SB1975sam001 104TH GENERAL ASSEMBLY

Sen. Lakesia Collins

Filed: 3/18/2025

10400SB1975sam001 LRB104 10391 SPS 23286 a

AMENDMENT TO SENATE BILL 1975

AMENDMENT NO. ______. Amend Senate Bill 1975 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Securities Law of 1953 is amended by changing Sections 5, 6, 7, 11, and 18.1 as follows:

(815 ILCS 5/5) (from Ch. 121 1/2, par. 137.5)

Sec. 5. Registration of Securities. All securities except those set forth under Section 2a of this Act, or those exempt under Section 3 of this Act, or those offered or sold in transactions exempt under Section 4 of this Act, or face amount certificate contracts required to be registered under Section 6 of this Act, or investment fund shares required to be registered under Section 7 of this Act, shall be registered either by coordination or by qualification, as hereinafter in this Section provided, prior to their offer or sale in this State.

A. Registration by Coordination.

(1) Securities which are being or have been registered under the Federal 1933 Act may be registered by coordination in the manner provided in this subsection A, if the effective date of the registration under the Federal 1933 Act is not more than 30 days before the filing with the Secretary of State.

(2) Securities may be registered by coordination by the filing with the Secretary of State by the issuer, by a controlling person or by a registered dealer of:

(a) One copy of the registration statement (without exhibits) descriptive of the securities on file with the Securities and Exchange Commission in its most recent form as of the date of the initial filing under this subsection A.;

(b) An application, in such form and executed, verified, or authenticated by such person as the Secretary of State shall by rule or regulation prescribe, setting forth the title and the total amount of securities to be offered, the amount of securities and the proposed maximum aggregate price thereof to be offered in this State under this subsection A and, if the applicant is electing the date of effectiveness of a post-effective amendment as its effective date as provided in Section 2.13 of this Act, specifying such date as the effective date for purposes of registration under this subsection A;

(c) An undertaking to forward to the Secretary of State, in writing (which may be by electronic or facsimile transmission), any and all subsequent amendments of and supplements to the registration statement not later than the 7th day after the forwarding thereof to the Securities and Exchange Commission, or such longer period as the Secretary of State may permit by rule, regulation or order; and

(d) If the applicant is not a registered dealer, the name of at least one registered dealer for the securities being registered under this subsection A (except that, in the case of securities being offered and sold on a delayed or continuous basis pursuant to Rule 415 under the Federal 1933 Act, 17 C.F.R. Section 230.415, or any similar or successor rule thereto as may be designated by the Secretary of State by rule or regulation, the name of the registered dealer may be furnished no later than the close of business on the second business day following the commencement of sales of the registered securities in this State) or a written statement setting forth the method of offer and sale in this State of the securities being registered in compliance with Section 8 of this Act.

(3) Registration of securities by coordination shall take effect automatically as of the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, provided that on the effective date, the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A have been on file with the Secretary of State for at least 10 business days, or such shorter period as the Secretary of State may permit by rule, regulation or order. If, however, the time period referred to in the preceding sentence shall not have expired on the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, registration of such securities by coordination shall, upon the expiration of such time period, take effect automatically as of the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act.

(4) If the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A are not filed with the Secretary of State prior to the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, any registration of securities by coordination under this subsection A shall take effect automatically as soon as all of the following conditions have been satisfied:

(a) the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A have been on file with the Secretary of State for 10 business days, or for such shorter period as the Secretary of State may permit by rule, regulation or order;

(b) the registration statement or post-effective amendment filed under the Federal 1933 Act is then in effect; and

(c) the prospectus then on file with the Secretary of State satisfies the requirements of Section 10(a)(3) of the Federal 1933 Act.

(5) The applicant shall furnish to the Secretary of State written notice (which may be by electronic or facsimile transmission) confirming the date of effectiveness and the title of the securities registered under the Federal 1933 Act, final pricing information, the total amount of securities registered under the Federal 1933 Act, and the amount registered in this State if different than the amounts then on file with the Secretary of State, no later than the close of business on the second business day following the date on which the registration statement becomes effective under the Federal 1933 Act.

(6) No action by the Secretary of State shall be necessary to evidence the effectiveness of the registration by coordination under this subsection A. The Secretary of State may, at his or her discretion, provide a statement attesting to such registration, which statement shall be in such form as the Secretary of State may deem appropriate.

(7) Notwithstanding the foregoing, the issuer, controlling person or registered dealer who filed the application set forth in subparagraph (b) of paragraph (2) of this subsection A may request, in writing (which may be by electronic or facsimile transmission) prior to or upon notice of effectiveness under the Federal 1933 Act, a waiver of automatic effectiveness of the registration of securities and the Secretary of State may, at his or her discretion, grant such waiver of automatic effectiveness. Upon the grant by the Secretary of State of the request of waiver of automatic effectiveness, such registration of securities shall become effective automatically on the date that the issuer, controlling person or registered dealer who filed the application set forth in subparagraph (b) of paragraph (2) of this subsection A notifies the Secretary of State in writing.

B. Registration by Qualification. Securities may be registered by qualification in the manner provided in this subsection B.

(1) An application for registration by qualification shall be made by the issuer, by a controlling person or by a registered dealer together with the examination fee established pursuant to Section 11a of this Act, which is not returnable in any event. Such application shall be executed, verified, or authenticated by the applicant and filed with the Secretary of State. The application shall set forth:

(a) The name and address of the issuer;

(b) The title and total amount of the securities to be offered;

(c) The amount of the securities to be offered in this State;

(d) The price at which the securities are to be offered, or the method by which such price is to be determined, provided that such price or method may be furnished by written notice (which may be by electronic or facsimile transmission) to the Secretary of State subsequent to the filing of the application but prior to registration of the securities under this Law; and

(e) The aggregate underwriting commissions, remuneration or discount.

(2) If the issuer, dealer, or controlling person has not filed a registration statement that is then in effect under the Federal 1933 Act, there shall be filed with the application:

(a) (Blank);

(b) (Blank);

(c) A copy of the indenture or other instrument, if any, under which the securities are to be or have been issued;

(d) A specimen copy of the securities or a copy of the form of the instrument to evidence the securities;

(e) An opinion of counsel as to the legality of the securities;

(f) A copy of the underwriting and selling agreements, if any;

(g) An undertaking to file promptly (no later than 2 business days after the occurrence of any event which requires a material change in the prospectus) with the Secretary of State all amendments of and supplements to the prospectus as theretofore filed under this subsection B, together with any additional information, document or undertaking which the Secretary of State, at his or her discretion, deems material, accompanied by the amendment filing fee established pursuant to Section 11a of this Act or, in lieu thereof, a notification in writing that all offers and sales of the securities have been suspended pending the filing with the Secretary of State of such amendment of or supplement to the prospectus; and

(h) A written statement setting forth the name of at least one registered dealer for the securities being registered under this subsection B, or an application for registration of a salesperson or a written statement setting forth the method of offer and sale in this State of the securities being registered in compliance with Section 8 of this Act.

(3) In addition, there shall be filed with the application such additional information and material in such form as the Secretary of State may by rule, regulation or order prescribe and a prospectus which contains but is not limited to the following:

(a) The date and form of organization of the issuer;

(b) A brief description of the business conducted and intended to be conducted by the issuer and by its subsidiaries and the general development of such business during the past 5 years or such shorter period as the issuer and such subsidiaries may have been in existence;

(c) The location and general character of the physical properties of the issuer and of its subsidiaries;

(d) The authorized and issued capitalization of the issuer and a description of the securities being registered and of all authorized securities;

(e) The proposed method of sale of the securities, the price thereof to the public or the method by which such price is to be computed, and the underwriting and selling discounts and commissions;

(f) The intended use by the issuer of the proceeds of the securities;

(g) The names and addresses of all of the issuer's officers and directors, or persons performing similar functions, their business experience during the preceding 5 years and the remuneration paid to each by the issuer and its subsidiaries during the fiscal year last past and proposed to be paid for the then current fiscal year;

(h) The names and addresses of all persons owning of record, and of all persons owning beneficially, to the extent known to the applicant, 10% or more of any class of equity securities of the issuer, and the percentage owned by each;

(i) A brief description of any pending material legal proceeding, and of any material legal proceeding known to be contemplated by governmental authorities, involving the issuer or its subsidiaries;

(j) The following financial statements of the issuer:

(i) A balance sheet as of a date within 135 days prior to the date of submitting the application. If such balance sheet is not certified by an independent certified public accountant, the prospectus shall also contain a balance sheet certified by an independent certified public accountant as of the close of the issuer's last fiscal year, unless such fiscal year ended within 135 days prior to the time of filing the application, in which case the certified balance sheet may be as of the end of the preceding fiscal year.

(ii) An income statement for each of the issuer's 3 fiscal years (or for the period of existence of the issuer if less than 3 years) next preceding the date of the certified balance sheet and for the period, if any, between the date of the certified balance sheet and the date of the most recent balance sheet. Such statement shall be certified by an independent certified public accountant for the periods ending with the date of the certified balance sheet.

(iii) An analysis of each surplus account of the issuer for each period for which an income statement is filed, certified by an independent certified public accountant for the periods for which certified income statements are filed.

(iv) An analysis (which need not be certified to by independent certified public accountants and which may be in narrative form if desired by the applicant) of all surplus accounts of the issuer for a period beginning on a date not less than 8 years prior to the date of the certified balance sheet required by the above sub-division (i) of this sub-paragraph (j), or from the date of the organization of the issuer, whichever is later, and ending on the day before the first day of the earliest period covered by the analysis of surplus accounts furnished pursuant to the above sub-division (iii) of this sub-paragraph (j); and

(k) If the issuer owns more than 50% of the voting securities of one or more entities, there shall also be included in the prospectus either (i) like financial statements for each such entity, or (ii) like consolidated financial statements for the issuer and such entities;

(l) Anything in sub-paragraphs (j) and (k) of this paragraph (3) to the contrary notwithstanding, the financial statements contained in the prospectus need not be certified by an independent certified public accountant if the securities being registered under this subsection B are covered by a Notification under Regulation A or an Offering Sheet under Regulation D adopted pursuant to the Federal 1933 Act or any other regulation so adopted which the Secretary of State may by rule or regulation or by order determine to have filing or disclosure requirements substantially similar to such Regulation A or Regulation D unless the financial statements furnished pursuant to any such Federal regulation are required to be or are certified by an independent certified public accountant.

