HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 7045 PCB GOS 22-10 OGSR/Information on Financial Institutions, Affiliated
International Trust Entities, and Qualified Limited Service Affiliates/OFR
SPONSOR(S): Government Operations Subcommittee, Fabricio
TIED BILLS: IDEN./SIM. BILLS: SB 7020
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Government Operations 11 Y, 5 N Villa Toliver
Subcommittee
1) Insurance & Banking Subcommittee 14 Y, 0 N Hinshelwood Luczynski
2) State Affairs Committee 22 Y, 0 N Villa Williamson
SUMMARY ANALYSIS
The Open Government Sunset Review Act requires the Legislature to review each public record exemption
and each public meeting exemption five years after enactment. If the Legislature does not reenact the
exemption, it automatically repeals on October 2nd of the fifth year after enactment.
The Office of Financial Regulation (OFR) regulates “financial institutions,” the definition of which was expanded
in 2017 to include two new entities called an “international trust entity” and a “qualified limited servic e affiliate.”
Public record exemptions were created for each of the new entities that make the following information
confidential and exempt from public disclosure:
Any personal identifying information of the customers or prospective customers of an affiliated
international trust entity which appears in the books and records of an international trust company
representative office (ITCRO) or a qualified limited service affiliate (QLSA) or which appears in records
relating to reports of examinations, operations, or condition of an ITCRO or a QLSA, including working
papers.
Any portion of a list of names of the shareholders or members of an affiliated international trust entity or
a QLSA.
Information received by OFR from a person from another state or country or the Federal Government
which is otherwise confidential and exempt pursuant to the laws of that state or country or pursuant to
federal law.
As a result of international trust entities and QLSAs being included within the definition of “financial institution,”
the following public record exemptions, relating to financial institutions generally were amended in 2017 to
incorporate the new definition:
Records and information relating to an investigation by OFR until the investigation is completed or
ceases to be active.
Reports of examinations, operations, and condition, including working papers, or portions thereof,
prepared by, or for the use of, OFR or any state or federal agency responsible for the regulation or
supervision of financial institutions in Florida.
Information that may be provided to particular parties under certain circumstances.
Confidential documents supplied to OFR or to employees of any financial institution by other state or
federal governmental agencies.
The bill saves from repeal the above-described public record exemptions, which will repeal on October 2,
2022, if this bill does not become law.
The bill does not appear to have a fiscal impact on state government or local governments.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 2/23/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Open Government Sunset Review Act
The Open Government Sunset Review Act (Act) 1 sets forth a legislative review process for newly
created or substantially amended public record or public meeting exemptions. It requires an automatic
repeal of the exemption on October 2nd of the fifth year after creation or substantial amendment,
unless the Legislature reenacts the exemption.2
The Act provides that a public record or public meeting exemption may be created or maintained only if
it serves an identifiable public purpose. In addition, it may be no broader than is necessary to meet one
of the following purposes:
Allow the state or its political subdivisions to effectively and efficiently administer a
governmental program, which administration would be significantly impaired without the
exemption.
Protect sensitive personal information that, if released, would be defamatory or would
jeopardize an individual’s safety; however, only the identity of an individual may be exempted
under this provision.
Protect trade or business secrets.3
If, and only if, in reenacting an exemption that will repeal, the exemption is expanded (essentially
creating a new exemption), then a public necessity statement and a two-thirds vote for passage are
required.4 If the exemption is reenacted with grammatical or stylistic changes that do not expand the
exemption, if the exemption is narrowed, or if an exception to the exemption is created, then a public
necessity statement and a two-thirds vote for passage are not required.
Office of Financial Regulation
The Office of Financial Regulation (OFR) regulates banks, credit unions, other financial institutions,
finance companies, and the securities industry.5 OFR’s Division of Financial Institutions charters,
licenses, and regulates various entities that engage in financial institution business in Florida, in
accordance with the financial institutions codes and the rules promulgated thereunder. 6 OFR also
ensures that state financial institutions (i.e. financial institutions 7 chartered or organized by the state of
Florida) comply with state and applicable federal requirements for safety and soundness.
