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BrLL: CS/SB 1178 Page 22 • Any trust company having trust powers which it is authorized to exercise in the state, which trust company renders or performs services in a fiduciary capacity incidental to the exercise of its trust powers; • Any person who renders investment advice exclusively to insurance or investment companies; • Any person who does not hold herself or himself out to the general public as an investment adviser and has no more than 15 clients within 12 consecutive months in this state; • Any person whose transactions in this state are limited to those transactions described in s. 222(d) of the Investment Advisers Act of 1940; or • A federal covered adviser.57 An investment adviser must be registered with the Office of Financial Regulation (OFR) within the Financial Services Commission58 to "sell or offer for sale any securities in or from offices in this state, or sell securities to persons in this state from offices outside this state, by mail or otherwise, unless the person has been registered with the [OFR] pursuant to the provisions of this section. The [OFR] shall not register any person as an associated person of a dealer unless the dealer with which the applicant seeks registration is lawfully registered with the [OFR] pursuant to [ch. 517, F. S.],,59 Effect of Proposed Changes The bill creates s. 718.111(16), F.S., to authorize condominium associations, including multicondominium associations, to invest reserve funds. The bill provides procedures and requirements an association must follow when investing reserve funds, including limits on the types of permissible investments, recording keeping requirements, and requiring the use of an independent investment adviser. The bill: • Requires the board to use its best efforts to make prudent investment decisions that carefully consider risk and return in an effort to maximize returns on invested funds; • Permits reserve funds to be invested in one or any combination of depository accounts at a community bank, savings bank, commercial bank, savings and loan association, or credit union if the respective account balance at any institution does not exceed the amount of deposit insurance per account provided by any agency of the Federal Government or as otherwise available. Permits only reserve funds identified as reserve funds may be invested even if the declaration permits operating funds to be invested; • Requires the board to create an investment committee composed of at least two board members and two -unit non -board member unit owners, adopt rules for invested funds, including, but not limited to, rules requiring periodic reviews of any investment manager's performance, the development of an investment policy statement, and that all meetings of the investment committee be recorded and made part of the official records of the association; • Specifies the issues that must be addressed in the investment policy, including the requirement that it project reserve expenditures within, at minimum, the next 24 months to be held in cash or cash equivalents and projected expenditures relating to the milestone inspection, and prove protocols for proxy response; 57 Section 517.021(14)(b), F.S. 58 Section 517.021(8), F.S. s9 Section 517.12(1), F.S. 332