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PAG LIN 1 1 Section 1. Section 502.102, subsection 3, Code 1997, is 1 2 amended to read as follows: 1 3 3. "Agent" means any individual other than a broker-dealer 1 4 who represents a broker-dealer or issuer in effecting or 1 5 attempting to effect purchases or sales of securities. 1 6 "Agent" does not include an individual who representsan: 1 7 a. An issuer in doing any of the following: 1 8a.(1) Effecting transactions in a security exempted by 1 9 section 502.202, subsection 1, 2, 3, 4, 6, 10, 11, 12, 13, or 1 10 17, or a security issued by an industrial loan company 1 11 licensed under chapter 536A;. 1 12b.(2) Effecting transactions exempted by section 502.203;1 13or. 1 14 (3) Effecting transactions in a federal covered security 1 15 as described in sections 18(b)(3) and 18(b)(4)(D) of the 1 16 Securities Act of 1933 as amended in Pub. L. No. 104-290. 1 17c.(4) Effecting transactions with an existingemployees1 18 employee,partnerspartner, ordirectorsdirector of the 1 19 issuer if no commission or other remuneration is paid or given 1 20 directly or indirectly for soliciting any person in this 1 21 state. 1 22 b. A broker-dealer in effecting a transaction in this 1 23 state which is limited to a transaction provided in section 1 24 15(h)(2) of the Securities Exchange Act of 1934. 1 25 "Agent" also does not include any otherindividuals1 26 individual whoareis not within the intent of this subsection 1 27 whom the administrator by rule or order designates. A 1 28 partner, officer, or director of a broker-dealer or issuer, or 1 29 a person occupying a similar status or performing similar 1 30 functions, is an agent only if such person otherwise comes 1 31 within this definition. 1 32 Sec. 2. Section 502.102, Code 1997, is amended by adding 1 33 the following new subsection: 1 34 NEW SUBSECTION. 5A. "Federal covered security" means any 1 35 security that is a covered security under section 18(b) of the 2 1 Securities Act of 1933 or rules or regulations adopted under 2 2 the Securities Act of 1933, except that up through October 10, 2 3 1999, a federal covered security for which a fee has not been 2 4 paid and promptly remedied following written notification from 2 5 the administrator to the issuer of the nonpayment or 2 6 underpayment of the fee, as required by this chapter, shall 2 7 not be a federal covered security. 2 8 Sec. 3. Section 502.102, Code 1997, is amended by adding 2 9 the following new subsection: 2 10 NEW SUBSECTION. 13A. "Securities and exchange commission" 2 11 means the United States securities and exchange commission as 2 12 established pursuant to 15 U.S.C. } 78(d). 2 13 Sec. 4. Section 502.102, subsection 14, Code 1997, is 2 14 amended to read as follows: 2 15 14. "Security" means any note; stock; treasury stock; 2 16 bond; debenture; evidence of indebtedness; certificate of 2 17 interest or participation in a profit sharing agreement; 2 18 collateral trust certificate; preorganization certificate or 2 19 subscription; transferable share; investment contract; voting 2 20 trust certificate; certificate of deposit for a security; 2 21 fractional undivided interest in an oil, gas, or other mineral 2 22 lease or in payments out of production under such a lease, 2 23 right, or royalty; an interest in a limited liability company 2 24 or in a limited liability partnership or any class or series 2 25 of such interest, including any fractional or other interest 2 26 in such interest; or, in general, any interest or instrument 2 27 commonly known as a "security", or any certificate of interest 2 28 or participation in, temporary or interim certificate for, 2 29 receipt for, guarantee of, or warrant or right to subscribe to 2 30 or purchase, any of the foregoing. "Security" does not 2 31 include an insurance or endowment policy or annuity contract 2 32 under which an insurance company promises to pay money either 2 33 in a lump sum or periodically for life or for some other 2 34 specified period. "Security" also does not include an 2 35 interest in a limited liability company or a limited liability 3 1 partnership if the person claiming that such an interest is 3 2 not a security proves that all of the members of the limited 3 3 liability company or limited liability partnership are 3 4 actively engaged in the management of the limited liability 3 5 company or limited liability partnership; provided that the 3 6 evidence that members vote or have the right to vote, or the 3 7 right to information concerning the business and affairs of 3 8 the limited liability company or limited liability 3 9 partnership, or the right to participate in management, shall 3 10 not establish, without more, that all members are actively 3 11 engaged in the management of the limited liability company or 3 12 limited liability partnership. 3 13 Sec. 5. Section 502.201, Code 1997, is amended to read as 3 14 follows: 3 15 502.201 REGISTRATION REQUIREMENT. 3 16 It is unlawful for any person to offer or sell any security 3 17 in this state unless one of the following applies: 3 18 1. It is registered under this chapter; or. 3 19 2. The security or transaction is exempted under section 3 20 502.202 or 502.203. 3 21 3. It is a federal covered security. 3 22 Sec. 6. Section 502.202, subsection 7, Code 1997, is 3 23 amended to read as follows: 3 24 7. Any security issued or guaranteed byany railroad,3 25other common carrier,a public utility,or holding company 3 26 which is any of the following: 3 27a. Subject to the jurisdiction of the interstate commerce3 28commission;3 29b.a. A registered holding company under the Public 3 30 Utility Holding Company Act of 1935 or a subsidiary of such a 3 31 company within the meaning of that Act; or. 3 32 b. Regulated in respect of its rates and charges by a 3 33 governmental authority of the United States or any state. 3 34 c. Regulated in respect of the issuance or guarantee of 3 35 the security by a governmental authority of the United States, 4 1 any state, Canada, or any Canadian province. 4 2 Sec. 7. NEW SECTION. 502.206A FEDERAL COVERED 4 3 SECURITIES. 4 4 1. The administrator, by rule or order, may require the 4 5 filing of any or all of the following documents with respect 4 6 to a federal covered security under section 18(b)(2) of the 4 7 Securities Act of 1933: 4 8 a. Prior to the initial offer of a federal covered 4 9 security in this state, all documents that are part of a 4 10 current federal registration statement filed with the United 4 11 States securities and exchange commission under the Securities 4 12 Act of 1933, together with a consent to service of process 4 13 signed by the issuer and a filing fee calculated as specified 4 14 in section 502.208, subsections 2 and 13. 4 15 b. After the initial offer of a federal covered security 4 16 in this state, all documents that are part of an amendment to 4 17 a current federal registration statement filed with the United 4 18 States securities and exchange commission under the Securities 4 19 Act of 1933. 4 20 c. An annual or periodic report of the value of the 4 21 federal covered securities offered or sold in this state 4 22 together with the applicable filing fee, if any, calculated as 4 23 specified in section 502.208, subsections 2 and 13. 4 24 2. With respect to any security that is a federal covered 4 25 security under section 18(b)(4)(D) of the Securities Act of 4 26 1933, the administrator, by rule or otherwise, may require the 4 27 issuer to file a notice on Form D as promulgated by the 4 28 securities and exchange commission and a consent to service of 4 29 process signed by the issuer not later than fifteen days after 4 30 the first sale of the federal covered security in this state 4 31 together with a filing fee, as established by rule adopted by 4 32 the administrator. 4 33 3. The administrator, by rule or otherwise, may require 4 34 the filing of any document filed with the securities and 4 35 exchange commission under the Securities Act of 1933 with 5 1 respect to a federal covered security under section 18(b)(3) 5 2 or (4) of the Securities Act of 1933, together with a filing 5 3 fee established by rule adopted by the administrator which 5 4 shall not be more than one hundred dollars. 5 5 4. The administrator may issue a stop order suspending the 5 6 offer and sale of a federal covered security, except a federal 5 7 covered security under section 18(b)(1) of the Securities Act 5 8 of 1933, if the administrator finds that both of the following 5 9 apply: 5 10 a. The order is in the public interest. 5 11 b. The person against whom the stop order is issued has 5 12 failed to comply with a requirement provided in this section. 5 13 5. The administrator, by rule or otherwise, may waive any 5 14 requirement of this section if the administrator finds good 5 15 cause that the requirement is not necessary in order to carry 5 16 out the purposes of the section. 5 17 Sec. 8. Section 502.207A, subsection 5, Code 1997, is 5 18 amended to read as follows: 5 19 5. In connection with an offering registered under this 5 20 section, a person may be registered as an agent of the issuer 5 21 under section 502.301 by the filing of an application by the 5 22 issuer with the administrator for the registration of the 5 23 person as an agent of the issuer and the paying of a fee of 5 24 ten dollars. Notwithstanding any other provision of this 5 25 chapter, the registration of the agent shall be effective 5 26 until withdrawn by the issuer or until the securities 5 27 registered pursuant to the registration statement have all 5 28 been sold, whichever occurs first. The registration of an 5 29 agent shall become effective when ordered by the administrator 5 30 or on the fifth business day after the agent's application has 5 31 been filed with the administrator, whichever occurs first, and 5 32 the administrator shall not impose further conditions upon the 5 33 registration of the agent. However, the administrator may 5 34 deny, revoke, suspend, or withdraw the registration of the 5 35 agent at any time as provided in section 502.304.For the6 1purposes of registration of agents under this section, the6 2issuer and agent are not required to post bond.An agent 6 3 registered solely pursuant to this section is entitled to sell 6 4 only securities registered under this section. 6 5 Sec. 9. Section 502.302, subsection 4, Code 1997, is 6 6 amended to read as follows: 6 7 4. The administrator may by rule or order require a 6 8 minimum capital for broker-dealersand establish limitations6 9on aggregate indebtedness of broker-dealers in relation to net6 10capital and may classify broker-dealers for purposes of such6 11requirementssubject to the limitations of section 15 of the 6 12 Securities Exchange Act of 1934.The administrator may not,6 13however, with respect to any broker-dealer who is a member of6 14the national association of securities dealers, inc., or who6 15is registered with the securities and exchange commission,6 16require a higher minimum capital or lower ratio of aggregate6 17indebtedness to net capital than is contained in the rules and6 18regulations adopted by such association or commission.6 19 Sec. 10. Section 502.303, subsections 1 and 2, Code 1997, 6 20 are amended to read as follows: 6 21 1. Every registered broker-dealer shall make and keepsuch6 22 accounts, correspondence, memoranda, papers, books, and other 6 23 records as the administratorby rule prescribesmay prescribe 6 24 by rule or order, except as provided by section 15 of the 6 25 Securities Exchange Act of 1934.All records so required shall6 26be preserved for three years unless the administrator by rule6 27prescribes otherwise for particular types of records. All6 28required records shall be kept within this state or shall, at6 29the request of the administrator, be made available at any6 30time for examination at the administrator's option either in6 31the principal office of the registrant or by production of6 32exact copies thereof in this state.6 33 2. Every registered broker-dealer shall file such 6 34 financial reports as the administratorby ruleprescribes by 6 35 rule or order, not to exceed the limitations provided in 7 1 section 15 of the Securities Exchange Act of 1934. 7 2 Sec. 11. Section 502.304, subsection 1, paragraph e, Code 7 3 1997, is amended to read as follows: 7 4 e. Is the subject of an order of the administrator 7 5 denying, suspending, or revoking registration as a broker- 7 6 dealer, agent, or insurance agent; 7 7 Sec. 12. Section 502.501, subsection 1, paragraph a, Code 7 8 1997, is amended to read as follows: 7 9 a. Violates section 502.201, subsection 1 or 2, or section 7 10 502.208, subsection 12, or section 502.406, subsection 2, 7 11 paragraph "b", or 7 12 Sec. 13. Section 502.602, Code 1997, is amended to read as 7 13 follows: 7 14 502.602 FILING OF SALES AND ADVERTISING LITERATURE. 7 15 The administrator may by rule or order require the filing 7 16 of any prospectus, pamphlet, circular, form letter, 7 17 advertisement, or other sales literature or advertising 7 18 communication addressed or intended for distribution to 7 19 prospective investors, unless the security or transaction is a 7 20 federal covered security or is exempted by section 502.202 or 7 21 502.203. The administrator may by rule or order prohibit the 7 22 publication, circulation or use of any advertising deemed 7 23 false or misleading. 7 24 Sec. 14. EFFECTIVE DATE. This Act, being deemed of 7 25 immediate importance, takes effect upon enactment. 7 26 EXPLANATION 7 27 This bill amends a number of provisions included in chapter 7 28 502, regulating securities. The bill adds provisions relating 7 29 to federal covered securities regulated under the federal 7 30 Securities Act of 1933 or rules or regulations promulgated by 7 31 the securities and exchange commission. Under the federal 7 32 Act, these securities are exempted from registration 7 33 requirements. The bill revises the definition of "agent" to 7 34 include a person who deals in federal covered securities. The 7 35 bill provides that the administrator may require the filing of 8 1 documents relating to federal covered securities, including a 8 2 current federal registration statement, amendments to a 8 3 current federal registration statement, reports concerning the 8 4 value of federal covered securities, and any other documents 8 5 required to be filed with the securities and exchange 8 6 commission. The bill provides that the administrator may 8 7 issue a stop order suspending the offer and sale of certain 8 8 federal covered securities. It provides that the 8 9 administrator may also waive the filing requirements of the 8 10 bill for federal covered securities. 8 11 The bill adds limited liability partnerships to the types 8 12 of entities dealing in securities regulated under the chapter. 8 13 The bill eliminates a reference to the interstate commerce 8 14 commission which has been abolished by Congress. The bill 8 15 eliminates a reference, for purposes of registration of agents 8 16 under Code section 502.207A, to a surety bond required when an 8 17 offering is made. The bill provides for minimum capital 8 18 requirements for brokers. The bill allows the minimum capital 8 19 requirement to be set by order of the administrator as well as 8 20 by rule. The bill provides that the capital requirements are 8 21 subject to limitations of the federal Securities Exchange Act 8 22 of 1934 and eliminates provisions basing capital requirements 8 23 on rules and regulations adopted by the national association 8 24 of securities dealers, inc., or the United States securities 8 25 and exchange commission. The bill provides for the 8 26 application of disciplinary action against persons licensed as 8 27 insurance agents who are subject to sanctions. 8 28 The bill takes effect upon enactment. 8 29 LSB 1274DP 77 8 30 da/sc/14
Text: HSB00094 Text: HSB00096 Text: HSB00000 - HSB00099 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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