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SECOND REGULAR SESSION
HOUSE COMMITTEE SUBSTITUTE FOR
HOUSE BILL NOS. 2908 & 2990
103RD GENERAL ASSEMBL Y
6408H.03C JOSEPH ENGLER, Chief Clerk
AN ACT
T o repeal sections 409.4-410, 409.6-601, and 409.6-604, RSMo, and to enact in lieu thereof
three new sections relating to the Missouri securities act.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 409.4-410, 409.6-601, and 409.6-604, RSMo, are repealed and
2 three new sections enacted in lieu thereof, to be known as sections 409.4-410, 409.6-601, and
3 409.6-604, to read as follows:
409.4-410. (a) A person shall pay a fee of two hundred dollars when initially filing
2 an application for registration as a broker -dealer and a fee of one hundred dollars when filing
3 a renewal of registration as a broker -dealer . If the filing results in a denial or withdrawal, the
4 commissioner shall retain the entire fee.
5 (b) The fee for an individual is fifty dollars when filing an application for registration
6 as an agent, a fee of fifty dollars when filing a renewal of registration as an agent, and a fee of
7 fifty dollars when filing for a change of registration as an agent. If the filing results in a
8 denial or withdrawal, the commissioner shall retain the entire fee.
9 (c) A person shall pay a fee of two hundred dollars when filing an application for
10 registration as an investment adviser and a fee of one hundred dollars when filing a renewal of
11 registration as an investment adviser . If the filing results in a denial or withdrawal, the
12 commissioner shall retain the entire fee.
13 (d) The fee for an individual is fifty dollars when filing an application for registration
14 as an investment adviser representative, a fee of fifty dollars when filing a renewal of
15 registration as an investment adviser representative, and a fee of fifty dollars when filing a
16 change of registration as an investment adviser representative. If the filing results in a denial
17 or withdrawal, the commissioner shall retain the entire fee.
EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
18 (e) A federal covered investment adviser required to file a notice under section 409.4-
19 405 shall pay an initial fee of two hundred dollars and an annual notice fee of one hundred
20 dollars.
21 (f) A person required to pay a filing or notice fee under this section may transmit the
22 fee through or to a designee as a rule or order provides under this act.
23 (g) An investment adviser representative who is registered as an agent under section
24 409.4-402 and who represents a person that is both registered as a broker -dealer under section
25 409.4-401 and registered as an investment adviser under section 409.4-403 or required as a
26 federal covered investment adviser to make a notice filing under section 409.4-405 is not
27 required to pay an initial or annual registration fee for registration as an investment adviser
28 representative.
29 (h) (1) The commissioner may , by rule, adjust the fees in this section to generate
30 the moneys necessary to cover the expenses or costs associated with administering this
31 chapter .
32 (2) For an adjustment to the fees by rule occurring after June 30, 2030, such
33 adjustment shall be subject to the following:
34 (A) The commissioner shall file a final order of rulemaking for such rule with
35 the joint committee on administrative rules under chapter 536 after October thirty-first
36 but before December first of the calendar year befor e the calendar year in which the
37 rule takes effect;
38 (B) If the general assembly deems such rule to be beyond the scope and authority
39 pr ovided in this subsection, the general assembly may reject the fee adjustment by
40 adopting a concurr ent r esolution pursuant to Article IV , Section 8 disappr oving such
41 rule befor e the fifteenth day of Mar ch of the calendar year immediately following the
42 filing of the final order of rulemaking for such rule; and
43 (C) If the general assembly:
44 (i) Adopts a concurr ent r esolution disappr oving such rule, the rule shall not take
45 effect, the commissioner shall not implement the fee adjustment, and the commissioner
46 shall continue to use fees established in this section or in the most recen t prec eding rule
47 pr omulgated under this subdivision; or
48 (ii) Does not adopt a concurr ent r esolution disappr oving the rule, the rule shall
49 take effect after the publication of such rule as pr ovided in chapter 536.
50 (3) (A) A fee incre ase shall not be made mor e than one time in any four -year
51 time period and in no case shall the total of all fee increa ses exceed the amount of
52 twenty-five dollars in an eight-year time period.
53 (B) No fee incr ease shall be made under this subsection after December 31, 2045.
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54 (4) In determining whether a fee incr ease is necessary , the commissioner shall
55 consider the following factors:
56 (A) The cost of administering and enfor cing this chapter , including personnel,
57 equipment, and operational expenses;
58 (B) Inflation and changes in the cost of living, as measur ed by the Consumer
59 Price Index or other appr opriate indices;
60 (C) The adequacy of curr ent fee levels to cover r egulatory and oversight
61 functions;
62 (D) The gr owth or decline in the number of reg istrations;
63 (E) Any legislative, legal, or technological changes or emerging risks that
64 incr ease regul atory res ponsibilities or service levels;
65 (F) The need to maintain appr opriate staffing levels and technical capacity;
66 (G) Revenue generated fr om other sources ; and
67 (H) Public interes t considerations including, but not limited to, the potential
68 impact of a fee incre ase on individuals subject to the fees in this section.
