This is the Final Public Hearing on the adoption of proposed Rules 69W-600.013, 69W-600.0131, and 69W-600.0133, Florida Administrative Code, published on September 26, 2008, in Vol. 34, No. 39, of the Florida Administrative Weekly. A Notice of ...

 

DEPARTMENT OF FINANCIAL SERVICES
Securities

RULE NO: RULE TITLE
69W-600.013: Prohibited Business Practices for Dealers and Their Associated Persons
69W-600.0131: Prohibited Business Practices for Investment Advisers and Their Associated Persons
69W-600.0133: Use of Senior-Specific Certifications and Professional Designations by Associated Persons and Investment Advisers
The Financial Services Commission, Office of Financial Regulation announces a hearing to which all persons are invited.

DATE AND TIME: December 9, 2008, 9:00 a.m., during a regular meeting of the Financial Services Commission

PLACE: Cabinet Meeting Room, Lower Level, The Capitol, Tallahassee, Florida

GENERAL SUBJECT MATTER TO BE CONSIDERED: This is the Final Public Hearing on the adoption of proposed Rules 69W-600.013, 69W-600.0131, and 69W-600.0133, Florida Administrative Code, published on September 26, 2008, in Vol. 34, No. 39, of the Florida Administrative Weekly. A Notice of Change for Rule 69W-600.0133, F.A.C., was published on November 14, 2008, in Vol. 34, No. 46, of the Florida Administrative Weekly. The rules relate to securities regulation. The proposed rules prohibit the misleading use by any person of senior and retiree designations while also providing a means by which the Office may recognize the use of certain designations which have been accredited. The rules are based on the model rule adopted on March 20, 2008, by the North American Securities Administrators Association (NASAA) regarding the use of senior-specific certifications and professional designations.

A copy of the agenda may be obtained by contacting: Governor and Cabinet website at http://www.myflorida.com/myflorida/cabinet/mart.html. The agenda should be available approximately one week before the cabinet meeting.

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Andrea Moreland at [phone] or [e-mail]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

For more information, you may contact: Andrea Moreland at [phone] or [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

69W-600.013 Prohibited Business Practices for Dealers and Their Associated Persons.

(1) The following are deemed demonstrations of unworthiness by a dealer under Section 517.161(1)(h), F.S., without limiting that term to the practices specified herein:

(a) through (n) No change.

(o) Any unethical practice pursuant to Rule 69W-600.0133, F.A.C.

(2) The following are deemed demonstrations of unworthiness by an associated person of a dealer under Section 517.161(1)(h), F.S., without limiting that term to the practices specified herein:

(a) through (g) No change.

(h) Engaging in any of the practices specified in paragraph (1)(a), (b), (e), (f), (g), (h), (i), (k), (l), (m), or (n) or (o).

(3) No change.

Specific Authority 517.03(1), 517.1217 FS. Law Implemented 517.081, 517.1217, 517.161(1) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.13, Amended 8-1-91, 6-16-92, 1-11-93, 11-7-93, 5-5-94, 9-9-96, 10-20-97, 1-25-00, 10-30-03, Formerly 3E-600.013, Amended 10-23-06,________.

 

69W-600.0131 Prohibited Business Practices for Investment Advisers and Their Associated Persons.

(1) The following are deemed demonstrations of unworthiness by an investment adviser or an associated person of an investment adviser under Section 517.161(1)(h), F.S., without limiting that term to the practices specified herein:

(a) through (t) No change.

(u) Any unethical practice pursuant to Rule 69W-600.0133, F.A.C.

(2) through (3) No change.

Specific Authority 517.03(1), 517.1215 FS. Law Implemented 517.12(4), 517.1215, 517.161(1) FS. History–New 1-25-00, Amended 410-30-03, Formerly 3E-600.0131, Amended 10-23-06,________.

 

69W-600.0133 Use of Senior – Specific Certifications and Professional Designations by Associated Persons and Investment Advisers.

(1) The use of a senior specific certification or designation by any person in connection with the offer, sale, or purchase of securities, or the provision of advice as to the value of or the advisability of investing in, purchasing, or selling securities, either directly or indirectly or through publications or writings, or by issuing or promulgating analyses or reports relating to securities, that indicates or implies that the user has special certification or training in advising or servicing senior citizens or retirees, in such a way as to mislead any person shall be a dishonest and unethical business practice in the securities industry in violation of Section 517.161(1)(d) or 517.161(1)(h), F.S., by an associated person of a dealer or investment adviser. The prohibited use of such certifications or professional designation includes, but is not limited to, the following:

(a) Use of a certification or professional designation by a person who has not actually earned or is otherwise ineligible to use such certification or designation;

(b) Use of a nonexistent or self-conferred certification or professional designation;

(c) Use of a certification or professional designation that indicates or implies a level of occupational qualifications obtained through education, training, or experience that the person using the certification or professional designation does not have; and

(d) Use of a certification or professional designation that was obtained from a designating or certifying organization that:

1. Is primarily engaged in the business of instruction in sales and/or marketing;

2. Does not have standards or procedures for assuring the competency of its designees or certificants;

3. Does not have standards or procedures for monitoring and disciplining its designees or certificants for improper or unethical conduct; or

4. Does not have continuing education requirements for its designees or certificants in order to maintain the designation or certificate.

(2) There is a rebuttable presumption that a designating or certifying organization is not disqualified solely for purposes of paragraph (1)(d) above when the organization has been accredited by:

(a) The American National Standards Institute; or

(b) The National Commission for Certifying Agencies; or

(c) An organization that is on the United States Department of Education’s list entitled “Accrediting Agencies Recognized for Title IV Purposes” and the designation or credential issued therefrom does not primarily apply to sales and/or marketing.

(3) In determining whether a combination of words (or an acronym standing for a combination of words) constitutes a certification or professional designation indicating or implying that a person has special certification or training in advising or servicing senior citizens or retirees, factors to be considered shall include:

(a) Use of one or more words such as “senior,” “retirement,” “elder,” or like words, combined with one or more words such as “certified,” registered,” “chartered,” “adviser,” “specialist,” “consultant,” “planner,” or like words, in the name of the certification or professional designation; and

(b) The manner in which those words are combined.

(4) For purposes of this rule, a certification or professional designation does not include a job title within an organization that is licensed or registered by a state or federal financial services regulatory agency, when that job title:

(a) Indicates seniority or standing within the organization; or

(b) Specifies an individual’s area of specialization within the organization.

For purposes of this subsection, financial services regulatory agency includes, but is not limited to, an agency that regulates brokers, dealers, investment advisers, or investment companies as defined under the Investment Company Act of 1940, 15 U.S.C. ss. 80a-2, 80a-3 (2006). The cited sections of the Investment Company Act of 1940 are hereby incorporated by reference.

(5) Nothing in this rule shall limit the Office of Financial Regulation’s authority to enforce existing law.

(6) This rule is based on the model rule adopted on March 20, 2008, by the North American Securities Administrators Association (NASAA) regarding the use of senior-specific certifications and professional designations. The NASAA model rule is hereby by incorporated by reference.

(7) All materials incorporated by reference in this rule may be obtained by writing to: Office of Financial Regulation, 200 East Gaines Street, Tallahassee, Florida 32399-0375.

Specific Authority 517.03(1), 517.1215(2), 517.1217 FS. Law Implemented 517.1215(2), 517.1217, 517.161 FS. History–New ________.