HB 194: "An Act repealing and reenacting the Alaska Securities Act, including provisions relating to exempt securities and transactions; relating to registration of securities, firms, and agents that offer or sell securities and investment advice; relating to administrative, civil, and criminal enforcement provisions, including restitution and civil penalties for violations; allowing certain civil penalties to be used for an investor training fund; establishing increased civil penalties for harming older Alaskans; retaining provisions concerning corporations organized under the Alaska Native Claims Settlement Act; amending Rules 4, 5, 54, 65, and 90, Alaska Rules of Civil Procedure; and providing for an effective date."
00 HOUSE BILL NO. 194 01 "An Act repealing and reenacting the Alaska Securities Act, including provisions 02 relating to exempt securities and transactions; relating to registration of securities, 03 firms, and agents that offer or sell securities and investment advice; relating to 04 administrative, civil, and criminal enforcement provisions, including restitution and civil 05 penalties for violations; allowing certain civil penalties to be used for an investor 06 training fund; establishing increased civil penalties for harming older Alaskans; 07 retaining provisions concerning corporations organized under the Alaska Native Claims 08 Settlement Act; amending Rules 4, 5, 54, 65, and 90, Alaska Rules of Civil Procedure; 09 and providing for an effective date." 10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 11 * Section 1. AS 45 is amended by adding a new chapter to read: 12 Chapter 56. Alaska Securities Act.
01 Article 1. General Provisions. 02 Sec. 45.56.105. Securities registration requirement. A person may not offer 03 or sell a security in this state unless 04 (1) the security is a federal covered security; 05 (2) is registered under this chapter; or 06 (3) the security or transaction is exempted from registration under 07 AS 45.56.205 - 45.56.250. 08 Article 2. Exemptions from Registration of Securities. 09 Sec. 45.56.205. Exempt securities. The following securities are exempt from 10 the requirements of AS 45.56.105, 45.56.305 - 45.56.360 and 45.56.550: 11 (1) a security, including a revenue obligation or a separate security, as 12 defined in 17 C.F.R. Part 230.131 adopted under 15 U.S.C. 77a - 77aa (Securities Act 13 of 1933), issued, insured, or guaranteed by the United States; by a state; by a political 14 subdivision of a state; by a public authority, agency, or instrumentality of one or more 15 states; by a political subdivision of one or more states; or by a person controlled or 16 supervised by and acting as an instrumentality of the United States under authority 17 granted by the United States Congress; or a certificate of deposit for any of the 18 foregoing; 19 (2) a security issued, insured, or guaranteed by a foreign government 20 with which the United States maintains diplomatic relations, or by any of its political 21 subdivisions, if the security is recognized as a valid obligation by the issuer, insurer, or 22 guarantor; 23 (3) a security issued by and representing, or that will represent an 24 interest in or a direct obligation of, or be guaranteed by, 25 (A) an international banking institution; 26 (B) a banking institution organized under the laws of the 27 United States; a member bank of the Federal Reserve System; or a depository 28 institution a substantial portion of the business of which consists or will consist 29 of receiving deposits or share accounts that are insured to the maximum 30 amount authorized by statute by the Federal Deposit Insurance Corporation, 31 the National Credit Union Share Insurance Fund, or a successor authorized by
01 federal law or exercising fiduciary powers that are similar to those permitted 02 for national banks under the authority of the United States Comptroller of 03 Currency under 12 U.S.C. 92a; or 04 (C) any other depository institution, unless, by a regulation or 05 order, the administrator proceeds under AS 45.56.250; 06 (4) a security issued by and representing an interest in, or a debt of, or 07 insured or guaranteed by, an insurance company authorized to do business in this 08 state; 09 (5) a security issued or guaranteed by a railroad, other common carrier, 10 public utility, or public utility holding company that is 11 (A) regulated with respect to its rates and charges by the United 12 States or a state; 13 (B) regulated with respect to the issuance or guarantee of the 14 security by the United States, a state, Canada, or a Canadian province or 15 territory; or 16 (C) a public utility holding company registered under 42 17 U.S.C. 16451 et seq. (Energy Policy Act of 2005) or a subsidiary of the 18 registered holding company within the meaning of that Act; 19 (6) a federal covered security specified in 15 U.S.C. 77r(b)(1) or 20 adopted by rule under that provision or a security listed or approved for listing on 21 another securities market specified by regulation under this chapter; a put or a call 22 option contract; a warrant; a subscription right on or with respect to the security; an 23 option or similar derivative security on a security or an index of securities or foreign 24 currencies issued by a clearing agency registered under 15 U.S.C. 78a - 78pp 25 (Securities Exchange Act of 1934) and listed or designated for trading on a national 26 securities exchange, a facility of a national securities exchange, or a facility of a 27 national securities association registered under 15 U.S.C. 78a - 78pp (Securities 28 Exchange Act of 1934) or an offer or sale of the underlying security in connection 29 with the offer, sale, or exercise of an option or other security that was exempt when 30 the option or other security was written or issued; or an option or a derivative security 31 designated by the Securities and Exchange Commission under 15 U.S.C. 78i(b);
01 (7) a security issued by a person organized and operated exclusively 02 for religious, educational, benevolent, fraternal, charitable, social, athletic, or 03 reformatory purposes, or as a chamber of commerce, and not for pecuniary profit, no 04 part of the net earnings of which inures to the benefit of a private stockholder or other 05 person, or a security of a company that is excluded from the definition of an 06 investment company under 15 U.S.C. 80a-3(c)(10)(B), except that, with respect to the 07 offer or sale of a note, bond, debenture, or other evidence of indebtedness issued by 08 the person, a regulation may be adopted under this chapter limiting the availability of 09 this exemption by classifying securities, persons, and transactions, imposing different 10 requirements for different classes, specifying, with respect to (B) of this paragraph, the 11 scope of the exemption and the grounds for denial or suspension, and requiring an 12 issuer 13 (A) to file a notice specifying the material terms of the 14 proposed offer or sale and copies of any proposed sales and advertising 15 literature to be used and provide that the exemption becomes effective if the 16 administrator does not disallow the exemption within the period established by 17 the regulation; 18 (B) to file a request for exemption authorization for which a 19 regulation adopted under this chapter may specify the 20 (i) scope of the exemption; 21 (ii) requirement of an offering statement; 22 (iii) filing of sales and advertising literature; 23 (iv) filing of consent to service of process complying 24 with AS 45.56.630; and 25 (v) grounds for denial or suspension of the exemption; 26 or 27 (C) to register under AS 45.56.310; 28 (8) a member's or owner's interest in, or a retention certificate or like 29 security given in lieu of a cash patronage dividend issued by, a cooperative organized 30 and operated as a nonprofit membership cooperative under the cooperative laws of a 31 state, but not a member's or owner's interest, retention certificate, or like security sold
01 to persons other than bona fide members of the cooperative; 02 (9) an equipment trust certificate with respect to equipment leased or 03 conditionally sold to a person if any security issued by the person would be exempt 04 under this section or would be a federal covered security under 15 U.S.C. 77r(b)(1); 05 and 06 (10) shares of membership stock in the Alaska Commercial Fishing 07 and Agriculture Bank under AS 44.81.010 and other securities issued by that bank to 08 members or in connection with loans to members. 09 Sec. 45.56.210. Exempt transactions. The following transactions are exempt 10 from the requirements of AS 45.56.105, 45.56.305 - 45.56.360, and 45.56.550: 11 (1) an isolated nonissuer transaction, whether effected by or through a 12 broker-dealer, if the seller is not a promoter or controlling person as the administrator 13 may define by regulation or order; 14 (2) a nonissuer transaction by or through a broker-dealer registered or 15 exempt from registration under this chapter and a resale transaction by a sponsor of a 16 unit investment trust registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company 17 Act of 1940) in a security of a class that has been outstanding in the hands of the 18 public for at least 90 days if, at the date of the transaction, 19 (A) the issuer of the security is engaged in business, the issuer 20 is not in the organizational stage or in bankruptcy or receivership, and the 21 issuer is not a blank check, blind pool, or shell company that does not have a 22 specific business plan or purpose or has indicated that its primary business plan 23 is to engage in a merger or combination of the business with or an acquisition 24 of an unidentified person; 25 (B) the security is sold at a price reasonably related to its 26 current market price; 27 (C) the security does not constitute the whole or part of an 28 unsold allotment to or a subscription or participation by the broker-dealer as an 29 underwriter of the security or a redistribution; 30 (D) a nationally recognized securities manual or its electronic 31 equivalent designated by a regulation adopted or order issued under this
01 chapter or a record filed with the Securities and Exchange Commission that is 02 publicly available contains 03 (i) a description of the business and operations of the 04 issuer; 05 (ii) the names of the issuer's executive officers and the 06 names of the issuer's directors, if any; 07 (iii) an audited balance sheet of the issuer as of a date 08 within 18 months before the date of the transaction or, in the case of a 09 reorganization or merger when the parties to the reorganization or 10 merger each had an audited balance sheet, a pro forma balance sheet for 11 the combined organization; and 12 (iv) an audited income statement for each of the issuer's 13 two immediately previous fiscal years or for the period of existence of 14 the issuer, whichever is shorter, or, in the case of a reorganization or 15 merger when each party to the reorganization or merger had audited 16 income statements, a pro forma income statement; and 17 (E) any one of the following requirements is met: 18 (i) the issuer of the security has a class of equity 19 securities listed on a national securities exchange registered under 15 20 U.S.C. 78f or designated for trading on the National Association of 21 Securities Dealers Automated Quotations; 22 (ii) the issuer of the security is a unit investment trust 23 registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 24 1940); 25 (iii) the issuer of the security, including its 26 predecessors, has been engaged in continuous business for at least three 27 years; or 28 (iv) the issuer of the security has total assets of at least 29 $2,000,000 based on an audited balance sheet as of a date within 18 30 months before the date of the transaction or, in the case of a 31 reorganization or merger when the parties to the reorganization or
01 merger each had an audited balance sheet, a pro forma balance sheet for 02 the combined organization; 03 (3) a nonissuer transaction by or through a broker-dealer registered or 04 exempt from registration under this chapter in a security of a foreign issuer that is a 05 margin security defined in regulations or rules adopted by the Board of Governors of 06 the Federal Reserve System; 07 (4) a nonissuer transaction by or through a broker-dealer registered or 08 exempt from registration under this chapter in an outstanding security if the guarantor 09 of the security files reports with the Securities and Exchange Commission under the 10 reporting requirements of 15 U.S.C. 78m or 15 U.S.C. 78o (Securities Exchange Act 11 of 1934); 12 (5) a nonissuer transaction by or through a broker-dealer registered or 13 exempt from registration under this chapter in a security that 14 (A) is rated at the time of the transaction by a nationally 15 recognized statistical rating organization as identified by regulations in one of 16 its four highest rating categories; or 17 (B) has a fixed maturity or a fixed interest or dividend if 18 (i) a default has not occurred during the current fiscal 19 year or within the three previous fiscal years or, if the issuer has been in 20 business less than three fiscal years, during the existence of the issuer 21 and any predecessor in the payment of principal, interest, or dividends 22 on the security; and 23 (ii) the issuer is engaged in business, is not in the 24 organizational stage or in bankruptcy or receivership, and is not and has 25 not, within the previous 12 months, been a blank check, blind pool, or 26 shell company that does not have a specific business plan or purpose or 27 has indicated that its primary business plan is to engage in a merger or 28 combination of the business with or an acquisition of an unidentified 29 person; 30 (6) a nonissuer transaction by or through a broker-dealer registered or 31 exempt from registration under this chapter effecting an unsolicited order or offer to