69 (i) (1) The commissioner shall conduct a comprehe nsive financial r eview of the
70 division's revenu e and expenditures every four years, beginning in fiscal year 2030. The
71 r eview shall include an analysis of all sources of funding and expenditures over the
72 pr eceding four fiscal years, a summary of tr ends in revenu es and expenditures of the
73 pr eceding four fiscal years, and an identification of any budget surplus or deficit for
74 each year under r eview . The findings of the review shall be published in a r eport and
75 posted to the division's website within ninety days of completion.
76 (2) If the commissioner , in conducting the revi ew , determines a budget surplus
77 exists that is not r easonably necessary to meet the anticipated costs of operating the
78 division, the commissioner shall, by order , decrea se the fees in an amount that ensures
79 that fee revenu e mor e closely aligns with the operational needs of the division.
80 (3) Except as otherwise limited in subdivision (4) of this subsection, in addition
81 to a requ ired decr ease of fees after a compr ehensive financial revi ew , the commissioner
82 may decr ease the fees by any amount at any time.
83 (4) In no event shall fees be decr eased by an amount that would re sult in the fee
84 being less than the amount established by the general assembly under subsections (a) to
85 (e) of this section.
409.6-601. (a) This act shall be administered by the commissioner of securities who
2 shall be appointed by and act under the direction of the secretary of state, and shall receive
3 compensation as provided by law .
4 (b) The attorney general shall appear on behalf of and represent the commissioner in
5 all proceedings before the administrative hearing commission, and in the circuit court of any
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6 county of the state or any city not within a county , or any court of another state in all civil
7 enforcement actions brought under this act. The attorney general may appoint attorneys
8 employed by the secretary of state as special assistant attorneys general to appear on behalf of
9 and represent the commissioner .
10 (c) It is unlawful for the secretary of state, commissioner or an of ficer , employee, or
11 designee of the commissioner to use for personal benefit or the benefit of others records or
12 other information obtained by or filed with the commissioner that are not public under section
13 409.6-607(b). This act does not authorize the secretary of state, commissioner or an of ficer ,
14 employee, or designee of the commissioner to disclose the record or information, except in
15 accordance with section 409.6-602, 409.6-607(c), or 409.6-608.
16 (d) This act does not create or diminish a privilege or exemption that exists at
17 common law , by statute or rule, or otherwise.
18 (e) The commissioner may develop and implement investor education initiatives to
19 inform the public about investing in securities, with particular emphasis on the prevention and
20 detection of securities fraud. In developing and implementing these initiatives, the
21 commissioner may collaborate with public and nonprofit or ganizations with an interest in
22 investor education. The commissioner may accept a grant or donation from a person that is
23 not af filiated with the securities industry or from a nonprofit or ganization, regardless of
24 whether the or ganization is af filiated with the securities industry , to develop and implement
25 investor education initiatives. This subsection does not authorize the commissioner to require
26 participation or monetary contributions of a registrant in an investor education program.
27 (f) The "Investor Education and Protection Fund" is created to provide funds for the
28 purposes identified in subsection (e). Notwithstanding the provisions of section 33.080, any
29 funds remaining in the secretary of state's investor education and protection fund at the end of
30 any biennium shall not be transferred to the general revenue fund.
31 (g) (1) Ther e is hereb y crea ted in the state tr easury the "Securities Division
32 Fund", which shall consist of the following:
33 (A) One hundred per cent of moneys collected that are attributable to a fee
34 adjustment implemented by rule under section 409.4-410(h) or (i);
35 (B) Moneys collected that are attributable to a reas onable charge assessed by the
36 commissioner for conducting an audit or inspection under section 409.4-41 1(d);
37 (C) (i) Befor e January 1, 2046, fifty per cent of moneys collected that are
38 attributable to the payment of fees re quir ed under section 409.4-410(b) and (d) when, on
39 or after the effective date of this section, a person initially files an application for
40 r egistration and when such person files:
41 i. A r enewal of reg istration; or
42 ii. A change of reg istration; and
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43 (ii) Beginning on January 1, 2046, fifty percen t of moneys collected that are
44 attributable to the payment of all fees re quir ed under section 409.4-410(b) and (d); and
45 (D) Other moneys that are appr opriated by the general assembly for the purpose
46 of administering and enforcin g the prov isions of this chapter .
