For Rules 19-11.001, 19-11.004 and 19-11.005, F.A.C., amendments are being made to reflect the fact that a self-directed brokerage account (“SDBA”) is being made available as an additional investment option to members of the Florida Retirement ...

 

STATE BOARD OF ADMINISTRATION

RULE NOS.:RULE TITLES:

19-11.001Definitions

19-11.004Excessive Trading in the FRS Investment Plan

19-11.005FRS Investment Plan Complaint Procedures

19-11.013FRS Investment Plan Self-Directed Brokerage Account

PURPOSE AND EFFECT: For Rules 19-11.001, 19-11.004 and 19-11.005, F.A.C., amendments are being made to reflect the fact that a self-directed brokerage account (“SDBA”) is being made available as an additional investment option to members of the Florida Retirement System (“FRS”) Investment Plan. Rule 19-11.001 sets forth a definition for a SDBA and emphasizes that the SDBA is different from the primary funds available under the FRS Investment Plan. Rule 19-11.004, F.A.C., is being amended to state that the excessive trading policies applicable to the FRS Investment Plan primary funds are not applicable to funds that a member has in a SDBA, and to emphasize that funds in the SDBA may be subject to their own excessive trading policies. Rule 19-11.005 is amended to reflect the fact that the complaint procedures applicable to the FRS Investment plan primary funds do not apply to funds placed in the SDBA. New Rule 19-11.013, F.A.C., is being added to detail information applicable to the SDBA, including, but not limited to, participation requirements, enrollment procedure, the responsibilities of participants in the SDBA, the types of available investments, applicable fees, the types of statements that will be issued, and complaint procedures available to SDBA participants.

SUMMARY: Amendments are being made to reflect the fact that a self-directed brokerage account (“SDBA”) is being offered as a service to members of the Florida Retirement System (“FRS”) Investment Plan. The SDBA will allow members to access additional investment opportunities that are not currently available under the primary funds offered under the FRS Investment Plan. Other than the rules covered by this Notice, there are no other rules incorporating any of these proposed rules. The proposed amendments do not have an impact on any other rules. Legislative ratification of these rule amendments is not required.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: Upon review of the proposed changes to the rules as well as all incorporated materials, the State Board of Administration has determined that the rules do not meet the statutory threshold for ratification by the legislature. There will be no impact on economic growth, job creation or employment, private-sector investment, or business competitiveness, and no increase in regulatory costs.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 121.4501(8) FS.

LAW IMPLEMENTED: 121.78, 120.569, 120.57, 120.573, 121.78, 121.4501(8), (9), (10), (11), (12), (13), (14), (15) FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: Wednesday, March 12, 2014, 9:00 a.m. – 11:00 a.m.

PLACE: Hermitage Room, the Hermitage Centre, 1801 Hermitage Blvd., Tallahassee, Florida 32308

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: Tina Joanos, Agency Clerk, Office of the General Counsel, State Board of Administration, 1801 Hermitage Blvd., Tallahassee, Florida 32308, [phone], [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).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ruth A. Smith, Assistant General Counsel, State Board of Administration, 1801 Hermitage Blvd., Tallahassee, Florida 32308, [phone], [e-mail]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

19-11.001 Definitions.

The following words and terms shall have the following meanings for purposes of Chapters 19-11 and 19-13, F.A.C.:

(1) through (31) No change.

(32) “Investment Plan primary funds” or “primary funds” shall mean investment funds offered under the Investment Plan. It does not include additional investment opportunities available under the Self-Directed Brokerage Account (“SDBA”).

(33)(32) “Limitation year” is the consecutive 12 month period of time to which Code limitations with respect to contributions and forfeitures are applied. For the FRS Investment Plan, the limitation year is the calendar year.

(34)(33) “Market losses” shall be defined, for purposes of Section 121.78(3)(c), F.S., which states that employers shall reimburse FRS Investment Plan members for market losses resulting from late contributions, or from contribution adjustments as a result of employer errors or corrections, as the value of a member’s account that otherwise would have been realized had the employer and employee contributions and accompanying payroll data been submitted on a timely basis. “Market losses” applies only to the monthly contribution that is late, not to the member’s aggregate value in his or her Investment Plan account.

