§ 260.607. Conflicts of Interests.
10 CA ADC § 260.607BARCLAYS OFFICIAL CALIFORNIA CODE OF REGULATIONS
Barclays Official California Code of Regulations Currentness
Title 10. Investment
Chapter 3. Commissioner of Business Oversight, Division of Corporations
Subchapter 2. Corporate Securities
Article 13. General Provisions
Subarticle 2. Miscellaneous Provisions (Refs & Annos)
10 CCR § 260.607
§ 260.607. Conflicts of Interests.
(a) The Department is charged with the responsibility of administering regulatory statutes which vitally affect the interests of private citizens and of the general public. It is important that persons employed in the Department maintain unusually high standards of honesty, integrity, impartiality and conduct. They must be constantly aware of the need to avoid situations which might result in either actual or apparent misconduct or conflict of interests, since any such actual or apparent conflict of interests may impair public confidence in the integrity of the Department regardless of whether any improper influence or action has resulted therefrom.
(b) No employee of the Department shall:
(1) Engage, directly or indirectly, in any personal business transaction or private arrangement for personal profit which accrues from or is based upon official position or authority or upon confidential or non-public information which he or she gains by reason of such position or authority.
(2) Solicit or accept, directly or indirectly, any valuable gift, gratuity, fee, entertainment, loan, service, or any other thing of monetary value from any person with whom he or she transacts business or may reasonably expect to transact business on behalf of the Department or who has any other interest which may be substantially affected by the performance or nonperformance of the employee's official duties.
This Clause (2) does not prohibit the acceptance of food and refreshments of nominal value (not on a repetitive basis), or unsolicited advertising or promotional material, such as pens, note pads, calendars, etc., or any similar gratuity of nominal value which could not reasonably be alleged to have influenced the official conduct of the employee, and does not prohibit the acceptance of reimbursement for the expenses of meetings attended in an official capacity, with the approval of the Commissioner, to the extent such expenses are not reimbursed in any manner from public funds.
This Clause (2) also does not prohibit an employee who is, or who may be, assigned to work on any application, filing or other matter involving the California Residential Mortgage Lending Act (commencing with Section 50000 of the Financial Code) from making application for or receiving a residential mortgage loan (as defined by subdivision (n) of Section 50003 of the Financial Code) from the residential mortgage lender licensed under the California Residential Mortgage Lending Act and subject to the employee's work on the application, filing or other matter so long as the employee immediately reports in writing to the Assistant Commissioner in charge of the application, filing or other matter the fact of the making of an application for or receiving of a residential mortgage loan from the residential mortgage lender. The Assistant Commissioner to whom such report is made shall normally relieve the employee in question of the assignment in writing; but the Assistant Commissioner may in writing direct the reporting employee to continue with the assignment in question if the Assistant Commissioner determines that the personal interest of the reporting employee is so insignificant as not to create even the appearance of a substantial conflict of interests. In making this determination, the Assistant Commissioner may take into consideration the extent to which the reporting employee's activities will be supervised and the difficulty in assigning the matter to some other employee, but all doubts must be resolved in favor of avoiding any substantial conflict of interests.
(3) Discuss or entertain any proposal for future employment by any person outside the government with whom he or she is personally transacting business on behalf of the Department or by the attorney for any such person.
(4) Act in any manner, whether or not specifically prohibited by this Section, which might result in, or create the appearance of, using public office for private gain, giving preferential treatment to any person, losing complete independence or impartiality, or affecting adversely the confidence of the public in the integrity of the Department.
(c) No employee of the Department shall:
(1) Permit his or her name to be associated in any way with any legal, accounting or other professional firm or office.
(2) Have any outside or private employment or activity or affiliation incompatible with concurrent employment by the Department.
(3) Be employed in any capacity by any company or firm which holds a license from the Commissioner.
Any employee who proposes to engage in outside employment of any kind must report such intention to the Commissioner and receive the written approval of the Commissioner, which shall be placed in his or her personnel file, prior to his or her accepting such outside employment. For the purposes of this subsection (c) the private employment or affiliation of an employee's parent, spouse, child, or any other relative living in his or her household by any person holding a license from the Commissioner is deemed to be incompatible with the employee's concurrent employment in the Department, except as otherwise determined by the Commissioner in a specific case. Nothing in this section is intended to prohibit an employee from engaging in teaching, lecturing, or writing activities which do not interfere with the performance of his or her duties to the Department, with or without compensation; provided, however, that any publication by an employee which refers to his or her connection with the Department must contain an appropriate disclaimer indicating that the views expressed are his or her own and do not necessarily reflect the views of the Commissioner or the policy of the Department.
