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| Public Act 101-0563
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| SB1758 Enrolled | LRB101 10278 AMC 55383 b |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Consumer Installment Loan Act is amended by |
changing Section 15 as follows:
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(205 ILCS 670/15) (from Ch. 17, par. 5415)
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Sec. 15. Charges permitted.
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(a) Every licensee may
lend a principal amount not |
exceeding $40,000 and, except as to small consumer loans as |
defined in this Section, may charge,
contract for
and receive |
thereon interest at an annual percentage rate of no more than |
36%, subject to the provisions of this Act; provided, however, |
that the limitation on the annual percentage rate contained in |
this subsection (a) does not apply to title-secured loans, |
which are loans upon which interest is charged at an annual |
percentage rate exceeding 36%, in which, at commencement, an |
obligor provides to the licensee, as security for the loan, |
physical possession of the obligor's title to a motor vehicle, |
and upon which a licensee may charge, contract for, and receive |
thereon interest at the rate agreed upon by the licensee and |
borrower. For purposes of this Section, the annual percentage |
rate shall be calculated in accordance with the federal Truth |
in Lending Act.
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(b) For purpose of this Section, the following terms shall |
have the
meanings ascribed herein.
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"Applicable interest" for a precomputed loan contract |
means the amount of
interest attributable to each monthly |
installment period. It is computed
as if each installment |
period were one month and any interest charged for
extending |
the first installment period beyond one month is ignored. The
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applicable interest for any monthly installment period is, for |
loans other than small consumer loans as defined in this |
Section, that portion of
the precomputed interest that bears |
the same ratio to the total precomputed
interest as the |
balances scheduled to be outstanding during that month bear
to |
the sum of all scheduled monthly outstanding balances in the |
original
contract. With respect to a small consumer loan, the |
applicable interest for any installment period is that portion |
of the precomputed monthly installment account handling charge |
attributable to the installment period calculated based on a |
method at least as favorable to the consumer as the actuarial |
method, as defined by the federal Truth in Lending Act.
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"Interest-bearing loan" means a loan in which the debt is
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expressed as a principal amount plus interest charged on actual |
unpaid
principal balances for the time actually outstanding.
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"Precomputed loan" means a loan in which the debt is |
expressed as the sum
of the original principal amount plus |
interest computed actuarially in
advance, assuming all |
payments will be made when scheduled.
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"Small consumer loan" means a loan upon which interest is |
charged at an annual percentage rate exceeding 36% and with an |
amount financed of $4,000 or less. "Small consumer loan" does |
not include a title-secured loan as defined by subsection (a) |
of this Section or a payday loan as defined by the Payday Loan |
Reform Act. |
"Substantially equal installment" includes a last |
regularly scheduled payment that may be less than, but not more |
than 5% larger than, the previous scheduled payment according |
to a disclosed payment schedule agreed to by the parties. |
(c) Loans may be interest-bearing or precomputed.
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(d) To compute time for either interest-bearing or |
precomputed loans for
the calculation of interest and other |
purposes, a month shall be a calendar
month and a day shall be |
considered 1/30th of a month when calculation is
made for a |
fraction of a month. A month shall be 1/12th of a year. A
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calendar month is that period from a given date in one month to |
the same
numbered date in the following month, and if there is |
no same numbered
date, to the last day of the following month. |
When a period of time
includes a month and a fraction of a |
month, the fraction of the month is
considered to follow the |
whole month. In the alternative, for
interest-bearing loans, |
the licensee may charge interest at the rate of
1/365th of the |
agreed annual rate for each day actually
elapsed.
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(d-5) No licensee or other person may condition an |
extension of credit to a consumer on the consumer's repayment |
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by preauthorized electronic fund transfers. Payment options, |
including, but not limited to, electronic fund transfers and |
Automatic Clearing House (ACH) transactions may be offered to |
consumers as a choice and method of payment chosen by the |
consumer. |
(e) With respect to interest-bearing loans:
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(1) Interest shall be computed on unpaid principal |
balances outstanding
from time to time, for the time |
outstanding, until fully paid. Each
payment shall be |
applied first to the accumulated interest and the
remainder |
of the payment applied to the unpaid principal balance; |
provided
however, that if the amount of the payment is |
insufficient to pay the
accumulated interest, the unpaid |
interest continues to accumulate to be
paid from the |
proceeds of subsequent payments and is not added to the |
principal
balance.
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(2) Interest shall not be payable in advance or |
compounded. However, if
part or all of the consideration |
for a new loan contract is the unpaid
principal balance of |
a prior loan, then the principal amount payable under
the |
new loan contract may include any unpaid interest which has |
accrued.
The unpaid principal balance of a precomputed loan |
is the balance due
after refund or credit of unearned |
interest as provided in paragraph (f),
clause (3). The |
resulting loan contract shall be deemed a new and separate
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loan transaction for all purposes.
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(3) Loans must be fully amortizing and be repayable in |
substantially equal and consecutive weekly, biweekly, |
semimonthly, or monthly installments. Notwithstanding this |
requirement, rates may vary according to an
index that is |
independently verifiable and beyond the control of the |
licensee.
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(4) The lender or creditor may, if the contract |
provides, collect a
delinquency or collection charge on |
each installment in default for a period of
not less than |
10 days in an amount not exceeding 5% of the installment on
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installments in excess of $200, or $10 on installments of |
$200 or less, but
only
one delinquency and collection |
charge may be collected on any installment
regardless of |
the period during which it remains in default.
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(f) With respect to precomputed loans:
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(1) Loans shall be repayable in substantially equal and |
consecutive weekly, biweekly, semimonthly, or
monthly |
installments of principal and interest combined, except |
that the
first installment period may be longer than one |
month by not more than 15
days, and the first installment |
payment amount may be larger than the
remaining payments by |
the amount of interest charged for the extra days;
and |
provided further that monthly installment payment dates |
may be omitted
to accommodate borrowers with seasonal |
income.
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(2) Payments may be applied to the combined total of |
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principal and
precomputed interest until the loan is fully |
paid. Payments shall be
applied in the order in which they |
become due, except that any insurance
proceeds received as |
a result of any claim made on any insurance, unless
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sufficient to prepay the contract in full, may be applied |
to the unpaid
installments of the total of payments in |
inverse order.
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(3) When any loan contract is paid in full by cash, |
renewal or
refinancing, or a new loan, one month or more |
before the final installment
due date, a licensee shall |
refund or credit the obligor with
the total of
the |
applicable interest for all fully unexpired installment |
periods, as
originally scheduled or as deferred, which |
follow the day of prepayment;
provided, if the prepayment |
occurs prior to the first installment due date,
the |
licensee may retain 1/30 of the applicable interest for a |
first
installment period of one month for each day from the |
date of the loan to
the date of prepayment, and shall |
refund or credit the obligor
with the
balance of the total |
interest contracted for. If the maturity of the loan
is |
accelerated for any reason and judgment is entered, the |
licensee shall
credit the borrower with the same refund as |
if prepayment in full had been
made on the date the |
judgement is entered.
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(4) The lender or creditor may, if the contract |
provides, collect a
delinquency or collection charge on |
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each installment in default for a period of
not less than |
10 days in an amount not exceeding 5% of the installment on
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installments in excess of $200, or $10 on installments of |
$200 or less, but
only
one delinquency or collection charge |
may be collected on any installment
regardless of the |
period during which it remains in default.