01 purchase; 02 (7) a nonissuer transaction executed by a bona fide pledgee without the 03 purpose of evading this chapter; 04 (8) a nonissuer transaction by a federal covered investment adviser 05 with investments under management in excess of $100,000,000 acting in the exercise 06 of discretionary authority in a signed record for the account of others; 07 (9) a transaction in a security, whether or not the security or 08 transaction is otherwise exempt, in exchange for one or more bona fide outstanding 09 securities, claims, or property interests, or partly in exchange for one or more bona 10 fide outstanding securities, claims, or property interests and partly for cash if the terms 11 and conditions of the issuance and exchange or the delivery and exchange and the 12 fairness of the terms and conditions have been approved by the administrator after a 13 hearing; 14 (10) a transaction between the issuer or other person on whose behalf 15 the offering is made and an underwriter or among underwriters; 16 (11) a transaction in a bond or other evidence of indebtedness secured 17 by a real or chattel mortgage or deed of trust, or by an agreement for the sale of real 18 estate or chattels, if the entire mortgage, deed of trust, or agreement, together with all 19 the bonds or other evidence of indebtedness, secured under those documents, is 20 offered and sold as a unit; 21 (A) the note, bond, debenture, or other evidence of 22 indebtedness is offered and sold with the mortgage or other security agreement 23 as a unit; 24 (B) a general solicitation or general advertisement of the 25 transaction is not made; and 26 (C) a commission or other remuneration is not paid or given, 27 directly or indirectly, to a person not registered under this chapter as a broker- 28 dealer or as an agent; 29 (12) a transaction by an executor, administrator of an estate, sheriff, 30 marshal, receiver, trustee in bankruptcy, guardian, or conservator; 31 (13) a sale or offer to sell to
01 (A) an institutional investor; 02 (B) a federal covered investment adviser; or 03 (C) any other person exempted by a regulation adopted or order 04 issued under this chapter; 05 (14) a sale or offer to sell securities by or on behalf of an issuer if the 06 transaction is part of a single issue in which 07 (A) not more than 25 purchasers in this state during any 12 08 consecutive months, other than a person designated in (13) of this section 09 regardless of whether the seller or any of the buyers is then present in this 10 state; 11 (B) a general solicitation or general advertising is not made in 12 connection with the sale of or offer to sell the securities; 13 (C) a commission or other remuneration is not paid or given, 14 directly or indirectly, to a person other than a broker-dealer registered under 15 this chapter or an agent registered under this chapter for soliciting a 16 prospective purchaser in this state; 17 (D) the issuer reasonably believes that all the purchasers in this 18 state, other than those designated in (13) of this section, are purchasing for 19 investment and not with a view to distribution; 20 (E) a legend is placed on the certificate or other document 21 evidencing ownership of the security, stating that the security is not registered 22 under this chapter and cannot be resold without registration under this chapter 23 or exemption from this chapter; and 24 (F) before a sale, each prospective buyer is furnished 25 information that is sufficient to make an informed investment decision, which 26 information shall be furnished to the administrator upon request; in this 27 subparagraph, "information that is sufficient to make an informed investment 28 decision" includes a business plan, an income and expense statement, a balance 29 sheet, a statement of risks, and a disclosure of any significant negative factors 30 that may affect the outcome of the 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. Part 10 230.165, 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 45.56.665;
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 this state if the offer or sale does not constitute a violation 03 of the laws of this 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, managers, and 12 members if the issuer is a limited liability company, if the issuer is a business 13 trust, officers, consultants, and advisors; 14 (B) family members who acquire the securities from those 15 persons through gifts or domestic relations orders; 16 (C) former employees, directors, general partners, trustees, 17 officers, consultants, limited liability managers or members, and advisors if 18 those individuals were employed by or providing services to the issuer when 19 the securities were offered; and 20 (D) insurance agents who are exclusive insurance agents of the 21 issuer or the issuer's subsidiary or parent or who derive more than 50 percent 22 of their annual income from those organizations; 23 (22) a transaction involving 24 (A) a stock dividend or equivalent equity distribution, whether 25 the corporation or other business organization distributing the dividend or 26 equivalent equity distribution is the issuer or not, if nothing of value is given 27 by stockholders or other equity holders for the dividend or equivalent equity 28 distribution other than the surrender of a right to a cash or property dividend if 29 each stockholder or other equity holder may elect to take the dividend or 30 equivalent equity distribution in cash, property, or stock; 31 (B) a transaction incident to a right of conversion or judicially
01 approved reorganization in which a security is issued in exchange for one or 02 more outstanding securities, claims, or property interests, or partly in exchange 03 for one or more outstanding securities, claims, or property interests and partly 04 for cash; or 05 (C) the solicitation of tenders of securities by an offeror in a 06 tender offer in compliance with 17 C.F.R. Part 230.162, adopted under 15 07 U.S.C. 77a - 77aa (Securities Act of 1933); 08 (23) a nonissuer transaction in an outstanding security by or through a 09 broker-dealer registered or exempt from registration under this chapter if the issuer is a 10 reporting issuer in a foreign jurisdiction designated by this paragraph or by a 11 regulation adopted or order issued under this chapter; the issuer has been subject to 12 continuous reporting requirements in the foreign jurisdiction for not less than 180 days 13 before the transaction; and the security is listed on the foreign jurisdiction's securities 14 exchange that has been designated by this paragraph or by a regulation adopted or 15 order issued under this chapter, or is a security of the same issuer that is of senior or 16 substantially equal rank to the listed security or is a warrant or right to purchase or 17 subscribe to any of the foregoing; for purposes of this paragraph, Canada, together 18 with its provinces and territories, is a designated foreign jurisdiction, and TSX, Inc., 19 formerly known as the Toronto Stock Exchange, Inc., is a designated securities 20 exchange; after an administrative hearing in compliance with AS 45.56.650(c), the 21 administrator, by a regulation adopted or order issued under this chapter, may revoke 22 the designation of a securities exchange under this paragraph if the administrator finds 23 that revocation is necessary or appropriate in the public interest and for the protection 24 of investors; 25 (24) sales by an issuer to the buyer of an enterprise or a business and 26 the assets and liabilities of the enterprise or business if 27 (A) the transfer of stock to the buyer is solely incidental to the 28 sale of the enterprise or business and its assets and liabilities; 29 (B) the seller provides full access to the buyer the books and 30 records of the enterprise or business; and 31 (C) a legend is placed on the certificate or other document
01 evidencing ownership of the security, stating that the security is not registered 02 under this chapter and cannot be resold without registration under this chapter 03 or exemption from it; 04 (25) offers or sales of certificates of interest or participation in oil, gas, 05 or mining rights, titles, or leases, or in payments out of production under the rights, 06 titles, or leases, if the purchasers 07 (A) are or have been during the preceding two years engaged 08 primarily in the business of exploring for, mining, producing, refining oil, gas, 09 or minerals; or 10 (B) have been found by the administrator upon written 11 application to be substantially engaged in the business of exploring for, 12 mining, producing, or refining oil, gas, or minerals so as not to require the 13 protection provided by this chapter; 14 (26) a transaction involving only family members who are related, 15 including related by adoption, within the fourth degree of affinity or consanguinity, or 16 involving only those family members and the corporations, partnerships, limited 17 liability companies, limited partnerships, limited liability partnerships, associations, 18 joint-stock companies, or trusts that are organized, formed, or created by those family 19 members or at the direction of those family members; or 20 (27) a security that is not part of an initial issue of stock covered by 21 AS 45.55.138, but that is issued by a corporation organized under Alaska law under 43 22 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act), if the corporation qualifies 23 for exempt status under 43 U.SC.1625(a). 24 Sec. 45.56.220. Small intrastate securities offerings. (a) An offer or sale of 25 securities conducted solely in this state to a person who has established residency in 26 this state, by an issuer in a transaction that meets the requirements of this section, is 27 exempted from the requirements of AS 45.56.105, 45.56.305 - 45.56.360, and 28 45.56.550 and is subject to the following limitations: 29 (1) the issuer of the security shall be a for-profit corporation or other 30 for-profit entity, or business cooperative with its principal place of business in this 31 state and licensed with the department;
01 (2) the transaction shall meet the requirements of the federal 02 exemption for intrastate offerings in 15 US.C. 77c(a)(11) (Securities Act of 1933) and 03 17 C.F.R. Part 230.147; the securities must be offered to and sold only to persons who 04 have established residency in this state at the time of purchase; before any offer or sale 05 under this exemption, the seller shall obtain documentary evidence from each 06 prospective purchaser that provides the seller with a reasonable basis to believe the 07 investor has established residency in this state; 08 (3) the sum of all cash and other consideration to be received for all 09 sales of the security in reliance on this exemption shall not exceed $1,000,000, less the 10 aggregate amount received for all sales of securities by the issuer within the 12 months 11 before the first offer or sale made in reliance on this exemption; 12 (4) the issuer shall not accept more than $5,000 from any single 13 purchaser unless the purchaser is an accredited investor as defined by 17 C.F.R. Part 14 230.501; 15 (5) the issuer must reasonably believe that all purchasers of securities 16 are purchasing for investment and not for sale in connection with a distribution of the 17 security; 18 (6) a commission or remuneration shall not be paid or given, directly 19 or indirectly, for any person's participation in the offer or sale of securities for the 20 issuer unless the person is registered as a broker-dealer, agent, investment adviser 21 representative, or investment adviser under AS 45.56.405 - 45.56.440; 22 (7) all funds received from investors shall be deposited into a bank or 23 depository institution authorized to do business in this state, and all funds shall be 24 used in accordance with representations made to investors; 25 (8) not less than 10 days before the use of any general solicitation or 26 within 15 days after the first sale of the security under this exemption, provided no 27 general solicitation has been used before the sale, whichever occurs first, the issuer 28 shall provide a notice to the administrator as prescribed in regulations for this section; 29 the notice shall specify that the issuer is conducting an offering in reliance upon this 30 exemption and shall contain the names and addresses of 31 (A) the issuer;
01 (B) officers, directors, and any control person of the issuer; 02 (C) all persons who will be involved in the offer or sale of 03 securities on behalf of the issuer; and 04 (D) the bank or other depository institution in which investor 05 funds will be deposited; 06 (9) the issuer shall not be, either before or as a result of the offering 07 (A) an investment company as defined by 15 U.S.C. 80a-1 - 08 80a-64 (Investment Company Act of 1940), or subject to the reporting 09 requirements of 15 U.S.C. 78m or 78o (Securities Exchange Act of 1934); or 10 (B) a broker-dealer, agent, investment adviser representative, or 11 investment adviser as defined by AS 45.56.405 - 45.56.440; 12 (10) the issuer shall inform all purchasers that the securities have not 13 been registered under AS 45.56.105, 45.56.305 - 45.56.360, and 45.56.550, and 14 therefore, cannot be resold unless the securities are registered or qualify for an 15 exemption from registration under AS 45.56.205, 45.56.210, or 45.56.240; in addition, 16 the issuer shall make the disclosures required by 17 C.F.R. Part 230.147(f); 17 (11) the issuer shall require all purchasers to sign the following 18 statement at the time of sale: "I acknowledge that I am investing in a high-risk, 19 speculative business venture, that I may lose all of my investment and that I can afford 20 the loss of my investment"; 21 (12) this exemption shall not be used in conjunction with any other 22 exemption under AS 45.56, except the exemption to institutional investors under 23 AS 45.56.405 and 45.56.435 and for offers and sales to controlling persons of the 24 issuer; sales to controlling persons shall not count toward the limitation in 25 AS 45.56.220(a)(3); 26 (13) nothing in this exemption shall be construed to alleviate any 27 person from the anti-fraud provisions under AS 45.56.505 - 45.56.560, nor shall the 28 exemption be construed to provide relief from any other provisions of AS 45.56 other 29 than as expressly stated; 30 (14) in this subsection, "residency" has the meaning given in 31 AS 01.10.055.
