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View Statement of Purpose / Fiscal Impact
S1177.......................................by COMMERCE AND HUMAN RESOURCES
INVESTMENT ADVISORS - Amends existing law to revise the definitions of
"investment advisor representative or agent" and "federal-covered advisor";
to delete language providing that the director of the Department of Finance
may require the registration of any person who is registered or required to
be registered as an investment advisor under federal law; to delete
language providing the director of the Department of Finance may require
the registration of any covered security; and to authorize the director of
the Department of Finance to exempt particular types of securities
transactions from the registration provisions of the Idaho Securities Act.
02/12 Senate intro - 1st rdg - to printing
02/15 Rpt prt - to Com/HuRes
02/24 Rpt out - rec d/p - to 2nd rdg
02/25 2nd rdg - to 3rd rdg
03/02 3rd rdg - PASSED - 31-2-2
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Danielson, Darrington, Deide, Dunklin, Frasure, Geddes, Ingram,
Ipsen, Keough, King, Lee, McLaughlin, Noh, Richardson, Riggs, Risch,
Sandy, Schroeder, Sorensen, Stegner, Stennett, Thorne, Twiggs,
Wheeler, Whitworth
NAYS--Davis, Hawkins
Absent and excused--Crow, Parry
Floor Sponsor - King
Title apvd - to House
03/03 House intro - 1st rdg - to Bus
03/10 Rpt out - rec d/p - to 2nd rdg
03/11 2nd rdg - to 3rd rdg
03/18 3rd rdg - PASSED - 61-0-9
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Boe, Callister,
Campbell, Chase, Clark, Crow, Cuddy, Deal, Denney, Field(20), Gagner,
Geddes, Gould, Hadley, Hammond, Hansen(23), Hornbeck, Jaquet, Jones,
Judd, Kellogg, Kempton, Kendell, Kunz, Lake, Limbaugh, Linford,
Mader, Marley, McKague, Meyer(Duncan), Mortensen, Moyle, Pischner,
Pomeroy, Reynolds, Ridinger, Ringo, Robison, Sali, Schaefer, Sellman,
Smith, Smylie, Stevenson, Stoicheff, Stone, Taylor, Tilman, Trail,
Watson, Wheeler, Williams, Wood, Zimmermann, Mr Speaker
NAYS -- None
Absent and excused -- Black, Bruneel, Ellsworth, Field(13),
Hansen(29), Henbest, Loertscher, Montgomery, Tippets
Floor Sponsor - Gagner
Title apvd - to Senate
03/19 To enrol - rpt enrol - Pres signed
03/22 Sp signed
03/23 To Governor
03/24 Governor signed
Session Law Chapter 322
Effective: 03/24/99 - Section 4
07/01/99 - Section 1
10/12/99 - Sections 2 & 3
S1177|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE SENATE SENATE BILL NO. 1177 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO SECURITIES TRANSACTIONS; AMENDING SECTION 30-1402, IDAHO CODE, TO 3 REVISE THE DEFINITIONS OF "INVESTMENT ADVISER REPRESENTATIVE OR AGENT" AND 4 "FEDERAL COVERED ADVISER" AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SEC- 5 TION 30-1406, IDAHO CODE, TO DELETE LANGUAGE WHERE THE DIRECTOR OF THE 6 DEPARTMENT OF FINANCE MAY REQUIRE THE REGISTRATION OF ANY PERSON WHO IS 7 REGISTERED OR REQUIRED TO BE REGISTERED AS AN INVESTMENT ADVISER UNDER 8 FEDERAL LAW; AMENDING SECTION 30-1433A, IDAHO CODE, TO DELETE LANGUAGE 9 WHERE THE DIRECTOR OF THE DEPARTMENT OF FINANCE MAY REQUIRE THE REGISTRA- 10 TION OF ANY COVERED SECURITY; AMENDING SECTION 30-1435, IDAHO CODE, TO 11 AUTHORIZE THE DIRECTOR OF THE DEPARTMENT OF FINANCE TO EXEMPT PARTICULAR 12 TYPES OF SECURITIES TRANSACTIONS FROM THE REGISTRATION PROVISIONS OF THE 13 IDAHO SECURITIES ACT AND TO MAKE TECHNICAL CORRECTIONS; AND DECLARING AN 14 EMERGENCY AND PROVIDING EFFECTIVE DATES. 15 Be It Enacted by the Legislature of the State of Idaho: 16 SECTION 1. That Section 30-1402, Idaho Code, be, and the same is hereby 17 amended to read as follows: 18 30-1402. DEFINITIONS. When used in this act, unless the context otherwise 19 requires: 20 (1) "Director" means the director of the department of finance. 21 (2) "Salesman" means any individual other than a broker-dealer who repre- 22 sents a broker-dealer or issuer in effecting or attempting to effect purchases 23 or sales of securities, but "salesman" does not include an individual who rep- 24 resents: 25 (a) an issuer in: 26 (i) effecting a transaction in a security exempted in paragraphs 27 (a), (b), (c), (f), (i), (j) or (k) of subsection (1) of section 28 30-1434, Idaho Code; 29 (ii) effecting transactions exempted by section 30-1435, Idaho Code; 30 (iii) effecting transactions with existing employees, partners or 31 directors of the issuer if no commission or other remuneration is 32 paid or given directly or indirectly for soliciting any person in 33 this state; or 34 (iv) effecting transactions in a covered security as described in 35 section 18(b)(3) and 18(b)(4)(D) of the securities act of 1933; or 36 (b) a broker-dealer in effecting transactions in this state limited to 37 those transactions described in section 15(h)(2) of the securities 38 exchange act of 1934. A partner, officer or director of a39brokerdealerbroker-dealer or issuer is a "salesman" 40 only if he otherwise comes within this definition. 