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(5) If the parties agree in writing, either in the loan |
contract or in a
subsequent agreement, to a deferment of |
wholly unpaid installments, a
licensee may grant a |
deferment and may collect a deferment charge as
provided in |
this Section. A deferment postpones the scheduled due date |
of
the earliest unpaid installment and all subsequent |
installments as
originally scheduled, or as previously |
deferred, for a period equal to the
deferment period. The |
deferment period is that period during which no
installment |
is scheduled to be paid by reason of the deferment. The
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deferment charge for a one month period may not exceed the |
applicable
interest for the installment period immediately |
following the due date of
the last undeferred payment. A |
proportionate charge may be made for
deferment for periods |
of more or less than one month. A deferment charge
is |
earned pro rata during the deferment period and is fully |
earned on the
last day of the deferment period. Should a |
loan be prepaid in full during
a deferment period, the |
licensee shall credit to the obligor a
refund of the |
unearned deferment charge in addition to any other refund |
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or
credit made for prepayment of the loan in full.
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(6) If two or more installments are delinquent one full |
month or more on
any due date, and if the contract so |
provides, the licensee may reduce the
unpaid balance by the |
refund credit which would be required for prepayment
in |
full on the due date of the most recent maturing |
installment in default.
Thereafter, and in lieu of any |
other default or deferment charges, the
agreed rate of |
interest or, in the case of small consumer loans, interest |
at the rate of 18% per annum, may be charged on the unpaid |
balance until fully paid.
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(7) Fifteen days after the final installment as |
originally scheduled or
deferred, the licensee, for any |
loan contract which has not previously been
converted to |
interest-bearing under paragraph (f), clause (6), may |
compute
and charge interest on any balance remaining |
unpaid, including unpaid
default or deferment charges, at |
the agreed rate of interest or, in the case of small |
consumer loans, interest at the rate of 18% per annum, |
until fully
paid. At the time of payment of said final |
installment, the licensee shall
give notice to the obligor |
stating any amounts unpaid.
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(Source: P.A. 96-936, eff. 3-21-11.)
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Section 10. The Illinois Securities Law of 1953 is amended |
by changing Sections 2.11, 2.12b, 8, and 12 and by adding |
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Section 3.5 as follows:
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(815 ILCS 5/2.11) (from Ch. 121 1/2, par. 137.2-11)
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Sec. 2.11. Investment adviser. "Investment adviser" means |
any person
who, for compensation, engages in this State in the |
business of advising
others, either directly or through |
publications or writings, as to the
value of securities or as |
to the advisability of investing in, purchasing,
or selling |
securities or who, in this State for direct or indirect
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compensation and as part of a regular advisory business, issues |
or
promulgates analyses or reports concerning securities or any |
financial
planner or other person who, as an integral component |
of other financially
related services, provides the foregoing |
investment advisory services to
others for compensation and as |
part of a business, or who holds himself or
herself out as |
providing the foregoing investment advisory services to
others |
for compensation; but "investment adviser" does not include:
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(1) a bank or trust company, or the regular employees of a |
bank or trust
company;
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(2) any lawyer, accountant, engineer, geologist or teacher |
(i) whose
performance of such services is solely incidental to |
the practice of his
or her profession or (ii) who:
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(A) does not exercise investment discretion with |
respect to the
assets of clients or maintain custody of the |
assets of clients for the
purpose of investing those |
assets, except when the person is acting as a
bona fide |
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fiduciary in a capacity such as an executor, trustee, |
personal
representative, estate or trust agent, guardian, |
conservator, or person
serving in a similar fiduciary |
capacity;
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(B) does not accept or receive, directly or indirectly, |
any
commission, fee, or other remuneration contingent upon |
the purchase or sale
of any specific security by a client |
of such person; and
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(C) does not advise on the purchase or sale of specific |
securities,
except that this clause (C) shall not apply |
when the advice about specific
securities is based on |
financial statement analyses or tax considerations
that |
are reasonably related to and in connection with the |
person's profession;
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(3) any registered dealer or partner, officer, director or |
regular
employee of a registered dealer, or registered |
salesperson, whose
performance of these services, in each case, |
is solely incidental to the
conduct of the business of the |
registered dealer or registered salesperson,
as the case may |
be, and who receives no special compensation, directly or
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indirectly, for such services;
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(4) any publisher or regular employee of such publisher of |
a bona fide
newspaper, news magazine or business or financial |
publication of regular
and established paid circulation;
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(5) any person whose advice, analyses or reports relate |
only to
securities which are direct obligations of, or |
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obligations guaranteed as to
principal or interest by, the |
United States, any state
or any political subdivision of any |
state, or any public agency or
public instrumentality of any |
one or more of the foregoing;
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(5.5) any person who is a federal covered investment |
adviser; or
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(6) any other persons who are not within the intent of this |
Section as
the Secretary of State may designate by rules and |
regulations or order.
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(Source: P.A. 90-70, eff. 7-8-97.)
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(815 ILCS 5/2.12b) (from Ch. 121 1/2, par. 137.2-12b)
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Sec. 2.12b. Investment adviser representative. "Investment |
adviser
representative" means, with respect to an investment |
adviser who is required
to register under this Act, any |
partner, officer, director of (or a person
occupying a similar |
status or performing similar functions), or other
natural |
person employed by or associated with an investment adviser, |
except
clerical or ministerial personnel, who in this State:
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(1) makes any recommendations or otherwise renders |
advice regarding
securities or investment products;
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(2) manages accounts or portfolios of clients;
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(3) determines what recommendation or advice regarding |
securities or investments should
be given;
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(4) supervises any employee who performs any of the |
foregoing; or
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(5) solicits, refers, offers, or negotiates for the |
sale
of, or sells, investment advisory services.
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With respect to a federal covered investment adviser, |
"investment adviser
representative" means any person who is an |
investment adviser representative
with a place of business in |
this State as such terms are defined by the
Securities and |
Exchange Commission under Section 203A of the Federal 1940
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Investment Advisers Act.
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(Source: P.A. 90-70, eff. 7-8-97; 90-667, eff. 7-30-98; 91-809, |
eff.
1-1-01.)
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(815 ILCS 5/3.5 new) |
Sec. 3.5. Authority of Secretary of State. Notwithstanding |
any other law, the Secretary of State has the authority to |
enforce this Act as it pertains to the offer, sale, or |
investment advice concerning a covered security as defined by |
Section 2.29.
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(815 ILCS 5/8) (from Ch. 121 1/2, par. 137.8)
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Sec. 8. Registration of dealers, limited Canadian dealers, |
Internet portals,
salespersons, investment advisers, and |
investment adviser representatives.
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A. Except as otherwise provided in this subsection A, every |
dealer,
limited Canadian dealer, salesperson, investment |
adviser,
and investment adviser representative shall be |
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registered as such with the
Secretary of State. No dealer or |
salesperson need be registered as such when
offering or selling |
securities in transactions
exempted by subsection A, B, C, D, |
E, G, H, I, J, K, M, O, P, Q, R or S of
Section 4 of this Act, |
provided that such dealer or salesperson is not
regularly |
engaged in the business of offering or selling securities
in |
reliance
upon the exemption set forth in subsection G or M of |
Section 4 of this Act. No
dealer, issuer or controlling person |
shall employ a salesperson unless such
salesperson is |
registered as such with the Secretary of State or is employed
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for the purpose of offering or selling securities solely in
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transactions exempted by subsection A, B, C,
D, E, G, H, I, J, |
K, L, M, O, P, Q, R or S of Section 4 of this Act;
provided that |
such salesperson need not be registered when
effecting |
transactions in this State limited to those transactions |
described
in Section 15(h)(2) of the Federal 1934 Act or |
engaging in the
offer or sale of securities in respect of which |
he or she has beneficial
ownership and is a controlling person. |
The Secretary of State may, by
rule, regulation or order and |
subject to such terms, conditions, and
fees as
may be |
prescribed in such rule, regulation or order, exempt from the
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registration requirements of this Section 8 any investment |
adviser, if the
Secretary of State shall find that such |
registration is not necessary in
the public interest by reason |
of the small number of clients or otherwise
limited character |
of operation of such investment adviser.
