Spring is the traditional season for cleaning and California's Corporations Code and securities rules are desperately in need of some tidying up. In a very quick and incomplete review of the Code and the Commissioner's rules, I found the following:
California Corporations Code
- Sections 5260, 9260 and 23000 refer to the "Internal Revenue Code of 1954" which is now the Internal Revenue Code of 1986.
- Section 25100(i) refers to the no longer existing Interstate Commerce Commission and the Public Utilities Holding Company Act. See Interstate Commerce Commission Termination Act, P.L. 104-88 and Energy Policy Act of 2005, P.L. 109-58.
- Section 25100(s)(5) refers to "Section 4(2)" of the Securities Act of 1933 ("Securities Act"). This section was re-designated as Section 4(a)(2) pursuant by Section 201(c) of the Jumpstart Our Business Startups Act, Pub. L. No. 112-106, sec. 201(c), 126 Stat. 306, 314 (Apr. 5, 2012) ("JOBS Act"). See SEC Rel. No. 33-9414 [78 FR 44730] (July 10, 2013).
- Section 25100(t)(1) refers to "industrial loan company". This should be updated to "industrial bank". See 2000 Cal. Stat. ch. 1015 (S.B. 2148 (Polanco)).
- Section 25101.1 refers to under "Section 4(1) or 4(3)" of the Securities Act. These sections were re-designated Section 4(a)(1) and 4(a)(3), respectively, pursuant to Section 201 of the JOBS Act.
- Section 25248(f) should refer to the Department of Business Oversight rather than the Department of Corporations. See Governor's Reorganization Plan No. 2 of 2012.
- Section 25302(b)(2) should refer to the Commissioner of Business Oversight rather than the Commissioner of Financial Institutions.
- Section 25302(b)(4) refers to the Office of Thrift Supervision. Section 312 of the Dodd Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, transferred all of the Office of Thrift Supervision's functions to the office of the Comptroller of the Currency.
Commissioner of Business Oversight Rules
- Rule 260.102.1(a)(3) continues to use the term "husband and wife" even though Section 25102(f) was amended to change "husband and wife" to "spouse", a term that includes a "registered domestic partner" as required by Family Code § 12.2.
- Rule 260.102.13(f) refers to the "Investment Advisors Act of 1940" which should be "Investment Advisers Act of 1940".
- Rule 260.102.14(a)(1) refers to "section 4(6)" of the Securities Act. This section was re-designated Section 4(a)(6) pursuant to Section 201 of the JOBS Act.
- Rule 260.103.4 refers to the "Pink Sheets LLC" which has been renamed. The OTC Markets Group LLC operates three different markets: OTCQX® Best Market, OTCQB® Venture Market, and Pink® Open Market.
- Rule 260.105.7 refers to the "Pink Sheets LLC" which has been renamed. The OTC Markets Group LLC operates three different markets: OTCQX® Best Market, OTCQB® Venture Market, and Pink® Open Market.
- Rule 260.105.16 should refer to the Commissioner of Business Oversight rather than the Commissioner of Corporations and the Superintendent of Banks.
- Rule 260.105.16 contains an outdated reference to Chapter 14 of Banking Law.
- Rule 260.105.29 incorrectly refers to the "Securities Exchange Act of 1933". The correct reference should be the Securities Act of 1933.
- Rule 260.105.35 refers to the "Pacific Stock Exchange", which was sold and is now owned by the New York Stock Exchange and operates under the name "NYSE Arca".
- Rule 260.105.35 refers to the "American Stock Exchange", which is now the "NYSE MKT LLC".
- Rule 260.105.35 refers to the "Philadelphia Stock Exchange". Its name was changed to the "NASDAQ OMX PHLX, Inc. see SEC Release No. 34-58380 (Aug. 18, 2008).
- Rule 260.105.40 cites Rule 7d-2(a)(2) as 17 CFR 7d-2(a)(2). The correct citation is 17 CFR § 270.7d-2(a)(2).
- Rule 260.115 refers to "industrial loan company". This should be updated to "industrial bank". 2000 Cal. Stat. ch. 1015 (S.B. 2148 (Polanco)).
I am sure that I have overlooked other incorrect or outdated provisions. Please let me know if you find some that I have missed.