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1998 Banking and Related Legislation

In 1998, the General Assembly enacted seven Department of Banking proposals into law. Brief summaries of these public acts are provided below. The summaries present certain key legal points for public information and do not represent complete statements of the law. Interested persons are advised to consult the official text of the various public acts and statutes. All references on this page are to sections and titles of the Connecticut General Statutes, unless otherwise noted.


S.S.B. 231, Public Act 98-65
An Act Concerning the Examination of Electronic Data Processing Servicers
(As Amended by Senate "A")

Effective: October 1, 1998

Statement of Purpose:
To require Connecticut banks that outsource electronic data processing services to enter into a written contract with such servicer pursuant to which the servicer will allow the Commissioner of Banking to examine its books, records and computer systems.

Previous Law:
Section 36a-17 allows the Banking Commissioner to make public and private investigations or examinations within or outside of Connecticut concerning any person subject to the jurisdiction of the Commissioner. Third parties who perform services for such persons were not subject to the Commissioner's jurisdiction and, therefore, were not subject to his examination authority.

Effect of S.B. 231:
This bill amended Section 36a-17 to require any Connecticut bank which uses an electronic data processing servicer to have a written contract with such servicer in which the servicer agrees to allow the Commissioner to examine its books, records and computer systems in accordance with subsection (b) of Section 36a-17, if required by the Commissioner, to enable the Commissioner to determine whether such servicer has the capacity to protect the Connecticut bank's customer information and to assess such servicer's potential for continued service. The amendment requires the bank to promptly send a copy of such contract to the Commissioner. The amendment allows the Commissioner to conduct such examination in accordance with subsection (b) of Section 36a-17 if the electronic data processing services specified in the contract substantially impact the operations of the Connecticut bank as determined by the Commissioner and to assess a fee of $150 per day plus costs for each examiner who conducts such examination of any such servicer, the total cost of which the Commissioner may allocate on a pro rata basis to all Connecticut banks under contract with such servicer.

Banking Commissioner's Position:
This was a Department of Banking proposal. As more banks outsource their electronic data processing to servicers who process the information into appropriate reporting formats for the banks' use and warehouse such data, it is imperative that the Banking Commissioner have the ability to examine such vital Connecticut bank support systems to assess whether the banks' data is being handled appropriately and whether the confidentiality of customer information in the hands of such servicers is being maintained. It is also vitally important for the Commissioner to have the authority to examine such servicers in order to ensure that banks are testing and implementing their "Year 2000" conversion programs, including computer code enhancements and revisions, hardware upgrades and associated changes.

H.B. 5277, Public Act 98-178
An Act Concerning Bank Investments
(As Amended by House "A")

Effective Date: October 1, 1998

Statement of Purpose:
To clarify that banks have the authority to purchase and sell coins and bullion and to clarify that the statutory definition of "debt securities" includes any security that has attributes similar to the marketable obligations specified in the definition.

Previous Law:
Previous law did not contain express statutory authority for Connecticut banks to purchase and sell coins or bullion.

The definition of "debt securities" in Section 36a-275(a), governing investments by Connecticut banks in debt securities and debt mutual funds, was limited to marketable obligations in the form of direct, assumed or guaranteed bonds, notes or debentures.

Effect of H.B. 5277:

Section 1.
This section amended Section 36a-250 to clarify that Connecticut banks may purchase and sell coins and bullion.

Section 2.
This section expanded the definition of "debt securities" in Section 36a-275 to include any security that has attributes similar to the obligations presently included in the definition.

Banking Commissioner's Position:
This was a Department of Banking proposal. The purchase and sale of coins and bullion is a traditional banking activity. However, Connecticut law, unlike the laws applicable to national banks and banks chartered by other states, such as New York, does not expressly provide banks with the authority to purchase and sell coins and bullion. This amendment would clarify that Connecticut banks have such authority. In addition, the amendment to the definition of "debt securities" would expand it to allow banks to invest in new, hybrid securities that have many of the attributes of traditional debt obligations, such as having a fixed term and a fixed rate rather than a floating rate. This would give banks a wider range of investment choices.

S.B. 235, Public Act 98-258
An Act Concerning Trust Companies

Effective Date: October 1, 1998

Statement of Purpose:
To authorize out-of-state trust companies to establish and maintain an office in Connecticut with the approval of the Commissioner of Banking and to give the commissioner regulatory authority over any such office.

