Commerce, Securities

Rule R164-101

Securities Fraud Reporting Program Act

Notice of Proposed Rule

(New Rule)

DAR File No.: 35558
Filed: 12/20/2011 10:46:10 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Pursuant to S.B. 100, passed in the 2011 General Session, the rule sets forth the procedures for filing an application for an award under the Securities Fraud Reporting Program Act and the procedures for the making or denial of such award.

Summary of the rule or change:

The rule sets forth the procedures for filing an application for an award under the Securities Fraud Reporting Program Act and the procedures for the making or denial of such award.

State statutory or constitutional authorization for this rule:

• Section 61-1-103
• Section 61-1-24
• Section 61-1-107

Anticipated cost or savings to:

the state budget:

No additional costs or savings to the state budget are anticipated, as the rule simply describes the procedures through which a person may apply for an award under the Securities Fraud Reporting Program Act.

local governments:

No additional costs or savings to local government are anticipated, as local government is not involved with the Securities Fraud Reporting Program Act and the rule simply describes the procedures through which a person may apply for an award under the Act.

small businesses:

No additional costs or savings to small businesses are anticipated, as the rule simply describes the procedures through which a person may apply for an award under the Securities Fraud Reporting Program Act. Small businesses are eligible to provide information and apply for an award under the Act.

persons other than small businesses, businesses, or local governmental entities:

No additional costs or savings are anticipated as the rule simply describes the procedures through which a person may apply for an award under the Securities Fraud Reporting Program Act. Such persons are eligible to provide information and apply for an award under the Act.

Compliance costs for affected persons:

There are no compliance costs because the Securities Fraud Reporting Program Act is a voluntary program through which persons providing information to the Utah Securities Division about a securities fraud may apply for and receive an award based upon monetary sanctions actually collected by the Division.

Comments by the department head on the fiscal impact the rule may have on businesses:

This proposed rule establishes procedures required by recent statutory amendments regarding awards for reporting securities fraud. No fiscal impact to businesses is anticipated beyond those considered by the Legislature in passing the statutory amendments.

Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Commerce
Securities
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Charles Lyons at the above address, by phone at 801-530-6940, by FAX at 801-530-6980, or by Internet E-mail at clyons@utah.gov
• Keith Woodwell at the above address, by phone at 801-530-6606, by FAX at 801-530-6980, or by Internet E-mail at kwoodwell@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/14/2012

This rule may become effective on:

02/21/2012

Authorized by:

Keith Woodwell, Director

R164. Commerce, Securities.

R164-101. Securities Fraud Reporting Program Act.

R164-101-1. Application and Award Procedures.

(A) Authority and Purpose

(1) The Division enacts this rule under authority granted by Sections 61-1-24, -103 and -107.

(2) This rule describes the procedures for filing an application for an award under the Securities Fraud Reporting Program Act and procedures for the making or denial of such award.

(B) Definitions

(1) "Act" means the Utah Uniform Securities Act, Utah Code Ann. Section 61-1-1 et seq.

(2) "Application" means the form designated by the Division through which an individual ("reporter") may report violations of the Act in accordance with Section 61-1-103.

(3) "Award" means a payment authorized by the Utah Securities Commission ("Commission") as described in Section 61-1-106.

(4) "Reporter" means an individual who provides original information relating to a violation in accordance with Section 61-1-103.

(C) Application Requirements

(1) To be considered for an award, a reporter shall submit to the Division an application containing the information set forth in Section 61-1-103 and any other information required by the Division.

(D) Award Procedures

(1) At the conclusion of an action that meets the criteria of Subsection 61-1-106(1) and Section 61-1-107, and in consideration of the criteria set forth in Subsection 61-1-106(3), the Commission may make an award to one or more reporters.

(2) Prior to making an award, the Commission shall confirm the reporter meets the requirements of Section 61-1-103. In determining whether the reporter meets such requirements, the Commission may request any relevant information from the Division or from the reporter.

(3) Upon making an award, the Commission shall enter an order that payment be made from the Securities Investor Education, Training, and Enforcement Fund. The Division shall make payment to the reporter in compliance with Section 61-1-18.7.

(4) If the Commission denies an award, the Commission shall enter an order denying the award. A person aggrieved by such order may appeal the denial as set forth in Subsection 61-1-107(4)(b).

(5) A majority of the Commission shall constitute a quorum for making or denying an award.

(6) The Commission shall make or deny an award within one hundred and twenty (120) days following the payment of a monetary sanction in excess of $50,000 in an action described in Subsection (D)(1).

 

KEY: securities, securities regulation, securities fraud reporting program

Date of Enactment or Last Substantive Amendment: February 21, 2012

Authorizing, and Implemented or Interpreted Law: 61-1-18.7; 61-1-24; 61-1-101; 61-1-103; 61-1-106; 61-1-107