(4) If the securities being registered under this subsection B are certificates of deposit, voting trust certificates, collateral-trust certificates, certificates of interest, fractional interests in oil, gas or other mineral rights of unincorporated issuers or like securities, the prospectus may omit such of the foregoing items in sub-paragraphs (a) through (k) of paragraph (3) of this subsection B, but shall include such pertinent information, as the Secretary of State may by rule, regulation or order prescribe; such prospectus shall contain a description of the properties and businesses from which such certificates, shares or interests derive value.

(5) The Secretary of State may, upon written request by the applicant and where consistent with the protection of investors, permit the omission of one or more of the financial statements required by this subsection B or the filing in substitution therefor of appropriate financial statements of comparable character or permit the omission of any of the information required by this subsection B. The Secretary of State may also by written notice require the filing of other financial statements or information in addition to, or in substitution for, the financial statements or information required by this subsection B in any case where such additional financial statements or information is necessary or appropriate for an adequate presentation of the financial condition of any issuer or otherwise required for fair disclosure respecting the business and property of any issuer.

(6) The Secretary of State shall within a reasonable time examine the application and documents filed with him or her, and unless the Secretary of State makes a determination that the application and documents so filed do not conform to the requirements of this subsection B, or there is a proceeding pending under Section 11 of this Act, shall register the securities for offer and sale in this State under this subsection B. If the securities registered shall not have been sold and distributed at the expiration of a period of 6 months following the date of registration, the Secretary of State may require the filing of such current information concerning the securities and the issuer thereof as he or she may by rule, regulation or order prescribe.

(7) The Secretary of State is granted authority to create by rule or regulation a limited offering registration provision that furthers the objectives of compatibility with federal exemptions and uniformity among the states. The Secretary of State shall prescribe by rule or regulation the amount of the fees for examining and filing any documents required under this subparagraph, but each fee shall not be less than the minimum amount nor more than the maximum amount established under Section 11a of this Act and shall not be returnable in any event.

C. Pending Application, Filing Fee and Oversales of Securities.

(1) No application shall be deemed to be filed or pending and no securities covered by such application shall be deemed to be registered under subsection A of this Section 5 unless a filing fee has been paid. No application shall be deemed to be filed or pending and no securities covered by such application shall be deemed to be registered under subsection B of this Section 5 unless the examination fee and filing fee have been paid. The filing fee payable under the provisions of subsections A and B of this Section 5 shall be established by rule or regulation, but in no event shall the fee be less than the minimum amount nor more than the maximum amount of filing fee established pursuant to Section 11a of this Act, and in no case shall such fee be returnable. The "maximum aggregate price" as used in subsection A of this Section 5 and in this subsection C shall be the applicant's bona fide estimate thereof, determined in the manner prescribed by the Secretary of State by rule or regulation.

(2) If after an offering of securities is registered under this Section 5 (except for securities registered under subsection B of this Section 5 wherein the entire offering of securities was registered), the offeror sells or determines that it will sell, prior to the expiration of the period during which the offeror intends the registration of the securities together with any renewals thereof to remain in effect in this State, an amount of that offering in excess of the amount registered, the applicant may amend the registration and register the excess securities by filing an amended application and paying a filing fee equal to the difference between the initial filing fee paid and the filing fee which would have been paid under paragraph (1) of this subsection C for the entire amount registered together with an additional fee established pursuant to Section 11a of this Act. The fees shall not be returnable in any event. With respect to the excess securities being registered, the "maximum aggregate price" shall be the actual sales price of such securities. Upon receipt of such amended application, filing fee, and additional fee by the Secretary of State, registration of the excess securities shall become effective retroactively to the date of the initial registration.

D. Effective Period and Sales Reports.

(1) A registration effected under Section 5 of this Act shall continue effective for a period of one year from the date of registration or renewal of registration unless sooner terminated by (1) suspension or revocation by the Secretary of State; or (2) the applicant filing with the Secretary of State an affidavit evidencing either that (a) the securities have been fully sold and distributed to the public or (b) that it is no longer desired to offer such securities in this State or (c) that such securities have become exempt from the registration requirements under Section 3 or paragraph (1) of subsection F of Section 4 of this Act.

(2) The Secretary of State may, at his or her discretion, require each issuer, controlling person or registered dealer on whose behalf a registration of securities is effected under this Section 5 to file a report, in such form and of such content and for such time period as the Secretary of State may by rule or regulation prescribe, stating the aggregate dollar amount of securities sold to Illinois residents. The civil remedies provided for in subsection A of Section 13 of this Act and the civil remedies of rescission and appointment of a receiver, conservator, ancillary receiver or ancillary conservator provided for in subsection I of Section 11 and in subsection F and G of Section 13 of this Act and the civil remedies of restitution, damages and disgorgement of profits provided for in subsection I of Section 11 of this Act shall not be available against any person by reason of the failure to file any such report or on account of the contents of any such report.

E. Renewal of Registration. A registration of securities in effect under subsection A of this Section 5 or subsection B of this Section 5 if a registration statement or post-effective amendment is then in effect under the Federal 1933 Act may be renewed for the amount of securities which remain unsold under such registration as then in effect, by the issuer, by a controlling person or by a registered dealer by filing an application for renewal with the Secretary of State no later than 10 business days prior to the date (or such lesser period as the Secretary of State may prescribe by rule or regulation) upon which such registration would otherwise expire, in such form and executed, verified, or authenticated by such person as the Secretary of State shall prescribe by rule or regulation. Such application shall be accompanied by a prospectus in its most current form together with a renewal fee equal in amount to a registration fee calculated in accordance with paragraph (1) of subsection C of this Section 5 and based upon the amount of securities initially registered for sale in this State but which remain unsold; except that the "maximum aggregate price" of such securities shall be the applicant's bona fide estimate thereof at the time the application for renewal of registration is filed with the Secretary of State pursuant to this subsection E. A renewal of registration of securities shall take effect as of the date and time that the prior registration under subsection A of this Section 5 or prior renewal under this subsection E would otherwise have expired and thereafter shall be deemed to be a new registration of the amount of unsold securities specified in the application for renewal. The Secretary of State may by rule or regulation prescribe an additional fee for the failure to file timely an application for renewal and limit the number of times that a registration may be renewed.

F. The applicant or registrant shall notify the Secretary of State, by written notice (which may be by electronic or facsimile transmission), within 2 business days after its receipt of any stop order, denial, order to show cause, suspension or revocation order, injunction or restraining order, or similar order entered or issued by any state, federal or other regulatory authority or by any court, concerning the securities which are being or have been registered in this State or any other securities of the issuer currently being or proposed to be offered to the public, if the matter which is the subject of, or the failure to disclose the existence of, such order would in this State constitute a violation of subsection E, F, G, H, I or J of Section 12 of this Act. The obligation contained in this subsection F shall continue until such time as offers and sales of the securities registered under this Section 5 are no longer being made in this State by the applicant or registrant.

G. Any document being filed pursuant to this Section 5 shall be deemed filed, and any fee being paid pursuant to this Section 5 shall be deemed paid, upon the date of actual receipt thereof by the Secretary of State.

H. The Secretary of State may require by rule or regulation the payment of an additional fee for the filing of information or documents required to be filed by this Section 5 which have not been filed in a timely manner. Such fees shall be deposited into the Securities Audit and Enforcement Fund Securities Investors Education Fund, a special fund hereby created in the State treasury. The amounts deposited into such Fund shall be used to promote public awareness of the dangers of securities fraud.

(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96; 90-70, eff. 7-8-97.)

(815 ILCS 5/6) (from Ch. 121 1/2, par. 137.6)

Sec. 6. Registration of Face Amount Certificate Contracts. All face amount certificate contracts except those set forth under Section 2a of this Act, or those exempt under Section 3 of this Act, or those offered or sold in transactions exempt under Section 4 of this Act, shall be registered either by coordination or by qualification, as hereinafter in this Section provided, prior to their offer or sale in this State.

A. Registration of Face Amount Certificate Contracts by Coordination.

(1) Face amount certificate contracts which are being or have been registered under the Federal 1933 Act may be registered by coordination in the manner provided in this subsection A, if the effective date of the registration under the Federal 1933 Act is not more than 30 days before the filing with the Secretary of State.

(2) Face amount certificate contracts may be registered by coordination by the filing with the Secretary of State by the issuer, by a controlling person or by a registered dealer of:

(a) One copy of the registration statement (without exhibits) descriptive of the face amount certificate contracts on file with the Securities and Exchange Commission in its most recent form as of the date of the initial filing under this subsection A;

(b) An application, in such form and executed, verified, or authenticated by such person as the Secretary of State shall by rule or regulation prescribe, setting forth the title of every series, type or class of face amount certificate contracts to be offered in this State under this subsection A and, if the applicant is electing the date of effectiveness of a post-effective amendment as its effective date as provided in Section 2.13 of this Act, specifying such date as the effective date for purposes of registration under this subsection A;

(c) An undertaking to forward to the Secretary of State, in writing (which may be by electronic or facsimile transmission), any and all subsequent amendments of and supplements to the registration statement not later than the 7th day after the forwarding thereof to the Securities and Exchange Commission, or such longer period as the Secretary of State may permit by rule, regulation or order; and

(d) If the applicant is not a registered dealer, the name of at least one registered dealer for the face amount certificate contracts being registered under this subsection A or a written statement setting forth the method of offer and sale in this State of the face amount certificate contracts being registered in compliance with Section 8 of this Act.

(3) Registration of face amount certificate contracts by coordination shall take effect automatically as of the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, provided that on the effective date, the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A have been on file with the Secretary of State for at least 10 business days, or such shorter period as the Secretary of State may permit by rule, regulation or order. If, however, the time period referred to in the preceding sentence shall not have expired on the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, registration of such face amount certificate contracts by coordination shall, upon the expiration of such time period, take effect automatically as of the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act.

(4) If the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A are not filed with the Secretary of State prior to the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, any registration of face amount certificate contracts by coordination under this subsection A shall take effect automatically as soon as all of the following conditions have been satisfied:

(a) the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A have been on file with the Secretary of State for 10 business days, or for such shorter period as the Secretary of State may permit by rule, regulation or order;

(b) the registration statement or post-effective amendment filed under the Federal 1933 Act is then in effect; and

(c) the prospectus then on file with the Secretary of State satisfies the requirements of Section 10(a)(3) of the Federal 1933 Act.

