Rule 69W-300.002, F.A.C., is amended to reflect the most current version of federal regulations and federal statutes referenced in the rule. The rule is also amended to replace references to the National Association of Securities Dealers with the ...

DEPARTMENT OF FINANCIAL SERVICES
Securities

RULE NO: RULE TITLE
69W-300.002: Financial Statements and Reports
69W-300.003: Refunds of Fees, Files Denied or Withdrawn
PURPOSE AND EFFECT: Rule 69W-300.002, F.A.C., is amended to reflect the most current version of federal regulations and federal statutes referenced in the rule. The rule is also amended to replace references to the National Association of Securities Dealers with the Financial Industry Regulatory Authority (FINRA). FINRA was created in July 2007 through the consolidation of National Association of Securities Dealers and the member regulation, enforcement and arbitration functions of the New York Stock Exchange. Rule 69W-300.003, F.S., is repealed. This rule is not needed because the statutes under Chapter 517, F.S., specify the accounts where fees are to be deposited and also specify that fees are non-refundable.
SUBJECT AREA TO BE ADDRESSED: Securities Regulation.
SPECIFIC AUTHORITY: 517.03 FS.
LAW IMPLEMENTED: 517.081, 517.082, 517.12, 517.131, 517.315 FS.
IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE NOTICED IN THE NEXT AVAILABLE FLORIDA ADMINISTRATIVE WEEKLY.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Pam Epting, Chief, Bureau of Regulatory Review, Division of Securities, Office of Financial Regulation, The Fletcher Building, 200 East Gaines Street, Tallahassee, Florida 32399-0375, [phone], [e-mail]

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

69W-300.002 Financial Statements and Reports.

(1) All financial statements required for registration of securities, or registration of dealers and investment advisers, shall be prepared in accordance with United States generally accepted accounting principles. Financial statements required to be prepared in accordance with Regulation S-X (17 C.F.R. Part 210 (2009)) together with the Accounting Series Releases, pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, will be acceptable to the Office of Financial Regulation unless otherwise required by these rules.

(2) No change.

(3) Requirements for Dealers.

(a) Every dealer applicant, unless exempted under paragraph (3)(b) or (3)(e) of this rule, shall file financial statements as of a date within ninety (90) days prior to the date of filing for registration. These financial statements need not be audited provided that there shall also be filed audited financial statements as of said applicant’s most recent fiscal year end.

(b) Those dealer applicants which have been in operation for a period of time less than twelve (12) months, and for whom an audited financial statement has not been prepared or is not available, shall be permitted to file unaudited financial statements provided the following conditions are met:

1. Such financial statements are as of a date within thirty (30) days prior to the date of filing for registration, and are prepared in accordance with the provisions of paragraphs (2)(b), (2)(d) and (3)(c) of this rule; and

2. Such applicant is effectively registered with the Securities Exchange Commission or Financial Industry Regulatory Authority (formerly known as the National Association of Securities Dealers, Inc.)

(c) Every dealer applicant and registrant shall file, in addition to the information specified in paragraph (2)(b) of this rule, the following:

1. Computations of net capital and customer reserve requirements prepared in accordance with the provisions of Rules 69W-600.016 and 69W-600.017, F.A.C.;

2. Written notice of designation of an independent certified public accountant, which notice shall include name, address, and telephone number of the accountant so designated;

3. Written notice of fiscal year end or audit date of such dealer;

4. Disclosure of any contingent, civil or criminal liabilities of such dealer.

(d) The Office of Financial Regulation shall deem those financial statements and reports, prepared and filed in accordance with the provisions of SEC Rule 17a-5 (17 C.F.R. CFR § 240.17a-5 (2009)) and SEC Rule 17a-10 (17 C.F.R. CFR § 240.17a-10 (2009)) (as such provisions existed on July 1, 2003), to be in compliance with, and fulfill the requirements of, this rule as applicable to a dealer.

