Text: HF00552 Text: HF00554 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 HOUSE FILE 553 1 2 1 3 AN ACT 1 4 AMENDING THE UNIFORM SECURITIES ACT RELATING TO THE 1 5 REGISTRATION OF SECURITIES AND THE REGISTRATION OF 1 6 BROKER-DEALERS AND AGENTS, ESTABLISHING FEES, AND 1 7 PROVIDING AN EFFECTIVE DATE. 1 8 1 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 10 1 11 Section 1. Section 502.102, subsection 3, Code 1997, is 1 12 amended to read as follows: 1 13 3. "Agent" means any individual other than a broker-dealer 1 14 who represents a broker-dealer or issuer in effecting or 1 15 attempting to effect purchases or sales of securities. 1 16 "Agent" does not include an individual who representsan: 1 17 a. An issuer in doing any of the following: 1 18a.(1) Effecting transactions in a security exempted by 1 19 section 502.202, subsection 1, 2, 3, 4, 6, 10, 11, 12, 13, or 1 20 17, or a security issued by an industrial loan company 1 21 licensed under chapter 536A;. 1 22b.(2) Effecting transactions exempted by section 502.203;1 23or. 1 24 (3) Effecting transactions in a federal covered security 1 25 as described in sections 18(b)(3) and 18(b)(4)(D) of the 1 26 Securities Act of 1933 as amended in Pub. L. No. 104-290. 1 27c.(4) Effecting transactions with an existingemployees1 28 employee, member, manager,partnerspartner, ordirectors1 29 director of the issuer if no commission or other remuneration 1 30 is paid or given directly or indirectly for soliciting any 1 31 person in this state. 1 32 b. A broker-dealer in effecting a transaction in this 1 33 state which is limited to a transaction provided in section 1 34 15(h)(2) of the Securities Exchange Act of 1934. 1 35 "Agent" also does not include any otherindividuals2 1 individual whoareis not within the intent of this subsection 2 2 whom the administrator by rule or order designates. A 2 3 partner, member, manager, officer, or director of a broker- 2 4 dealer or issuer, or a person occupying a similar status or 2 5 performing similar functions, is an agent only if such person 2 6 otherwise comes within this definition. 2 7 Sec. 2. Section 502.102, Code 1997, is amended by adding 2 8 the following new subsection: 2 9 NEW SUBSECTION. 5A. "Federal covered security" means any 2 10 security that is a covered security under section 18(b) of the 2 11 Securities Act of 1933 or rules or regulations adopted under 2 12 the Securities Act of 1933. 2 13 Sec. 3. Section 502.102, Code 1997, is amended by adding 2 14 the following new subsection: 2 15 NEW SUBSECTION. 13A. "Securities and exchange commission" 2 16 means the United States securities and exchange commission as 2 17 established pursuant to 15 U.S.C. } 78(d). 2 18 Sec. 4. Section 502.102, subsection 14, Code 1997, is 2 19 amended to read as follows: 2 20 14. "Security" means any note; stock; treasury stock; 2 21 bond; debenture; evidence of indebtedness; certificate of 2 22 interest or participation in a profit sharing agreement; 2 23 collateral trust certificate; preorganization certificate or 2 24 subscription; transferable share; investment contract; voting 2 25 trust certificate; certificate of deposit for a security; 2 26 fractional undivided interest in an oil, gas, or other mineral 2 27 lease or in payments out of production under such a lease, 2 28 right, or royalty; an interest in a limited liability company 2 29 or in a limited liability partnership or any class or series 2 30 of such interest, including any fractional or other interest 2 31 in such interest; or, in general, any interest or instrument 2 32 commonly known as a "security", or any certificate of interest 2 33 or participation in, temporary or interim certificate for, 2 34 receipt for, guarantee of, or warrant or right to subscribe to 2 35 or purchase, any of the foregoing. "Security" does not 3 1 include an insurance or endowment policy or annuity contract 3 2 under which an insurance company promises to pay money either 3 3 in a lump sum or periodically for life or for some other 3 4 specified period. "Security" also does not include an 3 5 interest in a limited liability company or a limited liability 3 6 partnership if the person claiming that such an interest is 3 7 not a security proves that all of the members of the limited 3 8 liability company or limited liability partnership are 3 9 actively engaged in the management of the limited liability 3 10 company or limited liability partnership; provided that the 3 11 evidence that members vote or have the right to vote, or the 3 12 right to information concerning the business and affairs of 3 13 the limited liability company or limited liability 3 14 partnership, or the right to participate in management, shall 3 15 not establish, without more, that all members are actively 3 16 engaged in the management of the limited liability company or 3 17 limited liability partnership. 