47 (2) The fund shall be a dedicated fund and moneys deposited in the state
48 tr easury to the credit of the securities division fund shall be used solely as follows:
49 (A) By the securities division for r eimbursement of the reas onable costs of
50 conducting an audit or inspection under 409.4-41 1(d);
51 (B) By the securities division for the r easonable costs of operating the division;
52 (C) By the commissioner of the securities division for the purposes identified in
53 section 409.4-410(h); and
54 (D) For transfers to the investor education and protect ion fund creat ed in this
55 section.
56 (3) The state tr easurer shall be custodian of the fund. In accordance with
57 sections 30.170 and 30.180, the state tr easurer may appr ove disbursements.
58 (4) If the balance of the securities division fund exceeds two hundred fifty
59 thousand dollars at the end of a given calendar year , the amount in excess of two
60 hundr ed fifty dollars shall be transferr ed to the investor education and protecti on fund
61 cr eated in this section.
62 (5) The state tre asurer shall invest moneys in the fund in the same manner as
63 other funds ar e invested. Any interes t and moneys earned on such investments shall be
64 cr edited to the fund.
65 (6) Notwithstanding the pro visions of section 33.080 to the contrary , any moneys
66 r emaining in the fund at the end of the biennium shall not r evert to the credit of the
67 general reven ue fund.
409.6-604. (a) If the commissioner determines that a person has engaged, is
2 engaging, or is about to engage in an act, practice, or course of business constituting a
3 violation of this act or a rule adopted or order issued under this act or that a person has
4 materially aided, is materially aiding, or is about to materially aid an act, practice, or course of
5 business constituting a violation of this act or a rule adopted or order issued under this act, the
6 commissioner may:
7 (1) Issue an order directing the person to cease and desist from engaging in the act,
8 practice, or course of business or to take other action necessary or appropriate to comply with
9 this act;
10 (2) Issue an order denying, suspending, revoking, or conditioning the exemptions for
11 a broker -dealer under section 409.4-401(b)(1)(D) or (F) or an investment adviser under
12 section 409.4-403(b)(1)(C); or
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13 (3) Issue an order under section 409.2-204.
14 (b) An order under subsection (a) is ef fective on the date of issuance. Upon issuance
15 of the order , the commissioner shall promptly serve each person subject to the order with a
16 copy of the order and a notice that the order has been entered. The order must include a
17 statement whether the commissioner will seek a civil penalty or costs of the investigation, a
18 statement of the reasons for the order , and notice that, within fifteen days after receipt of a
19 request in a record from the person, the matter will be scheduled for a hearing. If a person
20 subject to the order does not request a hearing and none is ordered by the commissioner
21 within thirty days after the date of service of the order , the order becomes final as to that
22 person by operation of law . If a hearing is requested or ordered, the commissioner , after
23 notice of and opportunity for hearing to each person subject to the order , may modify or
24 vacate the order or extend it until final determination.
25 (c) If a hearing is requested or ordered pursuant to subsection (b), a hearing before the
26 commissioner must be provided. A final order may not be issued unless the commissioner
27 makes findings of fact and conclusions of law in a record in accordance with the provisions of
28 chapter 536 and procedural rules promulgated by the commissioner . The final order may
29 make final, vacate, or modify the order issued under subsection (a).
30 (d) In a final order under subsection (c), the commissioner may:
31 (1) Impose a civil penalty up to twenty-five thousand dollars for each violation;
32 (2) Order a person subject to the order to pay restitution for any loss, including the
33 amount of any actual damages that may have been caused by the conduct and interest at the
34 rate of eight percent per year from the date of the violation causing the loss or disgor ge any
35 profits arising from the violation;
36 (3) In addition to any civil penalty otherwise provided by law , impose an additional
37 civil penalty not to exceed fifteen thousand dollars for each such violation if the
38 commissioner finds that a person subject to the order has violated any provision of this act
39 and that such violation was committed against an elderly or disabled person. For purposes of
40 this section, the following terms mean:
41 (A) "Disabled person", a person with a physical or mental impairment that
42 substantially limits one or more of the major life activities of such individual, a record of such
43 impairment, or being regarded as having such an impairment;
44 (B) "Elderly person", a person sixty years of age or older .
45 (e) In a final order , the commissioner may char ge the actual cost of an investigation or
46 proceeding for a violation of this act or a rule adopted or order issued under this act. These
47 funds may be paid into the [ investor education and protection ] res titution recov ery fund
48 cr eated in this section .
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49 (f) If a petition for judicial review of a final order is not filed in accordance with
50 section 409.6-609, the commissioner may file a certified copy of the final order with the clerk
51 of a court of competent jurisdiction. The order so filed has the same ef fect as a judgment of
52 the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the
53 court.