(5) The applicant shall furnish to the Secretary of State written notice (which may be by electronic or facsimile transmission) confirming the date of effectiveness and the title of the face amount certificate contracts registered under the Federal 1933 Act, no later than the close of business on the second business day following the date on which registration becomes effective under the Federal 1933 Act.

(6) No action by the Secretary of State shall be necessary to evidence the effectiveness of the registration by coordination under this subsection A. The Secretary of State may, at his or her discretion, provide a statement attesting to such registration, which statement shall be in such form as the Secretary of State may deem appropriate.

(7) Notwithstanding the foregoing, the issuer, controlling person or registered dealer who filed the application set forth in subparagraph (b) of paragraph (2) of this subsection A may request, in writing (which may be by electronic or facsimile transmission) prior to or upon notice of effectiveness under the Federal 1933 Act, a waiver of automatic effectiveness of the registration of the face amount certificate contracts and the Secretary of State may, at his or her discretion, grant such waiver of automatic effectiveness. Upon the grant by the Secretary of State of the request of waiver of automatic effectiveness, such registration of the face amount certificate contracts shall become effective automatically on the date that the issuer, controlling person or registered dealer who filed the application set forth in subparagraph (b) of paragraph (2) of this subsection A notifies the Secretary of State in writing.

B. Registration of Face Amount Certificate Contracts by Qualification. Face amount certificate contracts may be registered by qualification in the manner provided in this subsection B.

(1) An application for registration by qualification shall be made by the issuer, by a controlling person or by a registered dealer together with the examination fee established pursuant to Section 11a of the Act, which shall not be returnable in any event. Such application shall be executed, verified, or authenticated by the applicant and filed with the Secretary of State. The application shall set forth:

(a) The names and addresses of the persons creating or sponsoring the face amount certificate contracts; and

(b) The title of each series, type or class of face amount certificate contracts to be offered.

(2) If the issuer, dealer, or controlling person has not filed a registration statement or post-effective amendment which is then in effect under the Federal 1933 Act, there shall be filed with the application:

(a) Specimen copies of each and every series, type or class of face amount certificate contract proposed to be offered in this State, and specimen copies of each and every form of face amount certificate contract or other security being issued or proposed to be offered and issued elsewhere;

(b) (Blank);

(c) (Blank);

(d) An opinion of counsel as to the legality of the face amount certificate contracts;

(e) An undertaking to file promptly (no later than 2 business days after the occurrence of any event which requires a material change in the prospectus) with the Secretary of State any and all amendments of and supplements to the prospectus as theretofore filed under this subsection B, together with any additional information, document or undertaking which the Secretary of State at his or her discretion, deems material, accompanied by the amendment filing fee established pursuant to Section 11a of this Act or, in lieu thereof, a notification in writing that all offers and sales of the face amount certificate contracts have been suspended pending the filing with the Secretary of State of such amendment of or supplement to the prospectus; and

(3) In addition, there shall be filed with the application such additional information and material in such form as the Secretary of State may by rule, regulation or order prescribe and a prospectus which contains, but is not limited to the following:

(a) The date and form of organization of the issuer;

(b) A brief description of the business conducted and intended to be conducted by the issuer and by its subsidiaries and the general development of such business during the past 5 years or such shorter period as the issuer and such subsidiaries may have been in existence;

(c) The location and general character of the physical properties of the issuer and of its subsidiaries;

(d) A complete description of the terms and conditions of each and every series, type or class of face amount certificate contracts being issued or proposed to be offered in this State or elsewhere, which description shall include appropriate tables of initial or periodic installment payments required of the purchaser, surrender or liquidation values, maturity values, optional plans of extended contract periods and schedules of annuity payments which may be elected by a face amount certificate contract holder;

(e) A schedule of all types of deductions which may be made from plan payments or the income therefrom or the avails thereof as charges prior to distributions to holders of the face amount certificate contracts;

(f) The names and addresses of all of the issuer's officers and directors, or persons performing similar functions, their business experience during the preceding 5 years and the remuneration paid to each by the issuer and its subsidiaries during the fiscal year last past and proposed to be paid for the then current fiscal year;

(g) The names and addresses of all persons owning of record, and of all persons owning beneficially, to the extent known to the applicant, 10% or more of any class of equity securities of the issuer, and the percentage owned by each;

(h) A brief description of any pending material legal proceeding, and of any material legal proceeding known to be contemplated by governmental authorities, involving the issuer or its subsidiaries; and

(i) The following financial statements of the issuer:

(i) a balance sheet as of a date within 135 days prior to the date application for registration is received by the Secretary of State, which balance sheet, if not certified by an independent certified public accountant, shall be accompanied by a certified balance sheet of the issuer as of the close of the last prior fiscal year;

(ii) a detailed statement of income and expenses, including income from investments, service fees, loading and other sources, operating expenses and provisions for contract reserves or any additional credits to contract liabilities, profits realized and losses sustained in transactions in investments, and all other charges to operations, for a period of not less than 3 fiscal years (or for the period of existence of the issuer if less than 3 years) last preceding the date of the balance sheet presented under subdivision (i) of this subparagraph (i), which statement of income and expenses, if not certified by an independent certified public accountant, shall be accompanied by a certified statement of income and expenses for a period of 3 years last preceding the uncertified period or periods presented as and for this subdivision (ii);

(iii) a detailed analysis of each surplus and reserve account for the same period or periods covered by subdivision (ii) of this subparagraph (i), with like requirement for independent certification; and

(iv) such other financial data as the Secretary of State may reasonably require in any specific case or by rule or regulation.

(4) The Secretary of State shall within a reasonable time examine the application and related documents filed with him or her and, unless the Secretary of State makes a determination that the application and related documents so filed do not conform to the requirements of this subsection B or there is a proceeding pending under Section 11 of this Act, shall upon receipt of the deposit required by subsection G of this Section 6 and upon receipt of the registration fee as hereinafter prescribed, register the face amount certificate contracts, as described by series, type or class within the application, for offer and sale in this State under this subsection B.

C. Pending Application and Filing Fee. No application for registration of face amount certificate contracts shall be deemed to be filed or pending and no face amount certificate contracts covered by such application shall be deemed to be registered under subsection A of this Section 6 unless a filing fee in the amount established pursuant to Section 11a of this Act has been paid, which shall not be returnable in any event. No application for registration of face amount certificate contracts shall be deemed to be filed or pending and no face amount certificate contracts covered by such application shall be deemed to be registered under subsection B of this Section 6 unless the examination fee and filing fee established pursuant to Section 11a of this Act have been paid, which fees shall not be returnable in any event.

D. Effective Period and Sales Reports.

(1) A registration under subsection A or B of this Section 6, unless sooner terminated by the voluntary action of the issuer, or by suspension or revocation by the Secretary of State, shall continue in force and effect for a period of one year from the date of registration or renewal of registration or such other period of time as the Secretary of State may prescribe by rule or regulation, and shall permit the offer and sale of face amount certificate contracts so registered without limitation as to number or aggregate amount during such period of registration; provided, however, that, in the case of face amount certificate contracts registered under subsection B of this Section 6, the issuer shall promptly file with the Secretary of State, throughout such registration year, (i) one specimen copy of each monthly, quarterly, semi-annual or other periodic or special report and of each financial statement distributed to contract holders; (ii) one certified copy of all statements and reports filed with any regulatory authority or agency of the Federal Government which relate to the issuer or the issuance of the securities registered pursuant to this Section 6 and (iii) one copy of each independently certified audit report pertaining to the financial affairs and position of the issuer covering the issuer's fiscal year ending during the registration year, to be supplied to the Secretary of State as soon as available after the close of the issuer's fiscal year.

(2) The Secretary of State may, at his or her discretion, require each issuer, controlling person or registered dealer on whose behalf a registration of face amount certificate contracts is effective under this Section 6 to file a report, in such form and of such content and for such time period as the Secretary of State may by rule or regulation prescribe, stating the aggregate dollar amount of face amount certificate contracts sold to Illinois residents. The civil remedies provided for in subsection A of Section 13 of this Act and the civil remedies of rescission and appointment of a receiver, conservator, ancillary receiver or ancillary conservator provided for in subsection I of Section 11 and in subsections F and G of Section 13 of this Act and the civil remedies of restitution, damages and disgorgement of profits provided for in subsection I of Section 11 of this Act shall not be available against any person by reason of the failure to file any such report or on account of the contents of any such report.

E. Amendatory statements and required fees. The Secretary of State may by rule or regulation require the filing of an amendatory statement and prescribe its form and content. The fee for filing the statement shall be established pursuant to Section 11a of this Act. The fee shall not be returnable in any event.

F. Renewal of Registration. A registration of face amount certificate contracts in effect under subsection A or B of this Section 6 may be renewed by the issuer by filing an application for renewal with the Secretary of State no later than 10 business days prior to the date upon which such registration would otherwise expire, (or such lesser period as the Secretary of State may prescribe by rule or regulation) in such form and executed, verified, or authenticated by such person as the Secretary of State shall prescribe by rule or regulation. Such application shall be accompanied by a prospectus in its most current form together with a renewal fee established pursuant to Section 11a of this Act, which shall not be returnable in any event. A renewal of registration of face amount certificate contracts shall take effect as of the date and time that the prior registration under subsection A of this Section 6 or prior renewal under this subsection F would otherwise have expired and (or such alternative date as the Secretary of State may prescribe by rule or regulation) thereafter shall be deemed to be a new registration of the face amount certificate contracts covered thereby. The Secretary of State may by rule or regulation prescribe an additional fee for the failure to file timely an application for renewal and limit the number of times a registration may be renewed.

