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90_HB0023enr
40 ILCS 5/18-123 from Ch. 108 1/2, par. 18-123
Amends the Judges Article of the Pension Code. Allows
certain judges to elect to contribute (or to rescind their
election not to contribute) for a spouse's annuity benefit.
Effective immediately.
LRB9000434EGfg
HB0023 Enrolled LRB9000434EGfg
1 AN ACT in relation to public employee pensions.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 2. The State Finance Act is amended by adding
5 Section 8f as follows:
6 (30 ILCS 105/8f new)
7 Sec. 8f. Public Pension Regulation Fund. The Public
8 Pension Regulation Fund is created in the State Treasury.
9 Except as otherwise provided in the Illinois Pension Code,
10 all money received by the Illinois Department of Insurance
11 under the Illinois Pension Code shall be paid into the Fund.
12 The State Treasurer promptly shall invest the money in the
13 Fund, and all earnings that accrue on the money in the Fund
14 shall be credited to the Fund. No money may be transferred
15 from this Fund to any other fund. The General Assembly may
16 make appropriations from this Fund for the ordinary and
17 contingent expenses of the Public Pension Division of the
18 Illinois Department of Insurance.
19 Section 3. The Public Funds Investment Act is amended
20 by changing Section 1 as follows:
21 (30 ILCS 235/1) (from Ch. 85, par. 901)
22 Sec. 1. The words "public funds", as used in this Act,
23 mean current operating funds, special funds, interest and
24 sinking funds, and funds of any kind or character belonging
25 to or in the custody of any public agency.
26 The words "public agency", as used in this Act, mean the
27 State of Illinois, the various counties, townships, cities,
28 towns, villages, school districts, educational service
29 regions, special road districts, public water supply
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1 districts, fire protection districts, drainage districts,
2 levee districts, sewer districts, housing authorities, the
3 Illinois Bank Examiners' Education Foundation, the Chicago
4 Park District, and all other political corporations or
5 subdivisions of the State of Illinois, now or hereafter
6 created, whether herein specifically mentioned or not. This
7 Act does not apply to pension funds or retirement systems
8 established under the Illinois Pension Code, except as
9 otherwise provided in that Code.
10 (Source: P.A. 87-968.)
11 Section 4. The Illinois Pension Code is amended by
12 changing Sections 1-101.1, 1-113, 3-102, 3-132, 3-135, 3-143,
13 4-123, 4-128, and 4-134 and adding Sections 1-101.2, 1-101.3,
14 1-101.4, 1-113.1, 1-113.2, 1-113.3, 1-113.4, 1-113.5,
15 1-113.6, 1-113.7, 1-113.8, 1-113.9, 1-113.10, 1-113.11,
16 1-113.12, 1A-101, 1A-102, 1A-103, 1A-104, 1A-105, 1A-106,
17 1A-107, 1A-108, 1A-109, 1A-110, 1A-111, 1A-112, 1A-113,
18 3-108.2, 3-108.3, 4-105c, and 4-105d as follows:
19 (40 ILCS 5/1-101.1) (from Ch. 108 1/2, par. 1-101.1)
20 Sec. 1-101.1. Definitions. For purposes of this Article,
21 unless the context otherwise requires, the words defined in
22 the Sections following this Section and preceding Section
23 1-102 shall have meanings given in those Sections.:
24 (a) A person is a "Fiduciary" with respect to a
25 retirement system or pension fund established under this Code
26 to the extent that such person:
27 (i) exercises any discretionary authority or
28 discretionary control respecting management of such
29 retirement system or pension fund, or exercises any authority
30 or control respecting management or disposition of its
31 assets;
32 (ii) renders investment advice for a fee or other
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1 compensation, direct or indirect, with respect to any moneys
2 or other property of such retirement system or pension fund,
3 or has any authority or responsibility to do so; or
4 (iii) has any discretionary authority or discretionary
5 responsibility in the administration of such retirement
6 system.
7 (b) A person is a "Party in interest" with respect to a
8 retirement system or pension fund established under this Code
9 if such person is:
10 (i) a fiduciary, counsel or employee of such retirement
11 system or pension fund;
12 (ii) a person providing services to such retirement
13 system or pension fund;
14 (iii) an employer, any of whose employees are covered by
15 such retirement system or pension fund;
16 (iv) an employee organization any of whose members are
17 covered by such retirement system or pension fund;
18 (v) a relative of any individual described in paragraph
19 (i) or (ii) above of this subsection (b); or
20 (vi) an employee, officer or director (or an individual
21 having powers or responsibilities similar to those of
22 officers or directors) of a person described in paragraphs
23 (ii), (iii) or (iv) above of this subsection (b), or of such
24 retirement system or pension fund.
25 (c) A person is an "Investment manager" with respect to
26 a retirement system or pension fund established under this
27 Code if such person:
28 (i) is a fiduciary appointed by the board of trustees of
29 a retirement system or pension fund in accordance with
30 Section 1-109.1;
31 (ii) has the power to manage, acquire or dispose of any
32 asset of the retirement system or pension fund;
33 (iii) is either -
34 (A) registered as an investment advisor under the
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1 Investment Advisors Act of 1940 (15 U.S.C. 80b-1, et seq.);
2 (B) a bank, as defined in that Act; or
3 (C) an insurance company; and
4 (iv) has acknowledged in writing that he is a fiduciary
5 with respect to the retirement system or pension fund.
6 (Source: P.A. 82-960.)
7 (40 ILCS 5/1-101.2 new)
8 Sec. 1-101.2. Fiduciary. A person is a "fiduciary" with
9 respect to a pension fund or retirement system established
10 under this Code to the extent that the person:
11 (1) exercises any discretionary authority or
12 discretionary control respecting management of the
13 pension fund or retirement system, or exercises any
14 authority or control respecting management or disposition
15 of its assets;
16 (2) renders investment advice for a fee or other
17 compensation, direct or indirect, with respect to any
18 moneys or other property of the pension fund or
19 retirement system, or has any authority or responsibility
20 to do so; or
21 (3) has any discretionary authority or
22 discretionary responsibility in the administration of the
23 pension fund or retirement system.
24 (40 ILCS 5/1-101.3 new)
25 Sec. 1-101.3. Party in interest. A person is a "party in
26 interest" with respect to a pension fund or retirement system
27 established under this Code if the person is:
28 (1) a fiduciary, counsel, or employee of the
29 pension fund or retirement system, or a relative of such
30 a person;
31 (2) a person providing services to the pension fund
32 or retirement system, or a relative of such a person;
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1 (3) an employer, any of whose employees are covered
2 by the pension fund or retirement system;
3 (4) an employee organization, any members of which
4 are covered by the pension fund or retirement system; or
5 (5) an employee, officer, or director (or an
6 individual having powers or responsibilities similar to
7 those of an officer or director) of the pension fund or
8 retirement system or of a person described under item
9 (2), (3), or (4) of this Section.
10 (40 ILCS 5/1-101.4 new)
11 Sec. 1-101.4. Investment adviser. A person is an
12 "investment adviser", "investment advisor", or "investment
13 manager" with respect to a pension fund or retirement system
14 established under this Code if the person:
15 (1) is a fiduciary appointed by the board of
16 trustees of the pension fund or retirement system in
17 accordance with Section 1-109.1;
18 (2) has the power to manage, acquire, or dispose of
19 any asset of the retirement system or pension fund;
20 (3) has acknowledged in writing that he or she is a
21 fiduciary with respect to the pension fund or retirement
22 system; and
23 (4) is at least one of the following: (i)
24 registered as an investment adviser under the federal
25 Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et
26 seq.); (ii) registered as an investment adviser under the
27 Illinois Securities Law of 1953; (iii) a bank, as defined
28 in the Investment Advisers Act of 1940; or (iv) an
29 insurance company authorized to transact business in this
30 State.
31 (40 ILCS 5/1-113) (from Ch. 108 1/2, par. 1-113)
32 Sec. 1-113. Investment authority of certain pension
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1 funds, not including those established under Article 3 or 4.
2 The investment authority of a board of trustees of a
3 retirement system or pension fund established under this Code
4 shall, if so provided in the Article establishing such
5 retirement system or pension fund, embrace the following
6 investments:
7 (1) Bonds, notes and other direct obligations of the
8 United States Government; bonds, notes and other obligations
9 of any United States Government agency or instrumentality,
10 whether or not guaranteed; and obligations the principal and
11 interest of which are guaranteed unconditionally by the
12 United States Government or by an agency or instrumentality
13 thereof.
14 (2) Obligations of the Inter-American Development Bank,
15 the International Bank for Reconstruction and Development,
16 the African Development Bank, the International Finance
17 Corporation, and the Asian Development Bank.
18 (3) Obligations of any state, or of any political
19 subdivision in Illinois, or of any county or city in any
20 other state having a population as shown by the last federal
21 census of not less than 30,000 inhabitants provided that such
22 political subdivision is not permitted by law to become
23 indebted in excess of 10% of the assessed valuation of
24 property therein and has not defaulted for a period longer
25 than 30 days in the payment of interest and principal on any
26 of its general obligations or indebtedness during a period of
27 10 calendar years immediately preceding such investment.
28 (4) Nonconvertible bonds, debentures, notes and other
29 corporate obligations of any corporation created or existing
30 under the laws of the United States or any state, district or
31 territory thereof, provided there has been no default on the
32 obligations of the corporation or its predecessor(s) during
33 the 5 calendar years immediately preceding the purchase.
34 (5) Obligations guaranteed by the Government of Canada,
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1 or by any Province of Canada, or by any Canadian city with a
2 population of not less than 150,000 inhabitants, provided (a)
3 they are payable in United States currency and are exempt
4 from any Canadian withholding tax; (b) the investment in any
5 one issue of bonds shall not exceed 10% of the amount
6 outstanding; and (c) the total investments at book value in
7 Canadian securities shall be limited to 5% of the total
8 investment account of the board at book value.
9 (5.1) Direct obligations of the State of Israel for the
10 payment of money, or obligations for the payment of money
11 which are guaranteed as to the payment of principal and
12 interest by the State of Israel, or common or preferred stock
13 or notes issued by a bank owned or controlled in whole or in
14 part by the State of Israel, on the following conditions:
15 (a) The total investments in such obligations shall
16 not exceed 5% of the book value of the aggregate
17 investments owned by the board;
18 (b) The State of Israel shall not be in default in
19 the payment of principal or interest on any of its direct
20 general obligations on the date of such investment;
21 (c) The bonds, stock or notes, and interest thereon
22 shall be payable in currency of the United States;
23 (d) The bonds shall (1) contain an option for the
24 redemption thereof after 90 days from date of purchase or
25 (2) either become due 5 years from the date of their
26 purchase or be subject to redemption 120 days after the
27 date of notice for redemption;
28 (e) The investment in these obligations has been
29 approved in writing by investment counsel employed by the
30 board, which counsel shall be a national or state bank or
31 trust company authorized to do a trust business in the
32 State of Illinois, or an investment advisor qualified
33 under the federal Investment Advisors Act of 1940 and
34 registered under the Illinois Securities Act of 1953;
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1 (f) The fund or system making the investment shall
2 have at least $5,000,000 of net present assets.
3 (6) Notes secured by mortgages under Sections 203, 207,
4 220 and 221 of the National Housing Act which are insured by
5 the Federal Housing Commissioner, or his successor assigns,
6 or debentures issued by such Commissioner, which are
7 guaranteed as to principal and interest by the Federal
8 Housing Administration, or agency of the United States
9 Government, provided the aggregate investment shall not
10 exceed 20% of the total investment account of the board at
11 book value, and provided further that the investment in such
12 notes under Sections 220 and 221 shall in no event exceed
13 one-half of the maximum investment in notes under this
14 paragraph.
15 (7) Loans to veterans guaranteed in whole or part by the
16 United States Government pursuant to Title III of the Act of
17 Congress known as the "Servicemen's Readjustment Act of
18 1944," 58 Stat. 284, 38 U.S.C. 693, as amended or
19 supplemented from time to time, provided such guaranteed
20 loans are liens upon real estate.