01 (b) The administrator may by order deny or revoke the exemption specified in 02 this section with respect to a specific security if it finds that the sale of the security 03 would work or tend to work a fraud upon the purchasers of it. An order under this 04 subsection may not operate retroactively. A person may be considered to have violated 05 AS 45.56.205 - 45.56.250 by reason of any offer or sale effected after the entry of an 06 order under this subsection if the person sustains the burden of proof that the person 07 did not know and, in the exercise of reasonable care, could have not known of the 08 order. In any proceeding under AS 45.56, the burden of proving an exemption is on 09 the person claiming the exemption. 10 (c) Any person who makes application to the department for an exemption 11 under AS 45.56.220 shall be assessed a filing fee as prescribed in regulations for this 12 section. 13 Sec. 45.56.230. Disqualifier. A security or transaction exempted from 14 registration under AS 45.56.205 - 45.56.250 shall not be available if the issuer, or any 15 of its officers, controlling people, or promoters is subject to a disqualifier enumerated 16 in 15 U.S.C. 78c(a)(39) (Dodd-Frank Wall Street Reform and Consumer Protection 17 Act) as of the date of the transaction or offer. 18 Sec. 45.56.240. Waiver and modification. For any security or transaction or 19 any type of security or transaction, the administrator may by order, waive, withdraw, 20 or modify any of the requirements or conditions of AS 45.56.205 - 45.56.250. 21 Sec. 45.56.250. Denial, suspension, revocation, condition, or limitation of 22 exemptions. (a) Except with respect to a federal covered security or a transaction 23 involving a federal covered security, an order under this chapter may deny, suspend 24 application of, condition, limit, or revoke an exemption created under 25 AS 45.56.205(3)(C), (7), or (8) or 45.56.210 or 45.56.220, or an exemption or waiver 26 created under AS 45.56.240 with respect to a specific security, transaction, or offer. 27 An order under this subsection only may be issued under the procedures in 28 AS 45.56.360(d) or 45.56.650 and only prospectively. 29 (b) A person does not violate AS 45.56.105, 45.56.305, 45.56.310, 45.56.320, 30 45.56.340, 45.56.360, 45.56.550, or 45.56.665 by an offer to sell, offer to purchase, 31 sale, or purchase effected after the entry of an order issued under this section if the
01 person did not know, and in the exercise of reasonable care, could not have known, of 02 the order. 03 Article 3. Registration of Securities and Notice Filing of Federal Covered Securities. 04 Sec. 45.56.305. Securities registration by coordination. (a) A security for 05 which a registration statement has been filed under 15 U.S.C. 77a - 77aa (Securities 06 Act of 1933) in connection with the same offering may be registered by coordination 07 under this section. 08 (b) A registration statement and accompanying records under this section must 09 contain or be accompanied by the following records, in addition to the information 10 specified in AS 45.56.320, and a consent to service of process complying with 11 AS 45.56.630: 12 (1) a copy of the latest form of prospectus filed under 15 U.S.C. 77a - 13 77aa (Securities Act of 1933); 14 (2) if the administrator requires, a copy of the articles of incorporation 15 and bylaws or their substantial equivalents currently in effect; a copy of any other 16 information or any other records filed by the issuer under 15 U.S.C. 77a - 77aa 17 (Securities Act of 1933) requested by the administrator; and a copy of any agreement 18 with or among underwriters; a copy of any indenture or other instrument governing the 19 issuance of the security to be registered; and a specimen, copy, or description of the 20 security that is required by a regulation adopted or order issued under this chapter; and 21 (3) an undertaking to forward each amendment to the federal 22 prospectus, other than an amendment that delays the effective date of the registration 23 statement, promptly after it is filed with the Securities and Exchange Commission. 24 (c) A registration statement under this section becomes effective 25 simultaneously with or subsequent to the federal registration statement when all the 26 following conditions are satisfied: 27 (1) a stop order under (d) of this section or AS 45.56.360 or issued by 28 the Securities and Exchange Commission is not in effect, and a proceeding is not 29 pending against the issuer under AS 45.56.480; and 30 (2) the registration statement has been on file for at least 20 days or a 31 shorter period provided by a regulation adopted or order issued under this chapter.
01 (d) The registrant shall promptly notify the administrator in a record of the 02 date when the federal registration statement becomes effective and the content of any 03 price amendment and shall promptly file a record containing the price amendment. If 04 the notice is not timely received, the administrator may issue a stop order, without 05 prior notice or hearing, retroactively denying effectiveness to the registration 06 statement or suspending its effectiveness until compliance with this section. The 07 administrator shall promptly notify the registrant of an order by telephone or 08 electronic means and promptly confirm this notice by a record. If the registrant 09 subsequently complies with the notice requirements of this subsection, the stop order 10 is void as of the date of its issuance. 11 (e) If the federal registration statement becomes effective before each of the 12 conditions in this section is satisfied or is waived by the administrator, the registration 13 statement is automatically effective under this chapter when all the conditions are 14 satisfied or waived. If the registrant notifies the administrator of the date when the 15 federal registration statement is expected to become effective, the administrator shall 16 promptly notify the registrant by telephone or electronic means and promptly confirm 17 this notice by a record, indicating whether all the conditions are satisfied or waived 18 and whether the administrator intends the institution of a proceeding under 19 AS 45.56.360. The notice by the administrator does not preclude the institution of a 20 proceeding under AS 45.56.360. 21 Sec. 45.56.310. Securities registration by qualification. (a) A security may 22 be registered by qualification under this section. 23 (b) A registration statement under this section must contain the information or 24 records specified in AS 45.56.320, a consent to service of process complying with 25 AS 45.56.630, and the following information or records: 26 (1) with respect to the issuer and any significant subsidiary, the name, 27 address, and form of organization of the issuer and subsidiary; this state or foreign 28 jurisdiction and date of organization of the issuer and subsidiary; the general character 29 and location of the business of the issuer and subsidiary; a description of the physical 30 properties and equipment of the issuer and subsidiary; and a statement of the general 31 competitive conditions in the industry or business in which the issuer and subsidiary
01 are or will be engaged; 02 (2) with respect to each director and officer of the issuer and other 03 person having a similar status or performing similar functions, the person's name, 04 address, and principal occupation for the previous five years; the amount of securities 05 of the issuer held by the person as of the 30th day before the filing of the registration 06 statement; the amount of the securities covered by the registration statement to which 07 the person has indicated an intention to subscribe; and a description of any material 08 interest of the person in any material transaction with the issuer or a significant 09 subsidiary effected within the previous three years or proposed to be effected; 10 (3) with respect to persons covered by (2) of this subsection, the 11 aggregate sum of the remuneration paid to those persons during the previous 12 12 months and estimated to be paid during the next 12 months, directly or indirectly, by 13 the issuer, and all predecessors, parents, subsidiaries, and affiliates of the issuer; 14 (4) with respect to a person owning of record or owning beneficially, if 15 known, 10 percent or more of the outstanding shares of any class of equity security of 16 the issuer, the information specified in (2) of this subsection, other than the person's 17 occupation; 18 (5) with respect to a promoter, if the issuer was organized within the 19 previous three years, the information or records specified in (2) of this subsection, any 20 amount paid to the promoter within that period or intended to be paid to the promoter, 21 and the consideration for the payment; 22 (6) with respect to a person on whose behalf any part of the offering is 23 to be made in a nonissuer distribution, the person's name and address; the amount of 24 securities of the issuer held by the person as of the date of the filing of the registration 25 statement; a description of any material interest of the person in any material 26 transaction with the issuer or any significant subsidiary effected within the previous 27 three years or proposed to be effected; and a statement of the reasons for making the 28 offering; 29 (7) the capitalization and long-term debt, on both a current and pro 30 forma basis, of the issuer and any significant subsidiary, including a description of 31 each security outstanding or being registered or otherwise offered, and a statement of
01 the amount and kind of consideration, whether in the form of cash, physical assets, 02 services, patents, goodwill, or anything else of value, for which the issuer or any 03 subsidiary has issued its securities within the previous two years or is obligated to 04 issue its securities; 05 (8) the kind and amount of securities to be offered; the proposed 06 offering price or the method by which the offering price is to be computed; any 07 variation at which a proportion of the offering is to be made to a person or class of 08 persons other than the underwriters, with a specification of the person or class; the 09 basis on which the offering is to be made if otherwise than for cash; the estimated 10 aggregate underwriting and selling discounts or commissions and finders' fees, 11 including separately cash, securities, contracts, or anything else of value to accrue to 12 the underwriters or finders in connection with the offering or, if the selling discounts 13 or commissions are variable, the basis of determining them and their maximum and 14 minimum amounts; the estimated amounts of other selling expenses, including legal, 15 engineering, and accounting charges; the name and address of each underwriter and 16 each recipient of a finder's fee; a copy of any underwriting or selling group agreement 17 under which the distribution is to be made, or the proposed form of an underwriting or 18 selling group agreement whose terms have not yet been determined; and a description 19 of the plan of distribution of any securities that are to be offered other than through an 20 underwriter; 21 (9) the estimated monetary proceeds to be received by the issuer from 22 the offering; the purposes for which the proceeds are to be used by the issuer; the 23 estimated amount to be used for each purpose; the order or priority in which the 24 proceeds will be used for the purposes stated; the amounts of any funds to be raised 25 from other sources to achieve the purposes stated; the sources of the funds; and, if a 26 part of the proceeds is to be used to acquire property, including goodwill, other than in 27 the ordinary course of business, the names and addresses of the vendors, the purchase 28 price, the names of any persons that have received commissions in connection with the 29 acquisition, and the amounts of the commissions and other expenses in connection 30 with the acquisition, including the cost of borrowing money to finance the acquisition; 31 (10) a description of any stock options or other security options
01 outstanding or to be created in connection with the offering, and the amount of those 02 options held or to be held by each person required to be named in (2), (4), (5), (6), or 03 (8) of this subsection and by any person that holds or will hold 10 percent or more in 04 the aggregate of those options; 05 (11) the dates of, parties to, and general effect, concisely stated, of 06 each managerial or other material contract made or to be made other than in the 07 ordinary course of business to be performed in whole or in part at or after the filing of 08 the registration statement or that was made within the previous two years, and a copy 09 of each contract; 10 (12) a description of any pending litigation, action, or proceeding to 11 which the issuer is a party and that materially affects the issuer's business or assets and 12 any litigation, action, or proceeding known to be contemplated by governmental 13 authorities; 14 (13) a copy of any prospectus, pamphlet, circular, form letter, 15 advertisement, or other sales literature intended as of the effective date of the 16 registration statement to be used in connection with the offering and any solicitation of 17 interest used in compliance with AS 45.56.210(17)(B); 18 (14) a specimen or copy of the security being registered, unless the 19 security is uncertificated; a copy of the issuer's articles of incorporation and bylaws or 20 their substantial equivalents, in effect; and a copy of any indenture or other instrument 21 covering the security to be registered; 22 (15) a signed or conformed copy of an opinion of counsel concerning 23 the legality of the security being registered, with an English translation if it is in a 24 language other than English, that states whether the security when sold will be validly 25 issued, fully paid, nonassessable and, if a debt security, a binding obligation of the 26 issuer; 27 (16) a signed or conformed copy of a consent of any accountant, 28 engineer, appraiser, or other person whose profession gives authority for a statement 29 made by the person if the person is named as having prepared or certified a report or 30 valuation, other than an official record, that is public, that is used in connection with 31 the registration statement;
01 (17) a balance sheet of the issuer as of a date within four months 02 before the filing of the registration statement; a statement of income and a statement of 03 cash flows for each of the three fiscal years preceding the date of the balance sheet and 04 for any period between the close of the immediately previous fiscal year and the date 05 of the balance sheet, or for the period of the issuer's and any predecessor's existence if 06 less than three years; and, if any part of the proceeds of the offering is to be applied to 07 the purchase of a business, the financial statements that would be required if that 08 business were the registrant; and 09 (18) any additional information or records required by a regulation 10 adopted or order issued under this chapter. 11 (c) A registration statement under this section becomes effective when the 12 administrator so orders. 13 (d) A regulation adopted or order issued under this chapter may require as a 14 condition of registration under this section that a prospectus containing a specified part 15 of the information or record specified in (b) of this section be sent or given to each 16 person to which an offer is made, before or concurrently, with the earliest of 17 (1) the first offer made in a record to the person other than by means of 18 a public advertisement, by or for the account of the issuer or another person on whose 19 behalf the offering is being made or by an underwriter or broker-dealer that is offering 20 part of an unsold allotment or subscription taken by the person as a participant in the 21 distribution; 22 (2) the confirmation of a sale made by or for the account of the person; 23 (3) payment under the sale; or 24 (4) delivery of the security under the sale. 25 Sec. 45.56.320. Securities registration filings. (a) A registration statement 26 may be filed by the issuer, a person on whose behalf the offering is to be made, or a 27 broker-dealer registered under this chapter. 28 (b) A person filing a registration statement shall pay a filing fee established by 29 a regulation adopted under this chapter and consent to service of process as described 30 under AS 45.56.630. 31 (c) A registration statement filed under AS 45.56.305 or 45.56.310 must