G. Deposit of Securities. No face amount certificate contract shall be registered under subsection B of this Section 6 unless the issuer shall establish and maintain with the Secretary of State, for the benefit of the holders of such contracts residing in this State, a deposit of securities representing debt obligations of the kind in which life insurance companies organized under the laws of this State are permitted to invest their funds, in an amount having a fair market value of not less than $100,000 and at no time less than the current contract liability on all such face amount certificate contracts held by persons residing in this State, and provided further that deposited securities, other than those secured by entire first mortgage or trust deeds on improved unencumbered real estate, are issued by an issuer required to file reports pursuant to Section 13 or 15(d) of the Federal 1934 Act or are covered by Section 12(g)(2)(B) or (G) of the Federal 1934 Act, or appear in current quotations in transactions on exchanges recognized by subsection G of Section 3 of this Act, and provided further, that bonds or notes secured by mortgages or trust deeds be limited to those (i) constituting the entire indebtedness secured thereby, (ii) establishing a first lien on improved real estate held in fee simple, and (iii) insured by the Federal Housing Administrator under an Act of Congress of the United States entitled "National Housing Act". Debentures issued by the Federal Housing Administrator under an Act of Congress of the United States entitled the "National Housing Act" may be included in the deposit prescribed by this subsection in amounts related to, and in substitution for, specific insured mortgage loans then included in the subject deposit which are in default, but at no time shall the aggregate principal amount of such debentures included in the subject deposit exceed 5% of the fair market value of securities comprising the subject deposit. The current contract liability in respect of contracts held by persons residing in this State shall be that as determined in such contracts as computed by the issuer and regularly certified to the Secretary of State, on or before the last day of each calendar month as of the close of the month last prior to the date of reporting.

Securities deposited as hereinabove required may be withdrawn by the depositor at any time, and from time to time, whenever other securities eligible for deposit and of a fair market value not less than that withdrawn are deposited in substitution for securities withdrawn.

The Secretary of State may, upon receipt of appropriate certification in writing, deemed by the Secretary of State to be competent and adequate, evidencing the reduction of contract liability on contracts held by persons residing in this State to an aggregate amount representing not more than 90% of the fair market value of the securities then on deposit, permit an equivalent reduction in the deposited securities.

H. Minimum Deposit; Annual Fee; Transaction Charge. The initial and continuing deposit required hereby shall, so long as the face amount certificate contracts registered under subsection B of this Section 6 are being offered and sold in this State, and until all contract liability on all contracts outstanding in this State has been discharged, include obligations of the United States or the State of Illinois in bearer form or fully registered, or registered as to principal, in the title of Treasurer of the State of Illinois, and his or her successors in office, in the minimum principal amount of $50,000. An issuer of face amount certificate contracts, in respect of which a deposit is required to be established and maintained under this Section 6, and an issuer of face amount certificate contracts heretofore qualified for issuance to persons residing in this State under "An Act relating to the sale or other disposition of securities and providing penalties for the violation thereof and to repeal Acts in conflict therewith", approved June 10, 1919, as amended, and in respect of which a deposit of securities was established and has been maintained under the Act approved June 10, 1919, as cited above, shall pay to the Secretary of State an annual fee determined at the rate of 1/30th of one percent on the average of quarterly computations on the aggregate of principal amounts of market-quoted or listed securities and the original loan amounts of real estate loans insured by the Federal Housing Administrator, and in addition each such issuer shall pay to the Secretary of State, against quarterly billings therefor, a transaction charge in the amount established pursuant to Section 11a of this Act, which annual fee and transaction charge shall not be returnable in any event, for each separate issue or loan included in additions to and withdrawals from such deposits, provided however that the transaction charge established pursuant to Section 11a of this Act for each separate issue of market-quoted or listed securities shall apply to all the items of that issue included in a single transaction, regardless of the aggregate principal amount, and in respect of real estate loans such transaction charge shall apply to the group of documents pertaining to each separate loan, and not to the separate items and documents included in such group.

Nothing herein contained in respect of prescribed custody of deposited securities with the State Treasurer and of permissible procedures of liquidation of deposited securities by the Secretary of State in the event of insolvency of an issuer of face amount certificate contracts, or the appointment of a trustee in bankruptcy, shall preclude the surrender of deposited securities to a duly qualified trustee under appointment by a Court having jurisdiction under the Federal Bankruptcy Code under an appropriate order of such Court.

I. Liquidation of Securities. Upon the insolvency of the issuer of face amount certificate contracts or appointment of a receiver or trustee in bankruptcy, the Secretary of State, if not required otherwise under Federal law or under an order of a Federal Court of competent jurisdiction, may apply to the Circuit Court of Sangamon County, or any other court of competent jurisdiction, for authority to proceed for the liquidation of such securities held for the benefit of the holders of such contracts who reside in this State. The Secretary of State is hereby authorized to deal with such securities on deposit in this State for the benefit of the holders of such face amount certificate contracts, in his or her name or, if the Court shall so order, in the name of the issuer. The Secretary of State may, subject to the approval of the Court, sell or otherwise dispose of the securities so deposited or any part thereof. The Secretary of State shall as soon as may be conveniently possible, give notice by publication as provided by law, and as the Court may direct, to all contract holders residing in this State who may have claims against the issuer under such face amount certificate contracts and for whose benefit such deposit is held, to file and prove their claims in the manner and within the time the Court shall direct. In order to preserve so far as possible the rights and interests of the holders of outstanding contracts of such issuer who reside in this State, the Secretary of State may liquidate such securities on deposit in this State by entering into contracts with any issuer or person able to buy such securities in whole, or in part. Upon receiving an offer or offers for the purchase of such securities in whole, or in part, the Secretary of State shall submit such offer or offers to the Court, and if, after a full hearing upon the petition filed by the Secretary of State, the court shall find that the Secretary of State endeavored to obtain the best contract price for the benefit of the contract holders, and if the court shall find that the best contract price in the interests of the contract holders has been obtained, and that it is for the best interests of the holders of such contracts that such securities be sold, the court shall, by written order approve the acts of the Secretary of State and authorize him or her to dispose of such securities. Upon the conversion of such securities to cash, the Secretary of State may then proceed to dispose of the sum received for such securities among the respective holders of such contracts as their interests may appear. Upon the liquidation and distribution of such funds, the Secretary of State may make proper liquidation of such securities and the distribution or disposition thereof or of the proceeds therefrom as herein provided.

For the purpose of liquidation of such securities, the Secretary of State shall have the power to appoint one or more special deputies as his or her agent or agents and to employ such clerks, assistants or attorneys as may by him or her be deemed necessary and to give each of such persons such power to assist him or her as he or she may consider wise. The compensation of every such special deputy, agent, clerk, assistant or attorney shall be fixed, and all expenses of taking possession of such securities of the issuer and the administration thereof shall be approved, by the Secretary of State subject to the approval of the court and shall be paid out of the funds or assets received from the liquidation of such securities.

J. The applicant or registrant shall notify the Secretary of State, by written notice (which may be by electronic or facsimile transmission), within 2 business days after its receipt of any stop order, denial, order to show cause, suspension or revocation order, injunction or restraining order, or similar order entered or issued by any state, federal or other regulatory authority or by any court, concerning the face amount certificate contracts which are being or have been registered in this State or any other securities of the issuer currently being or proposed to be offered to the public, if the matter which is the subject of, or the failure to disclose the existence of, such order would in this State constitute a violation of subsection E, F, G, H, I or J of Section 12 of this Act. The obligation contained in this subsection J shall continue until such time as offers and sales of the face amount certificate contracts registered under this Section 6 are no longer being made in this State by the applicant or registrant.

K. Any document being filed pursuant to this Section 6 shall be deemed filed, and any fee being paid pursuant to this Section 6 shall be deemed paid, upon the date of actual receipt thereof by the Secretary of State.

L. The Secretary of State may require by rule or regulation the payment of an additional fee for the filing of information or documents required to be filed by this Section 6 which have not been filed in a timely manner. Such fees shall be deposited into the Securities Audit and Enforcement Fund Securities Investors Education Fund and used to promote public awareness of the dangers of securities fraud.

(Source: P.A. 89-209, eff. 1-1-96; 90-70, eff. 7-8-97.)

(815 ILCS 5/7) (from Ch. 121 1/2, par. 137.7)

Sec. 7. Registration of Investment Fund Shares. All investment fund shares except those set forth under Section 2a of this Act, or those exempt under Section 3 of this Act, or those offered or sold in transactions exempt under Section 4 of this Act, or face amount certificate contracts required to be registered under Section 6 of this Act, shall be registered either by coordination or by qualification, as hereinafter in this Section provided, prior to their offer or sale in this State. Additional classes of shares that are of the same rank, general description, and characteristics as those currently registered may be added to a current registration under this Section upon the filing of an amendment and the payment of the additional fees as prescribed by the Secretary of State by rule or regulation. Any change in organization or plans of operation shall be disclosed to the Secretary of State by filing an amendment to a current registration and the payment of the additional fees as prescribed by the Secretary of State by rule or regulation.

A. Registration of Investment Fund Shares by Coordination.

(1) Investment fund shares which are being or have been registered under the Federal 1933 Act and the Federal 1940 Investment Company Act may be registered by coordination in the manner provided in this subsection A, if the effective date of the registration under the Federal 1933 Act is not more than 30 days before the filing with the Secretary of State.

(2) Investment fund shares may be registered by coordination by the filing with the Secretary of State by the issuer, by a controlling person or by a registered dealer of:

(a) One copy of the registration statement (without exhibits) descriptive of the investment fund shares on file with the Securities and Exchange Commission in its most recent form as of the date of the initial filing under this subsection A;

(b) An application, in such form and executed, verified, or authenticated by such person as the Secretary of State shall by rule or regulation prescribe, setting forth the title of the investment fund shares to be offered in this State under this subsection A and, if the applicant is electing the date of effectiveness of a post-effective amendment as its effective date as provided in Section 2.13 of this Act, specifying such date as the effective date for purposes of registration under this subsection A; and

(c) An undertaking to forward to the Secretary of State, in writing (which may be by electronic or facsimile transmission), any and all subsequent amendments of and supplements to the registration statement not later than the 7th day after the forwarding thereof to the Securities and Exchange Commission, or such longer period as the Secretary of State may permit by rule, regulation or order; and

(d) if the applicant is not a registered dealer, the name of at least one registered dealer for the investment fund shares being registered under this subsection A or a written statement setting forth the method of offer and sale in this State of the investment fund shares being registered in compliance with Section 8 of this Act.