(35)(34) “Market Timing Trade” is a member-directed series of trades with the following two characteristics:

1. At least one Roundtrip Trade within a 30-day period, and

2. The trade amount for all Roundtrip Trades is an aggregate amount of $75,000 or more.

(36)(35) “Member”, “FRS Investment Plan Member,” or “Investment Plan Member means an employee who elected to participate, and has an account established, in the FRS Investment Plan as a result of current or previous employment with an FRS-covered employer; a person who has been designated as an alternate payee due to a qualified domestic relations order (“QDRO”); or a designated beneficiary when a member is deceased.

(37)(36) “Member’s account” or “member’s accounts” shall mean an Investment Plan account for an individual FRS Investment Plan member in which employer and employee contributions and, if applicable, FRS Pension Plan benefit transfers, are invested for an FRS Investment Plan member.

(38) “Primary Investment Account” or “primary account” shall mean the member’s Investment Plan account that is invested in the Investment Plan’s primary funds.

(39)(37) “Qualified Domestic Relations Order” (“QDRO”) is a domestic relations order that has been determined to meet the FRS Investment Plan’s qualification requirements.

(40)(38) “Required Minimum Distributions” (“RMD”) are the annual minimum distributions that must be taken by members who are age 70 1/2 or older from their qualified retirement plan accounts, including 401(k), 457, 403(b) plans and IRA accounts, when they terminate employment. The amount of an RMD in any year is based on account balances as of December 31st of the prior year. The member must have terminated all FRS covered employment in order for an RMD to be processed. Once the RMD has been calculated, the RMD will be paid to the member, even if the member returns to active FRS employment during the calendar year.

(41)(39) “Retiree” is a member who has received a self-initiated distribution from the FRS Investment Plan.

(42)(40) “Roundtrip Trade” occurs when a member conducts a series of at least two non-exempt transactions that include one or more transfers into an authorized investment fund and one or more transfers out of the same authorized investment fund in either order (i.e., in/out or out/in), regardless of any multiple transfers from or to other different authorized investment funds during the roundtrip. A roundtrip trade includes a trade from an Investment Plan primary fund to the SDBA and a trade from the SDBA to an Investment Plan primary fund.

(43)(42) “SBA” means the State Board of Administration of Florida, the plan sponsor for the FRS Investment Plan.

(44) “Self-Directed Brokerage Account” or “SDBA” shall mean an account within the Investment Plan that allows a member access to additional investment opportunities that are not available in the Investment Plan primary funds.

(45)(41) “Third Party Administrator,” “Administrator,” “Plan Administrator”, or “TPA” shall mean the Investment Plan Administrator hired by the State Board of Administration of Florida pursuant to Section 121.4501(8), F.S.

(46)(43) “True-up Amount” means the difference between the ABO calculated by using the member’s actual creditable service and the actual final average compensation as of the member’s effective date in the FRS Investment Plan and the ABO initially transferred.

Rulemaking Authority 121.78(3)(c), 121.4501(8) FS. Law Implemented 121.78, 121.4501 FS. History–New 12-8-02, Amended 3-9-06, 7-12-12, 12-16-12,__________.

 

19-11.004 Excessive Trading in the FRS Investment Plan.

(1) Excessive trading by Investment Plan members is prohibited. The United States Securities and Exchange Commission (SEC) has adopted Rule 22c-2. (17 CFR §270.22c-2.), regarding excessive trading for open-end mutual funds. Rule 22c-2 can be obtained by accessing the SEC website at sec.gov and clicking on the Laws and Regulations section. If the mutual funds determine that the member has engaged in excessive trading under the mutual funds’ policies, the mutual funds are entitled to impose redemption fees or prevent trading that violates the mutual funds’ excessive trading policies. It is the responsibility of the member to comply with the trading restrictions permitted by the SEC. Any applicable fees will be deducted directly from the members’ accounts. Funds within the Self-Directed Brokerage Account (“SDBA”) may have excessive trading rules that are applicable. However, these fund rules are separate and apart from the Investment Plan’s excessive trading policy.

(2) Limitations.

(a) Foreign and global stock funds are subject to a minimum holding of seven (7) calendar days following any non-exempt transfers into such funds.

