Current through Register Vol. 51, No. 19, September 20, 2024
A. Any person, or
group of persons acting in concert, seeking to acquire control of a licensee
shall comply with Financial Institutions Article, §12-415,
Annotated Code of Maryland.
B. Any
person, or group of persons acting in concert, seeking the Commissioner's
approval under Financial Institutions Article, §12-415,
Annotated Code of Maryland, to acquire control of a licensee shall, in
cooperation with the licensee, submit an application in a form and in a medium
prescribed by the Commissioner, together with any information the Commissioner
requires or requests.
C. The
application required by this regulation shall include information required by
Regulation .06 of this chapter for any new key individuals that have not
previously completed the requirements of Regulation .06 of this chapter for a
licensee.
D. When an application
for acquisition of control under this regulation appears to include all the
items and address all matters that are required, the application shall be
considered complete, and the Commissioner shall promptly notify the applicant
in a record of the date on which the application was determined to be complete
and:
(1) Except as provided in Financial
Institutions Article, §12-415(b)(2)
or (3)(ii), Annotated Code of Maryland:
(a)
The Commissioner shall approve or deny the application within 60 days after the
completion date; or
(b) If the
application is not approved or denied within 60 days after the completion date:
(i) The application is approved;
and
(ii) The person, or group of
persons acting in concert, are not prohibited from acquiring control.
(2) The Commissioner may
for good cause extend the application period.
E. A determination by the Commissioner that
an application is complete and is accepted for processing means only that the
application, on its face, appears to include all the items and address all the
matters that are required, and is not an assessment of the substance of the
application or of the sufficiency of the information provided.
F. When an application is filed and
considered complete under this regulation, the Commissioner shall investigate
the financial condition and responsibility, financial and business experience,
character, and general fitness of the person, or group of persons acting in
concert, seeking to acquire control. The Commissioner shall approve an
acquisition of control pursuant to this regulation if the Commissioner finds
that all of the following conditions have been fulfilled:
(1) The requirements of §§B and C
of this regulation have been met, as applicable;
(2) Following the change in control, the
financial condition and responsibility, financial and business experience,
competence, character, and general fitness of the licensee will remain
consistent with State licensure requirements; and
(3) That it is in the interest of the public
to permit the person, or group of persons acting in concert, to control the
licensee.
G. Under the
following circumstances, the Commissioner may consider the investigation of an
applicant by another State:
(1) If an
applicant avails itself or is otherwise subject to a multistate licensing
process:
(a) Subject to §G(2) of this
regulation, the Commissioner's investigation of the applicant under §F of
this regulation may include the investigation results of a lead investigative
state; or
(b) If Maryland is a lead
investigative state, the Commissioner may investigate the applicant pursuant to
§F of this regulation and the timeframes established by agreement through
the multistate licensing process, except that, in no case shall the timeframe
be noncompliant with the application period in Financial Institutions Article,
§12-415,
Annotated Code of Maryland.
(2) The Commissioner's investigation of the
applicant under §F of this regulation may include the investigation
results of the lead investigative state under §G(1)(a) of this regulation
if:
(a) The Commissioner reasonably
determines that the lead investigative state possesses licensing and
supervision authority over money transmission in its state substantially
similar to the licensing and supervision authority of the Commissioner over
money transmission Maryland;
(b)
The Commissioner reasonably determines that the lead investigative state
adequately addresses the applicant's anticipated financial condition and
responsibility, financial and business experience, character, and general
fitness following the proposed change of control;
(c) The Commissioner reasonably determines
the lead investigative state has sufficient staffing, expertise, and minimum
standards for the purposes of investigating a change of control application;
and
(d) The Commissioner
supplements the investigation of the lead investigative state with any
information the Commissioner considers relevant.
H. The Commissioner shall issue a formal
written notice of the denial of an application to acquire control within 30
days of the decision to deny the application. The Commissioner shall set forth
in the notice of denial the specific reasons for the denial of the application.
A licensee whose application is denied by the Commissioner under this
regulation may request a hearing within 30 days after receipt of the written
notice of the denial pursuant to State Government Article, §10-207, Annotated
Code of Maryland.