(3) Registration of investment fund shares by coordination shall take effect automatically as of the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, provided that on the effective date, the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A have been on file with the Secretary of State for at least 10 business days, or such shorter period as the Secretary of State may permit by rule, regulation or order. If, however, the time period referred to in the preceding sentence shall not have expired on the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, registration of such investment fund shares by coordination shall, upon the expiration of such time period, take effect automatically as of the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act.

(4) If the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A are not filed with the Secretary of State prior to the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, any registration of investment fund shares by coordination under this subsection A shall take effect automatically as soon as all of the following conditions have been satisfied:

(a) the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A have been on file with the Secretary of State for 10 business days, or for such shorter period as the Secretary of State may permit by rule, regulation or order;

(b) the registration statement or post-effective amendment filed under the Federal 1933 Act is then in effect; and

(c) the prospectus then on file with the Secretary of State satisfies the requirements of Section 10(a)(3) of the Federal 1933 Act.

(5) The applicant shall furnish to the Secretary of State written notice (which may be by electronic or facsimile transmission) confirming the date of effectiveness and the title of the investment fund shares registered under the Federal 1933 Act, no later than the close of business on the second business day following the date on which registration statement becomes effective under the Federal 1933 Act.

(6) No action by the Secretary of State shall be necessary to evidence the effectiveness of the registration by coordination under this subsection A. The Secretary of State may, at his or her discretion, provide a statement attesting to such registration, which statement shall be in such form as the Secretary of State may deem appropriate.

(7) Notwithstanding the foregoing, the issuer, controlling person or registered dealer who filed the application set forth in subparagraph (b) of paragraph (2) of this subsection A may request, in writing (which may be by electronic or facsimile transmission) prior to or upon notice of effectiveness under the Federal 1933 Act, a waiver of automatic effectiveness of the registration of investment fund shares and the Secretary of State may, at his or her discretion, grant such waiver of automatic effectiveness. Upon the grant by the Secretary of State of the request of waiver of automatic effectiveness, such registration of investment fund shares shall become effective automatically on the date that the issuer, controlling person or registered dealer who filed the application set forth in subparagraph (b) of paragraph (2) of this subsection A notifies the Secretary of State in writing.

B. Registration of Investment Fund Shares by Qualification. Investment fund shares may be registered by qualification in the manner provided in this subsection B.

(1) An application for registration by qualification shall be made by the issuer, by a controlling person or by a registered dealer together with the examination fee established pursuant to Section 11a of the Act, which shall not be returnable in any event. Such application shall be signed, verified, or authenticated by the applicant and filed with the Secretary of State. The application shall set forth:

(a) The name and address of the issuer;

(b) The title of the investment fund shares; and

(c) The names and addresses of the persons creating or sponsoring the investment fund shares.

(2) If the issuer, dealer, or controlling person has not filed a registration statement or post-effective amendment which is then in effect under the Federal 1933 Act, there shall be filed with the application:

(a) A specimen copy of the investment fund shares, if any, or a copy of the form of the instrument to evidence the investment fund shares, if any;

(b) (Blank);

(c) (Blank);

(d) An opinion of counsel as to the legality of the investment fund shares;

(e) An undertaking to file promptly (not later than 2 business days after the occurrence of any event which requires a material change in the prospectus) with the Secretary of State any and all amendments of and supplements to the prospectus as theretofore filed under this subsection B, together with any additional information, document or undertaking which the Secretary of State, at his or her discretion, deems material, accompanied by the amendment filing fee established pursuant to Section 11a of this Act or, in lieu thereof, a notification in writing that all offers and sales of the investment fund shares have been suspended pending the filing with the Secretary of State of the amendment of or supplement to the prospectus;

(f) A written statement setting forth the name of at least one registered dealer for the investment fund shares being registered under this subsection B or an application for registration of a salesperson or a written statement setting forth the method of offer and sale in this State of the investment fund shares being registered in compliance with Section 8 of this Act.

(3) In addition, there shall be filed with the application such additional information and material in such form as the Secretary of State may by rule, regulation or order prescribe and a prospectus which contains, but is not limited to the following:

(a) The date and form of organization of the fund or trust;

(b) The authorized and issued capitalization of the fund or trust and a description of the investment fund shares being registered and of all authorized securities;

(c) A schedule of the types of deductions which may be made from the trust or corporate or fund assets and the income therefrom or the avails thereof as charges prior to distribution to holders of the investment fund shares;

(d) The names and addresses of all of the fund's or trust's officers and directors, or persons performing similar functions, their business experience during the preceding 5 years and the remuneration paid to each by the fund or trust or any affiliate thereof during the fiscal year last past and proposed to be paid for the then current fiscal year;

(e) A brief description of any pending material legal proceeding, and of any material legal proceeding known to be contemplated by governmental authorities involving the fund or trust;

(f) A statement of the plan of operation, management policies and provisions and restrictions in respect of investment and reinvestment of principal funds and undistributed income therefrom;

(g) A statement of the plan and intention in respect of distributions of ordinary income and capital gains, which statement shall disclose the taking of adequate measures for specific separation and identification of distributions arising from ordinary income and those arising from profits realized from the disposition of securities;

(h) Specimen computations illustrating typical applications of the formulae to be used in determining asset value, offering price and liquidating price of the investment fund shares; and

(i) The following financial statements in respect of the issuer if the investment fund shares represent shares of an issuing corporation, or in respect of the trust fund, if the investment fund shares represent beneficial interests in a trust fund:

(i) a balance sheet as of a date within 135 days prior to the date of submitting the application. If such balance sheet is not certified by an independent certified public accountant, the prospectus shall also contain a balance sheet certified by an independent certified public accountant as of the close of the fund's last fiscal year, unless such fiscal year ended within 135 days prior to the time of filing the application, in which case the certified balance sheet may be as of the end of the preceding fiscal year;

(ii) a detailed statement of income and expenses and of profits realized and losses sustained from the sale of securities for each of the three fiscal years (or for the period of existence of the issuer if less than 3 years) next preceding the date of the certified balance sheet and for the period, if any, between the date of the certified balance sheet and the date of the most recent balance sheet. Such statements shall be certified by an independent certified public accountant for the periods ending with the date of the certified balance sheet;

(iii) an analysis of each surplus account (or, in lieu thereof, a statement of changes in net assets) for each period for which a statement of income and expenses is filed, certified by an independent certified public accountant for the periods for which certified statements of income and expenses are submitted; and

(iv) such other financial statements and supporting schedules as the Secretary of State may by rule or regulation prescribe.

(4) The Secretary of State may make or cause to be made an examination of matters pertaining to the investment fund shares as to which registration is sought under this subsection B and the persons creating, sponsoring or having general charge of the distribution of the investment fund shares, or any of them, and may require the applicant to advance sufficient funds to defray all actual expenses of such examination. An itemized statement of such expenses shall be furnished to the applicant.

(5) No investment fund shares shall be registered under this subsection B unless the underlying securities or cash are and are to be deposited and held under an appropriate agreement for the benefit of the holders of the investment fund shares with and by a trustee or custodian which is a clearing corporation, bank, trust company or member of a national securities exchange registered under the Federal 1934 Act, provided that any such bank or trust company shall have an aggregate capital, surplus and undivided profits of at least $2,000,000 and any such member of a national securities exchange shall have capital stock, additional paid-in capital and retained earnings of at least $2,000,000 if a corporation or partnership capital of at least $2,000,000 if a partnership and further provided that any such member of a national securities exchange shall comply with the provisions of the Federal 1940 Investment Company Act and the rules and regulations of the Securities and Exchange Commission promulgated under that Act relating to the custody of the underlying securities of investment funds.

(6) The Secretary of State shall within a reasonable time examine the application and documents filed with him or her and may make such additional examination pursuant to paragraph (4) of this subsection B as he or she may deem appropriate, and unless the Secretary of State makes a determination that the application and documents so filed do not conform to the requirements of this subsection B, or there is a proceeding pending under Section 11 of this Act, the Secretary of State shall register the investment fund shares for offer and sale in this State under this subsection B.

C. Pending Application and Filing Fee. No application for registration of investment fund shares shall be deemed to be filed or pending and no investment fund shares covered by such application shall be deemed to be registered under subsection A of this Section 7 unless a filing fee in the amount established pursuant to Section 11a of this Act has been paid, which fee shall not be returnable in any event. No application shall be deemed to be filed or pending and no investment fund shares covered by such application shall be deemed to be registered under subsection B of this Section 7 unless the examination fee and filing fee established pursuant to Section 11a of this Act have been paid, which fees shall not be returnable in any event.

D. Amendatory statements and required fees. The Secretary of State may by rule or regulation require the filing of an amendatory statement and prescribe its form and content. The fee for filing the statement shall be established pursuant to Section 11a of this Act. The fee shall not be returnable in any event.

E. Discontinuance of Registration. An amendatory statement or statements may be submitted by the applicant at any time, and from time to time, when it is desired to discontinue registration in respect of one or more classes, series, or portfolios and if the Secretary of State shall find that such discontinuance is not against the public interest, such amendatory statement or statements shall be filed by the Secretary of State without charge, but such discontinuance of registration shall not entitle the applicant to any refund of any fees previously paid in respect of such discontinued class or classes, series, or portfolios.

F. Effective Period and Sales Reports.

(1) A registration of investment fund shares under this Section 7, unless sooner terminated by the voluntary action of the applicant or by action of the Secretary of State under Section 11 hereof, shall continue in force and effect for a period of one year from the date of registration or renewal of registration (or such other period of time as the Secretary of State may prescribe by rule or regulation or order), without limitation as to number of shares or aggregate amount; provided, however, that in the case of investment fund shares registered under subsection B of this Section 7, the issuer which has no registration statement then in effect under the Federal 1933 Act and the Federal 1940 Investment Company Act shall promptly file with the Secretary of State throughout such registration period, one copy of each monthly, quarterly, semi-annual, annual or other periodic report and financial statement sent to holders of its outstanding investment fund shares, and one copy of each statement and report relating to such investment fund shares filed with any regulatory authority or agency of the Federal Government.

(2) The Secretary of State may, at his or her discretion, require each issuer, controlling person or registered dealer on whose behalf a registration of investment fund shares is effected under this Section 7 to file a report, in such form and of such content and for such time period as the Secretary of State may by rule or regulation prescribe, stating the aggregate dollar amount of investment fund shares sold to Illinois residents. The civil remedies provided for in subsection A of Section 13 of this Act and the civil remedies of rescission and appointment of a receiver, conservator, ancillary receiver or ancillary conservator provided for in subsection I of Section 11 and in subsections F and G of Section 13 of this Act and the civil remedies of restitution, damages and disgorgement of profits provided for in subsection I of Section 11 of this Act shall not be available against any person by reason of the failure to file any such report or on account of the contents of any such report.