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B. An application for registration as a dealer or limited |
Canadian
dealer, executed, verified, or
authenticated by or on |
behalf of the applicant,
shall be filed with the Secretary of |
State, in such form as the Secretary of
State may by rule, |
regulation or order prescribe, setting forth or accompanied
by:
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(1) The name and address of the applicant, the location |
of its principal
business office and all branch offices, if |
any, and the
date of its organization;
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(2) A statement of any other Federal or state licenses |
or
registrations
which have been granted the applicant and |
whether any such licenses or
registrations have ever been |
refused, cancelled, suspended, revoked or
withdrawn;
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(3) The assets and all liabilities, including |
contingent
liabilities of
the applicant, as of a date not |
more than 60 days prior to the filing of
the application;
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(4) (a) A brief description of any civil or criminal
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proceeding of which
fraud is an essential element pending |
against the applicant and whether the
applicant has ever |
been convicted of a felony, or of any misdemeanor of
which |
fraud is an essential element;
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(b) A list setting forth the name, residence and |
business address and
a 10 year occupational statement of |
each principal of the applicant and a
statement describing |
briefly any civil or criminal proceedings of which
fraud is |
an essential element pending against any such principal and |
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the
facts concerning any conviction of any such principal |
of a felony, or of
any misdemeanor of which fraud is an |
essential element;
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(5) If the applicant is a corporation: a list
of its |
officers and directors
setting forth the residence and |
business address of each; a 10-year
occupational statement |
of each such officer or director; and a
statement |
describing briefly any civil or criminal proceedings of |
which
fraud is an essential element pending against each |
such officer or
director and the facts concerning any |
conviction of any officer or director
of a felony, or of |
any misdemeanor of which fraud is an essential element;
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(6) If the applicant is a sole proprietorship, a |
partnership,
limited liability company, an unincorporated |
association or any similar
form of business organization:
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the name, residence and business address of the proprietor |
or of each
partner, member, officer, director, trustee or |
manager; the limitations, if
any, of the liability of each |
such individual; a 10-year occupational
statement of each |
such individual; a statement describing briefly any civil
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or criminal proceedings of which fraud is an essential |
element pending
against each such individual and the facts |
concerning any conviction of
any such individual of a |
felony, or of any misdemeanor of
which fraud is an |
essential element;
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(7) Such additional information as the Secretary of
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State may by rule or regulation prescribe as necessary to |
determine the
applicant's financial responsibility, |
business repute and qualification to
act as a dealer.
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(8) (a) No applicant shall be registered or |
re-registered as a
dealer or limited Canadian dealer
under |
this Section unless and until each principal of the dealer |
has
passed an examination conducted by the Secretary of |
State or a
self-regulatory organization of securities |
dealers or similar person, which
examination has been |
designated by the Secretary of State by rule,
regulation or |
order to be satisfactory for purposes of determining |
whether
the applicant has sufficient knowledge of the |
securities business and laws
relating thereto to act as a |
registered dealer. Any dealer who was
registered on |
September 30, 1963, and has continued to be so registered;
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and any principal of any registered dealer, who was acting |
in such capacity
on and continuously since September 30, |
1963; and any individual who has
previously passed a |
securities dealer examination administered by the
|
Secretary of State or any examination designated by the |
Secretary of State
to be satisfactory for purposes of |
determining whether the applicant has
sufficient knowledge |
of the securities business and laws relating thereto
to act |
as a registered dealer by rule, regulation or order, shall |
not be
required to pass an examination in order to continue |
to act in such
capacity. The Secretary of State may by |
|
order waive the examination
requirement for any principal |
of an applicant for registration under this
subsection B |
who has had such experience or education relating to the
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securities business as may be determined by the Secretary |
of State to be
the equivalent of such examination. Any |
request for such a waiver shall be
filed with the Secretary |
of State in such form as may be prescribed by rule
or |
regulation.
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(b) Unless an applicant is a member of the body |
corporate known as the
Securities Investor Protection |
Corporation established pursuant to the Act
of Congress of |
the United States known as the Securities Investor
|
Protection Act of 1970, as amended, a member of an |
association of
dealers registered as a national securities |
association pursuant to Section
15A of the Federal 1934 |
Act,
or a member of a self-regulatory organization or stock |
exchange in Canada
which the Secretary of State has |
designated by rule or order,
an applicant shall not be |
registered or
re-registered unless and until there is filed |
with the Secretary of State
evidence that such applicant |
has in effect insurance or other equivalent
protection for |
each client's cash or securities held by such applicant, |
and
an undertaking that such applicant will continually |
maintain such insurance
or other protection during the |
period of registration or re-registration.
Such insurance |
or other protection shall be in a form and amount |
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reasonably
prescribed by the Secretary of State by rule or |
regulation.
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(9) The application for the registration of a dealer or |
limited Canadian
dealer shall be
accompanied by a filing |
fee and a fee for each branch office in this State, in
each |
case in the amount established pursuant to Section 11a of |
this
Act, which fees shall not be returnable in any event.
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(10) The Secretary of State shall notify the dealer or |
limited Canadian
dealer by written notice (which may be by |
electronic or
facsimile transmission) of the effectiveness |
of the registration as a dealer in
this State.
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(11) Any change which renders no longer accurate any
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information
contained in any application for registration |
or re-registration of a
dealer or limited Canadian dealer |
shall be reported to the Secretary of
State within 10 |
business days
after the occurrence of such change; but in |
respect to assets and
liabilities only materially adverse |
changes need be reported.
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C. Any registered dealer, limited Canadian dealer, issuer, |
or
controlling person desiring to
register a salesperson shall |
file an application with the Secretary of
State, in such form |
as the Secretary of State may by rule or regulation
prescribe, |
which the salesperson is required by this Section to provide
to |
the dealer, issuer, or controlling person, executed, verified, |
or
authenticated by the salesperson setting forth or
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accompanied by:
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(1) the name, residence and business address of the |
salesperson;
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(2) whether any federal or State license or |
registration as dealer,
limited Canadian dealer, or |
salesperson has ever been refused the salesperson
or |
cancelled, suspended, revoked, withdrawn, barred, limited, |
or
otherwise adversely affected in a similar manner or |
whether the salesperson has
ever been censured or expelled;
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(3) the nature of employment with, and names and |
addresses of, employers
of the salesperson for the 10 years |
immediately preceding the date of
application;
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(4) a brief description of any civil or criminal |
proceedings of which
fraud is an essential element pending |
against the salesperson, and whether
the salesperson has |
ever been convicted of a felony, or of any misdemeanor
of |
which fraud is an essential element;
|
(5) such additional information as the Secretary of |
State may by rule,
regulation or order prescribe as |
necessary to determine the salesperson's
business repute |
and qualification to act as a salesperson; and
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(6) no individual shall be registered or re-registered |
as a
salesperson
under this Section unless and until such |
individual has passed an
examination conducted by the |
Secretary of State or a self-regulatory
organization of |
securities dealers or similar person, which examination |
|
has
been designated by the Secretary of State by rule, |
regulation or order to be
satisfactory for purposes of |
determining whether the applicant has
sufficient knowledge |
of the securities business and laws relating thereto
to act |
as a registered salesperson.