As part of its general supervisory powers, OFR has access to all state financial institutions’ books and
records necessary for the performance of its duties and functions prescribed under the financial
institutions codes.8 Among its duties, OFR is required to conduct examinations of the condition of each
state financial institution at least every 18 months.9 In relation to state financial institutions that also
have a federal regulator, OFR may accept an examination of a state financial institution made by an
1 Section 119.15, F.S.
2 Section 119.15(3), F.S.
3 Section 119.15(6)(b), F.S.
4 Article I, s. 24(c), FLA. CONST .
5 Section 20.121(3)(a)2., F.S.
6 Chapters 655, 657, 658, 660, 662, 663, 665, and 667, F.S.; chs. 69U-100 through 69U-162, F.A.C.
7 “Financial institution” is defined as “a state or federal savings or thrift association, bank, savings bank, trust company, international
bank agency, international banking corporation, international branch, international representative office, internatio nal administrative
office, international trust entity, international trust company representative office, qualified limited service affiliate, c redit union, or an
agreement corporation operating pursuant to s. 25 of the Federal Reserve Act, 12 U.S.C. ss. 601 et seq. or Edge Act corporation
organized pursuant to s. 25(a) of the Federal Reserve Act, 12 U.S.C. ss. 611 et seq.” Section 655.005(1)(i), F.S.
8 Section 655.012(1)(b), F.S.
9 Sections 655.045(1) and 663.537, F.S.
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appropriate federal regulatory agency, and may conduct joint or concurrent examinations with federal
agencies.10 However, at least once during every 36-month period, OFR must conduct an examination
of each state financial institution in a manner that allows the preparation of a complete examination
report.11
In addition to performing regular examinations, OFR may also make investigations which it deems
necessary to determine whether a person has violated or is about to violate any provision of the
financial institutions codes or the rules promulgated thereunder. 12
International Trust Entities, International Trust Company Representative Offices, and Qualified Limited
Service Affiliates
In 2017, the Legislature expanded the definition of “financial institution” to include two new entities
called an “international trust entity” and a “qualified limited service affiliate.” 13 An international trust
entity is an international trust company or organization, or any similar business entity, or an affiliated or
subsidiary entity that is licensed, chartered, or similarly permitted to conduct trust business in a foreign
country or countries under the laws where such entity is organized and supervised. 14 Currently, an
international trust entity can operate in Florida either directly through an international trust company
representative office (ITCRO) or indirectly through a qualified limited service affiliate (QLSA). 15
An ITCRO is defined as an office of an international trust entity which is established or maintained in
Florida for the purpose of engaging in specified nonfiduciary activities, or any affiliate, subsidiary, or
other person that engages in such activities on behalf of such international trust entity from an office
located in Florida. Permissible activities of an ITCRO include:
Advertising, marketing, and soliciting for fiduciary business on behalf of an international trust
entity;
Contacting existing or potential customers;
Answering questions and providing information about matters related to customer accounts;
Serving as a liaison in Florida between the international trust entity and its existing or potential
customers; and
Engaging in any other activities approved by OFR or under rules of the Financial Services
Commission.16
An ITCRO’s representatives and employees may not act as a fiduciary, which means they may not do
such things as accept fiduciary appointment, execute the fiduciary documents that create the fiduciary
relationship, or make discretionary decisions regarding the investment or distribution of fiduciary
accounts.17
A QLSA, on the other hand, is a separate legal entity from the international trust entity and is defined as
a person or entity that is qualified to perform specified permissible activities related to or for the benefit
of one or more affiliated international trust entities.18 Such permissible activities include:
Marketing and liaison services related to or for the benefit of the affiliated international trust
entities, directed exclusively at professionals and current or prospective nonresident clients of
an affiliated international trust entity;
Advertising and marketing at trade, industry, or professional events;
10 Section 655.045(1)(a), F.S.
11 Id.
12 Section 655.032(1), F.S.
13 Chapter 2017-83, L.O.F.
14 Section 663.401(3), F.S.
15 Prior to 2017, the equivalent of an international trust entity, an offshore non -depository trust company, was included within the
definition of an International Banking Corporation (IBC) and governed under that regulatory framework. However, given the dis tinct
nature of the two entities, the Legislature separated them and relocated the regulations related to licensed offices of an in ternational
trust entity, i.e., ITCROs, from the regulations related to licensed offices of an IBC. The Legislature also crea ted a new kind of entity
called a QLSA (of an international trust entity).