21 (8) Common and preferred stocks and convertible debt
22 securities authorized for investment of trust funds under the
23 laws of the State of Illinois, provided:
24 (a) the common stocks, except as provided in
25 subparagraph (g) (h), are listed on a national securities
26 exchange or board of trade, as defined in the federal
27 Securities Exchange Act of 1934, or quoted in the
28 National Association of Securities Dealers Automated
29 Quotation System (NASDAQ);
30 (b) the securities are of a corporation created or
31 existing under the laws of the United States or any
32 state, district or territory thereof;
33 (c) the corporation is not in arrears on payment of
34 dividends on its preferred stock;
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1 (d) the total book value of all stocks and
2 convertible debt owned by any pension fund or retirement
3 system shall not exceed 40% of the aggregate book value
4 of all investments of such pension fund or retirement
5 system, except for that system governed by Article 17,
6 where the total of all stocks and convertible debt shall
7 not exceed 50% of the aggregate book value of all fund
8 investments;
9 (e) the book value of stock and convertible debt
10 investments in any one corporation shall not exceed 5% of
11 the total investment account at book value in which such
12 securities are held, determined as of the date of the
13 investment, and the investments in the stock of any one
14 corporation shall not exceed 5% of the total outstanding
15 stock of such corporation, and the investments in the
16 convertible debt of any one corporation shall not exceed
17 5% of the total amount of such debt that may be
18 outstanding;
19 (f) the straight preferred stocks or convertible
20 preferred stocks and convertible debt securities are
21 issued or guaranteed by a corporation whose common stock
22 qualifies for investment by the board; and
23 (g) that any common stocks not listed or quoted as
24 provided in subdivision 8(a) above be limited to the
25 following types of institutions: (a) any bank which is a
26 member of the Federal Deposit Insurance Corporation
27 having capital funds represented by capital stock,
28 surplus and undivided profits of at least $20,000,000;
29 (b) any life insurance company having capital funds
30 represented by capital stock, special surplus funds and
31 unassigned surplus totalling at least $50,000,000; and
32 (c) any fire or casualty insurance company, or a
33 combination thereof, having capital funds represented by
34 capital stock, net surplus and voluntary reserves of at
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1 least $50,000,000.
2 (9) Withdrawable accounts of State chartered and federal
3 chartered savings and loan associations insured by the
4 Federal Savings and Loan Insurance Corporation; deposits or
5 certificates of deposit in State and national banks insured
6 by the Federal Deposit Insurance Corporation; and share
7 accounts or share certificate accounts in a State or federal
8 credit union, the accounts of which are insured as required
9 by the Illinois Credit Union Act or the Federal Credit Union
10 Act, as applicable.
11 No bank or savings and loan association shall receive
12 investment funds as permitted by this subsection (9), unless
13 it has complied with the requirements established pursuant to
14 Section 6 of the Public Funds Investment Act.
15 (10) Trading, purchase or sale of listed options on
16 underlying securities owned by the board.
17 (11) Contracts and agreements supplemental thereto
18 providing for investments in the general account of a life
19 insurance company authorized to do business in Illinois.
20 (12) Conventional mortgage pass-through securities which
21 are evidenced by interests in Illinois owner-occupied
22 residential mortgages, having not less than an "A" rating
23 from at least one national securities rating service. Such
24 mortgages may have loan-to-value ratios up to 95%, provided
25 that any amount over 80% is insured by private mortgage
26 insurance. The pool of such mortgages shall be insured by
27 mortgage guaranty or equivalent insurance, in accordance with
28 industry standards.
29 (13) Pooled or commingled funds managed by a national or
30 State bank which is authorized to do a trust business in the
31 State of Illinois, shares of registered investment companies
32 as defined in the federal Investment Company Act of 1940
33 which are registered under that Act, and separate accounts of
34 a life insurance company authorized to do business in
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1 Illinois, where such pooled or commingled funds, shares, or
2 separate accounts are comprised of common or preferred
3 stocks, bonds, or money market instruments.
4 (14) Pooled or commingled funds managed by a national or
5 state bank which is authorized to do a trust business in the
6 State of Illinois, separate accounts managed by a life
7 insurance company authorized to do business in Illinois, and
8 commingled group trusts managed by an investment adviser
9 registered under the federal Investment Advisors Act of 1940
10 (15 U.S.C. 80b-1 et seq.) and under The Illinois Securities
11 Law of 1953, where such pooled or commingled funds, separate
12 accounts or commingled group trusts are comprised of real
13 estate or loans upon real estate secured by first or second
14 mortgages. The total investment in such pooled or commingled
15 funds, commingled group trusts and separate accounts shall
16 not exceed 10% of the aggregate book value of all investments
17 owned by the fund.
18 (15) Investment companies which (a) are registered as
19 such under the Investment Company Act of 1940, (b) are
20 diversified, open-end management investment companies and (c)
21 invest only in money market instruments.
22 (16) Up to 10% of the assets of the fund may be invested
23 in investments not included in paragraphs (1) through (15) of
24 this Section, provided that such investments comply with the
25 requirements and restrictions set forth in Sections 1-109,
26 1-109.1, 1-109.2, 1-110 and 1-111 of this Code.
27 The board shall have the authority to enter into such
28 agreements and to execute such documents as it determines to
29 be necessary to complete any investment transaction.
30 Any limitations herein set forth shall be applicable only
31 at the time of purchase and shall not require the liquidation
32 of any investment at any time.
33 All investments shall be clearly held and accounted for
34 to indicate ownership by such board. Such board may direct
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1 the registration of securities in its own name or in the name
2 of a nominee created for the express purpose of registration
3 of securities by a national or state bank or trust company
4 authorized to conduct a trust business in the State of
5 Illinois.
6 Investments shall be carried at cost or at a book value
7 in accordance with accounting procedures approved by such
8 board. No adjustments shall be made in investment carrying
9 values for ordinary current market price fluctuations; but
10 reserves may be provided to account for possible losses or
11 unrealized gains as determined by such board.
12 The book value of investments held by any pension fund or
13 retirement system in one or more commingled investment
14 accounts shall be the cost of its units of participation in
15 such commingled account or accounts as recorded on the books
16 of such board.
17 (Source: P.A. 86-272; 87-575; 87-794; 87-895.)
18 (40 ILCS 5/1-113.1 new)
19 Sec. 1-113.1. Investment authority of pension funds
20 established under Article 3 or 4. The board of trustees of a
21 police pension fund established under Article 3 of this Code
22 or firefighter pension fund established under Article 4 of
23 this Code shall draw pension funds from the treasurer of the
24 municipality and, beginning January 1, 1998, invest any part
25 thereof in the name of the board in the items listed in
26 Sections 1-113.2 through 1-113.4 according to the limitations
27 and requirements of this Article. These investments shall be
28 made with the care, skill, prudence, and diligence that a
29 prudent person acting in like capacity and familiar with such
30 matters would use in the conduct of an enterprise of like
31 character with like aims.
32 Interest and any other income from the investments shall
33 be credited to the pension fund.
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1 For the purposes of Sections 1-113.2 through 1-113.11,
2 the "net assets" of a pension fund include both the cash and
3 invested assets of the pension fund.
4 (40 ILCS 5/1-113.2 new)
5 Sec. 1-113.2. List of permitted investments for all
6 Article 3 or 4 pension funds. Any pension fund established
7 under Article 3 or 4 may invest in the following items:
8 (1) Interest bearing direct obligations of the United
9 States of America.
10 (2) Interest bearing obligations to the extent that they
11 are fully guaranteed or insured as to payment of principal
12 and interest by the United States of America.
13 (3) Interest bearing bonds, notes, debentures, or other
14 similar obligations of agencies of the United States of
15 America. For the purposes of this Section, "agencies of the
16 United States of America" includes: (i) the Federal National
17 Mortgage Association and the Student Loan Marketing
18 Association; (ii) federal land banks, federal intermediate
19 credit banks, federal farm credit banks, and any other entity
20 authorized to issue direct debt obligations of the United
21 States of America under the Farm Credit Act of 1971 or
22 amendments to that Act; (iii) federal home loan banks and the
23 Federal Home Loan Mortgage Corporation; and (iv) any agency
24 created by Act of Congress that is authorized to issue direct
25 debt obligations of the United States of America.
26 (4) Interest bearing savings accounts or certificates of
27 deposit, issued by federally chartered banks or savings and
28 loan associations, to the extent that the deposits are
29 insured by agencies or instrumentalities of the federal
30 government.
31 (5) Interest bearing savings accounts or certificates of
32 deposit, issued by State of Illinois chartered banks or
33 savings and loan associations, to the extent that the
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1 deposits are insured by agencies or instrumentalities of the
2 federal government.
3 (6) Investments in credit unions, to the extent that the
4 investments are insured by agencies or instrumentalities of
5 the federal government.
6 (7) Interest bearing bonds of the State of Illinois.
7 (8) Pooled interest bearing accounts managed by the
8 Illinois Public Treasurer's Investment Pool in accordance
9 with the Deposit of State Moneys Act and interest bearing
10 funds or pooled accounts managed, operated, and administered
11 by banks, subsidiaries of banks, or subsidiaries of bank
12 holding companies in accordance with the laws of the State of
13 Illinois.
14 (9) Interest bearing bonds or tax anticipation warrants
15 of any county, township, or municipal corporation of the
16 State of Illinois.
17 (10) Direct obligations of the State of Israel, subject
18 to the conditions and limitations of item (5.1) of Section
19 1-113.
20 (11) Money market mutual funds managed by investment
21 companies that are registered under the federal Investment
22 Company Act of 1940 and the Illinois Securities Law of 1953
23 and are diversified, open-ended management investment
24 companies; provided that the portfolio of the money market
25 mutual fund is limited to the following:
26 (i) bonds, notes, certificates of indebtedness,
27 treasury bills, or other securities that are guaranteed
28 by the full faith and credit of the United States of
29 America as to principal and interest;
30 (ii) bonds, notes, debentures, or other similar
31 obligations of the United States of America or its
32 agencies; and
33 (iii) short term obligations of corporations
34 organized in the United States with assets exceeding
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1 $400,000,000, provided that (A) the obligations mature no
2 later than 180 days from the date of purchase, (B) at the
3 time of purchase, the obligations are rated by at least 2
4 standard national rating services at one of their 3
5 highest classifications, and (C) the obligations held by
6 the mutual fund do not exceed 10% of the corporation's
7 outstanding obligations.
8 (12) General accounts of life insurance companies
9 authorized to transact business in Illinois.
10 (13) Any combination of the following, not to exceed 10%
11 of the pension fund's net assets:
12 (i) separate accounts that are managed by life
13 insurance companies authorized to transact business in
14 Illinois and are comprised of diversified portfolios
15 consisting of common or preferred stocks, bonds, or money
16 market instruments; and
17 (ii) separate accounts that are managed by
18 insurance companies authorized to transact business in
19 Illinois, and are comprised of real estate or loans upon
20 real estate secured by first or second mortgages.
21 (40 ILCS 5/1-113.3 new)
22 Sec. 1-113.3. List of additional permitted investments
23 for pension funds with net assets of $2,500,000 or more.
24 (a) In addition to the items in Section 3-113.2, a
25 pension fund established under Article 3 or 4 that has net
26 assets of at least $2,500,000 may invest a portion of its net
27 assets in the following items:
28 (1) Separate accounts that are managed by life insurance
29 companies authorized to transact business in Illinois and are
30 comprised of diversified portfolios consisting of common or
31 preferred stocks, bonds, or money market instruments.
32 (2) Mutual funds that meet the following requirements:
33 (i) the mutual fund is managed by an investment
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1 company as defined and registered under the federal
2 Investment Company Act of 1940 and registered under the
3 Illinois Securities Law of 1953;
4 (ii) the mutual fund has been in operation for at
5 least 5 years;
6 (iii) the mutual fund has total net assets of $250
7 million or more; and
8 (iv) the mutual fund is comprised of diversified
9 portfolios of common or preferred stocks, bonds, or money
10 market instruments.
11 (b) A pension fund's total investment in the items
12 authorized under this Section shall not exceed 35% of the
13 market value of the pension fund's net present assets stated
14 in its most recent annual report on file with the Illinois
15 Department of Insurance.
16 (40 ILCS 5/1-113.4 new)
17 Sec. 1-113.4. List of additional permitted investments
18 for pension funds with net assets of $5,000,000 or more.
19 (a) In addition to the items in Sections 1-113.2 and
20 1-113.3, a pension fund established under Article 3 or 4 that
21 has net assets of at least $5,000,000 and has appointed an
22 investment adviser under Section 1-113.5 may, through that
23 investment adviser, invest a portion of its assets in common
24 and preferred stocks authorized for investments of trust
25 funds under the laws of the State of Illinois. The stocks
26 must meet all of the following requirements:
27 (1) The common stocks are listed on a national
28 securities exchange or board of trade (as defined in the
29 federal Securities Exchange Act of 1934 and set forth in
30 Section 3.G of the Illinois Securities Law of 1953) or
31 quoted in the National Association of Securities Dealers
32 Automated Quotation System National Market System (NASDAQ
33 NMS).
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1 (2) The securities are of a corporation created or
2 existing under the laws of the United States or any
3 state, district, or territory thereof and the corporation
4 has been in existence for at least 5 years.
5 (3) The corporation has not been in arrears on
6 payment of dividends on its preferred stock during the
7 preceding 5 years.