(b) All authorized investment funds, except for money market funds and funds within the SDBA, are subject to the following controls:

1. Members who engage in Market Timing Trades (as defined in Rule 19-11.001, F.A.C.) in authorized primary funds will receive a warning letter sent by U.S. mail. The warning letter shall notify the member that excessive trades have been identified in the member’s accounts and any additional violations will result in a direction letter.

2. Members who engage in Market Timing Trades in authorized primary funds and who have previously received a warning letter described in subparagraph 1., above, will be sent a direction letter delivered by courier. The direction letter shall require that the member shall not have access to automated online trade instructions for at least one full calendar month following the date of the direction letter for all trades involving the primary funds. The member shall be required to conduct trades involving primary funds via telephone by contacting the Investment Plan Administrator for at least one full calendar month. “One full calendar month,” in this context, means the full calendar month following the month in which the direction letter is received.

3. Members who engage in Market Timing Trades and who have previously received a direction letter, as described in subparagraph 2., above, will be sent another direction letter, delivered by courier. This direction letter shall require that the member shall not have access to automated trade instructions for at least three full calendar months following the date of the direction letter for all trades involving the primary funds. The member shall be required to conduct trades involving primary funds via telephone by contacting the Investment Plan Administrator for at least three full calendar months.

4. Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 3., above, will be sent another direction letter, delivered by courier. The direction letter shall require that the member shall only be permitted to conduct trades involving primary funds via paper trading forms for at least three full calendar months following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 06/10, http://www.flrules.org/Gateway/reference.asp?No=Ref-01127, which hereby is adopted and incorporated by this reference. The form will be sent to the member by the Plan Administrator with the direction letter. This form must be notarized and returned to the Office of Defined Contribution Programs, via US mail, certified\return receipt requested. This form cannot be used to trade in, out or within the SDBA.

5. Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 4., above, will be sent another direction letter, delivered by courier. The direction letter shall require that the member shall only be permitted to conduct trades involving primary funds via paper trading forms for at least twelve full calendar months following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 06/10. This form must be notarized and returned to the Office of Defined Contribution Programs, via US mail, certified\return receipt requested.

6. Members who engage in Market Timing Trades and who have previously received a direction letter as described in subparagraph 5., above, will be sent another direction letter, delivered by courier. The direction letter shall require that the member shall only be permitted to conduct trades involving primary funds via paper trading forms for the remainder of any time that any balance exists in the member’s Investment Plan account following the date of the direction letter. The form to be used by the member in conducting the trades is the “Transfer Request Form, Excessive Fund Trading Violators,” Form EFTPV-1, rev. 06/10. This form must be notarized and returned to the Office of Defined Contribution Programs, via US mail, certified\return receipt requested.

7. Members who received direction letters and who were placed on restricted trading within their primary funds, as provided in subparagraphs 2, 3, 4, 5 and 6 of paragraph (2)(b), shall be allowed to make automated trades in, out and within the SDBA. The member must meet the requirements of the SDBA as provided in Rule 19-11.013. The member’s activity within the SDBA is not subject to this policy, but will be subject to the applicable excessive trading rules and purchase restrictions of the funds in the SDBA.

(3)(a) through (g) No change.

(h) If Member A transfers $50,000 out of Fund A and into the SDBA on January 2, and then transfers $35,000 from the SDBA into Fund A on January 25, the transaction is a Roundtrip Trade and a Market Timing Trade because the aggregate amount of all trades into and out of Fund A exceeded $75,000 within a 30 day period.

(4)(5) For all members, Roundtrip and Market Timing Trades are calculated using a rolling 30-calendar day time period. For example, iIf a trade occurs on May 15 and the following 30-calendar day period, from May 16 through June 14, includes a sufficient number of trades to fit the definition of a Market Timing Trade, this rule shall apply.

Rulemaking Authority 121.4501(8) FS. Law Implemented 121.4501(13), (14), (15) FS. History–New 10-21-04, Amended 3-9-06, 10-25-07, 12-8-08, 1-7-10, 7-12-12,__________.

 

19-11.005 FRS Investment Plan Complaint Procedures.

(1) Request for Intervention.