G. Renewal of Registration. A registration of investment fund shares in effect under subsection A or B of this Section 7 may be renewed by the issuer by filing an application for renewal of registration with the Secretary of State no later than 10 business days prior to the date upon which such registration would otherwise expire or such lesser period as the Secretary of State may prescribe by rule or regulation, in such form and executed, verified, or authenticated by such person as the Secretary of State shall prescribe by rule or regulation. Such application shall be accompanied by a prospectus in its most current form together with a renewal fee established pursuant to Section 11a of this Act, which shall not be returnable in any event. A renewal of registration of securities shall take effect as of the date and time that the prior registration under subsection A of this Section 7 or prior renewal under this paragraph (1) would otherwise have expired (or such alternative date as the Secretary of State may prescribe by rule or regulation) and thereafter shall be deemed to be a new registration of the investment fund shares covered thereby. The Secretary of State may by rule or regulation prescribe an additional fee for the failure to file timely an application for renewal and limit the number of times a registration may be renewed.

H. The applicant or registrant shall notify the Secretary of State, by written notice (which may be by electronic or facsimile transmission), within 2 business days after its receipt of any stop order, denial, order to show cause, suspension or revocation order, injunction or restraining order, or similar order entered or issued by any state, federal or other regulatory authority or by any court, concerning the investment fund shares which are being or have been registered in this State or any other securities of the issuer currently being or proposed to be offered to the public, if the matter which is the subject of, or the failure to disclose the existence of, such order would in this State constitute a violation of subsection E, F, G, H, I or J of Section 12 of this Act. The obligation contained in this subsection H shall continue until such time as offers and sales of the investment fund shares registered under this Section 7 are no longer being made in this State by the applicant or registrant.

I. Any document being filed pursuant to this Section 7 shall be deemed filed, and any fee being paid pursuant to this Section 7 shall be deemed paid, upon the date of actual receipt thereof by the Secretary of State.

J. The Secretary of State may require by rule or regulation the payment of an additional fee for the filing of information or documents required to be filed by this Section 7 which have not been filed in a timely manner. Such fees shall be deposited into the Securities Audit and Enforcement Fund Securities Investors Education Fund and use to promote public awareness of the dangers of securities fraud.

(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96; 90-70, eff. 7-8-97.)

(815 ILCS 5/11) (from Ch. 121 1/2, par. 137.11)

Sec. 11. Duties and powers of the Secretary of State.

A. (1) The administration of this Act is vested in the Secretary of State, who may from time to time make, amend and rescind such rules and regulations as may be necessary to carry out this Act, including rules and regulations governing procedures of registration, statements, applications and reports for various classes of securities, persons and matters within his or her jurisdiction and defining any terms, whether or not used in this Act, insofar as the definitions are not inconsistent with this Act. The rules and regulations adopted by the Secretary of State under this Act shall be effective in the manner provided for in the Illinois Administrative Procedure Act.

(2) Among other things, the Secretary of State shall have authority, for the purposes of this Act, to prescribe the form or forms in which required information shall be set forth, accounting practices, the items or details to be shown in balance sheets and earning statements, and the methods to be followed in the preparation of accounts, in the appraisal or valuation of assets and liabilities, in the determination of depreciation and depletion, in the differentiation of recurring and non-recurring income, in the differentiation of investment and operating income, and in the preparation of consolidated balance sheets or income accounts of any person, directly or indirectly, controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer.

(3) No provision of this Act imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Secretary of State under this Act, notwithstanding that the rule or regulation may, after the act or omission, be amended or rescinded or be determined by judicial or other authority to be invalid for any reason.

(4) The Securities Department of the Office of the Secretary of State shall be deemed a criminal justice agency for purposes of all federal and state laws and regulations and, in that capacity, shall be entitled to access to any information available to criminal justice agencies and has the power to appoint special agents to conduct all investigations, searches, seizures, arrests, and other duties imposed under the provisions of any law administered by the Department. The special agents have and may exercise all the powers of peace officers solely for the purpose of enforcing provisions of this Act.

The Director must authorize to each special agent employed under this Section a distinct badge that, on its face, (i) clearly states that the badge is authorized by the Department and (ii) contains a unique and identifying number.

Special agents shall comply with all training requirements established for law enforcement officers by provisions of the Illinois Police Training Act.

(5) The Secretary of State, by rule, may conditionally or unconditionally exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions from any provision of Section 5, 6, 7, 8, 8a, or 9 of this Act or of any rule promulgated under these Sections, to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors.

B. The Secretary of State may, anything in this Act to the contrary notwithstanding, require financial statements and reports of the issuer, dealer, Internet portal, salesperson, investment adviser, or investment adviser representative as often as circumstances may warrant. In addition, the Secretary of State may secure information or books and records from or through others and may make or cause to be made investigations respecting the business, affairs, and property of the issuer of securities, any person involved in the sale or offer for sale, purchase or offer to purchase of any mineral investment contract, mineral deferred delivery contract, or security and of dealers, Internet portals, salespersons, investment advisers, and investment adviser representatives that are registered or are the subject of an application for registration under this Act. The costs of an investigation shall be borne by the registrant or the applicant, provided that the registrant or applicant shall not be obligated to pay the costs without his, her or its consent in advance.

C. Whenever it shall appear to the Secretary of State, either upon complaint or otherwise, that this Act, or any rule or regulation prescribed under authority thereof, has been or is about to be violated, he or she may, in his or her discretion, do one or more of the following:

(1) require or permit the person to file with the Secretary of State a statement in writing under oath, or otherwise, as to all the facts and circumstances concerning the subject matter which the Secretary of State believes to be in the public interest to investigate, audit, examine, or inspect;

(2) conduct an investigation, audit, examination, or inspection as necessary or advisable for the protection of the interests of the public; and

(3) appoint investigators to conduct all investigations, searches, seizures, arrests, and other duties imposed under the provisions of any law administered by the Department. The Director must authorize to each investigator employed under this Section a distinct badge that, on its face, (i) clearly states that the badge is authorized by the Department and (ii) contains a unique and identifying number.

D. (1) For the purpose of all investigations, audits, examinations, or inspections which in the opinion of the Secretary of State are necessary and proper for the enforcement of this Act, the Secretary of State or a person designated by him or her is empowered to administer oaths and affirmations, subpoena witnesses, take evidence, and require, by subpoena or other lawful means provided by this Act or the rules adopted by the Secretary of State, the production of any books and records, papers, or other documents which the Secretary of State or a person designated by him or her deems relevant or material to the inquiry.

(2) The Secretary of State or a person designated by him or her is further empowered to administer oaths and affirmations, subpoena witnesses, take evidence, and require the production of any books and records, papers, or other documents in this State at the request of a securities agency of another state, if the activities constituting the alleged violation for which the information is sought would be in violation of Section 12 of this Act if the activities had occurred in this State.

(3) The Circuit Court of any County of this State, upon application of the Secretary of State or a person designated by him or her may order the attendance of witnesses, the production of books and records, papers, accounts and documents and the giving of testimony before the Secretary of State or a person designated by him or her; and any failure to obey the order may be punished by the Circuit Court as a contempt thereof.

(4) The fees of subpoenaed witnesses under this Act for attendance and travel shall be the same as fees of witnesses before the Circuit Courts of this State, to be paid when the witness is excused from further attendance, provided, the witness is subpoenaed at the instance of the Secretary of State; and payment of the fees shall be made and audited in the same manner as other expenses of the Secretary of State.

(5) Whenever a subpoena is issued at the request of a complainant or respondent as the case may be, the Secretary of State may require that the cost of service and the fee of the witness shall be borne by the party at whose instance the witness is summoned.

(6) The Secretary of State shall have power at his or her discretion, to require a deposit to cover the cost of the service and witness fees and the payment of the legal witness fee and mileage to the witness served with subpoena.

(7) A subpoena issued under this Act shall be served in the same manner as a subpoena issued out of a circuit court.

(8) The Secretary of State may in any investigation, audits, examinations, or inspections cause the taking of depositions of persons residing within or without this State in the manner provided in civil actions under the laws of this State.

E. Anything in this Act to the contrary notwithstanding:

(1) If the Secretary of State shall find that the offer or sale or proposed offer or sale or method of offer or sale of any securities by any person, whether exempt or not, in this State, is fraudulent, or would work or tend to work a fraud or deceit, or is being offered or sold in violation of Section 12, or there has been a failure or refusal to submit any notification filing or fee required under this Act, the Secretary of State may by written order prohibit or suspend the offer or sale of securities by that person or deny or revoke the registration of the securities or the exemption from registration for the securities.

(2) If the Secretary of State shall find that any person has violated subsection C, D, E, F, G, H, I, J, or K of Section 12 of this Act, the Secretary of State may by written order temporarily or permanently prohibit or suspend the person from offering or selling any securities, any mineral investment contract, or any mineral deferred delivery contract in this State, provided that any person who is the subject of an order of permanent prohibition may petition the Secretary of State for a hearing to present evidence of rehabilitation or change in circumstances justifying the amendment or termination of the order of permanent prohibition.

(3) If the Secretary of State shall find that any person is engaging or has engaged in the business of selling or offering for sale securities as a dealer, Internet portal, or salesperson or is acting or has acted as an investment adviser, investment adviser representative, or federal covered investment adviser, without prior thereto and at the time thereof having complied with the registration or notice filing requirements of this Act, the Secretary of State may by written order prohibit or suspend the person from engaging in the business of selling or offering for sale securities, or acting as an investment adviser, investment adviser representative, or federal covered investment adviser, in this State.

(4) In addition to any other sanction or remedy contained in this subsection E, the Secretary of State, after finding that any provision of this Act has been violated, may impose a fine as provided by rule, regulation or order not to exceed $10,000 for each violation of this Act, may issue an order of public censure against the violator, and may charge as costs of investigation all reasonable expenses, including attorney's fees and witness fees.

