HB 302: "An Act adopting the Uniform Securities Act; and providing for an effective date."
00 HOUSE BILL NO. 302 01 "An Act adopting the Uniform Securities Act; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 45 is amended by adding a new chapter to read: 04 Chapter 56. Uniform Securities Act. 05 Article 1. General Provisions. 06 Sec. 45.56.105. Electronic records and signatures. This chapter modifies, 07 limits, and supersedes 15 U.S.C. 7001 - 7031 (Electronic Signatures in Global and 08 National Commerce Act), but does not modify, limit, or supersede 15 U.S.C. 7001(c) 09 or authorize electronic delivery of any of the notices described in 15 U.S.C. 7003(b). 10 This chapter authorizes the filing of records and signatures, when specified by 11 provisions of this chapter or by a regulation adopted or order issued under this chapter, 12 in a manner consistent with 15 U.S.C. 7004(a). 13 Article 2. Exemptions from Registration of Securities. 14 Sec. 45.56.201. Exempt securities. The following securities are exempt from 15 the requirements of AS 45.56.301 - 45.56.306 and 45.56.504:
01 (1) a security, including a revenue obligation or a separate security, as 02 defined in 17 C.F.R. 230.131 adopted under 15 U.S.C. 77a - 77aa (Securities Act of 03 1933), issued, insured, or guaranteed by the United States; by a state; by a political 04 subdivision of a state; by a public authority, agency, or instrumentality of one or more 05 states; by a political subdivision of one or more states; or by a person controlled or 06 supervised by and acting as an instrumentality of the United States under authority 07 granted by the United States Congress; or a certificate of deposit for any of the 08 foregoing; 09 (2) a security issued, insured, or guaranteed by a foreign government 10 with which the United States maintains diplomatic relations, or by any of its political 11 subdivisions, if the security is recognized as a valid obligation by the issuer, insurer, or 12 guarantor; 13 (3) a security issued by and representing, or that will represent an 14 interest in or a direct obligation of or be guaranteed by, 15 (A) an international banking institution; 16 (B) a banking institution organized under the laws of the 17 United States; a member bank of the Federal Reserve System; or a depository 18 institution a substantial portion of the business of which consists or will consist 19 of receiving deposits or share accounts that are insured to the maximum 20 amount authorized by statute by the Federal Deposit Insurance Corporation, 21 the National Credit Union Share Insurance Fund, or a successor authorized by 22 federal law or exercising fiduciary powers that are similar to those permitted 23 for national banks under the authority of the United States Comptroller of 24 Currency under 12 U.S.C. 92a; or 25 (C) any other depository institution, unless, by a regulation or 26 order, the administrator proceeds under AS 45.56.204; 27 (4) a security issued by and representing an interest in, or a debt of, or 28 insured or guaranteed by, an insurance company authorized to do business in this 29 state; 30 (5) a security issued or guaranteed by a railroad, other common carrier, 31 public utility, or public utility holding company that is
01 (A) regulated with respect to its rates and charges by the United 02 States or a state; 03 (B) regulated with respect to the issuance or guarantee of the 04 security by the United States, a state, Canada, or a Canadian province or 05 territory; or 06 (C) a public utility holding company registered under 15 07 U.S.C. 79 - 79z-6 (Public Utility Holding Company Act of 1935) or a 08 subsidiary of the registered holding company within the meaning of that Act; 09 (6) a federal covered security specified in 15 U.S.C. 77r(b)(1) or 10 adopted by rule under that provision or a security listed or approved for listing on 11 another securities market specified by regulation under this chapter; a put or a call 12 option contract; a warrant; a subscription right on or with respect to the security; an 13 option or similar derivative security on a security or an index of securities or foreign 14 currencies issued by a clearing agency registered under 15 U.S.C. 78a - 78lll 15 (Securities Exchange Act of 1934) and listed or designated for trading on a national 16 securities exchange, a facility of a national securities exchange, or a facility of a 17 national securities association registered under 15 U.S.C. 78a - 78lll (Securities 18 Exchange Act of 1934) or an offer or sale of the underlying security in connection 19 with the offer, sale, or exercise of an option or other security that was exempt when 20 the option or other security was written or issued; or an option or a derivative security 21 designated by the Securities and Exchange Commission under 15 U.S.C. 78i(b); 22 (7) a security issued by a person organized and operated exclusively 23 for religious, educational, benevolent, fraternal, charitable, social, athletic, or 24 reformatory purposes, or as a chamber of commerce, and not for pecuniary profit, no 25 part of the net earnings of which inures to the benefit of a private stockholder or other 26 person, or a security of a company that is excluded from the definition of an 27 investment company under 15 U.S.C. 80a-3(c)(10)(B), except that, with respect to the 28 offer or sale of a note, bond, debenture, or other evidence of indebtedness issued by 29 the person, a regulation may be adopted under this chapter limiting the availability of 30 this exemption by classifying securities, persons, and transactions, imposing different 31 requirements for different classes, specifying, with respect to (B) of this paragraph, the
01 scope of the exemption and the grounds for denial or suspension, and requiring an 02 issuer 03 (A) to file a notice specifying the material terms of the 04 proposed offer or sale and copies of any proposed sales and advertising 05 literature to be used and provide that the exemption becomes effective if the 06 administrator does not disallow the exemption within the period established by 07 the regulation; 08 (B) to file a request for exemption authorization for which a 09 regulation adopted under this chapter may specify the scope of the exemption, 10 the requirement of an offering statement, the filing of sales and advertising 11 literature, the filing of consent to service of process complying with 12 AS 45.56.611, and grounds for denial or suspension of the exemption; or 13 (C) to register under AS 45.56.304; 14 (8) a member's or owner's interest in, or a retention certificate or like 15 security given in lieu of a cash patronage dividend issued by, a cooperative organized 16 and operated as a nonprofit membership cooperative under the cooperative laws of a 17 state, but not a member's or owner's interest, retention certificate, or like security sold 18 to persons other than bona fide members of the cooperative; 19 (9) an equipment trust certificate with respect to equipment leased or 20 conditionally sold to a person if any security issued by the person would be exempt 21 under this section or would be a federal covered security under 15 U.S.C. 77r(b)(1); 22 and 23 (10) shares of membership stock in the Alaska Commercial Fishing 24 and Agriculture Bank, and other securities issued by that bank to members or in 25 connection with loans to members. 26 Sec. 45.56.202. Exempt transactions. The following transactions are exempt 27 from the requirements of AS 45.56.301 - 45.56.306 and 45.56.504: 28 (1) an isolated nonissuer transaction, whether effected by or through a 29 broker-dealer or not; 30 (2) a nonissuer transaction by or through a broker-dealer registered or 31 exempt from registration under this chapter and a resale transaction by a sponsor of a
01 unit investment trust registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company 02 Act of 1940) in a security of a class that has been outstanding in the hands of the 03 public for at least 90 days if, at the date of the transaction, 04 (A) the issuer of the security is engaged in business, the issuer 05 is not in the organizational stage or in bankruptcy or receivership, and the 06 issuer is not a blank check, blind pool, or shell company that does not have a 07 specific business plan or purpose or has indicated that its primary business plan 08 is to engage in a merger or combination of the business with or an acquisition 09 of an unidentified person; 10 (B) the security is sold at a price reasonably related to its 11 current market price; 12 (C) the security does not constitute the whole or part of an 13 unsold allotment to or a subscription or participation by the broker-dealer as an 14 underwriter of the security or a redistribution; 15 (D) a nationally recognized securities manual or its electronic 16 equivalent designated by a regulation adopted or order issued under this 17 chapter or a record filed with the Securities and Exchange Commission that is 18 publicly available contains 19 (i) a description of the business and operations of the 20 issuer; 21 (ii) the names of the issuer's executive officers and the 22 names of the issuer's directors, if any; 23 (iii) an audited balance sheet of the issuer as of a date 24 within 18 months before the date of the transaction or, in the case of a 25 reorganization or merger when the parties to the reorganization or 26 merger each had an audited balance sheet, a pro forma balance sheet for 27 the combined organization; and 28 (iv) an audited income statement for each of the issuer's 29 two immediately previous fiscal years or for the period of existence of 30 the issuer, whichever is shorter, or, in the case of a reorganization or 31 merger when each party to the reorganization or merger had audited
01 income statements, a pro forma income statement; and 02 (E) any one of the following requirements is met: 03 (i) the issuer of the security has a class of equity 04 securities listed on a national securities exchange registered under 15 05 U.S.C. 78f or designated for trading on the National Association of 06 Securities Dealers Automated Quotation System; 07 (ii) the issuer of the security is a unit investment trust 08 registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 09 1940); 10 (iii) the issuer of the security, including its 11 predecessors, has been engaged in continuous business for at least three 12 years; or 13 (iv) the issuer of the security has total assets of at least 14 $2,000,000 based on an audited balance sheet as of a date within 18 15 months before the date of the transaction or, in the case of a 16 reorganization or merger when the parties to the reorganization or 17 merger each had an audited balance sheet, a pro forma balance sheet for 18 the combined organization; 19 (3) a nonissuer transaction by or through a broker-dealer registered or 20 exempt from registration under this chapter in a security of a foreign issuer that is a 21 margin security defined in regulations or rules adopted by the Board of Governors of 22 the Federal Reserve System; 23 (4) a nonissuer transaction by or through a broker-dealer registered or 24 exempt from registration under this chapter in an outstanding security if the guarantor 25 of the security files reports with the Securities and Exchange Commission under the 26 reporting requirements of 15 U.S.C. 78m or 15 U.S.C. 78o(d); 27 (5) a nonissuer transaction by or through a broker-dealer registered or 28 exempt from registration under this chapter in a security that 29 (A) is rated at the time of the transaction by a nationally 30 recognized statistical rating organization in one of its four highest rating 31 categories; or
01 (B) has a fixed maturity or a fixed interest or dividend if 02 (i) a default has not occurred during the current fiscal 03 year or within the three previous fiscal years or, if the issuer has been in 04 business less than three fiscal years, during the existence of the issuer 05 and any predecessor in the payment of principal, interest, or dividends 06 on the security; and 07 (ii) the issuer is engaged in business, is not in the 08 organizational stage or in bankruptcy or receivership, and is not and has 09 not, within the previous 12 months, been a blank check, blind pool, or 10 shell company that does not have a specific business plan or purpose or 11 has indicated that its primary business plan is to engage in a merger or 12 combination of the business with or an acquisition of an unidentified 13 person; 14 (6) a nonissuer transaction by or through a broker-dealer registered or 15 exempt from registration under this chapter effecting an unsolicited order or offer to 16 purchase; 17 (7) a nonissuer transaction executed by a bona fide pledgee without the 18 purpose of evading this chapter; 19 (8) a nonissuer transaction by a federal covered investment adviser 20 with investments under management in excess of $100,000,000 acting in the exercise 21 of discretionary authority in a signed record for the account of others; 22 (9) a transaction in a security, whether or not the security or 23 transaction is otherwise exempt, in exchange for one or more bona fide outstanding 24 securities, claims, or property interests, or partly in exchange for one or more bona 25 fide outstanding securities, claims, or property interests and partly for cash if the terms 26 and conditions of the issuance and exchange or the delivery and exchange and the 27 fairness of the terms and conditions have been approved by the administrator after a 28 hearing; 29 (10) a transaction between the issuer or other person on whose behalf 30 the offering is made and an underwriter or among underwriters; 31 (11) a transaction in a note, bond, debenture, or other evidence of
01 indebtedness secured by a mortgage or other security agreement if 02 (A) the note, bond, debenture, or other evidence of 03 indebtedness is offered and sold with the mortgage or other security agreement 04 as a unit; 05 (B) a general solicitation or general advertisement of the 06 transaction is not made; and 07 (C) a commission or other remuneration is not paid or given, 08 directly or indirectly, to a person not registered under this chapter as a broker- 09 dealer or as an agent; 10 (12) a transaction by an executor, administrator of an estate, sheriff, 11 marshal, receiver, trustee in bankruptcy, guardian, or conservator; 12 (13) a sale or offer to sell to 13 (A) an institutional investor; 14 (B) a federal covered investment adviser; or 15 (C) any other person exempted by a regulation adopted or order 16 issued under this chapter; 17 (14) a sale or offer to sell securities by or on behalf of an issuer if the 18 transaction is part of a single issue in which 19 (A) not more than 25 purchasers are present in this state during 20 any 12 consecutive months, other than a person designated in (13) of this 21 section; 22 (B) a general solicitation or general advertising is not made in 23 connection with the sale of or offer to sell the securities; 24 (C) a commission or other remuneration is not paid or given, 25 directly or indirectly, to a person other than a broker-dealer registered under 26 this chapter or an agent registered under this chapter for soliciting a 27 prospective purchaser in this state; and 28 (D) the issuer reasonably believes that all the purchasers in this 29 state, other than those designated in (13) of this section, are purchasing for 30 investment; 31 (15) a transaction under an offer to existing security holders of the
01 issuer, including persons that, at the date of the transaction, are holders of convertible 02 securities, options, or warrants if a commission or other remuneration, other than a 03 standby commission, is not paid or given, directly or indirectly, for soliciting a 04 security holder in this state; 05 (16) an offer to sell, but not a sale of, a security not exempt from 06 registration under 15 U.S.C. 77a - 77aa (Securities Act of 1933) if 07 (A) a registration, offering statement, or similar record as 08 required under 15 U.S.C. 77a - 77aa (Securities Act of 1933) has been filed but 09 is not effective, or the offer is made in compliance with 17 C.F.R. 230.165, 10 adopted under 15 U.S.C. 77a - 77aa (Securities Act of 1933); and 11 (B) a stop order of which the offeror is aware has not been 12 issued against the offeror by the administrator or the Securities and Exchange 13 Commission, and an audit, inspection, or proceeding that is public and that 14 may culminate in a stop order is not known by the offeror to be pending; 15 (17) an offer to sell, but not a sale of, a security exempt from 16 registration under 15 U.S.C. 77a - 77aa (Securities Act of 1933) if 17 (A) a registration statement has been filed under this chapter 18 but is not effective; 19 (B) a solicitation of interest is provided in a record to offerees 20 in compliance with a regulation adopted by the administrator under this 21 chapter; and 22 (C) a stop order of which the offeror is aware has not been 23 issued by the administrator under this chapter, and an audit, inspection, or 24 proceeding that may culminate in a stop order is not known by the offeror to be 25 pending; 26 (18) a transaction involving the distribution of the securities of an 27 issuer to the security holders of another person in connection with a merger, 28 consolidation, exchange of securities, sale of assets, or other reorganization to which 29 the issuer or its parent or subsidiary and the other person or its parent or subsidiary are 30 parties; 31 (19) a rescission offer, sale, or purchase under AS 45.56.510;
01 (20) an offer to sell or sale of a security to a person not a resident of 02 this state and not present in the state if the offer or sale does not constitute a violation 03 of the laws of the state or foreign jurisdiction in which the offeree or purchaser is 04 present and is not part of an unlawful plan or scheme to evade this chapter; 05 (21) employees' stock purchase, savings, option, profit-sharing, 06 pension, or similar benefit plan, including any securities, plan interests, and guarantees 07 issued under a compensatory benefit plan or compensation contract, contained in a 08 record, established by the issuer, the issuer's parent, the issuer's majority-owned 09 subsidiary, or the majority-owned subsidiary of the issuer's parent for the participation 10 of their employees, including offers to sell or sales of the securities to 11 (A) directors, general partners, trustees if the issuer is a 12 business trust, officers, consultants, and advisors; 13 (B) family members who acquire the securities from those 14 persons through gifts or domestic relations orders; 15 (C) former employees, directors, general partners, trustees, 16 officers, consultants, and advisors if those individuals were employed by or 17 providing services to the issuer when the securities were offered; and 18 (D) insurance agents who are exclusive insurance agents of the 19 issuer or the issuer's subsidiary or parent or who derive more than 50 percent 20 of their annual income from those organizations; 21 (22) a transaction involving 22 (A) a stock dividend or equivalent equity distribution, whether 23 the corporation or other business organization distributing the dividend or 24 equivalent equity distribution is the issuer or not, if nothing of value is given 25 by stockholders or other equity holders for the dividend or equivalent equity 26 distribution other than the surrender of a right to a cash or property dividend if 27 each stockholder or other equity holder may elect to take the dividend or 28 equivalent equity distribution in cash, property, or stock; 29 (B) an act incident to a judicially approved reorganization in 30 which a security is issued in exchange for one or more outstanding securities, 31 claims, or property interests, or partly in exchange for one or more outstanding
01 securities, claims, or property interests and partly for cash; or 02 (C) the solicitation of tenders of securities by an offeror in a 03 tender offer in compliance with 17 C.F.R. 230.162, adopted under 15 U.S.C. 04 77a - 77aa (Securities Act of 1933); or 05 (23) a nonissuer transaction in an outstanding security by or through a 06 broker-dealer registered or exempt from registration under this chapter if the issuer is a 07 reporting issuer in a foreign jurisdiction designated by this paragraph or by a 08 regulation adopted or order issued under this chapter; the issuer has been subject to 09 continuous reporting requirements in the foreign jurisdiction for not less than 180 days 10 before the transaction; and the security is listed on the foreign jurisdiction's securities 11 exchange that has been designated by this paragraph or by a regulation adopted or 12 order issued under this chapter, or is a security of the same issuer that is of senior or 13 substantially equal rank to the listed security or is a warrant or right to purchase or 14 subscribe to any of the foregoing; for purposes of this paragraph, Canada, together 15 with its provinces and territories, is a designated foreign jurisdiction, and TSX, Inc. 16 (formerly known as the Toronto Stock Exchange, Inc.) is a designated securities 17 exchange; after an administrative hearing in compliance with AS 44.62.330 - 18 44.62.630 (Administrative Procedure Act), the administrator, by a regulation adopted 19 or order issued under this chapter, may revoke the designation of a securities exchange 20 under this paragraph if the administrator finds that revocation is necessary or 21 appropriate in the public interest and for the protection of investors. 22 Sec. 45.56.203. Additional exemptions and waivers. A regulation adopted 23 or order issued under this chapter may exempt a security, transaction, or offer; a 24 regulation adopted under this chapter may exempt a class of securities, transactions, or 25 offers from any or all of the requirements of AS 45.56.301 - 45.56.306 and 45.56.504; 26 and an order issued under this chapter may waive, in whole or in part, any or all of the 27 conditions for an exemption or offer under AS 45.56.201 and 45.56.202. 28 Sec. 45.56.204. Denial, suspension, revocation, condition, or limitation of 29 exemptions. (a) Except with respect to a federal covered security or a transaction 30 involving a federal covered security, an order under this chapter may deny, suspend 31 application of, condition, limit, or revoke an exemption created under