(a) Any FRS Investment Plan or FRS Pension Plan member who has a complaint regarding the FRS laws, rules, plan provisions or services rendered by an Investment Plan or MyFRS Financial Guidance Program provider or one of the representatives thereof, except the Self- Directed Brokerage Account (“SDBA”), may send a written Request for Intervention to the SBA. The written Request for Intervention shall be sent:

1. By regular US mail service to:

Investment Plan Complaint Resolution

Office of Defined Contribution Programs

State Board of Administration

P. O. Box 13300

Tallahassee, FL 32317-3300

2. By e-mail: [e-mail]; or

3. By fax: [phone].

(b) through (e) No change.

(f) Complaints regarding the SDBA shall be handled in accordance with Rule 19-11.013, F.A.C.

(2) No change.

Rulemaking Authority 121.4501(8) FS. Law Implemented 120.569, 120.57, 120,573, 121.4501(8)(g) FS. History-New 10-21-04, Amended 3-9-06, 11-26-07, 5-19-09, 7-12-12, 12-16-12,__________.

 

19-11.013 FRS Investment Plan Self-Directed Brokerage Account.

(1) An FRS Investment Plan member meeting certain criteria may transfer assets from the member’s Investment Plan primary investment account to a self-directed brokerage account (“SDBA”) in order to be able to access additional investment opportunities beyond the primary investment funds offered under the Investment Plan.

(a) In order to participate in the SDBA the member must:

1. Maintain a minimum balance of $5,000 in the Investment Plan’s primary investment funds. This minimum amount may be changed at any time.

2. Make initial and subsequent transfers into the SDBA of at least $1,000. Transfer requests must be in whole dollars. Percentages are not permitted. This minimum amount is subject to change.

3. Pay all trading fees, commissions, administrative fees, and any other expenses associated with participating in the SDBA.

(b) The member must open an account with the SDBA service provider in one of two ways:

1. By accessing and completing the enrollment form online by logging on to MyFRS.com, then choosing Manage My Benefits>Manage Investments>Open Brokerage Account. The enrollment form includes both a Member Service Agreement and Memorandum of Understanding which the member must acknowledge having received and read.

2. By printing and completing a hard copy of the enrollment form, Member Service Agreement and Memorandum of Understanding. The member must return the completed enrollment form to the service provider via fax or mail. The member must acknowledge the Member Service Agreement and Memorandum of Understanding were received and read. A hard copy of the enrollment form can be printed from the Open Brokerage Account link on MyFRS.com or can be obtained from the Investment Plan Administrator.

3. The SDBA account will be established within two days of receipt of either the online or hardcopy enrollment form. Once the account is established, the member will receive a package from the SDBA service provider containing information on how to access and use the SDBA.

The SDBA account will be automatically closed if there is a zero balance for 18 consecutive months. To participate in the SDBA in the future, the member will have to open a new SDBA account.

(c) The member is subject to the following fees, transaction changes, expenses:

1. An annual administrative fee of $25.00 ($6.25 quarterly) for participating in the SDBA. This fee will be deducted from the member’s primary investment account for each quarter the member maintains a balance in the SDBA. This fee is in addition to all applicable commissions, sales charges and transaction fees. This fee is deducted pro rata across the member’s Investment Plan primary funds.

2. Any and all commissions, sales charges and transaction fees applicable to transactions executed by the member through the SDBA. The member may review all SDBA commissions and fees by accessing the FRS Investment Plan Self-Directed Brokerage Account Commission and Fee Schedule in the “Investment Funds” section on MyFRS.com.

3. Depending on the investments chosen, transaction fees, commissions or sales charges may be charged to the member’s SDBA. These fees are automatically deducted from transaction proceeds or added to the purchases as they are incurred. In addition, investment management fees, 12b-1 fees, or other fees and expenses specific to individual funds may be charged to the member’s SDBA. It is the member’s sole responsibility to be aware of and understand the commissions and fees as described in the Commission and Fee Schedule and in the prospectus of any mutual fund.

(2)(a) The investment options offered through the SDBA have not been reviewed by the FRS for suitability for the member. The member is solely responsible for determining the appropriateness of any investments in the SDBA.

(b) The member agrees to fully indemnify and hold harmless the member’s employer, the FRS, the State Board of Administration, and any and all service providers to the FRS against any claims, damages, or other possible causes of actions resulting from the member’s use of the SDBA.

