HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 311 Securities
SPONSOR(S): Commerce Committee, Insurance & Banking Subcommittee, Barnaby
TIED BILLS: IDEN./SIM. BILLS: CS/SB 532
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 17 Y, 0 N, As CS Fletcher Lloyd
2) Commerce Committee 21 Y, 0 N, As CS Fletcher Hamon
SUMMARY ANALYSIS
In Florida, the Securities and Investor Protection Act (the Act) regulates securities issued, offered, and sold in
the state of Florida. The Office of Financial Regulation (OFR) regulates and registers the offer and sale of
securities in, to, or from Florida by firms, branch offices, and individuals affiliated with these firms.
The Act currently prohibits dealers, associated persons, and issuers from offering or selling securities in this
state unless registered with the OFR or specifically exempted. Additionally, all securities in Florida must be
registered with the OFR unless they meet a statutory exemption or are federally covered (i.e., under the
exclusive jurisdiction of the United States Securities Exchange Commission).
Revisions to the Act include:
 Amending the limited offering exemption and crowdfunding exemption;
 Adding an accredited investor exemption and a micro-offering exemption;
 Allowing for demo-day presentations in the pre-offering stage;
 Adding control person liability provisions;
 Expanding the current civil liability for aiders and abettors of a securities law violation;
 Eliminating the requirement for 5 years of annual reports and audited financial statements applicable to
simplified securities offerings that use the Small Company Offering Registration;
 Reducing the number of clients of an investment adviser that triggers registration from 15 to 6 clients;
 Increasing the maximum civil and administrative penalties that can be assessed against a natural
person in an action by the Attorney General from $10,000 to $20,000;
 Doubling maximum fines assessed in civil and administrative actions by the Attorney General for
securities violations targeting seniors and vulnerable adults;
 Eliminating the requirement that an investor make searches and inquiries to ascertain the assets of a
judgement debtor before the investor recovers from the Securities Guaranty Fund (Fund), and changes
the requirement that the date of the act for which recovery is sought occurred on or after January 1,
1979, to October 1, 2024;
 Increasing the amount an eligible person may recover from the Fund from $10,000 to $15,000, adding
an exception allowing recovery of up to $25,000 if the person is a specified adult, and increasing the
aggregate limit on claims from $100,000 to $250,000;
 Rewriting certain portions of the Act for clarification purposes; and
 Generally modernizing Florida’s securities laws in accordance with recent developments in federal
securities laws and securities laws in other states.
The bill has no impact on local government and an insignificant positive impact on the private sector. It has an
insignificant negative impact on state government expenses and an indeterminable positive impact on state
government revenues.
The bill provides an effective date of October 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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 FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
FLORIDA BAR BUSINESS LAW SECTION TASK FORCE
The Executive Council of the Business Law Section of The Florida Bar appointed a Task Force (BLS
Task Force) in September of 2022 to consider amendments to ch. 517, F.S., the Florida Securities and
Investor Protection Act (Act), which codifies Florida’s securities laws. 1 The BLS Task Force has worked
closely with the Office of Financial Regulation (OFR), the agency which regulates Florida’s securities
industry and determines compliance with the Act,2 to reform the Act.3
OFR, with the BLS Task Force’s assistance, presented to the 2023 legislative session proposed
amendments 4 to the Act that were limited to administrative and clarification changes, as OFR was
aware that the BLS Task Force was working on more substantive changes to the Act. 5 The 2023 bill
was enacted,6 and the BLS Task Force and OFR are now presenting their recommendations for
substantive amendments to the Act with this bill.7 In summary, this bill is a joint effort of the BLS Task
Force and OFR to bring Florida’s securities laws up to date with changes in federal securities laws and
other states’ securities laws.8
Securities Regulation
Background
FEDERAL SECURITIES REGULATION
The federal Securities Exchange Act of 1934 (1934 Act) requires registration of securities market
participants like broker-dealers and exchanges.9 Generally, any person acting as “broker” or “dealer” as
defined in the 1934 Act must be registered with the United States Securities and Exchange
Commission (SEC) and join a self-regulatory organization (SRO), like the Financial Industry Regulatory
Authority (FINRA) or a national securities exchange.10
The 1934 Act broadly defines “broker” as “any person engaged in the business of effecting transactions
in securities for the account of others,” which the SEC has interpreted to include involvement in any of
the key aspects of a securities transaction, including solicitation, negotiation, and execution. 11 A
1 The Florida Bar Business Law Section, Report of the Chapter 517 Task Force: Recommendations and Analysis of
Proposed Amendments to the Florida Securities and Investor Protection Act , p. 2 (Nov. 2023).