F. (1) The Secretary of State shall not deny, suspend or revoke the registration of securities, suspend or revoke the registration of a dealer, Internet portal, salesperson, investment adviser, or investment adviser representative, prohibit or suspend the offer or sale of any securities, prohibit or suspend any person from offering or selling any securities in this State, prohibit or suspend a dealer or salesperson from engaging in the business of selling or offering for sale securities, prohibit or suspend a person from acting as an investment adviser or federal covered investment adviser, or investment adviser representative, impose any fine for violation of this Act, issue an order of public censure, or enter into an agreed settlement except after an opportunity for hearing upon not less than 10 days notice given by personal service or registered mail or certified mail, return receipt requested, to the person or persons concerned. Such notice shall state the date and time and place of the hearing and shall contain a brief statement of the proposed action of the Secretary of State and the grounds for the proposed action. A failure to appear at the hearing or otherwise respond to the allegations set forth in the notice of hearing shall constitute an admission of any facts alleged therein and shall constitute sufficient basis to enter an order.

(2) Anything herein contained to the contrary notwithstanding, the Secretary of State may temporarily prohibit or suspend, for a maximum period of 90 days, by an order effective immediately, the offer or sale or registration of securities, the registration of a dealer, Internet portal, salesperson, investment adviser, or investment adviser representative, or the offer or sale of securities by any person, or the business of rendering investment advice, without the notice and prior hearing in this subsection prescribed, if the Secretary of State shall in his or her opinion, based on credible evidence, deem it necessary to prevent an imminent violation of this Act or to prevent losses to investors which the Secretary of State reasonably believes will occur as a result of a prior violation of this Act. Immediately after taking action without such notice and hearing, the Secretary of State shall deliver a copy of the temporary order to the respondent named therein by personal service or registered mail or certified mail, return receipt requested. The temporary order shall set forth the grounds for the action and shall advise that the respondent may request a hearing, that the request for a hearing will not stop the effectiveness of the temporary order and that respondent's failure to request a hearing within 30 days after the date of the entry of the temporary order shall constitute an admission of any facts alleged therein and shall constitute sufficient basis to make the temporary order final. Any provision of this paragraph (2) to the contrary notwithstanding, the Secretary of State may not pursuant to the provisions of this paragraph (2) suspend the registration of a dealer, limited Canadian dealer, salesperson, investment adviser, or investment adviser representative based upon sub-paragraph (n) of paragraph (l) of subsection E of Section 8 of this Act or revoke the registration of securities or revoke the registration of any dealer, salesperson, investment adviser representative, or investment adviser.

(3) The Secretary of State may issue a temporary order suspending or delaying the effectiveness of any registration of securities under subsection A or B of Section 5, 6 or 7 of this Act subsequent to and upon the basis of the issuance of any stop, suspension or similar order by the Securities and Exchange Commission with respect to the securities which are the subject of the registration under subsection A or B of Section 5, 6 or 7 of this Act, and the order shall become effective as of the date and time of effectiveness of the Securities and Exchange Commission order and shall be vacated automatically at such time as the order of the Securities and Exchange Commission is no longer in effect.

(4) When the Secretary of State finds that an application for registration as a dealer, Internet portal, salesperson, investment adviser, or investment adviser representative should be denied, the Secretary of State may enter an order denying the registration. Immediately after taking such action, the Secretary of State shall deliver a copy of the order to the respondent named therein by personal service or registered mail or certified mail, return receipt requested. The order shall state the grounds for the action and that the matter will be set for hearing upon written request filed with the Secretary of State within 30 days after the receipt of the request by the respondent. The respondent's failure to request a hearing within 30 days after receipt of the order shall constitute an admission of any facts alleged therein and shall make the order final. If a hearing is held, the Secretary of State shall affirm, vacate, or modify the order.

(5) The findings and decision of the Secretary of State upon the conclusion of each final hearing held pursuant to this subsection shall be set forth in a written order signed on behalf of the Secretary of State by his or her designee and shall be filed as a public record. All hearings shall be held before a person designated by the Secretary of State, and appropriate records thereof shall be kept.

(6) Notwithstanding the foregoing, the Secretary of State, after notice and opportunity for hearing, may at his or her discretion enter into an agreed settlement, stipulation or consent order with a respondent in accordance with the provisions of the Illinois Administrative Procedure Act. The provisions of the agreed settlement, stipulation or consent order shall have the full force and effect of an order issued by the Secretary of State.

(7) Anything in this Act to the contrary notwithstanding, whenever the Secretary of State finds that a person is currently expelled from, refused membership in or association with, or limited in any material capacity by a self-regulatory organization registered under the Federal 1934 Act or the Federal 1974 Act because of a fraudulent or deceptive act or a practice in violation of a rule, regulation, or standard duly promulgated by the self-regulatory organization, the Secretary of State may, at his or her discretion, enter a Summary Order of Prohibition, which shall prohibit the offer or sale of any securities, mineral investment contract, or mineral deferred delivery contract by the person in this State. The order shall take effect immediately upon its entry. Immediately after taking the action the Secretary of State shall deliver a copy of the order to the named Respondent by personal service or registered mail or certified mail, return receipt requested. A person who is the subject of an Order of Prohibition may petition the Secretary of State for a hearing to present evidence of rehabilitation or change in circumstances justifying the amendment or termination of the Order of Prohibition.

G. No administrative action shall be brought by the Secretary of State for relief under this Act or upon or because of any of the matters for which relief is granted by this Act after the earlier to occur of (i) 3 years from the date upon which the Secretary of State had notice of facts which in the exercise of reasonable diligence would lead to actual knowledge of the alleged violation of the Act, or (ii) 5 years from the date on which the alleged violation occurred.

H. The action of the Secretary of State in denying, suspending, or revoking the registration of a dealer, Internet portal, limited Canadian dealer, salesperson, investment adviser, or investment adviser representative, in prohibiting any person from engaging in the business of offering or selling securities as a dealer, limited Canadian dealer, or salesperson, in prohibiting or suspending the offer or sale of securities by any person, in prohibiting a person from acting as an investment adviser, federal covered investment adviser, or investment adviser representative, in denying, suspending, or revoking the registration of securities, in prohibiting or suspending the offer or sale or proposed offer or sale of securities, in imposing any fine for violation of this Act, or in issuing any order shall be subject to judicial review in the Circuit Courts of Cook or Sangamon Counties in this State. The Administrative Review Law shall apply to and govern every action for the judicial review of final actions or decisions of the Secretary of State under this Act.

I. Notwithstanding any other provisions of this Act to the contrary, whenever it shall appear to the Secretary of State that any person is engaged or about to engage in any acts or practices which constitute or will constitute a violation of this Act or of any rule or regulation prescribed under authority of this Act, the Secretary of State may at his or her discretion, through the Attorney General take any of the following actions:

(1) File a complaint and apply for a temporary restraining order without notice, and upon a proper showing the court may enter a temporary restraining order without bond, to enforce this Act.

(2) File a complaint and apply for a preliminary or permanent injunction, and, after notice and a hearing and upon a proper showing, the court may grant a preliminary or permanent injunction and may order the defendant to make an offer of rescission with respect to any sales or purchases of securities, mineral investment contracts, or mineral deferred delivery contracts determined by the court to be unlawful under this Act.

(3) Seek the seizure of assets when probable cause exists that the assets were obtained by a defendant through conduct in violation of Section 12, paragraph F, G, I, J, K, or L of this Act, and thereby subject to a judicial forfeiture hearing as required under this Act.

(a) In the event that such probable cause exists that the subject of an investigation who is alleged to have committed one of the relevant violations of this Act has in his possession assets obtained as a result of the conduct giving rise to the violation, the Secretary of State may seek a seizure warrant in any circuit court in Illinois.

(b) In seeking a seizure warrant, the Secretary of State, or his or her designee, shall submit to the court a sworn affidavit detailing the probable cause evidence for the seizure, the location of the assets to be seized, the relevant violation under Section 12 of this Act, and a statement detailing any known owners or interest holders in the assets.

(c) Seizure of the assets shall be made by any peace officer upon process of the seizure warrant issued by the court. Following the seizure of assets under this Act and pursuant to a seizure warrant, notice of seizure, including a description of the seized assets, shall immediately be returned to the issuing court. Seized assets shall be maintained pending a judicial forfeiture hearing in accordance with the instructions of the court.

(d) In the event that management of seized assets becomes necessary to prevent the devaluation, dissipation, or otherwise to preserve the property, the court shall have jurisdiction to appoint a receiver, conservator, ancillary receiver, or ancillary conservator for that purpose, as provided in item (2) of this subsection.

(4) Seek the forfeiture of assets obtained through conduct in violation of Section 12, paragraph F, G, H, I, J, K, or L when authorized by law. A forfeiture must be ordered by a circuit court or an action brought by the Secretary of State as provided for in this Act, under a verified complaint for forfeiture.

(a) In the event assets have been seized pursuant to this Act, forfeiture proceedings shall be instituted by the Attorney General within 45 days of seizure.

(b) Service of the complaint filed under the provisions of this Act shall be made in the manner as provided in civil actions in this State.

(c) Only an owner of or interest holder in the property may file an answer asserting a claim against the property. For purposes of this Section, the owner or interest holder shall be referred to as claimant.

(d) The answer must be signed by the owner or interest holder under penalty of perjury and must set forth:

(i) the caption of the proceedings as set forth on the notice of pending forfeiture and the name of the claimant;

(ii) the address at which the claimant will accept mail;

(iii) the nature and extent of the claimant's interest in the property;

(iv) the date, identity of the transferor, and circumstances of the claimant's acquisition of the interest in the property;

(v) the names and addresses of all other persons known to have an interest in the property;

(vi) the specific provisions of this Act relied on in asserting that the property is not subject to forfeiture;

(vii) all essential facts supporting each assertion; and

(viii) the precise relief sought.

(e) The answer must be filed with the court within 45 days after service of the complaint.

