Existing law, the Corporate Securities Law of 1968, regulates, among other things, investment advisers, as defined. The law makes it unlawful for any investment adviser to conduct business as an investment adviser in this state unless the investment adviser has first applied for and secured from the Commissioner of Financial Protection and Innovation a certificate, then in effect, authorizing the investment adviser to do so, except as specified. The law authorizes the commissioner to deny a certificate to, or suspend or revoke the certificate of, an investment adviser under specified circumstances. law generally prohibits discrimination in the provision of privileges and services on the basis of sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, and immigration status. Existing law provides a cause of action against any person who denies, aids or incites a denial, or makes any discrimination or distinction on the bases listed, as specified, and permits the recovery of attorney’s fees. Existing law establishes the Civil Rights Department (department) and makes it responsible for, among other things, investigating and prosecuting complaints alleging a violation of these provisions.

This bill would, commencing on March 1, 2025, and annually thereafter, require a covered person, defined as a person who acts an investment adviser to a venture capital company and meets any of specified criteria, to report to the commissioner department specified information about their funding determinations, including, at an aggregate level, specified demographic information for the founding teams of all of the businesses in which the covered person made a venture capital investment in the prior calendar year to the extent the information was provided pursuant to a survey the bill would require a covered person to provide to each founding team member of a business that has received funding from a venture capital company to which the covered person has acted as an investment adviser, as specified. The bill would require this information to be collected and reported in a manner that does not associate the survey response data with an individual founding team member, make that information confidential, and prohibit the commissioner department and the covered person from releasing that information under any circumstances, except as required by the bill’s provisions. The bill would require the commissioner department to charge and collect fees to administer these provisions, as specified. The bill would require the commissioner department to notify the covered person that the covered person must submit the report within 60 days of the notification, and require the commissioner department to charge and collect a penalty of $100,000 if the covered person has not submitted the report after those 60 days have elapsed, as specified. The bill would require moneys collected pursuant to these provisions to be deposited in the General Fund, and would express the intent of the Legislature that these moneys be appropriated in the Budget Act to the department for administration of these provisions. The bill would define various terms for these purposes.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.