Previous Law:
Section 36a-380, generally, prohibits corporations other than in-state banks and out-of-state banks with branches in Connecticut from exercising fiduciary powers in Connecticut.

Section 36a-381 exempts from the prohibition contained in Section 36a-380 any trust in real or personal property the trustee of which is a corporation acting pursuant to Section 45a-206 which authorizes foreign corporations to act as executor or trustee in Connecticut provided certain requirements are met.

Effect of S.B. 235:

Section 1.
This section amended Section 36a-2 to add a definition of "out-of-state trust company".

Section 2.
This section amended Section 36a-316 to change a statutory cross-reference.

Section 3.
This section amended Section 36a-381 to add an exemption for any trust the trustee of which is a corporation acting pursuant to Section 5 of the bill.

Section 4.
This section amended Section 36a-596 to change a statutory cross-reference.

Section 5.
This section provides that any out-of-state trust company may, with the approval of the Commissioner, establish and maintain an office in Connecticut to act as a fiduciary or engage in a trust business in Connecticut, provided the laws of the state in which such trust company is chartered allow Connecticut trust companies and banks organized to function solely in a fiduciary capacity to establish such office in such state. It also sets forth the application requirements for such approval, including a minimum equity capital requirement of $2 million, as well as the approval standards for the application.

Section 6.
This section sets forth the bonding requirement for the officers and employees of the office in Connecticut of an out-of-state trust company.

Section 7.
This section authorizes the Commissioner to examine and investigate offices of out-of-state trust companies in Connecticut, enter into cooperative and information-sharing agreements, joint examinations or joint enforcement actions with other state or federal supervisory agencies regarding such offices, and require periodic reports regarding such out-of-state trust companies.

Section 8.
This section requires each out-of-state trust company with an office in Connecticut to give the Commissioner prior notice of any merger, consolidation or other change of control of such trust company, any transfer of all or substantially all of the trust accounts or trust assets of such trust company, or the closing or disposition of any office in Connecticut.

Banking Commissioner's Position:
This was a Department of Banking proposal. Current law generally prohibits nonbank out-of-state trust companies from opening offices or engaging in fiduciary activities in Connecticut. Although Section 45a-206 permits foreign corporations to act as an executor and trustee in Connecticut, provided certain requirements are met, it does not appear to allow such corporations to engage in a broad range of fiduciary activities, or to do so through offices in Connecticut. The bill is intended to encourage out-of-state trust companies to open offices in Connecticut and, in order to protect Connecticut customers of such trust companies, it gives the Commissioner regulatory authority over such offices. Moreover, it is important to note that the Office of Thrift Supervision has taken the position that federal savings associations may set up unlicensed interstate operating subsidiaries to provide trust services. This bill would give out-of-state persons that wish to establish a trust office in Connecticut another option besides the federal thrift charter.

H.B. 5280, Public Act 98-260
An Act Concerning Bank Applications
(As Amended by House "A")

Effective Date: October 1, 1998

Statement of Purpose:
To authorize the Commissioner of Banking to grant extensions of temporary certificates of authority for Connecticut banks in organization; to delete the requirements that evidence of certain approvals be obtained by the commissioner prior to the commissioner's approval of mergers and conversions; and to give the commissioner authority to hold a hearing in connection with any application filed with the commissioner and with respect to any matter within the commissioner's jurisdiction.

Previous Law:
Section 36a-70(i) authorizes the approving authority to issue a temporary certificate of authority valid for 18 months to the organizers of a proposed Connecticut bank, and upon application of the organizers prior to the termination of the 18 months for which the temporary certificate of authority is valid, to extend the period for which the temporary certificate is valid.

Section 36a-125, which governs the merger or consolidation of Connecticut banks, requires the Commissioner to obtain evidence of shareholder approval and federal approvals of the transaction prior to approving any given transaction.

Sections 36a-135, 36a-136, 36a-137 and 36a-138 which, respectively, govern the conversion of a mutual institution to another type of mutual institution, a mutual institution into a capital stock institution, a capital stock institution into another capital stock institution, and a capital stock institution into a mutual institution, require the Commissioner to determine that approvals needed for FDIC insurance have been obtained prior to approving the conversion. Section 36a-135 also authorizes the Commissioner, in his discretion, to hold a hearing on the plan of conversion.

