Examination of company, etc.

to pay.

act, any further information other than such investment company is required to furnish under the provisions of this act, which shall be necessary to the end that said securities commission may be put in possession of all facts and information necessary to qualify it to properly pass upon all questions that may come before it. It shall be the duty of said Michigan Securities Commission to examine the statements and documents filed in its office by any investment company, and if said commission shall deem it advisable it shall make or have made under its direction a detailed examination of such investment company's business and affairs, which examination Expense, who shall be at the expense of such investment company as herein provided, and if said commission finds that such investment company is not solvent or that its articles of incorporation or association, its constitution or by-laws, or its proposed plan of business are not fair or that its proposed contracts, stocks, bonds or other securities are fraudulent or are of such a nature that the sale of such contracts, stocks, bonds or other securities would in all probability work a fraud upon the purchaser thereof or if said commission finds that the securities of said company are of such a nature and character that their purchase would in all probability result in loss to the purchaser, then said Michigan Securities Commission shall within thirty days notify such investment company by registered mail of its findings, and it shall be unlawful for such company to do any business in the way of selling or offering for sale any such contracts, stocks, bonds, or other securities in this State, and said contracts, stocks, bonds, or other securities shall not be sold in this State: Provided, however, That said investment company may change its articles of incorporation or association, its constitution and bylaws, its proposed plan of business, its proposed contracts, stocks, bonds or other securities and its general financial condition, and file documentary evidence of such change with said commission and again list its contracts, stocks, bonds, and other securities with said commission, whereupon said commission shall have and exercise the same power and authority conferred upon it in the original instance. All expenses paid or incurred and all fees or charges received or collected for any examination of any investment company made under the provisions of this act shall be recorded in detail by the commission in its office.

Proviso.

Stocks, etc., may sell, etc.

SEC. 6. It shall not be lawful for any investment company, when company either as principal or agent, or either by itself, or by or through others, to sell or offer for sale, or to negotiate for the sale of any stocks, bonds, or other securities issued or to be issued by it, within this State, until thirty days after it shall have filed all papers and documents in this act provided for, or which shall be required by the Michigan Securities Commission and shall have fully complied with the requirements of this act; nor shall it be lawful for any such investment company to transact business on any other plan than

that set forth in the statements and papers required to be filed by virtue of the provisions of this act, or the rules of the commission, or to sell or to offer for sale any contracts, stocks, bonds, or other securities other than those shown in the copies of the contracts, stocks, bonds or other securities required to be filed by this act, until thirty days after a written statement showing in full detail the proposed new plan of transacting business, and copies of the proposed new contracts, stocks, bonds or other securities shall have been filed with the Michigan Securities Commission in like manner as is provided in regard to the original plan of business and proposed contracts, stocks, bonds or other securities. All author Agents, regisized agents of any such investment company shall be registered with the commission. The name of any agent shall be stricken from the record by the commission upon written request of the investment company, and additional agents may be registered by the commission upon like written request of the investment company.

tration of.

statement.

SEC. 7. Every investment company, domestic or foreign, Annual shall file during the month of January in each and every year, a detailed statement in such form and containing such information as the Michigan Securities Commission may require, showing its condition at the close of business on the preceding December thirty-first. It shall also file statements at such other times as required by the commission, said statements to be verified by the oath of a member of the copartnership, or company, if it be a co-partnership or company, or by the oath of a duly authorized officer if it be an incorporated or unincorporated association. Said statements shall set forth the financial condition of said investment company, the amount of its assets and liabilities, and such other information concerning its business and affairs as said commission may require. Each annual statement to be filed dur- What to set ing January of each year setting forth the condition of the investment company as of the close of business on the preceding December thirty-first, shall be accompanied by a filing fee of five dollars. Any investment company failing to file Failure to file. such annual report during the month of January of each year or failing to file any other or special report herein required, within thirty days after receipt by it of the request or requisition of the commission therefor shall not sell any stocks, bonds or other securities within this State thereafter until it shall have complied with the request and requirements of the commission.

forth.

counts, how

SEC. 8. The general accounts of every investment com- General acpany, domestic or foreign, doing business in this State, or kept. which has sold any of its stock, bonds or other securities in this State, shall be kept by the double entry system and such company shall at the close of each and every calendar month, make a trial balance of such accounts, which trial balance shall be recorded in a book kept at the general office of such

control, etc.,

investment companies.

Examination, per diem expense of.

company. Such trial balance book and all other books and accounts of such company shall at all times during business hours, except on Sundays and legal holidays, be open to the inspection of the Michigan Securities Commission, each of its members and the clerks, accountants and examiners thereof. Commission to SEC. 9. The Michigan Securities Commission shall have general supervision and control as provided by this act over any and all investment companies, domestic or foreign, selling or offering for sale any contracts, stocks, bonds or other securities of its own issue in this State. And all such investment companies shall be subject to examination by said commission or any member thereof, or the clerks, accountants or examiners thereof, at any time said commission may deem it advisable, and in the same manner as is now provided for the examination of State banks, and such investment company shall pay a fee for each of such examinations of not to exceed seven dollars per day for each day or fraction thereof that any member of said commission, clerk, accountant or examiner is absent from the capitol building for the purpose of making such examination, and shall also pay the actual traveling and hotel expenses of the person or persons making such examination, and the failure or refusal of any investment company to pay such fees upon demand of such commissioner, clerk, accountant or examiner while making such examination, shall work a forfeiture of the right of such investment company to sell or to offer for sale any of its contracts, stocks, bonds or other securities in this State. In case of a preliminary examination of any investment company by said commission for the purpose of the ascertainment by said commission as to whether said company shall be permitted to come under the provisions of this act, the fees of such examination shall be the same as in this section provided.

