For Immediate Release: May 21, 2012
Commissioner Jack Issues a Special Order Waiving Surety Bond Requirements
Topeka, Kan- Commissioner Jack announced that he has issued a Special Order – Waiver Surety Bond requirements for Investment Advisers.
The current version of K.A.R. 81-14-9(e) requires every investment adviser registered or required to be registered under the Kansas Uniform Securities Act (KUSA) that has custody or discretionary authority over client funds or securities to be bonded for at least $35,000. Staff for the Office of the Kansas Securities Commissioner have recommended that the surety bond requirements of K.A.R. 81-14-9(e) are no longer necessary, and therefore, will not be required as of May 21, 2012.
"It is critical that we effectively balance investor protection with our rules and regulations for registrants that are not unnecessarily extensive or costly. When regulations become unreasonable they can restrict job growth. By eliminating this bonding requirement we are recognizing investor protection is more economically accomplished through errors & omission insurance which typically provides more coverage at a lower cost than traditional surety bonds. By removing this barrier to entry into the marketplace our goal is to continue to establish a regulatory environment where our brightest citizens will seek to join the financial services industry," said Commissioner Jack.
Investment Advisers who have questions on the new waiver of surety bond requirements should contact the Office of the Kansas Securities Commissioner for further information and guidance at (785) 296-3307. ###
The Office of the Kansas Securities Commissioner regulates securities offerings and investment professionals in the securities industry, provides investor education, investigates illegal securities activities, and prosecutes securities-related crimes. For more information about the Office of the Kansas Securities Commissioner, go to www.ksc.ks.gov or visit our Facebook page.