Securities Talks

Ohio-Division-of-SecuritiesBy Chris Hayes, FSI State Regulatory Affairs Counsel

The meetings continue! As part of FSI’s State Outreach Plan, I recently traveled to Ohio along with FSI members Lynn Goebel of ValMark Securities, Inc., Bill Pintaric of WRP Investment, Inc.  Joining us at our meeting with Ohio Securities Commissioner and NASAA Investment Adviser Section Chair Andrea Seidt were Mike Quinn, Seth Hertlein, Anne Followell, Janice Hitzeman, and Harvey McCleskey of the Ohio Securities Division.

We met in the Division’s office in downtown Columbus on a warm day, and began the conversation by introducing the members joining us to their state regulators. We spoke for a little while about the independent broker dealer business model and asked about the priorities of the Division as they would affect our industry. Commissioner Seidt explained that the Division is amending 25 different sections of the Ohio Securities Act, with a focus on licensing areas, to be potentially sent to the Ohio legislature later this year.

The review of the Ohio Securities Act would result in an update to the Act; the goal of the revision is to give the Act more clarity, thereby promoting efficiency and easier compliance from the broker dealer firms it regulates.  It would also implement a number of provisions in the Uniform Securities Act and would encourage uniformity among state “blue sky” laws. The amendments take into account recent court decisions (including the Evergreen securities fraud case) and respond to perceived concerns in the Ohio law. The changes would also tighten the definition of “dealers” and change select criminal prosecution elements of the Act to align more with Ohio’s theft statute. Additionally, new legislation would also take into account changes in federal regulation due to the JOBS and Dodd Frank Acts.

The Commissioner also gave us a brief overview of the Division’s efforts to decrease fraud through criminal charges (as opposed to administrative disciplinary action), and we talked about the need – both in Ohio and the country in general – for wider financial education and literacy, something we are both looking to further with our respective organizations. To this end, Commissioner Seidt extended an invitation (much welcomed!) to us to the upcoming annual conference of the Ohio Securities Division, which will be held this October.

Commissioner Seidt was very open to hearing from the industry and is receptive to our concerns about making rules clear, easy to follow, and seeing firms as a partner in efforts to carry out enforcement against bad actors. In short, a great meeting – FSI staff is looking forward to the conference in October, so stay tuned!

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