01 specify 02 (1) the amount of securities to be offered in this state; 03 (2) the states in which a registration statement or similar record in 04 connection with the offering has been or is to be filed; and 05 (3) any adverse order, judgment, or decree issued in connection with 06 the offering by a state securities regulator, the Securities and Exchange Commission, 07 or a court. 08 (d) A record filed under this chapter or former AS 45.55.010 - 45.55.120, 09 45.55.150, 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 10 45.55.935, and 45.55.960 - 45.55.995 within five years preceding the filing of a 11 registration statement may be incorporated by reference in the registration statement to 12 the extent that the record is currently accurate. 13 (e) In the case of a nonissuer distribution, information or a record may not be 14 required under (i) of this section or AS 45.56.310 unless it is known to the person 15 filing the registration statement or to the person on whose behalf the distribution is to 16 be made or unless it can be furnished by those persons without unreasonable effort or 17 expense. 18 (f) A regulation adopted or order issued under this chapter may require as a 19 condition of registration that a security issued within the previous five years or to be 20 issued to a promoter for a consideration substantially less than the public offering 21 price or to a person for a consideration other than cash be deposited in escrow and that 22 the proceeds from the sale of the registered security in this state be impounded until 23 the issuer receives a specified amount from the sale of the security, either in this state 24 or elsewhere. The conditions of any escrow or impoundment required under this 25 subsection may be established by a regulation adopted or order issued under this 26 chapter, but the administrator may not reject a depository institution solely because of 27 its location in another state. 28 (g) A regulation adopted or order issued under this chapter may require as a 29 condition of registration that a security registered under this chapter be sold only on a 30 specified form of subscription or sale contract and that a signed or conformed copy of 31 each contract be filed under this chapter or preserved for a period specified by the
01 regulation or order, not to exceed five years. 02 (h) Except while a stop order is in effect under AS 45.56.360, a registration 03 statement is effective for one year after the effective date of the registration statement 04 or for any longer period designated in an order under this chapter during which the 05 security is being offered or distributed in a nonexempted transaction by or for the 06 account of the issuer or other person on whose behalf the offering is being made or by 07 an underwriter or broker-dealer that is still offering part of an unsold allotment or 08 subscription taken as a participant in the distribution. For the purposes of a nonissuer 09 transaction, all outstanding securities of the same class identified in the registration 10 statement as a security registered under this chapter are considered to be registered 11 while the registration statement is effective. If any securities of the same class are 12 outstanding, a registration statement may not be withdrawn until one year after the 13 effective date of the registration statement. A registration statement may be withdrawn 14 only with the approval of the administrator. 15 (i) While a registration statement is effective, a regulation adopted or order 16 issued under this chapter may require the person that filed the registration statement to 17 file reports, not more often than quarterly, to keep the information or other record in 18 the registration statement reasonably current and to disclose the progress of the 19 offering. 20 (j) A registration statement may be amended after the effective date of the 21 registration statement. The post-effective amendment becomes effective when the 22 administrator so orders. If a post-effective amendment is made to increase the number 23 of securities specified to be offered or sold, the person filing the amendment shall pay 24 a registration fee established by a regulation adopted under this chapter. A post- 25 effective amendment relates back to the date of the offering of the additional securities 26 being registered if, within one year after the date of the sale, the amendment is filed 27 and the additional registration fee is paid. 28 Sec. 45.56.330. Notice filing of federal covered securities. (a) With respect to 29 a federal covered security, as defined in 15 U.S.C. 77r(b), that is not otherwise exempt 30 under AS 45.56.205 - 45.56.240, a regulation adopted or order issued under this 31 chapter may require the filing of any or all of the following records:
01 (1) before the initial offer of a federal covered security in this state, all 02 records that are part of a federal registration statement filed with the Securities and 03 Exchange Commission under 15 U.S.C. 77a - 77aa (Securities Act of 1933) and a 04 consent to service of process complying with AS 45.56.630 signed by the issuer and 05 the payment of a fee established in a regulation adopted under this chapter; 06 (2) after the initial offer of the federal covered security in this state, all 07 records that are part of an amendment to a federal registration statement filed with the 08 Securities and Exchange Commission under 15 U.S.C. 77a - 77aa (Securities Act of 09 1933); and 10 (3) to the extent necessary or appropriate to compute fees, a report of 11 the value of the federal covered securities sold or offered to persons present in this 12 state if the sales data are not included in records filed with the Securities and 13 Exchange Commission and payment of a fee established in a regulation adopted under 14 this chapter. 15 (b) A notice filing under (a) of this section is effective for one year 16 commencing on the later of the notice filing or the effectiveness of the offering filed 17 with the Securities and Exchange Commission. On or before expiration, the issuer 18 may renew a notice filing by filing a copy of those records filed by the issuer with the 19 Securities and Exchange Commission that are required by a regulation adopted or 20 order issued under this chapter to be filed and by paying a renewal fee established in a 21 regulation adopted under this chapter. A previously filed consent to service of process 22 complying with AS 45.56.630 may be incorporated by reference in a renewal. A 23 renewed notice filing becomes effective upon the expiration of the filing being 24 renewed. 25 (c) With respect to a security that is a federal covered security under 15 U.S.C. 26 77r(b)(4)(D) (Securities Act of 1933), a regulation adopted under this chapter may 27 require a notice filing by or on behalf of an issuer to include a copy of Form D, 28 including the Appendix, as adopted by the Securities and Exchange Commission, and 29 a consent to service of process complying with AS 45.56.630 signed by the issuer not 30 later than 15 days after the first sale of the federal covered security in this state and the 31 payment of a fee established in a regulation adopted under this chapter; and the
01 payment of a fee established in a regulation adopted under this chapter for any late 02 filing. 03 (d) Except with respect to a federal security under 15 U.S.C. 77r(b)(1), if the 04 administrator finds that there is a failure to comply with a notice or fee requirement of 05 this section, the administrator may issue a stop order suspending the offer and sale of a 06 federal covered security in this state. If the deficiency is corrected, the stop order is 07 void as of the time of its issuance and a penalty may not be imposed by the 08 administrator. 09 Sec. 45.56.340. Viatical settlement interests. (a) Before the sale of a viatical 10 settlement interest, an issuer shall provide a prospective buyer with information that is 11 sufficient to make an informed investment decision. The issuer shall also provide the 12 information to the administrator upon request if the issuer is not otherwise required to 13 file the information with the administrator. In this subsection, "information that is 14 sufficient to make an informed investment decision" includes state-mandated 15 disclosure forms and a disclosure of any significant factors that may affect the 16 outcome of the investment. 17 (b) Except as may be required in the course of conduct of the responsibilities 18 of the administrator, an issuer of a viatical settlement interest may not disclose to 19 another person the identity of the viator or insured of the insurance policy that is the 20 subject of the viatical settlement interest. The viator may waive this prohibition 21 against disclosure if the waiver is in writing and signed by the viator. 22 (c) The administrator shall regulate transactions between a viatical settlement 23 provider or person acting as an agent of a viatical settlement provider and a 24 subsequent investor, while the authority of the director of the division of insurance 25 extends to the regulation of viatical settlement contracts under AS 21.96.110. 26 Sec. 45.56.350. Waiver and modification. The administrator may waive or 27 modify, in whole or in part, any or all of the requirements of AS 45.56.305 and 28 45.56.320 or the requirement of any information or record in a registration statement 29 or in a periodic report filed under AS 45.56.310(i). 30 Sec. 45.56.360. Denial, suspension, and revocation of securities 31 registration. (a) The administrator may issue a stop order denying effectiveness to, or
01 suspending or revoking the effectiveness of, a registration statement if the 02 administrator finds that the order is in the public interest and that 03 (1) the registration statement as of the effective date of the registration 04 statement or before the effective date in the case of an order denying effectiveness, an 05 amendment under AS 45.56.320(j) as of the effective date of the amendment, or a 06 report under AS 45.56.320(i) is incomplete in a material respect or contains a 07 statement that, in the light of the circumstances under which it was made, was false or 08 misleading with respect to a material fact; 09 (2) this chapter or a regulation adopted or order issued under this 10 chapter or a condition imposed under this chapter has been wilfully violated in 11 connection with the offering by 12 (A) the person filing the registration statement; 13 (B) the issuer, a partner, officer, or director of the issuer or a 14 person having a similar status or performing a similar function; 15 (C) a promoter of the issuer; 16 (D) a person directly or indirectly controlling or controlled by 17 the issuer, but only if the person filing the registration statement is directly or 18 indirectly controlled by or acting for the issuer; or 19 (E) an underwriter; 20 (3) the security registered or sought to be registered is the subject of a 21 permanent or temporary injunction of a court of competent jurisdiction or an 22 administrative stop order or similar order issued under any federal, foreign, or state 23 law other than this chapter applicable to the offering; the administrator may not 24 institute a proceeding against an effective registration statement under this paragraph 25 more than one year after the date of the order or injunction on which it is based, and 26 the administrator may not issue an order under this paragraph on the basis of an order 27 or injunction issued under the securities act of another state unless the order or 28 injunction was based on conduct that would constitute, as of the date of the order, a 29 ground for a stop order under this section; 30 (4) the issuer's enterprise or method of business includes or would 31 include activities that are unlawful where performed;
01 (5) with respect to a security sought to be registered under 02 AS 45.56.305, there has been a failure to comply with the undertaking required by 03 AS 45.56.305(b)(3); 04 (6) the applicant or registrant has not paid the filing fee; the 05 administrator shall void the order if the deficiency is corrected and the order was 06 based solely on the nonpayment of the filing fee; or 07 (7) the offering 08 (A) will work or tend to work a fraud upon purchasers or would 09 operate; 10 (B) has been or would be made with unreasonable amounts of 11 underwriters' and sellers' discounts, commissions, or other compensation, or 12 promoters' profits or participations, or unreasonable amounts or kinds of 13 options; or 14 (C) is being made on terms that are unfair, unjust, or 15 inequitable. 16 (b) To the extent practicable, the administrator shall, by a regulation adopted 17 or order issued under this chapter, publish standards that provide notice of conduct 18 that violates (a)(7) of this section. 19 (c) The administrator may not institute a stop order proceeding against an 20 effective registration statement on the basis of conduct or a transaction known to the 21 administrator when the registration statement became effective unless the proceeding 22 is instituted within 30 days after the registration statement became effective. 23 (d) The administrator may summarily revoke, deny, postpone, or suspend the 24 effectiveness of a registration statement pending final determination of an 25 administrative proceeding. Upon the issuance of the order, the administrator shall 26 promptly notify each person specified in (e) of this section that the order has been 27 issued, the reasons for the revocation, denial, postponement, or suspension, and that, 28 within 15 days after the receipt of a request in a record from the person, the matter will 29 be scheduled for a hearing. If a hearing is not requested and none is ordered by the 30 administrator, within 30 days after the date of service of the order, the order becomes 31 final. If a hearing is requested or ordered, the administrator, after notice of and
01 opportunity for hearing for each person subject to the order, may modify or vacate the 02 order or extend the order until final determination. 03 (e) A stop order may not be issued under this section without 04 (1) appropriate notice to the applicant or registrant, the issuer, and the 05 person on whose behalf the securities are to be or have been offered; 06 (2) an opportunity for hearing conducted in the manner provided in 07 AS 45.56.650(c); and 08 (3) findings of fact and conclusions of law in a record. 09 (f) The administrator may modify or vacate a stop order issued under this 10 section if the administrator finds that the conditions that caused its issuance have 11 changed or that it is necessary or appropriate in the public interest or for the protection 12 of investors. 13 Article 4. Broker-dealers, Agents, Investment Advisers, Investment Adviser 14 Representatives, and Federal Covered Investment Advisers. 15 Sec. 45.56.405. Broker-dealer registration requirement and exemptions. 16 (a) A person may not transact business in this state as a broker-dealer unless the 17 person is registered under this chapter as a broker-dealer or is exempt from registration 18 as a broker-dealer under (b) of this section. 19 (b) The following persons are exempt from the registration requirement of (a) 20 of this section: 21 (1) a broker-dealer without a place of business in this state if the 22 broker-dealer's only transactions effected in this state are with 23 (A) the issuer of the securities involved in the transactions; 24 (B) a broker-dealer registered as a broker-dealer under this 25 chapter or not required to be registered as a broker-dealer under this chapter; 26 (C) an institutional investor; 27 (D) a nonaffiliated federal covered investment adviser with 28 investments under management in excess of $100,000,000 acting for the 29 account of others under discretionary authority in a signed record; 30 (E) a bona fide preexisting customer whose principal place of 31 residence is not in this state and the person is registered as a broker-dealer
01 under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) or not required 02 to be registered under 15 U.S.C. 78a - 78ll (Securities Exchange Act of 1934) 03 and is registered under the securities act of the state in which the customer 04 maintains a principal place of residence; 05 (F) a bona fide preexisting customer whose principal place of 06 residence is in this state but who was not present in this state when the 07 customer relationship was established if 08 (i) the broker-dealer is registered under 15 U.S.C. 78a - 09 78pp (Securities Exchange Act of 1934) or not required to be registered 10 under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) and is 11 registered under the securities laws of the state in which the customer 12 relationship was established and where the customer had maintained a 13 principal place of residence; and 14 (ii) within 45 days after the customer's first transaction 15 in this state, the person files an application for registration as a broker- 16 dealer in this state and a further transaction is not effected more than 75 17 days after the date on which the application is filed, or, if earlier, the 18 date on which the administrator notifies the person that the 19 administrator has denied the application for registration or has stayed 20 the pendency of the application for good cause; 21 (G) not more than three customers in this state during the 22 previous 12 months, in addition to those customers specified in (A) - (F) of this 23 paragraph and under (H) of this paragraph if the broker-dealer is registered 24 under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) or not required 25 to be registered under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) 26 and is registered under the securities act of the state in which the broker-dealer 27 has its principal place of business; and 28 (H) any other person exempted by a regulation adopted or order 29 issued under this chapter; and 30 (2) a person that deals solely in United States government securities 31 and is supervised as a dealer in government securities by the Board of Governors of