41 (3) "Broker-dealer" means any person engaged in the business of effecting 42 transactions in securities for the account of others or for his own account. 43 "Broker-dealer" does not include: 2 1 (a) a salesman, issuer, bank, savings institution, trust company, credit 2 union or insurance company; 3 (b) a person who has no place of business in this state if he effects 4 transactions in this state exclusively with or through the issuers of the 5 securities involved in the transactions, other broker-dealers, or banks, 6 savings institutions, trust companies, insurance companies, investment 7 companies as defined in theIi nvestmentC8c ompanyAa ct of 1940, pension 9 or profit-sharing trusts or other financial institutions or institutional 10 buyers, whether acting for themselves or as trustee; or 11 (c) a person who has no place of business in this state if during any 12 period of twelve (12) consecutive months he does not direct more than fif- 13 teen (15) offers to sell or to buy into this state in any manner to per- 14 sons other than those specified in subsection (3)(b) of this section. 15 (4) "Guaranteed" means guaranteed as to payment of principal, interest or 16 dividends. 17 (5) "Full business day" means all calendar days except Saturdays, Sundays 18 and all legal holidays as defined by statute. 19 (6) "Investment adviser" means any person who, for compensation, engages 20 in the business of advising others either directly or through publications or 21 writings as to the value of securities or as to the advisability of investing 22 in, purchasing or selling securities or, who, for compensation and as a part 23 of a regular business, issues or promulgates analyses or reports concerning 24 securities. Investment adviser also includes financial planners and other per- 25 sons who, as an integral component of other financially related services, pro- 26 vide the foregoing investment advisory services to others for compensation and 27 as a part of a business or who hold themselves out as providing the foregoing 28 advisory services to others for compensation. "Investment adviser" does not 29 include: 30 (a) a bank, savings institution, trust company, credit union or insurance 31 company; 32 (b) a certified public accountant or licensed public accountant who holds 33 himself out to the public as a certified public accountant or licensed 34 public accountant; 35 (c) a lawyer, engineer or teacher whose performance of these services is 36 solely incidental to the practice of his profession; 37 (d) a broker-dealer or its agent whose performance of these services is 38 solely incidental to the conduct of its business as a broker-dealer and 39 who receives no special compensation for them; 40 (e) a publisher of any newspaper, news column, newsletter, news magazine 41 or business or financial publication or service, whether communicated in 42 hard copy form, or by electronic means, or otherwise, that does not con- 43 sist of the rendering of advice on the basis of the specific investment 44 situation of each client; 45 (f) a person whose advice, analyses or reports relate only to securities 46 exempted by section 30-1434(1)(a), Idaho Code; 47 (g) an investment adviser representative; 48 (h) any person that is a federal coveredadvisor49 adviser ; 50 (i) such other persons not within the intent of this subsection as the 51 director may, by rule or order, designate. 52 (7) "Issuer" means any person who issues or proposes to issue any secu- 53 rity, except that with respect to certificates of deposit, voting - 54 trust certificates or collateral-trust certificates or with respect to 55 certificates of interest or shares in any unincorporated investment trust not 3 1 having a board of directors or persons performing similar functions or of the 2 fixed, restricted management or unit type, the term "issuer" means the person 3 or persons performing the acts and assuming the duties of depositor or manager 4 pursuant to the provisions of the trust or other agreement or instrument under 5 which the security is issued. 6 (8) "Nonissuer" means not directly or indirectly for the benefit of the 7 issuer. 8 (9) "Person," for the purpose of this act, means an individual, a corpo- 9 ration, a partnership, an association, a joint-stock company, a trust where 10 the interests of the beneficiaries are evidenced by a security, an unincorpo- 11 rated organization, a government or a political subdivision of a government. 12 (10) "Sale" or "sell" includes every contract of sale or contract to sell 13 or dispose of, a security or interest in a security for value. "Offer" or 14 "offer to sell" includes every attempt or offer to dispose of, and every 15 solicitation of an offer to buy, a security or interest in a security for 16 value. 