WHEREAS, the Banking Commissioner ("Commissioner") is charged with administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act ("Act"), and Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies ("Regulations") promulgated under the Act;

WHEREAS, Section 36b-31(a) of the Act provides, in pertinent part, that: "[t]he commissioner may from time to time make . . . such . . . orders as are necessary to carry out the provisions of . . . [the Act] . . . . For the purpose of . . . orders, the commissioner may classify securities, persons and matters within his jurisdiction, and prescribe different requirements for different classes";

WHEREAS, Section 36b-31(b) of the Act provides, in pertinent part, that: "[n]o . . . order may be made . . . unless the commissioner finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of . . . [the Act] . . . In prescribing . . . orders the commissioner may cooperate with the securities administrators of the other states and the Securities and Exchange Commission with a view to effectuating the policy of said sections to achieve maximum uniformity in the form and content of registration statements, applications and reports wherever practicable";

WHEREAS, P.L. 104-290, the National Securities Markets Improvement Act of 1996 ("NSMIA"), added to Section 15 of the Securities Exchange Act of 1934 subsection (h) which provides as follows:

WHEREAS, in response to NSMIA, P.A. 98-162 amended Section 36b-14(b) of the Act to provide, in pertinent part, that: "(2) Every . . . registered broker-dealer, shall file such financial reports as the commissioner by regulation prescribes, except that the commissioner shall not require the filing of financial reports that are not required to be filed with the Securities and Exchange Commission";

WHEREAS, Securities and Exchange Commission Rule 17a-5(d), 17 C.F.R. § 240.17a-5(d), provides, in pertinent part, that: "(1)(i) Every broker or dealer registered pursuant to section 15 of the [Securities Exchange] Act shall file annually, on a calendar or fiscal year basis, a report which shall be audited by an independent public accountant . . . (5) The annual audit report shall be filed not more than sixty (60) days after the date of the financial statements. (6) The annual audit report shall be filed at the regional or district office of the Commission for the region or district in which the broker or dealer has its principal place of business, the Commission's principal office in Washington, DC, and the principal office of the designated examining authority for such broker or dealer. Copies thereof shall be provided to all self-regulatory organizations of which said broker or dealer is a member";

WHEREAS, Securities and Exchange Commission Rule 17a-5(e)(3), 17 C.F.R. § 240.17a-5(e)(3), provides, in pertinent part, that: "All of the statements filed pursuant to paragraph (d) of this section shall be public, except that, if the Statement of Financial Condition in a format which is consistent with Form X-17A-5, Part II or Part IIA, is bound separately from the balance of the annual audited financial statements filed pursuant to paragraph (d)(1) of this section, the balance of the annual audited financial statements shall be deemed confidential, except that they shall be available for official use by any official or employee of the United States or any State, by national securities exchanges and registered national securities associations of which the person filing such a report is a member, and by any other person to whom the Commission authorizes disclosure of such information as being in the public interest";

WHEREAS, Section 36b-31(c) of the Act provides, in part, that: "To encourage uniform interpretation and administration of sections 36b-2 to 36b-33, inclusive, and effective securities regulation and enforcement, the commissioner may cooperate with the securities agencies or administrators of other states, Canadian provinces or territories, or other countries, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Securities Investor Protection Corporation, any self-regulatory organization, any national or international organization of securities officials or agencies, and any governmental law enforcement or regulatory agency. The cooperation authorized by this subsection includes, but is not limited to, the following actions: . . . (3) sharing and exchanging information and documents subject to the restrictions of chapter 3";

WHEREAS, Section 36b-31-14c of the Regulations, last amended prior to the passage of NSMIA, provides, in part, that:

WHEREAS, subsection (b) of Section 36b-31-14c of the Regulations, last amended prior to the passage of NSMIA, provides the following alternative to satisfying the filing requirement in Section 36b-31-14c(a) of the Regulations, subject to certain conditions:

WHEREAS, 36b-31-31c of the Regulations provides that: "The commissioner may exempt a person, security or transaction from a specified provision of sections 36b-31-2 to 36b-31-33, inclusive, of the regulations upon a finding that such exemption is in the public interest";

WHEREAS, the Commissioner finds that requiring Connecticut-registered broker-dealers who are registered with the Securities and Exchange Commission and members of the National Association of Securities Dealers, Inc. ("NASD") to file with the Commissioner a copy of the annual audited financial statements filed with the Securities and Exchange Commission and the NASD is duplicative and unnecessary provided that specific guidelines are observed;

AND WHEREAS, the Commissioner further finds that the exemption provided by this Order is necessary or appropriate in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act.

NOW THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:

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