|
Any salesperson who was registered prior to September |
30, 1963, and has
continued to be so registered, and any |
individual who has passed a securities
salesperson
|
examination administered by the Secretary of State or an |
examination
designated by the Secretary of State by rule, |
regulation or order to be
satisfactory for purposes of |
determining whether the applicant has
sufficient knowledge |
of the securities business and laws relating thereto
to act |
as a registered salesperson, shall not be required to pass |
an
examination in order to continue to act as a |
salesperson. The Secretary of
State may by order waive the |
examination requirement for any applicant for
registration |
under this subsection C who has had such experience or
|
education relating to the securities business as may be |
determined by the
Secretary of State to be the equivalent |
of such examination. Any request
for such a waiver shall be |
filed with the Secretary of State in such form
as may be |
prescribed by rule, regulation or order.
|
(7) The application for registration of a salesperson |
shall be
accompanied
by a filing fee and a Securities Audit |
and Enforcement Fund fee, each
in the amount established |
|
pursuant to Section 11a of this Act, which shall
not be |
returnable in any event.
|
(8) Any change which renders no longer accurate any
|
information
contained in any application for registration |
or re-registration as a
salesperson shall be reported to |
the Secretary of State within 10 business
days after the |
occurrence of such change. If the activities are terminated
|
which rendered an individual a salesperson for the dealer, |
issuer or
controlling person, the dealer, issuer or |
controlling person, as the case
may be, shall notify the |
Secretary of State, in writing, within 30 days of
the |
salesperson's cessation of activities, using the |
appropriate termination
notice form.
|
(9) A registered salesperson may transfer his or her
|
registration
under this Section 8 for the unexpired term |
thereof from one registered
dealer or limited Canadian |
dealer to another by the giving of notice of the
transfer |
by the new
registered dealer or limited Canadian dealer to |
the Secretary of State in
such form and subject to
such |
conditions as the Secretary of State shall by rule or |
regulation
prescribe. The new registered dealer or limited |
Canadian dealer shall
promptly file an application
for |
registration of such salesperson as provided in this |
subsection C,
accompanied by the filing fee prescribed by |
paragraph (7) of this
subsection C.
|
|
C-5. Except with respect to federal covered investment |
advisers whose only
clients
are investment companies as defined |
in the Federal 1940 Act, other investment
advisers, federal |
covered investment advisers, or any similar person which the
|
Secretary of State may prescribe by rule or order, a federal |
covered investment
adviser shall file with the Secretary of |
State, prior to acting as a federal
covered investment adviser |
in this State, such documents as have been filed
with the |
Securities and Exchange Commission as the Secretary of State by |
rule
or order may prescribe. The notification of a federal |
covered investment
adviser shall be accompanied by a |
notification filing fee established pursuant
to Section 11a of |
this Act, which shall not be returnable in any event. Every
|
person acting as a federal covered investment adviser in this |
State shall file
a notification filing and pay an annual |
notification filing fee established
pursuant to Section 11a of |
this Act, which is not
returnable in any event. The failure to |
file any such notification shall
constitute a violation of |
subsection D of Section 12 of this Act, subject to
the |
penalties enumerated in Section 14 of this Act.
Until October |
10, 1999 or other date as may be legally permissible, a
federal |
covered investment adviser who fails to file the notification |
or
refuses to pay the fees as required by this subsection shall |
register as an
investment adviser with the Secretary of State |
under Section 8 of this
Act.
The civil remedies
provided for in |
subsection A of Section 13 of this Act and the civil remedies
|
|
of rescission and appointment of receiver, conservator, |
ancillary receiver, or
ancillary conservator provided for in |
subsection F of Section 13 of this Act
shall not be available |
against any person by reason of the failure to file any
such |
notification or to pay the notification fee or on account of |
the contents
of any such notification.
|
D. An application for registration as an investment |
adviser,
executed, verified, or authenticated by or on behalf |
of the applicant, shall be
filed with
the Secretary of State, |
in such form
as the Secretary of State may by rule or |
regulation prescribe, setting
forth or accompanied by:
|
(1) The name and form of organization under which the |
investment adviser
engages or intends to engage in |
business; the state or country and date of
its |
organization; the location
of the adviser's principal |
business office and branch offices, if any; the
names and |
addresses of the adviser's principal, partners, officers,
|
directors, and persons performing similar functions or, if |
the
investment adviser is an individual, of the individual; |
and the
number of the adviser's employees who perform |
investment advisory functions;
|
(2) The education, the business affiliations for the |
past 10 years, and
the present business affiliations of the |
investment adviser and of
the adviser's principal, |
partners, officers, directors, and persons
performing |
|
similar functions and of any person controlling the
|
investment adviser;
|
(3) The nature of the business of the investment |
adviser,
including the manner of giving advice and |
rendering analyses or reports;
|
(4) The nature and scope of the authority of the |
investment
adviser with respect to clients' funds and |
accounts;
|
(5) The basis or bases upon which the investment |
adviser is
compensated;
|
(6) Whether the investment adviser or any principal,
|
partner, officer, director, person performing similar |
functions or person
controlling the investment adviser (i) |
within 10 years of the
filing of the application has been |
convicted of a felony, or of
any misdemeanor of which fraud |
is an essential element, or (ii) is
permanently or |
temporarily enjoined by order or judgment from acting as an
|
investment adviser, underwriter, dealer, principal or |
salesperson, or
from engaging in or continuing any conduct |
or practice in connection with
any such activity or in |
connection with the purchase or sale of any
security, and |
in each case the facts relating to the conviction,
order or |
judgment;
|
(7) (a) A statement as to whether the investment |
adviser is
engaged or is to engage primarily in the |
business of rendering investment
supervisory services; and
|
|
(b) A statement that the investment adviser will |
furnish his,
her, or its clients with such information as |
the Secretary of State
deems necessary in the form |
prescribed by the
Secretary of State by rule or regulation;
|
(8) Such additional information as the Secretary of |
State may, by rule,
regulation or order prescribe as |
necessary to determine the applicant's
financial |
responsibility, business repute and qualification to act |
as an
investment adviser.
|
(9) No applicant shall be registered or re-registered |
as an investment
adviser under this Section unless and |
until each principal of the applicant
who is actively |
engaged in the conduct and management of the applicant's
|
advisory business in this State has passed an examination |
or completed an
educational program conducted by the |
Secretary of State or an association
of investment advisers |
or similar person, which examination or educational
|
program has been designated by the Secretary of State by |
rule, regulation
or order to be satisfactory for purposes |
of determining whether the
applicant has sufficient |
knowledge of the securities business and laws
relating |
thereto to conduct the business of a registered investment |
adviser.
|
Any person who was a registered investment adviser |
prior to September 30,
1963, and has continued to be so |
registered, and any individual who has
passed an investment |
|
adviser examination administered by the Secretary of
|
State, or passed an examination or completed an educational |
program
designated by the Secretary of State by rule, |
regulation or order to be
satisfactory for purposes of |
determining whether the applicant has
sufficient knowledge |
of the securities business and laws relating thereto
to |
conduct the business of a registered investment adviser, |
shall not be
required to pass an examination or complete an |
educational program in
order to continue to act as an |
investment adviser. The Secretary of State
may by order |
waive the examination or educational program requirement |
for any
applicant for registration under this subsection D |
if the principal
of the applicant who is actively engaged |
in the conduct and management of the
applicant's advisory |
business in this State has had such experience
or education |
relating to the securities business as may be determined by |
the
Secretary of State to be the equivalent of the |
examination or
educational program. Any request for a |
waiver shall be filed
with the Secretary of State in such |
form as may be prescribed by
rule or regulation.
