Bill Text: NY S04965 | 2019-2020 | General Assembly | Introduced


Bill Title: Requires individuals who perform compliance functions, duties or tasks to obtain a compliance officer or compliance practitioner license; establishes application and examination requirements to obtain, and continuing education requirements to maintain, licensure; and permits the superintendent to issue licensing procedures and to prescribe regulations necessary for the proper supervision of compliance officers and practitioners.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2019-04-02 - REFERRED TO BANKS [S04965 Detail]

Download: New_York-2019-S04965-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          4965
                               2019-2020 Regular Sessions
                    IN SENATE
                                      April 2, 2019
                                       ___________
        Introduced  by  Sens. SKOUFIS, SAVINO -- read twice and ordered printed,
          and when printed to be committed to the Committee on Banks
        AN ACT to amend the financial services law, in relation to a  compliance
          officer or compliance practitioner license
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. The financial services law is amended by adding a new arti-
     2  cle 7 to read as follows:
     3                                  ARTICLE 7
     4            COMPLIANCE OFFICER OR COMPLIANCE PRACTITIONER LICENSE
     5  Section 701. Definition.
     6          702. Applicability; license.
     7          703. License application.
     8          704. Written examination.
     9          705. Temporary license.
    10          706. Fees.
    11          707. License term; renewal.
    12          708. Continuing education requirements.
    13          709. Rules and regulations; authority of the superintendent.
    14    § 701. Definition. For purposes of this  article,  "compliance"  shall
    15  mean:  (a) drafting, evaluating, applying compliance or regulatory poli-
    16  cies and procedures; (b) designing, assessing or implementing compliance
    17  or  regulatory  controls  or  systems; and (c) supervising, surveilling,
    18  monitoring, reviewing, testing or reporting  non-compliance  or  miscon-
    19  duct.   For purposes of this article, compliance tasks, duties and func-
    20  tions shall be performed only by an  individual  licensed  or  otherwise
    21  authorized to perform such tasks, duties or functions under the title of
    22  compliance  officer,  regulatory officer, compliance supervisor, compli-
    23  ance practitioner, compliance analyst, compliance consultant, compliance
    24  counsel, compliance advisor,  regulatory  officer,  regulatory  manager,
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10943-01-9

        S. 4965                             2
     1  regulatory  supervisor,  regulatory  practitioner,  regulatory  analyst,
     2  regulatory consultant, regulatory counsel or regulatory advisor.
     3    §  702. Applicability; license. The superintendent may issue a compli-
     4  ance officer or compliance practitioner license to any individual who is
     5  trustworthy and competent to act as a compliance officer  or  compliance
     6  practitioner  in such manner as to safeguard the interests of the people
     7  of this state and who has complied with  all  of  the  requirements  set
     8  forth  in  this  article. The holder of a license under this section may
     9  act as a compliance officer or compliance practitioner without any other
    10  additional license. Every applicant for a  license  under  this  section
    11  shall  be twenty-one years of age or over at the time of the issuance of
    12  such license.
    13    § 703. License application. (a) Before a compliance officer or compli-
    14  ance practitioner license or renewal thereof  shall  be  issued  by  the
    15  superintendent, an applicant shall file in the office of the superinten-
    16  dent  a  written  application for such license or renewal thereof.  Such
    17  application shall be in the form and contain information that the super-
    18  intendent prescribes.
    19    (b) An individual signing such application  shall,  simultaneous  with
    20  such  application,  submit  to the superintendent fingerprints of his or
    21  her two hands recorded in such manner as may be specified by the  super-
    22  intendent or his or her authorized representative. Before approving such
    23  application,  it  shall  be the duty of the superintendent or his or her
    24  authorized representative to compare such fingerprints with fingerprints
    25  filed with the division of criminal justice services. Such  fingerprints
    26  may  also  be  submitted  to  the  federal bureau of investigation for a
    27  national criminal history record check.
    28    (c) No such license shall be issued to any  individual  who  has  ever
    29  been convicted of a felony, or of any crime or offense involving fraudu-
    30  lent  or  dishonest  practices nor shall a compliance officer or practi-
    31  tioner licensed under this article be employed if  such  individual  has
    32  ever been convicted of a felony, or of any such crime or offense.
    33    (d)  Nothing contained in this section shall prevent the employment of
    34  a compliance officer or compliance practitioner or  the  issuance  of  a
    35  license  to  any  individual  who,  subsequent to his or her conviction,
    36  shall have received executive pardon therefor removing such  disability,
    37  or  who  has  received  a  certificate  of relief from disabilities or a
    38  certificate of good conduct pursuant  to  article  twenty-three  of  the
    39  correction  law  to  remove the disability under this article because of
    40  such conviction or previous license revocation occasioned thereby.
    41    § 704. Written examination. (a) The superintendent shall in  order  to
    42  determine  the  trustworthiness  and  competency  to act as a compliance
    43  officer or compliance practitioner of each individual applicant for such
    44  license, except in the case of a renewal  license,  require  every  such
    45  individual  to take and pass, to the satisfaction of the superintendent,
    46  a personal written examination. No individual shall be deemed  qualified
    47  to  take  the examination without having demonstrated by evidence satis-
    48  factory to the superintendent the following minimum qualifications:  (1)
    49  two  years'  experience  in  the  financial  industry,  if the applicant
    50  possesses a bachelors degree from an accredited school of higher  educa-
    51  tion,  with  involvement in regulatory oversight, compliance training or
    52  other experience considered sufficient by the superintendent, or if  the
    53  applicant possesses a minimum of five years' practical experience in the
    54  financial services industry with an involvement in regulatory oversight,
    55  compliance  training  or  other  experience considered sufficient by the
    56  superintendent; and (2) the applicant successfully completed thirty-five