01 AS 45.56.201(3)(C), (7), or (8) or 45.56.202 or an exemption or waiver created under 02 AS 45.56.203 with respect to a specific security, transaction, or offer. An order under 03 this subsection may be issued only under the procedures in AS 45.56.306(d) or 04 45.56.604 and only prospectively. 05 (b) A person does not violate AS 45.56.301, 45.56.303 - 45.56.306, 45.56.504, 06 or 45.56.510 by an offer to sell, offer to purchase, sale, or purchase effected after the 07 entry of an order issued under this section if the person did not know, and in the 08 exercise of reasonable care could not have known, of the order. 09 Article 3. Registration of Securities and Notice Filing of Federal Covered Securities. 10 Sec. 45.56.301. Securities registration requirement. A person may not offer 11 or sell a security in the state unless 12 (1) the security is a federal covered security; 13 (2) the security, transaction, or offer is exempted from registration 14 under AS 45.56.201 - 45.56.203; or 15 (3) the security is registered under this chapter. 16 Sec. 45.56.302. Notice filing. (a) With respect to a federal covered security, 17 as defined in 15 U.S.C. 77r(b)(2), that is not otherwise exempt under AS 45.56.201 - 18 45.56.203, a regulation adopted or order issued under this chapter may require the 19 filing of any or all of the following records: 20 (1) before the initial offer of a federal covered security in the state, all 21 records that are part of a federal registration statement filed with the Securities and 22 Exchange Commission under 15 U.S.C. 77a - 77aa (Securities Act of 1933) and a 23 consent to service of process complying with AS 45.56.611 signed by the issuer and 24 the payment of a fee established in a regulation adopted under this chapter; 25 (2) after the initial offer of the federal covered security in the state, all 26 records that are part of an amendment to a federal registration statement filed with the 27 Securities and Exchange Commission under 15 U.S.C. 77a - 77aa (Securities Act of 28 1933); and 29 (3) to the extent necessary or appropriate to compute fees, a report of 30 the value of the federal covered securities sold or offered to persons present in the 31 state if the sales data are not included in records filed with the Securities and
01 Exchange Commission and payment of a fee established in a regulation adopted under 02 this chapter. 03 (b) A notice filing under (a) of this section is effective for one year 04 commencing on the later of the notice filing or the effectiveness of the offering filed 05 with the Securities and Exchange Commission. On or before expiration, the issuer 06 may renew a notice filing by filing a copy of those records filed by the issuer with the 07 Securities and Exchange Commission that are required by a regulation adopted or 08 order issued under this chapter to be filed and by paying a renewal fee established in a 09 regulation adopted under this chapter. A previously filed consent to service of process 10 complying with AS 45.56.611 may be incorporated by reference in a renewal. A 11 renewed notice filing becomes effective upon the expiration of the filing being 12 renewed. 13 (c) With respect to a security that is a federal covered security under 15 U.S.C. 14 77r(b)(4)(D), a regulation adopted under this chapter may require a notice filing by or 15 on behalf of an issuer to include a copy of Form D, including the Appendix, as 16 adopted by the Securities and Exchange Commission, and a consent to service of 17 process complying with AS 45.56.611 signed by the issuer not later than 15 days after 18 the first sale of the federal covered security in the state and the payment of a fee 19 established in a regulation adopted under this chapter; and the payment of a fee 20 established in a regulation adopted under this chapter for any late filing. 21 (d) Except with respect to a federal security under 15 U.S.C. 77r(b)(1), if the 22 administrator finds that there is a failure to comply with a notice or fee requirement of 23 this section, the administrator may issue a stop order suspending the offer and sale of a 24 federal covered security in the state. If the deficiency is corrected, the stop order is 25 void as of the time of its issuance and a penalty may not be imposed by the 26 administrator. 27 Sec. 45.56.303. Securities registration by coordination. (a) A security for 28 which a registration statement has been filed under 15 U.S.C. 77a - 77aa (Securities 29 Act of 1933) in connection with the same offering may be registered by coordination 30 under this section. 31 (b) A registration statement and accompanying records under this section must
01 contain or be accompanied by the following records in addition to the information 02 specified in AS 45.56.305 and a consent to service of process complying with 03 AS 45.56.611: 04 (1) a copy of the latest form of prospectus filed under 15 U.S.C. 77a - 05 77aa (Securities Act of 1933); 06 (2) a copy of the articles of incorporation and bylaws or their 07 substantial equivalents currently in effect; a copy of any agreement with or among 08 underwriters; a copy of any indenture or other instrument governing the issuance of 09 the security to be registered; and a specimen, copy, or description of the security that 10 is required by a regulation adopted or order issued under this chapter; 11 (3) copies of any other information or any other records filed by the 12 issuer under 15 U.S.C. 77a - 77aa (Securities Act of 1933) requested by the 13 administrator; and 14 (4) an undertaking to forward each amendment to the federal 15 prospectus, other than an amendment that delays the effective date of the registration 16 statement, promptly after it is filed with the Securities and Exchange Commission. 17 (c) A registration statement under this section becomes effective 18 simultaneously with or subsequent to the federal registration statement when all the 19 following conditions are satisfied: 20 (1) a stop order under (d) of this section or AS 45.56.306 or issued by 21 the Securities and Exchange Commission is not in effect, and a proceeding is not 22 pending against the issuer under AS 45.56.306; and 23 (2) the registration statement has been on file for at least 20 days or a 24 shorter period provided by a regulation adopted or order issued under this chapter. 25 (d) The registrant shall promptly notify the administrator in a record of the 26 date when the federal registration statement becomes effective and the content of any 27 price amendment and shall promptly file a record containing the price amendment. If 28 the notice is not timely received, the administrator may issue a stop order, without 29 prior notice or hearing, retroactively denying effectiveness to the registration 30 statement or suspending its effectiveness until compliance with this section. The 31 administrator shall promptly notify the registrant of an order by telegram, telephone,
01 or electronic means and promptly confirm this notice by a record. If the registrant 02 subsequently complies with the notice requirements of this section, the stop order is 03 void as of the date of its issuance. 04 (e) If the federal registration statement becomes effective before each of the 05 conditions in this section is satisfied or is waived by the administrator, the registration 06 statement is automatically effective under this chapter when all the conditions are 07 satisfied or waived. If the registrant notifies the administrator of the date when the 08 federal registration statement is expected to become effective, the administrator shall 09 promptly notify the registrant by telegram, telephone, or electronic means and 10 promptly confirm this notice by a record, indicating whether all the conditions are 11 satisfied or waived and whether the administrator intends the institution of a 12 proceeding under AS 45.56.306. The notice by the administrator does not preclude 13 the institution of a proceeding under AS 45.56.306. 14 Sec. 45.56.304. Securities registration by qualification. (a) A security may 15 be registered by qualification under this section. 16 (b) A registration statement under this section must contain the information or 17 records specified in AS 45.56.305, a consent to service of process complying with 18 AS 45.56.611, and, if required by a regulation adopted under this chapter, the 19 following information or records: 20 (1) with respect to the issuer and any significant subsidiary, the name, 21 address, and form of organization of the issuer and subsidiary; the state or foreign 22 jurisdiction and date of organization of the issuer and subsidiary; the general character 23 and location of the business of the issuer and subsidiary; a description of the physical 24 properties and equipment of the issuer and subsidiary; and a statement of the general 25 competitive conditions in the industry or business in which the issuer and subsidiary 26 are or will be engaged; 27 (2) with respect to each director and officer of the issuer and other 28 person having a similar status or performing similar functions, the person's name, 29 address, and principal occupation for the previous five years; the amount of securities 30 of the issuer held by the person as of the 30th day before the filing of the registration 31 statement; the amount of the securities covered by the registration statement to which
01 the person has indicated an intention to subscribe; and a description of any material 02 interest of the person in any material transaction with the issuer or a significant 03 subsidiary effected within the previous three years or proposed to be effected; 04 (3) with respect to persons covered by (2) of this subsection, the 05 aggregate sum of the remuneration paid to those persons during the previous 12 06 months and estimated to be paid during the next 12 months, directly or indirectly, by 07 the issuer, and all predecessors, parents, subsidiaries, and affiliates of the issuer; 08 (4) with respect to a person owning of record or owning beneficially, if 09 known, 10 percent or more of the outstanding shares of any class of equity security of 10 the issuer, the information specified in (2) of this subsection, other than the person's 11 occupation; 12 (5) with respect to a promoter, if the issuer was organized within the 13 previous three years, the information or records specified in (2) of this subsection, any 14 amount paid to the promoter within that period or intended to be paid to the promoter, 15 and the consideration for the payment; 16 (6) with respect to a person on whose behalf any part of the offering is 17 to be made in a nonissuer distribution, the person's name and address; the amount of 18 securities of the issuer held by the person as of the date of the filing of the registration 19 statement; a description of any material interest of the person in any material 20 transaction with the issuer or any significant subsidiary effected within the previous 21 three years or proposed to be effected; and a statement of the reasons for making the 22 offering; 23 (7) the capitalization and long-term debt, on both a current and pro 24 forma basis, of the issuer and any significant subsidiary, including a description of 25 each security outstanding or being registered or otherwise offered, and a statement of 26 the amount and kind of consideration, whether in the form of cash, physical assets, 27 services, patents, goodwill, or anything else of value, for which the issuer or any 28 subsidiary has issued its securities within the previous two years or is obligated to 29 issue its securities; 30 (8) the kind and amount of securities to be offered; the proposed 31 offering price or the method by which the offering price is to be computed; any
01 variation at which a proportion of the offering is to be made to a person or class of 02 persons other than the underwriters, with a specification of the person or class; the 03 basis on which the offering is to be made if otherwise than for cash; the estimated 04 aggregate underwriting and selling discounts or commissions and finders' fees, 05 including separately cash, securities, contracts, or anything else of value to accrue to 06 the underwriters or finders in connection with the offering or, if the selling discounts 07 or commissions are variable, the basis of determining them and their maximum and 08 minimum amounts; the estimated amounts of other selling expenses, including legal, 09 engineering, and accounting charges; the name and address of each underwriter and 10 each recipient of a finder's fee; a copy of any underwriting or selling group agreement 11 under which the distribution is to be made, or the proposed form of an underwriting or 12 selling group agreement whose terms have not yet been determined; and a description 13 of the plan of distribution of any securities that are to be offered other than through an 14 underwriter; 15 (9) the estimated monetary proceeds to be received by the issuer from 16 the offering; the purposes for which the proceeds are to be used by the issuer; the 17 estimated amount to be used for each purpose; the order or priority in which the 18 proceeds will be used for the purposes stated; the amounts of any funds to be raised 19 from other sources to achieve the purposes stated; the sources of the funds; and, if a 20 part of the proceeds is to be used to acquire property, including goodwill, other than in 21 the ordinary course of business, the names and addresses of the vendors, the purchase 22 price, the names of any persons that have received commissions in connection with the 23 acquisition, and the amounts of the commissions and other expenses in connection 24 with the acquisition, including the cost of borrowing money to finance the acquisition; 25 (10) a description of any stock options or other security options 26 outstanding or to be created in connection with the offering, and the amount of those 27 options held or to be held by each person required to be named in (2), (4), (5), (6), or 28 (8) of this subsection and by any person that holds or will hold 10 percent or more in 29 the aggregate of those options; 30 (11) the dates of, parties to, and general effect, concisely stated, of 31 each managerial or other material contract made or to be made other than in the
01 ordinary course of business to be performed in whole or in part at or after the filing of 02 the registration statement or that was made within the previous two years, and a copy 03 of each contract; 04 (12) a description of any pending litigation, action, or proceeding to 05 which the issuer is a party and that materially affects the issuer's business or assets, 06 and any litigation, action, or proceeding known to be contemplated by governmental 07 authorities; 08 (13) a copy of any prospectus, pamphlet, circular, form letter, 09 advertisement, or other sales literature intended as of the effective date of the 10 registration statement to be used in connection with the offering and any solicitation of 11 interest used in compliance with AS 45.56.202(17)(B); 12 (14) a specimen or copy of the security being registered, unless the 13 security is uncertificated; a copy of the issuer's articles of incorporation and bylaws or 14 their substantial equivalents, in effect; and a copy of any indenture or other instrument 15 covering the security to be registered; 16 (15) a signed or conformed copy of an opinion of counsel concerning 17 the legality of the security being registered, with an English translation if it is in a 18 language other than English, that states whether the security when sold will be validly 19 issued, fully paid, nonassessable and, if a debt security, a binding obligation of the 20 issuer; 21 (16) a signed or conformed copy of a consent of any accountant, 22 engineer, appraiser, or other person whose profession gives authority for a statement 23 made by the person if the person is named as having prepared or certified a report or 24 valuation, other than an official record, that is public, that is used in connection with 25 the registration statement; 26 (17) a balance sheet of the issuer as of a date within four months 27 before the filing of the registration statement; a statement of income and a statement of 28 cash flows for each of the three fiscal years preceding the date of the balance sheet and 29 for any period between the close of the immediately previous fiscal year and the date 30 of the balance sheet, or for the period of the issuer's and any predecessor's existence if 31 less than three years; and, if any part of the proceeds of the offering is to be applied to
01 the purchase of a business, the financial statements that would be required if that 02 business were the registrant; and 03 (18) any additional information or records required by a regulation 04 adopted or order issued under this chapter. 05 (c) A registration statement under this section becomes effective 30 days, or 06 any shorter period provided by a regulation adopted or order issued under this chapter, 07 after the date the registration statement or the last amendment other than a price 08 amendment is filed if 09 (1) a stop order is not in effect and a proceeding is not pending under 10 AS 45.56.306; 11 (2) the administrator has not issued an order under AS 45.56.306 12 delaying effectiveness; or 13 (3) the applicant or registrant has not requested that effectiveness be 14 delayed. 15 (d) The administrator may delay effectiveness once for not more than 90 days 16 if the administrator determines the registration statement is not complete in all 17 material respects and promptly notifies the applicant or registrant of that 18 determination. The administrator may also delay effectiveness for a further period of 19 not more than 30 days if the administrator determines that the delay is necessary or 20 appropriate. 21 (e) A regulation adopted or order issued under this chapter may require as a 22 condition of registration under this section that a prospectus containing a specified part 23 of the information or record specified in (b) of this section be sent or given to each 24 person to which an offer is made, before or concurrently, with the earliest of 25 (1) the first offer made in a record to the person other than by means of 26 a public advertisement, by or for the account of the issuer or another person on whose 27 behalf the offering is being made or by an underwriter or broker-dealer that is offering 28 part of an unsold allotment or subscription taken by the person as a participant in the 29 distribution; 30 (2) the confirmation of a sale made by or for the account of the person; 31 (3) payment under the sale; or
01 (4) delivery of the security under the sale. 02 Sec. 45.56.305. Securities registration filings. (a) A registration statement 03 may be filed by the issuer, a person on whose behalf the offering is to be made, or a 04 broker-dealer registered under this chapter. 05 (b) A person filing a registration statement shall pay a filing fee established by 06 a regulation adopted under this chapter. If a registration statement is withdrawn 07 before the effective date of the registration statement or a preeffective stop order is 08 issued under AS 45.56.306, the administrator shall retain an amount of the fee 09 established by a regulation adopted under this chapter. 10 (c) A registration statement filed under AS 45.56.303 or 45.56.304 must 11 specify 12 (1) the amount of securities to be offered in the state; 13 (2) the states in which a registration statement or similar record in 14 connection with the offering has been or is to be filed; and 15 (3) any adverse order, judgment, or decree issued in connection with 16 the offering by a state securities regulator, the Securities and Exchange Commission, 17 or a court. 18 (d) A record filed under this chapter or former AS 45.55 within five years 19 preceding the filing of a registration statement may be incorporated by reference in the 20 registration statement to the extent that the record is currently accurate. 21 (e) In the case of a nonissuer distribution, information or a record may not be 22 required under (i) of this section or AS 45.56.304 unless it is known to the person 23 filing the registration statement or to the person on whose behalf the distribution is to 24 be made or unless it can be furnished by those persons without unreasonable effort or 25 expense. 26 (f) A regulation adopted or order issued under this chapter may require as a 27 condition of registration that a security issued within the previous five years or to be 28 issued to a promoter for a consideration substantially less than the public offering 29 price or to a person for a consideration other than cash be deposited in escrow and that 30 the proceeds from the sale of the registered security in the state be impounded until the 31 issuer receives a specified amount from the sale of the security, either in the state or
01 elsewhere. The conditions of any escrow or impoundment required under this 02 subsection may be established by a regulation adopted or order issued under this 03 chapter, but the administrator may not reject a depository institution solely because of 04 its location in another state. 05 (g) A regulation adopted or order issued under this chapter may require as a 06 condition of registration that a security registered under this chapter be sold only on a 07 specified form of subscription or sale contract and that a signed or conformed copy of 08 each contract be filed under this chapter or preserved for a period specified by the 09 regulation or order, not to exceed five years. 10 (h) Except while a stop order is in effect under AS 45.56.306, a registration 11 statement is effective for one year after the effective date of the registration statement 12 or for any longer period designated in an order under this chapter during which the 13 security is being offered or distributed in a nonexempted transaction by or for the 14 account of the issuer or other person on whose behalf the offering is being made or by 15 an underwriter or broker-dealer that is still offering part of an unsold allotment or 16 subscription taken as a participant in the distribution. For the purposes of a nonissuer 17 transaction, all outstanding securities of the same class identified in the registration 18 statement as a security registered under this chapter are considered to be registered 19 while the registration statement is effective. If any securities of the same class are 20 outstanding, a registration statement may not be withdrawn until one year after the 21 effective date of the registration statement. A registration statement may be 22 withdrawn only with the approval of the administrator. 23 (i) While a registration statement is effective, a regulation adopted or order 24 issued under this chapter may require the person that filed the registration statement to 25 file reports, not more often than quarterly, to keep the information or other record in 26 the registration statement reasonably current and to disclose the progress of the 27 offering. 28 (j) A registration statement may be amended after the effective date of the 29 registration statement. The posteffective amendment becomes effective when the 30 administrator so orders. If a posteffective amendment is made to increase the number 31 of securities specified to be offered or sold, the person filing the amendment shall pay