|
(10) No applicant shall be registered or re-registered |
as an
investment adviser under this Section 8 unless the |
application for
registration or re-registration is |
accompanied by an application for
registration or |
re-registration for each person
acting as an investment |
adviser representative on
behalf of the adviser and
a |
|
Securities Audit and Enforcement Fund fee that shall not be |
returnable in any
event is paid with respect to each |
investment adviser representative.
|
(11) The application for registration of an investment |
adviser shall be
accompanied by a filing fee and a fee for |
each branch office in this State, in
each case in the |
amount established pursuant to Section 11a of this
Act, |
which fees shall not be returnable in any event.
|
(12) The Secretary of State shall notify the investment |
adviser by written
notice (which may be by electronic or |
facsimile transmission)
of
the effectiveness of the |
registration as an investment adviser in this State.
|
(13) Any change which renders no longer accurate any |
information contained
in any application for registration |
or re-registration of an investment adviser
shall be |
reported to the Secretary of State within 10 business days |
after the
occurrence of the change. In respect to assets |
and liabilities of
an investment adviser that retains |
custody of clients' cash or
securities or accepts |
pre-payment of fees in excess of $500 per client and
6 or |
more months in advance only materially adverse changes need |
be reported by
written notice (which may be by electronic |
or facsimile
transmission) no later
than the close of |
business on the second business day following the discovery
|
thereof.
|
(14) Each application for registration as an |
|
investment adviser shall
become effective automatically on |
the 45th day following the filing of the
application, |
required documents or information, and payment of the |
required
fee unless (i) the Secretary of State has |
registered the investment adviser
prior to that date or |
(ii) an action with respect to the applicant is
pending |
under Section 11 of this Act.
|
D-5. A registered investment adviser or federal covered |
investment adviser
desiring to register an investment adviser |
representative shall file an
application with the Secretary of |
State, in the form as the Secretary of State
may by rule or |
order prescribe, which the investment adviser representative |
is
required by this Section to provide to the investment |
adviser, executed,
verified, or authenticated by the |
investment adviser representative and setting
forth or |
accompanied by:
|
(1) The name, residence, and business address of the |
investment
adviser representative;
|
(2) A statement whether any federal or state license or |
registration as a
dealer, salesperson, investment adviser, |
or investment adviser representative
has ever been |
refused, canceled, suspended, revoked or withdrawn;
|
(3) The nature of employment with, and names and |
addresses of,
employers of the investment adviser |
representative for the 10 years immediately
preceding the |
|
date of application;
|
(4) A brief description of any civil or criminal |
proceedings, of which
fraud is an essential element, |
pending against the investment adviser
representative and |
whether the investment adviser representative has ever |
been
convicted of a felony or of any misdemeanor of which |
fraud is an essential
element;
|
(5) Such additional information as the Secretary of |
State may by rule or
order prescribe as necessary to |
determine the investment adviser
representative's business |
repute or qualification to act as an investment
adviser |
representative;
|
(6) Documentation that the individual has passed an |
examination conducted
by the Secretary of State, an |
organization of investment advisers, or similar
person, |
which examination has been designated by the Secretary of |
State by rule
or order to be satisfactory for purposes of |
determining whether the
applicant has sufficient knowledge |
of the investment advisory or securities
business and laws |
relating to that business to act as a registered investment
|
adviser representative; and
|
(7) A Securities Audit and Enforcement Fund fee |
established under
Section 11a of this Act, which shall not |
be returnable in any event.
|
The Secretary of State may by order waive the examination |
requirement for an
applicant for registration under this |
|
subsection D-5 who has had the experience
or education relating |
to the investment advisory or securities business as may
be |
determined by the Secretary of State to be the equivalent of |
the
examination. A request for a waiver shall be filed with the |
Secretary of State
in the form as may be prescribed by rule or |
order.
|
A change that renders no longer accurate any information |
contained in any
application for registration or |
re-registration as an investment adviser
representative must |
be reported to the Secretary of State within 10 business
days |
after the occurrence of the change. If the activities that |
rendered an
individual an investment adviser representative |
for the investment adviser are
terminated, the investment |
adviser shall notify the Secretary of State in
writing (which |
may be by electronic or facsimile transmission), within 30 days
|
of the investment adviser representative's termination, using |
the
appropriate termination notice form as the Secretary of |
State may prescribe by
rule or order.
|
A registered investment adviser representative may |
transfer his or her
registration under this Section 8 for the |
unexpired term of the registration
from one registered |
investment adviser to another by the giving of notice of
the |
transfer by the new investment adviser to the Secretary of |
State in the
form and subject to the conditions as the |
Secretary of State shall prescribe.
The new registered |
investment adviser shall promptly file an application for
|
|
registration of the investment adviser representative as |
provided in this
subsection, accompanied by the Securities |
Audit and Enforcement Fund fee
prescribed by paragraph (7) of |
this
subsection D-5.
|
E. (1) Subject to the provisions of subsection F of Section |
11 of
this Act, the registration of a dealer, limited Canadian |
dealer,
salesperson, investment adviser, or investment adviser
|
representative may be denied, suspended or revoked if the |
Secretary of State
finds that the dealer, limited Canadian |
dealer, Internet portal, salesperson,
investment adviser, or |
investment adviser representative or any
principal officer, |
director, partner, member, trustee, manager or any
person who |
performs a similar function of the dealer, limited Canadian
|
dealer, Internet portal, or investment adviser:
|
(a) has been convicted of any felony
during the 10 year |
period preceding the date of filing of any application for
|
registration or at any time thereafter, or of any |
misdemeanor of
which fraud is an essential element;
|
(b) has engaged in any unethical practice in connection |
with any
security, or in any fraudulent business practice;
|
(c) has failed to account for any money or property, or |
has failed to
deliver any security, to any person entitled |
thereto when due or within
a reasonable time thereafter;
|
(d) in the case of a dealer, limited Canadian dealer, |
or investment
adviser, is insolvent;
|
|
(e) in the case of a dealer, limited Canadian dealer,
|
salesperson, or registered principal of a dealer or
limited |
Canadian dealer
(i) has
failed
reasonably to supervise the
|
securities activities of any of its salespersons or other |
employees and the
failure
has permitted or facilitated a |
violation of Section 12 of this Act or (ii) is
offering or |
selling or has offered or sold securities in this
State |
through a salesperson other than a registered salesperson, |
or, in
the case of a salesperson, is selling or has sold |
securities in this State
for a dealer, limited Canadian |
dealer, issuer or controlling person with
knowledge that |
the
dealer, limited Canadian dealer, issuer or controlling |
person has not
complied with the provisions of
this Act
or |
(iii) has failed reasonably to supervise the
|
implementation of compliance measures following notice by
|
the Secretary of State of noncompliance with the Act or
|
with the regulations promulgated thereunder or both or (iv) |
has failed to
maintain and enforce written procedures to |
supervise the types of
business in which it engages and to |
supervise the activities of its
salespersons that are |
reasonably designed to achieve compliance with applicable
|
securities laws and regulations;
|
(f) in the case of an investment adviser, has failed |
reasonably to
supervise the advisory activities of any of |
its investment adviser
representatives or employees and |
the
failure has permitted or facilitated a violation of |
|
Section 12 of this Act;
|
(g) has violated any of the provisions of this Act;
|
(h) has made any material misrepresentation to the |
Secretary of State
in connection with any information |
deemed necessary by the Secretary of
State to determine a |
