RIA Compliance Blog
Earlier this year the Maryland General Assembly amended parts of the Maryland Securities Act and added some new sections to it. The amendments went into effect on October 1, 2017. Changes to the Maryland Securities Act include the creation of the Securities Act Registration Fund, adoption of the North American Securities Administrators Association’s Senior Model Act to address financial exploitation of seniors, and changes in fees for certain filing categories.
The amendments added a new section, Section 11-208, which establishes a Securities Act Registration Fund. The Fund’s purpose is “to help fund the direct and indirect costs of administering and enforcing the Maryland Securities Act.” The Fund will comprise registration fees, money that the State sets aside for the Fund in its budget, and any money accepted from any other source for the Fund’s benefit. The Fund cannot be used for any purpose other than administering and enforcing the Maryland Securities Act.
The Maryland General Assembly also adopted NASAA’s Senior Model Act to address the financial exploitation of seniors. As discussed previously, NASAA adopted the Senior Model Act last year to provide state securities administrators with a framework for possible legislation to protect seniors and other vulnerable adults. The Maryland Securities Act now requires a broker-dealer or investment adviser who has a reasonable belief that a senior or other vulnerable adult has been financially exploited to inform the Maryland Securities Commissioner and a local department. A local department is a state authority tasked with addressing exploitation of vulnerable adults under Maryland’s family laws. The amendments will also permit a broker-dealer or investment adviser to delay disbursements from a senior or other vulnerable adult’s account if the broker-dealer or investment adviser reasonably believes that the disbursement could result in financial exploitation of the senior or other vulnerable adult. The amendments also provide that if the broker-dealer or investment adviser delays a disbursement while acting in good faith and exercising reasonable care, the broker-dealer or investment adviser shall be immune from any administrative or civil liability that could otherwise result from the delay.
The amendments to the Maryland Securities Act also introduced some changes in fees for certain filing categories. For example, New Section 11-407(a)(2) provides that a person who is applying for initial or renewal registration as an agent of a broker-dealer shall pay a filing fee of $50. New Section 11-407(b)(3) provides that a private fund adviser providing investment advice to one or more qualifying private funds shall pay an initial registration fee of $300 and a renewal fee of $300. The amendments also added Section 11-506(b)(3)(II), which provides that a supplementary fee of $150 will be assessed for each filing made after the filing date. Section 11.510.1(b) was amended to provide for the imposition of late fees for certain types of issuers.
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