California has an exemption from the issuer qualification requirement under the Corporate Securities Law of 1968 for any offer or sale to, among other listed entities, institutional investors or governmental agencies or instrumentalities that the Commissioner of Corporations may designate by rule. Rule 260.102.10 designates certain entities as institutional investors, but that rule hasn’t been amended since Survivor was belting out “Eye Read more...
CalPERS Proposes Changes to Disclosure Rule
Yesterday, the California Public Employees Retirement System (CalPERS) issued this notice of proposed amendments to its placement agent disclosure rules. The comment period ends on August 26, 2010. As first posted, the notice stated that CalPERS’ Board of Administration will be considering modified regulations at its meeting next Monday, August 16, 2010. This didn’t make a lot of sense. When I brought Read more...
Rule 260.204.9 – “What is to be Done?”
As I mentioned in this earlier post, California has its own definition of “venture capital company” in Rule 260.204.9. This rule is an exemption from the investment adviser registration requirement in Corporations Code Section 25230 if a person meets the following conditions: Does not hold itself out generally to the public as an investment adviser; Has fewer than 15 clients; Is exempt from Read more...
No Form D Filing – Now What?
In 1996, Congress added Section 18 to the Securities Act of 1933 as part of the National Securities Markets Improvement Act (NSMIA) to preempt state qualification requirements with respect to “covered securities”, as defined. Section 18(b)(4)(D) provides that a security is a covered security with respect to specified types of transactions. One such transaction is a transaction under Rule 506 Read more...
Placement Agent Bill Amended
The amendments to AB 1743 (Hernandez) are now in print. This bill would require placement agents with respect to California public retirement systems to register as lobbyists. These amendments address several technical concerns that I had with earlier versions of the bill. In particular, I thought that the bill confused the two situations in which placement agents are used to Read more...
New DOC Chief Deputy Commissioner
When I was Commissioner of Corporations, I was sometimes asked about the other commissioners. However, the Department of Corporations is headed by a Commissioner – not a commission. Thus, there is only one Commissioner at a time. The Commissioner is appointed by the Governor and confirmed by the state Senate. Government Code Section 1322(5). Thus, the Commissioner is a political Read more...
Form D or 25102(f) Notice?
Issuers relying on Rule 506 of Regulation D under the Securities Act of 1933 have the benefit of federal preemption of California’s (and other states’) qualification requirement by virtue of Section 18(b)(4)(D) of that act. Although no state law change was required to effect this preemption, the California legislature acknowledged reality by enacting Section 25102.1 of the California Corporations Code. That statute Read more...
Just Released: Marsh & Volk Updates
The publisher has now released the 2010 update to Marsh & Volk, Practice under the California Securities Laws. Therefore, be sure that you check to see that you have an updated copy. A couple of years ago, I joined Roy Finkle as a practice consultant to this work. Roy was a friend and protege of the late Harold Marsh. Professor Marsh is a legend among corporate and Read more...
Can California Handle Dodd-Frank?
In 1996, Congress apportioned regulation of investment advisers between the Securities and Exchange Commission and the states based on the amount of assets that an adviser had under management. At that time, Congress drew the line at $25 million in Section 203A of the Investment Advisers Act of 1940 (subsequent rulemaking by the SEC generally did not require SEC registration until the adviser had assets under management Read more...