Section 36a-185 gives the Commissioner discretion to hold a hearing in connection with the acquisition of the voting securities of a bank or holding company pursuant to Section 36a-184, and requires the Commissioner to hold a hearing if the bank or holding company whose securities are being acquired files a request for a hearing. The section sets forth the requirements and procedures relating to the hearing and the request for hearing.

Section 36a-192 requires the Commissioner to obtain evidence of shareholder and governing board approval and approvals needed for FDIC insurance prior to approving the merger step of the reorganization of mutual savings banks and savings and loan associations so as to form mutual holding companies.

Section 4 of Public Act 97-209 authorizes the Commissioner to hold a hearing on the plan of expansion of a community bank that proposes to expand its powers and requires the Commissioner to determine that approvals needed for FDIC insurance have been obtained prior to approving the expansion.

Section 5 of Public Act 97-209 authorizes the Commissioner to hold a hearing on the plan of conversion of a credit union proposing to convert to a bank.

Effect of H.B. 5280:

Section 1.
This section amended Section 36a-70(i) to give the Commissioner the authority to approve an extension of the period for which a temporary certificate of authority for an organizing Connecticut bank is valid.

Section 2.
This section retains the requirements of shareholder approval and FDIC insurance for bank mergers and consolidations, but amends Section 36a-125(f) to delete the requirement that the Commissioner receive a certification that the agreement of merger or consolidation has been approved by shareholders and notification that all federal approvals have been obtained prior to approving the transaction.

Section 3.
This section amended Section 36a-135 to delete the provisions authorizing the Commissioner to hold a hearing. The section also requires that the converted institution shall not commence business unless it is insured by the FDIC, but deletes the requirement that the Commissioner determine that approvals needed for FDIC insurance have been obtained prior to approving the conversion.

Section 4.
This section amended Section 36a-136(j) to require that the converted institution shall not commence business unless it is insured by the FDIC, but deletes the requirement that the Commissioner determine that approvals needed for FDIC insurance have been obtained prior to approving the conversion.

Section 5.
This section amended Section 36a-137 to delete the provisions authorizing the Commissioner hold a hearing. The section also requires that the converted bank shall not commence business unless it is insured by the FDIC, but deletes the requirement that the Commissioner determine that approvals needed for FDIC insurance have been obtained prior to approving the conversion.

Section 6.
This section amended Section 36a-138(c) to require that the converted institution shall not commence business unless it is insured by the FDIC, but deletes the requirement that the Commissioner determine that approvals needed for FDIC insurance have been obtained prior to approving the conversion.

Section 7.
This section amended Section 36a-185 to delete the requirements relating to a public hearing and adds, instead, a cross-reference to the hearing requirements set forth in Section 11 of the bill.

Section 8.
This section amended Section 36a-192(b) to delete the requirement that the Commissioner obtain a certification that the merger agreement has been approved by the shareholders and the governing board and notification that approvals needed for FDIC insurance have been obtained and that any waiting period prescribed by federal law has expired, prior to approving the merger.

Section 9.
This section amended Section 4 of Public Act 97-209 to delete the provisions authorizing the Commissioner to hold a hearing and requiring the Commissioner to determine that approvals needed for FDIC insurance have been obtained prior to approving an expansion of powers of a community bank.

Section 10.
This section amended Section 5 of Public Act 97-209 to delete the provision authorizing the Commissioner to hold a hearing.

Section 11.
This section gives the Commissioner the discretion to hold a hearing in connection with any application filed with the Commissioner and with respect to any matter within the Commissioner's jurisdiction. It also sets forth the provisions relating to hearings that are currently found in Section 36a-185.

Banking Commissioner's Position:
This was a Department of Banking proposal. Allowing the Banking Commissioner to approve the extension of temporary certificates of authority streamlines the procedure for the granting of such extensions. Current law prohibits the Commissioner from approving bank transactions until he obtains certification of shareholder approval of the transaction, notification that federal approvals have been obtained, and evidence that approvals for FDIC insurance have been obtained. This presents an obvious problem in certain transactions where the FDIC will not issue its approval until the Commissioner has approved the transaction. The bill gives the Commissioner flexibility with respect to coordinating his approval of mergers and conversions with that of federal regulators. Finally the bill expands the Commissioner's authority to hold hearings in connection with applications and other matters and consolidates into one section hearing provisions that are currently found in several statutes. 

