South Carolina § 35-11-515 - Acquisition of control.

§ 35-11-515. Acquisition of control.

(A) Any person, or group of persons acting in concert, seeking to acquire control of a licensee shall obtain the written approval of the Commissioner prior to acquiring control. An individual is not deemed to acquire control of a licensee and is not subject to these acquisition of control provisions when that individual becomes a key individual in the ordinary course of business.

(B) A person, or group of persons acting in concert, seeking to acquire control of a licensee, in cooperation with the licensee, shall:

(1) submit an application in a form and in a medium prescribed by the Commissioner; and

(2) submit a nonrefundable fee of one thousand dollars with the request for approval.

(C) Upon request, the Commissioner may permit a licensee or the person, or group of persons acting in concert, to submit some or all information required by the Commissioner pursuant to Section 35-11-515(B)(1) without using NMLS.

(D) The application required by Section 35-11-515(B)(1) must include information required by Section 35-11-210 for any new key individuals that have not previously completed the requirements of Section 35-11-210 for a licensee.

(E) When an application for acquisition of control under this section appears to include all the items and addresses all of the matters that are required, the application must 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) the Commissioner shall approve or deny the application within sixty days after the completion date; or

(2) if the application is not approved or denied within sixty days after the completion date:

(a) the application is approved;

(b) the person, or group of persons acting in concert, are not prohibited from acquiring control; and

(c) the Commissioner may for good cause extend the application period.

(F) 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 of the items and address all of the matters that are required, and is not an assessment of the substance of the application or of the sufficiency of the information provided.

(G) When an application is filed and considered complete under subsection (E), 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 section if the Commissioner finds that all of the following conditions have been fulfilled:

(1) the requirements of subsections (B) and (D) have been met, as applicable; and

(2) the financial condition and responsibility, financial and business experience, competence, character, and general fitness of the person, or group of persons acting in concert, seeking to acquire control; and the competence, experience, character, and general fitness of the key individuals and persons that would be in control of the licensee after the acquisition of control indicate that it is in the interest of the public to permit the person, or group of persons acting in concert, to control the licensee.

(H) The Commissioner shall issue a formal written notice of the denial of an application to acquire control within thirty 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. An applicant whose application is denied by the Commissioner under this section may request a hearing within thirty days after receipt of the written notice of the denial pursuant to Section 35-11-710.

(I) The requirements of subsections (A) and (B) 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 by devise or descent;

(3) 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;

(4) a person that is exempt under Section 35-11-110(A)(4);

(5) a person that the Commissioner determines is not subject to subsection (A) based on the public interest;

(6) a public offering of securities of a licensee or a person in control of a licensee; or

(7) an internal reorganization of a person in control of the licensee where the ultimate person in control of the licensee remains the same.

(J) Persons in subsection (I)(2), (3), (4), (6), and (7), in cooperation with the licensee, shall notify the Commissioner within fifteen days after the acquisition of control.

(K)(1) The requirements of subsections (A) and (B) do not apply to a person that has complied with and received approval to engage in money transmission under this chapter 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, provided that:

(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 five 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 such rating was given;

(c) the licensee to be acquired is projected to meet the requirements of Sections 35-11-215, 35-11-230, and 35-11-600 after the acquisition of control is completed, and if the person acquiring control is a licensee, that licensee is also projected to meet the requirements of Sections 35-11-215, 35-11-230, and 35-11-600 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; and

(e) the person provides notice of the acquisition in cooperation with the licensee and attests to subsection (K)(1)(a), (b), (c), and (d) in a form and in a medium prescribed by the Commissioner.

(2) If the notice is not disapproved within thirty days after the date on which the notice was determined to be complete, the notice is deemed approved.

(L) Before filing an application for approval to acquire control of a licensee a person may request in writing a determination from the Commissioner as to whether the person would be considered a person in control of a licensee upon consummation of a proposed transaction. If the Commissioner determines that the person would not be a person in control of a licensee, the proposed person and transaction is not subject to the requirements of subsections (A) and (B).

(M)(1) A licensee adding or replacing any key individual shall:

(a) provide notice in a manner prescribed by the Commissioner within fifteen days after the effective date of the key individual's appointment; and

(b) provide information as required by Section 35-11-210 within forty-five days of the effective date.

(2) Within ninety days of the date on which the notice provided pursuant to item (1) was determined to be complete, the Commissioner may issue a notice of disapproval of a key individual if the competence, experience, character, or integrity of the individual would not be in the best interest of the public or the customers of the licensee to permit the individual to be a key individual of such licensee.

(3) A notice of disapproval must contain a statement of the basis for disapproval and must be sent to the licensee and the disapproved individual. A licensee may request a hearing regarding a notice of disapproval, within thirty days after receipt of such notice of disapproval pursuant to Section 35-11-710.

(4) If the notice provided pursuant to item (1) is not disapproved within ninety days after the date on which the notice was determined to be complete, the key individual is deemed approved.

HISTORY: 2016 Act No. 266 (H.4554), SECTION 1, eff May 25, 2018; 2024 Act No. 218 (S.1031), SECTION 1, eff July 2, 2024.

Effect of Amendment

2024 Act No. 218, SECTION 1, rewrote the section.