16 Section 663.409(1), F.S.
17 Section 663.409(2), F.S.
18 Section 663.530(1)(f), F.S.
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Transmitting documents between the international trust entity and its current or prospective
clients or a designee of such clients; and
Transmitting information about the trust or trust holdings of current clients between current
clients or their designees and the international trust entity. 19
A QLSA is prohibited from engaging in the following activities:
Advertising and marketing related to or for the benefit of the international trust entity which are
directed to the general public.
Acting as a fiduciary, including, but not limited to, accepting the fiduciary appointment, executing
the fiduciary documents that create the fiduciary relationship, or making discretionary decisions
regarding the investment or distribution of fiduciary accounts.
Accepting custody of any trust property or any other good, asset, or thing of value on behalf of
the affiliated international trust entity, its subsidiaries or affiliates, or subsidiaries and affiliates of
the qualified limited service affiliate.
Soliciting business within this state from the general public related to or for the benefit of an
affiliated international trust entity.
Adding a director, an executive officer, a principal shareholder, a manager, a managing
member, or an equivalent position to the qualified limited service affiliate without prior written
notification to OFR.
Commencing services for an international trust entity without complying with applicable
requirements.
Providing services for any international trust entity that is in bankruptcy, conservatorship,
receivership, liquidation, or a similar status under the laws of any country.
Otherwise conducting banking or trust business. 20
Public Record Exemptions under Review
International Trust Company Representative Offices and Qualified Limited Service Affiliates
As a result of the Legislature creating two new entity types, the below-described public record
exemptions were created relating to each of those entities and make the following information
confidential and exempt21 from public disclosure:
Any personal identifying information of the customers or prospective customers of an affiliated
international trust entity which appears in the books and records of an ITCRO or a QLSA or
which appears in records relating to reports of examinations, operations, or condition 22 of an
ITCRO or a QLSA, including working papers.23
Any portion of a list of names of the shareholders or members of an affiliated international trust
entity or a QLSA.
Information received by OFR from a person from another state or country or the Federal
Government which is otherwise confidential and exempt pursuant to the laws of that state or
country or pursuant to federal law.24
19 Section 663.531(1), F.S.
20 Section 663.531(2), F.S.
21 There is a difference between records the Legislature designates exempt from public record requirements and those the Legisla ture
deems confidential and exempt. A record classified as exempt from public disclosure may be disclosed under certain circumstan ces.
See WFTV, Inc. v. Sch. Bd. of Seminole, 874 So.2d 48, 53 (Fla. 5th DCA 2004), review denied 892 So.2d 1015 (Fla. 2004); City of
Rivera Beach v. Barfield, 642 So.2d 1135 (Fla. 4th DCA 1994); Williams v. City of Minneola, 575 So.2d 683, 687 (Fla. 5th DCA
1991). If the Legislature designates a record as confidential and exempt from public disclosure, such record may not be relea sed by the
custodian of public records to anyone other than the persons or entities specifically designated in statute. See Op. Att’y Gen. Fla. 04-
09 (2004).
22 “Reports of examination, operations, and condition” is defined to mean records submitted to or prepared by OFR as part of OFR’s
duties performed pursuant to ss. 655.012, 655.045, or 663.537, F.S. Sections 663.416(1)(a) and 663.540(1)(a), F.S.
23 “Working papers” is defined to mean the records of the procedures followed, the tests performed, the information obtained, an d the
conclusions reached in an investigation or examination performed under ss. 655.032, 655.045, or 663.537, F.S. The term includes
planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of the books and
records of a financial institution, as defined in s. 655.005, and schedules or commentaries prepared o r obtained in the course of such
investigation or examination. Sections 663.416(1)(b) and 663.540(1)(b), F.S.
24 Chapter 2017-84, L.O.F.; codified as ss. 663.416(2) and 663.540(2), F.S.
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The information made confidential and exempt by the public record exemptions may be disclosed by
OFR:
To the authorized representative or representatives of the ITCRO or QLSA under examination.
The authorized representative or representatives must be identified in a resolution or by written
consent of the board of directors, or the equivalent, of the international trust entity or QLSA.
To a fidelity insurance company, upon written consent of the board of directors, or the
equivalent, of the international trust entity or QLSA.