        S. 4965                             3
     1  hours of formal training in a course, program of instruction,  or  semi-
     2  nars approved by the superintendent.
     3    (b) The superintendent may prescribe the types of written examinations
     4  according  to  the  kinds  of  compliance  issues  the  applicant may be
     5  subjected to in the course of his or her duties.
     6    (c) The superintendent may, in his or her discretion and on such terms
     7  as he or she prescribes, dispense with such examination in the  case  of
     8  any  applicant  who  shall previously have held a position of compliance
     9  officer or compliance practitioner for a minimum period  of  five  years
    10  prior  to the effective date of this article; provided, further that the
    11  applicant applies within two years following the date of termination  of
    12  such license.
    13    (d)  An individual who at any time served with the armed forces of the
    14  United States, and who  immediately  prior  to  entering  such  military
    15  service  had  been  continuously  engaged in bona fide operation in this
    16  state as a compliance officer or compliance practitioner for a period of
    17  five years, may within one  year  after  termination  of  such  military
    18  service  file  with the superintendent an application in such form as he
    19  or she prescribes, and upon the payment of the requisite license fee  be
    20  licensed  by  the  superintendent  as a compliance officer or compliance
    21  practitioner without being required to take and pass such examination.
    22    (e)  The  superintendent  may  exempt  from  the  written  examination
    23  requirement  an applicant who holds a license or certificate to practice
    24  compliance issued to them upon examination, accredited and  administered
    25  by  a  regulatory  compliance accreditation agency in any other state or
    26  political subdivision of the United States or other country provided the
    27  applicant's qualifications met the requirements in  this  state  at  the
    28  time such license was issued and that jurisdiction recognizes reciproci-
    29  ty of the validity of a license issued from the state of New York.
    30    (f)  The  superintendent  shall  exempt  from  the written examination
    31  requirement any official or employee of a  government  unit,  agency  or
    32  instrumentality  who  is  responsible  for  performing compliance tasks,
    33  duties or functions as part of his or  her  official  duties  with  such
    34  governmental unit, agency or instrumentality.
    35    §  705. Temporary license. (a) An individual who has had at least five
    36  years' experience as a compliance officer or compliance practitioner  in
    37  a  financial services industry and has made application for a license as
    38  a compliance officer or compliance practitioner in  New  York  may  file
    39  with  the superintendent, in such form as the superintendent prescribes,
    40  a written application for a temporary permit to perform  the  duties  as
    41  prescribed  herein  as  a  compliance officer or compliance practitioner
    42  during the pendency of the application.
    43    (b) Notwithstanding any provision contained in section  seven  hundred
    44  four  of  this  article,  an  applicant for a temporary license shall be
    45  required to take and pass a personal written examination  in  accordance
    46  with  subsection  (a)  of section seven hundred four of this article. If
    47  satisfied that the individual applying for such temporary permit has  in
    48  all  other respects met the requirements of this article with respect to
    49  the licensing of a compliance officer or compliance practitioner and  is
    50  qualified  by  training  and  experience  as  an employee of a financial
    51  service provider or other financial industry related entity as a compli-
    52  ance officer or compliance practitioner, the superintendent shall  issue
    53  such  temporary  permit  to  be effective for such period of time as the
    54  superintendent may specify therein but, in no event,  for  a  period  in
    55  excess of one hundred twenty days.