17 Any security given or delivered with, or as a bonus on account of, any 18 purchase of securities or any other thing is considered to constitute part of 19 the subject of the purchase and to have been offered and sold for value. A 20 purported gift of or the levying of an assessment on assessable stock is con- 21 sidered to involve an offer and sale. Every sale or offer of a warrant or 22 right to purchase or subscribe to another security of the same or another 23 issuer, as well as every sale or offer of a security which gives the holder a 24 present or future right or privilege to convert into another security of the 25 same or another issuer, is considered to include an offer of the other secu- 26 rity. 27 (11) "Securities Act of 1933," "Securities Exchange Act of 1934," "Public 28 Utility Holding Company Act of 1935," and "Investment Company Act of 1940" 29 mean the federal statutes identified by those names as amended before or after 30 the effective date of this chapter. 31 (12) "Security" means any note, stock, treasury stock, bond, debenture, 32 evidence of indebtedness, certificate of interest or participation in any 33 profit-sharing agreement, collateral-trust certificate, preorganization cer- 34 tificate or subscription, transferable share, investment contract, voting- 35 trust certificate, certificate of deposit for a security, certificate of 36 interest or participation in an oil, gas or mining title or lease or in pay- 37 ments out of production under such a title or lease, or, in general, any 38 interest or instrument commonly known as a "security" or any certificate of 39 interest or participation in, temporary or interim certificate for, receipt 40 for, guarantee of, or warrant or right to subscribe to or purchase, any of the 41 foregoing. "Security" does not include any insurance or endowment policy or 42 annuity contract under which an insurance company promises to pay money, 43 either in a lump sum, or periodically for life or some other specified period. 44 (13) "State" means any state, territory or possession of the United 45 States, the District of Columbia and Puerto Rico. 46 (14) "Investment adviser representative or agent" means : 47 (a) with respect to an investment adviser, any partner, officer, 48 director, or a person occupying a similar status or performing similar 49 functions, or other individual, except clerical or ministerial personnel, 50(a)employed by or associated with an investment adviser reg- 51 istered in this state, or(b) who has a place of business located in52this state and is employed by or associated with a federal covered53adviser,required to be registered in this state and 54 who: 55 (ai ) makes any recommendation or otherwise 4 1 renders advice regarding securities; 2 (bii ) manages accounts or portfolios of 3 clients; 4 (ciii ) determines which recommendation or 5 advice regarding securities should be given; 6 (div ) solicits, offers or 7 negotiates for the sale of or sells investment advisory services; or 8 (ev ) supervises employees in the perfor- 9 mance of any of the foregoing. 10 (b) with respect to a federal covered adviser, an individual who 11 has a "place of business" in this state, as that term is defined in rules 12 or regulations promulgated under section 203AA of the investment advisers 13 act of 1940 by the United States securities and exchange commission and 14 who either: 15 (i) is an "investment adviser representative" as that term is 16 defined in rules or regulations promulgated under section 203A of the 17 investment advisers act of 1940 by the U.S. securities and exchange 18 commission; or 19 (ii) is not a "supervised person" as that term is defined in the 20 investment advisers act of 1940 and solicits, offers or negotiates 21 for the sale of or sells investment advisory services on behalf of a 22 federal covered adviser. 23 (c) "Investment adviser representative or agent" does not include 24 a person whose performance of these services is solely incidental to the 25 conduct of such person's business as a salesman for a broker-dealer and 26 who does not share in an investment advisory fee paid by the investment 27 adviser client. 28 (15) "Federal covered adviser" means a person who is: (a)29 registered under section 203 of the investment advisers act of 1940; or30(b) is excluded from the definition of "investment adviser" under section31202(a)(11) of the investment advisers act of 1940. 32 (16) "Federal covered security" means any security that is a covered secu- 33 rity under section 18(b) of the securities act of 1933, or rules or regula- 34 tions promulgated thereunder. 35 SECTION 2. That Section 30-1406, Idaho Code, be, and the same is hereby 36 amended to read as follows: 37 30-1406. REGISTRATION OR NOTICE FILING REQUIRED OF BROKER-DEALERS, SALES- 38 MEN, INVESTMENT ADVISERS, INVESTMENT ADVISER REPRESENTATIVES. (1) It is unlaw- 39 ful for any person to transact business in this state as a broker-dealer or 40 salesman unless he is registered under this chapter, and it is unlawful for 41 any broker-dealer or issuer to employ a salesman unless the salesman is regis- 42 tered under this chapter. 