01 the Federal Reserve System, the United States Comptroller of the Currency, the 02 Federal Deposit Insurance Corporation, or the Office of Thrift Supervision, United 03 States Department of the Treasury. 04 (c) A broker-dealer or an issuer engaged in offering, offering to purchase, 05 purchasing, or selling securities in this state may not, directly or indirectly, employ or 06 associate with an individual to engage in an activity related to securities transactions in 07 this state if the registration of the individual is suspended or revoked or the individual 08 is barred from employment or association with a broker-dealer, an issuer, an 09 investment adviser, or a federal covered investment adviser by an order of the 10 administrator under this chapter, the Securities and Exchange Commission, or a self- 11 regulatory organization. A broker-dealer or issuer does not violate this subsection if 12 the broker-dealer or issuer did not know and, in the exercise of reasonable care, could 13 not have known of the suspension, revocation, or bar. Upon request from a broker- 14 dealer or issuer and for good cause, an order under this chapter may modify or waive, 15 in whole or in part, the application of the prohibitions of this subsection to the broker- 16 dealer. 17 Sec. 45.56.410. Limited registration of Canadian broker-dealers and 18 agents. (a) If a broker-dealer is registered under this section and its principal office is 19 located in a province or territory of Canada that provides at least equivalent 20 registration for a broker-dealer that is resident in the United States, a broker-dealer 21 that is resident in Canada and does not have an office or other physical presence in this 22 state may effect transactions in securities with or for or induce or attempt to induce the 23 purchase or sale of a security by a person from Canada who is 24 (1) temporarily resident in this state and with whom the Canadian 25 broker-dealer had a bona fide broker-dealer-client relationship before the person 26 entered the United States; or 27 (2) resident in this state and whose transactions are in a self-directed 28 tax-advantaged retirement plan in Canada of which the person is the holder or 29 contributor. 30 (b) An agent who represents a Canadian broker-dealer registered under this 31 section may, if the agent is registered under this section, effect transactions in
01 securities in this state as permitted for the broker-dealer under (a) of this section. 02 (c) Subject to the requirements of (a) of this section, a Canadian broker-dealer 03 may register under this section if the broker-dealer 04 (1) files an application in the form required by the jurisdiction in which 05 the broker-dealer has its principal office; 06 (2) files a written consent to service of process under AS 45.56.630; 07 (3) is registered as a broker or dealer in good standing in the 08 jurisdiction from which the broker-dealer is effecting transactions into this state and 09 files evidence of the registration; and 10 (4) is a member of a self-regulating organization or stock exchange in 11 Canada. 12 (d) An agent may register under this section in order to effect transactions in 13 securities in this state if the agent represents a Canadian broker-dealer that is 14 registered under this section, and the agent 15 (1) files an application in the form required by the jurisdiction in which 16 the broker-dealer has its principal office; 17 (2) files a written consent to service of process under AS 45.56.630; 18 and 19 (3) is registered and files evidence of good standing in the jurisdiction 20 from which the agent is effecting transactions into this state. 21 (e) Registration under this section becomes effective on the 30th day after an 22 application is filed unless it is made effective earlier by the administrator or a denial 23 order is in effect and a proceeding is pending under AS 45.56.480. 24 (f) A Canadian broker-dealer registered under this section shall 25 (1) maintain provincial or territorial registration and membership in 26 good standing in a self-regulating organization or stock exchange; 27 (2) provide the administrator on request with books and records 28 relating to its business in this state as a broker-dealer; 29 (3) inform the administrator promptly of any criminal action taken 30 against the broker-dealer or of any finding or sanction imposed on the broker-dealer as 31 a result of regulatory action, including that of a self-regulating organization, involving
01 fraud, theft, deceit, misrepresentation, or similar conduct; and 02 (4) disclose to its clients in this state that the broker-dealer and its 03 agents are not subject to the full regulatory requirements of this chapter. 04 (g) An agent of a Canadian broker-dealer registered under this section shall 05 (1) maintain provincial or territorial registration in good standing; and 06 (2) inform the administrator promptly of any criminal action taken 07 against the agent or of any finding or sanction imposed on the broker-dealer or agent 08 as a result of regulatory action, including that of a self-regulating organization, 09 involving fraud, theft, deceit, misrepresentation, or similar conduct. 10 (h) Renewal applications for Canadian broker-dealers and agents under this 11 section must be filed by midnight on December 31 of each year and may be made by 12 filing the most recent renewal application, if any, filed in the jurisdiction in which the 13 broker-dealer has its principal office or, if a renewal application is not required, the 14 most recent application filed under (c)(1) or (d)(1) of this section. 15 (i) An applicant for registration or renewal registration under this section shall 16 pay the fee for broker-dealers and agents required by this chapter. 17 (j) A Canadian broker-dealer or agent registered under this section may not 18 effect transactions in this state except 19 (1) as permitted under (a) or (b) of this section; 20 (2) with or through 21 (A) the issuers of the securities involved in the transactions; 22 (B) other broker-dealers; or 23 (C) banks, savings institutions, trust companies, insurance 24 companies, investment companies as defined in 15 U.S.C. 80a-3 (Investment 25 Company Act of 1940), pension or profit-sharing trusts, or other financial 26 institutions or institutional buyers, whether acting for themselves or as trustees; 27 or 28 (3) as otherwise permitted by this chapter. 29 (k) A Canadian broker-dealer or agent registered under this section and acting 30 in accordance with the limitations in (j) of this section is exempt from all of the 31 requirements of this chapter except the anti-fraud provisions under AS 45.56.505 and
01 the requirements of this section. The registration of a Canadian broker-dealer or agent 02 under this section may not be denied, suspended, or revoked except in accordance with 03 the provisions of AS 45.56.480 for a breach of the anti-fraud provisions under 04 AS 45.56.505 or the requirements of this section. 05 (l) In this section, "Canadian broker-dealer" means a broker-dealer that has its 06 principal office in a province or territory of Canada. 07 Sec. 45.56.420. Registration exemption for merger and acquisition broker. 08 (a) In general, except as provided in (b) and (d) of this section, a merger and 09 acquisition broker shall be exempt from registration under AS 45.55.405. 10 (b) A merger and acquisition broker is not exempt from registration under 11 AS 45.55.405 if the broker does any of the following: 12 (1) directly or indirectly, in connection with the transfer of ownership 13 of an eligible privately held company, receives, holds, transmits, or has custody of the 14 funds or securities to be exchanged by the parties to the transaction; 15 (2) engages on behalf of an issuer in a public offering of any class of 16 securities that is registered, or is required to be registered, with the United States 17 Securities and Exchange Commission under Section 12 of the Securities Exchange Act 18 of 1934, 15 U.S.C. 78o(b) or with respect to which the issuer files, or is required to 19 file, periodic information, documents, and reports under the Securities Exchange Act 20 of 1934 Section 15(b) subsection (d), 15 U.S.C. 78o(d); or 21 (3) engages on behalf of any party in a transaction involving a public 22 shell company. 23 (c) A merger and acquisition broker is not exempt from registration under 24 AS 45.55.401 if the broker is subject to 25 (1) Suspension or revocation of registration under Section 15(b) of the 26 Securities Exchange Act of 1934, 15 U.S.C. 78o(b)(4); 27 (2) a statutory disqualification described in Section 3(a)(39) of the 28 Securities Exchange Act of 1934, 15 U.S.C. 78c(a)(39); 29 (3) a disqualification under the rules adopted by the United States 30 Securities and Exchange Commission under Section 926 of the Dodd-Frank Wall 31 Street Reform and Consumer Protection Act (15 U.S.C. 77d note); or
01 (4) a final order described in paragraph (4)(H) of Section 15(b) of the 02 Securities Exchange Act of 1934, 15 U.S.C. 78o(b)(4)(H). 03 (d) Nothing in this section shall be construed to limit any other authority of the 04 department to exempt any person, or any class of persons, from any provision of this 05 title, or from any provision of any rule or regulation thereunder. 06 (e) In this section, 07 (1) "control" means the power, directly or indirectly, to direct the 08 management or policies of a company, whether through ownership of securities, by 09 contract, or otherwise; there is a presumption of control for any person who 10 (A) is a director, general partner, member or manager of a 11 limited liability company, or officer exercising executive responsibility, or has 12 similar status or functions; 13 (B) has the right to vote 20 percent or more of a class of voting 14 securities or the power to sell or direct the sale of 20 percent or more of a class 15 of voting securities; or 16 (C) in the case of a partnership or limited liability company, 17 has the right to receive upon dissolution, or has contributed, 20 percent or more 18 of the capital; 19 (2) "eligible privately held company" means a company meeting both 20 of the following conditions: 21 (A) the company does not have any class of securities 22 registered, or required to be registered, with the United States Securities and 23 Exchange Commission under Section 12 of the Securities Exchange Act of 24 1934, 15 U.S.C. 78o(b), or with respect to which the company files, or is 25 required to file, periodic information, documents, and reports under subsection 26 (d), 15 U.S.C. 78o(d); and 27 (B) in the fiscal year ending immediately before the fiscal year 28 in which the services of the merger and acquisition broker are initially engaged 29 with respect to the securities transaction, the company meets either or both of 30 the following conditions, determined in accordance with the historical financial 31 accounting records of the company:
01 (i) the earnings of the company before interest, taxes, 02 depreciation, and amortization are less than $25,000,000; 03 (ii) the gross revenues of the company are less than 04 $250,000,000; 05 (3) "merger and acquisition broker" means any broker and any person 06 associated with a broker engaged in the business of effecting securities transactions 07 solely in connection with the transfer of ownership of an eligible privately held 08 company, regardless of whether that broker acts on behalf of a seller or buyer, through 09 the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business 10 combination involving, securities or assets of the eligible privately held company, if 11 the broker reasonably believes that 12 (A) upon consummation of the transaction, any person 13 acquiring securities or assets of the eligible privately held company, acting 14 alone or in concert, will control and, directly or indirectly, will be active in the 15 management of the eligible privately held company or the business conducted 16 with the assets of the eligible privately held company; and 17 (B) if any person is offered securities in exchange for securities 18 or assets of the eligible privately held company, the person will, before 19 becoming legally bound to consummate the transaction, receive or have 20 reasonable access to the most recent fiscal year-end financial statements of the 21 issuer of the securities as customarily prepared by its management in the 22 normal course of operations and, if the financial statements of the issuer are 23 audited, reviewed, or compiled, any related statement by the independent 24 accountant; a balance sheet dated not more than 120 days before the date of the 25 exchange offer; and information pertaining to the management, business, 26 results of operations for the period covered by the foregoing financial 27 statements, and any material loss contingencies of the issuer; 28 (4) "public shell company" means a company that, at the time of a 29 transaction with an eligible privately held company, 30 (A) has any class of securities registered, or required to be 31 registered, with the United States Securities and Exchange Commission under
01 Section 12, 15 U.S.C. 78o(b), or with respect to which the company files, or is 02 required to file periodic information, documents, and reports under 15 U.S.C. 03 78o(d); and 04 (B) has no or nominal operations; and 05 (C) has 06 (i) no or nominal assets; 07 (ii) assets consisting solely of cash and cash 08 equivalents; or 09 (iii) assets consisting of any amount of cash and cash 10 equivalents and nominal other assets. 11 Sec. 45.56.430. Agent registration requirement and exemptions. (a) An 12 individual may not transact business in this state as an agent unless the individual is 13 registered under this chapter as an agent or is exempt from registration as an agent 14 under (b) of this section. 15 (b) The following individuals are exempt from the registration requirement of 16 (a) of this section: 17 (1) an individual who represents a broker-dealer in effecting 18 transactions in this state limited to those described in 15 U.S.C. 78o(i); 19 (2) an individual who represents a broker-dealer that is exempt under 20 AS 45.56.405(b) or AS 45.56.410; 21 (3) an individual who represents an issuer with respect to an offer or 22 sale of the issuer's own securities or those of the issuer's parent or any of the issuer's 23 subsidiaries, and who is not compensated in connection with the individual's 24 participation by the payment of commissions or other remuneration based, directly or 25 indirectly, on transactions in those securities; 26 (4) an individual who represents an issuer and who effects transactions 27 in the issuer's securities exempted by AS 45.56.210, other than AS 45.56.210(11) and 28 (14); 29 (5) an individual who represents an issuer that effects transactions 30 solely in federal covered securities of the issuer, but an individual who effects 31 transactions in a federal covered security under 15 U.S.C. 77r(b)(3) or (b)(4)(D) is not
01 exempt if the individual is compensated in connection with the agent's participation by 02 the payment of commissions or other remuneration based, directly or indirectly, on 03 transactions in those securities; 04 (6) an individual who represents a broker-dealer registered in this state 05 under AS 45.56.405(a) or exempt from registration under AS 45.56.405(b) in the offer 06 and sale of securities for an account of a nonaffiliated federal covered investment 07 adviser with investments under management in excess of $100,000,000 acting for the 08 account of others under discretionary authority in a signed record; 09 (7) an individual who represents an issuer in connection with the 10 purchase of the issuer's own securities; 11 (8) an individual who represents an issuer and who restricts 12 participation to performing clerical or ministerial acts; or 13 (9) any other individual exempted by a regulation adopted or order 14 issued under this chapter. 15 (c) The registration of an agent is effective only while the agent is employed 16 by or associated with a broker-dealer registered under this chapter or an issuer that is 17 offering, selling, or purchasing the issuer's securities in this state. 18 (d) A broker-dealer or an issuer engaged in offering, selling, or purchasing 19 securities in this state may not employ or associate with an agent who transacts 20 business in this state on behalf of broker-dealers or issuers unless the agent is 21 registered under (a) of this section or exempt from registration under (b) of this 22 section. 23 (e) An individual may not act as an agent for more than one broker-dealer or 24 one issuer at a time, unless the broker-dealer or the issuer for which the agent acts is 25 affiliated by direct or indirect common control or is authorized by a regulation or order 26 issued under this chapter. 27 Sec. 45.56.435. Investment adviser registration requirement and 28 exemptions. (a) A person may not transact business in this state as an investment 29 adviser unless the person is registered under this chapter as an investment adviser or is 30 exempt from registration as an investment adviser under (b) of this section. 31 (b) The following persons are exempt from the registration requirement in (a)