S.S.B. 230, Public Act 98-192
An Act Concerning Electronic Payment Instruments and Currency and Foreign Transactions Reporting
(As Amended by Senate "A", "B")

Effective Date: October 1, 1998

Statement of Purpose:
To make electronic payment instruments subject to regulation by the Commissioner of Banking, to provide a bonding and net worth requirement for issuers of electronic payment instruments and money forwarders; to provide that any required bond shall remain available for two years after the person ceases doing business in this state; and to require check cashing, money order, travelers check, electronic payment instrument and money forwarder licensees to comply with the applicable provisions of the federal Currency and Foreign Transactions Reporting Act.

Previous Law:
Section 36a-3 contains cross-references to terms that are defined in various provisions of Title 36a.

Section 36a-586 does not require check cashing licensees to comply with anti-money laundering laws.

Sections 36a-595 to 36a-610, the Money Order and Travelers Check Licensees Act, does not contemplate or address issuers of electronic payment instruments.

Section 36a-598 requires an applicant for a license to specify whether the applicant will engage in the money order or travelers check business.

Section 36a-599 does not require applicants for a license to issue Connecticut instruments or to engage in the business of receiving money for transmitting the same to pay an investigation fee.

Section 36a-602 establishes a bonding requirement for applicants for a license or licensee who issues Connecticut instruments but does not require such bonds to be maintained after such licensees cease to do business in Connecticut.

Section 36a-604 establishes a net worth requirement for any licensee which issues Connecticut instruments which are travelers checks, but has no similar net worth requirement for any licensee that engages in the business of receiving money for transmitting the same.

Effect of S.B. 230:

Section 1.
This section amended Section 36a-3 to add a cross-reference to the definition of "electronic payment instrument" contained in Section 3 of this bill.

Section 2.
This section added a new subsection (c) to Section 36a-586 to impose a new requirement on check cashing licensees under Connecticut law to comply with applicable provisions of the federal Currency and Foreign Transactions Reporting Act, 31 USC Section 5311 et seq., and its implementing regulations.

Section 3.
This section added a definition for the term "electronic payment instrument" to Section 36a-596; includes such instruments in the existing definition of "instruments"; and specifically excludes such instruments from the existing definition of "money order".

This section also clarifies that any instrument is outstanding if, among other things, it has not yet been paid by the issuer.

Section 4.
This section amended Section 36a-598 to add a requirement for applicants for a license under Sections 36a-595 to 36a-610, inclusive, to specify in their application whether they will engage in the money order, travelers check or electronic payment instrument business, or whichever of such businesses.

Section 5.
This section amended Section 36a-599(a) to add a requirement that each application for an original or renewal license under the Money Order and Travelers Check Licensees Act be accompanied by a nonrefundable investigation fee of $500 to conform the subsection with Section 36a-600(a) which requires applicants to pay an investigation fee.

Section 6.
This section amended Section 36a-602(a) to add a bonding requirement for licensees that engage in the business of money forwarders and to add a requirement that any bond required to be maintained by a money order, travelers check, electronic payment instrument and money forwarder licensee remain in place for two years after such licensee ceases to engage in business in Connecticut.

Section 7.
This section amended Section 36a-604 to establish a net worth requirement of at least $1 million for licensees who issue electronic payment instruments and at least $500,000 for licensees who engage in the money forwarder business.

Section 8.

This section imposes a new requirement on money order, travelers check, electronic payment instrument and money forwarder licensees under Connecticut law to comply with the applicable provisions of the federal Currency and Foreign Reporting Act, 31 USC Section 5311 et seq., and its implementing regulations. The federal act and regulations require financial institutions, such as an issuer, seller or redeemer of traveler's checks or money orders, except as a selling agent exclusively, who do not sell more than $150,000 of such instruments within any given 30-day period, and a licensed transmitter of funds or other person engaged in the business of transmitting funds to, among other things, file a report with the Treasury Department of any exchange of currency or other payment or transfer by, through or to such financial institution which involves a transaction in currency of more than $10,000.