43 (2) It is unlawful for any person to transact business in this state as 44 an investment adviser or as an investment adviser representative unless: 45 (a) he is so registered under this chapter, or 46 (b) he has no place of business in this state and his only clients in 47 this state are investment companies as defined in the investment company 48 act of 1940, other investment advisers, federal covered advisers, broker- 49 dealers, banks, trust companies, savings and loan associations, insurance 50 companies, employee benefit plan with assets of not less than one million 51 dollars ($1,000,000), and governmental agencies or instrumentalities, 52 whether acting for themselves or as trustees with investment control, or 53 other institutional investors as are designated by rule or order of the 5 1 director, or 2 (c) he has no place of business in this state and during the preceding 3 twelve (12) month period has had not more than five (5) clients, other 4 than those specified in paragraph (b) of this subsection, who are resi- 5 dents of this state, or 6 (d) he is registered as a salesman under this chapter and is employed by 7 a broker-dealer registered under this chapter and: (i) his investment 8 advisory activities are limited to recommending the investment advisory 9 services of an investment adviser registered under this chapter or a fed- 10 eral covered adviser, and all such recommendations are made on behalf of 11 the employing broker-dealer; (ii) he is not compensated directly for mak- 12 ing such recommendations; and (iii) he provides written notice to the 13 director that he is relying on this exemption from the requirement to be 14 registered as an investment adviser representative. 15 (3) (a) It is unlawful for any investment adviser required to be regis- 16 tered under this chapter, to employ an investment adviser representative 17 unless the investment adviser representative is registered under this 18 chapter or is exempt from registration. 19 (b) It is unlawful for any federal covered adviser to employ, supervise, 20 or associate with an investment adviser representative having a place of 21 business located in this state, unless such investment adviser representa- 22 tive is registered under this chapter, or is exempt from registration. 23 (4) Except with respect to advisers whose only clients are those 24 described in paragraphs (2)(b) and (c) of this section, it is unlawful for any 25 federal covered adviser to conduct advisory business in this state unless such 26 person files with the director, prior to acting as a federal covered adviser 27 in this state: (a) such documents as have been filed with the securities and 28 exchange commission as the director, by rule or order, may require; (b) a con- 29 sent to service of process as prescribed by section 30-1436, Idaho Code; and 30 (c) pays a fee as provided in section 30-1437, Idaho Code. The director may 31 issue an order of suspension against any person rendering investment advice in 32 violation of this subsection. 33(5) Notwithstanding anything to the contrary in this chapter, until34October 11, 1999, the director may require the registration of any person who35is registered or required to be registered as an investment adviser under sec-36tion 203 of the investment advisers act of 1940 and who has failed to promptly37pay the fees required by section 30-1437, Idaho Code, after being notified in38writing by the director of the nonpayment or underpayment of such fees. A per-39son shall be considered to have promptly paid such fees if they are remitted40to the director within fifteen (15) days following such person's receipt of41the written notification from the director.42 SECTION 3. That Section 30-1433A, Idaho Code, be, and the same is hereby 43 amended to read as follows: 44 30-1433A. FEDERAL COVERED SECURITIES. (1) The director, by rule or order, 45 may require the filing of any or all of the following documents with respect 46 to a covered security under section 18(b)(2) of the securities act of 1933: 47 (a) Prior to the initial offer of such federal covered security in this 48 state, all documents that are part of a federal registration statement 49 filed with the securities and exchange commission under the securities act 50 of 1933, together with a consent to service of process signed by the 51 issuer, as prescribed by section 30-1436, Idaho Code, and with the payment 52 of the fee prescribed by section 30-1437, Idaho Code; and 53 (b) After the initial offer of such federal covered security in this 6 1 state, all documents that are part of an amendment to a federal registra- 2 tion statement filed with the securities and exchange commission under the 3 securities act of 1933 which shall be filed concurrently with the direc- 4 