(c) The member is exercising control over all of the assets in the member’s Investment Plan account, including the SDBA, pursuant to Section 404(c) regulations and all applicable laws governing the operation of the Investment Plan. Sections 121.4501(8)(b)2. and 121.4501(15)(b) of Florida law incorporate the federal law concept of participant control, established by regulations of the U.S. Department of Labor under Section 404(c) of the Employee Retirement Income Security Act of 1974. No program fiduciary shall be liable for any loss to the member’s account which results from such exercise of control.

(d) Securities, including mutual funds, sold within the SDBA are not obligations of or insured by the FDIC or any other governmental agency. These investments are not endorsed or guaranteed by the SBA or any other plan fiduciary and are subject to risks, including possible loss of the principal amount invested. The value of a member’s investments may fluctuate so that when they are sold, they may be worth more or less than when they were purchased.

(e) The member is responsible for reviewing and understanding the trading restrictions that may apply to the SDBA investment options purchased. It is the member’s responsibility to review the fund prospectus and will be subject to a mutual fund’s excessive trading policy and to any redemption fees, restrictions or penalties that may apply.

(f) Investment options available within the SDBA include the following:

1. Stocks listed on a Securities Exchange Commission (SEC) regulated national exchange

2. Exchange-Traded Funds (except for leveraged Exchange-Traded Funds)

3. Mutual funds (except for any of the Investment Plan’s primary investment funds)

4. Fixed income products

(g) Investment options not permitted within the SDBA include the following:

1. Illiquid investments

2. Over-the-Counter (OTC) Bulletin Board securities

3. Pink Sheet® (PS) securities

4. Leveraged Exchange-Traded Funds

5. Direct Ownership of Foreign Securities

6. Derivatives, including, but not limited to, futures and options contracts on securities, market indexes, and commodities

7. Limited Partnerships

8. Private Placements

9. Buying or Trading on Margin

10. Investment Plan primary investment funds

11. Any investment that would jeopardize the Investment Plan’s tax-qualified status

(3)(a) The member can transfer funds from the member’s primary investment funds to the SDBA by logging in to MyFRS.com or by calling the Investment Plan Administrator at 1(866)446-9377, Option 4, and asking to speak to an SDBA specialist.

1. The SDBA will not accept direct contributions.

2. Transfer requests must be in whole dollars. Percentages are not permitted.

3. Transfers must be in amounts at least equal to $1,000.

4. Transfers into the SDBA requested by 4:00 p.m. ET on regular business days are processed the same day. If a transfer is processed after 4:00 p.m. ET, it will be processed the next business day.

(b) To transfer assets from the SDBA back to the Investment Plan primary funds, the member must first liquidate investments in the SDBA and wait for the trades to settle. This process can take up to five business days to complete depending on the settlement period of the liquidated investments. Once the funds are available, the member is responsible for processing the request to transfer the funds to the member’s Investment Plan primary funds.

(4)(a) The Investment Plan Administrator will include in the member’s Investment Plan primary investment funds quarterly account statements the aggregate total amount invested by the member in the SDBA.

(b) The SDBA provider will provide to the member:

1. A separate quarterly statement that will itemize the brokerage transactions and show individual holdings balances as well as the total SDBA balance.

2. If the member has any activity in the SDBA, a separate monthly statement will be provided.

3. If the member has no activity in the quarter, a separate quarterly statement will be provided.

4. If the member provides the SDBA provider with an email address, the member will receive electronic statements unless the member affirmatively elects a paper format.

5. The member will also receive SDBA trade confirmations and other SDBA communications electronically.

6. The member may opt out of electronic delivery at any time by logging onto MyFRS.com and accessing the SDBA account or by calling 1(866)446-9377, Option 4, and speaking to an SDBA specialist.

(5)(a) Distributions cannot be made directly from the SDBA. A member must first transfer money in the SDBA back to the member’s Investment Plan primary investment account.

(b) If the member is subject to a Required Minimum Distribution (RMD), and has insufficient funds in the member’s primary account, the member will be subject to an automatic liquidation of assets by the Plan Administrator from the SDBA of an amount sufficient to cover the RMD requirements and maintain the required account balance in the primary investment funds.