01 a registration fee established by a regulation adopted under this chapter. A 02 posteffective amendment relates back to the date of the offering of the additional 03 securities being registered if, within one year after the date of the sale, the amendment 04 is filed and the additional registration fee is paid. 05 Sec. 45.56.306. Denial, suspension, and revocation of securities 06 registration. (a) The administrator may issue a stop order denying effectiveness to, 07 or suspending or revoking the effectiveness of, a registration statement if the 08 administrator finds that the order is in the public interest and that 09 (1) the registration statement as of the effective date of the registration 10 statement or before the effective date in the case of an order denying effectiveness, an 11 amendment under AS 45.56.305(j) as of the effective date of the amendment, or a 12 report under AS 45.56.305(i) is incomplete in a material respect or contains a 13 statement that, in the light of the circumstances under which it was made, was false or 14 misleading with respect to a material fact; 15 (2) this chapter or a regulation adopted or order issued under this 16 chapter or a condition imposed under this chapter has been wilfully violated in 17 connection with the offering by 18 (A) the person filing the registration statement; 19 (B) the issuer, a partner, officer, or director of the issuer or a 20 person having a similar status or performing a similar function; 21 (C) a promoter of the issuer; 22 (D) a person directly or indirectly controlling or controlled by 23 the issuer, but only if the person filing the registration statement is directly or 24 indirectly controlled by or acting for the issuer; or 25 (E) an underwriter; 26 (3) the security registered or sought to be registered is the subject of a 27 permanent or temporary injunction of a court of competent jurisdiction or an 28 administrative stop order or similar order issued under any federal, foreign, or state 29 law other than this chapter applicable to the offering; the administrator may not 30 institute a proceeding against an effective registration statement under this paragraph 31 more than one year after the date of the order or injunction on which it is based, and
01 the administrator may not issue an order under this paragraph on the basis of an order 02 or injunction issued under the securities act of another state unless the order or 03 injunction was based on conduct that would constitute, as of the date of the order, a 04 ground for a stop order under this section; 05 (4) the issuer's enterprise or method of business includes or would 06 include activities that are unlawful where performed; 07 (5) with respect to a security sought to be registered under 08 AS 45.56.303, there has been a failure to comply with the undertaking required by 09 AS 45.56.303(b)(4); 10 (6) the applicant or registrant has not paid the filing fee; the 11 administrator shall void the order if the deficiency is corrected and the order was 12 based solely on the nonpayment of the filing fee; or 13 (7) the offering 14 (A) will work or tend to work a fraud upon purchasers or would 15 so operate; 16 (B) has been or would be made with unreasonable amounts of 17 underwriters' and sellers' discounts, commissions, or other compensation, or 18 promoters' profits or participations, or unreasonable amounts or kinds of 19 options; or 20 (C) is being made on terms that are unfair, unjust, or 21 inequitable. 22 (b) To the extent practicable, the administrator shall, by a regulation adopted 23 or order issued under this chapter, publish standards that provide notice of conduct 24 that violates (a)(7) of this section. 25 (c) The administrator may not institute a stop order proceeding against an 26 effective registration statement on the basis of conduct or a transaction known to the 27 administrator when the registration statement became effective unless the proceeding 28 is instituted within 30 days after the registration statement became effective. 29 (d) The administrator may summarily revoke, deny, postpone, or suspend the 30 effectiveness of a registration statement pending final determination of an 31 administrative proceeding. Upon the issuance of the order, the administrator shall
01 promptly notify each person specified in (e) of this section that the order has been 02 issued, the reasons for the revocation, denial, postponement, or suspension, and that, 03 within 15 days after the receipt of a request in a record from the person, the matter will 04 be scheduled for a hearing. If a hearing is not requested and none is ordered by the 05 administrator, within 30 days after the date of service of the order, the order becomes 06 final. If a hearing is requested or ordered, the administrator, after notice of and 07 opportunity for hearing for each person subject to the order, may modify or vacate the 08 order or extend the order until final determination. 09 (e) A stop order may not be issued under this section without 10 (1) appropriate notice to the applicant or registrant, the issuer, and the 11 person on whose behalf the securities are to be or have been offered; 12 (2) an opportunity for hearing; and 13 (3) findings of fact and conclusions of law in a record under 14 AS 44.62.330 - 44.62.630 (Administrative Procedure Act). 15 (f) The administrator may modify or vacate a stop order issued under this 16 section if the administrator finds that the conditions that caused its issuance have 17 changed or that it is necessary or appropriate in the public interest or for the protection 18 of investors. 19 Sec. 45.56.307. Waiver and modification. The administrator may waive or 20 modify, in whole or in part, any or all of the requirements of AS 45.56.302, 45.56.303, 21 and 45.56.304(b) or the requirement of any information or record in a registration 22 statement or in a periodic report filed under AS 45.56.305(i). 23 Article 4. Broker-dealers, Agents, Investment Advisers, Investment Adviser 24 Representatives, and Federal Covered Investment Advisers. 25 Sec. 45.56.401. Broker-dealer registration requirement and exemptions. 26 (a) A person may not transact business in the state as a broker-dealer unless the 27 person is registered under this chapter as a broker-dealer or is exempt from registration 28 as a broker-dealer under (b) or (d) of this section. 29 (b) The following persons are exempt from the registration requirement of (a) 30 of this section: 31 (1) a broker-dealer without a place of business in the state if the
01 broker-dealer's only transactions effected in the state are with 02 (A) the issuer of the securities involved in the transactions; 03 (B) a broker-dealer registered as a broker-dealer under this 04 chapter or not required to be registered as a broker-dealer under this chapter; 05 (C) an institutional investor; 06 (D) a nonaffiliated federal covered investment adviser with 07 investments under management in excess of $100,000,000 acting for the 08 account of others under discretionary authority in a signed record; 09 (E) a bona fide preexisting customer whose principal place of 10 residence is not in the state and the person is registered as a broker-dealer 11 under 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934) or not required 12 to be registered under 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934) 13 and is registered under the securities act of the state in which the customer 14 maintains a principal place of residence; 15 (F) a bona fide preexisting customer whose principal place of 16 residence is in the state but who was not present in the state when the customer 17 relationship was established if 18 (i) the broker-dealer is registered under 15 U.S.C. 78a - 19 78lll (Securities Exchange Act of 1934) or not required to be registered 20 under 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934) and is 21 registered under the securities laws of the state in which the customer 22 relationship was established and where the customer had maintained a 23 principal place of residence; and 24 (ii) within 45 days after the customer's first transaction 25 in the state, the person files an application for registration as a broker- 26 dealer in the state and a further transaction is not effected more than 75 27 days after the date on which the application is filed, or, if earlier, the 28 date on which the administrator notifies the person that the 29 administrator has denied the application for registration or has stayed 30 the pendency of the application for good cause; 31 (G) not more than three customers in the state during the
01 previous 12 months, in addition to those customers specified in (A) - (F) of this 02 paragraph and under (H) of this paragraph if the broker-dealer is registered 03 under 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934) or not required 04 to be registered under 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934) 05 and is registered under the securities act of the state in which the broker-dealer 06 has its principal place of business; and 07 (H) any other person exempted by a regulation adopted or order 08 issued under this chapter; and 09 (2) a person that deals solely in United States government securities 10 and is supervised as a dealer in government securities by the Board of Governors of 11 the Federal Reserve System, the United States Comptroller of the Currency, the 12 Federal Deposit Insurance Corporation, or the Office of Thrift Supervision, United 13 States Department of the Treasury. 14 (c) A broker-dealer or an issuer engaged in offering, offering to purchase, 15 purchasing, or selling securities in the state may not, directly or indirectly, employ or 16 associate with an individual to engage in an activity related to securities transactions in 17 the state if the registration of the individual is suspended or revoked or the individual 18 is barred from employment or association with a broker-dealer, an issuer, an 19 investment adviser, or a federal covered investment adviser by an order of the 20 administrator under this chapter, the Securities and Exchange Commission, or a self- 21 regulatory organization. A broker-dealer or issuer does not violate this subsection if 22 the broker-dealer or issuer did not know and, in the exercise of reasonable care, could 23 not have known of the suspension, revocation, or bar. Upon request from a broker- 24 dealer or issuer and for good cause, an order under this chapter may modify or waive, 25 in whole or in part, the application of the prohibitions of this subsection to the broker- 26 dealer. 27 (d) A regulation adopted or order issued under this chapter may permit 28 (1) a broker-dealer that is registered in Canada or another foreign 29 jurisdiction and that does not have a place of business in the state to effect transactions 30 in securities with or for or attempt to effect the purchase or sale of any securities by 31 (A) an individual from Canada or another foreign jurisdiction
01 who is temporarily present in the state and with whom the broker-dealer had a 02 bona fide customer relationship before the individual entered the United States; 03 (B) an individual from Canada or another foreign jurisdiction 04 who is present in the state and whose transactions are in a self-directed tax 05 advantaged retirement plan of which the individual is the holder or contributor 06 in that foreign jurisdiction; or 07 (C) an individual who is present in the state, with whom the 08 broker-dealer customer relationship arose while the individual was temporarily 09 or permanently resident in Canada or the other foreign jurisdiction; and 10 (2) an agent who represents a broker-dealer that is exempt under this 11 subsection to effect transactions in securities or attempt to effect the purchase or sale 12 of securities in the state as permitted for a broker-dealer described in (1) of this 13 subsection. 14 Sec. 45.56.402. Agent registration requirement and exemptions. (a) An 15 individual may not transact business in the state as an agent unless the individual is 16 registered under this chapter as an agent or is exempt from registration as an agent 17 under (b) of this section. 18 (b) The following individuals are exempt from the registration requirement of 19 (a) of this section: 20 (1) an individual who represents a broker-dealer in effecting 21 transactions in the state limited to those described in 15 U.S.C. 78o(h)(2); 22 (2) an individual who represents a broker-dealer that is exempt under 23 AS 45.56.401(b) or (d); 24 (3) an individual who represents an issuer with respect to an offer or 25 sale of the issuer's own securities or those of the issuer's parent or any of the issuer's 26 subsidiaries, and who is not compensated in connection with the individual's 27 participation by the payment of commissions or other remuneration based, directly or 28 indirectly, on transactions in those securities; 29 (4) an individual who represents an issuer and who effects transactions 30 in the issuer's securities exempted by AS 45.56.202, other than AS 45.56.202(11) and 31 (14);
01 (5) an individual who represents an issuer that effects transactions 02 solely in federal covered securities of the issuer, but an individual who effects 03 transactions in a federal covered security under 15 U.S.C. 77r(b)(3) or (b)(4)(D) is not 04 exempt if the individual is compensated in connection with the agent's participation by 05 the payment of commissions or other remuneration based, directly or indirectly, on 06 transactions in those securities; 07 (6) an individual who represents a broker-dealer registered in the state 08 under AS 45.56.401(a) or exempt from registration under AS 45.56.401(b) in the offer 09 and sale of securities for an account of a nonaffiliated federal covered investment 10 adviser with investments under management in excess of $100,000,000 acting for the 11 account of others under discretionary authority in a signed record; 12 (7) an individual who represents an issuer in connection with the 13 purchase of the issuer's own securities; 14 (8) an individual who represents an issuer and who restricts 15 participation to performing clerical or ministerial acts; or 16 (9) any other individual exempted by a regulation adopted or order 17 issued under this chapter. 18 (c) The registration of an agent is effective only while the agent is employed 19 by or associated with a broker-dealer registered under this chapter or an issuer that is 20 offering, selling, or purchasing the issuer's securities in this state. 21 (d) A broker-dealer or an issuer engaged in offering, selling, or purchasing 22 securities in the state may not employ or associate with an agent who transacts 23 business in the state on behalf of broker-dealers or issuers unless the agent is 24 registered under (a) of this section or exempt from registration under (b) of this 25 section. 26 (e) An individual may not act as an agent for more than one broker-dealer or 27 one issuer at a time, unless the broker-dealer or the issuer for which the agent acts is 28 affiliated by direct or indirect common control or is authorized by a regulation or order 29 issued under this chapter. 30 Sec. 45.56.403. Investment adviser registration requirement and 31 exemptions. (a) A person may not transact business in the state as an investment
01 adviser unless the person is registered under this chapter as an investment adviser or is 02 exempt from registration as an investment adviser under (b) of this section. 03 (b) The following persons are exempt from the registration requirement in (a) 04 of this section: 05 (1) a person without a place of business in this state that is registered 06 under the securities act of the state in which the person has the person's principal place 07 of business if the person's only clients in this state are 08 (A) federal covered investment advisers, investment advisers 09 registered under this chapter, or broker-dealers registered under this chapter; 10 (B) institutional investors; 11 (C) bona fide preexisting clients whose principal places of 12 residence are not in the state if the investment adviser is registered under the 13 securities act of the state in which the clients maintain principal places of 14 residence; or 15 (D) any other client exempted by regulation adopted or order 16 issued under this chapter; 17 (2) a person without a place of business in the state if the person has 18 had, during the preceding 12 months, not more than five clients that are resident in the 19 state in addition to those specified under (1) of this subsection; or 20 (3) any other person exempted by a regulation adopted or order issued 21 under this chapter. 22 (c) An investment adviser may not, directly or indirectly, employ or associate 23 with an individual to engage in an activity related to investment advice in the state if 24 the registration of the individual is suspended or revoked or the individual is barred 25 from employment or association with an investment adviser, federal covered 26 investment adviser, or broker-dealer by an order under this chapter, the Securities and 27 Exchange Commission, or a self-regulatory organization, unless the investment 28 adviser did not know, and in the exercise of reasonable care could not have known, of 29 the suspension, revocation, or bar. Upon request from the investment adviser and for 30 good cause, the administrator may, by order, waive, in whole or in part, the application 31 of the prohibitions of this subsection to the investment adviser.
01 (d) An investment adviser may not employ or associate with an individual 02 required to be registered under this chapter as an investment adviser representative 03 who transacts business in the state on behalf of the investment adviser unless the 04 individual is registered under AS 45.56.404(a) or is exempt from registration under 05 AS 45.56.404(b). 06 Sec. 45.56.404. Investment adviser representative registration 07 requirement and exemptions. (a) An individual may not transact business in the 08 state as an investment adviser representative unless the individual is registered under 09 this chapter as an investment adviser representative or is exempt from registration as 10 an investment adviser representative under (b) of this section. 11 (b) The following individuals are exempt from the registration requirement of 12 (a) of this section: 13 (1) an individual who is employed by or associated with an investment 14 adviser that is exempt from registration under AS 45.56.403(b) or a federal covered 15 investment adviser that is excluded from the notice filing requirements of 16 AS 45.56.405; and 17 (2) any other individual exempted by a regulation adopted or order 18 issued under this chapter. 19 (c) The registration of an investment adviser representative is not effective 20 while the investment adviser representative is not employed by or associated with an 21 investment adviser registered under this chapter or a federal covered investment 22 adviser that has made or is required to make a notice filing under AS 45.56.405. 23 (d) An individual may transact business as an investment adviser 24 representative for more than one investment adviser or federal covered investment 25 adviser unless a regulation adopted or order issued under this chapter prohibits or 26 limits an individual from acting as an investment adviser representative for more than 27 one investment adviser or federal covered investment adviser. 28 (e) An individual acting as an investment adviser representative may not, 29 directly or indirectly, conduct business in the state on behalf of an investment adviser 30 or a federal covered investment adviser if the registration of the individual as an 31 investment adviser representative is suspended or revoked or the individual is barred
01 from employment or association with an investment adviser or a federal covered 02 investment adviser by an order under this chapter, the Securities and Exchange 03 Commission, or a self-regulatory organization. Upon request from a federal covered 04 investment adviser and for good cause, the administrator may, by order, waive, in 05 whole or in part, the application of the requirements of this subsection to the federal 06 covered investment adviser. 07 (f) An investment adviser registered under this chapter, a federal covered 08 investment adviser that has filed a notice under AS 45.56.405, or a broker-dealer 09 registered under this chapter is not required to employ or associate with an individual 10 as an investment adviser representative if the only compensation paid to the individual 11 for a referral of investment advisory clients is paid to an investment adviser registered 12 under this chapter, a federal covered investment adviser who has filed a notice under 13 AS 45.56.405, or a broker-dealer registered under this chapter with which the 14 individual is employed or associated as an investment adviser representative. 15 Sec. 45.56.405. Federal covered investment adviser notice filing 16 requirement. (a) Except with respect to a federal covered investment adviser 17 described in (b) of this section, a federal covered investment adviser may not transact 18 business in the state as a federal covered investment adviser unless the federal covered 19 investment adviser complies with (c) of this section. 20 (b) The following federal covered investment advisers are not required to 21 comply with (c) of this section: 22 (1) a federal covered investment adviser without a place of business in 23 the state if the only clients of the federal covered investment adviser in the state are 24 (A) federal covered investment advisers, investment advisers 25 registered under this chapter, and broker-dealers registered under this chapter; 26 (B) institutional investors; 27 (C) bona fide preexisting clients whose principal places of 28 residence are not in the state; or 29 (D) other clients specified by a regulation adopted or order 30 issued under this chapter; 31 (2) a federal covered investment adviser without a place of business in
01 the state if the person has had, during the preceding 12 months, not more than five 02 clients that are resident in the state in addition to those specified under (1) of this 03 subsection; and 04 (3) any other person excluded by a regulation adopted or order issued 05 under this chapter. 06 (c) A person acting as a federal covered investment adviser not excluded 07 under (b) of this section shall file a notice, a consent to service of process complying 08 with AS 45.56.611, and the records that have been filed with the Securities and 09 Exchange Commission under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 10 1940) required by a regulation adopted or order issued under this chapter and shall pay 11 the fees specified in AS 45.56.410. 12 (d) The notice under (c) of this section becomes effective upon filing. 13 Sec. 45.56.406. Registration by broker-dealer, agent, investment adviser, 14 and investment adviser representative. (a) A person shall register as a broker- 15 dealer, agent, investment adviser, or investment adviser representative by filing an 16 application and a consent to service of process complying with AS 45.56.611 and 17 paying the fee specified in AS 45.56.410 and any reasonable fees charged by the 18 designee of the administrator for processing the filing. The application must contain 19 (1) the information or record required for the filing of a uniform 20 application; and 21 (2) upon request by the administrator, any other financial or other 22 information or record that the administrator determines is appropriate. 23 (b) If the information or record contained in an application filed under (a) of 24 this section is or becomes inaccurate or incomplete in a material respect, the registrant 25 shall promptly file a correcting amendment. 26 (c) If an order is not in effect and a proceeding is not pending under 27 AS 45.56.412, registration becomes effective at noon on the 45th day after a 28 completed application is filed, unless the registration is denied. A regulation adopted 29 or order issued under this chapter may set an earlier effective date or may defer the 30 effective date until noon on the 45th day after the filing of any amendment completing 31 the application.