        S. 4965                             4
     1    (c)  The  superintendent may summarily suspend or revoke any temporary
     2  permit issued pursuant to this section upon ten days' notice in  writing
     3  to the temporary permittee of the superintendent's intention to do so.
     4    § 706. Fees. (a) At the time of application for every compliance offi-
     5  cer  or  compliance  practitioner license and for every renewal thereof,
     6  there shall be paid to the superintendent by each  applicant  a  fee  of
     7  seventy-five  dollars  for  each  year  or  fraction  thereof in which a
     8  license shall be valid. Upon payment of such  fee  and  the  superinten-
     9  dent's  issuance  of such license or renewal thereof, such license shall
    10  also be valid for any one or more of the various licenses issued by  the
    11  superintendent  for  the licensing period or fraction thereof covered by
    12  such payment.
    13    (b) No license fee shall be required of any individual who served as a
    14  member of the armed forces of the United States  at  any  time  and  who
    15  shall have been discharged, under conditions other than dishonorable, in
    16  a current license period, for the duration of such period.
    17    (c)  Every  individual applying to take a written examination shall at
    18  the time of application pay to the superintendent, or at the  discretion
    19  of  the  superintendent,  directly  to  any  organization  that is under
    20  contract to provide examination services, a  non-refundable  examination
    21  fee  in an amount which is equal to the actual documented administrative
    22  expense.  If, however, the applicant should withdraw his or her applica-
    23  tion or the superintendent should deny his or her application before the
    24  license applied for is issued, the superintendent  may  refund  the  fee
    25  paid  by  the applicant for the license applied for, excepting any exam-
    26  ination fees required pursuant to this subsection.
    27    (d) The superintendent may issue a replacement for a  current  license
    28  which  has been lost or destroyed. Before such replacement license shall
    29  be issued, there shall be on file in the office of the superintendent  a
    30  written application for such replacement license, affirming under penal-
    31  ty  of  perjury  that  the  original license has been lost or destroyed,
    32  together with a fee of fifteen dollars.
    33    § 707. License term; renewal. (a) Every compliance officer license and
    34  compliance practitioner license issued pursuant to this section shall be
    35  for a term expiring on the thirty-first day of December of even numbered
    36  years, and may be renewed for the ensuing two calendar  years  upon  the
    37  filing  of an application in conformity with section seven hundred three
    38  of this article.  In the case of a license issued to  a  new  applicant,
    39  the superintendent may issue a license or a term of more than two years,
    40  provided however, such term shall not exceed thirty months.
    41    (b)  If  an applicant for a renewal license shall have been filed with
    42  the superintendent by December thirty-first of the year  of  expiration,
    43  the license sought to be renewed shall continue in full force and effect
    44  either  until  the issuance by the superintendent of the renewal license
    45  applied for or until five  days  after  the  superintendent  shall  have
    46  refused  to  issue  such  renewal license and shall have given notice of
    47  such refusal to the applicant.
    48    (c) If such refusal is based on any grounds other than failure to pass
    49  a written examination and if the  applicant  shall  within  thirty  days
    50  after  such  notice is given, notify the superintendent of their request
    51  for a hearing on such refusal, the superintendent shall within a reason-
    52  able time after receipt of such notice grant such a hearing, and  he  or
    53  she may, in his or her discretion, reinstate such license.
    54    § 708. Continuing education requirements. (a) The continuing education
    55  requirements  set  forth in this section shall apply to all resident and
    56  non-resident compliance officer or  compliance  practitioner  licensees,

