange Act of 1934, 15
88 U.S.C. s. 78o(d);
89 b. Has nominal or no operations; and
90 c. Has nominal assets or no assets, assets consisting
91 solely of cash and cash equivalents, or assets consisting of any
92 amount of cash and cash equivalents and nominal other assets.
93 (b) Prior to the completion of any securities transaction
94 described in s. 517.061(22), a merger and acquisition broker
95 must receive written assurances from the control person with the
96 largest percentage of ownership for both the buyer and seller
97 engaged in the transaction that:
98 a. After the transaction is completed, any person who
99 acquires securities or assets of the eligible privately held
100 company, acting alone or in concert, will be a control person of
101 the eligible privately held company or will be a control person
102 for the business conducted with the assets of the eligible
103 privately held company; and
104 b. If any person is offered securities in exchange for
105 securities or assets of the eligible privately held company,
106 such person will, before becoming legally bound to complete the
107 transaction, receive or be given reasonable access to the most
108 recent year-end financial statements of the issuer of the
109 securities offered in exchange. The most recent year-end
110 financial statements shall be customarily prepared by the
111 issuer’s management in the normal course of operations. If the
112 financial statements of the issuer are audited, reviewed, or
113 compiled, the most recent year-end financial statements must
114 include any related statement by the independent certified
115 public accountant; a balance sheet dated not more than 120 days
116 before the date of the exchange offer; and information
117 pertaining to the management, business, results of operations
118 for the period covered by the foregoing financial statements,
119 and material loss contingencies of the issuer.
120 (c) A merger and acquisition broker engaged in a
121 transaction exempt under s. 517.061(22) is exempt from
122 registration under this section unless the merger and
123 acquisition broker:
124 1. Directly or indirectly, in connection with the transfer
125 of ownership of an eligible privately held company, receives,
126 holds, transmits, or has custody of the funds or securities to
127 be exchanged by the parties to the transaction;
128 2. Engages on behalf of an issuer in a public offering of
129 any class of securities which is registered, or which is
130 required to be registered, with the United States Securities and
131 Exchange Commission under the Securities Exchange Act of 1934,
132 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07;
133 or for which the issuer files, or is required to file, periodic
134 information, documents, and reports under Section 15(d) of the
135 Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d);
136 3. Engages on behalf of any party in a transaction
137 involving a public shell company;
138 4. Is subject to a suspension or revocation of registration
139 under Section 15(b)(4) of the Securities Exchange Act of 1934,
140 15 U.S.C. s. 78o(b)(4);
141 5. Is subject to a statutory disqualification described in
142 Section 3(a)(39) of the Securities Exchange Act of 1934, 15
143 U.S.C. s. 78c(a)(39);
144 6. Is subject to a disqualification under U.S. Securities
145 and Exchange Commission Rule 506(d), 17 C.F.R. s. 230.506(d); or
146 7. Is subject to a final order described in Section
147 15(b)(4)(H) of the Securities Exchange Act of 1934, 15 U.S.C. s.
148 78o(b)(4)(H).
149 Section 3. This act shall take effect July 1, 2016.
150
151 ================= T I T L E A M E N D M E N T ================
152 And the title is amended as follows:
153 Delete everything before the enacting clause
154 and insert:
155 A bill to be entitled
156 An act relating to merger and acquisition brokers;
157 amending s. 517.061, F.S.; providing an exemption from
158 certain registration requirements with the Office of
159 Financial Regulation for a specified offer or sale of
160 securities; amending s. 517.12, F.S.; defining terms;
161 requiring a merger and acquisition broker to receive
162 certain written assurances from a specified person
163 prior to the completion of specified securities
164 transactions; providing an exemption from certain
165 registration requirements with the office for a merger
166 and acquisition broker under certain circumstances;
167 specifying disqualifying conditions for the exemption;
168 providing an effective date.