The Vermont Securities Regulations set out requirements for issuing securities in Vermont and regulating those who provide investment advice and offer and sell securities to the public. The primary changes include: for investment companies offering federally covered securities in Vermont, the revised Rule mandates electronic filings through a system to be designated by the Commissioner (allowed but not required under the current Rule); adding a requirement that Vermont domiciled investment advisers controlling client funds carry errors and omissions insurance; clarifying provisions for administering restitution assistance for victims of securities violations, including the application process; adding into regulation a current Department policy governing the privacy of client financial information held by broker-dealers and investment advisers; updating certain provisions to match national model rules from North American Securities Administrators Association; and drafting changes for clarity.
Persons Affected:
The Rule affects: investment advisers and broker-dealers registered in Vermont; representatives and agents of those investment advisers and broker-dealers; issuers and offerors of securities in Vermont; victims of securities violations that are eligible for restitution assistance; Vermonters who are customers of investment advisers and broker-dealers; Vermonters who otherwise invest in securities; and the Department.
Economic Impact:
The Department expects the economic impact of the revisions to the Rule to be a net positive. The revisions change certain compliance and operating requirements for broker-dealers and investment advisers, including requiring certain investment advisers to incur the expense of purchasing additional insurance. Many revisions to the Rule make the legal requirements more clear, and conform certain provisions to model rules adopted by the North American Securities Administrators Association, which should create cost savings for regulated entities. The change to require investment companies to file electronic notice filings for federally covered securities will create additional expense for some investment companies, but the Department believes the requirement is beneficial to ensure orderly submission and record keeping for notice filings. The Department concludes that the benefits of additional protection for Vermont investors outweigh any additional compliance costs.