8 (4) The market value of stock in any one
9 corporation does not exceed 5% of the cash and invested
10 assets of the pension fund, and the investments in the
11 stock of any one corporation do not exceed 5% of the
12 total outstanding stock of that corporation.
13 (5) The straight preferred stocks or convertible
14 preferred stocks are issued or guaranteed by a
15 corporation whose common stock qualifies for investment
16 by the board.
17 (6) The issuer of the stocks has been subject to
18 the requirements of Section 12 of the federal Securities
19 Exchange Act of 1934 and has been current with the filing
20 requirements of Sections 13 and 14 of that Act during the
21 preceding 3 years.
22 (b) A pension fund's total investment in the items
23 authorized under this Section and Section 1-113.3 shall not
24 exceed 35% of the market value of the pension fund's net
25 present assets stated in its most recent annual report on
26 file with the Illinois Department of Insurance.
27 (c) A pension fund that invests funds under this Section
28 shall electronically file with the Division any reports of
29 its investment activities that the Division may require, at
30 the times and in the format required by the Division.
31 (40 ILCS 5/1-113.5 new)
32 Sec. 1-113.5. Investment advisers and investment
33 services.
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1 (a) The board of trustees of a pension fund may appoint
2 investment advisers as defined in Section 1-101.4. The board
3 of any pension fund investing in common or preferred stock
4 under Section 1-113.4 shall appoint an investment adviser
5 before making such investments.
6 The investment adviser shall be a fiduciary, as defined
7 in Section 1-101.2, with respect to the pension fund and
8 shall be one of the following:
9 (1) an investment adviser registered under the
10 federal Investment Advisers Act of 1940 and the Illinois
11 Securities Law of 1953;
12 (2) a bank or trust company authorized to conduct a
13 trust business in Illinois;
14 (3) a life insurance company authorized to transact
15 business in Illinois; or
16 (4) an investment company as defined and registered
17 under the federal Investment Company Act of 1940 and
18 registered under the Illinois Securities Law of 1953.
19 (b) All investment advice and services provided by an
20 investment adviser appointed under this Section shall be
21 rendered pursuant to a written contract between the
22 investment adviser and the board, and in accordance with the
23 board's investment policy.
24 The contract shall include all of the following:
25 (1) acknowledgement in writing by the investment
26 adviser that he or she is a fiduciary with respect to the
27 pension fund;
28 (2) the board's investment policy;
29 (3) full disclosure of direct and indirect fees,
30 commissions, penalties, and any other compensation that
31 may be received by the investment adviser, including
32 reimbursement for expenses; and
33 (4) a requirement that the investment adviser
34 submit periodic written reports, on at least a quarterly
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1 basis, for the board's review at its regularly scheduled
2 meetings. All returns on investment shall be reported as
3 net returns after payment of all fees, commissions, and
4 any other compensation.
5 (c) Within 30 days after appointing an investment
6 adviser, the board shall submit a copy of the contract to the
7 Department of Insurance.
8 (d) Investment services provided by a person other than
9 an investment adviser appointed under this Section, including
10 but not limited to services provided by the kinds of persons
11 listed in items (1) through (4) of subsection (a), shall be
12 rendered only after full written disclosure of direct and
13 indirect fees, commissions, penalties, and any other
14 compensation that shall or may be received by the person
15 rendering those services.
16 (e) The board of trustees of each pension fund shall
17 retain records of investment transactions in accordance with
18 the rules of the Department of Insurance.
19 (40 ILCS 5/1-113.6 new)
20 Sec. 1-113.6. Investment policies. Every board of
21 trustees of a pension fund shall adopt a written investment
22 policy and file a copy of that policy with the Department of
23 Insurance within 30 days after its adoption. Whenever a
24 board changes its investment policy, it shall file a copy of
25 the new policy with the Department within 30 days.
26 (40 ILCS 5/1-113.7 new)
27 Sec. 1-113.7. Registration of investments; custody and
28 safekeeping. The board of trustees may register the
29 investments of its pension fund in the name of the pension
30 fund, in the nominee name of a bank or trust company
31 authorized to conduct a trust business in Illinois, or in the
32 nominee name of the Illinois Public Treasurer's Investment
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1 Pool.
2 The assets of the pension fund and ownership of its
3 investments shall be protected through third-party custodial
4 safekeeping. The board of trustees may appoint as custodian
5 of the investments of its pension fund the treasurer of the
6 municipality, a bank or trust company authorized to conduct a
7 trust business in Illinois, or the Illinois Public
8 Treasurer's Investment Pool.
9 A dealer may not maintain possession of or control over
10 securities of a pension fund subject to the provisions of
11 this Section unless it is registered as a broker-dealer with
12 the U.S. Securities and Exchange Commission and is a member
13 in good standing of the National Association of Securities
14 Dealers, and (1) with respect to securities that are not
15 issued only in book-entry form, (A) all such securities of
16 each fund are either held in safekeeping in a place
17 reasonably free from risk of destruction or held in custody
18 by a securities depository that is a "clearing agency"
19 registered with the U.S. Securities and Exchange Commission,
20 (B) the dealer is a member of the Securities Investor
21 Protection Corporation, (C) the dealer sends to each fund, no
22 less frequently than each calendar quarter, an itemized
23 statement showing the moneys and securities in the custody or
24 possession of the dealer at the end of such period, and (D)
25 an independent certified public account conducts an audit, no
26 less frequently than each calendar year, that reviews the
27 dealer's internal accounting controls and procedures for
28 safeguarding securities; and (2) with respect to securities
29 that are issued only in book-entry form, (A) all such
30 securities of each fund are held either in a securities
31 depository that is a "clearing agency" registered with the
32 U.S. Securities and Exchange Commission or in a bank that is
33 a member of the Federal Reserve System, (B) the dealer
34 records the ownership interest of the funds in such
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1 securities on the dealer's books and records, (C) the dealer
2 is a member of the Securities Investor Protection
3 Corporation, (D) the dealer sends to each fund, no less
4 frequently than each calendar quarter, an itemized statement
5 showing the moneys and securities in the custody or
6 possession of the dealer at the end of such period, and (E)
7 the dealer's financial statement (which shall contain among
8 other things a statement of the dealer's net capital and its
9 required net capital computed in accordance with Rule 15c3-1
10 under the Securities Exchange Act of 1934) is audited
11 annually by an independent certified public accountant, and
12 the dealer's most recent audited financial statement is
13 furnished to the fund. No broker-dealer serving as a
14 custodian for any public pension fund as provided by this Act
15 shall be authorized to serve as an investment advisor for
16 that same public pension fund as described in Section 1-101.4
17 of this Code, to the extent that the investment advisor
18 acquires or disposes of any asset of that same public pension
19 fund. Notwithstanding the foregoing, in no event may a
20 broker or dealer that is a natural person maintain possession
21 of or control over securities or other assets of a pension
22 fund subject to the provisions of this Section. In
23 maintaining securities of a pension fund subject to the
24 provisions of this Section, each dealer must maintain those
25 securities in conformity with the provisions of Rule
26 15c3-3(b) of the Securities Exchange Act of 1934 (Physical
27 Possession or Control of Securities). The Director of the
28 Department of Insurance may adopt such rules and regulations
29 as shall be necessary and appropriate in his or her judgment
30 to effectuate the purposes of this Section.
31 A bank or trust company authorized to conduct a trust
32 business in Illinois shall register, deposit, or hold
33 investments for safekeeping, all in accordance with the
34 obligations and subject to the limitations of the Securities
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1 in Fiduciary Accounts Act.
2 (40 ILCS 5/1-113.8 new)
3 Sec. 1-113.8. Limitations on banks and savings and loan
4 associations. A bank or savings and loan association shall
5 not receive investment funds from a pension fund established
6 under Article 3 or 4 of this Code, unless it has complied
7 with the requirements established under Section 6 of the
8 Public Funds Investment Act. The limitations set forth in
9 that Section 6 are applicable only at the time of investment
10 and do not require the liquidation of any investment at any
11 time.
12 (40 ILCS 5/1-113.9 new)
13 Sec. 1-113.9. Illegal investments. A person registered
14 as a dealer, salesperson, or investment adviser under the
15 Illinois Securities Law of 1953 who sells a pension fund a
16 security, or engages in a transaction with a pension fund,
17 that is not authorized by this Code, shall be subject to the
18 penalty provisions of Subsection E of Section 8 of the
19 Illinois Securities Law of 1953, if (1) the dealer,
20 salesperson, or investment adviser has discretionary
21 authority or control over the fund's assets and has
22 acknowledged in writing that it is acting in a fiduciary
23 capacity for the fund, (2) the fund has requested the
24 investment advice of the dealer, salesperson, or investment
25 adviser and has provided the dealer, salesperson, or
26 investment adviser with its investment policy, and the
27 dealer, salesperson, or investment adviser acknowledges in
28 writing that the fund is relying primarily on the investment
29 advice of that dealer, salesperson, or investment adviser, or
30 (3) the dealer, salesperson, or investment adviser knows or
31 has reason to know that the fund is not capable of
32 independently evaluating investment risk or exercising
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1 independent judgment with respect to a particular securities
2 transaction, and nonetheless recommends that the fund engage
3 in that transaction.
4 A bank or trust company authorized to conduct a trust
5 business in Illinois or a broker-dealer, and any officer,
6 director, or employee thereof, that advises or causes a
7 pension fund to make an investment or engages in a
8 transaction not authorized by this Code is subject to the
9 penalty provisions of Article V of the Corporate Fiduciary
10 Act.
11 (40 ILCS 5/1-113.10 new)
12 Sec. 1-113.10. Legality at time of investment. The
13 investment limitations set forth in this Article are
14 applicable only at the time of investment and do not require
15 the liquidation of any investment at any time. However, no
16 additional pension funds may be invested in any investment
17 item while the market value of the pension fund's investments
18 in that item meets or exceeds the applicable limitation.
19 (40 ILCS 5/1-113.11 new)
20 Sec. 1-113.11. Rules. The Department of Insurance is
21 authorized to promulgate rules that are necessary or useful
22 for the administration and enforcement of Sections 1-113.1
23 through 1-113.10 of this Article.
24 (40 ILCS 5/1-113.12 new)
25 Sec. 1-113.12. Application. Sections 1-113.1 through
26 1-113.10 apply only to pension funds established under
27 Article 3 or 4 of this Code.
28 (40 ILCS 5/Art. 1A heading new)
29 ARTICLE 1A. REGULATION OF PUBLIC PENSION FUNDS
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1 (40 ILCS 5/1A-101 new)
2 Sec. 1A-101. Creation of Public Pension Division. There
3 is created in the Department of Insurance a Public Pension
4 Division which, under the supervision and direction of the
5 Director of Insurance, shall exercise the powers and perform
6 the duties and functions prescribed under this Code. The
7 Division shall consist of an administrator, a supervisor, a
8 technical staff trained in the fundamentals of public pension
9 fund planning, operations, administration, and investment of
10 public pension funds, and such other personnel as may be
11 necessary properly and effectively to discharge the functions
12 of the Division.
13 (40 ILCS 5/1A-102 new)
14 Sec. 1A-102. Definitions. As used in this Article, the
15 following terms have the meanings ascribed to them in this
16 Section, unless the context otherwise requires:
17 "Accrued liability" means the actuarial present value of
18 future benefit payments and appropriate administrative
19 expenses under a plan, reduced by the actuarial present value
20 of all future normal costs (including any participant
21 contributions) with respect to the participants included in
22 the actuarial valuation of the plan.
23 "Actuarial present value" means the single amount, as of
24 a given valuation date, that results from applying actuarial
25 assumptions to an amount or series of amounts payable or
26 receivable at various times.
27 "Actuarial value of assets" means the value assigned by
28 the actuary to the assets of a plan for the purposes of an
29 actuarial valuation.
30 "Basis point" means 1/100th of one percent.
31 "Beneficiary" means a person eligible for or receiving
32 benefits from a pension fund as provided in the Article of
33 this Code under which the fund is established.
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1 "Credited projected benefit" means that portion of a
2 participant's projected benefit based on an allocation taking
3 into account service to date determined in accordance with
4 the terms of the plan based on anticipated future
5 compensation.
6 "Current value" means the fair market value when
7 available; otherwise, the fair value as determined in good
8 faith by a trustee, assuming an orderly liquidation at the
9 time of the determination.
10 "Department" means the Department of Insurance of the
11 State of Illinois.
12 "Director" means the Director of the Department of
13 Insurance.
14 "Division" means the Public Pension Division of the
15 Department of Insurance.
16 "Governmental unit" means the State of Illinois, any
17 instrumentality or agency thereof (except transit authorities
18 or agencies operating within or within and without cities
19 with a population over 3,000,000), and any political
20 subdivision or municipal corporation that establishes and
21 maintains a public pension fund.
