Summary
The rules are expected to result in only beneficial effects on small business because the rules only address a temporary increase in WHEDA bonding authority for single-family and multifamily housing activities.
Initial Regulatory Flexibility Analysis
Types of small businesses that will be affected by the rules
Businesses that receive payments from funds which become available because of the rules.
Reporting, bookkeeping and other procedures required for compliance with the rules
No new reporting, bookkeeping or other procedures are necessary for compliance with the rules.
Types of professional skills necessary for compliance with the rules
No new professional skills are necessary for compliance with the rules.
Rules have a significant economic impact on small businesses
No
Environmental Impact
In accordance with chapter Comm 1, the rules are a Type III action. A Type III action normally does not have the potential to cause significant environmental effects and normally does not involve unresolved conflicts in the use of available resources. The Department has reviewed these rules and finds no reason to believe that any unusual conditions exist. At this time, the Department has issued this notice to serve as a finding of no significant impact.
Fiscal Estimate
Summary
The rules are not expected to have a significant fiscal effect on the Department because they simply allocate new tax-exempt bonding authority of $175.4 million to the Wisconsin Housing and Economic Development Authority for calendar year 2008.
The rules are likewise not expected to impose any significant costs on the private sector.
State government fiscal impact
None
Local government fiscal impact
None
Long-range fiscal implications
None known
Submission of Written Comments
Interested persons are invited to appear at the hearing and present comments on the emergency rules. Persons making oral presentations are requested to submit their comments in writing, via e-mail. Persons submitting comments will not receive individual responses. The hearing record on this rulemaking will remain open until November 1, 2008, to permit submittal of written comments from persons who are unable to attend the hearing or who wish to supplement testimony offered at the hearing. E-mail comments should be sent to
srockweiler@commerce.state.wi.us. If e-mail submittal is not possible, written comments may be submitted to Sam Rockweiler, Department of Commerce, Division of Environmental and Regulatory Services, P.O. Box 14427, Madison, WI 53708-0427.
Copies of Emergency Rules
The emergency rules and an analysis of the rules are available on the Internet by entering “Comm 113" in the search engine at the following Web site:
http://adminrules.wisconsin.gov. Paper copies may be obtained without cost from Sam Rockweiler at the Department of Commerce, Division of Environmental and Regulatory Services, P.O. Box 14427, Madison, WI 53707, or at
srockweiler@commerce.state.wi.us, or at telephone (608) 266-0797. Copies will also be available at the public hearing.
Agency Contact Person
Tarna Gahan-Hunter, Wisconsin Department of Commerce, Bureau of Policy and Budget, P.O. Box 7970, Madison, WI, 53707-7970; telephone (608) 267-9382; e-mail
tarna.gahanhunter@wisconsin.gov.
Any inquiries for the small business regulatory coordinator for the Department of Commerce can be directed to Sam Rockweiler, as listed above.
Notice of Hearing
Financial Institutions - Securities
NOTICE IS HEREBY GIVEN that the Division of Securities of the Department of Financial Institutions will hold a public hearing to consider the adoption of emergency and permanent rules revising Chapters
DFI-Sec 4,
5 and
10, relating to making it a dishonest or unethical practice for securities licensees to make use of misleading designations or certifications purporting to demonstrate special expertise in the financial or retirement needs of seniors.
Hearing Information
The public hearing will be held:
Date and Time
|
Location
|
November 18, 2008
Tuesday
at 10:00 a.m.
|
Hearing Room
411 South, State Capitol
Madison
|
Analysis Prepared by the Department of Financial Institutions - Division of Securities
Statutes interpreted
Statutory authority
Plain language analysis
The rule-making procedures under Chapter
227 of the Wisconsin Statutes are being implemented for the purpose of adopting permanent rules to be in effect upon expiration of emergency rules issued by the Division on September 11, 2008 to protect seniors in Wisconsin from being misled through the use by securities licensees of designations and credentials that imply or represent that a person has special expertise, certification, or training in financial planning for seniors, but where such designations and/or credentials are either non-existent or do not involve significant education, testing, training or experience, and in reality are marketing ploys.
The Division's rulemaking is based on a “Model Rule On the Use of Senior-Specific Certifications and Professional Designations," developed by the North American Securities Administrators Association, Inc. ("NASAA Model Rule"), and adopted by the NASAA membership, including Wisconsin, with an effective date of April 1, 2008. The Wisconsin rule-making involves amending the list of “dishonest or unethical business practice" provisions applicable to broker-dealers, agents, investment advisers and investment adviser representatives to provide that the misleading use by licensees of senior designations or certifications -- as particularized in the rules -- can be a basis for denial, censure, suspension or revocation of a license.
Because the “senior designation/certification problem" is current and ongoing, and represents a serious source of potential harm for seniors in Wisconsin, the Division used the emergency rule-making procedures to adopt the NASAA Model Rule to be able to have such rule in place immediately to protect Wisconsin seniors, rather than using the regular, permanent rule-making process which requires a 5-6 month process to complete.
Additional justification for this rule-making action relates to the discussion in the following paragraphs which describes the need for acting on a uniform, Model NASAA Rule basis, and the involvement of U.S. Senator Herb Kohl who has expressed interest in this problem and has introduced federal legislation to promote action by individual states to adopt the uniform, NASAA Model Rule.