54 (g) If a person does not comply with an order under this section, the commissioner
55 may petition a court of competent jurisdiction to enforce the order . The court may not require
56 the commissioner to post a bond in an action or proceeding under this section. If the court
57 finds, after service and opportunity for hearing, that the person was not in compliance with
58 the order , the court may adjudge the person in civil contempt of the order . The court may
59 impose a further civil penalty against the person for contempt in an amount not less than five
60 thousand dollars but not greater than one hundred thousand dollars for each violation and may
61 grant any other relief the court determines is just and proper in the circumstances.
62 (h) The commissioner is authorized to issue administrative consent orders in the
63 settlement of any proceeding in the public interest under this act.
64 (i) (1) Moneys collected fr om an order enter ed under this section shall be
65 deposited in the state tr easury to the credit of the res titution r ecovery fund creat ed in
66 this subsection.
67 (2) (A) Ther e is her eby creat ed in the state tr easury the "Restitution Recovery
68 Fund", which shall consist of the following:
69 (i) Moneys collected fro m an order enter ed under this section; and
70 (ii) Other moneys that ar e appr opriated by the general assembly for the purpose
71 of administering and enforcin g the prov isions of this chapter .
72 (B) The fund shall be a dedicated fund and shall be administer ed by the
73 commissioner of the securities division for the sole purposes of awarding:
74 (i) Restitution ordered under this section; and
75 (ii) Restitution assistance to aggrieved investors who were awarded res titution in
76 a final order issued under sections 409.1-101 to 409.7-703 but who did not re ceive
77 payment in full of the amount awarded.
78 (C) The state tr easurer shall be custodian of the fund. In accordance with
79 sections 30.170 and 30.180, the state tr easurer may appr ove disbursements.
80 (D) Notwithstanding the provi sions of section 33.080 to the contrary , any moneys
81 r emaining in the fund at the end of the biennium shall not r evert to the credit of the
82 general reven ue fund.
83 (E) The state tr easurer shall invest moneys in the fund in the same manner as
84 other funds ar e invested. Any interes t and moneys earned on such investments shall be
85 cr edited to the fund.
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86 (3) The commissioner of the securities division shall pr omulgate rules to
87 administer the res titution reco very fund and to establish the conditions upon which
88 r estitution assistance shall be awarded fr om the fund to an aggrieved investor described
89 in subparagraph (ii) of paragraph (B) of subdivision (2) of this subsection. Rules
90 establishing the conditions for such award of r estitution assistance to an aggrieved
91 investor shall include at least the following:
92 (A) The qualifications that establish an aggrieved investor ’ s eligibility for
93 r estitution from the fund;
94 (B) A method for determining the number of aggrieved investors who are
95 eligible for r estitution from the fund;
96 (C) A method for calculating the total amount each eligible aggrieved investor is
97 eligible to r eceive;
98 (D) A method for listing the name and mailing addr ess of each eligible aggrieved
99 investor;
100 (E) A calculation for determining whether the amount r emaining in the
101 r estitution reco very fund after the award of all eligible res titution will be below fifty
102 thousand dollars; and
103 (F) A method for pr orating awards to eligible aggrieved investors to ensur e that
104 the balance of the r estitution recover y fund is not below fifty thousand dollars after all
105 eligible r estitution is awarded to aggrieved investors.
106 (4) (A) After determining that the conditions for awarding res titution fr om the
107 r estitution r ecovery fund to aggrieved investors described in subparagraph (ii) of
108 paragraph (B) of subdivision (2) of this subsection have been met as described in
109 subdivision (3) of this subsection, the commissioner shall notify the state tr easure r of
110 such determination. Such notice shall contain the information described in subdivision
111 (3) of this subsection and any other necessary information requi re d by rules
11 2 pr omulgated by the commissioner .
113 (B) Upon rec eiving such notification fr om the commissioner , the state tre asurer
114 shall appr ove the disbursal of such determined amount fr om the r estitution reco very
115 fund to each aggrieved investor identified in the notice.
116 (5) Restitution assistance awarded under subparagraph (ii) of paragraph (B) of
117 subdivision (2) of this subsection may be awarded in an amount that is the lesser of:
118 (A) T wenty-five thousand dollars; or
119 (B) T wenty-five per cent of unpaid r estitution awarded in a final order described
120 in subparagraph (ii) of paragraph (B) of subdivision (2) of this subsection.
121 (6) If payment of restit ution assistance to aggrieved investors would res ult in a
122 r estitution recove ry fund balance below fifty thousand dollars, the commissioner may
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123 suspend res titution assistance until such time as the commissioner determines a
124 sufficient balance has been r estored to the fund.
125 (7) If the balance of the res titution recov ery fund exceeds one million dollars at
126 the end of a given calendar year , the amount in excess of one million dollars shall be
127 transferr ed to the investor education and pr otection fund cr eated in section 409.6-601.
✔
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