22 "Normal cost" means that part of the actuarial present
23 value of all future benefit payments and appropriate
24 administrative expenses assigned to the current year under
25 the actuarial valuation method used by the plan (excluding
26 any amortization of the unfunded accrued liability).
27 "Participant" means a participating member or deferred
28 pensioner or annuitant of a pension fund as provided in the
29 Article of this Code under which the pension fund is
30 established, or a beneficiary thereof.
31 "Pension fund" means any public pension fund, annuity and
32 benefit fund, or retirement system established under this
33 Code.
34 "Plan year" means the calendar or fiscal year on which
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1 the records of a given plan are kept.
2 "Projected benefits" means benefit amounts under a plan
3 which are expected to be paid at various future times under a
4 particular set of actuarial assumptions, taking into account,
5 as applicable, the effect of advancement in age and past and
6 anticipated future compensation and service credits.
7 "Supplemental annual cost" means that portion of the
8 unfunded accrued liability assigned to the current year under
9 one of the following bases:
10 (1) interest only on the unfunded accrued
11 liability;
12 (2) the level annual amount required to amortize
13 the unfunded accrued liability over a period not
14 exceeding 40 years;
15 (3) the amount required for the current year to
16 amortize the unfunded accrued liability over a period not
17 exceeding 40 years as a level percentage of payroll.
18 "Total annual cost" means the sum of the normal cost plus
19 the supplemental annual cost.
20 "Unfunded accrued liability" means the excess of the
21 accrued liability over the actuarial value of the assets of a
22 plan.
23 "Vested pension benefit" means an interest obtained by a
24 participant or beneficiary in that part of an immediate or
25 deferred benefit under a plan which arises from the
26 participant's service and is not conditional upon the
27 participant's continued service for an employer any of whose
28 employees are covered under the plan, and which has not been
29 forfeited under the terms of the plan.
30 (40 ILCS 5/1A-103 new)
31 Sec. 1A-103. Rules. The Department is authorized to
32 promulgate rules necessary for the administration and
33 enforcement of this Code. Except as otherwise provided under
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1 this Code, these rules shall apply only to pension funds
2 established under Article 3 or Article 4 of this Code. Rules
3 adopted pursuant to this Section shall govern where conflict
4 with local rules and regulations exists.
5 (40 ILCS 5/1A-104 new)
6 Sec. 1A-104. Examinations and investigations.
7 (a) The Division shall make periodic examinations and
8 investigations of all pension funds established under this
9 Code and maintained for the benefit of employees and officers
10 of governmental units in the State of Illinois. However, in
11 lieu of making an examination and investigation, the Division
12 may accept and rely upon a report of audit or examination of
13 any pension fund made by an independent certified public
14 accountant pursuant to the provisions of the Article of this
15 Code governing the pension fund. The acceptance of the
16 report of audit or examination does not bar the Division from
17 making a further audit, examination, and investigation if
18 deemed necessary by the Division.
19 The Department may implement a flexible system of
20 examinations under which it directs resources as it deems
21 necessary or appropriate. In consultation with the pension
22 fund being examined, the Division may retain attorneys,
23 independent actuaries, independent certified public
24 accountants, and other professionals and specialists as
25 examiners, the cost of which (except in the case of pension
26 funds established under Article 3 or 4) shall be borne by the
27 pension fund that is the subject of the examination.
28 (b) The Division shall examine or investigate each
29 pension fund established under Article 3 or Article 4 of this
30 Code.
31 Each examination shall include the following:
32 (1) an audit of financial transactions, investment
33 policies, and procedures;
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1 (2) an examination of books, records, documents,
2 files, and other pertinent memoranda relating to
3 financial, statistical, and administrative operations;
4 (3) a review of policies and procedures maintained
5 for the administration and operation of the pension fund;
6 (4) a determination of whether or not full effect
7 is being given to the statutory provisions governing the
8 operation of the pension fund;
9 (5) a determination of whether or not the
10 administrative policies in force are in accord with the
11 purposes of the statutory provisions and effectively
12 protect and preserve the rights and equities of the
13 participants; and
14 (6) a determination of whether or not proper
15 financial and statistical records have been established
16 and adequate documentary evidence is recorded and
17 maintained in support of the several types of annuity and
18 benefit payments being made.
19 In addition, the Division may conduct investigations,
20 which shall be identified as such and which may include one
21 or more of the items listed in this subsection.
22 A copy of the report of examination or investigation as
23 prepared by the Division shall be submitted to the secretary
24 of the board of trustees of the pension fund examined or
25 investigated. The Director, upon request, shall grant a
26 hearing to the officers or trustees of the pension fund or
27 their duly appointed representatives, upon any facts
28 contained in the report of examination. The hearing shall be
29 conducted before filing the report or making public any
30 information contained in the report. The Director may
31 withhold the report from public inspection for up to 60 days
32 following the hearing.
33 (40 ILCS 5/1A-105 new)
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1 Sec. 1A-105. Examination and subpoena of records and
2 witnesses. The Director may administer oaths and
3 affirmations and summon and compel the attendance before him
4 or her and examine under oath any officer, trustee, agent,
5 actuary, attorney, or employee connected either directly or
6 indirectly with any pension fund, or any other person having
7 information regarding the condition, affairs, management,
8 administration, or methods of conducting a pension fund. The
9 Director may require any person having possession of any
10 record, book, paper, contract, or other document pertaining
11 to a pension fund to surrender it or to otherwise afford the
12 Director access to it and for failure so to do the Director
13 may attach the same.
14 Should any person fail to obey the summons of the
15 Director or refuse to surrender to him or her or afford him
16 or her access to any such record, book, paper, contract, or
17 other document, the Director may apply to the circuit court
18 of the county in which the principal office of the pension
19 fund involved is located, and the court, if it finds that the
20 Director has not exceeded his or her authority in the matter,
21 may, by order duly entered, require the attendance of
22 witnesses and the production of all relevant documents
23 required by the Director in carrying out his or her
24 responsibilities under this Code. Upon refusal or neglect to
25 obey the order of the court, the court may compel obedience
26 by proceedings for contempt of court.
27 (40 ILCS 5/1A-106 new)
28 Sec. 1A-106. Advisory services. The Division shall
29 render advisory services to the pension funds on all matters
30 pertaining to their operations and shall recommend any
31 corrective or clarifying legislation that it may deem
32 necessary. These recommendations shall be made in the report
33 of examination of the particular pension fund and in the
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1 biennial report to the General Assembly under Section 1A-108.
2 The recommendations may embrace all substantive legislative
3 and administrative policies, including, but not limited to,
4 matters dealing with the payment of annuities and benefits,
5 the investment of funds, and the condition of the books,
6 records, and accounts of the pension fund.
7 (40 ILCS 5/1A-107 new)
8 Sec. 1A-107. Automation of services. The Division shall
9 automate its operations, services, and communications to the
10 fullest practical extent. This automation shall include, but
11 need not be limited to, the acquisition, use, and maintenance
12 of electronic data processing technology to (i) automate
13 Division operations as necessary to carry out its duties and
14 responsibilities under this Code, (ii) provide by FY 2000
15 electronic exchange of information between the Division and
16 pension funds subject to this Code, (iii) provide to pension
17 funds and the general public and receive from pension funds
18 and the general public data on computer processible media,
19 and (iv) control access to information when necessary to
20 protect the confidentiality of persons identified in the
21 information.
22 The Division shall ensure that this automation is
23 designed so as to protect any confidential data it may
24 receive from a pension fund. This Section does not authorize
25 the Division or the Department of Insurance to disclose any
26 information identifying specific pension fund participants or
27 relating to an identifiable pension fund participant.
28 (40 ILCS 5/1A-108 new)
29 Sec. 1A-108. Report to the Governor and General Assembly.
30 On or before October 1 following the convening of a regular
31 session of the General Assembly, the Division shall submit a
32 report to the Governor and General Assembly setting forth the
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1 latest financial statements on the pension funds operating in
2 the State of Illinois, a summary of the current provisions
3 underlying these funds, and a report on any changes that have
4 occurred in these provisions since the date of the last such
5 report submitted by the Division.
6 The report shall also include the results of examinations
7 made by the Division of any pension fund and any specific
8 recommendations for legislative and administrative correction
9 that the Division deems necessary. The report may embody
10 general recommendations concerning desirable changes in any
11 existing pension, annuity, or retirement laws designed to
12 standardize and establish uniformity in their basic
13 provisions and to bring about an improvement in the financial
14 condition of the pension funds. The purposes of these
15 recommendations and the objectives sought shall be clearly
16 expressed in the report.
17 The requirement for reporting to the General Assembly
18 shall be satisfied by filing copies of the report with the
19 Speaker, the Minority Leader, and the Clerk of the House of
20 Representatives, the President, the Minority Leader, and the
21 Secretary of the Senate, and the Legislative Research Unit,
22 as required by Section 3.1 of the General Assembly
23 Organization Act, and filing additional copies with the State
24 Government Report Distribution Center for the General
25 Assembly as required under paragraph (t) of Section 7 of the
26 State Library Act.
27 Upon request, the Division shall distribute additional
28 copies of the report at no charge to the secretary of each
29 pension fund established under Article 3 or 4, the treasurer
30 or fiscal officer of each municipality with an established
31 police or firefighter pension fund, the executive director of
32 every other pension fund established under this Code, and to
33 public libraries, State agencies, and police, firefighter,
34 and municipal organizations active in the public pension
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1 area.
2 (40 ILCS 5/1A-109 new)
3 Sec. 1A-109. Annual statements by pension funds. Each
4 pension fund shall furnish to the Division an annual
5 statement in a format prepared by the Division. The Division
6 shall design the form and prescribe the content of the annual
7 statement and, at least 60 days prior to the filing date,
8 shall furnish the form to each pension fund for completion.
9 The annual statement shall be prepared by each fund, properly
10 certified by its officers, and submitted to the Division
11 within 6 months following the close of the fiscal year of the
12 pension fund.
13 The annual statement shall include, but need not be
14 limited to, the following:
15 (1) a financial balance sheet as of the close of
16 the fiscal year;
17 (2) a statement of income and expenditures;
18 (3) an actuarial balance sheet;
19 (4) statistical data reflecting age, service, and
20 salary characteristics concerning all participants;
21 (5) special facts concerning disability or other
22 claims;
23 (6) details on investment transactions that
24 occurred during the fiscal year covered by the report;
25 (7) details on administrative expenses; and
26 (8) such other supporting data and schedules as in
27 the judgement of the Division may be necessary for a
28 proper appraisal of the financial condition of the
29 pension fund and the results of its operations. The
30 annual statement shall also specify the actuarial and
31 interest tables used in the operation of the pension
32 fund.
33 A pension fund that fails to file its annual statement
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1 within the time prescribed under this Section is subject to
2 the penalty provisions of Section 1A-113.
3 (40 ILCS 5/1A-110 new)
4 Sec. 1A-110. Actuarial statements by pension funds
5 established under Articles other than 3 or 4.
6 (a) Each pension fund established under an Article of
7 this Code other than Article 3 or 4 shall include as part of
8 its annual statement a complete actuarial statement
9 applicable to the plan year.
10 The actuarial statement shall be filed with the Division
11 within 9 months after the close of the fiscal year of the
12 pension fund. Any pension fund that fails to file within
13 that time is subject to the penalty provisions of Section
14 1A-113.
15 The board of trustees of each pension fund subject to
16 this Section, on behalf of all its participants, shall engage
17 an enrolled actuary who shall be responsible for the
18 preparation of the materials comprising the actuarial
19 statement. The enrolled actuary shall utilize such
20 assumptions and methods as are necessary for the contents of
21 the matters reported in the actuarial statement to be
22 reasonably related to the experience of the plan and to
23 reasonable expectations, and to represent in the aggregate
24 the actuary's best estimate of anticipated experience under
25 the plan.
26 The actuarial statement shall include a description of
27 the actuarial assumptions and methods used to determine the
28 actuarial values in the statement and shall disclose the
29 impact of significant changes in the actuarial assumptions
30 and methods, plan provisions, and other pertinent factors on
31 the actuarial position of the plan.
32 The actuarial statement shall include a statement by the
33 enrolled actuary that to the best of his or her knowledge the
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1 actuarial statement is complete and accurate and has been
2 prepared in accordance with generally accepted actuarial
3 principles and practice.
4 For the purposes of this Section, "enrolled actuary"
5 means an actuary who (1) is a member of the Society of
6 Actuaries or the American Academy of Actuaries and (2) either
7 is enrolled under Subtitle C of Title III of the Employee
8 Retirement Income Security Act of 1974 or was engaged in
9 providing actuarial services to a public retirement plan in
10 Illinois on July 1, 1983.
11 (b) The actuarial statement referred to in subsection
12 (a) shall include all of the following:
13 (1) The dates of the plan year and the date of the
14 actuarial valuation applicable to the plan year for which
15 the actuarial statement is filed.