2 Office of Financial Regulation, Division of Securities, https://flofr.gov/sitePages/DivisionOfSecurities.htm (last visited Jan.
3, 2024).
3 The Florida Bar Business Law Section, supra note 1.
4 See 2023 Senate Bill 180, and 2023 House Bill 253.
5 The Florida Bar Business Law Section, supra note 1.
6 Ch. 2023-205, Laws of Fla.
7 The Florida Bar Business Law Section, supra note 1.
8 Id.
9 15 U.S.C. §§ 78c(a)(4) and 78o. U.S. Securities and Exchange Commission, Guide to Brok er-Dealer Registration,
http://www.sec.gov/divisions/mark etreg/bdguide.htm#II (last visited Jan. 3, 2024).
10 A “national securities exchange” is a securities exchange that has registered with the SEC under Section 6 of the 1934
Act. Examples of national securities exchanges registered with the SEC include the Nasdaq Stock Market, NYSE National
Inc., and the New York Stock Exchange LLC. See U.S. Securities and Exchange Commission, National Securities
Exchanges, https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml (last visited Jan. 8, 2024).
11 Id.
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 “dealer” is “any person engaged in the business of buying and selling securities for such person’s own
account through a broker or otherwise.12
Certain entities in the securities industry are often referred to as “broker-dealers” because such entities
are considered “brokers” when executing trades on behalf of customers, but are “dealers” when
executing trades for their own account. In addition to being registered with the SEC, broker-dealers
must comply with state registration requirements.
STATE SECURITIES REGULATION
State laws that protect the investing public from fraudulent sales practices and activities are known as
“Blue Sky Laws.”13 Florida’s laws relating to the regulation of securities issued, offered, and sold in the
State of Florida are codified under the Act.
OFR’s Division of Securities (Division) regulates and registers the offer and sale of securities in, to, or
from Florida by firms, branch offices, and individuals affiliated with these firms in accordance with the
Act and Rule Chapter 69W, Florida Administrative Code.14 The Financial Services Commission,
comprised of the Governor and Cabinet (the Commission), serves as OFR’s agency head for purposes
of rulemaking and appoints OFR’s Commissioner, who serves as the agency head for purposes of final
agency action for all areas within OFR’s regulatory authority. 15
As of September 30, 2023, the Division had total registrants in the following areas:
 Dealers: 2,427
 Investment advisers: 8,359
 Branch offices: 11,702
 Associated Persons: 378,43516
Additionally, as of September 2023, OFR has five registered offerings and zero crowdfunding
offerings.17
The Act prohibits dealers and associated persons from offering or selling securities in Florida unless
registered with OFR or specifically exempted.18 Additionally, all securities in Florida must be registered
with OFR unless they meet one of the exemptions under the Act,19 or are federally covered (i.e., under
the exclusive jurisdiction of the SEC).20
Failure to meet the precise requirements of these exemptions can subject the violator to civil, criminal,
and administrative liability for the sale of unregistered securities, which is a third-degree felony.21 Civil
remedies under the Act include rescission and damages.22
12 15 U.S.C. § 78c(a)(5).
13 U.S. Securities and Exchange Commission, Blue Sk y Laws, http://www.sec.gov/answers/bluesky.htm (last visited Jan.
3, 2024).
14 Office of Financial Regulation, Division of Securities, https://flofr.gov/sitePages/DivisionOfSecurities.htm (last visited
Jan. 3, 2024).
15 S. 20.121(3), F.S.
16 Office of Financial Regulation, Agency Analysis of 2024 House Bill 311, p. 2 (Nov. 1, 2023).
17 Id.
18 S. 517.12, F.S.
19 See ss. 517.051 or 517.061, F.S.
20 S. 517.07, F.S. If a security is registered with the SEC, s. 517.082, F.S., requires the broker or issuer to notify OFR that
the security is registered with the SEC.
