§ 23-55-604 — Acquisition of control

(a) (1) A person, or a group of persons acting in concert, seeking to acquire control of a licensee shall obtain the written approval of the Securities Commissioner before acquiring control. (2) If an individual becomes a key individual of the licensee in the ordinary course of business, then the individual is not deemed to have acquired control of a licensee and is not subject to this section. (b) A person or a group of persons acting in concert seeking to acquire control of a licensee shall submit, in cooperation with the licensee: (1) an application in a form and in a medium prescribed by the commissioner; and (2) a nonrefundable fee of $1,000 with a request for approval. (c) Upon request, the commissioner may permit a licensee or the person or group of persons acting in concert to submit some or all information required under subdivision (b)(1) without using the Nationwide Multistate Licensing System and Registry. (d) The application under subdivision (b)(1) shall include information required by § 23-55-202(g) for a new key individual who has not previously completed the requirements of § 23-55-202(g) for a licensee. (e) (1) If an application for acquisition of control under this section appears to include all the items and address all of the matters that are required, then the application shall be considered complete, and the commissioner shall promptly notify the applicant in a record of the date that the application was determined to be complete. (2) The commissioner shall approve or deny the application within 60 days after the completion date. (3) If the application is not approved or denied within 60 days after the completion date, then: (i) the application is approved; and (ii) the person or group of persons acting in concert are not prohibited from acquiring control. (4) The commissioner may for good cause extend the application period. (f) A determination by the commissioner that an application is complete and the application is accepted for processing means that the application, on its face, appears to include all of the items and address all of the matters that are required but is not an assessment of the substance of the application or of the sufficiency of the information provided. (g) (1) If an application is filed and considered complete under subsection (e), then the commissioner shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the person or group of persons acting in concert seeking to acquire control. (2) The commissioner shall approve an application for acquisition of control under this section if the commissioner finds that all of the following conditions have been fulfilled: (A) the requirements of subsections (b) and (d) have been met, as applicable; and (B) the financial condition and responsibility, financial and business experience, competence, character, and general fitness of the person or group of persons acting in concert seeking to acquire control, and the competence, experience, character, and general fitness of the key individuals and persons that would be in control of the licensee after the acquisition of control indicate that it is in the interest of the public to permit the person or group of persons acting in concert to control the licensee. (h) (1) The commissioner shall issue a formal written notice of the denial of an application to acquire control within 30 days of the decision to deny the application. (2) The commissioner shall state in the notice of denial the specific reasons for the denial of the application. (3) An applicant whose application is denied by the commissioner under this subsection (h) may appeal within 30 days after receipt of the written notice of the denial. (i) The requirements of subsections (a) and (b) do not apply to: (1) a person that acts as a proxy for the sole purpose of voting: (A) at a designated meeting of the shareholders or holders of voting shares; or (B) interests of a licensee or a person in control of a licensee; (2) a person that acquires control of a licensee by devise or descent; (3) a person that acquires control of a licensee: (A) as a personal representative, custodian, guardian, conservator, or trustee; (B) as an officer appointed by a court of competent jurisdiction; or (C) by operation of law; (4) a person that is exempt under § 23-55-103 ; (5) a person that the commissioner determines is not subject to subsection (a) based on the public interest; (6) a public offering of securities of a licensee or a person in control of a licensee; or (7) an internal reorganization of a person in control of the licensee if the ultimate person in control of the licensee remains the same. (j) Persons in subdivisions (i)(2)-(4) and subdivisions (i)(6) and (7), in cooperation with the licensee, shall notify the commissioner within 15 days after the acquisition of control. (k) (1) The requirements of subsections (a) and (b) do not apply to a person that has complied with and received approval to engage in money transmission under this chapter or was identified as a person in control in a prior application filed with and approved by the commissioner or by a money services business accredited state under a multistate licensing process if: (A) the person has not had a license revoked or suspended or controlled a licensee that has had a license revoked or suspended while the person was in control of the licensee in the previous 5 years; (B) the person is a licensee, and the person is well managed and has received at least a satisfactory rating for compliance at its most recent examination by a money services business accredited state if the rating was given; (C) the licensee to be acquired is projected to meet the requirements of §§ 23-55-204 , 23-55-207 , and 23-55-701 after the acquisition of control is completed, and if the person acquiring control is a licensee, then that licensee is also projected to meet the requirements of §§ 23-55-204 , 23-55-207 , and 23-55-701 after the acquisition of control is completed; (D) the licensee to be acquired shall not implement any material changes to its business plan as a result of the acquisition of control, and if the person acquiring control is a licensee, then that licensee also shall not implement any material changes to its business plan as a result of the acquisition of control; and (E) the person provides notice of the acquisition in cooperation with the licensee and attests to subdivisions (k)(1)(A)-(D) in a form and in a medium prescribed by the commissioner. (2) If the notice is not disapproved within 30 days after the date that the notice was determined to be complete, then the notice is approved. (l) (1) Before filing an application for approval to acquire control of a licensee, a person may request in writing a determination from the commissioner as to whether or not the person would be considered a person in control of a licensee upon consummation of a proposed transaction. (2) If the commissioner determines that the person would not be a person in control of a licensee, then the proposed person and transaction are not subject to the requirements of subsections (a) and (b). (m) (1) A licensee adding or replacing a key individual shall: (A) provide notice in a manner prescribed by the commissioner within 15 days after the effective date of the key individual's appointment; and (B) provide information as required by this section within 45 days of the effective date of the key individual's appointment. (2) Within 90 days of the date that the notice provided under subdivision (m)(1) was determined to be complete, the commissioner may issue a notice of disapproval of a key individual if the competence, experience, character, or integrity of the individual are such that it would not be in the best interests of the public or the customers of the licensee to permit the individual to be a key individual of the licensee. (3) (A) A notice of disapproval shall: (i) contain a statement of the basis for disapproval; and (ii) be sent to the licensee and the disapproved individual. (B) A licensee may appeal a notice of disapproval within 30 days after receipt of the notice of disapproval. (4) If the notice provided under subdivision (m)(1) is not disapproved within 90 days after the date that the notice was determined to be complete, then the key individual is approved.

Legislative History

Amended by Act 2023, No. 442,§ 7, eff. 8/1/2023. Amended by Act 2021, No. 532,§ 18, eff. 7/28/2021. Acts 2007, No. 1595, § 1; 2009, No. 164, § 14.