Brief⁽¹⁾

S.B. 122, as amended, concerns the regulation of investment advisors under the Kansas securities statutes. The bill makes it unlawful for any person giving investment advice to another person for compensation:

• to knowingly sell a security to or purchase any security from a client while acting as a principal for such person's own account without disclosing that fact to the client in writing and obtaining the client's consent prior to completing the transaction;



• to knowingly effect any sale or purchase of any security for a client while acting as the broker for another person without disclosing that fact to the client in writing and obtaining the client's consent to the transaction; and



• to engage in any dishonest or unethical practice as defined by rules and regulations of the Securities Commissioner.

Additionally, in the solicitation of clients to advise, the bill makes it unlawful for any person to make untrue statements of material fact, or to omit a material fact that would make a statement misleading.

The Senate Committee amendment is technical.

Background

S.B. 122 was requested by the Securities Commissioner who explained that the bill would conform Kansas statutes to model language enacted in a number of other states and thereby clarify the Commissioner's anti-fraud authority over investment advisers, whether they be primarily regulated by the state or a federal agency. There were no opponents to the bill.

The fiscal impact statement indicated no impact on the agency and little, if any, impact on other criminal justice agencies that might be involved because of increased convictions for securities fraud.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html.