3 18 Sec. 5. Section 502.201, Code 1997, is amended to read as 3 19 follows: 3 20 502.201 REGISTRATION REQUIREMENT. 3 21 It is unlawful for any person to offer or sell any security 3 22 in this state unless one of the following applies: 3 23 1. It is registered under this chapter; or. 3 24 2. The security or transaction is exempted under section 3 25 502.202 or 502.203. 3 26 3. It is a federal covered security. 3 27 Sec. 6. Section 502.202, subsection 7, Code 1997, is 3 28 amended to read as follows: 3 29 7. Any security issued or guaranteed byany railroad,3 30other common carrier,a public utility,or holding company 3 31 which is any of the following: 3 32a. Subject to the jurisdiction of the interstate commerce3 33commission;3 34b.a. A registered holding company under the Public 3 35 Utility Holding Company Act of 1935 or a subsidiary of such a 4 1 company within the meaning of that Act; or. 4 2 b. Regulated in respect of its rates and charges by a 4 3 governmental authority of the United States or any state. 4 4 c. Regulated in respect of the issuance or guarantee of 4 5 the security by a governmental authority of the United States, 4 6 any state, Canada, or any Canadian province. 4 7 Sec. 7. NEW SECTION. 502.206A FEDERAL COVERED 4 8 SECURITIES. 4 9 1. The administrator, by rule or order, may require the 4 10 filing of any or all of the following documents with respect 4 11 to a federal covered security under section 18(b)(2) of the 4 12 Securities Act of 1933: 4 13 a. Prior to the initial offer of a federal covered 4 14 security in this state, all documents that are part of a 4 15 current federal registration statement filed with the United 4 16 States securities and exchange commission under the Securities 4 17 Act of 1933, together with a consent to service of process 4 18 signed by the issuer and a filing fee calculated as specified 4 19 in section 502.208, subsection 2. 4 20 b. After the initial offer of a federal covered security 4 21 in this state, all documents that are part of an amendment to 4 22 a current federal registration statement filed with the United 4 23 States securities and exchange commission under the Securities 4 24 Act of 1933. 4 25 c. To the extent necessary to compute fees, an annual or 4 26 periodic report of the value of the federal covered securities 4 27 offered or sold in this state together with the applicable 4 28 filing fee, if any, calculated as specified in section 4 29 502.208, subsection 2. 4 30 2. With respect to any security that is a federal covered 4 31 security under section 18(b)(4)(D) of the Securities Act of 4 32 1933, the administrator, by rule or otherwise, may require the 4 33 issuer to file a notice on Form D as promulgated by the 4 34 securities and exchange commission and a consent to service of 4 35 process signed by the issuer not later than fifteen days after 5 1 the first sale of the federal covered security in this state 5 2 together with a filing fee, as established by rule adopted by 5 3 the administrator. 5 4 3. The administrator, by rule or otherwise, may require 5 5 the filing of any document filed with the securities and 5 6 exchange commission under the Securities Act of 1933 with 5 7 respect to a federal covered security under section 18(b)(3) 5 8 or (4) of the Securities Act of 1933, together with a filing 5 9 fee established by rule adopted by the administrator which 5 10 shall not be more than one hundred dollars. 5 11 4. The administrator may issue a stop order suspending the 5 12 offer and sale of a federal covered security, except a federal 5 13 covered security under section 18(b)(1) of the Securities Act 5 14 of 1933, if the administrator finds that both of the following 5 15 apply: 5 16 a. The order is in the public interest. 