Delaware General Assembly

CHAPTER 560

FORMERLY

HOUSE BILL 342

AS AMENDED BY HOUSE AMENDMENT NO. 1

AND SENATE AMENDMENT NO. 1

AN ACT TO AMEND CHAPTER 73. TITLE 6. OF THE DELAWARE CODE RELATING TO THE REGULATION OF SECURITIES, BROKER-DEALERS, INESTMENT ADVISORS AND AGENTS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE: (three-fifths of all members elected to each house thereof concurring therein):

Section 1. .Amend Chapter 73, Title 6. of the Delaware Code by adding the term "30 days" to Sections 7306(b)(2),7309(a)(11) and 7323(e) in each location where that term was deleted by Section 13 of 68 Del. Laws, Chapter 181 (effective August 16, 1991).

Section 2. Amend Chapter 73. Title 6, of the Delaware Code 1)) striking subsection 7308(h) in its entirety and by adding in lieu thereof the following:

(b) The Commissioner may not institute a stop-order proceeding against an effective registration statement on the basis of a fact or transaction known to hint when the registration statement became effective unless the proceeding is instituted within the next 90 days."

Section 3. Amend Chapter 73, Title 6 of. the Delaware Code by striking Subsection 7302(a)(3)c. in its entirety and by adding in lieu thereof the following:

"c. A bank, savings institution or trust company to the extent that these entities are exempt or excluded from broker-dealer registration requirements under federal securities law,"

Section 4. Amend Chapter 73, Title 6. of the Delaware Code by striking Subsection 73 total) 5) in its entirety and by adding in lieu thereof the following:

"(5) Is the subject of a cease and desist order of the Commissioner or of an order of the Commissioner denying, suspending, or revoking registration as it broker-dealer, investment adviser or agent:"

Section 5. Amend Chapter 73. Title 6. of the Delaware Code by striking the third clause of subsection 7302(a)(11)(d) (which begins with the words "any act") in its entirety and by adding in lieu thereof the following.

"any act incident to a vote by stockholders (or approval pursuant to section 228 of I Me 8) pursuant to the certificate of incorporation. or the provisions of Title 8, on a merger, consolidation. reclassification of securities. dissolution, or sale of corporate assets in consideration of the issuance of securities of the same or another corporation:"

Section 6. Amend Chapter 73. Title 6, of the Delaware ('ode by adding the following subsection to the end of § 7306.

(f) The Commissioner may exercise his rule making authority under § 7325(b) to establish special registration procedures IM limited offerings. these procedures. including tiling requirements and fees, may differ from the qualification procedures set forth above."

Section 7. Amend Chapter 73, Title 6, of the Delaware Code by deleting § 7329 in its entirety and adding in lieu thereof the following:

"§ 7329. Investor Protection Fund.

(a) All monies as described in subparagraph (b) below shall be credited by the State Treasurer to a fund to be known as the "Investor Protection Fund."

(b) The Investor Protection Fund will be a revolving fund and shall consist

of:

(1) Monies transferred to the revolving fund pursuant to court order or judgment, including costs and attorney's fees, in a securities action brought by the Attorney General or the Securities Commissioner pursuant to this chapter; and

(2) Monies received by the Commissioner pursuant to any settlement agreement.

(c) Any fines, costs or other monies (except those obtained as restitution or rescission) received by the Commissioner as a result of an administrative order (other than a consent order) shall be credited to the General Fund.

(d) If, at the end of any fiscal year, the balance in the Investor Protection Fund exceeds $100,000, the excess shall be withdrawn from the Investor Protection Fund and deposited in the General Fund.

(e) The Attorney General is authorized to expend from the Investor Protection Fund such monies as are necessary for:

(1) The payment of costs, expenses and charges incurred in the preparation, institution and maintenance of administrative and court actions authorized under this chapter;

(2) The payment of costs, expenses and charges incurred in the training and education of Securities Division personnel; and

(3) The payment of costs, expenses and charges incurred in connection with the dissemination of information to the public, to include the costs of printing copies of this statute and the Commissioner's administrative rules. Monies from the Investor Protection Fund may not be used for any purpose unrelated to the administration or enforcement ()I this chapter.

(f) The Attorney General and the Securities Commissioner shall provide such reports as to the expenditure of monies from the Investor Protection Fund to the Budget Director and the Controller General, and in such detail as they require."

Section 8. This Act shall be referred to as the "Securities Act Amendments of 1996". and the provisions in this Act shall become effective immediately upon its enactment into law.

Approved July 18, 1996