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CALIFORNIA CORPORATE & SECURITIES LAW

Can The DBO Incorporate By Reference A Federal Form?

Almost a year ago, the Commissioner of Corporations (now the Commissioner of Business Oversight) proposed to amend the custody rule, 10 CCR Section 260.237, for investment advisers under the Corporate Securities Law of 1968.  The Department received several comments and recently proposed to amend its proposed custody rule by expressly incorporating by reference Form ADV-E and…

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Petition Questions Lack Of MTA Regulations

Soon, the Office of Administrative Law will decide whether it will determine the merits of a petition for review of underground regulations allegedly being enforced by the Department of Business Oversight (fka Department of Financial Institutions).  Regardless of whether the OAL accepts the petition, the petition raises some troubling questions about the DBO’s administration and…

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FTB Fights Underground Regulation Determination – Why Won’t It Simply Do What’s Right?

Just last week, the California Taxpayers Association reported: For at least several months, the Franchise Tax Board has been sending filing enforcement notices to nonresidents of California, including many foreign nonregistered limited liability companies (LLCs), who hold an interest in LLCs doing business in California. CalTaxletter, page 9, Vol. XXVI, No. 22 (June 14, 2013) In April,…

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CalPERS To Consider External Investment Resource Disclosure Rule

Last August the Investment Committee of the California Public Employees’ Retirement System (CalPERS) approved revisions to its External Investment Resource Conflict of Interest Policy.  A week later, I asked the Office of Administrative Law to make a determination that the policy was an illegal “underground regulation” (i.e., a rule that has not been adopted in…

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New Law Lets A Thousand Rules Bloom, But Only Quarterly

Under the Administrative Procedure Act, the Office of Administrative Law is responsible for the review of regulations promulgated by over 200 state agencies.  In 2011, reportedly 103 different agencies proposed 467 new rules.  If the OAL determines that a proposed rule or amendment meets the standards prescribed by the APA, the OAL files the regulation with the Secretary…

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CalPERS Agrees That It Will Not Enforce Conflict Of Interest Policy

As discussed in this post, I had petitioned the Office of Administrative Law for a determination that the Statement of Investment Policy for External Investment Resource Conflict of Interest adopted by the California Public Employees’ Retirement System constituted an illegal “underground” regulation. The OAL accepted my petition and established a schedule for CalPERS and interested…

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Office of Administrative Law To Determine Whether CalPERS’ Policy is an Underground Regulation

In August, I submitted a petition to the Office of Administrative Law alleging that the California Public Employees Retirement System had “issued, used enforced, or attempted to enforce an underground regulation”.  Specifically, I challenged CalPERS’ Statement of Investment Policy for External Investment Resource Conflict of Interest.  In CalPERS’ argot, an “external investment resource” is someone who…

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Did A State Agency Really Decide That Corporations Have A Right To Assault Weapons?

The California Constitution does not explicitly grant anyone or anything the right to bear arms.  However, a recent determination by the Office of Administrative Law has apparently given rise to the misconception that it has decided that corporations have the right to be issued assault weapons permits on the basis of the U.S. Supreme Court’s…

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No Necessity; No Regulation!

In May, I wrote about a rare bird – a request by a legislative committee for priority review of a regulation by the Office of Administrative Law.  See “Not As Rare As An Ivory-Billed Woodpecker, But Still A Rara Avis“.  Recently, the OAL completed its review and issued its decision. Recall that the OAL does…

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If It’s Not Clear, It’s Neither French Nor Legal

The Eighteenth Century French journalist, Antoine de Rivarol wrote “Ce qui n’est pas clair n’est pas français (what is not clear is not French)”.  The same might be said of regulations under California’s Administrative Procedure Act.  All regulations must meet the six standards set forth in Government Code Section 11349.1:  Necessity, Authority, Clarity, Consistency, Reference, and Nonduplication. …

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