5 17 b. The person against whom the stop order is issued has 5 18 failed to comply with a requirement provided in this section. 5 19 5. The administrator, by rule or otherwise, may waive any 5 20 requirement of this section if the administrator finds good 5 21 cause that the requirement is not necessary in order to carry 5 22 out the purposes of the section. 5 23 Sec. 8. Section 502.207A, subsection 5, Code 1997, is 5 24 amended to read as follows: 5 25 5. In connection with an offering registered under this 5 26 section, a person may be registered as an agent of the issuer 5 27 under section 502.301 by the filing of an application by the 5 28 issuer with the administrator for the registration of the 5 29 person as an agent of the issuer and the paying of a fee of 5 30 ten dollars. Notwithstanding any other provision of this 5 31 chapter, the registration of the agent shall be effective 5 32 until withdrawn by the issuer or until the securities 5 33 registered pursuant to the registration statement have all 5 34 been sold, whichever occurs first. The registration of an 5 35 agent shall become effective when ordered by the administrator 6 1 or on the fifth business day after the agent's application has 6 2 been filed with the administrator, whichever occurs first, and 6 3 the administrator shall not impose further conditions upon the 6 4 registration of the agent. However, the administrator may 6 5 deny, revoke, suspend, or withdraw the registration of the 6 6 agent at any time as provided in section 502.304.For the6 7purposes of registration of agents under this section, the6 8issuer and agent are not required to post bond.An agent 6 9 registered solely pursuant to this section is entitled to sell 6 10 only securities registered under this section. 6 11 Sec. 9. Section 502.208, subsections 1, 2, 4, 5, 8, 9, 11, 6 12 and 13, Code 1997, are amended to read as follows: 6 13 1. A registration statement or a notice filing made 6 14 pursuant to section 502.206A may be filed by the issuer, any 6 15 other person on whose behalf the offering is to be made, or a 6 16 registered broker-dealer. 6 17 2. a. Except as provided in subsection 13 and section 6 18 502.207A, subsection 3, paragraph "g", a person who files a 6 19 registration statement or a notice filing shall pay a filing 6 20 fee of one-tenth of one percent of the proposed aggregate 6 21 sales price of the securities to be offered to persons in this 6 22 state pursuant to the registration statement or notice filing. 6 23 However, except as provided in paragraph "c" of this 6 24 subsection, subsection 13, and section 502.207A, subsection 3, 6 25 paragraph "g", the annual filing fee shall not be less than 6 26 fifty dollars or more than one thousand dollars. 6 27 b. The administrator shall retain the filing fee even if 6 28 the notice filing is withdrawn or the registration is 6 29 withdrawn, denied, suspended, revoked, or abandoned. 6 30 c. A person who isa face-amount certificate company,6 31open-end management investment company, or a unit investment6 32trust, as defined in the Investment Company Act of 1940,the 6 33 issuer of a federal covered security under section 18(b)(2) of 6 34 the Securities Act of 1933 shall initiallyregistermake a 6 35 notice filing and annually renew aregistration statement7 1 notice filing in this state for an indefinite amount or a 7 2 fixed amount. The fixed amount must be for two hundred fifty 7 3 thousand dollars. Aregistrantnotice filer shall pay a 7 4 filing fee when thestatementnotice is filed. If the 7 5registration statementamount covered by the notice is 7 6 indefinite, theregistrantnotice filer shall pay a filing fee 7 7 of one thousand dollars. If theregistration statementamount 7 8 covered by the notice is fixed, theregistrantnotice filer 7 9 shall pay a filing fee of two hundred fifty dollars, and the 7 10 following shall apply: 7 11 (1) Theregistrantnotice filer shall file a sales report 7 12 with the administrator or pay an additional filing fee of one 7 13 thousand two hundred fifty dollars within ninety days after 7 14 theregistration statement'snotice filing's annual renewal 7 15 date. If theregistrantnotice filer files a sales report 7 16 with the administrator, theregistrantnotice filer shall pay 7 17 an additional filing fee of one-tenth of one percent of the 7 18 amount of securities sold in excess of two hundred fifty 7 19 thousand dollars. The additional filing fee must be paid 7 20 within ninety days after theregistration statement'snotice 7 21 filing's annual renewal date. 7 22 (2) Theadministrator shall order the registration of7 23 notice filing covering the additional securities shall be 7 24 effective retroactively as of the effective date of the 7 25registration statementnotice filing that is being amended. 