16 (2) The amount of (i) the contributions made by the
17 participants, and (ii) all other contributions, including
18 those made by the employer or employers.
19 (3) The total estimated amount of the covered
20 compensation with respect to active participants for the
21 plan year for which the statement is filed.
22 (4) The number of (i) active participants, (ii)
23 terminated participants currently eligible for deferred
24 vested pension benefits or the return of contributions
25 made by those participants, and (iii) all other
26 participants and beneficiaries included in the actuarial
27 valuation.
28 (5) The following values as of the date of the
29 actuarial valuation applicable to the plan year for which
30 the statement is filed:
31 (i) The current value of assets accumulated in
32 the plan.
33 (ii) The unfunded accrued liability. The
34 major factors that have resulted in the change in
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1 the unfunded accrued liability from the previous
2 year shall be identified. Effects that are
3 individually significant shall be separately
4 identified. As a minimum, the effect of the
5 following shall be shown: plan amendments; changes
6 in actuarial assumptions; experience less (or more)
7 favorable than that assumed; and contributions less
8 (or more) than the normal cost plus interest on the
9 unfunded accrued liability.
10 (iii) The amount of accumulated contributions
11 for active participants (including interest, if
12 any).
13 (iv) The actuarial present value of credited
14 projected benefits for vested participants currently
15 receiving benefits, other vested participants, and
16 non-vested participants.
17 (6) The actuarial value of assets.
18 (7) Any other information that is necessary to
19 fully and fairly disclose the actuarial position of the
20 plan and any other information the enrolled actuary may
21 present.
22 (8) Any other information regarding the plan that
23 the Division may by rule request.
24 (40 ILCS 5/1A-111 new)
25 Sec. 1A-111. Actuarial statements by pension funds
26 established under Article 3 or 4.
27 (a) Each pension fund established under Article 3 or 4
28 of this Code shall include as part of its annual statement a
29 complete actuarial statement applicable to the plan year.
30 If the actuarial statement is prepared by a person other
31 than the Department, it shall be filed with the Division
32 within 9 months after the close of the fiscal year of the
33 pension fund. Any pension fund that fails to file within
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1 that time shall be subject to the penalty provisions of
2 Section 1A-113. The statement shall be prepared by or under
3 the supervision of a qualified actuary, signed by the
4 qualified actuary, and contain such information as the
5 Division may by rule require.
6 (b) For the purposes of this Section, "qualified
7 actuary" means (i) a member of the American Academy of
8 Actuaries, or (ii) an individual who has demonstrated to the
9 satisfaction of the Director that he or she has the
10 educational background necessary for the practice of
11 actuarial science and has at least 7 years of actuarial
12 experience.
13 (40 ILCS 5/1A-112 new)
14 Sec. 1A-112. Fees.
15 (a) Every pension fund that is required to file an
16 annual statement under Section 1A-109 shall pay to the
17 Department an annual compliance fee. In the case of a
18 pension fund under Article 3 or 4 of this Code, the annual
19 compliance fee shall be 0.007% (0.7 basis points) of the
20 total assets of the pension fund, as reported in the most
21 current annual statement of the fund, but not more than
22 $6,000. In the case of all other pension funds and
23 retirement systems, the annual compliance fee shall be
24 $6,000.
25 (b) The annual compliance fee shall be due on June 30
26 for the following State fiscal year, except that the fee
27 payable in 1997 for fiscal year 1998 shall be due no earlier
28 than 30 days following the effective date of this amendatory
29 Act of 1997.
30 (c) Any information obtained by the Division that is
31 available to the public under the Freedom of Information Act
32 and is either compiled in published form or maintained on a
33 computer processible medium shall be furnished upon the
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1 written request of any applicant and the payment of a
2 reasonable information services fee established by the
3 Director, sufficient to cover the total cost to the Division
4 of compiling, processing, maintaining, and generating the
5 information. The information may be furnished by means of
6 published copy or on a computer processed or computer
7 processible medium.
8 No fee may be charged to any person for information that
9 the Division is required by law to furnish to that person.
10 (d) Except as otherwise provided in this Section, all
11 fees and penalties collected by the Department under this
12 Code shall be deposited into the Public Pension Regulation
13 Fund.
14 (e) Fees collected under subsection (c) of this Section
15 and money collected under Section 1A-107 shall be deposited
16 into the Department's Statistical Services Revolving Fund and
17 credited to the account of the Public Pension Division. This
18 income shall be used exclusively for the purposes set forth
19 in Section 1A-107. Notwithstanding the provisions of Section
20 408.2 of the Illinois Insurance Code, no surplus funds
21 remaining in this account shall be deposited in the Insurance
22 Financial Regulation Fund. All money in this account that
23 the Director certifies is not needed for the purposes set
24 forth in Section 1A-107 of this Code shall be transferred to
25 the Public Pension Regulation Fund.
26 (f) Nothing in this Code prohibits the General Assembly
27 from appropriating funds from the General Revenue Fund to the
28 Department for the purpose of administering or enforcing this
29 Code.
30 (40 ILCS 5/1A-113 new)
31 Sec. 1A-113. Penalties.
32 (a) A pension fund that fails, without just cause, to
33 file its annual statement within the time prescribed under
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1 Section 1A-109 shall pay to the Department a penalty to be
2 determined by the Department, which shall not exceed $100 for
3 each day's delay.
4 (b) A pension fund that fails, without just cause, to
5 file its actuarial statement within the time prescribed under
6 Section 1A-110 or 1A-111 shall pay to the Department a
7 penalty to be determined by the Department, which shall not
8 exceed $100 for each day's delay.
9 (c) A pension fund that fails to pay a fee within the
10 time prescribed under Section 1A-112 shall pay to the
11 Department a penalty of 5% of the amount of the fee for each
12 month or part of a month that the fee is late. The entire
13 penalty shall not exceed 25% of the fee due.
14 (d) This subsection applies to any governmental unit, as
15 defined in Section 1A-102, that is subject to any law
16 establishing a pension fund or retirement system for the
17 benefit of employees of the governmental unit.
18 Whenever the Division determines by examination,
19 investigation, or in any other manner that the governing body
20 or any elected or appointed officer or official of a
21 governmental unit has failed to comply with any provision of
22 that law:
23 (1) The Director shall notify in writing the
24 governing body, officer, or official of the specific
25 provision or provisions of the law with which the person
26 has failed to comply.
27 (2) Upon receipt of the notice, the person notified
28 shall take immediate steps to comply with the provisions
29 of law specified in the notice.
30 (3) If the person notified fails to comply within a
31 reasonable time after receiving the notice, the Director
32 may hold a hearing at which the person notified may show
33 cause for noncompliance with the law.
34 (4) If upon hearing the Director determines that
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1 good and sufficient cause for noncompliance has not been
2 shown, the Director may order the person to submit
3 evidence of compliance within a specified period of not
4 less than 30 days.
5 (5) If evidence of compliance has not been
6 submitted to the Director within the period of time
7 prescribed in the order and no administrative appeal from
8 the order has been initiated, the Director may assess a
9 civil penalty of up to $2,000 against the governing body,
10 officer, or official for each noncompliance with an order
11 of the Director.
12 The Director shall develop by rule, with as much
13 specificity as practicable, the standards and criteria to be
14 used in assessing penalties and their amounts. The standards
15 and criteria shall include, but need not be limited to,
16 consideration of evidence of efforts made in good faith to
17 comply with applicable legal requirements. This rulemaking
18 is subject to the provisions of the Illinois Administrative
19 Procedure Act.
20 If a penalty is not paid within 30 days of the date of
21 assessment, the Director without further notice shall report
22 the act of noncompliance to the Attorney General of this
23 State. It shall be the duty of the Attorney General or, if
24 the Attorney General so designates, the State's Attorney of
25 the county in which the governmental unit is located to apply
26 promptly by complaint on relation of the Director of
27 Insurance in the name of the people of the State of Illinois,
28 as plaintiff, to the circuit court of the county in which the
29 governmental unit is located for enforcement of the penalty
30 prescribed in this subsection or for such additional relief
31 as the nature of the case and the interest of the employees
32 of the governmental unit or the public may require.
33 (e) Whoever knowingly makes a false certificate, entry,
34 or memorandum upon any of the books or papers pertaining to
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1 any pension fund or upon any statement, report, or exhibit
2 filed or offered for file with the Division or the Director
3 of Insurance in the course of any examination, inquiry, or
4 investigation, with intent to deceive the Director, the
5 Division, or any of its employees is guilty of a Class A
6 misdemeanor.
7 (40 ILCS 5/3-102) (from Ch. 108 1/2, par. 3-102)
8 Sec. 3-102. Terms defined. The terms used in this
9 Article have the meanings ascribed to them in Sections 3-103
10 through 3-108.3 3-108.1, except when the context otherwise
11 requires.
12 (Source: P.A. 83-1440.)
13 (40 ILCS 5/3-108.2 new)
14 Sec. 3-108.2. Participant. "Participant": A police
15 officer or deferred pensioner of a pension fund, or a
16 beneficiary of the pension fund.
17 (40 ILCS 5/3-108.3 new)
18 Sec. 3-108.3. Beneficiary. "Beneficiary": A person
19 receiving benefits from a pension fund, including, but not
20 limited to, retired pensioners, disabled pensioners, their
21 surviving spouses, minor children, disabled children, and
22 dependent parents.
23 (40 ILCS 5/3-132) (from Ch. 108 1/2, par. 3-132)
24 Sec. 3-132. To control and manage the Pension Fund. In
25 accordance with the applicable provisions of Articles 1 and
26 1A and this Article, to control and manage, exclusively, the
27 following:
28 (1) the pension fund,
29 (2) investment expenditures and income, including
30 interest dividends, capital gains and other distributions
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1 on the investments, and
2 (3) all money donated, paid, or assessed, or
3 provided by law for the pensioning of disabled and
4 retired police officers, their surviving spouses, minor
5 children, and dependent parents.
6 All money received or collected shall be credited by the
7 treasurer of the municipality such moneys shall be placed by
8 the treasurer of the municipality to the account credit of
9 the pension fund, and held by the treasurer of the
10 municipality subject to the order and control of the board.
11 The treasurer of the municipality shall maintain a record of
12 all money received, transferred, and held for the account of
13 the board.
14 (Source: P.A. 83-1440.)
15 (40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)
16 Sec. 3-135. To draw and invest funds. Beginning January
17 1, 1998, the board shall invest funds in accordance with
18 Sections 1-113.1 through 1-113.10 of this Code. To draw
19 pension funds from the treasurer of the municipality, and
20 invest any part thereof in the name of the board in: (1)
21 interest bearing bonds or tax anticipation warrants of the
22 United States, of the State of Illinois, or of any county,
23 township or municipal corporation of the State of Illinois;
24 (2) insured withdrawable capital accounts of State chartered
25 savings and loan associations; (3) insured withdrawable
26 capital accounts of federal chartered federal savings and
27 loan associations if the withdrawable capital accounts are
28 insured by the Federal Savings and Loan Insurance
29 Corporation; (4) insured investments in credit unions if the
30 investments are insured by the National Credit Union
31 Administration; (5) savings accounts or certificates of
32 deposit of a national or State bank; (6) securities described
33 in item 5.1 of Section 1-113 of this Code, but only subject
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1 to the conditions therein set forth; (7) contracts and
2 agreements supplemental thereto providing for investments in
3 the general account of a life insurance company authorized to
4 do business in Illinois; (8) separate accounts of a life
5 insurance company authorized to do business in Illinois,
6 comprised of common or preferred stocks, bonds, or money
7 market instruments; and (9) separate accounts managed by a
8 life insurance company authorized to do business in Illinois,
9 comprised of real estate or loans upon real estate secured by
10 first or second mortgages. The total investment in such
11 separate accounts shall not exceed 10% of the aggregate book
12 value of all investments owned by the fund. All securities
13 shall be deposited with the treasurer of the municipality,
14 and be subject to the order of the board. Interest on the
15 investments shall be credited to the pension fund.
16 No bank or savings and loan association shall receive
17 investment funds as permitted by this Section, unless it has
18 complied with the requirements established pursuant to
19 Section 6 of "An Act relating to certain investments of
20 public funds by public agencies", approved July 23, 1943, as
21 now or hereafter amended. The limitations set forth in such
22 Section 6 shall be applicable only at the time of investment
23 and shall not require the liquidation of any investment at
24 any time.
25 (Source: P.A. 84-1472.)