dealer's, limited Canadian dealer's, or investment
|
adviser's financial responsibility
or a dealer's, limited |
Canadian dealer's, investment adviser's,
salesperson's, or |
investment
adviser representative's business repute or
|
qualifications, or has refused to furnish any such |
information
requested by the Secretary of State;
|
(i) has had a license or registration under any Federal |
or State law
regulating securities, commodity futures
|
contracts,
or stock futures contracts refused, cancelled, |
suspended, withdrawn,
revoked, or otherwise
adversely |
affected in a similar manner;
|
(j) has had membership
in or
association with any |
self-regulatory
organization registered under the Federal |
1934 Act or the Federal 1974 Act
suspended, revoked, |
refused, expelled, cancelled, barred, limited in any
|
capacity, or
otherwise adversely affected in a similar |
manner
arising from any fraudulent or deceptive act or a |
practice in violation of
any rule, regulation or standard |
duly promulgated by the self-regulatory
organization;
|
(k) has had any order entered against it after notice |
and opportunity
for hearing by a securities agency of any |
|
state, any foreign government
or agency thereof, the |
Securities and Exchange Commission, or the Federal
|
Commodities Futures Trading Commission arising from any |
fraudulent or
deceptive act or a practice in violation of |
any statute, rule or regulation
administered or |
promulgated by the agency or commission;
|
(l) in the case of a dealer or limited Canadian dealer, |
fails to
maintain a minimum net capital
in an amount which |
the Secretary of State may by rule or regulation require;
|
(m) has conducted a continuing course of dealing of |
such
nature as to demonstrate an inability to properly |
conduct the business of
the dealer, limited Canadian |
dealer, salesperson, investment
adviser,
or investment |
adviser representative;
|
(n) has had, after notice and opportunity for hearing, |
any injunction or
order entered against it or license or |
registration refused, cancelled,
suspended, revoked, |
withdrawn, limited, or otherwise adversely
affected in a |
similar manner by any state or federal body,
agency or |
commission regulating banking, insurance, finance or small |
loan
companies, real estate or mortgage brokers or |
companies, if the
action resulted from any act found by the |
body, agency or
commission to be a fraudulent or deceptive |
act or practice in violation of
any statute, rule or |
regulation administered or
promulgated by the body, agency |
or commission;
|
|
(o) has failed to file a return, or to pay the tax, |
penalty or interest
shown in a filed return, or to pay any |
final assessment of tax, penalty or
interest, as required |
by any tax Act administered by the Illinois
Department of |
Revenue, until such time as the requirements of
that tax |
Act are satisfied;
|
(p) (blank);
|
(q) has failed to maintain the books and records |
required under this Act
or rules or regulations promulgated |
under this Act or under any requirements
established by the |
Securities and Exchange Commission or a self-regulatory
|
organization;
|
(r) has refused to allow or otherwise impeded designees |
of the Secretary
of
State from conducting an audit, |
examination, inspection, or investigation
provided for |
under Section 8 or 11 of this Act;
|
(s) has failed to maintain any minimum net capital or |
bond requirement set
forth in this Act or any rule or |
regulation promulgated under this Act;
|
(t) has refused the Secretary of State or his or her |
designee access to
any office or location within an office |
to conduct an investigation, audit,
examination, or |
inspection;
|
(u) has advised or caused a public pension fund or |
retirement system
established under the Illinois Pension |
Code to make an investment or engage in
a transaction not |
|
authorized by that Code;
|
(v) if a corporation, limited liability company, or |
limited liability
partnership has been suspended, |
canceled, revoked, or has failed to register as
a foreign
|
corporation, limited liability company, or limited |
liability partnership
with the Secretary
of State;
|
(w) is permanently or temporarily enjoined by any court |
of competent
jurisdiction, including any state, federal, |
or foreign government, from
engaging
in or continuing any |
conduct or practice involving any aspect of the securities
|
or commodities business or in any other business where the |
conduct or practice
enjoined involved investments, |
franchises, insurance, banking, or finance;
|
(2) If the Secretary of State finds that any registrant or |
applicant for
registration is no longer in existence or has |
ceased to do business as a
dealer, limited Canadian dealer, |
Internet portal, salesperson, investment
adviser, or |
investment adviser representative, or is subject to an
|
adjudication
as a person under legal disability or to the |
control of a
guardian, or cannot be located after reasonable |
search, or has failed
after written notice to pay to the |
Secretary of State any additional fee
prescribed by this |
Section or specified by rule or regulation, the Secretary of |
State may by order cancel the
registration or application.
|
(3) Withdrawal of an application for registration or |
withdrawal from
registration as a dealer, limited Canadian |
|
dealer, salesperson,
investment adviser, or investment adviser |
representative becomes effective
30 days after receipt of an |
application to withdraw or within such
shorter period of time |
as the Secretary of State may determine, unless any
proceeding |
is pending under Section 11 of this Act when the application is
|
filed or a proceeding is instituted within 30 days after the |
application is
filed. If a proceeding is pending or instituted, |
withdrawal becomes effective
at such time and upon such |
conditions as the Secretary
of State by order determines. If no |
proceeding is pending or instituted and
withdrawal |
automatically becomes effective, the Secretary of State may
|
nevertheless institute a revocation or suspension proceeding |
within 2
years after withdrawal became effective and enter a |
revocation or suspension
order as of the last date on which |
registration was effective.
|
F. The Secretary of State shall make available upon request |
the date
that each dealer, investment adviser, salesperson, or |
investment
adviser representative was granted
registration, |
together with the name and address of the dealer, limited
|
Canadian dealer, or issuer on
whose behalf the salesperson is |
registered, and all
orders of the Secretary of State denying or |
abandoning an application, or
suspending or revoking |
registration, or censuring the persons.
The Secretary of State |
may designate by rule, regulation or order the
statements, |
information or reports submitted to or filed with him or
her |
|
pursuant to this Section 8 which the Secretary of State |
determines are
of a sensitive nature and therefore should be |
exempt from public
disclosure. Any such statement, information |
or report shall be
deemed confidential and shall not be |
disclosed to the public except upon the
consent of the person |
filing or submitting the statement,
information or report or by |
order of court or in court proceedings.
|
G. The registration or re-registration of a dealer or |
limited Canadian
dealer and of all salespersons
registered upon |
application of the dealer or limited Canadian dealer shall
|
expire on the next
succeeding anniversary date of the |
registration or re-registration of the
dealer; and the |
registration or re-registration of an investment
adviser and of |
all investment adviser representatives registered upon
|
application of the investment adviser shall expire on the next |
succeeding
anniversary date of the
registration of the |
investment adviser; provided, that the
Secretary of State may |
by rule or regulation prescribe an alternate date which
any |
dealer registered under the Federal 1934 Act or a member of any
|
self-regulatory association approved pursuant thereto, a |
member of a
self-regulatory organization or stock exchange in |
Canada, or any investment
adviser may elect
as
the expiration |
date of its dealer or limited Canadian dealer and
salesperson |
registrations, or the expiration date of its investment adviser
|
registration, as the case may be. A
registration of a |
|
salesperson registered upon application of an issuer or
|
controlling person shall expire on the next succeeding |
anniversary date of
the registration, or upon termination or |
expiration of the
registration of the securities, if any, |
designated in the application for his
or her registration or |
the alternative date as the Secretary may prescribe by
rule or |
regulation. Subject to paragraph (9) of subsection C of this |
Section
8, a salesperson's registration also shall terminate |
upon cessation of his or
her employment, or termination of his |
or her appointment or authorization, in
each case by the person |
who applied for the salesperson's registration,
provided that |
the Secretary of State may by rule or regulation prescribe an
|
alternate date for the expiration of the registration.
