Section 10232.45 - Required determination by broker(a) Any broker subject to the provisions of Section 10232.3 or Article 6 (commencing with Section 10237) shall make reasonable efforts to ensure all of the following with respect to the offer or sale of notes or interest in notes to be secured by a lien on real property or a business opportunity:(1) All persons to whom notes or interests are sold can be reasonably assumed to have the capacity to understand the fundamental aspects of the investment, by reason of their educational, business, or financial experience.(2) All persons to whom notes or interests are sold can bear the economic risk of the investment.(3) The investment in the notes or interests is suitable and appropriate for the purchaser, given the purchaser's investment objectives, portfolio structure, and financial situation.(b) A broker shall make this determination on the basis of information he or she obtains from the purchaser. Relevant information for this purpose includes, at least, the age, investment objective, investment experience, income, net worth, financial situation, and other investments of the prospective purchaser, as well as any other pertinent factors the commissioner shall establish through regulation.(c) A broker shall maintain records of the information used to determine that an investment is suitable and appropriate for each purchaser and shall retain these records for at least four years.(d) A broker that complies with all of the following shall be deemed to have complied with subdivision (a):(1) Obtains from each person to whom notes and deeds of trust or interests therein are offered or sold, at least two business days and not more than one year prior to completing each sale, a completed investor questionnaire in a form approved by the commissioner. After obtaining an initial questionnaire, any subsequent questionnaire from the same person need only reflect any updates from the immediately preceding questionnaire obtained by the broker.(2) Uses the responses in that questionnaire as an aid in complying with subdivision (a).(e) Nothing in this section shall be construed to require a broker to utilize an investor questionnaire to ensure compliance with subdivision (a). Reliance of a broker on an investor questionnaire in a form approved by the commissioner shall not prohibit that broker from utilizing additional information to ensure compliance with subdivision (a).Ca. Bus. and Prof'l. Code § 10232.45
Amended by Stats 2015 ch 263 (SB 647),s 2, eff. 1/1/2016.Added by Stats 2012 ch 669 (SB 978),s 2, eff. 1/1/2013.