26 (40 ILCS 5/3-143) (from Ch. 108 1/2, par. 3-143)
27 Sec. 3-143. Report by board. The board shall report
28 annually to the city council or board of trustees of the
29 municipality on the condition of the pension fund at the end
30 of its most recently completed fiscal year. The report shall
31 be made prior to the council or board meeting held for the
32 levying of taxes for the year for which the report is made.
33 The board shall certify:
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1 (1) the assets of the fund in its custody at the
2 end of the fiscal year such time;
3 (2) the estimated receipts during the next
4 succeeding fiscal calendar year from deductions from the
5 salaries of police officers, and from all other sources;
6 and
7 (3) the estimated amount required during the next
8 succeeding fiscal said calendar year to (a) pay all
9 pensions and other obligations provided in this Article,
10 and (b) to meet the annual requirements of the fund as
11 provided in Sections Section 3-125 and 3-127; and
12 (4) the total net income received from investment
13 of assets, compared to such income received during the
14 preceding fiscal year.
15 Before the board makes its report, the municipality shall
16 have the assets of the fund and their current market value
17 verified by an independent certified public accountant of its
18 choice.
19 (Source: P.A. 83-1440.)
20 (40 ILCS 5/4-105c new)
21 Sec. 4-105c. Participant. "Participant": A firefighter
22 or deferred pensioner of a pension fund, or a beneficiary of
23 the pension fund.
24 (40 ILCS 5/4-105d new)
25 Sec. 4-105d. Beneficiary. "Beneficiary": A person
26 receiving benefits from a pension fund, including, but not
27 limited to, retired pensioners, disabled pensioners, their
28 surviving spouses, minor children, disabled children, and
29 dependent parents.
30 (40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)
31 Sec. 4-123. To control and manage the Pension Fund. In
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1 accordance with the applicable provisions of Articles 1 and
2 1A and this Article, to control and manage, exclusively, the
3 following:
4 (1) the pension fund,
5 (2) investment expenditures and income, including
6 interest dividends, capital gains, and other
7 distributions on the investments, and
8 (3) all money donated, paid, assessed, or provided
9 by law for the pensioning of disabled and retired
10 firefighters, their surviving spouses, minor children,
11 and dependent parents.
12 All money received or collected shall be credited by the
13 treasurer of the municipality to the account of the pension
14 fund and held by the treasurer of the municipality subject to
15 the order and control of the board. The treasurer of the
16 municipality shall maintain a record of all money received,
17 transferred, and held for the account of the board.
18 (Source: P.A. 83-1440.)
19 (40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)
20 Sec. 4-128. To invest funds. Beginning January 1, 1998,
21 the board shall invest funds in accordance with Sections
22 1-113.1 through 1-113.10 of this Code. To invest the money
23 of the pension fund only in: (1) interest bearing bonds of
24 the United States, or of the State of Illinois, or of any
25 county, city, township, village, incorporated town, municipal
26 corporation or school district in this State; (2) tax
27 anticipation warrants issued by any city, township, village,
28 incorporated town, or fire protection district included
29 within this Article; (3) notes, bonds, debentures or other
30 similar obligations which are guaranteed as to principal and
31 interest by the United States; (4) insured withdrawable
32 capital accounts of State chartered savings and loan
33 associations; (5) insured withdrawable capital accounts of
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1 federal chartered federal savings and loan associations if
2 the withdrawable capital accounts are insured by the Federal
3 Savings and Loan Insurance Corporation; (6) insured
4 investments in credit unions if the investments are insured
5 by the National Credit Union Administration; and (7) savings
6 accounts or certificates of deposit of a national or State
7 bank; (8) securities described in item 5.1 of Section 1-113
8 of this Code, but only subject to the conditions therein set
9 forth; (9) contracts and agreements supplemental thereto
10 providing for investments in the general account of a life
11 insurance company authorized to do business in Illinois; (10)
12 separate accounts of a life insurance company authorized to
13 do business in Illinois, comprised of common or preferred
14 stocks, bonds, or money market instruments; and (11) separate
15 accounts managed by a life insurance company authorized to do
16 business in Illinois, comprised of real estate or loans upon
17 real estate secured by first or second mortgages. The total
18 investment in such separate accounts shall not exceed 10% of
19 the aggregate book value of all investments owned by the
20 fund.
21 Bonds purchased hereunder shall be registered in the name
22 of the board or held under custodial agreement at a bank.
23 No bank or savings and loan association shall receive
24 investment funds as permitted by this Section, unless it has
25 complied with the requirements established pursuant to
26 Section 6 of "An Act relating to certain investments of
27 public funds by public agencies", approved July 23, 1943, as
28 now or hereafter amended. The limitations set forth in such
29 Section 6 shall be applicable only at the time of investment
30 and shall not require the liquidation of any investment at
31 any time.
32 (Source: P.A. 84-1472.)
33 (40 ILCS 5/4-134) (from Ch. 108 1/2, par. 4-134)
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1 Sec. 4-134. Report for tax levy. The board shall report
2 to the city council or board of trustees of the municipality
3 on the condition of the pension fund at the end of its most
4 recently completed fiscal year. The report shall be made
5 prior to the council or board meeting held for appropriating
6 and levying taxes for the year for which the report is made.
7 The board in the report shall certify:
8 (1) the assets of the fund and their current market
9 value in its custody at such time;
10 (2) the estimated receipts during the next
11 succeeding fiscal year (from January 1 to December 31)
12 from deductions from the salaries or wages of
13 firefighters firemen, and from all other sources;
14 (3) the estimated amount necessary during the
15 fiscal year such period to meet the annual actuarial
16 requirements of the pension fund as provided in Sections
17 Section 4-118 and 4-120; and
18 (4) the total net income received from investment
19 of assets, compared to such income received during the
20 preceding fiscal year.
21 Before the board makes its report, the municipality shall
22 have the assets of the fund and their current market value
23 verified by an independent certified public accountant of its
24 choice.
25 (Source: P.A. 85-293.)
26 Section 5. The Illinois Pension Code is amended by
27 changing Section 18-123 as follows:
28 (40 ILCS 5/18-123) (from Ch. 108 1/2, par. 18-123)
29 Sec. 18-123. Participation in survivor's annuity. A
30 participant in active service as a judge after July 26, 1949,
31 is eligible to participate in the survivor's annuity provided
32 under this Article. A married participant who was in service
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1 on July 27, 1949 is subject to the provisions relating to
2 survivor's annuities unless he or she filed with the Board
3 written notice not to participate in such annuity within 30
4 days of that date.
5 A married judge who becomes a participant after July 27,
6 1949, an unmarried judge who becomes a participant after
7 December 31, 1992, and a judge who marries after becoming a
8 participant shall be subject to the provisions relating to
9 survivor's annuities unless he or she files with the Board
10 written notice of his or her election not to participate in
11 the survivor's annuity within 30 days of the date of being
12 notified of the option by the System. Once the election
13 period has expired, a judge may not withdraw from
14 participation under this Section except as provided in
15 Section 18-129.
16 A person who became a participant before January 1, 1997
17 1993 and who is not contributing for survivor's annuity may
18 elect to make contributions for survivor's annuity by filing
19 written notice of the election with the Board no later than
20 April 1, 1998 1993. Such an election may not be rescinded.
21 A person who has so elected shall be entitled only to partial
22 credit for survivor's annuity under subsection (g) of Section
23 18-129 unless all of the payments required under subsection
24 (f) of that Section have been made.
25 A married participant who elects not to participate in
26 the survivor's annuity provisions shall thereafter be
27 ineligible to participate in the survivor's annuity unless
28 the election is rescinded as provided herein.
29 A married participant who elected not to participate in
30 the survivor's annuity provisions and who is still a judge,
31 may elect to participate therein by filing with the Board
32 before April 1, 1998 1993 a written recision of the election
33 not to participate. The participant and his or her spouse
34 shall be entitled to all the rights of the survivor's
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1 annuity, except as limited in Section 18-129, upon paying the
2 System for the survivor's annuity 1 1/2% of each payment of
3 salary earned between July 27, 1949 and July 12, 1953, and 2
4 1/2% of each payment of salary earned after July 12, 1953,
5 together with interest at 4% per annum, compounded annually
6 from the date the contributions would have been due to the
7 date of payment. The time and manner of paying the required
8 contributions and interest shall be prescribed by the Board.
9 (Source: P.A. 86-1488; 87-1265.)
10 (40 ILCS 5/Art. 22, Div. 5 rep.)
11 Section 10. Division 5 of Article 22 of the Illinois
12 Pension Code is repealed.
13 Section 15. The Illinois Securities Law of 1953 is
14 amended by changing Section 8 as follows:
15 (815 ILCS 5/8) (from Ch. 121 1/2, par. 137.8)
16 Sec. 8. Registration of dealers, salespersons and
17 investment advisers.
18 A. Except as otherwise provided in this subsection A,
19 every dealer, salesperson and investment adviser shall be
20 registered as such with the Secretary of State. No dealer or
21 salesperson need be registered as such when offering or
22 selling securities in transactions believed in good faith to
23 be exempted by subsection A, B, C, E, G, H, I, J, K, M, O, P,
24 Q, R or S of Section 4 of this Act, provided that such dealer
25 or salesperson is not regularly engaged in the business of
26 offering or selling securities in reliance upon the exemption
27 set forth in subsection G or M of Section 4 of this Act. No
28 dealer, issuer or controlling person shall employ a
29 salesperson unless such salesperson is registered as such
30 with the Secretary of State or is employed for the purpose of
31 offering or selling securities solely in transactions
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1 believed in good faith to be exempted by subsection A, B, C,
2 D, E, G, H, I, J, K, L, M, O, P, Q, R or S of Section 4 of
3 this Act; provided that such salesperson need not be
4 registered when engaged in the offer or sale of securities in
5 respect of which he or she has beneficial ownership and is a
6 controlling person. The Secretary of State may, by rule,
7 regulation or order and subject to such terms, conditions as
8 fees as may be prescribed in such rule, regulation or order,
9 exempt from the registration requirements of this Section 8
10 any investment adviser, if the Secretary of State shall find
11 that such registration is not necessary in the public
12 interest by reason of the small number of clients or
13 otherwise limited character of operation of such investment
14 adviser.
15 B. An application for registration as a dealer,
16 executed, verified, or authenticated by or on behalf of the
17 applicant, shall be filed with the Secretary of State, in
18 such form as the Secretary of State may by rule, regulation
19 or order prescribe, setting forth or accompanied by:
20 (1) The name and address of the applicant, the
21 location of its principal business office and all branch
22 offices, if any, and the date of its organization;
23 (2) A statement of any other Federal or state
24 licenses or registrations which have been granted the
25 applicant and whether any such licenses or registrations
26 have ever been refused, cancelled, suspended, revoked or
27 withdrawn;
28 (3) The assets and all liabilities, including
29 contingent liabilities of the applicant, as of a date not
30 more than 60 days prior to the filing of the application;
31 (4) (a) A brief description of any civil or
32 criminal proceeding of which fraud is an essential
33 element pending against the applicant and whether the
34 applicant has ever been convicted of a felony, or of any
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1 misdemeanor of which fraud is an essential element;
2 (b) A list setting forth the name, residence and
3 business address and a 10 year occupational statement of
4 each principal of the applicant and a statement
5 describing briefly any civil or criminal proceedings of
6 which fraud is an essential element pending against any
7 such principal and the facts concerning any conviction of
8 any such principal of a felony, or of any misdemeanor of
9 which fraud is an essential element;
10 (5) If the applicant is a corporation: a copy of
11 its articles of incorporation in their most current form,
12 unless they are already on file in the office of the
13 Secretary of State; a list of its officers and directors
14 setting forth the residence and business address of each;
15 a 10-year occupational statement of each such officer or
16 director; and a statement describing briefly any civil or
17 criminal proceedings of which fraud is an essential
18 element pending against each such officer or director and
19 the facts concerning any conviction of any officer or
20 director of a felony, or of any misdemeanor of which
21 fraud is an essential element;
22 (6) If the applicant is a sole proprietorship, a
23 partnership, limited liability company, an unincorporated
24 association or any similar form of business organization:
25 the name, residence and business address of the
26 proprietor or of each partner, member, officer, director,
27 trustee or manager; the limitations, if any, of the
28 liability of each such individual; a 10-year occupational
29 statement of each such individual; a statement describing
30 briefly any civil or criminal proceedings of which fraud
31 is an essential element pending against each such
32 individual and the facts concerning any conviction of any
33 such individual of a felony, or of any misdemeanor of
34 which fraud is an essential element;
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1 (7) Such additional information as the Secretary of
2 State may by rule or regulation prescribe as necessary to
3 determine the applicant's financial responsibility,
4 business repute and qualification to act as a dealer.
