STATEMENT OF BASIS AND PURPOSE

Promulgation of Amendments to Division Rules 51-4.3 

Colorado Division of Securities
November 9, 2006

Pursuant to the authority found in the Colorado Securities Act (“Act”), sections 11-51-101, et seq., C.R.S. (2006), including part 6 of the Act, the Securities Commissioner adopts amendments to Division Rule 51-4.3.

The general purpose of the new rules promulgated on this date is to implement the provisions of House Bill 06S-1009, which was signed into law by the Governor on July 31, 2006.  House Bill 06S-1009 creates the requirement that all state government agencies issues licenses only to individuals that are lawfully present in the United States.  The bill becomes effective January 1, 2007, and applies to acts occurring on or after that date.

Specifically, House Bill 06S-1009 amends section 24-34-107(1) (a) of the Colorado Revised Statutes to say that a state division, board or agency may issue or renew a license to an individual only if the individual is lawfully present in the United States and shall immediately deny any such license or renewal upon determining the individual is unlawfully present in the United States.  The individual shall prove his or her identity with a secure and verifiable document as that term is defined in section 24-72.1-102 of the Colorado Revised Statutes.

Division Rule 51-4.3 is amended to identify what is a “secure and verifiable document” is as it relates to sales representatives.  Also, the rule states the types of documents required for NASD-affiliated license applicants as well as non NASD-affiliated license applicants.  In essence, the same types of documents are required for each type of sales representative.

The Securities Commissioner finds that the adoption of the amendment to Rule 51-4.3 is necessary and appropriate in the public interest, and is consistent with the purposes and provisions of the Act.  The Securities Commissioner further finds that the record demonstrates the need for the rule; the rule is clearly and simply stated; proper statutory authority exists for the rule; the rule does not conflict with any other rules or statutes governing the Division of Securities; and the rule is coordinated with the federal acts and statutes and the rules and regulations promulgated thereunder to which references are made, to the extent coordination with them is consistent with the purposes and provisions of the Act.

This general statement of basis and purpose is incorporated by reference in the rule adopted by the Securities Commissioner on November 9, 2006.  The rule becomes effective on January 1, 2007.

DATED this 9th day of November, 2006.

_________________________________
Fred J. Joseph
Securities Commissioner

STATEMENT OF BASIS AND PURPOSE

Promulgation of Amendments to Division Rule 51-4.4(IA)

Colorado Division of Securities
November 9, 2006

Pursuant to the authority found in the Colorado Securities Act (“Act”), section 11-51-101, et seq., C.R.S. (2006), including part 6 of the Act, the Securities Commissioner adopts amendments to Division Rule 51-4.4(IA).

The general purpose of the amendments promulgated on this date is to implement the provisions of House Bill 06S-1009, which was signed into law by the Governor on July 31, 2006.  House Bill 06S-1009 creates the requirement that all state government agencies issues licenses only to individuals that are lawfully present in the United States.  The bill becomes effective January 1, 2007, and applies to acts occurring on or after that date.

Specifically, House Bill 06S-1009 amends section 24-34-107(1)(a) of the Colorado Revised Statutes to say that a state division, board or agency may issue or renew a license to an individual only if the individual is lawfully present in the United States and shall immediately deny any such license or renewal upon determining the individual is unlawfully present in the United States.  The individual shall prove his or her identity with a secure and verifiable document as that term is defined in section 24-72.1-102 of the Colorado Revised Statutes.

Division Rule 51-4.4(IA) is amended to identify what is a “secure and verifiable document” as it relates to investment adviser representatives.  Specifically, the rule states the types of documents required from investment adviser representative license applicants to be provided to the investment advisory firm.  

The Securities Commissioner finds that the adoption of the amendment to Rule 51-4.4(IA) is necessary and appropriate in the public interest, and is consistent with the purposes and provisions of the Act.  The Securities Commissioner further finds that the record demonstrates the need for the rule; the rule is clearly and simply stated; proper statutory authority exists for the rule; the rule does not conflict with any other rules or statutes governing the Division of Securities; and the rule is coordinated with the federal acts and statutes and the rules and regulations promulgated thereunder to which references are made, to the extent coordination with them is consistent with the purposes and provisions of the Act.

This general statement of basis and purpose is incorporated by reference in the rule adopted by the Securities Commissioner on November 9, 2006.  The rule becomes effective on January 1, 2007.

DATED this 9th day of November, 2006.

_________________________________
Fred J. Joseph
Securities Commissioner