(e) The financial statements and reports required by paragraphs (a) through (d) are not required to be filed with the Office of Financial Regulation, unless specifically requested by the Office of Financial Regulation, by a dealer applicant or registrant if the dealer registrant is a current member of a securities association registered pursuant to section 15A of the Exchange Act (15 U.S.C. §78o-3 (2006)) and such association requires financial reports to be filed with it.

(4) Requirements for Investment Advisers.

(a) Investment adviser applicants shall file financial statements as of a date within ninety (90) days prior to the date of filing for registration, which statements may be unaudited financial statements defined in paragraph (2)(d) of this rule. However, each investment adviser who has custody or possession of client’s funds or securities; requires prepayment of advisory fees six months or more in advance and in excess of $500 per client; or computes net capital pursuant to SEC Rule 15c3-1 (17 C.F.R. § 240.15c3-1 (2009)) for purposes of compliance with subsection 69W-600.016(3), F.A.C., shall file financial statements as required by paragraphs (3)(a) and (3)(b) of this rule.

(b) Investment adviser registrants shall provide the Office of Financial Regulation with written notification of such investment adviser’s fiscal year end or annual audit date, and thereafter file annually financial statements as of said date in accordance with the provisions of subsection 69W-600.015(3), F.A.C. Such financial statements may be unaudited as defined in paragraph (2)(d) of this rule. However, each investment adviser who has custody or possession of client’s funds or securities; requires prepayment of advisory fees six months or more in advance and in excess of $500 per client; or computes net capital pursuant to SEC Rule 15c3-1 (17 C.F.R. § 240.15c3-1 (2009)) for purposes of compliance with subsection 69W-600.016(3), F.A.C., shall file audited financial statements as defined by paragraph (2)(a) of this rule. Accompanying all audited financial statements shall be a written statement from the independent certified public accountant verifying compliance with subsection 69W-600.016(3), F.A.C.

(c) Every investment adviser applicant and registrant, in addition to the information specified in paragraphs (2)(b) and (2)(d) of this rule, shall provide to the Office of Financial Regulation:

1. Computations of net capital requirements prepared in accordance with the provision of Rule 69W-600.016, F.A.C.;

2. Written disclosure of any contingent, civil or criminal liabilities of such investment adviser.

(5) through (7) No change.

(8) The federal regulations and federal statutes referenced in this rule are hereby incorporated by reference and may be obtained by mail from the Florida Office of Financial Regulation, Division of Securities, 200 E. Gaines Street, Tallahassee, Florida 32399.

Rulemaking Specific Authority 517.03 FS. Law Implemented 517.081, 517.12 FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-300.02, Amended 6-28-93, 11-22-93, 12-24-95, 9-19-00, 10-30-03, Formerly 3E-300.002, Amended 5-15-07,_________.

 

69W-300.003 Refunds of Fees, Files Denied or Withdrawn.

(1) Fees paid to the Office of Financial Regulation in connection with the filing of applications for registration become a part of the general revenue of the State when paid in accordance with Sections 517.12(10) and (11), F.S., and are not refundable when files are denied or withdrawn, after a preliminary evaluation of the file has been initiated.

(2) Fees paid to the Office of Financial Regulation in connection with the filing of applications of Registrations under Section 517.081 or 517.082, F.S., become a part of the general revenue of the State and are not refundable when files are denied or withdrawn, after a preliminary evaluation of the file has been initiated.

(3) Pursuant to Section 517.315, F.S., all fees and charges collected under Chapter 517, F.S., except those collected under Section 517.131, F.S., are paid into the General Revenue Fund. The fees collected under Section 517.131, F.S., are paid into the Security Guaranty Fund. No refund of monies referred to in these sections shall be refunded for amounts less than one (1) dollar, unless such is requested by the registrant or applicant.

Rulemaking Specific Authority 517.03(1) FS. Law Implemented 517.081, 517.082, 517.12, 517.131, 517.315 FS. History–New 12-5-79, Formerly 3E-300.03, Amended 7-31-91, 10-1-96, 10-20-97, 10-30-03, Formerly 3E-300.003, Repealed__________.