5 (8) (a) No applicant shall be registered or
6 re-registered as a dealer under this Section unless and
7 until each principal of the dealer has passed an
8 examination conducted by the Secretary of State or a
9 self-regulatory organization of securities dealers or
10 similar person, which examination has been designated by
11 the Secretary of State by rule, regulation or order to
12 be satisfactory for purposes of determining whether the
13 applicant has sufficient knowledge of the securities
14 business and laws relating thereto to act as a registered
15 dealer. Any dealer who was registered on September 30,
16 1963, and has continued to be so registered; and any
17 principal of any registered dealer, who was acting in
18 such capacity on and continuously since September 30,
19 1963; and any individual who has previously passed a
20 securities dealer examination administered by the
21 Secretary of State or any examination designated by the
22 Secretary of State to be satisfactory for purposes of
23 determining whether the applicant has sufficient
24 knowledge of the securities business and laws relating
25 thereto to act as a registered dealer by rule, regulation
26 or order, shall not be required to pass an examination in
27 order to continue to act in such capacity. The Secretary
28 of State may by order waive the examination requirement
29 for any principal of an applicant for registration under
30 this subsection B who has had such experience or
31 education relating to the securities business as may be
32 determined by the Secretary of State to be the equivalent
33 of such examination. Any request for such a waiver shall
34 be filed with the Secretary of State in such form as may
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1 be prescribed by rule or regulation.
2 (b) Unless an applicant is a member of the body
3 corporate known as the Securities Investor Protection
4 Corporation established pursuant to the Act of Congress
5 of the United States known as the Securities Investor
6 Protection Act of 1970, as amended, or a member of an
7 association of dealers registered as a national
8 securities association pursuant to Section 15A of the
9 Federal 1934 Act, an applicant shall not be registered or
10 re-registered unless and until there is filed with the
11 Secretary of State evidence that such applicant has in
12 effect insurance or other equivalent protection for each
13 client's cash or securities held by such applicant, and
14 an undertaking that such applicant will continually
15 maintain such insurance or other protection during the
16 period of registration or re-registration. Such
17 insurance or other protection shall be in a form and
18 amount reasonably prescribed by the Secretary of State by
19 rule or regulation.
20 (9) The application for the registration of a
21 dealer shall be accompanied by a filing fee and a fee
22 for each branch office in this State, in each case in the
23 amount established pursuant to Section 11a of this Act,
24 which fees shall not be returnable in any event.
25 (10) The Secretary of State shall notify the dealer
26 by written notice (which may be by electronic,
27 telegraphic, or facsimile transmission) of the
28 effectiveness of the registration as a dealer in this
29 State.
30 (11) Any change which renders no longer accurate
31 any information contained in any application for
32 registration or re-registration of a dealer shall be
33 reported to the Secretary of State within 10 business
34 days after the occurrence of such change; but in respect
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1 to assets and liabilities only materially adverse changes
2 need be reported.
3 C. Any registered dealer, issuer, or controlling person
4 desiring to register a salesperson shall file an application
5 with the Secretary of State, in such form as the Secretary of
6 State may by rule or regulation prescribe, which the
7 salesperson is required by this Section to provide to the
8 dealer, issuer, or controlling person, executed, verified, or
9 authenticated by the salesperson setting forth or accompanied
10 by:
11 (1) The name, residence and business address of the
12 salesperson;
13 (2) Whether any federal or State license or
14 registration as dealer or salesperson has ever been
15 refused the salesperson or cancelled, suspended,
16 revoked, or withdrawn;
17 (3) The nature of employment with, and names and
18 addresses of, employers of the salesperson for the 10
19 years immediately preceding the date of application;
20 (4) A brief description of any civil or criminal
21 proceedings of which fraud is an essential element
22 pending against the salesperson, and whether the
23 salesperson has ever been convicted of a felony, or of
24 any misdemeanor of which fraud is an essential element;
25 (5) Such additional information as the Secretary of
26 State may by rule, regulation or order prescribe as
27 necessary to determine the salesperson's business repute
28 and qualification to act as a salesperson; and
29 (6) No individual shall be registered or
30 re-registered as a salesperson under this Section unless
31 and until such individual has passed an examination
32 conducted by the Secretary of State or a self-regulatory
33 organization of securities dealers or similar person,
34 which examination has been designated by the Secretary of
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1 State by rule, regulation or order to be satisfactory for
2 purposes of determining whether the applicant has
3 sufficient knowledge of the securities business and laws
4 relating thereto to act as a registered salesperson.
5 Any salesperson who was registered prior to
6 September 30, 1963, and has continued to be so
7 registered, and any individual who has passed a
8 securities salesperson examination administered by the
9 Secretary of State or an examination designated by the
10 Secretary of State by rule, regulation or order to be
11 satisfactory for purposes of determining whether the
12 applicant has sufficient knowledge of the securities
13 business and laws relating thereto to act as a registered
14 salesperson, shall not be required to pass an examination
15 in order to continue to act as a salesperson. The
16 Secretary of State may by order waive the examination
17 requirement for any applicant for registration under this
18 subsection C who has had such experience or education
19 relating to the securities business as may be determined
20 by the Secretary of State to be the equivalent of such
21 examination. Any request for such a waiver shall be
22 filed with the Secretary of State in such form as may be
23 prescribed by rule, regulation or order.
24 (7) The application for registration of a
25 salesperson shall be accompanied by a filing fee and a
26 Securities Audit and Enforcement Fund fee, each in the
27 amount established pursuant to Section 11a of this Act,
28 which shall not be returnable in any event.
29 (8) Any change which renders no longer accurate any
30 information contained in any application for registration
31 or re-registration as a salesperson shall be reported to
32 the Secretary of State within 10 business days after the
33 occurrence of such change. If the activities are
34 terminated which rendered an individual a salesperson for
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1 the dealer, issuer or controlling person, the dealer,
2 issuer or controlling person, as the case may be, shall
3 notify the Secretary of State, in writing, within 30 days
4 of the salesperson's cessation of activities, using the
5 appropriate termination notice form.
6 (9) A registered salesperson may transfer his or
7 her registration under this Section 8 for the unexpired
8 term thereof from one registered dealer to another by the
9 giving of notice of the transfer by the new registered
10 dealer to the Secretary of State in such form and subject
11 to such conditions as the Secretary of State shall by
12 rule or regulation prescribe. The new registered dealer
13 shall promptly file an application for registration of
14 such salesperson as provided in this subsection C,
15 accompanied by the filing fee prescribed by paragraph (7)
16 of this subsection C.
17 D. An application for registration as an investment
18 adviser, executed, verified, or authenticated by or on behalf
19 of the applicant, shall be filed with the Secretary of State,
20 in such form as the Secretary of State may by rule or
21 regulation prescribe, setting forth or accompanied by:
22 (1) The name and form of organization under which
23 the investment adviser engages or intends to engage in
24 business; the state or country and date of its
25 organization; the location of the adviser's principal
26 business office and branch offices, if any; the names and
27 addresses of the adviser's principal, partners, officers,
28 directors, and persons performing similar functions or,
29 if the investment adviser is an individual, of the
30 individual; and the number of the adviser's employees who
31 perform investment advisory functions;
32 (2) The education, the business affiliations for
33 the past 10 years, and the present business affiliations
34 of the investment adviser and of the adviser's principal,
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1 partners, officers, directors, and persons performing
2 similar functions and of any person controlling the
3 investment adviser;
4 (3) The nature of the business of the investment
5 adviser, including the manner of giving advice and
6 rendering analyses or reports;
7 (4) The nature and scope of the authority of the
8 investment adviser with respect to clients' funds and
9 accounts;
10 (5) The basis or bases upon which the investment
11 adviser is compensated;
12 (6) Whether the investment adviser or any
13 principal, partner, officer, director, person performing
14 similar functions or person controlling the investment
15 adviser (i) within 10 years of the filing of the
16 application has been convicted of a felony, or of any
17 misdemeanor of which fraud is an essential element, or
18 (ii) is permanently or temporarily enjoined by order or
19 judgment from acting as an investment adviser,
20 underwriter, dealer, principal or salesperson, or from
21 engaging in or continuing any conduct or practice in
22 connection with any such activity or in connection with
23 the purchase or sale of any security, and in each case
24 the facts relating to the conviction, order or judgment;
25 (7) (a) A statement as to whether the investment
26 adviser is engaged or is to engage primarily in the
27 business of rendering investment supervisory services;
28 and
29 (b) A statement that the investment adviser will
30 furnish his, her, or its clients with such information as
31 the Secretary of State deems necessary in the form
32 prescribed by the Secretary of State by rule or
33 regulation;
34 (8) Such additional information as the Secretary of
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1 State may, by rule, regulation or order prescribe as
2 necessary to determine the applicant's financial
3 responsibility, business repute and qualification to act
4 as an investment adviser.
5 (9) No applicant shall be registered or
6 re-registered as an investment adviser under this Section
7 unless and until each principal of the applicant who is
8 actively engaged in the conduct and management of the
9 applicant's advisory business in this State has passed an
10 examination or completed an educational program conducted
11 by the Secretary of State or an association of investment
12 advisers or similar person, which examination or
13 educational program has been designated by the Secretary
14 of State by rule, regulation or order to be satisfactory
15 for purposes of determining whether the applicant has
16 sufficient knowledge of the securities business and laws
17 relating thereto to conduct the business of a registered
18 investment adviser.
19 Any person who was a registered investment adviser
20 prior to September 30, 1963, and has continued to be so
21 registered, and any individual who has passed an
22 investment adviser examination administered by the
23 Secretary of State, or passed an examination or completed
24 an educational program designated by the Secretary of
25 State by rule, regulation or order to be satisfactory for
26 purposes of determining whether the applicant has
27 sufficient knowledge of the securities business and laws
28 relating thereto to conduct the business of a registered
29 investment adviser, shall not be required to pass an
30 examination or complete an educational program in order
31 to continue to act as an investment adviser. The
32 Secretary of State may by order waive the examination or
33 educational program requirement for any applicant for
34 registration under this subsection D if the principal of
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1 the applicant who is actively engaged in the conduct and
2 management of the applicant's advisory business in this
3 State has had such experience or education relating to
4 the securities business as may be determined by the
5 Secretary of State to be the equivalent of the
6 examination or educational program. Any request for a
7 waiver shall be filed with the Secretary of State in such
8 form as may be prescribed by rule or regulation.
9 (10) No applicant shall be registered or
10 re-registered as an investment adviser under this Section
11 8 unless (i) the application for registration or
12 re-registration is accompanied by a list of all persons
13 acting as investment adviser representatives on behalf of
14 the adviser and (ii) a Securities Audit and Enforcement
15 Fund fee that shall not be returnable in any event is
16 paid with respect to each investment adviser
17 representative. No fee, however, shall be required under
18 this paragraph if the investment adviser representative
19 is also registered as a salesperson and the Securities
20 Audit and Enforcement Fund fee required under subsection
21 C or subsection H of this Section has been paid to the
22 Secretary of State.
23 (11) The application for registration of an
24 investment adviser shall be accompanied by a filing fee
25 and a fee for each branch office in this State, in each
26 case in the amount established pursuant to Section 11a of
27 this Act, which fees shall not be returnable in any
28 event.
29 (12) The Secretary of State shall notify the
30 investment adviser by written notice (which may be by
31 electronic, telegraphic, or facsimile transmission) of
32 the effectiveness of the registration as an investment
33 adviser in this State.
34 (13) Any change which renders no longer accurate
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1 any information contained in any application for
2 registration or re-registration of an investment adviser
3 shall be reported to the Secretary of State within 10
4 business days after the occurrence of the change. In
5 respect to assets and liabilities of an investment
6 adviser that retains custody of clients' cash or
7 securities or accepts pre-payment of fees in excess of
8 $500 per client and 6 or more months in advance only
9 materially adverse changes need be reported by written
10 notice (which may be by telegraphic or facsimile
11 transmission) no later than the close of business on the
12 second business day following the discovery thereof.
13 (14) Each application for registration as an
14 investment adviser shall become effective automatically
15 on the 45th day following the filing of the application,
16 required documents or information, and payment of the
17 required fee unless (i) the Secretary of State has
18 registered the investment adviser prior to that date or
19 (ii) an action with respect to the applicant is pending
20 under Section 11 of this Act.