(f) A property interest is exempt from forfeiture under this Act if its owner or interest holder establishes by a preponderance of evidence that the owner or interest holder:

(i) is not legally accountable for the conduct giving rise to the forfeiture, did not acquiesce in it, and did not know and could not reasonably have known of the conduct or that the conduct was likely to occur;

(ii) with respect to conveyances, did not hold the property jointly or in common with a person whose conduct gave rise to the forfeiture;

(iii) does not hold the property for the benefit of or as a nominee for any person whose conduct gave rise to its forfeiture and the owner or interest holder acquires it as a bona fide purchaser for value without knowingly taking part in the conduct giving rise to the forfeiture; or

(iv) acquired the interest after the commencement of the conduct giving rise to its forfeiture and the owner or interest holder acquired the interest as a mortgagee, secured creditor, lienholder, or bona fide purchaser for value without knowledge of the conduct that gave rise to the forfeiture.

(g) The hearing must be held within 60 days after the answer is filed unless continued for good cause.

(h) During the probable cause portion of the judicial in rem proceeding wherein the Secretary of State presents its case-in-chief, the court must receive and consider, among other things, any relevant hearsay evidence and information. The laws of evidence relating to civil actions shall apply to all other portions of the judicial in rem proceeding.

(i) The Secretary of State shall show the existence of probable cause for forfeiture of the property. If the Secretary of State shows probable cause, the claimant has the burden of showing by a preponderance of the evidence that the claimant's interest in the property is not subject to forfeiture.

(j) If the Secretary of State does not show the existence of probable cause or a claimant has an interest that is exempt under subdivision I (4)(d) of this Section, the court shall order the interest in the property returned or conveyed to the claimant and shall order all other property forfeited to the Secretary of State pursuant to all provisions of this Act. If the Secretary of State does show the existence of probable cause and the claimant does not establish by a preponderance of the evidence that the claimant has an interest that is exempt under subsection D herein, the court shall order all the property forfeited to the Secretary of State pursuant to the provisions of the Section.

(k) A defendant convicted in any criminal proceeding is precluded from later denying the essential allegations of the criminal offense of which the defendant was convicted in any proceeding for violations of the Act giving rise to forfeiture of property herein regardless of the pendency of an appeal from that conviction. However, evidence of the pendency of an appeal is admissible.

(l) An acquittal or dismissal in a criminal proceeding for violations of the Act giving rise to the forfeiture of property herein shall not preclude civil proceedings under this provision; however, for good cause shown, on a motion by the Secretary of State, the court may stay civil forfeiture proceedings during the criminal trial for a related criminal indictment or information alleging violation of the provisions of Section 12 of the Illinois Securities Law of 1953. Property subject to forfeiture under this Section shall not be subject to return or release by a court exercising jurisdiction over a criminal case involving the seizure of the property unless the return or release is consented to by the Secretary of State.

(m) All property declared forfeited under this Act vests in the State on the commission of the conduct giving rise to forfeiture together with the proceeds of the property after that time. Any such property or proceeds subsequently transferred to any person remain subject to forfeiture and thereafter shall be ordered forfeited unless the transferee claims and establishes in a hearing under the provisions of this Act that the transferee's interest is exempt under the Act. Any assets forfeited to the State shall be disposed of in following manner:

(i) all forfeited property and assets shall be liquidated by the Secretary of State in accordance with all laws and rules governing the disposition of such property;

(ii) the Secretary of State shall provide the court at the time the property and assets are declared forfeited a verified statement of investors subject to the conduct giving rise to the forfeiture;

(iii) after payment of any costs of sale, receivership, storage, or expenses for preservation of the property seized, other costs to the State, and payment to claimants for any amount deemed exempt from forfeiture, the proceeds from liquidation shall be distributed pro rata to investors subject to the conduct giving rise to the forfeiture; and

(iv) any proceeds remaining after all verified investors have been made whole shall be distributed 25% to the Securities Investors Education Fund, 25% to the Securities Audit and Enforcement Fund, 25% to the Attorney General or any State's Attorney bringing criminal charges for the conduct giving rise to the forfeiture, and 25% to other law enforcement agencies participating in the investigation of the criminal charges for the conduct giving rise to the forfeiture. In the event that no other law enforcement agencies are involved in the investigation of the conduct giving rise to the forfeiture, then the portion to other law enforcement agencies shall be distributed to the Securities Investors Education Fund.

Any additional fees established by administrative rule and collected by the Secretary of State pursuant to this subparagraph shall be deposited into the Securities Audit and Enforcement Fund.

(n) The Secretary of State shall notify by certified mail, return receipt requested, all known investors in the matter giving rise to the forfeiture of the forfeiture proceeding and sale of assets forfeited arising from the violations of this Act, and shall further publish notice in a paper of general circulation in the district in which the violations were prosecuted. The notice to investors shall identify the name, address, and other identifying information about any defendant prosecuted for violations of this Act that resulted in forfeiture and sale of property, the offense for which the defendant was convicted, and that the court has ordered forfeiture and sale of property for claims of investors who incurred losses or damages as a result of the violations. Investors may then file a claim in a form prescribed by the Secretary of State in order to share in disbursement of the proceeds from sale of the forfeited property. Investor claims must be filed with the Secretary of State within 30 days after receipt of the certified mail return receipt, or within 30 days after the last date of publication of the general notice in a paper of general circulation in the district in which the violations were prosecuted, whichever occurs last.

(o) A civil action under this subsection must be commenced within 5 years after the last conduct giving rise to the forfeiture became known or should have become known or 5 years after the forfeitable property is discovered, whichever is later, excluding time during which either the property or claimant is out of this State or in confinement or during which criminal proceedings relating to the same conduct are in progress.

(p) If property is seized for evidence and for forfeiture, the time periods for instituting judicial forfeiture proceedings shall not begin until the property is no longer necessary for evidence.

(q) Notwithstanding other provisions of this Act, the Secretary of State and a claimant of forfeitable property may enter into an agreed-upon settlement concerning the forfeitable property in such an amount and upon such terms as are set out in writing in a settlement agreement.

(r) Nothing in this Act shall apply to property that constitutes reasonable bona fide attorney's fees paid to an attorney for services rendered or to be rendered in the forfeiture proceeding or criminal proceeding relating directly thereto when the property was paid before its seizure and before the issuance of any seizure warrant or court order prohibiting transfer of the property and when the attorney, at the time he or she received the property, did not know that it was property subject to forfeiture under this Act.

The court shall further have jurisdiction and authority, in addition to the penalties and other remedies in this Act provided, to enter an order for the appointment of the court or a person as a receiver, conservator, ancillary receiver or ancillary conservator for the defendant or the defendant's assets located in this State, or to require restitution, damages or disgorgement of profits on behalf of the person or persons injured by the act or practice constituting the subject matter of the action, and may assess costs against the defendant for the use of the State; provided, however, that the civil remedies of rescission and appointment of a receiver, conservator, ancillary receiver or ancillary conservator shall not be available against any person by reason of the failure to file with the Secretary of State, or on account of the contents of, any report of sale provided for in subsection G or P of Section 4, paragraph (2) of subsection D of Sections 5 and 6, or paragraph (2) of subsection F of Section 7 of this Act. Appeals may be taken as in other civil cases.

I-5. Property forfeited under this Section is subject to reporting under the Seizure and Forfeiture Reporting Act.

J. In no case shall the Secretary of State, or any of his or her employees or agents, in the administration of this Act, incur any official or personal liability by instituting an injunction or other proceeding or by denying, suspending or revoking the registration of a dealer or salesperson, or by denying, suspending or revoking the registration of securities or prohibiting the offer or sale of securities, or by suspending or prohibiting any person from acting as a dealer, limited Canadian dealer, salesperson, investment adviser, or investment adviser representative or from offering or selling securities.

K. No provision of this Act shall be construed to require or to authorize the Secretary of State to require any investment adviser or federal covered investment adviser engaged in rendering investment supervisory services to disclose the identity, investments, or affairs of any client of the investment adviser or federal covered investment adviser, except insofar as the disclosure may be necessary or appropriate in a particular proceeding or investigation having as its object the enforcement of this Act.

L. Whenever, after an examination, investigation or hearing, the Secretary of State deems it of public interest or advantage, he or she may certify a record to the State's Attorney of the county in which the act complained of, examined or investigated occurred. The State's Attorney of that county within 90 days after receipt of the record shall file a written statement at the Office of the Secretary of State, which statement shall set forth the action taken upon the record, or if no action has been taken upon the record that fact, together with the reasons therefor, shall be stated.

M. The Secretary of State may initiate, take, pursue, or prosecute any action authorized or permitted under Section 6d of the Federal 1974 Act.

N. (1) Notwithstanding any provision of this Act to the contrary, to encourage uniform interpretation, administration, and enforcement of the provisions of this Act, the Secretary of State may cooperate with the securities agencies or administrators of one or more states, Canadian provinces or territories, or another country, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Securities Investor Protection Corporation, any self-regulatory organization, and any governmental law enforcement or regulatory agency.

(2) The cooperation authorized by paragraph (1) of this subsection includes, but is not limited to, the following:

(a) establishing or participating in a central depository or depositories for registration under this Act and for documents or records required under this Act;

(b) making a joint audit, inspection, examination, or investigation;

(c) holding a joint administrative hearing;

(d) filing and prosecuting a joint civil or criminal proceeding;

(e) sharing and exchanging personnel;

(f) sharing and exchanging information and documents; or

(g) issuing any joint statement or policy.

O. The Secretary of State may provide funds for restitution assistance to victims that were awarded restitution in a final order issued by a court of competent jurisdiction in a legal action initiated by the Secretary of State and who have not received the full amount of restitution ordered one year after the date of the final order. The Secretary of State may adopt rules to implement this subsection, including, but not be limited to, eligibility requirements for a restitution assistance award, applicable deadlines for applying for the award, and caps on the amount of restitution awards available from the Secretary of State.

(Source: P.A. 99-182, eff. 1-1-16; 100-512, eff. 7-1-18; 100-699, eff. 8-3-18.)

(815 ILCS 5/18.1)

Sec. 18.1. Additional fees. In addition to any other fee that the Secretary of State may impose and collect pursuant to the authority contained in Sections 4, 8, and 11a of this Act, beginning on July 1, 2003 the Secretary of State shall also collect the following additional fees:

Investment fund shares notification filing and annual notification filing: $800 plus $80 for each series, class, or portfolio.

All fees collected by the Secretary of State pursuant to this Section amendatory Act of the 93rd General Assembly shall be deposited into the Securities Audit and Enforcement Fund General Revenue Fund in the State treasury.

(Source: P.A. 99-182, eff. 1-1-16.)".