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California Finders Rule May Soon Take Effect

Nearly one year ago, 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.  In March, the Department issued this Notice of Modifications to the Text of the Proposed Regulation.

Under California's Administrative Procedure Act, the Department must transmit a rulemaking action to Office of Administrative Law for review within one year from the date that the notice was published in the California Regulatory Notice Register.  Cal. Gov't Code § 11346.4(b). See What Is, What Will Be & What’s Passed – The CCR, Z-Register & Register.  The OAL then has 30 working days to conduct a review of the rulemaking record to ensure that the agency satisfied the requirements of the APA and the OAL’s regulations. Cal. Gov't Code § 11349.3(a).  The OAL will then either approve the rulemaking action and file the proposed regulation with the Secretary of State or disapprove the rulemaking action.

Sed fugit interea, fugit inreparabile tempus . . .

I am pleased to report that the Department has submitted the long-awaited finders regulations to the OAL for review.  The OAL's 30-day clock runs out on July 3, 2017.

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
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