(c)1. If the member is subject to qualified domestic relations orders (QDROs) by a court of competent jurisdiction, income deduction orders as provided in Section 61.1301, Florida Statutes, or a federal income tax levy, the member’s SDBA balance may be subject to a partial or full liquidation to comply with the court or federally mandated levy and to ensure that at least a $5,000 account balance in the Investment Plan primary funds is maintained.

2. In the event the member’s SDBA account is subject to a lien or levy, the directions of the appropriate levying authority will be followed unless some form of release from the levying authority, or a court order staying or quashing the lien or levy is provided.

(d) A member participating in the SDBA cannot take a distribution from the member’s primary account that would make the member’s primary account balance fall below $5,000. In such instance for a distribution to occur, the member first would need to liquidate sufficient SDBA funds and return the funds to the member’s primary account. If such a member’s primary account balance were to fall below $5,000 due to market losses, no additional transfers into the SDBA will be allowed, and no additional distributions would be processed until the primary account balance is greater than $5,000.

(e) A member participating in the SDBA who has requested distributions to be made on an installment basis may request to have installments established based on the total of the funds in both the member’s primary account and in the member’s SDBA. If a point is reached at which an additional distribution would cause the member’s primary account balance to fall below $5,000, the installments will be stopped and the member will be notified that no additional installments can be processed until the member liquidates sufficient SDBA funds to cover future distributions and maintain a $5,000 minimum balance in the member’s primary account.

(f) If the member terminates FRS employment prior to meeting the vesting requirements of the Investment Plan and has enrolled in the SDBA, the member will be required to liquidate all investments in the SDBA prior to requesting a distribution of any vested account balance. If the member requests a distribution of any portion of the vested account balance, the member will forfeit any unvested account balance and will be considered retired from the FRS. The member can reinvest in the SDBA with vested money so long as a $5,000 minimum balance is maintained in the primary account and a minimum of $1,000 is available to transfer to the SDBA.

(g) If the member terminates employment and has unvested money in the Investment Plan and has enrolled in the SDBA, the member’s SDBA account is subject to liquidation by the Plan Administrator within four calendar months of termination and any unvested money will be moved to the Investment Plan’s suspense account. The member can reinvest in the SDBA with vested money so long as a $5,000 minimum balance is maintained in the primary account and a minimum of $1,000 is available to transfer to the SDBA account. If the member returns to FRS-covered employment and has not taken a distribution from the Investment Plan primary account the money held in suspense will be returned to the member’s primary account.

(6)(a)1. Any FRS Investment Plan member who has a complaint regarding the SDBA should call the Investment Plan Administrator at 1(866)446-9377, Option 4, and ask to speak to an SDBA specialist. If the SDBA specialist cannot resolve the complaint over the telephone, the member will be provided with instructions on how to submit a written complaint. If a written complaint is received by the SDBA provider, the SDBA provider will handle the written complaint regarding the SDBA in accordance with FINRA Rule 4530.

2. The Compliance Officer of the SDBA provider will conduct an investigation and will prepare and send the member a letter within 10 business days of receipt of the written complaint detailing the findings, any proposed resolution, and information on any next steps in resolving the complaint. Copies of the complaint and responses thereto will be provided to the SBA.

3. If a complaint is received by the SBA regarding an SDBA issue, the complaint will be forwarded to the Compliance Officer of the SDBA provider for a response.

4. The complaint process provided in Rule 19-11.005, F.A.C., is not applicable to any complaint regarding the SDBA.

(b) If the SDBA provider and the member cannot come to a resolution regarding the complaint the member can request arbitration as detailed in the SDBA Plan Member Agreement.

(c)1. If SDBA provider receives a written complaint that is unrelated to the SDBA, it will be sent to the Administrator and to the SBA. The SDBA provider will acknowledge receipt of the complaint to the member advising the member that the complaint has been forwarded to the appropriate party.

2. Upon receipt of the complaint unrelated to the SDBA referenced in subparagraph (c)1. above, the SBA will handle the complaint in accordance with Rule 19-11.005, F.A.C.

Rulemaking Authority 121.4501(8), (5)(e) FS. Law Implemented 121.4501(8), (9),(10), (11), (12), (13), (14), (15) FS. History–New___________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Ron Poppell, Senior Officer, Defined Contributions Program

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Trustees of the State Board of Administration

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: February 6, 2014

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: December 6, 2013, Vol. 39/236