7 26 4. Any document filed under this chapter or a predecessor 7 27 act within five years preceding the filing of a registration 7 28 statement or notice filing may be incorporated by reference in 7 29 the registration statement or notice filing to the extent that 7 30 the document is currently accurate. 7 31 5. The administrator may by rule or otherwise permit the 7 32 omission of any item of information or document from any 7 33 registration statement or notice filing. 7 34 8. The administrator may by rule require that registered 7 35 securities of designated classes shall be issued under a trust 8 1 indenture containing such provisions as the administrator 8 2 determines. 8 3 9. a. A registration statement or notice filing shall 8 4 remain effective for one year from its effective date unless 8 5 it is renewed, extended, or amended by rule or order of the 8 6 administrator. An initial notice filing or a renewal or 8 7 amendment of a notice filing becomes effective on the date 8 8 received by the administrator, or, if requested by the issuer, 8 9 on the date that the initial notice filing, renewal, or 8 10 amendment is effective with the securities and exchange 8 11 commission. All outstanding securities of the same class as a 8 12 registered security or a security for which a notice filing 8 13 has been made are considered to be registered or covered by a 8 14 notice filing for the purpose of any transaction by or on 8 15 behalf of a person who is not the issuer, and who is not in 8 16 control of the issuer or controlled by the issuer or under 8 17 common control with the issuer, so long as the registration 8 18 statement or notice filing is effective, unless otherwise 8 19 prescribed by order. A registration statementmayor notice 8 20 filing shall not be withdrawn after its effective date if any 8 21 of the securities has been sold in this state, unless 8 22 permitted by rule or order of the administrator. A 8 23 registration statement is not effective during the time a stop 8 24 order is in effect under section 502.209. A notice filing is 8 25 not effective during the time that a stop order issued 8 26 pursuant to section 502.206A is in effect. A registration 8 27 statement which never became effective may be withdrawn 8 28 without prejudice to the issuer upon request and for good 8 29 cause as determined at the discretion of the administrator. 8 30 b. During the effective period of a registration 8 31 statement, the administrator may by rule or order require the 8 32 person who filed the registration statement to file reports, 8 33 not more often than quarterly, to keep reasonably current the 8 34 information contained in the registration statement and to 8 35 disclose the progress of the offering. If any of the 9 1 securities registered has been sold in this state, the 9 2 administrator may by rule or order extend the period for 9 3 filing the reports for an additional period not exceeding two 9 4 years from the date the registration became effective or from 9 5 the date of its last amendment or extension. 9 6 11.Except for face-amount certificate companies, open-end9 7management investment companies, and unit investment trusts,9 8as defined by the Investment Company Act of 1940, registration9 9 Registration statements may be amended during the registration 9 10 period to increase the amount of registered securities to be 9 11 offered for sale to persons in this state. 9 12 a. The amendment to the registration statement becomes 9 13 effective on the date ordered by the administrator. 9 14 b. Filing fees shall be calculated as specified by 9 15 subsection 2, paragraph "a", and subsection 13. 