|
H. Applications for re-registration of dealers, limited |
Canadian
dealers, Internet portals, salespersons, investment |
advisers, and investment
adviser representatives shall be |
filed with the Secretary of State prior
to the expiration of |
the then current registration and
shall
contain such |
information as may be required by the Secretary of
State upon |
initial application with such omission therefrom or
addition |
thereto as the Secretary of State may authorize or prescribe. |
Each
application for re-registration of a dealer, limited |
Canadian dealer, Internet portal, or
investment adviser
shall |
be accompanied by a filing fee, each application for
|
re-registration as a salesperson shall be accompanied by a |
|
filing fee and a
Securities Audit and Enforcement Fund fee |
established pursuant to Section
11a of this Act, and
each |
application for re-registration as an investment adviser |
representative
shall be accompanied by a Securities Audit and |
Enforcement Fund fee
established under Section 11a of this Act,
|
which shall not be returnable in any event. Notwithstanding
the |
foregoing, applications for
re-registration of dealers, |
limited Canadian dealers, Internet portals, and investment
|
advisers may be filed within 30 days
following the expiration |
of the registration provided that the applicant pays
the annual |
registration fee together with an additional amount equal to
|
the annual registration fee and files any other information or |
documents that
the Secretary of State may prescribe by rule
or |
regulation or order. Any application filed within 30 days |
following the
expiration of the registration shall be |
automatically effective as of the
time of the earlier |
expiration provided that the proper fee has been paid
to the |
Secretary of State.
|
Each registered dealer, limited Canadian dealer, Internet |
portal, or investment adviser
shall continue to be
registered |
if the registrant changes his, her, or its form of organization
|
provided that the dealer or investment adviser files an |
amendment to his,
her, or its application not later than 30 |
days following the occurrence of the
change and pays the |
Secretary of State a fee in the amount established under
|
Section 11a of this Act.
|
|
I. (1) (a) Every registered dealer, limited Canadian |
dealer, Internet portal, and investment
adviser shall make and |
keep
for such periods, such accounts, correspondence,
|
memoranda, papers, books and records as the Secretary of State |
may by rule or
regulation prescribe. All records so required |
shall be preserved for 3 years
unless the Secretary of State by |
rule, regulation or order prescribes otherwise
for particular |
types of records.
|
(b) Every registered dealer, limited Canadian dealer, |
Internet portal, and investment adviser shall provide to the |
Secretary of State, upon request, such accounts, |
correspondence, memoranda, papers, books, and records as the |
Secretary of State may by rule or regulation prescribe, that it |
possesses and that it preserves for periods of longer than 3 |
years. |
(2) Every registered dealer, limited Canadian dealer, |
Internet portal, and investment
adviser shall file such |
financial reports as the Secretary of State may by rule
or |
regulation
prescribe.
|
(3) All the books and records referred to in paragraph (1) |
of this
subsection I are subject at any time or from time to |
time to such
reasonable periodic, special or other audits, |
examinations, or inspections by
representatives of the |
Secretary of State, within or without this State, as the
|
Secretary of State deems necessary or appropriate in the public |
|
interest or for
the protection of investors.
|
(4) At the time of an audit, examination, or inspection, |
the Secretary of
State, by his or her designees, may
conduct an |
interview of any person employed or appointed by or
affiliated |
with a registered dealer, limited Canadian dealer, Internet |
portal, or investment
advisor, provided that the
dealer, |
limited Canadian dealer, Internet portal, or investment |
advisor shall be given
reasonable
notice of the time and place |
for the interview. At the option of the dealer,
limited |
Canadian dealer, Internet portal, or
investment advisor, a |
representative of the dealer or investment advisor with
|
supervisory responsibility over the individual being |
interviewed may be present
at the interview.
|
J. The Secretary of State may require by rule or regulation |
the
payment of an additional fee for the filing of information |
or documents
required to be filed by this Section which have |
not been filed in a timely
manner. The Secretary of State may |
also require by rule or regulation the
payment of an |
examination fee for administering any examination which it
may |
conduct pursuant to subsection B, C, D, or D-5 of this
Section |
8.
|
K. The Secretary of State may declare any application for
|
registration or limited registration
under this Section 8 |
abandoned by order if the applicant fails to pay any
fee or |
|
file any information or document required under this Section 8 |
or by
rule or regulation for more than 30 days after the |
required payment or
filing date. The applicant may petition the |
Secretary of State for a
hearing within 15 days after the |
applicant's receipt of the order of
abandonment, provided that |
the petition sets forth the grounds
upon which the applicant |
seeks a hearing.
|
L. Any document being filed pursuant to this Section 8 |
shall be deemed
filed, and any fee being paid pursuant to this |
Section 8 shall be deemed
paid, upon the date of actual receipt |
thereof by the Secretary of State or
his or her designee.
|
M. (Blank).
|
(Source: P.A. 99-182, eff. 1-1-16; 100-872, eff. 8-14-18.)
|
(815 ILCS 5/12) (from Ch. 121 1/2, par. 137.12)
|
Sec. 12. Violation. It shall be a violation of the |
provisions of
this Act for any person:
|
A. To offer or sell any security except in accordance |
with the provisions
of this Act.
|
B. To deliver to a purchaser any security required to |
be registered
under Section 5, Section 6 or Section 7 |
hereof unless accompanied or preceded
by a prospectus that |
meets the requirements of the pertinent subsection of
|
Section 5 or of Section 6 or of Section 7.
|
|
C. To act as a dealer, Internet portal, salesperson, |
investment adviser, or
investment adviser representative, |
unless
registered as such, where such registration is |
required, under the
provisions of this Act.
|
D. To fail to file with the Secretary of State any |
application,
report or document required to be filed under |
the provisions of this Act
or any rule or regulation made |
by the Secretary of State pursuant to
this Act or to fail |
to comply with the terms of any order of the
Secretary of |
State issued pursuant to Section 11 hereof.
|
E. To make, or cause to be made, (1) in any sworn |
testimony before the Secretary of State or the Illinois |
Securities Department within the Office of the Secretary, |
or application, report or
document filed under this Act or |
any rule or regulation made by the
Secretary of State |
pursuant to this Act, any statement which was false
or |
misleading with respect to any material fact or (2) any |
statement to
the effect that a security (other than a |
security issued by the State of
Illinois) has been in any |
way endorsed or approved by the Secretary of
State or the |
State of Illinois.
|
F. To engage in any transaction, practice or course of |
business in
connection with the sale or purchase of |
securities which works or tends
to work a fraud or deceit |
upon the purchaser or seller thereof.
|
G. To obtain money or property through the sale of |
|
securities by
means of any untrue statement of a material |
fact or any omission to
state a material fact necessary in |
order to make the statements made, in
the light of the |
circumstances under which they were made, not
misleading.
|
H. To sign or circulate any statement, prospectus, or |
other paper or
document required by any provision of this |
Act or pertaining to any
security knowing or having
|
reasonable grounds to know any material representation |
therein contained
to be false or untrue.
|
I. To employ any device, scheme or artifice to defraud |
in connection
with the sale or purchase of any security, |
directly or indirectly.
