Rules relating to banks selling certificates of deposit of third-party financial institutions.
Objective of the rule.
The Division currently has administrative rules in s. DFI-Sec 4.10 (1)
entitled “Bank Agency Transactions." That series of rules sets forth the requirements to be met for a bank, savings institution or trust company (“bank") to not have to be licensed as a broker-dealer in Wisconsin in order to execute transactions involving various types of securities as an agent for public investor-purchasers or sellers of the securities.
Currently, when a bank sells its own certificates of deposit (“CDs") to purchasers, such does not trigger the Wisconsin securities broker-dealer licensing requirements. However, when a bank sells CDs of third-party financial institutions, such sales activities do not come within current Wisconsin statutory definitional exclusions or current administrative rules establishing exclusions from broker-dealer licensure for banks involved in effectuating securities transactions as agent for investors. As a result, Wisconsin banks cannot engage in this activity, and Wisconsin investors cannot purchase at their “home" bank the CDs of other financial institutions, unless and until an administrative rule with appropriate and necessary investor protections is in place to enable such. The proposed rules would create a new rule subsection under existing Bank Agency Transactions rule s. DFI-Sec 4.10
to separately deal with the situation where the type of security involved in the transaction effectuated by the bank is a certificate of deposit issued by a third-party financial institution.
Because the securities involved in such transactions under the proposed rules would be federally-insured certificates of deposit in amounts not exceeding the $100,000 per investor FDIC insurance level (such that there is no risk of loss of principal to an investor), the entirety of the existing rules under s. DFI-Sec 4.10 (1) to (4) would not be made applicable. Rather, in addition to those parts of rules s. DFI-Sec 4.10 (1)
that would be utilized, inasmuch as the securities involved are certificates of deposit, the proposed rules would include several of the specific requirements currently contained in the existing administrative rule s. DFI-Sec 4.11
relating to sales to the public by securities broker-dealers of so-called “brokered certificates of deposit."
Existing and new policies contained in the proposed rules include:
(1) Supervisory requirements to be met by the bank regarding persons involved in executing the CD transactions, which requirements correspond to existing requirements in rule s. DFI-Sec 4.10 (1) (b) 2.
(2) Record-keeping requirements to be met by the bank relating to the CD transactions that correspond to existing requirements in s. DFI-Sec 4.10 (2)
(3) Disclosure requirements to be met--applicable to general advertising materials as well as materials used individually with investors--that are derived from current “brokered certificates of deposit" rule subsections in s. DFI-Sec 4.11 (1)
(4) The certificates of deposit involved in transactions under the rule may not exceed $100,000 per investor such that, due to the existence of FDIC deposit insurance up to that level, there is no risk of loss of principal to investors.
Staff time required
Estimated time to be spent by state employees to develop the rule--20 hours. No other resources are necessary.
Health and Family Services
The Department proposes to modify ch. HFS 45
, relating to the licensing of family day care centers and ch. HFS 46
, relating to the licensing of group day care centers. Chapter HFS 45
applies to centers caring for between 4 and 8 children, while ch. HFS 46
applies to centers caring for 9 or more children. These modifications would: 1. Incorporate new statutory requirements under s. 48.67
, Stats., for training of child care providers in the most recent medically accepted method of reducing the risk of Sudden Infant Death Syndrome.
2. Bring both chapters of rules into conformance with other legislation relating to Caregiver Background Checks and the Clean Indoor Air Act.
3. Revise the rules to reflect current generally accepted safety practice in child care.
4. Modify portions of ch. HFS 45
to make those provisions consistent with ch. HFS 46
With minor exceptions, the Department has not revised ch. HFS 45
, relating to licensing rules for family day care centers, since 1989. Since that time, several events have suggested or required the modification of ch. HFS 45
. First, in 1997, the Department created ch. HFS 46
, relating to licensing of group day care centers. Not surprisingly, these two chapters of rules address similar topics and, in the Department's judgement, should contain comparable requirements, including ones related to definitions, licensing procedures and penalties and sanctions. Second, since 1989, changes in the child safety practices standards have become generally accepted. For example, cardiopulmonary resuscitation training for childcare providers has become standardized. Finally, 2001 Wisconsin Act 16 amended s. 48.67, Stats., to require that all child care centers licensed to care for children under 1 year of age must receive training in the most recent medically accepted practice to reduce the risk of Sudden Infant Death Syndrome.
Similarly, ch. HFS 46
needs to be revised to reflect recent generally accepted child care practices standards in addition to 2001 Wis. Act 16
In developing these rules, the Department will consult with the Department of Workforce Development's Office of Child Care, the agency responsible for developing rules for certified child care homes.
Staff time required
About 120 hours of staff time to research, write and review the proposed changes to the licensing rules.
Health and Family Services
The repeal and recreation of ch. HFS 57
relating to Group Foster Homes for Children.
In Wisconsin, 121 group foster homes provide residence, care and services to children, adolescents and some young adults to age 19, if full-time in school and completing their high school education. The children, youth and young adults residing in group foster homes are under juvenile court jurisdiction and have one or more of the following conditions: emotional or behavioral disorders; drug, alcohol or other substance abuse problems; difficulty acquiring life skills; or a developmental disability.
Placements into group foster homes occur from youth correctional facilities and institutions, county human service or social service agencies and via the interstate compact for placement of children under s. 48.988
and s. 48.989
, Stats.; or are made by courts or parents.
The Department is responsible under ss. 48.625
, Stats., for the licensure and supervision of group foster homes for children on the basis of requirements for issuance of a license and standards for operation of a group foster home. These requirements are set forth in ch. HFS 57
, Wis. Adm. Code. HFS 57 has not undergone any significant revision since its original promulgation in 1976. The proposed rules seek to update ch. HFS 57 to bring it into compliance with current drafting standards, statutes and other rules and will add new provisions which support the intent of s. 48.67, Stats., to protect the health, safety and welfare of children.
While the current group foster home rule addresses areas related to personnel, care of children, physical plant and environment, the service needs of children and youth have changed considerably since the original promulgation of the group foster home standards in 1976. The complex treatment-related needs and level of services required by children and youth currently being placed in group foster homes necessitates a revision of licensing standards.
The new rule proposal will include requirements related to:
Minimum staffing levels and staff qualifications;
The roles and responsibilities of sponsoring agencies;
Caregiver background checks in accordance with s. 48.685
Child abuse and neglect reporting responsibilities in accordance with s. 48.981 (2)
Admission criteria, individual service plan components and documentation and review standards;
Behavior management policies that specify appropriate and specific methods of behavior management, including the use of appropriate crisis intervention techniques;
Physical plant, safety and health of children and youth in care;
The provision of healthcheck services not provided by a private insurer and obtaining written consents for medical and emergency medical care;
Policies and procedures for discharge of residents that provide for preparation, aftercare and recommendations for post-discharge services;
Special provisions for group foster homes providing respite care services;
Special provisions for group foster homes licensed to care for custodial parents and expectant mothers (“Second Chance Homes");
Special provisions for group foster homes licensed to care for children under the age of six years;
Reporting serious incidents (including but limited to: death, serious illness or injury to a child; reportable abuse or neglect; serious incidents requiring law enforcement services; suicide attempts; outbreaks of communicable disease; significant physical plant damage) to the Department;
Patient rights under s. 51.61
, Stats., and ch. HFS 94
, Wis. Adm. Code; which allow specific children's rights, protections and grievance procedures;
Provisions allowing for inspections, complaint investigations and enforcement actions by the Department.
The Wisconsin Department of Health and Family Services is given authority to revise these rules in ss. 48.67
and in 227.11 (2) (a)