21 S. 517.302(1), F.S.
22 S. 517.211, F.S.
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 Party Registration Requirements
The Act requires the following individuals or businesses to be registered with OFR before selling or
offering to sell any securities in or from offices in this state, or selling securities to persons in this state
from offices outside this state:23
 Dealers, which is defined as any person, other than an associated person of a dealer, that
engages, for all or part of the person’s time, directly or indirectly, as agent or principal in the
business of offering, buying, selling, or otherwise dealing or trading in securities issued by
another person.
o The term does not include a licensed practicing attorney, bank authorized to do business
in Florida, wholesaler selling exclusively to dealers, person buying and selling for the
person’s own account exclusively through a registered dealer or stock exchange, issuer,
or natural person representing an issuer under certain conditions 24
 Investment advisers, which is defined as any person that receives compensation, directly or
indirectly, and engages for all or part of the person’s time, directly or indirectly, in the business
of advising others as to the value of securities or as to the advisability of investments in,
purchasing of, or selling of securities.
o The term contains similar exclusions as the exclusions for “dealers” in addition to a
federal covered adviser, a person that does not hold itself out to the general public as an
investment adviser and has no more than 15 clients within 12 consecutive months in this
state, and a few other exclusions.25
 Associated persons, which is defined by a party’s relation to a dealer or to an investment
adviser:
o With respect to a dealer, an associated person is an individual who is employed,
appointed, or authorized by a dealer and who represents the dealer in effecting the
purchase or sale of a security.
 The term does not include a dealer or a partner, officer, or director of a dealer
unless such person is specified in the group above. The term also does not
include a dealer’s employee whose function is only clerical or ministerial.
o With respect to an investment adviser, an associated person is an individual, including,
but not limited to, a partner, officer, director, or branch manager who is employed by or
associated with, or is subject to the supervision or control of an investment adviser
registered under the Act, and
 Such person:
 Makes recommendations or otherwise gives investment advice regarding
securities;
 Manages client accounts or portfolios;
 Determines which recommendations regarding securities should be
given;
 Receives compensation to solicit, offer, or negotiate for the sale of
investment advisory services; or
 Supervises employees who perform a function outlined above.
 The term does not include an investment adviser or an employee whose function
is only clerical or ministerial.26
Effect of the Bill
The bill amends the following definitions:
 Accredited investor is amended to clarify the term is defined by rule of the Commission in
accordance with SEC Rule 501, 17 C.F.R. s. 230.501, as amended.
23 S. 517.12, F.S.
24 S. 517.021(8), F.S.
25 S. 517.021(14), F.S.
26 S. 517.021(3), F.S.
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  Boiler room is amended to mean an enterprise in which two or more persons in a common
scheme or enterprise solicit potential investors through telephone calls, electronic mail, text
messages, social media, chat rooms, or other electronic means.
 Dealer is restructured into subparagraphs for clarification.
 Federal covered adviser is amended to update cross-references.
 Investment adviser is amended as follows:
o Reduces the threshold number of clients triggering registration from 15 clients to 6.
o Deletes the exclusion applicable to a person whose transactions in this state are limited
to those transactions described in s. 222(d) of the Investment Advisers Act of 1940.
o Provides an exclusion for the U.S., a state, a political subdivision of a state, or an
agency, authority, or instrumentality of one or more of the foregoing, or a business entity
that is wholly owned by one or more of the foregoing, or an officer, agent, or employee
of any of the foregoing acting as such in the course of his or her official duty. 27
The bill adds the following definitions:
 Angel investor group28 means a group of accredited investors 29 that holds regular meetings and
has defined processes and procedures for making investment decisions, individually or among
the membership of the group, and that is not an associated person, affiliate, or an agent of a
dealer or investment adviser.
 Business entity30 means a corporation, partnership, limited partnership, limited liability company,
proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust,
whether fictitiously named or not, doing business in this state.
Exempt Securities
Background
It is unlawful and a violation of the Act for any person to sell or offer to sell an unregistered security
within Florida unless the security is exempt under s. 517.051, F.S., or such sale or offering is otherwise
exempt from the registration requirements of the Act.31
The exempt securities provided in the Act are self-executing and do not require any filing with OFR
prior to claiming an exemption.32 A person who claims entitlement to any of the exempt securities bears
the burden of proving such entitlement in any proceeding brought under the Act.33
27 An example of this type of entity is the State Board of Administration of Florida (SBA), which is an asset management
organization primarily responsible for investing state and local government assets. See Office of Program Policy Analysis
and Government Accountability, State Board of Administration of Florida,
https://oppaga.fl.gov/ProgramSummary/ProgramDetail?programNumber=4040 (last visited Jan. 8, 2024).
28 This definiti