|
J. When acting as an investment adviser, investment |
adviser
representative, or federal covered investment |
adviser, by any means or
instrumentality, directly or |
indirectly:
|
(1) To employ any device, scheme or artifice to defraud |
any client
or prospective client;
|
(2) To engage in any transaction, practice, or |
course of business
which operates as a fraud or deceit |
upon any client or prospective
client; or
|
(3) To engage in any act, practice, or course of |
business which is
fraudulent, deceptive or |
manipulative. The Secretary of State shall for
the |
purposes of this paragraph (3), by rules and |
regulations, define and
prescribe means reasonably |
|
designed to prevent such acts, practices,
and courses |
of business as are fraudulent, deceptive, or |
manipulative.
|
K. When offering or selling any mineral investment |
contract or mineral
deferred delivery contract:
|
(1) To employ any device, scheme, or artifice to |
defraud any customer,
prospective customer, or |
offeree;
|
(2) To engage in any transaction, practice, or course |
of business that
operates as a fraud or deceit upon any |
customer, prospective customer, or
offeree; or
|
(3) To engage in any act, practice, or course of |
business that is
fraudulent, deceptive, or |
manipulative. The Secretary of State shall for
the |
purposes of this paragraph (3), by rules and |
regulations, define and
prescribe means reasonably |
designed to prevent acts, practices, and
courses of |
business as are fraudulent, deceptive, or |
manipulative.
|
L. To knowingly influence, coerce, manipulate, or |
mislead any person
engaged
in
the
preparation or audit of |
financial statements or appraisals to be used in the
offer |
or
sale of securities for the purpose of rendering such |
financial statements or
appraisals materially misleading.
|
(Source: P.A. 99-182, eff. 1-1-16.)
|
|
Section 15. The Payday Loan Reform Act is amended by |
changing Section 2-5 as follows:
|
(815 ILCS 122/2-5)
|
Sec. 2-5. Loan terms. |
(a) Without affecting the right of a consumer to prepay at |
any time without cost or penalty, no payday loan may have a |
minimum term of less than 13 days. |
(b) Except for an installment payday loan as defined in |
this Section,
no payday loan may be made to a consumer if the |
loan would result in the consumer being indebted to one or more |
payday lenders for a period in excess of 45 consecutive days. |
Except as provided under subsection (c) of this Section and |
Section 2-40, if a consumer has or has had loans outstanding |
for a period in excess of 45 consecutive days, no payday lender |
may offer or make a loan to the consumer for at least 7 |
calendar days after the date on which the outstanding balance |
of all payday loans made during the 45 consecutive day period |
is paid in full. For purposes of this subsection, the term |
"consecutive days" means a series of continuous calendar days |
in which the consumer has an outstanding balance on one or more |
payday loans; however, if a payday loan is made to a consumer |
within 6 days or less after the outstanding balance of all |
loans is paid in full, those days are counted as "consecutive |
days" for purposes of this subsection. |
(c) Notwithstanding anything in this Act to the contrary, a |
|
payday loan
shall also include any installment loan otherwise |
meeting the definition of
payday loan contained in Section |
1-10, but that has a term agreed by the
parties of not less |
than 112 days and not exceeding 180 days; hereinafter an
|
"installment payday loan". The following provisions shall |
apply:
|
(i) Any installment payday loan must be fully |
amortizing, with a finance
charge calculated on the |
principal balances scheduled to be outstanding and
be |
repayable in substantially equal and consecutive |
installments, according
to a payment schedule agreed by the |
parties with not less than 13 days and
not more than one |
month between payments; except that the first installment
|
period may be longer than the remaining installment periods |
by not more than
15 days, and the first installment payment |
may be larger than the remaining
installment payments by |
the amount of finance charges applicable to the
extra days. |
In calculating finance charges under this subsection, when |
the first installment period is longer than the remaining |
installment periods, the amount of the finance charges |
applicable to the extra days shall not be greater than |
$15.50 per $100 of the original principal balance divided |
by the number of days in a regularly scheduled installment |
period and multiplied by the number of extra days |
determined by subtracting the number of days in a regularly |
scheduled installment period from the number of days in the |
|
first installment period. |
(ii) An installment payday loan may be refinanced by a |
new installment
payday loan one time during the term of the |
initial loan; provided that the
total duration of |
indebtedness on the initial installment payday loan |
combined
with the total term of indebtedness of the new |
loan refinancing that initial
loan, shall not exceed 180 |
days. For purposes of this Act, a refinancing
occurs when |
an existing installment payday loan is paid from the |
proceeds of
a new installment payday loan. |
(iii) In the event an installment payday loan is paid |
in full prior to
the date on which the last scheduled |
installment payment before maturity is
due, other than |
through a refinancing, no licensee may offer or make a |
payday
loan to the consumer for at least 2 calendar days |
thereafter. |
(iv) No installment payday loan may be made to a |
consumer if the loan would
result in the consumer being |
indebted to one or more payday lenders for a
period in |
excess of 180 consecutive days. The term "consecutive days" |
does not include the date on which a consumer makes the |
final installment payment. |
(d) (Blank). |
(e) No lender may make a payday loan to a consumer if the |
total of all payday loan payments coming due within the first |
calendar month of the loan, when combined with the payment |
|
amount of all of the consumer's other outstanding payday loans |
coming due within the same month, exceeds the lesser of: |
(1) $1,000; or |
(2) in the case of one or more payday loans, 25% of the |
consumer's gross monthly income; or |
(3) in the case of one or more installment payday |
loans, 22.5% of the consumer's gross monthly income; or |
(4) in the case of a payday loan and an installment |
payday loan, 22.5% of the consumer's gross monthly income. |
No loan shall be made to a consumer who has an outstanding |
balance on 2 payday loans, except that, for a period of 12 |
months after March 21, 2011 (the effective date of Public Act |
96-936), consumers with an existing CILA loan may be issued an |
installment loan issued under this Act from the company from |
which their CILA loan was issued. |
(e-5) Except as provided in subsection (c)(i), no lender |
may charge more than $15.50 per $100 loaned on any payday loan, |
or more than $15.50 per $100 on the initial principal balance |
and on the principal balances scheduled to be outstanding |
during any installment period on any installment payday loan. |
Except for installment payday loans and except as provided in |
Section 2-25, this charge is considered fully earned as of the |
date on which the loan is made. For purposes of determining the |
finance charge earned on an installment payday loan, the |
disclosed annual percentage rate shall be applied to the |
principal balances outstanding from time to time until the loan |
|
is paid in full, or until the maturity date, whichever occurs |
first. No finance charge may be imposed after the final |
scheduled maturity date. |
When any loan contract is paid in full, the licensee shall |
refund any unearned finance charge. The unearned finance charge |
that is refunded shall be calculated based on a method that is |
at least as favorable to the consumer as the actuarial method, |
as defined by the federal Truth in Lending Act. The sum of the |
digits or rule of 78ths method of calculating prepaid interest |
refunds is prohibited. |
(f) A lender may not take or attempt to take an interest in |
any of the consumer's personal property to secure a payday |
loan. |
(g) A consumer has the right to redeem a check or any other |
item described in the definition of payday loan under Section |
1-10 issued in connection with a payday loan from the lender |
holding the check or other item at any time before the payday |
loan becomes payable by paying the full amount of the check or |
other item.
|
(h) For the purpose of this Section, "substantially equal |
installment" includes a last regularly scheduled payment that |
may be less than, but no more than 5% larger than, the previous |
scheduled payment according to a disclosed payment schedule |
agreed to by the parties. |
(Source: P.A. 100-201, eff. 8-18-17.)
|
