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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

A proposed set of administrative rules under the&nbsp;Michigan Uniform Securities Act&nbsp;(2002) (MUSA) has been published (<a href="http://www.michigan.gov/documents/opt/MR4_031518_617651_7.pdf" target="_blank" rel="noreferrer noopener">click here</a>) by The Michigan Department of Licensing and Regulatory Affairs (LARA), Corporations, Securities, and Commercial Licensing Bureau (Bureau). Most of the proposed rules are based on model state rules developed by the North American Securities Administrators Association (NASAA) (<a href="http://www.nasaa.org/1325/adopted-model-rules/" target="_blank" rel="noreferrer noopener">click here</a>). Public comments on the proposed rules can be submitted to the Bureau until&nbsp;Tuesday, April 3, 2018.

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Proposed rules of special interest include:

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The proposed MUSA rules will supersede all existing rules under the prior state securities act. The new rules cover substantially all aspects of state securities regulation in Michigan, including the following subjects among others: &nbsp; Securities Offerings; Secondary Public Trading

Investment Advisers, Representatives, and Private Fund Advisers

Michigan Investment Markets (secondary trading of intrastate securities)

The MUSA was amended in 2014 to add Chapter 4A,&nbsp;Michigan Investment Markets, a type of intrastate broker-dealer that would act as a market or exchange for transactions involving securities previously issued in intrastate offerings. Rule 4.8 lays out the extensive requirements to apply for this type of Michigan-only registration, including proof of compliance with Sections 5, 6, and 15 of the Securities Exchange Act of 1934 (e.g., an SEC no-action letter). Rule 4.16 prescribes minimum financial requirements for a Michigan investment market and customer protection rules based on SEC broker-dealer requirements. &nbsp; Other Topics

Transition and Effective Date &nbsp; A date for LARA’s adoption of the new ruleset is not yet known, but it is anticipated by late Summer or Fall 2018—the effective date will be 180 days later. Generally, there are no rule-specific transitional periods. Compliance with some of the rules’ requirements within the 180-day period may be challenging, so early preparations for these new rules is strongly encouraged. When effective, these MUSA rules will replace the six “Transition Orders” issued in 2009, 2010, and 2011 (<a href="http://www.michigan.gov/lara/0,4601,7-154-61343_32915-268142--,00.html" target="_blank" rel="noreferrer noopener">click here</a>) to implement the MUSA that became effective on October 1, 2009 (<a href="http://www.legislature.mi.gov/(S(e3e53j54rbgwp31cawjbqvq2))/mileg.aspx?page=getobject&amp;objectname=mcl-Act-551-of-2008&amp;query=on" target="_blank" rel="noreferrer noopener">click here</a>). &nbsp; Public Comments &nbsp; Public comments on any or all of the proposed MUSA rules may be submitted to LARA by&nbsp;4:30 P.M. on Tuesday, April 3, 2018, electronically or in paper to: &nbsp; Department of Licensing and Regulatory Affairs Corporation, Securities, and Commercial Licensing Bureau Attention:&nbsp; Stephen Brey P.O. Box 30018 Lansing, MI 48909-7518 Phone: 517-241-9212 Fax: 517-241-7539 E-mail:&nbsp;<a href="mailto:breys@michigan.gov">breys@michigan.gov</a> &nbsp; LARA is also holding a public hearing to receive comments starting at&nbsp;8:30 AM on March 27, 2018, at: &nbsp; Library of Michigan Forum, 1st Floor 702 W. Kalamazoo Street Lansing, Michigan 48915 &nbsp; This rulemaking process commenced in 2015. LARA’s MUSA rulemaking history is available (<a href="https://dmbinternet.state.mi.us/DMB/DTMBORR/Rules.aspx?type=Numeric&amp;id=2015" target="_blank" rel="noreferrer noopener">click here</a>) and its Regulatory Impact Statement and Cost Benefit Analysis (as amended) is available (<a href="https://dmbinternet.state.mi.us/DMB/ORRDocs/RIS/1528_2015-027LR_ris.pdf" target="_blank" rel="noreferrer noopener">click here</a>). &nbsp; We have been proactively engaged in the rulemaking process working cooperatively with the Bureau through the Securities Committee of the Business Law Section of the State Bar of Michigan. The Committee submitted extensive comments on prior drafts of these rules (<a href="http://connect.michbar.org/businesslaw/home" target="_blank" rel="noreferrer noopener">click here</a>) and the Bureau incorporated the overwhelming majority of those suggested changes. &nbsp; We encourage you to carefully review the proposed MUSA rules. If you have questions or would like assistance in submitting public comments on the proposed rules, please contact any member of our Funds and Investment Services Practice Group.

Funds and Investments

Partner

Loren Andrulis

Executive Partner

Joscelyn “Josie” Cekola Boucher

Senior Compliance Consultant

Diane M. Currie

Dana R. Dawe

Of Counsel

Shane B. Hansen

Associate

John C. Muhs

Linda Paullin-Hebden

Michigan Proposes New Securities Act Ruleset ~ Public Comment Period Closes April 3, 2018

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Michigan Proposes New Securities Act Ruleset ~ Public Comment Period Closes April 3, 2018

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