01 of this section: 02 (1) a person without a place of business in this state that is registered 03 under the securities act of the state in which the person has the person's principal place 04 of business if the person's only clients in this state are 05 (A) federal covered investment advisers, investment advisers 06 registered under this chapter, or broker-dealers registered under this chapter; 07 (B) institutional investors; 08 (C) bona fide preexisting clients whose principal places of 09 residence are not in this state if the investment adviser is registered under the 10 securities act of the state in which the clients maintain principal places of 11 residence; or 12 (D) exempt by regulation adopted or order issued under this 13 chapter; 14 (2) a person without a place of business in this state if the person has 15 had, during the preceding 12 months, not more than five clients that are resident in this 16 state in addition to those specified under (1) of this subsection; or 17 (3) any other person exempted by a regulation adopted or order issued 18 under this chapter. 19 (c) An investment adviser may not, directly or indirectly, employ or associate 20 with an individual to engage in an activity related to investment advice in this state if 21 the registration of the individual is suspended or revoked or the individual is barred 22 from employment or association with an investment adviser, federal covered 23 investment adviser, or broker-dealer by an order under this chapter, the Securities and 24 Exchange Commission, or a self-regulatory organization, unless the investment 25 adviser did not know, and, in the exercise of reasonable care could not have known, of 26 the suspension, revocation, or bar. Upon request from the investment adviser and for 27 good cause, the administrator may by order, waive, in whole or in part, the application 28 of the prohibitions of this subsection to the investment adviser. 29 (d) An investment adviser may not employ or associate with an individual 30 required to be registered under this chapter as an investment adviser representative 31 who transacts business in this state on behalf of the investment adviser unless the
01 individual is registered under AS 45.56.440(a) or is exempt from registration under 02 AS 45.56.440(b). 03 Sec. 45.56.440. Investment adviser representative registration requirement 04 and exemptions. (a) An individual may not transact business in this state as an 05 investment adviser representative unless the individual is registered under this chapter 06 as an investment adviser representative or is exempt from registration as an investment 07 adviser representative under (b) of this section. 08 (b) The following individuals are exempt from the registration requirement of 09 (a) of this section: 10 (1) an individual who is employed by or associated with an investment 11 adviser that is exempt from registration under AS 45.56.435(b) or a federal covered 12 investment adviser that is excluded from the notice filing requirements of 13 AS 45.56.445; and 14 (2) any other individual exempted by a regulation adopted or order 15 issued under this chapter. 16 (c) The registration of an investment adviser representative is not effective 17 while the investment adviser representative is not employed by or associated with an 18 investment adviser registered under this chapter or a federal covered investment 19 adviser that has made or is required to make a notice filing under AS 45.56.445. 20 (d) An individual may transact business as an investment adviser 21 representative for more than one investment adviser or federal covered investment 22 adviser unless a regulation adopted or order issued under this chapter prohibits or 23 limits an individual from acting as an investment adviser representative for more than 24 one investment adviser or federal covered investment adviser. 25 (e) An individual acting as an investment adviser representative may not, 26 directly or indirectly, conduct business in this state on behalf of an investment adviser 27 or a federal covered investment adviser if the registration of the individual as an 28 investment adviser representative is suspended or revoked or the individual is barred 29 from employment or association with an investment adviser or a federal covered 30 investment adviser by an order under this chapter, the Securities and Exchange 31 Commission, or a self-regulatory organization. Upon request from a federal covered
01 investment adviser and for good cause, the administrator may by order, waive, in 02 whole or in part, the application of the requirements of this subsection to the federal 03 covered investment adviser. 04 (f) An investment adviser registered under this chapter, a federal covered 05 investment adviser that has filed a notice under AS 45.56.445, or a broker-dealer 06 registered under this chapter is not required to employ or associate with an individual 07 as an investment adviser representative if the only compensation paid to the individual 08 for a referral of investment advisory clients is paid to an investment adviser registered 09 under this chapter, a federal covered investment adviser who has filed a notice under 10 AS 45.56.445, or a broker-dealer registered under this chapter with which the 11 individual is employed or associated as an investment adviser representative. 12 Sec. 45.56.445. Federal covered investment adviser notice filing 13 requirement. (a) Except with respect to a federal covered investment adviser 14 described in (b) of this section, a federal covered investment adviser may not transact 15 business in this state as a federal covered investment adviser unless the federal 16 covered investment adviser complies with (c) of this section. 17 (b) The following federal covered investment advisers are not required to 18 comply with (c) of this section: 19 (1) a federal covered investment adviser without a place of business in 20 this state if the only clients of the federal covered investment adviser in this state are 21 (A) federal covered investment advisers, investment advisers 22 registered under this chapter, and broker-dealers registered under this chapter; 23 (B) institutional investors; 24 (C) bona fide preexisting clients whose principal places of 25 residence are not in this state; or 26 (D) other clients specified by a regulation adopted or order 27 issued under this chapter; 28 (2) a federal covered investment adviser without a place of business in 29 this state if the person has had, during the preceding 12 months, not more than five 30 clients that are resident in this state in addition to those specified under (1) of this 31 subsection; and
01 (3) any other person excluded by a regulation adopted or order issued 02 under this chapter. 03 (c) A person acting as a federal covered investment adviser not excluded 04 under (b) of this section shall file a notice, a consent to service of process complying 05 with AS 45.56.630, and the records that have been filed with the Securities and 06 Exchange Commission under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 07 1940) required by a regulation adopted or order issued under this chapter and shall pay 08 the fees specified by regulation adopted under AS 45.56.470. 09 (d) The notice under (c) of this section becomes effective upon filing. 10 Sec. 45.56.450. Registration by broker-dealer, agent, investment adviser, 11 and investment adviser representative. (a) A person shall register as a broker-dealer, 12 agent, investment adviser, or investment adviser representative by filing an application 13 and a consent to service of process complying with AS 45.56.630 and paying the fee 14 specified in AS 45.56.470 and any reasonable fees charged by the designee of the 15 administrator for processing the filing. The application must contain 16 (1) the information or record required for the filing of a uniform 17 application; and 18 (2) upon request by the administrator, any other financial or other 19 information or record that the administrator determines is appropriate. 20 (b) If the information or record contained in an application filed under (a) of 21 this section is or becomes inaccurate or incomplete in a material respect, the registrant 22 shall promptly file a correcting amendment. 23 (c) If an order is not in effect, and a proceeding is not pending under 24 AS 45.56.480, and the administrator has not initiated an investigation, registration 25 becomes effective at noon on the 45th day after a completed application is filed, unless 26 the registration is denied. A regulation adopted or order issued under this chapter may 27 set an earlier effective date or may defer the effective date until noon on the 45th day 28 after the filing of any amendment completing the application. 29 (d) A registration is effective until midnight on December 31 of the year for 30 which the application for registration is filed. Unless an order is in effect under 31 AS 45.56.480, a registration may be automatically renewed each year by filing the
01 records required by a regulation adopted or order issued under this chapter, by paying 02 the fee specified in AS 45.56.470, and by paying costs charged by the designee of the 03 administrator for processing the filings. 04 (e) A regulation adopted or order issued under this chapter may impose other 05 conditions, not inconsistent with 15 U.S.C. 77b - 77c, 77e - 77f, 77r, 77z-3, 77ddd, 06 78a - 78d, 78g - 78h, 78n - 78o, 78q, 78bb, 78ee, 78kk, 78mm, 80a-2 - 80a-3, 80a-6, 07 80a-12, 80a-24, 80a-26 - 80a-27, 80a-29 - 80a-30, 80a-34, 80a-51, 80a-54, 80a-60, 08 80a-63, 80b-2 - 80b-3a, 80b-5, 80b-10, 80b-18a, 80b-20, and 29 U.S.C. 1002 (P.L. 09 104-290) (National Securities Markets Improvement Act of 1996). An order issued 10 under this chapter may waive, in whole or in part, specific requirements in connection 11 with registration that are in the public interest and for the protection of investors. 12 Sec. 45.56.455. 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 45.56.405 or 45.56.435 or a notice under AS 45.56.445 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 this 28 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. 45.56.460. 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. The registrant may file the notice of termination if the registrant 14 learns that the broker-dealer, issuer, investment adviser, or federal covered investment 15 adviser has not filed the notice. 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 45.56.445 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 45.56.445, 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 45.56.450(a) and payment of the filing fee required under 27 AS 45.56.470, 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 Financial Industry Regulatory Authority or the investment adviser representative's 31 record or successor record in the Investment Adviser Registration Depository operated
01 by the Financial Industry Regulatory Authority does not contain a new or amended 02 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 Financial Industry Regulatory Authority or the investment adviser representative's 06 record or successor record in the Investment Adviser Registration Depository operated 07 by the Financial Industry Regulatory Authority contains a new or amended 08 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 45.56.480 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. 45.56.465. 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 45.56.480 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. 45.56.470. Filing fees. (a) The administrator shall establish fees by 07 regulation 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; 10 (2) an application for registration as an agent and renewal of 11 registration as an agent; 12 (3) an application for registration as an investment adviser and renewal 13 of registration as an investment adviser; 14 (4) an application for registration as an investment adviser 15 representative, a renewal of registration as an investment adviser representative, and a 16 change of registration as an investment adviser representative; and 17 (5) an initial fee and annual notice fee for a federal covered investment 18 adviser required to file a notice under AS 45.56.445. 19 (b) A person required to pay a filing or notice fee under this section may 20 transmit the fee through or to a designee as provided by a regulation adopted or order 21 issued under this chapter. 22 Sec. 45.56.475. Post registration requirements. (a) Subject to 15 U.S.C. 23 78o(i) or 80b-18a, a regulation adopted or order issued under this chapter may 24 establish minimum financial requirements for broker-dealers registered or required to 25 be registered under this chapter and investment advisers registered or required to be 26 registered under this chapter. 27 (b) Subject to 15 U.S.C. 78o(i) or 80b-18a, a broker-dealer registered or 28 required to be registered under this chapter and an investment adviser registered or 29 required to be registered under this chapter shall file the financial reports required by a 30 regulation adopted or order issued under this chapter. If the information contained in a 31 record filed under this subsection is or becomes inaccurate or incomplete in a material
01 respect, the registrant shall promptly file a correcting amendment. 02 (c) Subject to 15 U.S.C. 78o(i) or 80b-18a, 03 (1) a broker-dealer registered or required to be registered under this 04 chapter and an investment adviser registered or required to be registered under this 05 chapter shall make and maintain the accounts, correspondence, memoranda, papers, 06 books, and other records required by a regulation adopted or order issued under this 07 chapter; 08 (2) broker-dealer records required to be maintained under (1) of this 09 subsection may be maintained in any form of data storage acceptable under 15 U.S.C. 10 78q(a) if they are readily accessible to the administrator; and 11 (3) investment adviser records required to be maintained under (1) of 12 this subsection may be maintained in any form of data storage required by a regulation 13 adopted or order issued under this chapter. 14 (d) The records of a broker-dealer registered or required to be registered under 15 this chapter and of an investment adviser registered or required to be registered under 16 this chapter are subject to the reasonable periodic, special, or other audits or 17 inspections by a representative of the administrator, in or outside this state, that the 18 administrator considers necessary or appropriate in the public interest and for the 19 protection of investors. An audit or inspection may be made at any time and without 20 prior notice. The administrator may copy and remove for audit or inspection copies of 21 all records the administrator reasonably considers necessary or appropriate to conduct 22 the audit or inspection. The administrator may assess a reasonable charge for 23 conducting an audit or inspection under this subsection. 24 (e) Subject to 15 U.S.C. 78o(i) or 80b-18a, a regulation adopted or order 25 issued under this chapter may require a broker-dealer or investment adviser that has 26 custody of or discretionary authority over funds or securities of a customer or client to 27 obtain insurance or post a bond or other satisfactory form of security in an amount 28 established by a regulation adopted under this chapter. The administrator may 29 determine the requirements of the insurance, bond, or other satisfactory form of 30 security. Insurance or a bond or other satisfactory form of security may not be required 31 of a broker-dealer registered under this chapter whose net capital exceeds, or of an
01 investment adviser registered under this chapter whose minimum financial 02 requirements exceed, the amounts required by a regulation adopted or order issued 03 under this chapter. The insurance, bond, or other satisfactory form of security must 04 permit an action by a person to enforce any liability on the insurance, bond, or other 05 satisfactory form of security if instituted within the time limitations in 06 AS 45.56.660(j)(2). 07 (f) Subject to 15 U.S.C. 78o(i) or 80b-18a, an agent may not have custody of 08 funds or securities of a customer except under the supervision of a broker-dealer and 09 an investment adviser representative may not have custody of funds or securities of a 10 client except under the supervision of an investment adviser or a federal covered 11 investment adviser. A regulation adopted or order issued under this chapter may 12 prohibit, limit, or impose conditions on a broker-dealer regarding custody of funds or 13 securities of a customer and on an investment adviser regarding custody of securities 14 or funds of a client. 15 (g) With respect to an investment adviser registered or required to be 16 registered under this chapter, a regulation adopted or order issued under this chapter 17 may require that information or other records be furnished or disseminated to clients 18 or prospective clients in this state as necessary or appropriate in the public interest and 19 for the protection of investors and advisory clients. 20 (h) A regulation adopted or order issued under this chapter may require an 21 individual registered under AS 45.56.430 or 45.56.440 to participate in a continuing 22 education program approved by the Securities and Exchange Commission and 23 administered by a self-regulatory organization, or, in the absence of a continuing 24 education program, a regulation adopted or order issued under this chapter may 25 require continuing education for an individual registered under AS 45.56.440. 26 Sec. 45.56.480. Denial, revocation, suspension, withdrawal, restriction, 27 condition, or limitation of registration. (a) If the administrator finds that the order is 28 in the public interest and (d) of this section authorizes the action, an order issued under 29 this chapter may deny an application, or may condition or limit registration of an 30 applicant to be a broker-dealer, agent, investment adviser, or investment adviser 31 representative, and, if the applicant is a broker-dealer or investment adviser, of a