tor. 5 (2) With respect to any security that is a covered security under section 6 18(b)(4)(D) of the securities act of 1933, the director, by rule or order, may 7 require the issuer to file a notice on SEC Form D and a consent to service of 8 process, as prescribed by section 30-1436, Idaho Code, signed by the issuer no 9 later than fifteen (15) days after the first sale of such covered security in 10 this state, together with the fee prescribed by section 30-1437, Idaho Code. 11 (3) The director, by rule or order, may require the filing of any docu- 12 ment filed with the securities and exchange commission under the securities 13 act of 1933, with respect to a covered security under section 18(b)(3) or (4) 14 of the securities act of 1933, together with the fee prescribed by section 15 30-1437, Idaho Code. 16 (4) The director may issue a stop order suspending the offer and sale of 17 a covered security, except a covered security under section 18(b)(1) of the 18 securities act of 1933, if he finds that: (a) the order is in the public 19 interest; and (b) there is a failure to comply with any condition established 20 under this section. 21 (5) The director, by rule or order, may waive any or all of the provi- 22 sions of this section. 23(6) Notwithstanding the provisions of this section, until October2411, 1999, the director may require the registration of any covered security25for which the fees required by section 30-1437, Idaho Code, have not been paid26promptly following written notification from the director to the issuer of the27nonpayment or underpayment of such fees. An issuer shall be considered to have28promptly paid such fees if they are remitted to the director within fifteen29(15) days following the issuer's receipt of written notification from the30director.31 SECTION 4. That Section 30-1435, Idaho Code, be, and the same is hereby 32 amended to read as follows: 33 30-1435. EXEMPT TRANSACTIONS. (1) Except as hereinafter in this section 34 expressly provided, sections 30-1416 through 30-1433A, Idaho Code, shall not 35 apply to: 36 (a) any isolated transaction, 37 (b) sales not involving a public offering, whether effected through a 38 broker-dealer or not, 39 (c) any nonissuer distribution of an outstanding security by a registered 40 broker-dealer if: 41 (i) a recognized securities manual contains the names of the 42 issuer's officers and directors, a balance sheet of the issuer as of 43 a date within eighteen (18) months and a profit and loss statement 44 for either the fiscal year preceding that date or the most recent 45 year of operations, or 46 (ii) the security has a fixed maturity or a fixed interest or divi- 47 dend provision and there has been no default during the current fis- 48 cal year or within the three (3) preceding fiscal years or during the 49 existence of the issuer and any predecessors, if less than three (3) 50 years, in the payment of principal, interest or dividends on the 51 security, 52 (d) any nonissuer transaction effected by or through a registered broker- 53 dealer pursuant to an unsolicited order or offer to buy, but the director 7 1 may require that the customer acknowledge on a form prescribed by the 2 director that the sale was unsolicited and the director may require that a 3 signed copy of each such form be preserved by the broker-dealer for a 4 specified period, 5 (e) any transaction between the issuer or other person on whose behalf 6 the offering is made and an underwriter or among underwriters, 7 (f) any transaction by an executor, administrator, sheriff, marshal, 8 receiver, trustee in bankruptcy, guardian or conservator in the perfor- 9 mance of his official duties as such, 10 (g) any transaction executed by a bona fide pledgee without any purpose 11 of evading this chapter, 12 (h) any offer or sale to a bank, savings institution, trust company, 13 insurance company, investment company as defined in theI14i nvestmentCc ompanyA15a ct of 1940, pension or profit-sharing trust or other 16 financial institution or institutional buyer or to a broker-dealer, 17 whether the purchaser is acting for itself or in some fiduciary capacity, 18 (i) any transaction pursuant to an offer directed by the offerer to not 19 more than ten (10) persons in this state other than those designated in 20 paragraph (h) of subsection (1) of this section during any period of 21 twelve (12) consecutive months, whether or not the offerer or any of the 22 offerees is then present in this state, if 23 (i) the seller reasonably believes that all the buyers are purchas- 24 ing for investment and, 25 (ii) no commission or other remuneration is paid or given directly 26 or indirectly for soliciting any prospective buyer, 27 (j) any offer or sale of a preorganization certificate or subscription, 28 if 29 (i) no commission or other remuneration is paid or given directly 30 or indirectly for soliciting any prospective subscriber, 31 (ii) the number of subscribers does not exceed ten (10), and 32 (iii) no payment is made by any subscriber, 33 (k) any transaction pursuant to an offer to existing security holders of 34 the issuer, including persons who at the time of the transaction are hold- 35 ers of convertible securities, nontransferable warrants or transferable 36 warrants exercisable within not more than ninety (90) days of their issu- 37 ance, if 38 (i) no commission or other remuneration other than a standby com- 39 mission is paid or given directly or indirectly for soliciting any 40 security holder in this state, or 41 (ii) the issuer files a notice in the form prescribed by the direc- 42 tor not less than thirty (30) days before making the offer, 43 (l) any offer, but not a sale, of a security for which registration 44 statements have been filed under both this chapter and theS45s ecuritiesAa ct of 1933 if no 46 stop order or denial order is in effect and no public proceeding or exami- 47 nation looking toward such an order is pending under either act, 48 (m) the issuance of any stock dividend, whether the corporation distrib- 49 uting the dividend is the issuer of the stock or not, if nothing of value 50 is given by stockholders for the distribution other than the surrender of 51 a right to a cash dividend where the stockholder can elect to take a divi- 52 dend in cash or stock, 53 (n) any transaction incident to a right of conversion or a statutory or 54 judicially approved reclassification, recapitalization, reorganization, 55 quasi-reorganization, stock split, reverse stock split, merger, consolida- 8 1 tion or sale of assets, if 2 (i) no commission or other remuneration other than a standby com- 3 mission is paid or given directly or indirectly for soliciting any 4 security holder in this state, or 5 (ii) the issuer files a notice in the form specified by the director 6 not less than thirty (30) days before making the offer, 7 (o) any transaction in a bond or other evidence of indebtedness secured 8 by a real or chattel mortgage or deed of trust, or by an agreement for the 9 sale of real estate or chattels, if the entire mortgage, deed of trust, or 10 agreement, together with all the bonds or other evidences of indebtedness 11 secured thereby, is offered and sold as a unit , 12 (p) such other transactions as the director by rule or order may 13 prescribe . 14 (2) The director may by order , deny or revoke the exemption 15 specified in paragraph (c), (d), (k) or (n) of subsection (1) of this section 16 with respect to a specific security. Upon the entry of such an order the 17 director shall promptly notify all interested parties that it has been entered 18 and of the reasons therefor and that within twenty (20) days of the receipt of 19 a written request the matter will be set for hearing. If no hearing is 20 requested and none is ordered by the director, the order will remain in effect 21 until it is modified or vacated by the director. If a hearing is requested or 22 ordered, the director, after notice of and opportunity for hearing to all 23 interested persons, may modify or vacate the order or extend it until final 24 determination. No order under said subsections may operate retroactively. No 25 person may be considered to have violated this chapter by reason of any offer 26 or sale effected after the entry of any order under said subsections if he 27 sustains the burden of proof that he did not know, and in the exercise of rea- 28 sonable care could not have known of the order. 29 SECTION 5. An emergency existing therefor, which emergency is hereby 30 declared to exist, Section 4 of this act shall be in full force and effect on 31 and after its passage and approval; Section 1 of this act shall be in full 32 force and effect on and after July 1, 1999; and Sections 2 and 3 of this act 33 shall be in full force and effect on and after October 12, 1999.
STATEMENT OF PURPOSE
RS 08966
This legislation amends four sections of the Idaho
Securities Act. The amendment to Idaho Code 30-1435 will
provide the Director of Finance with the authority to exempt
particular types of securities transactions from the
registration provisions of the Idaho Securities Act. This
authority could be used in many instances. The Department
intends to use it immediately to promulgate an administrative
rule which authorizes the operation of a service which matches
small businesses seeking equity capital with venture capital
firms and high net worth individuals seeking such investment
opportunities.
The amendments to Idaho Code 30-1402 are necessary to
conform state definitions pertaining to investment advisers to
federal law and new federal investment adviser regulations. The
amendments to Idaho Code 30-1406 and 30-1433A delete code
sections which are only effective until October 11, 1999.
FISCAL NOTE
No fiscal impact.
CONTACT PERSON:
Marilyn Scanlan
Department of Finance
332-8070
S1177