01 (d) A registration is effective until midnight on December 31 of the year for 02 which the application for registration is filed. Unless an order is in effect under 03 AS 45.56.412, a registration may be automatically renewed each year by filing the 04 records required by a regulation adopted or order issued under this chapter, by paying 05 the fee specified in AS 45.56.410, and by paying costs charged by the designee of the 06 administrator for processing the filings. 07 (e) A regulation adopted or order issued under this chapter may impose other 08 conditions, not inconsistent with P.L. 104-290 (National Securities Markets 09 Improvement Act of 1996). An order issued under this chapter may waive, in whole 10 or in part, specific requirements in connection with registration that are in the public 11 interest and for the protection of investors. 12 Sec. 45.56.407. Succession and change in registration of broker-dealer or 13 investment adviser. (a) A broker-dealer or investment adviser may succeed to the 14 current registration of another broker-dealer or investment adviser or a notice filing of 15 a federal covered investment adviser, and a federal covered investment adviser may 16 succeed to the current registration of an investment adviser or notice filing of another 17 federal covered investment adviser, by filing as a successor an application for 18 registration under AS 45.56.401 or 45.56.403 or a notice under AS 45.56.405 for the 19 unexpired portion of the current registration or notice filing. 20 (b) A broker-dealer or investment adviser that changes its form of 21 organization or state of incorporation or organization may continue its registration by 22 filing an amendment to its registration if the change does not involve a material 23 change in its financial condition or management. The amendment becomes effective 24 when filed or on a date designated by the registrant in its filing. The new organization 25 is a successor to the original registrant for the purposes of this chapter. If there is a 26 material change in financial condition or management, the broker-dealer or investment 27 adviser shall file a new application for registration. A predecessor registered under 28 this chapter shall stop conducting its securities business other than winding down 29 transactions and shall file for withdrawal of broker-dealer or investment adviser 30 registration within 45 days after filing its amendment to effect succession. 31 (c) A broker-dealer or investment adviser that changes its name may continue
01 its registration by filing an amendment to its registration. The amendment becomes 02 effective when filed or on a date designated by the registrant. 03 (d) A change of control of a broker-dealer or investment adviser may be made 04 in accordance with a regulation adopted or order issued under this chapter. 05 Sec. 45.56.408. Termination of employment or association of agent and 06 investment adviser representative and transfer of employment or association. (a) 07 If an agent registered under this chapter terminates employment by or association with 08 a broker-dealer or issuer, or if an investment adviser representative registered under 09 this chapter terminates employment by or association with an investment adviser or 10 federal covered investment adviser, or if either registrant terminates activities that 11 require registration as an agent or investment adviser representative, the broker-dealer, 12 issuer, investment adviser, or federal covered investment adviser shall promptly file a 13 notice of termination. If the registrant learns that the broker-dealer, issuer, investment 14 adviser, or federal covered investment adviser has not filed the notice, the registrant 15 may do so. 16 (b) If an agent registered under this chapter terminates employment by or 17 association with a broker-dealer registered under this chapter and begins employment 18 by or association with another broker-dealer registered under this chapter, or if an 19 investment adviser representative registered under this chapter terminates employment 20 by or association with an investment adviser registered under this chapter or a federal 21 covered investment adviser that has filed a notice under AS 45.56.405 and begins 22 employment by or association with another investment adviser registered under this 23 chapter or a federal covered investment adviser that has filed a notice under 24 AS 45.56.405, then, within 30 days after the termination, upon the filing by or on 25 behalf of the registrant of an application for registration that complies with the 26 requirement of AS 45.56.406(a) and payment of the filing fee required under 27 AS 45.56.410, the registration of the agent or investment adviser representative is 28 (1) immediately effective as of the date of the completed filing, if the 29 agent's record or successor record in the Central Registration Depository operated by 30 the National Association of Securities Dealers, Inc., or the investment adviser 31 representative's record or successor record in the Investment Adviser Registration
01 Depository operated by the National Association of Securities Dealers, Inc., does not 02 contain a new or amended disciplinary disclosure within the previous 12 months; or 03 (2) temporarily effective as of the date of the completed filing, if the 04 agent's record or successor record in the Central Registration Depository operated by 05 the National Association of Securities Dealers, Inc., or the investment adviser 06 representative's record or successor record in the Investment Adviser Registration 07 Depository operated by the National Association of Securities Dealers, Inc., contains a 08 new or amended disciplinary disclosure within the preceding 12 months. 09 (c) The administrator may withdraw a temporary registration if there are or 10 were grounds for discipline as specified in AS 45.56.412 and the administrator does so 11 within 30 days after the filing of the application. If the administrator does not 12 withdraw the temporary registration within the 30-day period, registration becomes 13 automatically effective on the 31st day after filing. 14 (d) The administrator may prevent the effectiveness of a transfer of an agent 15 or investment adviser representative under (b)(1) or (2) of this section based on the 16 public interest and the protection of investors. 17 (e) If the administrator determines that a registrant or applicant for registration 18 is no longer in existence, has ceased to act as a broker-dealer, agent, investment 19 adviser, or investment adviser representative, is the subject of an adjudication of 20 incapacity, is subject to the control of a committee, conservator, or guardian, or cannot 21 reasonably be located, a regulation adopted or order issued under this chapter may 22 require the registration be canceled or terminated or the application denied. The 23 administrator may reinstate a canceled or terminated registration, with or without 24 hearing, and may make the registration retroactive. 25 Sec. 45.56.409. Withdrawal of registration of broker-dealer, agent, 26 investment adviser, and investment adviser representative. Withdrawal of 27 registration by a broker-dealer, agent, investment adviser, or investment adviser 28 representative becomes effective 60 days after the filing of the application to withdraw 29 or within any shorter period as provided by a regulation adopted or order issued under 30 this chapter unless a revocation or suspension proceeding is pending when the 31 application is filed. If a proceeding is pending, withdrawal becomes effective when
01 and upon the conditions required by a regulation adopted or order issued under this 02 chapter. The administrator may institute a revocation or suspension proceeding under 03 AS 45.56.412 within one year after the withdrawal became effective automatically and 04 issue a revocation or suspension order as of the last date on which registration was 05 effective if a proceeding is not pending. 06 Sec. 45.56.410. Filing fees. (a) The administrator shall establish fees by 07 regulation under AS 44.62.010 - 44.62.320 (Administrative Procedure Act) for 08 (1) an initial filing of an application as a broker-dealer and renewal of 09 an application by a broker-dealer for registration, but, if the filing results in a denial or 10 withdrawal, the administrator shall retain an amount of the fee established by the 11 administrator by regulation; 12 (2) an application for registration as an agent and renewal of 13 registration as an agent, but, if the filing results in a denial or withdrawal, the 14 administrator shall retain an amount of the fee established by the administrator by 15 regulation; 16 (3) an application for registration as an investment adviser and renewal 17 of registration as an investment adviser, but, if the filing results in a denial or 18 withdrawal, the administrator shall retain an amount of the fee established by the 19 administrator by regulation; 20 (4) an application for registration as an investment adviser 21 representative, a renewal of registration as an investment adviser representative, and a 22 change of registration as an investment adviser representative, but, if the filing results 23 in a denial or withdrawal, the administrator shall retain an amount of the fee 24 established by the administrator by regulation; and 25 (5) an initial fee and annual notice fee for a federal covered investment 26 adviser required to file a notice under AS 45.56.405. 27 (b) A person required to pay a filing or notice fee under this section may 28 transmit the fee through or to a designee as provided by a regulation adopted or order 29 issued under this chapter. 30 (c) An investment adviser representative who is registered as an agent under 31 AS 45.56.402 and who represents a person that is both registered as a broker-dealer
01 under AS 45.56.401 and registered as an investment adviser under AS 45.56.403 or 02 required, as a federal covered investment adviser, to make a notice filing under 03 AS 45.56.405 is not required to pay an initial or annual registration fee for registration 04 as an investment adviser representative. 05 Sec. 45.56.411. Postregistration requirements. (a) Subject to 15 U.S.C. 06 78o(h) or 15 U.S.C. 80b-18a, a regulation adopted or order issued under this chapter 07 may establish minimum financial requirements for broker-dealers registered or 08 required to be registered under this chapter and investment advisers registered or 09 required to be registered under this chapter. 10 (b) Subject to 15 U.S.C. 78o(h) or 15 U.S.C. 80b-18a, a broker-dealer 11 registered or required to be registered under this chapter and an investment adviser 12 registered or required to be registered under this chapter shall file the financial reports 13 required by a regulation adopted or order issued under this chapter. If the information 14 contained in a record filed under this subsection is or becomes inaccurate or 15 incomplete in a material respect, the registrant shall promptly file a correcting 16 amendment. 17 (c) Subject to 15 U.S.C. 78o(h) (Securities Exchange Act of 1934) or 15 18 U.S.C. 80b-18a, 19 (1) a broker-dealer registered or required to be registered under this 20 chapter and an investment adviser registered or required to be registered under this 21 chapter shall make and maintain the accounts, correspondence, memoranda, papers, 22 books, and other records required by a regulation adopted or order issued under this 23 chapter; 24 (2) broker-dealer records required to be maintained under (1) of this 25 subsection may be maintained in any form of data storage acceptable under 15 U.S.C. 26 78q(a) if they are readily accessible to the administrator; and 27 (3) investment adviser records required to be maintained under (1) of 28 this subsection may be maintained in any form of data storage required by a regulation 29 adopted or order issued under this chapter. 30 (d) The records of a broker-dealer registered or required to be registered under 31 this chapter and of an investment adviser registered or required to be registered under
01 this chapter are subject to the reasonable periodic, special, or other audits or 02 inspections by a representative of the administrator, within or without the state, that 03 the administrator considers necessary or appropriate in the public interest and for the 04 protection of investors. An audit or inspection may be made at any time and without 05 prior notice. The administrator may copy, and remove for audit or inspection copies 06 of, all records the administrator reasonably considers necessary or appropriate to 07 conduct the audit or inspection. The administrator may assess a reasonable charge for 08 conducting an audit or inspection under this subsection. 09 (e) Subject to 15 U.S.C. 78o(h) or 15 U.S.C. 80b-18a, a regulation adopted or 10 order issued under this chapter may require a broker-dealer or investment adviser that 11 has custody of or discretionary authority over funds or securities of a customer or 12 client to obtain insurance or post a bond or other satisfactory form of security in an 13 amount established by a regulation adopted under this chapter. The administrator may 14 determine the requirements of the insurance, bond, or other satisfactory form of 15 security. Insurance or a bond or other satisfactory form of security may not be 16 required of a broker-dealer registered under this chapter whose net capital exceeds, or 17 of an investment adviser registered under this chapter whose minimum financial 18 requirements exceed, the amounts required by a regulation adopted or order issued 19 under this chapter. The insurance, bond, or other satisfactory form of security must 20 permit an action by a person to enforce any liability on the insurance, bond, or other 21 satisfactory form of security if instituted within the time limitations in 22 AS 45.56.509(j)(2). 23 (f) Subject to 15 U.S.C. 78o(h) or 15 U.S.C. 80b-18a, an agent may not have 24 custody of funds or securities of a customer except under the supervision of a broker- 25 dealer and an investment adviser representative may not have custody of funds or 26 securities of a client except under the supervision of an investment adviser or a federal 27 covered investment adviser. A regulation adopted or order issued under this chapter 28 may prohibit, limit, or impose conditions on a broker-dealer regarding custody of 29 funds or securities of a customer and on an investment adviser regarding custody of 30 securities or funds of a client. 31 (g) With respect to an investment adviser registered or required to be
01 registered under this chapter, a regulation adopted or order issued under this chapter 02 may require that information or other records be furnished or disseminated to clients 03 or prospective clients in the state as necessary or appropriate in the public interest and 04 for the protection of investors and advisory clients. 05 (h) A regulation adopted or order issued under this chapter may require an 06 individual registered under AS 45.56.402 or 45.56.404 to participate in a continuing 07 education program approved by the Securities and Exchange Commission and 08 administered by a self-regulatory organization, or, in the absence of a continuing 09 education program, a regulation adopted or order issued under this chapter may 10 require continuing education for an individual registered under AS 45.56.404. 11 Sec. 45.56.412. Denial, revocation, suspension, withdrawal, restriction, 12 condition, or limitation of registration. (a) If the administrator finds that the order 13 is in the public interest and (d) of this section authorizes the action, an order issued 14 under this chapter may deny an application, or may condition or limit registration of 15 an applicant to be a broker-dealer, agent, investment adviser, or investment adviser 16 representative, and, if the applicant is a broker-dealer or investment adviser, of a 17 partner, officer, director, or person having a similar status or performing similar 18 functions, or a person directly or indirectly in control, of the broker-dealer or 19 investment adviser. 20 (b) If the administrator finds that the order is in the public interest and (d) of 21 this section authorizes the action, an order issued under this chapter may revoke, 22 suspend, condition, or limit the registration of a registrant, and, if the registrant is a 23 broker-dealer or investment adviser, of a partner, officer, director, or person having a 24 similar status or performing similar functions, or a person directly or indirectly in 25 control, of the broker-dealer or investment adviser. However, the administrator may 26 not 27 (1) institute a revocation or suspension proceeding under this 28 subsection based on an order issued under a law of another state that is reported to the 29 administrator or a designee of the administrator more than one year after the date of 30 the order on which it is based; or 31 (2) under (d)(5)(A) or (B) of this section, issue an order on the basis of
01 an order issued under the securities act of another state unless the other order was 02 based on conduct for which (d) of this section would authorize the action had the 03 conduct occurred in this state. 04 (c) If the administrator finds that the order is in the public interest and (d)(1), 05 (2), (3), (4), (5), (6), (8), (9), (10), or (12) and (13) of this section authorize the action, 06 an order under this chapter may censure, impose a bar, or impose a civil penalty of not 07 more than $2,500 for a single violation or not more than $100,000 for more than one 08 violation, on a registrant, and, if the registrant is a broker-dealer or investment adviser, 09 a partner, officer, director, or person having a similar status or performing similar 10 functions, or a person directly or indirectly in control, of the broker-dealer or 11 investment adviser. 12 (d) A person may be disciplined under (a) - (c) of this section if the person 13 (1) has filed an application for registration in the state under this 14 chapter or former AS 45.55 within the previous 10 years that, as of the effective date 15 of registration or as of any date after filing in the case of an order denying 16 effectiveness, was incomplete in any material respect or contained a statement that, in 17 light of the circumstances under which it was made, was false or misleading with 18 respect to a material fact; 19 (2) wilfully violated or wilfully failed to comply with this chapter or 20 former AS 45.55 or a regulation adopted or order issued under this chapter or former 21 AS 45.55 within the previous 10 years; 22 (3) has been convicted of a felony or within the previous 10 years has 23 been convicted of a misdemeanor involving a security, a commodity future or option 24 contract, or an aspect of a business involving securities, commodities, investments, 25 franchises, insurance, banking, or finance; 26 (4) is enjoined or restrained by a court of competent jurisdiction in an 27 action instituted by the administrator under this chapter or former AS 45.55, a state, 28 the Securities and Exchange Commission, or the United States from engaging in or 29 continuing an act, practice, or course of business involving an aspect of a business 30 involving securities, commodities, investments, franchises, insurance, banking, or 31 finance;
01 (5) is the subject of an order, issued after notice and opportunity for 02 hearing by 03 (A) the securities or other financial services regulator of a state 04 or the Securities and Exchange Commission or other federal agency denying, 05 revoking, barring, or suspending registration as a broker-dealer, agent, 06 investment adviser, federal covered investment adviser, or investment adviser 07 representative; 08 (B) the securities regulator of a state or the Securities and 09 Exchange Commission against a broker-dealer, agent, investment adviser, 10 investment adviser representative, or federal covered investment adviser; 11 (C) the Securities and Exchange Commission or a self- 12 regulatory organization suspending or expelling the registrant from 13 membership in the self-regulatory organization; 14 (D) a court adjudicating a United States Postal Service fraud 15 order; 16 (E) the insurance regulator of a state denying, suspending, or 17 revoking registration as an insurance agent; or 18 (F) a depository institution or financial services regulator 19 suspending or barring the person from the depository institution or other 20 financial services business; 21 (6) is the subject of an adjudication or determination, after notice and 22 opportunity for hearing, by the Securities and Exchange Commission, the Commodity 23 Futures Trading Commission, the Federal Trade Commission, a federal depository 24 institution regulator, or a depository institution, insurance, or other financial services 25 regulator of a state that the person wilfully violated 15 U.S.C. 77a - 77aa (Securities 26 Act of 1933), 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934), 15 U.S.C. 80b- 27 1 - 80b-21 (Investment Advisers Act of 1940), 15 U.S.C. 80a-1 - 80a-64 (Investment 28 Company Act of 1940), or 7 U.S.C. 1 - 27f (Commodity Exchange Act), the securities 29 or commodities law of a state, or a federal or state law under which a business 30 involving investments, franchises, insurance, banking, or finance is regulated; 31 (7) is insolvent, either because the person's liabilities exceed the
01 person's assets or because the person cannot meet the person's obligations as they 02 mature, but the administrator may not enter an order against an applicant or registrant 03 under this paragraph without a finding of insolvency as to the applicant or registrant; 04 (8) refuses to allow or otherwise impedes the administrator from 05 conducting an audit or inspection under AS 45.56.411(d) or refuses access to a 06 registrant's office to conduct an audit or inspection under AS 45.56.411(d); 07 (9) has failed to reasonably supervise an agent, investment adviser 08 representative, or other individual, if the agent, investment adviser representative, or 09 other individual was subject to the person's supervision and committed a violation of 10 this chapter or former AS 45.55 or a regulation adopted or order issued under this 11 chapter or former AS 45.55 within the previous 10 years; 12 (10) has not paid the proper filing fee within 30 days after having been 13 notified by the administrator of a deficiency, but the administrator shall vacate an 14 order under this paragraph when the deficiency is corrected; 15 (11) after notice and opportunity for a hearing, has been found within 16 the previous 10 years 17 (A) by a court of competent jurisdiction to have wilfully 18 violated the laws of a foreign jurisdiction under which the business of 19 securities, commodities, investment, franchises, insurance, banking, or finance 20 is regulated; 21 (B) to have been the subject of an order of a securities regulator 22 of a foreign jurisdiction denying, revoking, or suspending the right to engage 23 in the business of securities as a broker-dealer, agent, investment adviser, 24 investment adviser representative, or similar person; or 25 (C) to have been suspended or expelled from membership by or 26 participation in a securities exchange or securities association operating under 27 the securities laws of a foreign jurisdiction; 28 (12) is the subject of a cease and desist order issued by the Securities 29 and Exchange Commission or issued under the securities, commodities, investment, 30 franchise, banking, finance, or insurance laws of a state; 31 (13) has engaged in dishonest or unethical practices in the securities,
01 commodities, investment, franchise, banking, finance, or insurance business within the 02 previous 10 years; or 03 (14) is not qualified on the basis of factors that may include training, 04 experience, and knowledge of the securities business; however, in the case of an 05 application by an agent for a broker-dealer that is a member of a self-regulatory 06 organization or by an individual for registration as an investment adviser 07 representative, a denial order may not be based on this paragraph if the individual has 08 successfully completed all examinations required by (e) of this section; the 09 administrator may require an applicant for registration under AS 45.56.402 or 10 45.56.404 who has not been registered in a state within the two years preceding the 11 filing of an application in this state to successfully complete an examination. 12 (e) A regulation adopted or order issued under this chapter may require that an 13 examination, including an examination developed or approved by an organization of 14 securities regulators, be successfully completed by a class of individuals or all 15 individuals. An order issued under this chapter may waive, in whole or in part, an 16 examination as to an individual and a regulation adopted under this chapter may 17 waive, in whole or in part, an examination as to a class of individuals if the 18 administrator determines that the examination is not necessary or appropriate in the 19 public interest and for the protection of investors. 20 (f) The administrator may suspend or deny an application summarily; restrict, 21 condition, limit, or suspend a registration; or censure, bar, or impose a civil penalty on 22 a registrant before final determination of an administrative proceeding. Upon the 23 issuance of an order, the administrator shall promptly notify each person subject to the 24 order that the order has been issued, the reasons for the action, and that, within 15 days 25 after the receipt of a request in a record from the person, the matter will be scheduled 26 for a hearing. If a hearing is not requested and none is ordered by the administrator 27 within 30 days after the date of service of the order, the order becomes final by 28 operation of law. If a hearing is requested or ordered, the administrator, after notice of 29 and opportunity for hearing to each person subject to the order, may modify or vacate 30 the order or extend the order until final determination. 31 (g) An order may not be issued under this section, except under (f) of this
01 section, without 02 (1) appropriate notice to the applicant or registrant; 03 (2) opportunity for hearing; and 04 (3) findings of fact and conclusions of law in a record in accordance 05 with AS 44.62.330 - 44.62.630 (Administrative Procedure Act). 06 (h) A person that controls, directly or indirectly, a person not in compliance 07 with this section may be disciplined by order of the administrator under (a), (b), or (c) 08 of this section to the same extent as the noncomplying person, unless the controlling 09 person did not know, and in the exercise of reasonable care could not have known, of 10 the existence of conduct that is a ground for discipline under this section. 11 (i) The administrator may not institute a proceeding under (a), (b), or (c) of 12 this section based solely on material facts actually known by the administrator unless 13 an investigation or the proceeding is instituted within one year after the administrator 14 actually acquires knowledge of the material facts. 15 Article 5. Fraud and Liabilities. 16 Sec. 45.56.501. General fraud. A person may not, in connection with the 17 offer, sale, or purchase of a security, directly or indirectly, 18 (1) employ a device, scheme, or artifice to defraud; 19 (2) make an untrue statement of a material fact or omit to state a 20 material fact necessary in order to make the statements made, in light of the 21 circumstances under which they were made, not misleading; or 22 (3) engage in an act, practice, or course of business that operates or 23 would operate as a fraud or deceit upon another person. 24 Sec. 45.56.502. Prohibited conduct in providing investment advice. (a) A 25 person that advises others for compensation, either directly or indirectly or through 26 publications or writings, as to the value of securities or the advisability of investing in, 27 purchasing, or selling securities or that, for compensation and as part of a regular 28 business, issues or adopts analyses or reports relating to securities may not 29 (1) employ a device, scheme, or artifice to defraud another person; or 30 (2) engage in an act, practice, or course of business that operates or 31 would operate as a fraud or deceit upon another person.
