March 26, 2014, Introduced by Rep. Jenkins and referred to the Committee on Commerce.
A bill to amend 2008 PA 551, entitled
"Uniform securities act (2002),"
by amending section 102 (MCL 451.2102) and by adding sections 600
and 600a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 102. As used in this act, unless the context otherwise
requires:
(a)
"Administrator" means the office of financial and
insurance
regulation of the department of energy, labor, and
economic
growth securities regulation
created in section 600.
(b) "Agent" means an individual other than a broker-dealer who
represents a broker-dealer in effecting or attempting to effect
purchases or sales of securities or represents an issuer in
effecting or attempting to effect purchases or sales of the
issuer's securities. The term does not include a partner, officer,
or director of a broker-dealer or issuer, or an individual having a
similar status or performing similar functions, unless the
individual otherwise comes within the term. The term does not
include an individual excluded by rule or order under this act. The
term does not include a person acting solely as a finder and
registered as a broker-dealer under this act or acting as a finder
in a transaction exempt under section 202(1)(r).
(c) "Bank" means any of the following:
(i) A banking institution organized under the laws of the
United States.
(ii) A member bank of the federal reserve system.
(iii) Any other banking institution that meets all of the
following:
(A) It is doing business under the laws of a state or of the
United States.
(B) A substantial portion of its business consists of
receiving deposits or exercising fiduciary powers similar to those
permitted to be exercised by national banks under the authority of
the comptroller of the currency pursuant to 12 USC 92a.
(C) It is supervised and examined by a state or federal agency
having supervision over banks.
(D) It is not operated for the purpose of evading this act.
(iv) A receiver, conservator, or other liquidating agent of any
institution or firm included in subparagraph (i), (ii), or (iii).
(d) "Broker-dealer" means a person engaged in the business of
effecting transactions in securities for the account of others or
for the person's own account. The term does not include any of the
following:
(i) An agent.
(ii) An issuer.
(iii) A bank or savings institution if its activities as a
broker-dealer are limited to those specified in section 3(a)(4) and
3(a)(5) of the securities exchange act of 1934, 15 USC 78c, or a
bank that satisfies the conditions described in section 3(a)(4)(E)
of the securities exchange act of 1934, 15 USC 78c.
(iv) An international banking institution.
(v) A person excluded by rule or order under this act.
(e) "Depository institution" means a bank; or a savings
institution, trust company, credit union, or similar institution
that is organized or chartered under the laws of a state or of the
United States, authorized to receive deposits, and supervised and
examined by an official or agency of a state or the United States
if its deposits or share accounts are insured to the maximum amount
authorized by federal statute by the federal deposit insurance
corporation, the national credit union share insurance fund, or a
successor authorized by federal law; or a bank that does not
receive deposits because of a limitation in its charter, articles
of incorporation, or articles of association. The term does not
include any of the following:
(i) An insurance company or other organization primarily
engaged in the business of insurance.
(ii) A Morris Plan bank.
(iii) An industrial loan company that is not an insured
depository institution, as that term is defined in section 3(c)(2)
of the federal deposit insurance act, 12 USC 1813(c)(2).
(f) "Federal covered investment adviser" means a person
registered under the investment advisers act of 1940.
(g) "Federal covered security" means a security that is, or
upon completion of a transaction will be, a covered security under
section 18(b) of the securities act of 1933, 15 USC 77r, or rules
or regulations adopted under that provision.
(h) "Filing" means the receipt under this act of a record by
the administrator or a designee of the administrator.
(i) "Finder" means a person who, for consideration,
participates in the offer to sell, sale, or purchase of securities
by locating, introducing, or referring potential purchasers or
sellers. Finder does not include a person whose actions are solely
incidental to a transaction exempt pursuant to section 202(1)(r).
The administrator may by rule or order exclude other persons from
this definition.
(j) "Fraud," "deceit," and "defraud" include, but are not
limited to, common law deceit.
(k) "Guaranteed" means guaranteed as to payment of all
principal and all interest.
Sec. 600. (1) The office of securities regulation is created
in the department of licensing and regulatory affairs.
(2) The governor shall appoint a securities commissioner to
serve as the head of the office of securities regulation. The
governor shall select the commissioner from a list of at least 2
names submitted to him or her by the board.
(3) All of the following apply to the office of securities
regulation:
(a) The office shall have all of the authority, powers,
duties, functions, and responsibilities of the department of
licensing and regulatory affairs under this act that were
transferred to that department from the securities division of the
office of finance and insurance regulation under Executive
Reorganization Order No. 2012-6, MCL 445.2034.
(b) The department of licensing and regulatory affairs shall
perform the budgeting, procurement, and related management
functions of the office.
(4) As used in this section and section 600a:
(a) "Board" means the securities regulation board created in
section 600a.
(b) "Commissioner" means the securities commissioner appointed
under subsection (2).
(c) "Office" means the office of securities regulation created
in subsection (1).
Sec. 600a. (1) The securities regulation board is created in
the office.
(2) All of the following apply to the board:
(a) The board shall consist of 9 members, as follows:
(i) Three members appointed by the governor. The governor shall
appoint 1 of the members described in this subdivision to serve as
the chairperson of the board.
(ii) Two members selected by the speaker of the house of
representatives.
(iii) Two members selected by the majority leader of the senate.
(iv) Two members selected by the director of the department of
licensing and regulatory affairs.
(b) Members of the securities regulation board shall serve for
2-year terms or until a successor is appointed or selected,
whichever is later. A vacancy on the board shall be filled for the
unexpired term in the same manner as the original appointment or
selection under subsection (1).
(c) The first meeting of the board shall be called by the
director of the department of licensing and regulatory affairs. At
the first meeting, the board shall elect from among its members a
vice-chairperson and other officers as it considers necessary or
appropriate. After the first meeting, the board shall meet at least
once in the second week of January each year, and at least every 10
weeks during the remainder of each calendar year. The chairperson
shall determine the time and place of each meeting of the board
described in this subdivision. The board may meet more frequently
at the call of the chairperson or if requested by 5 or more
members.
(d) A majority of the members of the board constitute a quorum
for the transaction of business at a meeting of the board. A
majority of the members present and serving are required for
official action of the board.
(e) The board shall conduct its business only at public
meetings of the board, held in compliance with the open meetings
act, 1976 PA 267, MCL 15.261 to 15.275.
(f) A writing prepared, owned, used, in the possession of, or
retained by the board in the performance of an official function is
subject to the freedom of information act, 1976 PA 442, MCL 15.231
to 15.246.
(g) Members of the board shall serve without compensation.
However, the office may reimburse members of the board for their
actual and necessary expenses incurred in the performance of their
official duties as members of the board.
(h) The board's duties shall include all of the following:
(i) Serving as an advisory board to the governor, the director
of the department of licensing and regulatory affairs, the office,
and the commissioner concerning securities regulation issues.
(ii) When requested, for purposes of section 600(2), providing
the governor with a list of the names of at least 2 candidates it
determines are qualified to serve as the commissioner.
(iii) Performing any other duties concerning economic issues in
this state assigned by the governor, the director of the department
of licensing and regulatory affairs, the office, or the
commissioner or required by law.