01 partner, officer, director, or person having a similar status or performing similar 02 functions, or a person directly or indirectly in control, of the broker-dealer or 03 investment adviser. 04 (b) If the administrator finds that the order is in the public interest and (d) of 05 this section authorizes the action, an order issued under this chapter may revoke, 06 suspend, condition, or limit the registration of a registrant, and, if the registrant is a 07 broker-dealer or investment adviser, of a partner, officer, director, or person having a 08 similar status or performing similar functions, or a person directly or indirectly in 09 control, of the broker-dealer or investment adviser. However, the administrator may 10 not 11 (1) institute a revocation or suspension proceeding under this 12 subsection based on an order issued under a law of another state that is reported to the 13 administrator or a designee of the administrator more than three years after the date of 14 the order on which it is based; or 15 (2) under (d)(5)(A) and (B) of this section, issue an order on the basis 16 of an order issued under the securities act of another state unless the other order was 17 based on conduct for which (d) of this section would authorize the action had the 18 conduct occurred in this state. 19 (c) If the administrator finds that the order is in the public interest and (d)(1) - 20 (6), (8) - (10), (12), or (13) of this section authorize the action, an order under this 21 chapter may censure, impose a bar, or impose a civil penalty of not more than 22 $100,000 for a single violation, on a registrant, and, if the registrant is a broker-dealer 23 or investment adviser, a partner, officer, director, or person having a similar status or 24 performing similar functions, or a person directly or indirectly in control, of the 25 broker-dealer or investment adviser. 26 (d) A person may be disciplined under (a) - (c) of this section if the person 27 (1) has filed an application for registration in this state under this 28 chapter or former AS 45.55.010 - 45.55.120, 45.55.150, 45.55.155, 45.55.170, 29 45.55.900, 45.55.905(c), 45.55.915, 45.55.935, and 45.55.960 - 45.55.995, as of the 30 effective date of registration or as of any date after filing in the case of an order 31 denying effectiveness, was incomplete in any material respect or contained a statement
01 that, in light of the circumstances under which it was made, was false or misleading 02 with respect to a material fact; 03 (2) wilfully violated or wilfully failed to comply with this chapter or 04 former AS 45.55.010 - 45.55.120, 45.55.150, 45.55.155, 45.55.170, 45.55.900, 05 45.55.905(c), 45.55.915, 45.55.935, and 45.55.960 45.55.930 - 45.55.995 or a 06 regulation adopted or order issued under this chapter or former AS 45.55.010 - 07 45.55.120, 45.55.150, 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 08 45.55.930, 45.55.935, and 45.55.960 - 45.55.995; 09 (3) has been convicted of a felony or within the previous 10 years has 10 been convicted of a misdemeanor involving a security, a commodity future or option 11 contract, or an aspect of a business involving securities, commodities, investments, 12 franchises, insurance, banking, or finance; 13 (4) is enjoined or restrained by a court of competent jurisdiction in an 14 action instituted by the administrator under this chapter or former AS 45.55.010 - 15 45.55.120, 45.55.150, 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 16 45.55.930, 45.55.935, and 45.55.960 - 45.55.995, a state, the Securities and Exchange 17 Commission, or the United States from engaging in or continuing an act, practice, or 18 course of business involving an aspect of a business involving securities, commodities, 19 investments, franchises, insurance, banking, or finance; 20 (5) is the subject of an order, issued after notice and opportunity for 21 hearing by 22 (A) the securities or other financial services regulator of a state 23 or the Securities and Exchange Commission or other federal agency denying, 24 revoking, barring, or suspending registration as a broker-dealer, agent, 25 investment adviser, federal covered investment adviser, or investment adviser 26 representative; 27 (B) the securities regulator of a state or the Securities and 28 Exchange Commission against a broker-dealer, agent, investment adviser, 29 investment adviser representative, or federal covered investment adviser; 30 (C) the Securities and Exchange Commission or a self- 31 regulatory organization suspending or expelling the registrant from
01 membership in the self-regulatory organization; 02 (D) a court adjudicating a United States Postal Service fraud 03 order; 04 (E) the insurance regulator of a state denying, suspending, or 05 revoking registration as an insurance agent; or 06 (F) a depository institution or financial services regulator 07 suspending or barring the person from the depository institution or other 08 financial services business; 09 (6) is the subject of an adjudication or determination, after notice and 10 opportunity for hearing, by the Securities and Exchange Commission, the Commodity 11 Futures Trading Commission, the Federal Trade Commission, a federal depository 12 institution regulator, or a depository institution, insurance, or other financial services 13 regulator of a state that the person wilfully violated 15 U.S.C. 77a - 77aa (Securities 14 Act of 1933), 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934), 15 U.S.C. 80b- 15 1 - 80b-21 (Investment Advisers Act of 1940), 15 U.S.C. 80a-1 - 80a-64 (Investment 16 Company Act of 1940), or 7 U.S.C. 1 - 27 (Commodity Exchange Act), the securities 17 or commodities law of a state, or a federal or state law under which a business 18 involving investments, franchises, insurance, banking, or finance is regulated; 19 (7) is insolvent, either because the person's liabilities exceed the 20 person's assets or because the person cannot meet the person's obligations as they 21 mature, but the administrator may not enter an order against an applicant or registrant 22 under this paragraph without a finding of insolvency as to the applicant or registrant; 23 (8) refuses to allow or otherwise impedes the administrator from 24 conducting an audit or inspection under AS 45.56.475(d) or refuses access to a 25 registrant's office to conduct an audit or inspection under AS 45.56.475(d); 26 (9) has failed to reasonably supervise an agent, investment adviser 27 representative, or other individual, if the agent, investment adviser representative, or 28 other individual was subject to the person's supervision and committed a violation of 29 this chapter or former AS 45.55.010 - 45.55.120, 45.55.150, 45.55.155, 45.55.170, 30 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, and 45.55.960 - 45.55.995 31 or a regulation adopted or order issued under this chapter or former AS 45.55.010 -
01 45.55.120, 45.55.150, 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 02 45.55.930, 45.55.935, and 45.55.960 - 45.55.995; 03 (10) has not paid the proper filing fee within 30 days after having been 04 notified by the administrator of a deficiency, but the administrator shall vacate an 05 order under this paragraph when the deficiency is corrected; 06 (11) after notice and opportunity for a hearing, has been found 07 (A) by a court of competent jurisdiction to have wilfully 08 violated the laws of a foreign jurisdiction under which the business of 09 securities, commodities, investment, franchises, insurance, banking, or finance 10 is regulated; 11 (B) to have been the subject of an order of a securities regulator 12 of a foreign jurisdiction denying, revoking, or suspending the right to engage 13 in the business of securities as a broker-dealer, agent, investment adviser, 14 investment adviser representative, or similar person; or 15 (C) to have been suspended or expelled from membership by or 16 participation in a securities exchange or securities association operating under 17 the securities laws of a foreign jurisdiction; 18 (12) is the subject of a cease and desist order issued by the Securities 19 and Exchange Commission or issued under the securities, commodities, investment, 20 franchise, banking, finance, or insurance laws of a state; 21 (13) has engaged in dishonest or unethical practices in the securities, 22 commodities, investment, franchise, banking, finance, or insurance business; 23 (14) is not qualified on the basis of factors that may include training, 24 experience, and knowledge of the securities business; however, in the case of an 25 application by an agent for a broker-dealer that is a member of a self-regulatory 26 organization or by an individual for registration as an investment adviser 27 representative, a denial order may not be based on this paragraph if the individual has 28 successfully completed all examinations required by (e) of this section; the 29 administrator may require an applicant for registration under AS 45.56.430 or 30 45.56.440 who has not been registered in a state within the two years preceding the 31 filing of an application in this state to successfully complete an examination; or
01 (15) is a person whose license renewal is denied under AS 14.43.148 02 or whose license issuance or renewal is denied under AS 25.27.244. 03 (e) A regulation adopted or order issued under this chapter may require that an 04 examination, including an examination developed or approved by an organization of 05 securities regulators, be successfully completed by a class of individuals or all 06 individuals. An order issued under this chapter may waive, in whole or in part, an 07 examination as to an individual and a regulation adopted under this chapter may 08 waive, in whole or in part, an examination as to a class of individuals if the 09 administrator determines that the examination is not necessary or appropriate in the 10 public interest and for the protection of investors. 11 (f) The administrator may suspend or deny an application summarily; restrict, 12 condition, limit, or suspend a registration; or censure, bar, or impose a civil penalty on 13 a registrant before final determination of an administrative proceeding. Upon the 14 issuance of an order, the administrator shall promptly notify each person subject to the 15 order that the order has been issued, the reasons for the action, and that, within 15 days 16 after the receipt of a request in a record from the person, the matter will be scheduled 17 for a hearing. If a hearing is not requested and none is ordered by the administrator 18 within 30 days after the date of service of the order, the order becomes final by 19 operation of law. If a hearing is requested or ordered, the administrator, after notice of 20 and opportunity for hearing to each person subject to the order, may modify or vacate 21 the order or extend the order until final determination. 22 (g) An order may not be issued under this section, except under (f) of this 23 section, without appropriate notice to the applicant or registrant, and an opportunity 24 for hearing under AS 45.56.650(c). 25 (h) A person that controls, directly or indirectly, a person not in compliance 26 with this section may be disciplined by order of the administrator under (a) - (c) of this 27 section to the same extent as the noncomplying person, unless the controlling person 28 did not know, and in the exercise of reasonable care could not have known, of the 29 existence of conduct that is a ground for discipline under this section. 30 (i) The administrator may not institute a proceeding under (a) - (c) of this 31 section based solely on material facts actually known by the administrator unless an
01 investigation or the proceeding is instituted within one year after the administrator 02 actually acquires knowledge of the material facts. 03 Article 5. Fraud and Liabilities. 04 Sec. 45.56.505. General fraud. A person may not, in connection with the 05 offer, sale, or purchase of a security, directly or indirectly, 06 (1) employ a device, scheme, or artifice to defraud; 07 (2) make an untrue statement of a material fact or omit to state a 08 material fact necessary in order to make the statements made, in light of the 09 circumstances under which they were made, not misleading; or 10 (3) engage in an act, practice, or course of business that operates or 11 would operate as a fraud or deceit upon another person. 12 Sec. 45.56.510. Prohibited conduct in providing investment advice. (a) A 13 person that advises others for compensation, either directly or indirectly or through 14 publications or writings, as to the value of securities or the advisability of investing in, 15 purchasing, or selling securities or that, for compensation and as part of a regular 16 business, issues or adopts analyses or reports relating to securities may not 17 (1) employ a device, scheme, or artifice to defraud another person; or 18 (2) engage in an act, practice, or course of business that operates or 19 would operate as a fraud or deceit upon another person. 20 (b) A regulation adopted under this chapter may define an act, practice, or 21 course of business of an investment adviser or an investment adviser representative, 22 other than a supervised person of a federal covered investment adviser, as fraudulent, 23 deceptive, or manipulative and may prescribe means reasonably designed to prevent 24 investment advisers and investment adviser representatives, other than supervised 25 persons of a federal covered investment adviser, from engaging in acts, practices, and 26 courses of business defined as fraudulent, deceptive, or manipulative. 27 (c) A regulation adopted under this chapter may specify the contents of an 28 investment advisory contract entered into, extended, or renewed by an investment 29 adviser. 30 Sec. 45.56.520. Misleading filings. A person may not, in a document filed 31 with the administrator or in a proceeding under this chapter, make or cause to be made
01 an untrue statement of a material fact or omit to state a material fact necessary in order 02 to make the statements made, in the light of the circumstances under which they are 03 made, not misleading. 04 Sec. 45.56.530. Misrepresentations concerning registration or exemption. 05 The filing of an application for registration, a registration statement, a notice filing 06 under this chapter, the registration of a person, the notice filing by a person, or the 07 registration of a security under this chapter does not constitute a finding by the 08 administrator that a record filed under this chapter is true, complete, and not 09 misleading. The filing or registration or the availability of an exemption, exception, 10 preemption, or exclusion for a security or a transaction does not mean that the 11 administrator has passed upon the merits or qualifications of, or recommended or 12 given approval to, a person, security, or transaction. A person may not make, or cause 13 to be made, to a purchaser, customer, client, or prospective customer or client a 14 representation inconsistent with this section. 15 Sec. 45.56.540. Evidentiary burden. (a) In a civil action or administrative 16 proceeding under this chapter, a person claiming an exemption, exception, 17 preemption, or exclusion has the burden to prove the applicability of the claim. 18 (b) In a criminal proceeding under this chapter, a person claiming an 19 exemption, exception, preemption, or exclusion has the burden of going forward with 20 evidence of the claim. 21 Sec. 45.56.550. Filing of sales and advertising literature. (a) Except as 22 otherwise provided in (b) of this section, a regulation adopted or order issued under 23 this chapter may require the filing of a prospectus, pamphlet, circular, form letter, 24 advertisement, sales literature, or other advertising record relating to a security or 25 investment advice, addressed or intended for distribution to prospective investors, 26 including clients or prospective clients of a person registered or required to be 27 registered as an investment adviser under this chapter. 28 (b) This section does not apply to sales and advertising literature specified in 29 (a) of this section that relates to a federal covered security, a federal covered 30 investment adviser, or a security or transaction exempted by AS 45.56.205, 45.56.210, 31 45.56.220, or 45.56.240, except as required under AS 45.56.205(7).
