Commissioner’s Release: 113-C

SUSPENSION OF NOTICE FILING FEES FOR FEDERALLY REGISTERED INVESTMENT ADVISERS

Pete Wilson, Governor
Date: 12-07-98

Dale E. Bonner, Commissioner

Effective January 1, 1999, the notice filing fees under the Corporate Securities Law of 1968 will be temporarily suspended for (i) federally registered investment advisers and (ii) investment adviser representatives of federally registered investment advisers.

Section 5 of SB 1589 (Chapter 328, Statutes 1998; the 1998 Budget Trailer Bill that, among other things, suspended for a two-year period commencing July 1, 1998, certain notice filing fees under the Corporate Securities Law of 1968) refers to subdivisions (a) through (d) of Corporations Code Section 25608.1 as in effect on that date. However, through inadvertence, a chaptering-out problem arose as a consequence of the enactment of SB 1589, which became effective on August 21, 1998, and the enactment of SB 1200, which becomes effective on January 1, 1999.

At the time SB 1589 was amended, another bill, SB 1200 (Chapter 48, Statutes 1998) also amended Section 25608.1. In circumstances where two bills amend the same code section, the bill that becomes law last (i.e., the bill that is “chaptered” last) becomes the law that is in effect.

Among other things, SB 1200 amended Section 25608.1 to delete current subdivision (c) and re-letter current subdivision (d) as subdivision (c). Another result of the SB 1200 amendment is that current subdivision (e) of Section 25608.1 was re-lettered to become subdivision (d). SB 1200 was enacted into law before SB 1589. Section 5 of SB 1589, however, did not reflect the changes made to Section 25608.1 by SB 1200. Thus, the ultimate effect of the SB 1200 re-lettering of Section 25608.1 is that Section 5 of SB 1589 incorrectly refers to the “wrong” subdivision (d).

The consequence of this incorrect reference is that, effective January 1, 1999, the $125 fee charged to a federally registered investment adviser filing a notice pursuant to subdivision (b) of Section 25230.1, and the $25 fee charged to an investment adviser representative of a federally registered investment adviser for filing a notice pursuant to subdivision (c) of Section 25230.1, are suspended until June 30, 2000, or until subsequent legislation is enacted to correct the chaptering-out problem caused by SB 1589.

WILLIAM KENEFICK
Assistant Commissioner
Office of Policy
(916) 322-3553