01 (b) A regulation adopted under this chapter may define an act, practice, or 02 course of business of an investment adviser or an investment adviser representative, 03 other than a supervised person of a federal covered investment adviser, as fraudulent, 04 deceptive, or manipulative and may prescribe means reasonably designed to prevent 05 investment advisers and investment adviser representatives, other than supervised 06 persons of a federal covered investment adviser, from engaging in acts, practices, and 07 courses of business defined as fraudulent, deceptive, or manipulative. 08 (c) A regulation adopted under this chapter may specify the contents of an 09 investment advisory contract entered into, extended, or renewed by an investment 10 adviser. 11 Sec. 45.56.503. Evidentiary burden. (a) In a civil action or administrative 12 proceeding under this chapter, a person claiming an exemption, exception, 13 preemption, or exclusion has the burden to prove the applicability of the claim. 14 (b) In a criminal proceeding under this chapter, a person claiming an 15 exemption, exception, preemption, or exclusion has the burden of going forward with 16 evidence of the claim. 17 Sec. 45.56.504. Filing of sales and advertising literature. (a) Except as 18 otherwise provided in (b) of this section, a regulation adopted or order issued under 19 this chapter may require the filing of a prospectus, pamphlet, circular, form letter, 20 advertisement, sales literature, or other advertising record relating to a security or 21 investment advice, addressed or intended for distribution to prospective investors, 22 including clients or prospective clients of a person registered or required to be 23 registered as an investment adviser under this chapter. 24 (b) This section does not apply to sales and advertising literature specified in 25 (a) of this section that relates to a federal covered security, a federal covered 26 investment adviser, or a security or transaction exempted by AS 45.56.201, 45.56.202, 27 or 45.56.203 except as required under AS 45.56.201(7). 28 Sec. 45.56.505. Misleading filings. A person may not make or cause to be 29 made, in a record that is used in an action or proceeding or filed under this chapter, a 30 statement that, at the time and in the light of the circumstances under which it is made, 31 is false or misleading in a material respect, or, in connection with the statement, omit
01 to state a material fact necessary to make the statement made, in the light of the 02 circumstances under which it was made, not false or misleading. 03 Sec. 45.56.506. Misrepresentations concerning registration or exemption. 04 The filing of an application for registration, a registration statement, a notice filing 05 under this chapter, the registration of a person, the notice filing by a person, or the 06 registration of a security under this chapter does not constitute a finding by the 07 administrator that a record filed under this chapter is true, complete, and not 08 misleading. The filing or registration or the availability of an exemption, exception, 09 preemption, or exclusion for a security or a transaction does not mean that the 10 administrator has passed upon the merits or qualifications of, or recommended or 11 given approval to, a person, security, or transaction. A person may not make, or cause 12 to be made, to a purchaser, customer, client, or prospective customer or client a 13 representation inconsistent with this section. 14 Sec. 45.56.507. Qualified immunity. A broker-dealer, agent, investment 15 adviser, federal covered investment adviser, or investment adviser representative is not 16 liable to another broker-dealer, agent, investment adviser, federal covered investment 17 adviser, or investment adviser representative for defamation relating to a statement 18 that is contained in a record required by the administrator, or designee of the 19 administrator, the Securities and Exchange Commission, or a self-regulatory 20 organization, unless the person knew, or should have known at the time the statement 21 was made, that it was false in a material respect or the person acted in reckless 22 disregard of the statement's truth or falsity. 23 Sec. 45.56.508. Criminal penalties. (a) A person that wilfully violates this 24 chapter or a regulation adopted or order issued under this chapter, except 25 AS 45.56.504 or the notice filing requirements of AS 45.56.302 or 45.56.405, or that 26 wilfully violates AS 45.56.505 knowing the statement made to be false or misleading 27 in a material respect, upon conviction, shall be fined not more than $25,000 or 28 imprisoned for not less than one year or more than five years, or both. An individual 29 convicted of violating a regulation or order issued under this chapter may be fined, but 30 may not be imprisoned, if the individual did not know of the regulation or order. 31 (b) The attorney general, with or without a reference from the administrator,
01 may institute criminal proceedings under this chapter. 02 (c) This chapter does not limit the power of the state to punish a person for 03 conduct that constitutes a crime under other laws of the state. 04 Sec. 45.56.509. Civil liability. (a) Enforcement of civil liability under this 05 section is subject to P.L. 105-353 (Securities Litigation Uniform Standards Act of 06 1998). 07 (b) A person is liable to the purchaser if the person sells a security in violation 08 of AS 45.56.301 or by means of an untrue statement of a material fact or an omission 09 to state a material fact necessary in order to make the statement made, in light of the 10 circumstances under which it is made, not misleading, the purchaser not knowing the 11 untruth or omission and the seller not sustaining the burden of proof that the seller did 12 not know and, in the exercise of reasonable care, could not have known of the untruth 13 or omission. An action under this subsection is governed by the following: 14 (1) the purchaser may maintain an action to recover the consideration 15 paid for the security, less the amount of any income received on the security, and 16 interest at the legal rate of interest in AS 45.45.010 from the date of the purchase, 17 costs, and reasonable attorney fees determined by the court, upon the tender of the 18 security, or for actual damages as provided in (3) of this subsection; 19 (2) the tender referred to in (1) of this subsection may be made any 20 time before entry of judgment; tender requires only notice in a record of ownership of 21 the security and willingness to exchange the security for the amount specified; a 22 purchaser that no longer owns the security may recover actual damages as provided in 23 (3) of this subsection; 24 (3) actual damages in an action arising under this subsection are the 25 amount that would be recoverable upon a tender less the value of the security when the 26 purchaser disposed of it, and interest at the legal rate of interest in AS 45.45.010 from 27 the date of the purchase, costs, and reasonable attorney fees determined by the court. 28 (c) A person is liable to the seller if the person buys a security by means of an 29 untrue statement of a material fact or omission to state a material fact necessary in 30 order to make the statement made, in light of the circumstances under which it is 31 made, not misleading, the seller not knowing of the untruth or omission, and the
01 purchaser not sustaining the burden of proof that the purchaser did not know and, in 02 the exercise of reasonable care, could not have known of the untruth or omission. An 03 action under this subsection is governed by the following: 04 (1) the seller may maintain an action to recover the security and any 05 income received on the security, costs, and reasonable attorney fees determined by the 06 court, upon the tender of the purchase price, or for actual damages as provided in (3) 07 of this subsection; 08 (2) the tender referred to in (1) of this subsection may be made any 09 time before entry of judgment; tender requires only notice in a record of the present 10 ability to pay the amount tendered and willingness to take delivery of the security for 11 the amount specified; if the purchaser no longer owns the security, the seller may 12 recover actual damages as provided in (3) of this subsection; 13 (3) actual damages in an action arising under this subsection are the 14 difference between the price at which the security was sold and the value the security 15 would have had at the time of the sale in the absence of the purchaser's conduct 16 causing liability, and interest at the legal rate of interest in AS 45.45.010 from the date 17 of the sale of the security, costs, and reasonable attorney fees determined by the court. 18 (d) A person acting as a broker-dealer or agent that sells or buys a security in 19 violation of AS 45.56.401(a), 45.56.402(a), or 45.56.506 is liable to the customer. 20 The customer, if a purchaser, may maintain an action for recovery of actual damages 21 as specified in (b)(1) - (3) of this section or, if a seller, for a remedy as specified in 22 (c)(1) - (3) of this section. 23 (e) A person acting as an investment adviser or investment adviser 24 representative that provides investment advice for compensation in violation of 25 AS 45.56.403(a), 45.56.404(a), or 45.56.506 is liable to the client. The client may 26 maintain an action to recover the consideration paid for the advice, interest at the legal 27 rate of interest in AS 45.45.010 from the date of payment, costs, and reasonable 28 attorney fees determined by the court. 29 (f) A person that receives, directly or indirectly, any consideration for 30 providing investment advice to another person and that employs a device, scheme, or 31 artifice to defraud the other person or engages in an act, practice, or course of business
01 that operates or would operate as a fraud or deceit on the other person is liable to the 02 other person. An action under this subsection is governed by the following: 03 (1) the person defrauded may maintain an action to recover the 04 consideration paid for the advice and the amount of any actual damages caused by the 05 fraudulent conduct, interest at the legal rate of interest in AS 45.45.010 from the date 06 of the fraudulent conduct, costs, and reasonable attorney fees determined by the court, 07 less the amount of any income received as a result of the fraudulent conduct; 08 (2) this subsection does not apply to a broker-dealer or its agents if the 09 investment advice provided is solely incidental to transacting business as a broker- 10 dealer and special compensation is not received for the investment advice. 11 (g) The following persons are liable jointly and severally with and to the same 12 extent as persons liable under (b) - (f) of this section: 13 (1) a person that directly or indirectly controls a person liable under (b) 14 - (f) of this section, unless the controlling person sustains the burden of proof that the 15 person did not know and, in the exercise of reasonable care, could not have known of 16 the existence of conduct by reason of which the liability is alleged to exist; 17 (2) an individual who is a managing partner, executive officer, or 18 director of a person liable under (b) - (f) of this section, including an individual having 19 a similar status or performing similar functions, unless the individual sustains the 20 burden of proof that the individual did not know and, in the exercise of reasonable 21 care, could not have known of the existence of conduct by reason of which the liability 22 is alleged to exist; 23 (3) an individual who is an employee of or associated with a person 24 liable under (b) - (f) of this section and who materially aids the conduct giving rise to 25 the liability, unless the individual sustains the burden of proof that the individual did 26 not know and, in the exercise of reasonable care, could not have known of the 27 existence of conduct by reason of which the liability is alleged to exist; and 28 (4) a person that is a broker-dealer, agent, investment adviser, or 29 investment adviser representative that materially aids the conduct giving rise to the 30 liability under (b) - (f) of this section, unless the person sustains the burden of proof 31 that the person did not know and, in the exercise of reasonable care, could not have
01 known of the existence of conduct by reason of which liability is alleged to exist. 02 (h) A person liable under this section has a right of contribution as in cases of 03 contract against any other person liable under this section for the same conduct. 04 (i) A cause of action under this section survives the death of an individual who 05 might have been a plaintiff or defendant. 06 (j) A person may not obtain relief 07 (1) under (b) of this section for a violation of AS 45.56.301, or under 08 (d) or (e) of this section, unless the action is instituted within one year after the 09 violation occurred; or 10 (2) under (b) of this section, other than for violation of AS 45.56.301, 11 or under (c) or (f) of this section, unless the action is instituted within the earlier of 12 two years after discovery of the facts constituting the violation or five years after the 13 violation. 14 (k) A person that has made, or has engaged in the performance of, a contract 15 in violation of this chapter or a regulation adopted or order issued under this chapter or 16 that has acquired a purported right under the contract with knowledge of conduct by 17 reason of which its making or performance was in violation of this chapter may not 18 base an action on the contract. 19 (l) A condition, stipulation, or provision binding a person purchasing or 20 selling a security or receiving investment advice to waive compliance with this chapter 21 or a regulation adopted or order issued under this chapter is void. 22 (m) The rights and remedies provided by this chapter are in addition to any 23 other rights or remedies that may exist, but this chapter does not create a cause of 24 action not specified in this section or AS 45.56.411(e). 25 Sec. 45.56.510. Rescission offers. A purchaser, seller, or recipient of 26 investment advice may not maintain an action under AS 45.56.509 if 27 (1) the purchaser, seller, or recipient of investment advice receives, in 28 a record, before the action is instituted 29 (A) an offer stating the respect in which liability under 30 AS 45.56.509 may have arisen and fairly advising the purchaser, seller, or 31 recipient of investment advice of that person's rights in connection with the
01 offer, and any financial or other information necessary to correct all material 02 misrepresentations or omissions in the information that was required by this 03 chapter to be furnished to that person at the time of the purchase, sale, or 04 investment advice; 05 (B) if the basis for relief under this section may have been a 06 violation of AS 45.56.509(b), an offer to repurchase the security for cash, 07 payable on delivery of the security, equal to the consideration paid, and interest 08 at the legal rate of interest in AS 45.45.010 from the date of the purchase, less 09 the amount of any income received on the security, or, if the purchaser no 10 longer owns the security, an offer to pay the purchaser, upon acceptance of the 11 offer, damages in an amount that would be recoverable upon a tender, less the 12 value of the security when the purchaser disposed of it, and interest at the legal 13 rate of interest in AS 45.45.010 from the date of the purchase in cash equal to 14 the damages computed in the manner provided in this subparagraph; 15 (C) if the basis for relief under this section may have been a 16 violation of AS 45.56.509(c), an offer to tender the security, on payment by the 17 seller of an amount equal to the purchase price paid, less income received on 18 the security by the purchaser and interest at the legal rate of interest in 19 AS 45.45.010 from the date of the sale, or, if the purchaser no longer owns the 20 security, an offer to pay the seller, upon acceptance of the offer, in cash, 21 damages in the amount of the difference between the price at which the 22 security was purchased and the value the security would have had at the time 23 of the purchase in the absence of the purchaser's conduct that may have caused 24 liability and interest at the legal rate of interest in AS 45.45.010 from the date 25 of the sale; 26 (D) if the basis for relief under this section may have been a 27 violation of AS 45.56.509(d) and if the customer is a purchaser, an offer to pay 28 as specified in (B) of this paragraph or, if the customer is a seller, an offer to 29 tender or to pay as specified in (C) of this paragraph; 30 (E) if the basis for relief under this section may have been a 31 violation of AS 45.56.509(e), an offer to reimburse in cash the consideration
01 paid for the advice and interest at the legal rate of interest in AS 45.45.010 02 from the date of payment; or 03 (F) if the basis for relief under this section may have been a 04 violation of AS 45.56.509(f), an offer to reimburse in cash the consideration 05 paid for the advice, the amount of any actual damages that may have been 06 caused by the conduct, and interest at the legal rate of interest in AS 45.45.010 07 from the date of the violation causing the loss; 08 (2) the offer under (1) of this section states that it must be accepted by 09 the purchaser, seller, or recipient of investment advice within 30 days after the date of 10 its receipt by the purchaser, seller, or recipient of investment advice or any shorter 11 period of not less than three days that the administrator, by order, specifies; 12 (3) the offeror has the present ability to pay the amount offered or to 13 tender the security under (1) of this section; 14 (4) the offer under (1) of this section is delivered to the purchaser, 15 seller, or recipient of investment advice or sent in a manner that ensures receipt by the 16 purchaser, seller, or recipient of investment advice; and 17 (5) the purchaser, seller, or recipient of investment advice that accepts 18 the offer under (1) of this section, in a record, within the period specified under (2) of 19 this section, is paid in accordance with the terms of the offer. 20 Article 6. Administration and Judicial Review. 21 Sec. 45.56.601. Administration. (a) The Department of Commerce, 22 Community, and Economic Development shall administer this chapter. 23 (b) The administrator or an officer, employee, or designee of the administrator 24 may not use for personal benefit or the benefit of others records or other information 25 obtained by or filed with the administrator that are not public under AS 45.56.607(b). 26 This chapter does not authorize the administrator or an officer, employee, or designee 27 of the administrator to disclose the record or information, except in accordance with 28 AS 45.56.602, 45.56.607(c), or 45.56.608. 29 (c) This chapter does not create or diminish a privilege or exemption that 30 exists at common law, by statute or regulation, or otherwise. 31 (d) The administrator may develop and implement investor education
01 initiatives to inform the public about investing in securities, with particular emphasis 02 on the prevention and detection of securities fraud. In developing and implementing 03 these initiatives, the administrator may collaborate with public and nonprofit 04 organizations with an interest in investor education. The administrator may accept a 05 grant or donation from a person that is not affiliated with the securities industry or 06 from a nonprofit organization, regardless of whether the organization is affiliated with 07 the securities industry, to develop and implement investor education initiatives. This 08 subsection does not authorize the administrator to require participation or monetary 09 contributions of a registrant in an investor education program. 10 (e) The securities investor education and training fund is created as a special 11 fund in the general fund to provide funds for the purposes specified in (d) of this 12 section. All money received by the state by reason of civil penalties under this chapter 13 shall be deposited in the fund. The legislature may appropriate amounts from the fund 14 to the administrator for securities investor education and training. Nothing in this 15 subsection exempts money deposited into the fund from the requirements of AS 37.07 16 (Executive Budget Act) or dedicates money for a specific purpose. 17 Sec. 45.56.602. Investigations and subpoenas. (a) The administrator may 18 (1) conduct public or private investigations within or outside of the 19 state that the administrator considers necessary or appropriate to determine whether a 20 person has violated, is violating, or is about to violate this chapter or a regulation 21 adopted or order issued under this chapter, or to aid in the enforcement of this chapter 22 or in the adoption of regulations and forms under this chapter; 23 (2) require or permit a person to testify, file a statement, or produce a 24 record, under oath or otherwise as the administrator determines, as to all the facts and 25 circumstances concerning a matter to be investigated or about which an action or 26 proceeding is to be instituted; and 27 (3) publish a record concerning an action, proceeding, or an 28 investigation under, or a violation of, this chapter or a regulation adopted or order 29 issued under this chapter if the administrator determines it is necessary or appropriate 30 in the public interest and for the protection of investors. 31 (b) For the purpose of an investigation under this chapter, the administrator or
