SECURITIES OFFERINGS—FLORIDA amends its securities laws - 29 September 2023

Among the numerous changes to Florida’s securities laws is the addition of new Section 517.1214, “Continuing education requirements for associated persons of investment advisers and federal covered advisers.”

On October 1, 2023, Florida C.S. S.B. 180 takes effect. The legislation, enacted on June 9, 2023, makes changes across multiple sections of Florida’s securities laws. Notably, the legislation, among other things, provides that the definition of “accredited investor” shall be defined by rule of the commission in accordance with the Securities and Exchange Commission Rule 501.

The legislation also expands on the definitions of “associated person,” “dealer,” and “investment adviser,” in Section 517.021, “Definitions,” and adds and strikes language in several of the other definitions.

Among other changes, new paragraph (4) is added to Section 517.072, “Viatical settlement investments,” which provides that the commission “may establish by rule requirements and standards for disclosures to purchasers of viatical settlement investments and recordkeeping requirements for sellers of viatical settlement investments.”

Section 517.075, “Cuba, prospectus disclosure of doing business with, required,” is amended by striking “as defined in s. 517.021(1)” from paragraph (1).

Among other changes throughout Section 517.081, “Registration procedures,” the legislation adds a sentence to paragraph (3)(n) addressing if the issuer is a limited liability company and the required filing of the application with a copy of the articles of organization if not already on file. Paragraph (6) clarifies that an issuer filing under the section pay the application fee “for each offering that exceeds the amount provided in s. 3(b) of the Securities Act of 1933, as amended, or $200 per application for each offering that does not exceed the amount provided in s. 3(b) of the Securities Act of 1933, as amended.” New paragraph (8) is also added and provides that an application to register shall be deemed abandoned if the issuer or person acting on behalf of the issuer has failed to timely complete an application specified by commission rule.

Among other changes to section 517.082, including an amended title to “Registration by notification; federal registration statements,” new paragraph (5) is added stating that: “if the Securities and Exchange Commission has not declared effective the applicant’s federal registration statement within 180 days after the applicant’s filing with the office of an application for registration by notification, the office must deem the application abandoned.”

The legislation amends Section 517.12, “Registration of dealers, associated persons, intermediaries, and investment advisers,” by adding and striking language throughout. Notably, new paragraph (22) is added and includes definitions for “Advisory affiliate,” “Exempt reporting adviser,” “Private fund adviser,” “Qualifying private fund,” “3(c)(1) fund,” and it exempts a private fund adviser from the registration requirements of the section if the private fund adviser satisfies certain conditions. In addition, if a private fund adviser is registered with the Securities and Exchange Commission, the adviser is not eligible for the exemption from the registration requirements of the section. Finally, report filings shall be made electronically through the Investment Adviser Registration Depository of the Financial Industry Regulatory Authority.

The legislation also adds new Section 517.1214, “Continuing education requirements for associated persons of investment advisers and federal covered advisers” and, among other things, provides definitions and mandates that by December 31, 2024, and each December 31 thereafter, each associated person of an investment adviser or a federal covered adviser shall complete six credits of approved continuing education content that addresses an associated person’s ethical and regulatory obligations, and six credits of approved continuing education content that addresses an associated person’s skills and knowledge regarding financial products, investment features, and practices in the investment advisory industry. Importantly, excess credits will not carry forward to a subsequent reporting period.

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