        S. 4965                             5
     1  including  any  individual  previously licensed whose license was not in
     2  effect on the effective  date  of  this  article  and  who  subsequently
     3  obtains a license pursuant to the provisions of this article.
     4    (b)  During  each  biennial  licensing period, a compliance officer or
     5  compliance practitioner licensee shall satisfactorily  complete  courses
     6  or  programs of instruction or attend seminars as may be approved by the
     7  superintendent equivalent to thirty-six credit hours of instruction.
     8    (c) A licensee may use accumulated  continuing  education  credits  to
     9  meet  the  requirement so long as the education credits are certified as
    10  such by the superintendent and are approved by a  regulatory  compliance
    11  accreditation  agency or any other licensing authority within the finan-
    12  cial services industry as a commensurate course of study in  the  finan-
    13  cial industry pertaining to compliance and ethics.
    14    (d)  The following courses or programs of instruction, if successfully
    15  completed, shall be deemed to meet the  superintendent's  standards  for
    16  continuing education:
    17    (1)  Courses  or  programs  of instruction or seminars, approved as to
    18  method and content by the superintendent covering portions of  principle
    19  branches  of  the  finance  industry  related  to  the kinds of subjects
    20  covered by the compliance officer or  compliance  practitioner  license,
    21  including  but  not  limited to compliance regulation, law and practice,
    22  regulatory examinations, regulatory enforcement proceedings,  and  liti-
    23  gation, provided that:
    24    (A)  Such  courses or programs shall be given by an accredited associ-
    25  ation, degree conferring  college  or  university  whose  curriculum  is
    26  registered  with  the  education  department  at the time the individual
    27  takes the course, whether such course is given as part of  such  curric-
    28  ulum  or  separately,  or  by  any other institution, association, trade
    29  association  or  employer,  which  maintains  equivalent  standards   of
    30  instruction  and  which shall have been approved for such purpose by the
    31  superintendent;
    32    (B) The number of credit hours assigned to each course or  program  of
    33  instruction shall be determined by the superintendent; and
    34    (2) Continuing education as required by the state in which a non-resi-
    35  dent  resides and maintains an office, provided the superintendent deems
    36  such requirements equivalent to New York continuing  education  require-
    37  ments;  provided,  further,  that if the state in which the non-resident
    38  licensee resides and maintains an office does not have continuing educa-
    39  tion requirements, or if the superintendent does not deem such  require-
    40  ments equivalent, the licensee much satisfy New York's continuing educa-
    41  tion requirements.
    42    (e) An individual who teaches an approved course of instruction or who
    43  lectures  at an approved seminar, and who is subject to these continuing
    44  education requirements shall be granted the same number of credit  hours
    45  as  would be granted to an individual taking and successfully completing
    46  such course, seminar or program, provided that such credit  hours  shall
    47  be  credited  only  once  for  each  approved course during any biennial
    48  licensing period.
    49    (f) Every individual subject to the continuing education  requirements
    50  set  forth  in this section, shall furnish in a form satisfactory to the
    51  superintendent  written  certification  attesting  to  the  courses   or
    52  programs  of  instruction taken and successfully completed by such indi-
    53  vidual. Such certification shall be signed by the  sponsoring  organiza-
    54  tion or its authorized representative.
    55    (g)  (1)  An  individual  who  does not meet the applicable continuing
    56  education requirements shall  not  be  eligible  to  renew  his  or  her

        S. 4965                             6
     1  license.    Such  individual  shall not be eligible to become relicensed
     2  during the next biennial licensing period unless and until such individ-
     3  ual has demonstrated to the satisfaction of the superintendent that  the
     4  continuing education requirements for the last biennial licensing period
     5  were met.
     6    (2)  An individual whose license was not renewed pursuant to paragraph
     7  one of this subsection who accumulates sufficient credit hours  for  the
     8  prior  licensing  period  to  qualify  for  relicensing  in the biennial
     9  licensing period following such non-renewal, may not  apply  those  same
    10  credit  hours  toward  the  continuing  education  requirements  for the
    11  current biennial licensing period.
    12    (h) (1) Any entity eligible to provide continuing  education  courses,
    13  programs  of  instruction,  or  seminars  shall file for approval by the
    14  superintendent on a  biennial  basis,  to  conform  with  its  areas  of
    15  instruction, a provider organization application and a course submission
    16  application for each course, program, and seminar.
    17    (2)  The  provider organization application shall include the names of
    18  all instructors to be used during the  biennial  licensing  period,  and
    19  instructors may be added during such period by notifying the superinten-
    20  dent and paying the appropriate filing fee.
    21    (3)  The  completed applications shall be returned in a timely manner,
    22  as specified by the superintendent with a non-refundable filing  fee  of
    23  two  hundred  dollars  for  each  organization,  fifty  dollars for each
    24  course, program, and seminar, and fifty dollars for each instructor.
    25    (4) Approval of the application shall be  at  the  discretion  of  the
    26  superintendent.
    27    (i)  A  licensee  shall  pay  a  biennial  fee  of ten dollars for any
    28  license, for continuing education  certification  filing  and  recording
    29  charges,  to the superintendent, or, at the direction of the superinten-
    30  dent, directly to an organization under contract to  provide  continuing
    31  education administrative services.
    32    §  709. Rules and regulations; authority of the superintendent. (a) In
    33  order to carry out the purposes of this article, the superintendent may:
    34    (1) prescribe the types of compliance licenses according to the  kinds
    35  of compliance duties inherent in the financial services industry; and
    36    (2)  issue protocols and procedures for licensing and certifying mini-
    37  mum qualifications for compliance officers, compliance practitioners and
    38  other  individuals  tasked  with  monitoring,  evaluating,  testing  and
    39  reporting  non-compliance or misconduct in the financial services indus-
    40  try.
    41    (b) The superintendent shall establish and prescribe regulations  that
    42  are  deemed necessary for the proper and adequate supervision of compli-
    43  ance officers and compliance practitioners.
    44    § 2. This act shall take effect on the thirtieth day  after  it  shall
    45  have become a law. Effective immediately, the addition, amendment and/or
    46  repeal  of  any  rule  or regulation necessary for the implementation of
    47  this act on its effective date are authorized to be made  and  completed
    48  on or before such effective date.
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