Banking Commissioner's Position:
This was a Department of Banking proposal. The explosive growth in electronic commerce and the increasing use of electronic payment instruments, such as electronic travelers checks and other prepaid instruments, exposes the consumers of such instruments to the potential for loss due to the insolvency of the issuers of such instruments or fraud. This bill will provide protection to consumers of electronic payment instruments by making issuers of such instruments subject to the Commissioner's jurisdiction and by imposing licensing, net worth and bonding requirements on such issuers. Since a Connecticut consumer may incur a loss after a money order, travelers check, electronic payment instrument or money forwarder licensee has ceased doing business in Connecticut, it would aid consumers seeking to recover such losses by requiring that any bond remain in place for two years after such licensee ceases to engage in business in Connecticut. The addition of the anti-money laundering provisions are necessary to give the Commissioner the jurisdiction to examine check cashing services, issuers of Connecticut instruments and money forwarder licensees and to determine whether such licensees are complying with existing currency and transaction reporting requirements, and to bring enforcement actions against those who are not in compliance. 

H.B. 5278, Public Act 98-161
An Act Concerning the Connecticut Business Opportunity Investment Act
(As Amended by House "A")

Effective Date: October 1, 1998

Statement of Purpose:
To permit the Commissioner of Banking to deem applications for business opportunity registration to be abandoned, with leave to reapply without prejudice, where the applicant fails to respond to any request for required information within sixty days of written notification by the commissioner.

Previous Law:
Under Section 36b-68, in order to dispose of an application for registration of a business opportunity which has been abandoned, the Banking Commissioner is required to issue a stop order denying effectiveness, provide opportunity for a hearing and issue written findings of fact and conclusions of law.

Effect of H.B. 5278:
This bill amends Section 36b-68 to permit the Commissioner to deem an application for registration of a business opportunity to be abandoned, without a hearing, if the applicant fails to respond to a request for required information within 60 days of written notification by the Commissioner. Abandonment shall not preclude the applicant from submitting a new application for registration.

Banking Commissioner's Position:
This was a Department of Banking proposal. The bill enables the Commissioner to dispose of abandoned business opportunity registration applications in an efficient and streamlined fashion. The Department of Banking often receives applications that are incomplete and which the applicant never completes even after being requested to do so. As a result, there is a back log of these applications which essentially have been abandoned. Current law requires the Department to go through a formal administrative proceeding and provide an opportunity for hearing in order to dispose of such applications. This amendment would allow the Department to dispose of these applications, after notifying the applicant of its intended action.

H.B. 5281, Public Act 98-162
An Act Concerning the Connecticut Uniform Securities Act
(As Amended by House "A")

Effective Date: October 1, 1998

Statement of Purpose:
To conform the definition of "investment adviser agent" to the federal definition of "investment adviser representative"; to substitute a notice requirement in lieu of the registration requirement for branch offices of federally registered investment advisers; to permit the Commissioner of Banking to deem any securities registration to be abandoned for failure to respond to a request for information; to clarify that all foreign securities approved for margin by the Board of Governors of the Federal Reserve System are exempt from registration; to limit use of the manual exemption to securities for which a trading market has been established; to exempt from registration transactions made pursuant to Securities and Exchange Commission Rule 701; to require persons subject to the jurisdiction of the commissioner to make records available to the commissioner and furnish access to areas where records may be located; to make a technical amendment to conform terminology relating to administrative fines; and to exempt Connecticut's securities laws from the preemptive effect of the Philanthropy Protection Act of 1995.

Previous Law:
Subdivision (10) of Section 36b-3 defines "investment adviser" for the purposes of the Connecticut Uniform Securities Act) (the "Act").

Subdivision (11) of Section 36b-3 defines "investment adviser agent" for the purpose of the Act.

Subsection (d) of Section 36b-6 currently requires registration of branch offices in Connecticut of all investment advisers as well as notification of acquisition or relocation of such offices and of engaging a new manager at such offices.

Under Section 36b-20, in order to dispose of a registration statement which has been abandoned, the Banking Commissioner is required to issue a stop order denying effectiveness, provide an opportunity for a hearing and issue written findings of fact and conclusions of law.

Section 36b-21 describes those securities and securities transactions that are exempt from the registration requirements of the Act.

Section 36b-26, which concerns the investigative powers of the Commissioner under the Act, does not require persons subject to the jurisdiction of the Commissioner to make records available to the Commissioner and furnish access to areas where records may be located.

Subsection (d) of Section 36b-27, which concerns the administrative powers of the Commissioner, uses the terms "administrative penalty" and "fine" interchangeably.

Effect of H.B. 5281:

Section 1.
This section amended subdivision (10) of Section 36b-3 to exclude investment adviser agents from the definition of "investment adviser".