9 16 13.a. With the exception of face-amount certificate9 17companies, open-end management investment companies, and unit9 18investment trusts, aA registrant who sold securities to 9 19 persons in this state in excess of the amount of securities 9 20 registered in this state at the time of the sale may file an 9 21 amendment to its registration statement to register the 9 22 additional securities. The following requirements shall 9 23 apply: 9 24(1)a. If a registrant proposes to sell securities to 9 25 persons in this state pursuant to a registration statement 9 26 that is currently effective in this state in an amount that 9 27 exceeds the amount registered in this state, the registrant 9 28 must do both of the following: 9 29(a)(1) File an amendment to register the additional 9 30 securities. 9 31(b)(2) Pay an additional filing fee in the same amount as 9 32 specified by subsection 2, paragraph "a", as though the 9 33 amendment constitutes a separate issue. 9 34(2)b. If a registrant sold securities to persons in this 9 35 state in excess of the amount registered in this state at that 10 1 time, the registrant must do both of the following: 10 2(a)(1) File an amendment to register the additional 10 3 securities. 10 4(b)(2) Pay an additional filing fee that is three times 10 5 the amount specified in subsection 2, paragraph "a", as though 10 6 the amendment constitutes a separate issue. 10 7(3)c. The administrator may order the amendment effective 10 8 retroactively as of the effective date of the registration 10 9 statement that is being amended. 10 10 Sec. 10. Section 502.302, subsection 4, Code 1997, is 10 11 amended to read as follows: 10 12 4. The administrator may by rule or order require a 10 13 minimum capital for broker-dealersand establish limitations10 14on aggregate indebtedness of broker-dealers in relation to net10 15capital and may classify broker-dealers for purposes of such10 16requirementssubject to the limitations of section 15 of the 10 17 Securities Exchange Act of 1934.The administrator may not,10 18however, with respect to any broker-dealer who is a member of10 19the national association of securities dealers, inc., or who10 20is registered with the securities and exchange commission,10 21require a higher minimum capital or lower ratio of aggregate10 22indebtedness to net capital than is contained in the rules and10 23regulations adopted by such association or commission.10 24 Sec. 11. Section 502.303, subsections 1 and 2, Code 1997, 10 25 are amended to read as follows: 10 26 1. Every registered broker-dealer shall make and keepsuch10 27 accounts, correspondence, memoranda, papers, books, and other 10 28 records as the administratorby rule prescribesmay prescribe 10 29 by rule or order, except as provided by section 15 of the 10 30 Securities Exchange Act of 1934.All records so required10 31shall be preserved for three years unless the administrator by10 32rule prescribes otherwise for particular types of records.10 33All required records shall be kept within this state or shall,10 34at the request of the administrator, be made available at any10 35time for examination at the administrator's option either in11 1the principal office of the registrant or by production of11 2exact copies thereof in this state.11 3 2. Every registered broker-dealer shall file such 11 4 financial reports as the administratorby ruleprescribes by 11 5 rule or order, not to exceed the limitations provided in 11 6 section 15 of the Securities Exchange Act of 1934. 11 7 Sec. 12. Section 502.304, subsection 1, paragraph e, Code 11 8 1997, is amended to read as follows: 11 9 e. Is the subject of an order of the administrator 11 10 denying, suspending, or revoking registration as a broker- 11 11 dealer, agent, or insurance agent; 11 12 Sec. 13. Section 502.406, subsection 2, paragraph a, Code 11 13 1997, is amended to read as follows: 11 14 a.Neither theThe fact that a registration statement or a 11 15 notice filing has been filed under this chapternoror the 11 16 fact thatsuchthe statement has become effectiveconstitutes11 17 does not constitute a finding by the administrator that any 11 18 document filed under this chapter is true, complete or not 11 19 misleading.Neither anyAny such factnoror the fact that an 11 20 exemption is available for a security or a transactionmeans11 21 does not mean that the administrator has passed in any way 11 22 upon the merits or qualifications of, or has recommended or 11 23 given approval to, any person, security or transaction. 