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News Release: 01-20
GRAY DAVIS, Governor
Date: 12/18/01
DEMETRIOS A. BOUTRIS, Commissioner
Department of Corporations Cuts Costs for Small Business
Sacramento, December 18, 2001 — The Davis Administration today announced a number of proposals to benefit small businesses, including a 50 percent reduction in certain securities filing fees and a rule that makes it easier for small businesses to offer stock option packages to their employees.
"I have directed every department in our agency to do all they can to give small businesses in California the assistance and support they need and deserve," said Secretary Maria Contreras-Sweet of the Business, Transportation and Housing Agency. "The Department of Corporations has demonstrated its commitment to fulfilling this mandate by providing businesses with fair, cost-effective and efficient regulatory processes, and continually working to improve upon these procedures."
Beginning January 1, 2002, the maximum filing fees associated with securities law exemptions under Corporations Code Section 25102(f) and Section 25102.1(d) will be decreased from $300 to $150. This reduction is expected to save nearly 10,000 business filers between $1.2 million and $1.5 million per year.
California-registered investment advisers will also benefit from legislation signed by Governor Davis earlier this year. Assembly Bill 1048 (Chapter 264, Statutes of 2001) authorizes the Department of Corporations to accept filings through the Investment Adviser Registration Depository (IARD), a national, online filing system. All Securities and Exchange Commission-registered investment advisers are required to register and make federal filings through the IARD as of January 1, 2001. In order to promote e-government and support small business, the Department of Corporations is waiving routine regulatory exam fees for state-licensed investment advisers as an incentive to transition to this paperless filing system.
California Corporations Commissioner Demetrios A. Boutris recently issued an opinion making it possible for a business with nonliquid stock (typically small corporations) to develop an internal stock trading system without registering with the state as a securities broker-dealer (Commissioner's Opinion No. 01/1C). This opinion enables a smaller business to utilize this trading system to bolster employee ownership, thus making the company better able to compensate its employees on a par with its bigger and better-funded counterparts.
The Department of Corporations is California's Investment and Financing Authority, reporting to the Business, Transportation and Housing Agency and the Governor. The Department is responsible for the regulation, enforcement and licensing of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending and residential mortgage lending. For further information or to obtain a complaint form, see the Department's Web site at www.corp.ca.gov.
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