21 E. (1) Subject to the provisions of subsection F of
22 Section 11 of this Act, the registration of a dealer,
23 salesperson or investment adviser may be denied, suspended or
24 revoked if the Secretary of State finds that the dealer,
25 salesperson or investment adviser or any officer, director,
26 partner, member, trustee, manager or any person who performs
27 a similar function of the dealer or investment adviser:
28 (a) Has been convicted of any felony, or of any
29 misdemeanor of which fraud is an essential element;
30 (b) Has engaged in any inequitable practice in the
31 offer or sale of securities or in any fraudulent business
32 practice;
33 (c) Has failed to account for any money or
34 property, or has failed to deliver any security, to any
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1 person entitled thereto when due or within a reasonable
2 time thereafter;
3 (d) In the case of a dealer or investment adviser,
4 is insolvent;
5 (e) In the case of a dealer (i) has failed
6 reasonably to supervise the securities activities of any
7 of its salespersons and the failure has permitted or
8 facilitated a violation of Section 12 of this Act or (ii)
9 is offering or selling or has offered or sold securities
10 in this State through a salesperson other than a
11 registered salesperson, or, in the case of a salesperson,
12 is selling or has sold securities in this State for a
13 dealer, issuer or controlling person with knowledge that
14 the dealer, issuer or controlling person has not complied
15 with the provisions of this Act;
16 (f) In the case of an investment adviser, has
17 failed reasonably to supervise the advisory activities of
18 any of its employees and the failure has permitted or
19 facilitated a violation of Section 12 of this Act;
20 (g) Has violated any of the provisions of this Act;
21 (h) Has made any material misrepresentation to the
22 Secretary of State in connection with any information
23 deemed necessary by the Secretary of State to determine a
24 dealer's or investment adviser's financial responsibility
25 or a dealer's, investment adviser's or salesperson's
26 business repute or qualifications, or has refused to
27 furnish any such information requested by the Secretary
28 of State;
29 (i) Has had a license or registration under any
30 Federal or State law regulating the offer or sale of
31 securities or commodity futures contracts, refused,
32 cancelled, suspended or withdrawn;
33 (j) Has been suspended or expelled from or refused
34 membership in or association with or limited in any
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1 capacity by any self-regulatory organization registered
2 under the Federal 1934 Act or the Federal 1974 Act
3 arising from any fraudulent or deceptive act or a
4 practice in violation of any rule, regulation or standard
5 duly promulgated by the self-regulatory organization;
6 (k) Has had any order entered against it after
7 notice and opportunity for hearing by a securities agency
8 of any state, any foreign government or agency thereof,
9 the Securities and Exchange Commission, or the Federal
10 Commodities Futures Trading Commission arising from any
11 fraudulent or deceptive act or a practice in violation of
12 any statute, rule or regulation administered or
13 promulgated by the agency or commission;
14 (l) In the case of a dealer, fails to maintain a
15 minimum net capital in an amount which the Secretary of
16 State may by rule or regulation require;
17 (m) Has conducted a continuing course of dealing of
18 such nature as to demonstrate an inability to properly
19 conduct the business of the dealer, salesperson or
20 investment adviser;
21 (n) Has had, after notice and opportunity for
22 hearing, any injunction or order entered against it or
23 license or registration refused, cancelled, suspended,
24 revoked, withdrawn or limited by any state or federal
25 body, agency or commission regulating banking, insurance,
26 finance or small loan companies, real estate or mortgage
27 brokers or companies, if the action resulted from any act
28 found by the body, agency or commission to be a
29 fraudulent or deceptive act or practice in violation of
30 any statute, rule or registration administered or
31 promulgated by the body, agency or commission;
32 (o) Has failed to file a return, or to pay the tax,
33 penalty or interest shown in a filed return, or to pay
34 any final assessment of tax, penalty or interest, as
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1 required by any tax Act administered by the Illinois
2 Department of Revenue, until such time as the
3 requirements of that tax Act are satisfied;
4 (p) In the case of a natural person who is a
5 dealer, salesperson or investment adviser, has defaulted
6 on an educational loan guaranteed by the Illinois Student
7 Assistance Commission, until the natural person has
8 established a satisfactory repayment record as determined
9 by the Illinois Student Assistance Commission;
10 (q) Has failed to maintain the books and records
11 required under this Act or rules or regulations
12 promulgated under this Act within a reasonable time after
13 receiving notice of any deficiency;
14 (r) Has refused to allow or otherwise impeded
15 designees of the Secretary of State from conducting an
16 audit, examination, inspection, or investigation provided
17 for under Section 8 or 11 of this Act;
18 (s) Has failed to maintain any minimum net capital
19 or bond requirement set forth in this Act or any rule or
20 regulation promulgated under this Act;
21 (t) Has refused the Secretary of State or his or
22 her designee access to any office or location within an
23 office to conduct an investigation, audit, examination,
24 or inspection;
25 (u) Has advised or caused a public pension fund or
26 retirement system established under the Illinois Pension
27 Code to make an investment or engage in a transaction not
28 authorized by that Code.
29 (2) If the Secretary of State finds that any registrant
30 or applicant for registration is no longer in existence or
31 has ceased to do business as a dealer, salesperson or
32 investment adviser, or is subject to an adjudication as a
33 person under legal disability or to the control of a
34 guardian, or cannot be located after reasonable search, or
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1 has failed after written notice to pay to the Secretary of
2 State any additional fee prescribed by this Section or
3 specified by rule or regulation, or if a natural person, has
4 defaulted on an educational loan guaranteed by the Illinois
5 Student Assistance Commission, the Secretary of State may by
6 order cancel the registration or application.
7 (3) Withdrawal of an application for registration or
8 withdrawal from registration as a dealer, salesperson or
9 investment adviser becomes effective 30 days after receipt of
10 an application to withdraw or within such shorter period of
11 time as the Secretary of State may determine, unless any
12 proceeding is pending under Section 11 of this Act when the
13 application is filed or a proceeding is instituted within 30
14 days after the application is filed. If a proceeding is
15 pending or instituted, withdrawal becomes effective at such
16 time and upon such conditions as the Secretary of State by
17 order determines. If no proceeding is pending or instituted
18 and withdrawal automatically becomes effective, the Secretary
19 of State may nevertheless institute a revocation or
20 suspension proceeding within one year after withdrawal became
21 effective and enter a revocation or suspension order as of
22 the last date on which registration was effective.
23 F. The Secretary of State shall make available upon
24 request the date that each dealer, investment adviser or
25 salesperson was granted registration, together with the name
26 and address of the dealer or issuer on whose behalf the
27 salesperson is registered, and all orders of the Secretary of
28 State denying or abandoning an application, or suspending or
29 revoking registration, or censuring the persons. The
30 Secretary of State may designate by rule, regulation or order
31 the statements, information or reports submitted to or filed
32 with him or her pursuant to this Section 8 which the
33 Secretary of State determines are of a sensitive nature and
34 therefore should be exempt from public disclosure. Any such
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1 statement, information or report shall be deemed confidential
2 and shall not be disclosed to the public except upon the
3 consent of the person filing or submitting the statement,
4 information or report or by order of court or in court
5 proceedings.
6 G. The registration or re-registration of a dealer and
7 of all salespersons registered upon application of the dealer
8 shall expire on the next succeeding anniversary date of the
9 registration or re-registration of the dealer; and the
10 registration or re-registration of an investment adviser
11 shall expire on the next succeeding anniversary date of the
12 registration of the investment adviser; provided, that the
13 Secretary of State may by rule or regulation prescribe an
14 alternate date which any dealer registered under the Federal
15 1934 Act or a member of any self-regulatory association
16 approved pursuant thereto, or any investment adviser
17 registered under the Federal 1940 Investment Advisers Act may
18 elect as the expiration date of its dealer and salesperson
19 registrations, or the expiration date of its investment
20 adviser registration, as the case may be. A registration of
21 a salesperson registered upon application of an issuer or
22 controlling person shall expire on the next succeeding
23 anniversary date of the registration, or upon termination or
24 expiration of the registration of the securities, if any,
25 designated in the application for his or her registration or
26 the alternative date as the Secretary may prescribe by rule
27 or regulation. Subject to paragraph (9) of subsection C of
28 this Section 8, a salesperson's registration also shall
29 terminate upon cessation of his or her employment, or
30 termination of his or her appointment or authorization, in
31 each case by the person who applied for the salesperson's
32 registration, provided that the Secretary of State may by
33 rule or regulation prescribe an alternate date for the
34 expiration of the registration.
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1 H. Applications for re-registration of dealers,
2 salespersons and investment advisers shall be filed with the
3 Secretary of State not less than 7 days preceding the
4 expiration of the then current registration and shall contain
5 such information as may be required by the Secretary of State
6 upon initial application with such omission therefrom or
7 addition thereto as the Secretary of State may authorize or
8 prescribe. Each application for re-registration of a dealer
9 or investment adviser shall be accompanied by a filing fee
10 and each application for re-registration as a salesperson
11 shall be accompanied by a filing fee and a Securities Audit
12 and Enforcement Fund fee established pursuant to Section 11a
13 of this Act, which shall not be returnable in any event.
14 Notwithstanding the foregoing, (1) applications for
15 re-registration of dealers and investment advisers may be
16 filed within the 6 days next preceding the expiration of the
17 then current registration provided that the applicant pays
18 the annual registration fee for the year with respect to
19 which the re-registration is applicable together with an
20 additional amount equal to the annual registration fee; and
21 (2) applications for re-registration of dealers and
22 investment advisers may be filed within 30 days following the
23 expiration of the registration provided that the applicant
24 pays the annual registration fee together with an additional
25 amount equal to 2 times the annual registration fee and files
26 any other information or documents that the Secretary of
27 State may prescribe by rule or regulation or order. Any
28 application filed within 30 days following the expiration of
29 the registration shall be automatically effective as of the
30 time of the earlier expiration provided that the proper fee
31 has been paid to the Secretary of State.
32 Each registered dealer or investment adviser shall
33 continue to be registered if the registrant changes his, her,
34 or its form of organization provided that the dealer or
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1 investment adviser files an amendment to his, her, or its
2 application not later than 30 days following the occurrence
3 of the change and pays the Secretary of State a fee in the
4 amount established under Section 11a of this Act.
5 I. (1) Every registered dealer and investment adviser
6 shall make and keep for such periods, such accounts,
7 correspondence, memoranda, papers, books and records as the
8 Secretary of State may by rule or regulation prescribe. All
9 records so required shall be preserved for 3 years unless the
10 Secretary of State by rule, regulation or order prescribes
11 otherwise for particular types of records.
12 (2) Every registered dealer and investment adviser shall
13 file such financial reports as the Secretary of State may by
14 rule or regulation prescribe.
15 (3) All the books and records referred to in paragraph
16 (1) of this subsection I are subject at any time or from time
17 to time to such reasonable periodic, special or other audits,
18 examinations, or inspections by representatives of the
19 Secretary of State, within or without this State, as the
20 Secretary of State deems necessary or appropriate in the
21 public interest or for the protection of investors.
22 (4) At the time of an audit, examination, or inspection,
23 the Secretary of State, by his or her designees, may conduct
24 an interview of any person employed or appointed by or
25 affiliated with a registered dealer or investment advisor,
26 provided that the dealer or investment advisor shall be given
27 reasonable notice of the time and place for the interview.
28 At the option of the dealer or investment advisor, a
29 representative of the dealer or investment advisor with
30 supervisory responsibility over the individual being
31 interviewed may be present at the interview.
32 J. The Secretary of State may require by rule or
33 regulation the payment of an additional fee for the filing of
34 information or documents required to be filed by this Section
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1 which have not been filed in a timely manner. The Secretary
2 of State may also require by rule or regulation the payment
3 of an examination fee for administering any examination which
4 it may conduct pursuant to subsection B, C or D of this
5 Section 8.
6 K. The Secretary of State may declare any application
7 for registration under this Section 8 abandoned by order if
8 the applicant fails to pay any fee or file any information or
9 document required under this Section 8 or by rule or
10 regulation for more than 30 days after the required payment
11 or filing date. The applicant may petition the Secretary of
12 State for a hearing within 15 days after the applicant's
13 receipt of the order of abandonment, provided that the
14 petition sets forth the grounds upon which the applicant
15 seeks a hearing.
16 L. Any document being filed pursuant to this Section 8
17 shall be deemed filed, and any fee being paid pursuant to
18 this Section 8 shall be deemed paid, upon the date of actual
19 receipt thereof by the Secretary of State or his or her
20 designee.
21 M. The Secretary of State shall provide to the Illinois
22 Student Assistance Commission annually or at mutually agreed
23 periodic intervals the names and social security numbers of
24 natural persons registered under subsections B, C, and E of
25 this Section. The Illinois Student Assistance Commission
26 shall determine if any student loan defaulter is registered
27 as a dealer, salesperson, or investment adviser under this
28 Act and report its determination to the Secretary of State or
29 his or her designee.
30 (Source: P.A. 88-494; 89-209, eff. 1-1-96; 89-626, eff.
31 8-9-96.)
32 Section 99. Effective date. This Act takes effect upon
33 becoming law.