11 24 Sec. 14. Section 502.501, subsection 1, paragraph a, Code 11 25 1997, is amended to read as follows: 11 26 a. Violates section 502.201, subsection 1 or 2, or section 11 27 502.208, subsection 12, or section 502.406, subsection 2, 11 28 paragraph "b", or 11 29 Sec. 15. Section 502.602, Code 1997, is amended to read as 11 30 follows: 11 31 502.602 FILING OF SALES AND ADVERTISING LITERATURE. 11 32 The administrator may by rule or order require the filing 11 33 of any prospectus, pamphlet, circular, form letter, 11 34 advertisement, or other sales literature or advertising 11 35 communication addressed or intended for distribution to 12 1 prospective investors, unless the security is a federal 12 2 covered security or the transaction relates to a federal 12 3 covered security or the security or transaction is exempted by 12 4 section 502.202 or 502.203. The administrator may by rule or 12 5 order prohibit the publication, circulation or use of any 12 6 advertising deemed false or misleading. 12 7 Sec. 16. Section 502.607, subsection 1, Code 1997, is 12 8 amended to read as follows: 12 9 1. Pursuant tothe Iowa administrative procedure Act12 10 chapter 17A, the administrator may from time to time make, 12 11 amend, and rescind such rules, forms, and orders as are 12 12 necessary to carry out the provisions of this chapter, 12 13 including rules and forms governing registration statements, 12 14 notice filings, applications, and reports, and defining any 12 15 terms, whether or not used in this chapter, insofar as the 12 16 definitions are not inconsistent with the provisions of this 12 17 chapter. For the purpose of rules and forms, the 12 18 administrator may classify securities, persons, and other 12 19 relevant matters, and prescribe different requirements for 12 20 different classes. 12 21 Sec. 17. Section 502.608, subsections 2 and 3, Code 1997, 12 22 are amended to read as follows: 12 23 2. The administrator shall keep a register of all 12 24 applications for registration, notice filings, and 12 25 registration statements which are or have been effective under 12 26 this chapter and predecessor laws, and all censure, denial, 12 27 suspension, or revocation orders which have been entered under 12 28 this chapter and predecessor laws. The register shall be open 12 29 for public inspection. 12 30 3. The information contained in or filed with any 12 31 registration statement, application, notice filing, or report 12 32 may be made available to the public under such rules as the 12 33 administrator prescribes. 12 34 Sec. 18. Section 502.609, subsection 1, unnumbered 12 35 paragraph 1, Code 1997, is amended to read as follows: 13 1 Every applicant for registration under this chapter, and 13 2 every issuer which proposes to offer a security in this state, 13 3 shall file with the administrator, in such form as the 13 4 administrator by rule prescribes, an irrevocable consent 13 5 appointing the administrator or the administrator's successor 13 6 in office to be such person's attorney to receive service of 13 7 any lawful process in any noncriminal suit, action or 13 8 proceeding against such person or the successor, executor or 13 9 administrator of such person which arises under this chapter 13 10 or any rule or order hereunder after the consent has been 13 11 filed, with the same validity as if served personally on the 13 12 person filing the consent. The consent need not be filed by a 13 13 person who has filed a consent in connection with a previous 13 14 registration or notice filing which is then in effect. 13 15 Service may be made by leaving a copy of the process in the 13 16 office of the administrator, but it is not effective unless 13 17 the plaintiff, including the administrator when acting as 13 18 such, 13 19 Sec. 19. EFFECTIVE DATE. This Act, being deemed of 13 20 immediate importance, takes effect upon enactment. 13 21 13 22 13 23 13 24 RON J. CORBETT 13 25 Speaker of the House 13 26 13 27 13 28 13 29 MARY E. KRAMER 13 30 President of the Senate 13 31 13 32 I hereby certify that this bill originated in the House and 13 33 is known as House File 553, Seventy-seventh General Assembly. 13 34 13 35 14 1 14 2 ELIZABETH ISAACSON 14 3 Chief Clerk of the House 14 4 Approved , 1997 14 5 14 6 14 7 14 8 TERRY E. BRANSTAD 14 9 Governor
Text: HF00552 Text: HF00554 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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