I. The
requirements of Financial Institutions Article, §12-415,
Annotated Code of Maryland, as applied to a change of control of a licensee and
as provided for in §§A and B of this regulation do not apply to any
of the following:
(1) A person that acts as a
proxy for the sole purpose of voting at a designated meeting of the
shareholders or holders of voting shares or voting interests of a licensee or a
person in control of a licensee;
(2) A person that acquires control of a
licensee as a personal representative, custodian, guardian, conservator, or
trustee, or as an officer appointed by a court of competent jurisdiction or by
operation of law;
(3) A public
offering of securities of a licensee or a person in control of a licensee,
except that, if a single person or group of persons acting in concert acquire
control of the licensee as a result of the public offering, the licensee shall
obtain the Commissioner 's approval under Financial Institutions Article,
§12-415,
Annotated Code of Maryland, and this regulation; or
(4) An internal reorganization of a person in
control of the licensee if the ultimate person in control of the licensee
remains the same.
J.
Persons in §I(2)-(4) of this regulation in cooperation with the licensee
shall notify the Commissioner within 15 days after the acquisition of
control.
K. Streamlined Acquisition
of Control.
(1) The requirements of Financial
Institutions Article, §12-415,
Annotated Code of Maryland, as applied to a change of control of a licensee
shall be considered satisfied and no application under §B of this
regulation will be required of a person that has complied with and received
approval to engage in money transmission under the Maryland Money Transmission
Act or was identified as a person in control in a prior application filed with
and approved by the Commissioner or by an MSB accredited state pursuant to a
multistate licensing process, if:
(a) The
person has not had a license revoked or suspended or controlled a licensee that
has had a license revoked or suspended while the person was in control of the
licensee in the previous 5 years;
(b) If the person is a licensee, the person
is well managed and has received at least a satisfactory rating for compliance
at its most recent examination by an MSB accredited state if that rating was
given;
(c) The licensee to be
acquired is projected to meet the qualifications for licensure under the
Maryland Money Transmission Act, including the requirements of Regulation .18
of this chapter, after the acquisition of control is completed, and if the
person acquiring control is a licensee, that licensee is also projected to meet
the qualifications for licensure under the Maryland Money Transmission Act,
including the requirements of Regulation .18 of this chapter, after the
acquisition of control is completed;
(d) The licensee to be acquired will not
implement any material changes to its business plan as a result of the
acquisition of control, and if the person acquiring control is a licensee, that
licensee also will not implement any material changes to its business plan as a
result of the acquisition of control;
(e) The person provides notice of the
acquisition in cooperation with the licensee and attests to §K(1)(a)-(d)
of this regulation in a form and in a medium prescribed by the Commissioner;
and
(f) The person provides the
Commissioner with any additional information the Commissioner requests in
connection with the notice.
(2) If the Commissioner requests additional
information in connection with a notice, the notice may not be considered
complete until that information is provided to the Commissioner.
(3) If the notice is not disapproved within
30 days after the date on which the notice was determined to be complete, the
notice is considered approved.
(4)
A licensee whose notice is disapproved by the Commissioner under this
regulation may request a hearing within 30 days after receipt of the written
notice of the disapproval pursuant to State Government Article, §10-207, Annotated
Code of Maryland.
L.
Before filing an application or notice under §B or K of this regulation, a
person or group of persons acting in concert may request in writing a
determination from the Commissioner as to whether the person or group of
persons acting in concert would be considered a person in control of a licensee
upon consummation of a proposed transaction. If the Commissioner determines
that the person or group of persons acting in concert would not be a person in
control of a licensee, the proposed person or group of persons acting in
concert is not subject to the requirements of Financial Institutions Article,
§12-415(b),
Annotated Code of Maryland, as applied to a change of control of a
licensee.
M. Rebuttable Presumption
of Control.
(1) A person is presumed to
exercise a controlling influence if the person holds the power to vote,
directly or indirectly, at least 10 percent of the outstanding voting shares or
voting interests of a licensee or person in control of a licensee.
(2) A person presumed to exercise a
controlling influence can rebut the presumption of control if the person is a
passive investor.
(3) For purposes
of determining the percentage of a person controlled by any other person, the
person's interest shall be aggregated with the interest of any other immediate
family member, including the person's spouse, parents, children, siblings,
mothers- and fathers-in law, sons- and daughters-in-law, brothers- and
sisters-in-law, and any other person who shares that person's home.
