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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).  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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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...

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