Sunset Process Securities Regulation

Plain English Breakdown

The official summary mentions a deadline change from 35 days to 60 days for hearings with an exception, but does not fully explain all exceptions or scenarios.

Continuing Colorado's Securities Regulation and Updating Enforcement Rules

This law extends the life of state securities regulators until 2037, clarifies that deficiency letters are not public records, requires licensing for investment advisers unless exempt, updates how emergency orders work so hearings happen later if requested, and uses gender-neutral language.

What This Bill Does

• Continues the Division of Securities and the Securities Board through 2037 based on a government review.
• States that deficiency letters and communications about them are not public records under the Colorado Open Records Act.
• Requires investment advisers doing business in Colorado to be licensed by the securities commissioner unless exempt.
• Changes how emergency orders work so the commissioner can issue preliminary cease-and-desist or license suspension orders first, with hearings happening later if requested within 15 days.
• Updates laws to use gender-neutral language.

Who It Names or Affects

• The Division of Securities and the Securities Board
• Investment advisers and investment adviser representatives in Colorado
• People or companies receiving preliminary cease-and-desist orders or summary license suspensions

Terms To Know

Sunset review

A process where the government checks if a state agency should continue to exist.

Deficiency letter

A notice sent by regulators pointing out problems or missing information in an application or report, which is not considered a public record under this law.

Cease-and-desist order

An official command to stop a specific activity immediately; the new process allows for preliminary orders before a hearing.

Limits and Unknowns

• The effective date of the law is not listed in the provided text.
• The summary does not list which investment advisers are exempt from licensing requirements.
• Details on how extensions beyond the standard timeline work if both parties request them are limited to a general mention.

Official Summary Text

The act implements the recommendations of the department of regulatory agencies (department) in its 2025 sunset review and report by continuing the division of securities and the securities board until 2037. In connection with continuing these entities, the act:
Clarifies that deficiency letters and communications concerning a deficiency letter are not public documents that may be inspected under the 'Colorado Open Records Act';
Requires that an investment adviser or an investment adviser representative doing business in Colorado must be licensed by the securities commissioner (commissioner) unless otherwise exempt;
Specifies that the executive director of the department must consult with the securities board when appointing the commissioner; and
Updates statutory language to be gender neutral.
The act revises the process by which a cease-and-desist order is issued or a license is summarily suspended. Under the previous law, the commissioner issued a cease-and-desist order or conducted a summary license suspension by issuing an order to show cause as to why a cease-and-desist order or license suspension should not be issued. After appropriate notices were given, a hearing was scheduled with the securities board or an administrative law judge. At the hearing, it was determined whether to issue a cease-and-desist order or suspend the license and what form the order or suspension would take. The act changes this process to authorize the commissioner to issue a preliminary cease-and-desist order or a summary license-suspension order. If the person that is the subject of the order disagrees with the order, the person may request a hearing to resolve the issue. The hearing must take place within 45 days after issuance of the order unless both parties request an extension. The deadline for a hearing, with an exception, is changed from 35 days to 60 days. If a hearing is not requested within 15 days after issuance of the order, the order becomes final. The person that is the subject of the order must obey the order until a hearing is requested.
(Note: This summary applies to this bill as enacted.)