Felony, what deemed.

Penalty.

Commission

to furnish information.

SEC. 10. Any person who shall knowingly or wilfully subscribe to or make or cause to be made, any false statement or false entry in any book of any investment company, or who shall exhibit any false paper with the intention or for the purpose of deceiving any person authorized to examine into the affairs of such investment company or shall make or publish any false statement of the financial condition of such investment company or false statement relative to the contracts, stocks, bonds or other securities by it issued and offered for sale, shall be deemed guilty of a felony and upon conviction thereof in a court of competent jurisdiction shall be fined not more than five thousand dollars or shall be imprisoned in the State prison of this State for not more than five years, and both such fine and imprisonment may be imposed in the discretion of the court.

SEC. 11. The Michigan Securities Commission shall provide for the furnishing to those who may apply therefor, of any information regarding any investment company or its affairs, which is on file in its office, said commission to charge there

paid, etc.

for approximately the cost of preparing such information. All fees collected under the provisions of this act shall be Fees, where paid into the State treasury on the first day of each and every calendar month, and a complete record of all fees received shall be kept in the office of the commission, and all said fees so turned into the State treasury are hereby reappropriated to the Michigan Securities Commission for the purpose of paying salaries and expenses necessary for carrying this act into effect. The members of the commission shall perform the duties imposed upon them and each of them, by the terms of this act, without other compensation than the salaries paid them by the State, but they shall be entitled to receive their actual expenses incurred when absent from the seat of government on business of the commission. Said Clerks, etc. commission is hereby authorized to appoint such clerks, accountants and examiners as are actually and absolutely necessary to carry this act into full force and effect: Provided, Proviso, comhowever, That the compensation paid to each of said clerks, accountants or examiners shall not exceed the compensation paid similar clerks, accountants or examiners employed by the State Banking Department. All moneys actually and necessarily paid out by the Michigan Securities Commission in enforcing the provisions of this act and all moneys paid to any clerk, accountant or examiner appointed under this act, as salaries and all moneys actually and necessarily paid out by the members of the commission, or by clerks, accountants or examiners thereof for traveling or incidental expenses shall be repaid under the authority of the Board of State Auditors upon sworn vouchers containing an itemized account of such salaries and expenses.

pensation.

etc.

SEC. 12. Nothing in this act shall be construed to repeal Certain laws or modify any laws giving the State Banking Department of not repealed, this State control of and supervision over State banks, and the business of banking in this State, nor shall any part of this act be construed to repeal or modify laws giving the Commissioner of Insurance of this State control of and supervision over the business of insurance in this State, and those engaged therein.

etc.

SEC. 13. The Michigan Securities Commission shall adopt Seal, design, a seal with the words "Michigan securities commission" and such design as the commission may prescribe, engraved thereon, by which it shall authenticate its proceedings. Copies of all records and papers in the office of the commission certified by the president or secretary thereof and authenticated by the seal of said Michigan Securities Commission shall be received in evidence in all courts equally and with like effect as the originals.

SEC. 14. Any person, firm, co partnership, corporation or "Dealer", who association, whether domestic or foreign, not the issuer, who deemed, shall in this State sell or offer for sale any of the stocks, bonds or other securities issued by any foreign or domestic investment company, except the securities specifically exempt

What not to include.,

Dealer, registry, etc.

Registration

fee.

Proviso.

When nonresident.

Stocks, etc..

to sell.

ed in this act, or who shall by advertisement or otherwise profess or engage in the business of selling or offering for sale such securities, shall be deemed to be a "dealer” in such securities within the meaning of this act, and no dealer within the meaning of this act shall sell or offer for sale any such securities or profess the business of selling or offering for sale such securities unless and until he shall have filed a list of the same in the office of the Michigan Securities Commission, as in this act provided. The term "dealer" shall not include an owner, not issuer, of such securities, who for his awn [own] account, sells such securities so owned by him when such sale is not made in the course of continued and successive transactions of a similar nature, nor one who in a trust capacity created by law lawfully sells any securities embraced within such trust.

SEC. 15. Any dealer desiring to sell or offer for sale within this State any stocks, bonds or other securities not exempted under the terms of this act, shall first register with the Michigan Securities Commission and shall furnish said commission, upon oath, in such form as the commission shall prescribe, the following information to-wit: The dealer's name, residence and business address, the general character of the securities to be dealt in, the place or places where the business is to be conducted within this State, and where the business in this State is not to be conducted by the dealer in person, then the names and addresses of all the persons in charge thereof. Said dealer shall pay to the commission a registration fee of fifty dollars and shall furnish said commission with such other information in addition to that above specified as said commission shall deem necessary in order to thoroughly acquaint such commission with the character of the business of said dealer. All authorized agents of any dealer shall be registered with the commission and the name of any agent shall be stricken from the register by the commission upon written request of the dealer and additional agents may be registered by the commission upon like request of the dealer: Provided, That no agent shall act as such until his name and address shall be registered with the commission. If the dealer shall be a non-resident of this State or a corporation other than a domestic corporation, he shall at the time he registers with the commission, file with the commission a written duly authenticated appointment of the Commissioner of the State Banking Department of this State as his or its agent in Michigan upon whom process or pleadings may be served for and on behalf of the dealer, which appointment shall be irrevocable.

SEC. 16. No dealer within the meaning of this act shall when unlawful sell or offer for sale within this State any of the stocks, bonds or other securities of any investment company unless such investment company shall have fully complied with all of the provisions of this act, nor until said dealer shall have registered with the commission, under the terms of this act: