Authority: IC 23-19-6-5
Affected: IC 23-19
Sec. 1.
The following definitions apply throughout this article
unless the context otherwise requires:
(1) "Affiliate of or person affiliated with a
specified person" means a person who directly, or indirectly through one (1) or
more intermediaries, controls or is controlled by, or is under common control
with, the person specified.
(2)
"Aggregate offering price" means the sum of all:
(A) cash;
(B) services;
(C) property;
(D) notes;
(E) cancellation of debt; or
(F) other consideration;
received by an issuer for issuance of its securities. Where
securities are being offered for both cash and noncash consideration, the
aggregate offering price shall be based on the price at which the securities
are offered for cash. If securities are not offered for cash, the aggregate
offering price shall be based on the value of the consideration as established
by bona fide sales of that consideration made within a reasonable time or, in
the absence of sales, on the fair value as determined by an accepted
standard.
(3)
"Applicant" means the issuer, broker-dealer, agent, or other person executing
the application.
(4) "Associated
person" means:
(A) a partner;
(B) an officer;
(C) a director;
(D) a salesperson;
(E) a trader;
(F) a manager; or
(G) any employee;
handling funds or securities or soliciting transactions or
accounts for a broker-dealer.
(5) "Branch office" means any location where
one (1) or more associated persons of a member regularly conducts the business
of effecting any transactions in, or inducing or attempting to induce the
purchase or sale of any security, or is held out as such, excluding the
following:
(A) Any location that is
established solely for customer service or back office type, or both, functions
where no sales activities are conducted and that is not held out to the public
as a branch office.
(B) Any
location that is the associated person's primary residence, provided the
following:
(i) Only one (1) associated person,
or multiple associated persons who reside at that location and are members of
the same immediate family, conduct business at that location.
(ii) The location is not held out to the
public as an office, and the associated person does not meet with customers at
that location.
(iii) Neither
customer funds nor securities are handled at that location.
(iv) The associated person is assigned to a
designated branch office, and such designated branch office is reflected on all
business cards, stationery, advertisements, and other communications to the
public by the associated person.
(v) The associated person's correspondence
and communications with the public are subject to the firm's supervision in
accordance with Rule 3010.
(vi)
Electronic communications are made through the broker-dealer's electronic
system.
(vii) All orders are
entered through the designated branch office or an electronic system.
(viii) Written supervisory procedures
pertaining to supervision of sales activities conducted at the residence are
maintained by the broker-dealer.
(ix) A list of residence locations is
maintained by the broker-dealer.
(C) Any location, other than a primary
residence, that is used for securities business for less than thirty (30) days
in one (1) calendar year, provided that the broker-dealer complies with the
provisions of clause (B).
(D) Any
office of convenience, where associated persons occasionally and exclusively by
appointment meet with customers, that is not held out to the public as an
office.
(E) Any location that is
not used primarily to engage in nonsecurities activities and in which the
associated person or persons effects not more than twenty-five (25) securities
transactions in any one (1) calendar year; provided that any advertisement or
sales literature identifying the location also sets forth the address and
telephone number of the location from which the associated person or persons
conducting business at the nonbranch location are directly
supervised.
(F) The floor of a
registered national securities exchange where a broker-dealer conducts a direct
access business with public customers.
(G) A temporary location established in
response to a business continuity plan.
(6) "Commissioner" means the Indiana
securities commissioner appointed under IC 23-19-6-1(a).
(7) "Division" means the Indiana securities
division.
(8) "Initiation of
proceedings" or "order for proceedings" means any:
(A) summary order issued under IC
23-19-2-4(a), IC 23-19-3-6, or IC 23-19-4-12;
(B) ex parte order issued under IC 23-19-6-4;
or
(C) notice of hearing issued at
the instance of the commissioner.
(9) "National securities association" means
an association registered with the U.S. Securities and Exchange Commission
under Section 15A of the Securities Exchange Act of 1934 (15 U.S.C.
78o-3)
.
(10) "National securities
exchange" means an exchange registered with the U.S. Securities and Exchange
Commission under Section 6 of the Securities Exchange Act of 1934
(15 U.S.C.
78f) .
(11) "Net liquid capital" means net capital
as defined in Rule 15c3-1(c) (2) (17 CFR
240.15c
3-
1(c)(2)) under
the Securities Exchange Act of 1934, promulgated by the U.S. Securities and
Exchange Commission.
(12)
"Offering" means all offers and sales of securities by an issuer that are
integrated and considered as part of a single offering of securities by the
issuer. Offers and sales that are made more than six (6) months before the
start of a putative offering under IC 23-19-2-2(14) or are made more than six
(6) months after completion of a putative offering will not be considered part
of that offering, so long as during those six (6) month periods there are no
offers or sales of securities by or for the issuer that are of the same or a
similar class of those offered or sold under IC 23-19-2-2(14), other than those
offers or sales of securities under an employee benefit plan as defined in Rule
405 (17 CFR
230.405) under the Securities Act of 1933. If
the issuer offers or sells securities within the six (6) month periods, the
determination as to whether separate sales of securities are part of the same
offering depends on the particular facts and circumstances of the sales,
including the following:
(A) Whether the
sales are part of a single plan of financing.
(B) Whether the sales involve issuance of the
same class of securities.
(C)
Whether the sales have been made at or about the same time.
(D) Whether the same type of consideration is
received.
(E) Whether the sales are
made for the same general purpose.
(13) "Office of supervisory jurisdiction"
means any office of a broker-dealer at which one (1) or more of the following
functions takes place:
(A) Order execution or
market making, or both.
(B)
Structuring of public offerings or private placements.
(C) Maintaining custody of customers' funds
or securities, or both.
(D) Final
acceptance (approval) of new accounts on behalf of the broker-dealer.
(E) Review and endorsement of customer orders
under clause (D).
(F) Final
approval of advertising or sales literature for use by persons associated with
the broker-dealer, except for an office that solely conducts final approval of
research reports.
(G)
Responsibility for supervising the activities of persons associated with the
broker-dealer at one (1) or more other branch offices of the
broker-dealer.
(14)
"Officer" means and shall be limited to the:
(A) president;
(B) first vice president;
(C) secretary; and
(D) treasurer;
of a corporation or the equivalent positions in another type
of business organization.
(15) "Purchaser representative" means any
person who satisfies all of the following conditions or who the issuer
reasonably believes satisfies all of the following conditions:
(A) Is not an affiliate, director, officer,
or other employee of the issuer, or beneficial owner of ten percent (10%) or
more of any class of the equity securities or ten percent (10%) or more of the
equity interest in the issuer, except where the purchaser is a:
(i) relative of the purchaser representative
by blood, marriage, or adoption and not more remote than a first
cousin;
(ii) trust or estate in
which the purchaser representative and any person related to the purchaser as
specified in item (i), collectively, have more than fifty percent (50%) of the
beneficial interest (excluding contingent interest) or of which the purchaser
representative serves as trustee, executor, or in any similar capacity;
or
(iii) corporation or other
organization of which the purchaser representative and any persons related to
the purchaser as specified in item (i) or (ii), collectively, are the
beneficial owners of more than fifty percent (50%) of the equity securities
(excluding directors' qualifying shares) or equity interests.
(B) Has the knowledge and
experience in financial and business matters that the person is capable of
evaluating:
(i) alone;
(ii) together with other purchaser
representatives of the purchaser; or
(iii) together with the purchaser;
the merits and risks of the prospective investment.
(C) Is acknowledged by
the purchaser, in writing, during the course of the specific transaction, to be
the purchaser's purchaser representative in connection with evaluating the
merits and risks of the specific prospective investment.
(D) Discloses to the purchaser, in writing,
prior to the acknowledgment specified in clause (C), any material relationship
between himself or herself or his or her affiliates and the issuer or its
affiliates that:
(i) then exist;
(ii) is mutually understood to be
contemplated; or
(iii) has existed
at any time during the previous two (2) years;
and any compensation received or to be received as a result
of the relationship.
(16) "Secretary of state" means the secretary
of state of Indiana.
(17)
"Underwriter" includes any individual or organization that offers securities
for the direct or indirect benefit of the issuer of the securities whether on a
firm or best-efforts basis.