01 the designated officer of the administrator may administer oaths and affirmations, 02 subpoena witnesses, seek compulsion of attendance, take evidence, require the filing 03 of statements, and require the production of any records that the administrator 04 considers relevant or material to the investigation. 05 (c) If a person does not appear or refuses to testify, file a statement, produce 06 records, or otherwise obey a subpoena as required by the administrator under this 07 chapter, the administrator may refer the matter to the attorney general, who may bring 08 an action in the superior court or a court of another state to enforce compliance. The 09 court may 10 (1) hold the person in contempt; 11 (2) order the person to appear before the administrator; 12 (3) order the person to testify about the matter under investigation or in 13 question; 14 (4) order the production of records; 15 (5) grant injunctive relief, including restricting or prohibiting the offer 16 or sale of securities or the providing of investment advice; 17 (6) impose a civil penalty of not more than $500 for a single violation 18 and not more than $25,000 for multiple violations; and 19 (7) grant any other necessary or appropriate relief. 20 (d) This section does not preclude a person from applying to the superior court 21 or a court of another state for relief from a request to appear, testify, file a statement, 22 produce records, or obey a subpoena. 23 (e) An individual is not excused from attending, testifying, filing a statement, 24 producing a record or other evidence, or obeying a subpoena of the administrator 25 under this chapter or in an action or proceeding instituted by the administrator under 26 this chapter on the ground that the required testimony, statement, record, or other 27 evidence, directly or indirectly, may tend to incriminate the individual or subject the 28 individual to a criminal fine, penalty, or forfeiture. If the individual refuses to testify, 29 file a statement, or produce a record or other evidence on the basis of the individual's 30 privilege against self-incrimination, the administrator may apply to the superior court 31 to compel the testimony, the filing of the statement, the production of the record, or
01 the giving of other evidence. The testimony, record, or other evidence compelled 02 under an order of the superior court may not be used, directly or indirectly, against the 03 individual in a criminal case, except in a prosecution for perjury or contempt or 04 otherwise failing to comply with the order. 05 (f) At the request of the securities regulator of another state or a foreign 06 jurisdiction, the administrator may provide assistance if the requesting regulator states 07 that it is conducting an investigation to determine whether a person has violated, is 08 violating, or is about to violate a law or regulation of the other state or foreign 09 jurisdiction relating to securities matters that the requesting regulator administers or 10 enforces. The administrator may provide the assistance by using the authority to 11 investigate and the powers conferred by this section as the administrator determines is 12 necessary or appropriate. The assistance may be provided without regard to whether 13 the conduct described in the request would also constitute a violation of this chapter or 14 other law of this state if occurring in this state. In deciding whether to provide the 15 assistance, the administrator may consider whether the requesting regulator is 16 permitted and has agreed to provide assistance reciprocally within its state or foreign 17 jurisdiction to the administrator on securities matters when requested, whether 18 compliance with the request would violate or prejudice the public policy of this state, 19 and the availability of resources and employees of the administrator to carry out the 20 request for assistance. 21 Sec. 45.56.603. Civil enforcement. (a) If the administrator believes that a 22 person has engaged, is engaging, or is about to engage in an act, practice, or course of 23 business constituting a violation of this chapter or a regulation adopted or order issued 24 under this chapter or that a person has, is, or is about to engage in an act, practice, or 25 course of business that materially aids a violation of this chapter or a regulation 26 adopted or order issued under this chapter, the administrator may maintain an action in 27 the superior court to enjoin the act, practice, or course of business and to enforce 28 compliance with this chapter or a regulation adopted or order issued under this 29 chapter. 30 (b) In an action under this section and on a proper showing, the court may 31 (1) issue a permanent or temporary injunction, restraining order, or
01 declaratory judgment; 02 (2) order other appropriate or ancillary relief, which may include 03 (A) an asset freeze, accounting, writ of attachment, writ of 04 general or specific execution, and appointment of a receiver or conservator that 05 may be the administrator for the defendant or the defendant's assets; 06 (B) ordering the administrator to take charge and control of a 07 defendant's property, including investment accounts and accounts in a 08 depository institution, rents, and profits; to collect debts; and to acquire and 09 dispose of property; 10 (C) imposing a civil penalty of not more than $2,500 for a 11 single violation or not more than $100,000 for more than one violation; an 12 order of rescission, restitution, or disgorgement directed to a person that has 13 engaged in an act, practice, or course of business constituting a violation of this 14 chapter or former AS 45.55 or a regulation adopted or order issued under this 15 chapter or former AS 45.55; and 16 (D) ordering the payment of prejudgment and postjudgment 17 interest; or 18 (3) order other relief that the court considers appropriate. 19 (c) The administrator may not be required to post a bond in an action or 20 proceeding under this chapter. 21 Sec. 45.56.604. Administrative enforcement. (a) If the administrator 22 determines that a person has engaged, is engaging, or is about to engage in an act, 23 practice, or course of business constituting a violation of this chapter or a regulation 24 adopted or order issued under this chapter or that a person has materially aided, is 25 materially aiding, or is about to materially aid an act, practice, or course of business 26 constituting a violation of this chapter or a regulation adopted or order issued under 27 this chapter, the administrator may 28 (1) issue an order directing the person to cease and desist from 29 engaging in the act, practice, or course of business or to take other action necessary or 30 appropriate to comply with this chapter; 31 (2) issue an order denying, suspending, revoking, or conditioning the
01 exemptions for a broker-dealer under AS 45.56.401(b)(1)(D) or (F) or an investment 02 adviser under AS 45.56.403(b)(1)(C); or 03 (3) issue an order under AS 45.56.204. 04 (b) An order under (a) of this section is effective on the date of issuance. 05 Upon issuance of the order, the administrator shall promptly serve each person subject 06 to the order with a copy of the order and a notice that the order has been entered. The 07 order must include a statement of any civil penalty or costs of investigation the 08 administrator will seek, a statement of the reasons for the order, and notice that, within 09 15 days after receipt of a request in a record from the person, the matter will be 10 scheduled for a hearing. If a person subject to the order does not request a hearing and 11 none is ordered by the administrator within 30 days after the date of service of the 12 order, the order, which may include a civil penalty or costs of the investigation if a 13 civil penalty or costs were sought in the statement accompanying the order, becomes 14 final as to that person by operation of law. If a hearing is requested or ordered, the 15 administrator, after notice of and opportunity for hearing to each person subject to the 16 order, may modify or vacate the order or extend it until final determination. 17 (c) If a hearing is requested or ordered under (b) of this section, a hearing must 18 be conducted by the office of administrative hearings established in AS 44.64.010 19 under AS 44.62.330 - 44.62.630. A final order may not be issued unless the 20 administrative law judge makes findings of fact and conclusions of law in a record 21 under AS 44.62.330 - 44.62.630 (Administrative Procedure Act). The final order may 22 make final, vacate, or modify the order issued under (a) of this section. 23 (d) In a final order under (c) of this section, the administrative law judge may 24 impose a civil penalty of not more than $2,500 for a single violation or not more than 25 $100,000 for more than one violation. 26 (e) In a final order, the administrative law judge may charge the actual cost of 27 an investigation or proceeding for a violation of this chapter or a regulation adopted or 28 order issued under this chapter. 29 (f) If a petition for judicial review of a final order is not filed in accordance 30 with AS 45.56.609, the administrative law judge may file a certified copy of the final 31 order with the clerk of a court of competent jurisdiction. The order so filed has the
01 same effect as a judgment of the court and may be recorded, enforced, or satisfied in 02 the same manner as a judgment of the court. 03 (g) If a person does not comply with an order under this section, the 04 administrator may petition a court of competent jurisdiction to enforce the order. The 05 court may not require the administrator to post a bond in an action or proceeding under 06 this section. If the court finds, after service and opportunity for hearing, that the 07 person was not in compliance with the order, the court may adjudge the person in civil 08 contempt of the order. The court may impose a further civil penalty against the person 09 for contempt in an amount not less than $2,500 but not greater than $100,000 for each 10 violation and may grant any other relief the court determines is just and proper in the 11 circumstances. 12 Sec. 45.56.605. Regulations, forms, orders, interpretative opinions, and 13 hearings. (a) The administrator may 14 (1) issue forms and orders; after notice and comment, adopt and amend 15 regulations necessary or appropriate to carry out this chapter; and repeal regulations, 16 including regulations and forms governing registration statements, applications, notice 17 filings, reports, and other records; 18 (2) by regulation, define terms, whether or not used in this chapter, but 19 those definitions may not be inconsistent with this chapter; and 20 (3) by regulation, classify securities, persons, and transactions and 21 adopt different requirements for different classes. 22 (b) Under this chapter, a regulation or form may not be adopted or amended, 23 or an order issued or amended, unless the administrator finds that the regulation, form, 24 order, or amendment is necessary or appropriate in the public interest or for the 25 protection of investors and is consistent with the purposes intended by this chapter. In 26 adopting, amending, and repealing regulations and forms, AS 45.56.608 applies in 27 order to achieve uniformity among the states and coordination with federal laws in the 28 form and content of registration statements, applications, reports, and other records, 29 including the adoption of uniform rules, forms, and procedures. 30 (c) Subject to 15 U.S.C. 78o(h) and 15 U.S.C. 80b-18a, the administrator may 31 require that a financial statement filed under this chapter be prepared in accordance
01 with generally accepted accounting principles in the United States and comply with 02 other requirements specified by regulation adopted or order issued under this chapter. 03 A regulation adopted or order issued under this chapter may establish 04 (1) subject to 15 U.S.C. 78o(h) and 15 U.S.C. 80b-18a, the form and 05 content of financial statements required under this chapter; 06 (2) whether unconsolidated financial statements must be filed; and 07 (3) whether required financial statements must be audited by an 08 independent certified public accountant. 09 (d) The administrator may provide interpretative opinions or issue 10 determinations that the administrator will not institute a proceeding or an action under 11 this chapter against a specified person for engaging in a specified act, practice, or 12 course of business if the determination is consistent with this chapter. A regulation 13 adopted or order issued under this chapter may establish a reasonable charge for 14 interpretative opinions or determinations that the administrator will not institute an 15 action or a proceeding under this chapter. 16 (e) A penalty under this chapter may not be imposed for and liability does not 17 arise from conduct that is engaged in or omitted in good faith believing it conforms to 18 a regulation, form, or order of the administrator under this chapter. 19 (f) A hearing in an administrative proceeding under this chapter must be 20 conducted in public unless the administrative law judge or the administrator for good 21 cause consistent with this chapter determines that the hearing may not be conducted in 22 public. 23 Sec. 45.56.606. Administrative files and opinions. (a) The administrator 24 shall maintain, or designate a person to maintain, a register of applications for 25 registration of securities; registration statements; notice filings; applications for 26 registration of broker-dealers, agents, investment advisers, and investment adviser 27 representatives; notice filings by federal covered investment advisers that are or have 28 been effective under this chapter or former AS 45.55; notices of claims of exemption 29 from registration or notice filing requirements contained in a record; orders issued 30 under this chapter or former AS 45.55; and interpretative opinions or no action 31 determinations issued under this chapter.
01 (b) The administrator shall make all regulations, forms, interpretative 02 opinions, and orders available to the public. 03 (c) The administrator shall furnish a copy of a record that is a public record or 04 a certification that the public record does not exist to a person upon request. A 05 regulation adopted under this chapter may establish a reasonable charge for furnishing 06 the record or certification. A copy of the record certified or a certificate by the 07 administrator of a record's nonexistence is prima facie evidence of a record or its 08 nonexistence. 09 Sec. 45.56.607. Public records; confidentiality. (a) Except as otherwise 10 provided in (b) of this section, records obtained by the administrator or filed under this 11 chapter, including a record contained in or filed with a registration statement, 12 application, notice filing, or report, are public records and are available for public 13 examination. 14 (b) The following records are not public records and are not available for 15 public examination under (a) of this section: 16 (1) a record obtained by the administrator in connection with an audit 17 or inspection under AS 45.56.411(d) or an investigation under AS 45.56.602; 18 (2) a part of a record filed in connection with a registration statement 19 under AS 45.56.301 and 45.56.303 - 45.56.305 or a record under AS 45.56.411(d) that 20 contains trade secrets or confidential information if the person filing the registration 21 statement or report has asserted a claim of confidentiality or privilege that is 22 authorized by law; 23 (3) a record that is not required to be provided to the administrator or 24 filed under this chapter and is provided to the administrator only on the condition that 25 the record may not be subject to public examination or disclosure; 26 (4) a nonpublic record received from a person specified in 27 AS 45.56.608(a); and 28 (5) any social security number, residential address unless used as a 29 business address, and residential telephone number unless used as a business 30 telephone number, contained in a record that is filed. 31 (c) If disclosure is for the purpose of a civil, administrative, or criminal
01 investigation, action, or proceeding or to a person specified in AS 45.56.608(a), the 02 administrator may disclose a record obtained in connection with an audit or inspection 03 under AS 45.56.411(d) or a record obtained in connection with an investigation under 04 AS 45.56.602. 05 Sec. 45.56.608. Uniformity and cooperation with other agencies. (a) The 06 administrator may cooperate, coordinate, consult, and, subject to AS 45.56.607, share 07 records and information with the securities regulator of another state, Canada, a 08 Canadian province or territory, a foreign jurisdiction, the Securities and Exchange 09 Commission, the United States Department of Justice, the Commodity Futures 10 Trading Commission, the Federal Trade Commission, the Securities Investor 11 Protection Corporation, a self-regulatory organization, a national or international 12 organization of securities regulators, a federal or state banking and insurance 13 regulator, and a governmental law enforcement agency to bring about greater 14 uniformity in securities matters among the federal government, self-regulatory 15 organizations, states, and foreign governments. 16 (b) In cooperating, coordinating, consulting, and sharing records and 17 information under this section and in acting by regulation, order, or waiver under this 18 chapter, the administrator may take into consideration in carrying out the public 19 interest the following general policies: 20 (1) maximizing effectiveness of regulation for the protection of 21 investors; 22 (2) maximizing uniformity in federal and state regulatory standards; 23 and 24 (3) minimizing burdens on the business of capital formation, without 25 adversely affecting essentials of investor protection. 26 (c) The cooperation, coordination, consultation, and sharing of records and 27 information authorized by this section includes 28 (1) establishing or employing one or more designees as a central 29 depository for registration and notice filings under this chapter and for records 30 required or allowed to be maintained under this chapter; 31 (2) developing and maintaining uniform forms;
01 (3) conducting a joint examination or investigation; 02 (4) holding a joint administrative hearing; 03 (5) instituting and prosecuting a joint civil or administrative 04 proceeding; 05 (6) sharing and exchanging personnel; 06 (7) coordinating registrations under AS 45.56.301 and 45.56.401 - 07 45.56.404 and exemptions under AS 45.56.203; 08 (8) sharing and exchanging records, subject to AS 45.56.607; 09 (9) formulating regulations, statements of policy, guidelines, forms, 10 and interpretative opinions and releases; 11 (10) formulating common systems and procedures; 12 (11) notifying the public of proposed regulations, forms, statements of 13 policy, and guidelines; 14 (12) attending conferences and other meetings among securities 15 regulators, which may include representatives of governmental and private sector 16 organizations involved in capital formation, considered necessary or appropriate to 17 promote or achieve uniformity; and 18 (13) developing and maintaining a uniform exemption from 19 registration for small issuers, and taking other steps to reduce the burden of raising 20 investment capital by small businesses. 21 Sec. 45.56.609. Judicial review. (a) A final order issued by the administrator 22 or administrative law judge under this chapter is subject to judicial review under 23 AS 44.62.560 (Administrative Procedure Act). 24 (b) A regulation adopted under this chapter is subject to judicial review under 25 AS 44.62.300 (Administrative Procedure Act). 26 Sec. 45.56.610. Jurisdiction. (a) AS 45.56.301, 45.56.302, 45.56.401(a), 27 45.56.402(a), 45.56.403(a), 45.56.404(a), 45.56.501, 45.56.506, 45.56.509, and 28 45.56.510 do not apply to a person that sells or offers to sell a security unless the offer 29 to sell or the sale is made in the state or the offer to purchase or the purchase is made 30 and accepted in the state. 31 (b) AS 45.56.401(a), 45.56.402(a), 45.56.403(a), 45.56.404(a), 45.56.501,
01 45.56.506, 45.56.509, and 45.56.510 do not apply to a person that purchases or offers 02 to purchase a security unless the offer to purchase or the purchase is made in the state 03 or the offer to sell or the sale is made and accepted in the state. 04 (c) For the purpose of this section, an offer to sell or to purchase a security is 05 made in the state, whether or not either party is then present in the state, if the offer 06 (1) originates from within the state; or 07 (2) is directed by the offeror to a place in the state and received at the 08 place to which it is directed. 09 (d) For the purpose of this section, an offer to purchase or to sell is accepted in 10 the state, whether or not either party is then present in the state, if the acceptance 11 (1) is communicated to the offeror in the state and the offeree 12 reasonably believes the offeror to be present in the state and the acceptance is received 13 at the place in the state to which it is directed; and 14 (2) has not previously been communicated to the offeror, orally or in a 15 record, outside the state. 16 (e) An offer to sell or to purchase is not made in the state when a publisher 17 circulates or there is circulated on the publisher's behalf in the state a bona fide 18 newspaper or other publication of general, regular, and paid circulation that is not 19 published in the state, or that is published in the state but has had more than two-thirds 20 of its circulation outside the state during the previous 12 months, or when a radio or 21 television program or other electronic communication originating outside the state is 22 received in the state. A radio or television program, or other electronic 23 communication is considered as having originated in the state if either the broadcast 24 studio or the originating source of transmission is located in the state, unless 25 (1) the program or communication is syndicated and distributed from 26 outside the state for redistribution to the general public in the state; 27 (2) the program or communication is supplied by a radio, television, or 28 other electronic network with the electronic signal originating from outside the state 29 for redistribution to the general public in the state; 30 (3) the program or communication is an electronic communication that 31 originates outside the state and is captured for redistribution to the general public in