Section 2.
This section amended subdivision (11) of Section 36b-3 to conform the definition of "investment adviser agent" to the federal definition of "investment adviser representative".

Section 3.
This section amended subsection (d) of Section 36b-6 to substitute a notice requirement in lieu of the current registration requirement for branch offices of federally registered investment advisers, deletes the requirement of notification to the Commissioner of such offices engaging a new manager, and makes the notification requirement for acquisition or relocation of such offices consistent with the notification of such information to the Securities and Exchange Commission.

Section 4.
This section amended Section 36b-20 to permit the Commissioner to deem a registration statement to be abandoned, without a hearing, if the applicant fails to respond to a request for required information within 60 days of written notification by the Commissioner and provides that abandonment shall not preclude the filing of a new registration statement.

Section 5.
This section amended subsection (a) of Section 36b-21 to clarify that all over-the-counter and foreign securities approved for margin by the Federal Reserve Board, that are not covered securities under federal law, and warrants on such securities, are exempt from registration.

Section 6.
This section amended subsection (b) of Section 36b-21 concerning exempt securities transactions to expand the type of information that must be contained in a securities manual under the manual exemption and to limit such exemption to securities that have been in the hands of the public for at least 90 days, where the security is sold at a price reasonably related to its current market price and the issuer has a class of equity securities listed on a national securities exchange or designated for trading on National Association of Securities Dealers Automated Quotation System. The section also exempts transactions made pursuant to Securities Exchange Commission Rule 701.

Section 7.
This section amended Section 36b-26 to require persons subject to the jurisdiction of the Commissioner to make records available to the Commissioner, in connection with any investigation, examination or proceeding under the Act, and furnish access to areas where records may be located. The section also requires a registered broker-dealer or investment adviser to provide the Commissioner with a listing of all records relating to its business.

Section 8.
This section amended Section 36b-27 to delete the term "civil penalty" and substitute the term "fine" in lieu thereof.

Section 9.
This section provides that the Philanthropy Protection Act of 1995 shall not preempt Connecticut's securities laws relating to registration or qualification and that such act shall not apply as a defense to any claim that any person, security interest or participation is subject to the Act.

Banking Commissioner's Position:
This was a Department of Banking proposal. The National Securities Markets Improvement Act of 1996 ("NSMIA") limits the state's ability to require registration of investment adviser representatives to those who have a place of business in Connecticut and prevents the state from regulating covered securities. Therefore, the Department needs to amend the definition of investment adviser agent to conform it to the federal definition of investment adviser representative, as well as amend the securities exemption provisions to exempt certain over-the-counter securities and warrants on such securities and covered warrants. Securities and Exchange Commission Rule 701 exempts from registration securities issued pursuant to a compensatory benefits plan and the bill's exemption for securities transactions made pursuant to Rule 701 would conform to federal law. Also in conformance to NSMIA, the bill provides for a notification instead of a filing requirement for branch offices of federally registered investment advisers. Currently, the manual exemption is too broad in that mere listing in a securities manual does not provide adequate information regarding the issuer, nor does it guarantee that the issuer is seasoned. The amendment to the manual exemption precluding the use of the exemption immediately after the completion of an initial public offering and imposing other requirements is aimed at ensuring that there is sufficient trading activity, and that a certain amount of information is available to the public. Several other states have a similar limitation on the use of the manual exemption. The amendment to Section 36b-20 streamlines the procedure for the disposition of applications which essentially have been abandoned. The amendment to Section 36b-26 enhances the enforcement powers of the Commissioner by providing him access to the records of persons subject to his jurisdiction. Section 36b-27(d) currently uses the terms "fine" and "civil penalty" interchangeably. The bill corrects this inconsistency. The Philanthropy Protection Act of 1995 exempts from state registration requirements securities or interests of participation in any pooled income fund, collective trust fund, collective investment fund or similar fund maintained by a charitable organization for certain specified purposes. It also provides that no charitable organization, any trustee, director, officer, employee or volunteer of a charitable organization acting within the scope of such person's employment or duties shall be required to register as, or be subject to regulation as, a dealer, broker, agent or investment adviser under the securities laws of any state. The act gives states three years from December 8, 1995, to enact a law providing that the above-described provisions do not preempt state securities laws. The bill preserves Connecticut's securities laws by exempting Connecticut from the preemptive effect of the Philanthropy Protection Act of 1995.


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