The background of the discovery by NASAA of the current and ongoing “senior designation" problem and development of the NASAA Model Rule began in 2004 when licensing examiners for the Securities Divisions in a number of states across the U.S., including Wisconsin, noted while conducting office examinations of securities professionals that some securities agents and advisers were using sets of various, new acronyms in their marketing materials. Such acronyms relate to numerous different certifications or designations to make it appear that the salesperson has special qualifications or specialized education in addressing the needs of senior citizens or retirees in areas of finance, financial planning, estate planning, or investing, and thus are used by those licensees to provide an edge in attracting seniors who are nearing retirement, or are in retirement, to become clients/customers.
Summary of the rule. The NASAA Model Rule being adopted in Wisconsin covers a broad array of practices. It prohibits licensees from using any non-existent or self-conferred certification. Also prohibited would be any designation that “indicates or implies a level of occupational qualification obtained through education, training, or experience" that the person doesn't actually have. Furthermore, the proposed rule would disallow designations obtained from organizations that are “primarily engaged in the business of instruction in sales and/or marketing." Additionally, reasonable standards for competency would be required, along with monitoring designees and minimum continuing-education standards. Also included is a listing of nationally recognized accrediting agencies whose accreditation of an organization would not be disqualified under the Model Rule.
Comparison with federal regulations
There currently are no federal statutes or regulations dealing with this specific issue. However, shortly after NASAA detected the misleading senior certifications/designations problem that was occurring on a multi-state basis, Senator Herb Kohl of Wisconsin, who chaired (and continues to chair) the US Senate Committee on Aging, called a series of hearings in 2006 on various aspects concerning older investors, one of the results of which was Senator Kohl's interest in creating federal legislation to limit the use of misleading certification/designations. However, based upon NASAA's intent to create a model rule for its members to adopt on a uniform basis throughout the states, the Senator instead drafted legislation that recognizes the need for developing a uniform, model rule, and which rewards individual states for adopting such a model rule. The legislation, S. 2794, the Senior Investor Protection Act of 2008, would establish a grant program under which a State may receive a grant of up to $100,000 per year if it has “adopted rules on the appropriate use of designations in the offer or sale of securities or investment advice, which … conform to the minimum requirements of the NASAA Model Rule."
Comparison with rules in adjacent states
Currently, no states adjacent to Wisconsin have adopted the NASAA Model Rule. However, the need for uniform treatment in dealing with the problem was highlighted by a few states who undertook separate rule-making actions using divergent approaches in 2007 (before the NASAA Model Rule was completed), thus creating difficulties for large securities firms with brokers and advisers across the country trying to comply with non-uniform approaches to the problem. Those firms, justifiably, have asked for a single, uniform rule that would make it possible to design systems to facilitate compliance throughout all state jurisdictions. Several non-adjacent states have already adopted the NASAA Model Rule, including Virginia, Washington, New Hampshire, Alabama and California.
Small Business Impact
Initial regulatory flexibility analysis
Types of small businesses that could be affected by the proposed rules
Broker-dealer and investment adviser registrants under the new Wisconsin Uniform Securities Law (
2007 Wisconsin Act 196) with fewer than 25 full-time employees who meet the other criteria of sec. 227.114 (l) (a), Wis. Stats. However, the proposed Prohibited Conduct rule provisions are made applicable equally to all broker-dealers and investment advisers -- irrespective of the size of the firm -- because the requirements involved are for the protection and benefit of Wisconsin customers of those firms. All Wisconsin customers of securities broker-dealers and investment advisers are entitled to the public investor protection benefits of such Prohibited Conduct rule requirements, irrespective of the size of the firm providing the securities services.
Reporting, bookkeeping and other procedures required for compliance with the rules
No new or additional reporting, bookkeeping, or other procedures are contained in the proposed rules.
Fiscal Estimate
State government fiscal impact
None
Local government fiscal impact
None
One-time revenue fluctuations
None
Long-range fiscal implications
None
Submission of Written Comments
Written comments in lieu of public hearing testimony may be submitted which must be received no later than the hearing date and should be addressed to the Administrator of the Division of Securities, 345 West Washington Avenue, PO Box 1768, Madison Wisconsin, 53701.
Copies of Proposed Rule and Agency Contact Person
A copy of the full text of the proposed rules and fiscal estimate may be obtained from:
Randall E. Schumann (608) 266-3414
Legal Counsel for the Division of Securities
Department of Financial Institutions
345 West Washington Avenue, 4th Floor
P. O. Box 1768
Madison, WI 53701
Notice of Hearing
Government Accountability Board
NOTICE IS HEREBY GIVEN that pursuant to ss.
5.05 (1) (f) and
227.11 (2) (a), Stats., and pursuant to a written request from Paul Malischke and more than 35 other electors of Wisconsin, the Government Accountability Board will hold a public hearing to consider adoption of a rule to repeal and recreate Chapter
GAB 5, Wis. Adm. Code, relating to ballot security.
Hearing Information
The public hearing will be held at the time and location shown below.
Date and Time
|
Location
|
November 11, 2008
at 9:30 a.m.
|
Board's offices
201 W. Washington Avenue
Madison
|
Analysis Prepared by the Government Accountability Board
Statutes interpreted