01 the state by a community antenna or cable, radio, cable television, or other electronic 02 system; or 03 (4) the program or communication consists of an electronic 04 communication that originates in the state, but that is not intended for distribution to 05 the general public in the state. 06 (f) AS 45.56.403(a), 45.56.404(a), 45.56.405(a), 45.56.502, 45.56.505, and 07 45.56.506 apply to a person if the person engages in an act, practice, or course of 08 business instrumental in effecting prohibited or actionable conduct in the state, 09 whether or not either party is then present in the state. 10 Sec. 45.56.611. Service of process. (a) A consent to service of process 11 complying with this section required by this chapter shall be signed and filed in the 12 form required by a regulation adopted or order issued under this chapter. A consent 13 appointing the administrator the person's agent for service of process in a noncriminal 14 action or proceeding against the person or the person's successor or personal 15 representative under this chapter or a regulation adopted or order issued under this 16 chapter after the consent is filed has the same force and validity as if the service were 17 made personally on the person filing the consent. A person that has filed a consent 18 under this subsection in connection with a previous application for registration or 19 notice filing need not file an additional consent. 20 (b) If a person, including a nonresident of the state, engages in an act, practice, 21 or course of business prohibited or made actionable by this chapter or a regulation 22 adopted or order issued under this chapter and the person has not filed a consent to 23 service of process under (a) of this section, the act, practice, or course of business 24 constitutes the appointment of the administrator as the person's agent for service of 25 process in a noncriminal action or proceeding against the person or the person's 26 successor or personal representative. 27 (c) Service under (a) or (b) of this section may be made by providing a copy of 28 the process to the office of the administrator, but the service is not effective unless 29 (1) the plaintiff, which may be the administrator, promptly sends 30 notice of the service and a copy of the process, return receipt requested, to the 31 defendant or respondent at the address set out in the consent to service of process or, if
01 a consent to service of process has not been filed, at the last known address, or takes 02 other reasonable steps to give notice; and 03 (2) the plaintiff files an affidavit of compliance with this subsection in 04 the action or proceeding on or before the return day of the process, if any, or within 05 the time that the court, or the administrator in a proceeding before the administrator, 06 allows. 07 (d) Service under (c) of this section may be used in a proceeding before the 08 administrator or by the administrator in a civil action in which the administrator is the 09 moving party. 10 (e) If process is served under (c) of this section, the court, or the administrator 11 in a proceeding before the administrator, shall order continuances as are necessary or 12 appropriate to afford the defendant or respondent reasonable opportunity to defend. 13 Article 7. Miscellaneous and Additional General Provisions. 14 Sec. 45.56.810. References to federal statutes. 15 U.S.C. 77a - 77aa 15 (Securities Act of 1933), 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934), 15 16 U.S.C. 79 - 79z-6 (Public Utility Holding Company Act of 1935), 15 U.S.C. 80a-1 - 17 80a-64 (Investment Company Act of 1940), 15 U.S.C. 80b-1 - 80b-21 (Investment 18 Advisers Act of 1940), 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security 19 Act of 1974), 12 U.S.C. 1701 - 1750g (National Housing Act), 7 U.S.C. 1 - 27f 20 (Commodity Exchange Act), 26 U.S.C. (Internal Revenue Code), 15 U.S.C. 78aaa - 21 78lll (Securities Investor Protection Act of 1970), P.L. 105-353, 112 Stat. 3227 22 (Securities Litigation Uniform Standards Act of 1998), 15 U.S.C. 661 - 697g (Small 23 Business Investment Act of 1958), and 15 U.S.C. 7001 - 7031 (Electronic Signatures 24 in Global and National Commerce Act) mean those statutes and the rules and 25 regulations adopted under those statutes, as in effect on the date of enactment of this 26 chapter, or as later amended. 27 Sec. 45.56.820. References to federal agencies. A reference in this chapter 28 to an agency or department of the United States is also a reference to a successor 29 agency or department. 30 Sec. 45.56.830. Application to Alaska Native Claims Settlement Act 31 corporations. The initial issue of stock of a corporation organized under Alaska law
01 under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act) is not a sale of a 02 security under AS 45.56.301. 03 Sec. 45.56.840. Reports of corporations. Copies of all annual reports, 04 proxies, consents or authorizations, proxy statements, and other materials relating to 05 proxy solicitations distributed, published, or made available by any person to at least 06 30 Alaska resident shareholders of a corporation that has total assets exceeding 07 $1,000,000 and a class of equity security held of record by 500 or more persons and 08 that is exempted from the registration requirements of AS 45.56.301 by AS 45.56.830 09 shall be filed with the administrator concurrently with their distribution to 10 shareholders. 11 Sec. 45.56.990. Definitions. In this chapter, unless the context otherwise 12 requires, 13 (1) "administrator" means the commissioner of commerce, community, 14 and economic development or a designee of the commissioner; 15 (2) "agent" means an individual, other than a broker-dealer, who 16 represents a broker-dealer in effecting or attempting to effect purchases or sales of 17 securities or represents an issuer in effecting or attempting to effect purchases or sales 18 of the issuer's securities; however, a partner, officer, or director of a broker-dealer or 19 issuer, or an individual having a similar status or performing similar functions is an 20 agent only if the individual otherwise comes within the term; "agent" does not include 21 an individual excluded by regulation adopted or order issued under this chapter; 22 (3) "bank" means 23 (A) a banking institution organized under the laws of the 24 United States; 25 (B) a member bank of the Federal Reserve System; 26 (C) any other banking institution, whether incorporated or not, 27 doing business under the laws of a state or of the United States, a substantial 28 portion of the business of which consists of receiving deposits or exercising 29 fiduciary powers similar to those permitted to be exercised by national banks 30 under the authority of the United States Comptroller of the Currency under 12 31 U.S.C. 92a, that is supervised and examined by a state or federal agency
01 having supervision over banks, and that is not operated for the purpose of 02 evading this chapter; and 03 (D) a receiver, conservator, or other liquidating agent of any 04 institution or firm included in (A), (B), or (C) of this paragraph; 05 (4) "broker-dealer" means a person engaged in the business of 06 effecting transactions in securities for the accounts of others or for the person's own 07 account; the term does not include 08 (A) an agent; 09 (B) an issuer; 10 (C) a bank or savings institution if its activities as a broker- 11 dealer are limited to those specified in 15 U.S.C. 78c(a)(4)(B)(i) - (vi), (viii) - 12 (x), and (xi) if limited to unsolicited transactions, or 15 U.S.C. 78c(a)(5)(B) 13 and (C), or a bank that satisfies the conditions described in 15 U.S.C. 14 78c(a)(4); 15 (D) an international banking institution; or 16 (E) a person excluded by a regulation adopted or order issued 17 under this chapter; 18 (5) "depository institution" means 19 (A) a bank; or 20 (B) a savings institution, trust company, credit union, or similar 21 institution that is organized or chartered under the laws of a state or of the 22 United States, authorized to receive deposits, and supervised and examined by 23 an official or agency of a state or the United States if its deposits or share 24 accounts are insured to the maximum amount authorized by statute by the 25 Federal Deposit Insurance Corporation, the National Credit Union Share 26 Insurance Fund, or a successor authorized by federal law; the term does not 27 include 28 (i) an insurance company or other organization 29 primarily engaged in the business of insurance; 30 (ii) a Morris Plan bank; or 31 (iii) an industrial loan company;
01 (6) "federal covered investment adviser" means a person registered 02 under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 1940); 03 (7) "federal covered security" means a security that is, or upon 04 completion of a transaction will be, a covered security under 15 U.S.C. 77r(b) or rules 05 or regulations adopted under that provision; 06 (8) "filing" means the receipt under this chapter of a record by the 07 administrator or a designee of the administrator; 08 (9) "fraud," "deceit," and "defraud" are not limited to common law 09 deceit; 10 (10) "guaranteed" means guaranteed as to payment of all principal and 11 all interest; 12 (11) "institutional investor" means any of the following, whether 13 acting for itself or for others in a fiduciary capacity: 14 (A) a depository institution or international banking institution; 15 (B) an insurance company; 16 (C) a separate account of an insurance company; 17 (D) an investment company as defined in 15 U.S.C. 80a-1 - 18 80a-64 (Investment Company Act of 1940); 19 (E) a broker-dealer registered under 15 U.S.C. 78a - 78lll 20 (Securities Exchange Act of 1934); 21 (F) an employee pension, profit-sharing, or benefit plan if the 22 plan has total assets in excess of $10,000,000 or its investment decisions are 23 made by a named fiduciary, as defined in 29 U.S.C. 1102(a)(2) (Employee 24 Retirement Income Security Act of 1974), that is a broker-dealer registered 25 under 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934), an investment 26 adviser registered or exempt from registration under 15 U.S.C. 80b-1 - 80b-21 27 (Investment Advisers Act of 1940), an investment adviser registered under this 28 chapter, a depository institution, or an insurance company; 29 (G) a plan established and maintained by a state, a political 30 subdivision of a state, or an agency or instrumentality of a state or a political 31 subdivision of a state for the benefit of its employees if the plan has total assets
01 in excess of $10,000,000 or its investment decisions are made by a legally 02 designated public official or by a named fiduciary, as defined in 29 U.S.C. 03 1102(a)(2), that is a broker-dealer registered under 15 U.S.C. 78a - 78lll 04 (Securities Exchange Act of 1934), an investment adviser registered or exempt 05 from registration under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 06 1940), an investment adviser registered under this chapter, a depository 07 institution, or an insurance company; 08 (H) a trust if that trust has total assets in excess of $10,000,000, 09 the trustee of the trust is a depository institution, and the participants in the 10 trust are exclusively plans of the types identified in (F) or (G) of this 11 paragraph, regardless of the size of their assets, except a trust that includes as 12 participants self-directed individual retirement accounts or similar self-directed 13 plans; 14 (I) an organization described in 26 U.S.C. 501(c)(3), 15 corporation, Massachusetts trust or similar business trust, limited liability 16 company, or partnership, not formed for the specific purpose of acquiring the 17 securities offered, with total assets in excess of $10,000,000; 18 (J) a small business investment company licensed by the 19 United States Small Business Administration under 15 U.S.C. 681(c) with total 20 assets in excess of $10,000,000; 21 (K) a private business development company as defined in 15 22 U.S.C. 80b-2(a)(22) with total assets in excess of $10,000,000; 23 (L) a federal covered investment adviser acting for its own 24 account; 25 (M) a qualified institutional buyer, as defined in 17 C.F.R. 26 230.144A, other than 17 C.F.R. 230.144A(a)(1)(i)(H), adopted under 15 27 U.S.C. 77a - 77aa (Securities Act of 1933); 28 (N) a major U.S. institutional investor, as defined in 17 C.F.R. 29 240.15a-6(b)(4)(i), adopted under 15 U.S.C. 78a - 78lll (Securities Exchange 30 Act of 1934); 31 (O) any other person, other than an individual, of institutional
01 character with total assets in excess of $10,000,000 not organized for the 02 specific purpose of evading this chapter; or 03 (P) any other person specified by regulation adopted or order 04 issued under this chapter; 05 (12) "insurance company" means a company organized as an insurance 06 company whose primary business is writing insurance or reinsuring risks underwritten 07 by insurance companies and that is subject to supervision by the insurance 08 commissioner or a similar official or agency of a state; 09 (13) "insured" means insured as to payment of all principal and all 10 interest; 11 (14) "international banking institution" means an international 12 financial institution of which the United States is a member and whose securities are 13 exempt from registration under 15 U.S.C. 77a - 77aa (Securities Act of 1933); 14 (15) "investment adviser" means a person that, for compensation, 15 engages in the business of advising others, either directly or through publications or 16 writings, as to the value of securities or the advisability of investing in, purchasing, or 17 selling securities or that, for compensation and as a part of a regular business, issues or 18 produces analyses or reports concerning securities; the term includes a financial 19 planner or other person that, as an integral component of other financially related 20 services, provides investment advice to others for compensation as part of a business 21 or that holds itself out as providing investment advice to others for compensation; the 22 term does not include 23 (A) an investment adviser representative; 24 (B) a lawyer, accountant, engineer, or teacher whose 25 performance of investment advice is solely incidental to the practice of the 26 person's profession; 27 (C) a broker-dealer or its agents whose performance of 28 investment advice is solely incidental to the conduct of business as a broker- 29 dealer and that does not receive special compensation for the investment 30 advice; 31 (D) a publisher of a bona fide newspaper, news magazine, or
01 business or financial publication of general and regular circulation; 02 (E) a federal covered investment adviser; 03 (F) a bank or savings institution; 04 (G) any other person that is excluded by 15 U.S.C. 80b-1 - 05 80b-21 (Investment Advisers Act of 1940) from the definition of investment 06 adviser; or 07 (H) any other person excluded by a regulation adopted or order 08 issued under this chapter; 09 (16) "investment adviser representative" means an individual 10 employed by or associated with an investment adviser or federal covered investment 11 adviser and who makes any recommendations or otherwise gives investment advice 12 regarding securities, manages accounts or portfolios of clients, determines which 13 recommendation or advice regarding securities should be given, provides investment 14 advice or offers to provide investment advice, receives compensation to solicit, offer, 15 or negotiate for the sale of or for selling investment advice, or supervises employees 16 who perform any of the foregoing; the term does not include an individual who 17 (A) performs only clerical or ministerial acts; 18 (B) is an agent whose performance of investment advice is 19 solely incidental to the individual's acting as an agent and who does not receive 20 special compensation for investment advisory services; 21 (C) is employed by or associated with a federal covered 22 investment adviser, unless the individual has a place of business in this state, as 23 that term is defined by rule adopted under 15 U.S.C. 80b-3a and is 24 (i) an investment adviser representative, as that term is 25 defined by rule adopted under 15 U.S.C. 80b-3a; or 26 (ii) not a supervised person, as that term is defined in 15 27 U.S.C. 80b-2(a)(25); or 28 (D) is excluded by a regulation adopted or order issued under 29 this chapter; 30 (17) "issuer" means a person that issues or proposes to issue a security, 31 subject to the following:
01 (A) the issuer of a voting trust certificate, collateral trust 02 certificate, certificate of deposit for a security, or share in an investment 03 company without a board of directors or individuals performing similar 04 functions is the person performing the acts and assuming the duties of 05 depositor or manager under the trust or other agreement or instrument under 06 which the security is issued; 07 (B) the issuer of an equipment trust certificate or similar 08 security serving the same purpose is the person by which the property is or will 09 be used or to which the property or equipment is or will be leased or 10 conditionally sold or that is otherwise contractually responsible for ensuring 11 payment of the certificate; 12 (C) the issuer of a fractional undivided interest in an oil, gas, or 13 other mineral lease or in payments out of production under a lease, right, or 14 royalty is the owner of an interest in the lease or in payments out of production 15 under a lease, right, or royalty, whether whole or fractional, that creates 16 fractional interests for the purpose of sale; 17 (18) "nonissuer transaction" or "nonissuer distribution" means a 18 transaction or distribution not directly or indirectly for the benefit of the issuer; 19 (19) "offer to purchase" includes an attempt or offer to obtain, or 20 solicitation of an offer to sell, a security or interest in a security for value; the term 21 does not include a tender offer that is subject to 15 U.S.C. 78n(d); 22 (20) "person" means an individual; corporation; business trust; estate; 23 trust; partnership; limited liability company; association; joint venture; government; 24 governmental subdivision, agency, or instrumentality; public corporation; or any other 25 legal or commercial entity; 26 (21) "place of business" of a broker-dealer, an investment adviser, or a 27 federal covered investment adviser means 28 (A) an office at which the broker-dealer, investment adviser, or 29 federal covered investment adviser regularly provides brokerage or investment 30 advice or solicits, meets with, or otherwise communicates with customers or 31 clients; or
01 (B) any other location that is held out to the general public as a 02 location at which the broker-dealer, investment adviser, or federal covered 03 investment adviser provides brokerage or investment advice or solicits, meets 04 with, or otherwise communicates with customers or clients; 05 (22) "price amendment" means the amendment to a registration 06 statement filed under 15 U.S.C. 77a - 77aa (Securities Act of 1933) or, if an 07 amendment is not filed, the prospectus or prospectus supplement filed under 15 U.S.C. 08 77a - 77aa (Securities Act of 1933) that includes a statement of the offering price, 09 underwriting and selling discounts or commissions, amount of proceeds, conversion 10 rates, call prices, and other matters dependent upon the offering price; 11 (23) "principal place of business" of a broker-dealer or an investment 12 adviser means the executive office of the broker-dealer or investment adviser from 13 which the officers, partners, or managers of the broker-dealer or investment adviser 14 direct, control, and coordinate the activities of the broker-dealer or investment adviser; 15 (24) "record," except in the phrases "of record," "official record," and 16 "public record," means information that is inscribed on a tangible medium or that is 17 stored in an electronic or other medium and is retrievable in perceivable form; 18 (25) "sale" includes every contract of sale, contract to sell, or 19 disposition of a security or interest in a security for value, and "offer to sell" includes 20 every attempt or offer to dispose of, or solicitation of an offer to purchase, a security 21 or interest in a security for value; both terms include 22 (A) a security given or delivered with, or as a bonus on account 23 of, a purchase of securities or any other thing constituting part of the subject of 24 the purchase and having been offered and sold for value; 25 (B) a gift of assessable stock involving an offer and sale; and 26 (C) a sale or offer of a warrant or right to purchase or subscribe 27 to another security of the same or another issuer and a sale or offer of a 28 security that gives the holder a present or future right or privilege to convert 29 the security into another security of the same or another issuer, including an 30 offer of the other security; 31 (26) "Securities and Exchange Commission" means the United States
01 Securities and Exchange Commission; 02 (27) "securities business" means a business that provides the services 03 provided by 04 (A) investment advisers, federal covered investment advisers, 05 or investment adviser representatives; or 06 (B) broker-dealers, issuers, or agents of broker-dealers or 07 issuers; 08 (28) "security" means a note; stock; treasury stock; security future; 09 bond; debenture; evidence of indebtedness; certificate of interest or participation in a 10 profit-sharing agreement; collateral trust certificate; preorganization certificate or 11 subscription; transferable share; investment contract; voting trust certificate; certificate 12 of deposit for a security; fractional undivided interest in oil, gas, or other mineral 13 rights; put, call, straddle, option, or privilege on a security, certificate of deposit, or 14 group or index of securities, including an interest or based on the value of a put, call, 15 straddle, option, or privilege on a security, certificate of deposit, or group or index of 16 securities; put, call, straddle, option, or privilege entered into on a national securities 17 exchange relating to foreign currency; or, in general, an interest or instrument 18 commonly known as a "security"; or a certificate of interest or participation in, 19 temporary or interim certificate for, receipt for, guarantee of, or warrant or right to 20 subscribe to or purchase any of the foregoing; the term 21 (A) includes both a certificated and an uncertificated security; 22 (B) does not include an insurance or endowment policy or 23 annuity contract under which an insurance company promises to pay a fixed 24 sum of money either in a lump sum or periodically for life or other specified 25 period; 26 (C) does not include an interest in a contributory or 27 noncontributory pension or welfare plan subject to 29 U.S.C. 1001 - 1461 28 (Employee Retirement Income Security Act of 1974); 29 (D) includes an investment in a common enterprise with the 30 expectation of profits to be derived primarily from the efforts of a person other 31 than the investor; in this subparagraph, "common enterprise" means an
01 enterprise in which the fortunes of the investor are interwoven with those of 02 either the person offering the investment, a third party, or other investors; and 03 (E) includes as an investment contract, among other contracts, 04 an interest in a limited partnership and a limited liability company and an 05 investment in a viatical settlement or similar agreement; 06 (29) "self-regulatory organization" means a national securities 07 exchange registered under 15 U.S.C. 78a - 78lll (Securities Exchange Act of 1934), a 08 national securities association of broker-dealers registered under 15 U.S.C. 78a - 78lll 09 (Securities Exchange Act of 1934), a clearing agency registered under 15 U.S.C. 78a - 10 78lll (Securities Exchange Act of 1934), or the Municipal Securities Rulemaking 11 Board established under 15 U.S.C. 78o-4; 12 (30) "sign" means, with present intent to authenticate or adopt a 13 record, 14 (A) to execute or adopt a tangible symbol; or 15 (B) to attach or logically associate with the record an electronic 16 symbol, sound, or process; 17 (31) "state" means a state of the United States, the District of 18 Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular 19 possession subject to the jurisdiction of the United States. 20 Sec. 45.56.995. Short title. This chapter may be cited as the Uniform 21 Securities Act. 22 * Sec. 2. AS 06.05.340 is amended to read: 23 Sec. 06.05.340. Certain remuneration prohibited. A bank may not pay 24 directly or indirectly a fee, commission, or bonus of any kind for its promotion and 25 organization or for securing a subscription to the original capital or to any increase in 26 capital. However, this section does not prohibit the payment of reasonable 27 compensation for legal, accounting, and econometric services, or payments to a 28 securities broker-dealer registered under AS 43.56 [AS 45.55] for services that have 29 been performed in connection with the sale of bank securities. 30 * Sec. 3. AS 06.26.020(a) is amended to read: 31 (a) Notwithstanding any other provision of this chapter, a person does not act
01 as a fiduciary under this chapter if the person 02 (1) is licensed to practice law in this state, the person is acting within 03 the scope of the license, and the person and any law firm of the person are not trustees 04 of more trusts than the number established for the person and law firm by the 05 department by regulation or order; in this paragraph, "law firm" means a partnership, a 06 professional corporation organized under AS 10.45, or another association organized 07 for the practice of law and in which the person practices law; 08 (2) acts as trustee under a deed of trust delivered only as security for 09 the payment of money or for the performance of another act; 10 (3) receives and distributes on behalf of a principal rents and proceeds 11 of sales as a real estate broker or other licensee under AS 08.88; 12 (4) engages in securities business activity [OR INVESTMENT 13 ADVISORY BUSINESS ACTIVITY] as a registered broker-dealer, a broker-dealer 14 agent, an [A STATE] investment adviser, or an investment adviser representative, or 15 as a federal covered investment adviser who has made a notice filing under 16 AS 45.56.405(c) [AS 45.55.040(h),] the person is acting within the scope of the 17 person's registration or notice filing, and the activity is regulated by the department 18 under AS 45.56 [AS 45.55] or by the United States Securities and Exchange 19 Commission; in this paragraph, "agent," "broker-dealer," "federal covered investment 20 adviser," "investment adviser," "investment adviser representative," and 21 ["INVESTMENT ADVISORY BUSINESS,"] "securities business" [," AND "STATE 22 INVESTMENT ADVISER"] have the meanings given in AS 45.56.990 23 [AS 45.55.990]; 24 (5) engages in the sale and administration of an insurance product as 25 an insurance company licensed under AS 21 or an insurance producer licensed under 26 AS 21 and is acting within the scope of that license; 27 (6) handles escrow transactions and is a title insurance company that 28 has a certificate of authority issued under AS 21.09, a title insurance limited producer 29 that is licensed as required by AS 21.66.270, or an employee of the title insurance 30 company or title insurance producer when acting in the scope of the employee's 31 employment; in this paragraph,
01 (A) "escrow transaction" has the meaning given in 02 AS 34.80.090; 03 (B) "title insurance company" has the meaning given in 04 AS 21.66.480; 05 (C) "title insurance limited producer" has the meaning given in 06 AS 21.66.480; 07 (7) is a cemetery association organized and acting under AS 10.30; 08 (8) is a trustee for a voting trust under AS 10.06 and is acting in that 09 capacity; 10 (9) has a certified public accountant certificate issued under AS 08.04, 11 the person is acting within the scope of the certificate, and the person and any 12 accounting firm of the person are not trustees of more trusts than the number 13 established for the person and accounting firm by the department by regulation or 14 order; in this paragraph, "accounting firm" means a partnership, a professional 15 corporation organized under AS 10.45, or another association organized for the 16 practice of public accounting and in which the person practices public accounting; 17 (10) holds real property in trust for the primary purpose of subdivision, 18 development, or sale or to facilitate a business transaction with respect to the real 19 property; 20 (11) serves as a trustee of a trust created by the person's family 21 members; 22 (12) holds money or other assets as a homeowners' association or 23 similar organization to pay maintenance and other related costs for commonly owned 24 property; in this paragraph, "homeowners' association" includes an association of 25 apartment owners under AS 34.07.450 and a unit owners' association or master 26 association under AS 34.08.990; 27 (13) holds money or other assets in connection with the collection of 28 debts or payments on loans by a person acting solely as the agent or representative at 29 the sole direction of the person to whom the debt or payment is owed, including 30 engaging in the business of an escrow agent; 31 (14) acts as a conservator if the person is appointed by a court of this
01 or another state or is qualified to act as a conservator under AS 13.26.320; 02 (15) acts as a personal representative if the person is appointed a 03 personal representative by a court of this or another state or is qualified to act as a 04 personal representative under AS 13.21.035; 05 (16) acts as a guardian or receiver if the person is appointed as a 06 guardian or receiver by a court of this or another state; 07 (17) is a business partner acting with regard to the business, or a co- 08 owner of property acting with regard to the co-owned property; 09 (18) serves as a trustee of one or more trusts in which the settlor is not 10 a family member of the person, except that the person may not at any one time serve 11 as a trustee for trusts that cumulatively have more than 10 different settlors; however, 12 the department may change by regulation or order the maximum number of settlors 13 allowed for this exemption; in this paragraph, a husband and wife who create a joint 14 trust are considered to be one settlor. 15 * Sec. 4. AS 06.26.990(a)(21) is amended to read: 16 (21) "issuer" has the meaning given in AS 45.56.990 [AS 45.55.990]; 17 * Sec. 5. AS 12.62.400(13) is amended to read: 18 (13) registration as a broker-dealer, agent, investment adviser 19 representative, or [STATE] investment adviser under AS 45.56.401 - 45.56.404 20 [AS 45.55.030 - 45.55.060]. 21 * Sec. 6. AS 14.43.148(h)(1) is amended to read: 22 (1) "license" 23 (A) means, except as provided in (B) of this paragraph, a 24 license, certificate, permit, registration, or other authorization that, at the time 25 of issuance, will be valid for more than 150 days and that may be acquired 26 from a state agency to perform an occupation, including the following: 27 (i) license relating to boxing or wrestling under 28 AS 05.10; 29 (ii) authorization to perform an occupation regulated 30 under AS 08; 31 (iii) teacher certificate under AS 14.20;
01 (iv) authorization under AS 18.08 to perform 02 emergency medical services; 03 (v) asbestos worker certification under AS 18.31; 04 (vi) boiler operator's license under AS 18.60.395; 05 (vii) certificate of fitness under AS 18.62; 06 (viii) hazardous painting certification under AS 18.63; 07 (ix) certification as a municipal correctional, 08 correctional, probation, or parole officer under AS 18.65.245; 09 (x) security guard license under AS 18.65.400 - 10 18.65.490; 11 (xi) license relating to insurance under AS 21.27; 12 (xii) employment agency permit under AS 23.15.330 - 13 23.15.520; 14 (xiii) registration as a broker-dealer, an agent, an [A 15 STATE] investment adviser, or an investment adviser representative 16 under AS 45.56.401, 45.56.402, 45.56.403, or 45.56.404 17 [AS 45.55.030]; 18 (xiv) certification as a pesticide applicator under 19 AS 46.03.320; 20 (xv) certification as a storage tank worker or contractor 21 under AS 46.03.375; 22 (xvi) certification as a water and wastewater works 23 operator under AS 46.30; and 24 (B) does not include 25 (i) a commercial fishing license under AS 16.05.480, 26 including a crewmember fishing license; 27 (ii) a vessel license issued under AS 16.05.490 or 28 16.05.530; 29 (iii) a license issued under AS 47.35; 30 (iv) a business license issued under AS 43.70; 31 (v) an entry permit or interim-use permit issued under
01 AS 16.43; or 02 (vi) a driver's license issued under AS 28.15; 03 * Sec. 7. AS 21.89.110(a) is amended to read: 04 (a) The director shall regulate the transaction of viatical settlement contracts 05 for the protection of viators, insureds, and insurers. The authority of the director under 06 this subsection extends to the regulation of transactions between a viator and a viatical 07 settlement provider and between a viator and a person acting as an agent in viaticating 08 a life insurance policy, while the authority of the commissioner extends to the 09 regulation of viatical settlement investments as provided under AS 45.56 10 [AS 45.55.905(c)]. 11 * Sec. 8. AS 25.27.244(s)(2) is amended to read: 12 (2) "license" 13 (A) means, except as provided in (B) of this paragraph, a 14 license, certificate, permit, registration, or other authorization that, at the time 15 of issuance, will be valid for more than 150 days and that may be acquired 16 from a state agency to perform an occupation, including the following: 17 (i) license relating to boxing or wrestling under 18 AS 05.10; 19 (ii) authorization to perform an occupation regulated 20 under AS 08; 21 (iii) teacher certificate under AS 14.20; 22 (iv) authorization under AS 18.08 to perform 23 emergency medical services; 24 (v) asbestos worker certification under AS 18.31; 25 (vi) boiler operator's license under AS 18.60.395; 26 (vii) certificate of fitness under AS 18.62; 27 (viii) hazardous painting certification under AS 18.63; 28 (ix) security guard license under AS 18.65.400 - 29 18.65.490; 30 (x) license relating to insurance under AS 21.27; 31 (xi) employment agency permit under AS 23.15.330 -
01 23.15.520; 02 (xii) registration as a broker-dealer, an agent, an [A 03 STATE] investment adviser, or an investment adviser representative 04 under AS 45.56.401, 45.56.402, 45.56.403, 45.56.404 [AS 45.55.030]; 05 (xiii) certification as a pesticide applicator under 06 AS 46.03.320; 07 (xiv) certification as a storage tank worker or contractor 08 under AS 46.03.375; 09 (xv) certification as a water and wastewater works 10 operator under AS 46.30; [AND] 11 (xvi) commercial crewmember fishing license under 12 AS 16.05.480 other than an entry permit or interim-use permit under 13 AS 16.43; 14 (xvii) fish transporter permit under AS 16.05.671; 15 (xviii) sport fishing operator license under 16 AS 16.40.260; 17 (xix) sport fishing guide license under AS 16.40.270; 18 (B) does not include 19 (i) a vessel license issued under AS 16.05.490 or 20 16.05.530; 21 (ii) a license issued under AS 14.37 or AS 47.35; 22 (iii) a business license issued under AS 43.70; 23 (iv) an entry permit or interim-use permit issued under 24 AS 16.43; or 25 (v) a driver's license issued under AS 28.15; 26 * Sec. 9. AS 34.08.570 is amended to read: 27 Sec. 34.08.570. Common interest community securities. If an interest in a 28 common interest community is currently registered with the Securities and Exchange 29 Commission of the United States, a declarant satisfies each requirement relating to the 30 preparation of a public offering statement of this chapter if the declarant delivers to the 31 purchaser a copy of the public offering statement filed with the Securities and
01 Exchange Commission. An interest in a common interest community is not subject to 02 the registration requirements of AS 45.56 [AS 45.55]. 03 * Sec. 10. AS 37.23.010(c) is amended to read: 04 (c) The registration requirements of AS 45.56 [AS 45.55] do not apply to an 05 investment pool formed under this chapter or to participating public entities with 06 respect to activities of the pool. 07 * Sec. 11. AS 37.23.050 is amended to read: 08 Sec. 37.23.050. Investment management. The public entities participating in 09 an investment pool under this chapter shall provide for management of investments in 10 the pool by contracting for investment management and related services with 11 (1) a securities broker-dealer registered under AS 45.56.401 12 [AS 45.55.030] and under 15 U.S.C. 78o (Securities Exchange Act of 1934); 13 (2) an [A STATE] investment adviser registered under AS 45.56.403 14 [AS 45.55.030] or a federal covered investment adviser that has made a notice filing 15 under AS 45.56.405(c) [AS 45.55.040(h)]; 16 (3) the Department of Revenue; or 17 (4) a financial institution that is a state or federally chartered 18 commercial or mutual bank, savings and loan association, or credit union if the 19 institution's accounts are insured through the appropriate federal insuring agency of 20 the United States and if the institution has trust powers under state or federal law. 21 * Sec. 12. AS 43.70.105(a) is amended to read: 22 (a) This chapter does not apply to 23 (1) a fisheries business; 24 (2) the sale of liquor under a license issued under AS 04.11; 25 (3) an insurance business; 26 (4) a mining business; 27 (5) supplying services as an employee; 28 (6) furnishing goods or services by a person who does not represent to 29 be regularly engaged in furnishing goods or services; 30 (7) the activities of an investment club; in this paragraph, 31 (A) "investment club" means a group of individuals,
01 incorporated or otherwise organized, that engages primarily in investing in 02 securities, that does not sell investment services to another person, that does 03 not advertise, and the primary purpose of which is educational; 04 (B) "security" has the meaning given in AS 45.56.990 05 [AS 45.55.990]. 06 * Sec. 13. AS 44.64.030(a)(31) is repealed and reenacted to read: 07 (31) AS 45.56 (Uniform Securities Act); 08 * Sec. 14. AS 45.63.080(a)(1) is amended to read: 09 (1) of a security regulated under AS 45.56 [AS 45.55] or a security that 10 is exempted by AS 45.56.201 [AS 45.55.900] from regulation under AS 45.56 11 [AS 45.55]; 12 * Sec. 15. AS 45.66.220 is amended to read: 13 Sec. 45.66.220. Exemptions. This chapter does not apply to a sale of or an 14 offer to sell 15 (1) a business opportunity if the total amount of the payments to be 16 made by the buyer under the contract is less than $250; 17 (2) a franchise under 16 C.F.R. 436; 18 (3) an ongoing business operated by the seller that is to be sold in its 19 entirety; 20 (4) a business opportunity to an ongoing business if the seller will 21 provide products, equipment, supplies, or services that are to be sold by the buyer in 22 connection with the buyer's ongoing business; 23 (5) sales demonstration equipment, materials, or samples for use in 24 sales demonstrations and not for resale, or product inventory sold to the buyer at a 25 bona fide wholesale price; 26 (6) a business opportunity by an executor, an administrator, a marshal, 27 a receiver, a trustee in bankruptcy, or a guardian or conservator, or under a judicial 28 sale; 29 (7) a security registered under AS 45.56 [AS 45.55] or a security that 30 is exempted by AS 45.56.201 [AS 45.55.900] from registration under AS 45.56 31 [AS 45.55];
01 (8) a business opportunity if the sale or offer is made by a person 02 registered with the United States Securities and Exchange Commission when acting 03 within the scope of the person's Securities and Exchange Commission license or by a 04 person registered by the state under AS 45.56 [AS 45.55] when acting within the 05 scope of registration; 06 (9) a business opportunity by an issuer or a subsidiary of an issuer of a 07 class of securities that is 08 (A) subject to 15 U.S.C. 78a - 78lll (Securities Exchange Act of 09 1934); and 10 (B) registered under 15 U.S.C. 78a - 78lll (Securities Exchange 11 Act of 1934) unless exempt from registration under 15 U.S.C. 78l(g)(2)(A) - 12 (C) or (E) - (H); 13 (10) a business opportunity in which the buyer is 14 (A) a bank, savings and loan association, trust company, 15 insurance company, credit union, or investment company under 15 U.S.C. 80a- 16 1 - 80a-64 (Investment Company Act of 1940), pension or profit sharing trust, 17 or other financial institution or institutional buyer; or 18 (B) a broker-dealer registered under AS 45.56.401 [AS 45.55]; 19 (11) a business opportunity that involves a marketing plan made in 20 conjunction with the registration of a trademark or service mark under 15 U.S.C. 1051 21 - 1127 (Trademark Act of 1946) if the seller has a minimum net worth of $1,000,000 22 as determined on the basis of the seller's most recent audited financial statement 23 prepared within 13 months of the first offer to sell in this state; net worth may be 24 determined on a consolidated basis if one person owns at least 80 percent of the seller 25 and that one person expressly guarantees the obligations of the seller that arise under 26 the sale or offer claimed to be exempt under this paragraph; or 27 (12) a business opportunity in which either the seller or the buyer is 28 licensed as a real estate broker, associate real estate broker, or real estate salesperson 29 under AS 08.88 and the sale or offer is regulated by AS 08.88. 30 * Sec. 16. AS 45.66.900(11) is amended to read: 31 (11) "securities or investment laws" means AS 45.56 (Uniform
01 Securities Act) [AS 45.55 (ALASKA SECURITIES ACT)] or a substantially similar 02 statute of another jurisdiction, 15 U.S.C. 77a - 77aa [15 U.S.C. 77a - 77bbbb] 03 (Securities [EXCHANGE] Act of 1933), 15 U.S.C. 78a - 78lll (Securities 04 [EXCHANGE] Act of 1934), or 15 U.S.C. 80a-1 - 80b-21 ([INVESTMENT 05 COMPANY ACT OF 1940/] Investment Advisers Act of 1940); 06 * Sec. 17. AS 45.55.010, 45.55.020, 45.55.023, 45.55.025, 45.55.027, 45.55.028, 07 45.55.030, 45.55.035, 45.55.040, 45.55.050, 45.55.060, 45.55.070, 45.55.075, 45.55.080, 08 45.55.090, 45.55.100, 45.55.110, 45.55.120, 45.55.138, 45.55.139, 45.55.150, 45.55.155, 09 45.55.160, 45.55.170, 45.55.900, 45.55.905, 45.55.910, 45.55.915, 45.55.920, 45.55.925, 10 45.55.930, 45.55.935, 45.55.940, 45.55.950, 45.55.960, 45.55.970, 45.55.980, 45.55.990, and 11 45.55.995 are repealed. 12 * Sec. 18. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 15 Economic Development may proceed to adopt regulations necessary to implement AS 45.56, 16 enacted by sec. 1 of this Act. The regulations take effect under AS 44.62 (Administrative 17 Procedure Act), but not before the effective date of sec. 1 of this Act. 18 * Sec. 19. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 TRANSITION; APPLICATION OF ACT TO EXISTING PROCEEDING AND 21 EXISTING RIGHTS AND DUTIES. (a) Former AS 45.55 exclusively governs all actions or 22 proceedings that are pending on the effective date of this Act or may be instituted on the basis 23 of conduct occurring before the effective date of this Act, but a civil action may not be 24 maintained to enforce any liability under former AS 45.55 unless instituted within any period 25 of limitation that applied when the cause of action accrued or within five years after the 26 effective date of this Act, whichever is earlier. 27 (b) All effective registrations under former AS 45.55, all administrative orders 28 relating to the registrations, regulations, statements of policy, interpretative opinions, 29 declaratory rulings, no action determinations, and conditions imposed on the registrations 30 under former AS 45.55 remain in effect while they would have remained in effect if this Act 31 had not been enacted. They are considered to have been filed, issued, or imposed under this
01 Act, but are exclusively governed by former AS 45.55. 02 (c) Former AS 45.55 exclusively applies to an offer or sale made within one year after 03 the effective date of this Act under an offering made in good faith before the effective date of 04 this Act on the basis of an exemption available under former AS 45.55. 05 * Sec. 20. Section 18 of this Act takes effect immediately under AS 01.10.070(c). 06 * Sec. 21. Except as provided in sec. 20 of this Act, this Act takes effect July 1, 2006.