Department Of Business Oversight Proposes Changes To Proposed Finders Rule

Last July, the California Department of Business Oversight proposed regulations to implement the provisions of AB 667 (Wagner).  The bill, which was enacted in 2015 and took effect last year, created a new exemption from the broker-dealer requirements for finders, or individuals who, for compensation, introduce potential investors and issuers of securities to each other.  The proposed regulations, among other things, prescribed the Statement of Information form that individuals must complete and file with the Commissioner to be exempt from the broker-dealer requirements as a finder.

Yesterday, the Department issued this Notice of Modifications to the Text of the Proposed Regulation.  This notice is required whenever an agency changes the text from that which was originally made available to the public, unless the change is (1) nonsubstantial or solely grammatical in nature, or (2) sufficiently related to the original text that the public was adequately placed on notice that the change could result from the originally proposed regulatory action.  Cal. Gov't Code § 11346.8(c).  Among other things, the modifications would clarify that disclosure of a filer's social security number is voluntary, a concern that I had expressed.  See The DBO Wants Your Social Security Number, But Is It Legal?

The public now has until 5:00 p.m. on April 14, 2017 to comment on the modifications.  Written comments may be submitted by email to  Comments may also be submitted by mail or facsimile as set forth in the Notice.  All comments should include "PRO 05/15" in the subject line.

No Secretary of State Filings on Friday

Friday, March 31, is César Chavez Day and California state agency offices, including the Secretary of State's office, will be closed.  For more on California state holidays, see this post.