(d) (1) Pursuant to subdivision (b) of Section 25607 of the Code, the following rules are adopted with respect to the purchasing and holding of securities by any assistant, clerk or deputy of the Department, and govern all transactions in securities effected by or on behalf of any such person, including transactions for the accounts of other persons effected by such person, directly or indirectly, under a power of attorney or otherwise, and including any transactions by any trust or estate in which he or she holds a beneficial interest (unless the transactions by such trust or estate are effected without any knowledge or participation by such person). Any assistant, clerk or deputy is considered to have sufficient interest in the securities transactions of his or her spouse, children, or any other relatives living in his or her household that such transactions are subject to the provisions of this subsection.
(2) No assistant, clerk or deputy shall effect any securities transaction involving any short sale, put, call, straddle or spread; and no assistant, clerk or deputy shall purchase or hold any security in any licensee of the Department or in any business outside the State of California which, if conducted within this State, would require a license from the Commissioner.
(3) Within 30 days after December 31st and June 30th of each year, each assistant, clerk or deputy shall file a report with the Commissioner detailing all of his or her holdings of securities as of those dates on a form to be supplied by the Commissioner; and each assistant, clerk or deputy shall report to the Commissioner any purchase or disposition of any security (other than a security exempted by Chapter 1 of Part 2 of the Corporate Securities Law of 1968) within five days after the date of each such transaction. This Clause (3) does not require any report with respect to any interest in any professional, charitable, religious, social, civic, political, or other similar organization which is not conducted as a business enterprise for profit, and securities purchased pursuant to the State of California Deferred Compensation Plan may be reported only in the semi-annual reports herein required. All reports pursuant to this Clause (3) shall be furnished directly to the Commissioner or the Chief Deputy Commissioner marked “Confidential” and will be maintained in a confidential file. Only those officials or employees of the Department whose access thereto is necessary for the purpose of carrying out the provisions of this Section shall be permitted access to such file.
(4) Any assistant, clerk or deputy assigned to work on any application, filing or other matter involving a person in which he or she (or any of the persons whose securities transactions he or she is required to report pursuant to this Section) owns any amount of securities or with respect to whom for any other reason (including current or prior employment or other association) he or she has a personal interest, shall immediately report such fact in writing to the Commissioner, the Chief Deputy Commissioner, or the Assistant Commissioner in charge of the matter. The official to whom such report is made shall normally relieve the employee in question of the assignment in writing; but such official may in writing direct the reporting employee to continue with the assignment in question if the official determines that the personal interest or the holding of securities is so insignificant as not to create even the appearance of a substantial conflict of interests. In making this determination, the official may take into consideration the extent to which the reporting employee's activities will be supervised and the difficulty of assigning the matter to some other employee, but all doubts must be resolved in favor of avoiding any substantial conflict of interests.
(5) The reporting and disqualification provisions of Clauses (3) and (4) of this subsection (d) do not apply to any employee of the Department who is assigned to purely stenographic, clerical, or other nondiscretionary duties. Pursuant to subdivision (b) of Section 25607 of the Code, all purchases and holdings of securities made in accordance with the rules contained in this Section (including all purchases and holdings of securities by employees exempted from the reporting requirement by this Clause (5)), are exempted from the prohibition contained in subdivision (a) of Section 25607 of the Code.
(e) No person shall appear in a representative capacity before the Department in a particular matter if such person, or anyone assisting him or her or participating with him or her in such representation, personally considered the matter or gained knowledge of the facts thereof during any former employment or association with the Department. Nothing in the preceding sentence shall prohibit appearance in a proceeding more than two years after a person ceases to be an official or employee of the Department, unless it appears to the Commissioner that there is such identity of particular issues or pertinent facts as to create a reasonably substantial possibility that confidential information, derived by such person while an official or employee of the Department, would have continuing relevance to the proceeding. No person who has been a commissioner, a chief deputy commissioner, or an assistant commissioner shall within one year after his or her employment has ceased appear in a representative capacity before the Department with respect to any application or proceeding that was pending under his or her official responsibility (whether or not it was brought to his or her personal attention) at any time while he or she was employed by the Department.
(f) Knowing violation or knowing participation in a violation of any of the provisions of this section by any official or employee of the Department shall constitute a breach of his or her duties as an employee of the State of California and shall constitute grounds for dismissal for cause.
Note: Authority cited: Section 25610, Corporations Code; and Section 50304, Financial Code. Reference: Sections 25607, Corporations Code; and Section 50303, Financial Code.
1. Amendment of subsection (d)(3) filed 1-22-75; effective thirtieth day thereafter (Register 75, No. 4).
2. Amendment of section and new Note filed 11-25-96; operative 12-25-96 (Register 96, No. 48).
This database is current through 10/4/19 Register 2019, No. 40
10 CCR § 260.607, 10 CA ADC § 260.607
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