01 (c) The administrator may by regulation or order prohibit the publication, 02 circulation, or use of any advertising deemed false or misleading. 03 Sec. 45.56.560. Qualified immunity. A broker-dealer, agent, investment 04 adviser, federal covered investment adviser, or investment adviser representative is not 05 liable to another broker-dealer, agent, investment adviser, federal covered investment 06 adviser, or investment adviser representative for defamation relating to a statement 07 that is contained in a record required by the administrator, or designee of the 08 administrator, the Securities and Exchange Commission, or a self-regulatory 09 organization, unless the person knew, or should have known at the time the statement 10 was made, that it was false in a material respect or the person acted in reckless 11 disregard of the statement's truth or falsity. 12 Article 6. Administration and Judicial Review. 13 Sec. 45.56.605. Administration. (a) The Department of Commerce, 14 Community, and Economic Development shall administer this chapter. 15 (b) The administrator or an officer, employee, or designee of the administrator 16 may not use for personal benefit or the benefit of others records or other information 17 obtained by or filed with the administrator that is not public under AS 45.56.615(b). 18 This chapter does not authorize the administrator or an officer, employee, or designee 19 of the administrator to disclose the record or information, except in accordance with 20 AS 45.56.615(c), 45.56.604, 45.56.645. 21 (c) This chapter does not create or diminish a privilege or exemption that 22 exists at common law, by statute or regulation, or otherwise. 23 (d) The administrator may develop and implement investor education 24 initiatives to inform the public about investing in securities, with particular emphasis 25 on the prevention and detection of securities fraud. In developing and implementing 26 these initiatives, the administrator may collaborate with public and nonprofit 27 organizations with an interest in investor education. The administrator may accept a 28 grant or donation from a person that is not affiliated with the securities industry or 29 from a nonprofit organization, regardless of whether the organization is affiliated with 30 the securities industry, to develop and implement investor education initiatives. This 31 subsection does not authorize the administrator to require participation or monetary
01 contributions of a registrant in an investor education program. 02 (e) The securities investor education and training fund is created as a special 03 fund in the general fund to provide funds for the purposes specified in (d) of this 04 section. Thirty-three percent of the money received by this state by reason of civil 05 penalties under this chapter shall be deposited in the fund. The legislature may 06 appropriate amounts from the fund to the administrator for securities investor 07 education and training. Nothing in this subsection exempts money deposited into the 08 fund from the requirements of AS 37.07 (Executive Budget Act) or dedicates money 09 for a specific purpose. 10 (f) In addition to the requirements applicable to a variable annuity transaction 11 under AS 21, a variable annuity transaction between a broker-dealer, agent, 12 investment adviser, investment advisor representative, or federal covered investment 13 advisor and an investor is subject to the applicable requirements under AS 45.56. 14 Sec. 45.56.610. Administrative files and opinions. (a) The administrator shall 15 maintain, or designate a person to maintain, a register of applications for registration 16 of securities; registration statements; notice filings; applications for registration of 17 broker-dealers, agents, investment advisors, and investment adviser representatives; 18 notice filings by federal covered investment advisors that are or have been effective 19 under this chapter or former AS 45.55.010 - 45.55.120, 45.55.150, 45.55.155, 20 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, and 45.55.960 - 21 45.55.995; notices of claims of exemption from registration or notice filing 22 requirements contained in a record; orders issued under this chapter or former 23 AS 45.55.010 - 45.55.120, 45.55.150, 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 24 45.55.915, 45.55.930, 45.55.935, and 45.55.960 - 45.55.995; and interpretative 25 opinions or no action determinations issued under this chapter. The register will be 26 kept according to the existing retention schedule mandated by the department. 27 (b) The administrator shall make all regulations, forms, interpretative 28 opinions, and orders available to the public. 29 (c) The administrator shall furnish a copy of a record that is a public record or 30 a certification that the public record does not exist to a person upon request. A copy of 31 the record certified or a certificate by the administrator of a record's nonexistence is
01 prima facie evidence of a record or its nonexistence. 02 Sec. 45.56.615. Public records; confidentiality. (a) Except as otherwise 03 provided in (b) of this section, records obtained by the administrator or filed under this 04 chapter, including a record contained in or filed with a registration statement, 05 application, notice filing, or report are public records and are available for public 06 examination under AS 40.25.100 - 40.25.295 (Alaska Public Records Act). 07 (b) The following records are not public records under AS 40.25.100 - 08 40.25.295 (Alaska Public Records Act) and are not available for public examination 09 under (a) of this section: 10 (1) a record obtained by the administrator in connection with an audit, 11 examination or inspection under AS 45.56.475(d) or an investigation under 12 AS 45.56.645; 13 (2) a part of a record filed in connection with a registration statement 14 under AS 45.56.105 and 45.56.305 - 45.56.320 or a record under AS 45.56.475(d) that 15 contains trade secrets or confidential information if the person filing the registration 16 statement or report has asserted a claim of confidentiality or privilege that is 17 authorized by law; 18 (3) a record that is not required to be provided to the administrator or 19 filed under this chapter and is provided to the administrator only on the condition that 20 the record may not be subject to public examination or disclosure; 21 (4) a nonpublic record received from a person specified in 22 AS 45.56.620(a); and 23 (5) any social security number, residential address unless used as a 24 business address, and residential telephone number unless used as a business 25 telephone number, contained in a record that is filed. 26 (c) If disclosure is for the purpose of a civil, administrative, or criminal 27 investigation, action, or proceeding or to a person specified in AS 45.56.620(a), the 28 administrator may disclose a record obtained in connection with an audit or inspection 29 under AS 45.56.475(d) or a record obtained in connection with an investigation under 30 AS 45.56.645. 31 Sec. 45.56.620. Uniformity and cooperation with other agencies. (a) The
01 administrator may cooperate, coordinate, consult, and, subject to AS 45.56.615, share 02 records and information with the securities regulator of another state, Canada, a 03 Canadian province or territory, a foreign jurisdiction, the Securities and Exchange 04 Commission, the United States Department of Justice, the Commodity Futures 05 Trading Commission, the Federal Trade Commission, the Securities Investor 06 Protection Corporation, a self-regulatory organization, a national or international 07 organization of securities regulators, a federal or state banking and insurance 08 regulator, and a governmental law enforcement agency to bring about greater 09 uniformity in securities matters among the federal government, self-regulatory 10 organizations, states, and foreign governments. 11 (b) In cooperating, coordinating, consulting, and sharing records and 12 information under this section and in acting by regulation, order, or waiver under this 13 chapter, the administrator may take into consideration in carrying out the public 14 interest the following general policies: 15 (1) maximizing effectiveness of regulation for the protection of 16 investors; 17 (2) maximizing uniformity in federal and state regulatory standards; 18 and 19 (3) minimizing burdens on the business of capital formation, without 20 adversely affecting essentials of investor protection. 21 (c) The cooperation, coordination, consultation, and sharing of records and 22 information authorized by this section includes 23 (1) establishing or employing one or more designees as a central 24 depository for registration and notice filings under this chapter and for records 25 required or allowed to be maintained under this chapter; 26 (2) developing and maintaining uniform forms; 27 (3) conducting a joint examination or investigation; 28 (4) holding a joint administrative hearing; 29 (5) instituting and prosecuting a joint civil or administrative 30 proceeding; 31 (6) sharing and exchanging personnel;
01 (7) coordinating registrations under AS 45.56.105 and 45.56.405 - 02 45.56.440 and exemptions under AS 45.56.240; 03 (8) sharing and exchanging records, subject to AS 45.56.615; 04 (9) formulating regulations, statements of policy, guidelines, forms, 05 and interpretative opinions and releases; 06 (10) formulating common systems and procedures; 07 (11) notifying the public of proposed regulations, forms, statements of 08 policy, and guidelines; 09 (12) attending conferences and other meetings among securities 10 regulators, that may include representatives of governmental and private sector 11 organizations involved in capital formation, considered necessary or appropriate to 12 promote or achieve uniformity; and 13 (13) developing and maintaining a uniform exemption from 14 registration for small issuers and taking other steps to reduce the burden of raising 15 investment capital by small businesses. 16 Sec. 45.56.625. Jurisdiction. (a) AS 45.56.105, 45.56.320, 45.56.405(a), 17 45.56.430(a), 45.56.435(a), 45.56.440(a), 45.56.505, 45.56.530, 45.56.660, and 18 45.56.665 do not apply to a person that sells or offers to sell a security unless the offer 19 to sell or the sale is made in this state or the offer to purchase or the purchase is made 20 and accepted in this state. 21 (b) AS 45.56.405(a), 45.56.430(a), 45.56.435(a), 45.56.440(a), 45.56.505, 22 45.56.530, 45.56.660, and 45.56.665 do not apply to a person that purchases or offers 23 to purchase a security unless the offer to purchase or the purchase is made in this state 24 or the offer to sell or the sale is made and accepted in this state. 25 (c) For the purpose of this section, an offer to sell or to purchase a security is 26 made in this state, whether or not either party is then present in this state, if the offer 27 (1) originates from within this state; or 28 (2) is directed by the offeror to a place in this state and received at the 29 place to which it is directed. 30 (d) For the purpose of this section, an offer to purchase or to sell is accepted in 31 this state, whether or not either party is then present in this state, if the acceptance
01 (1) is communicated to the offeror in this state and the offeree 02 reasonably believes the offeror to be present in this state and the acceptance is 03 received at the place in this state to which it is directed; and 04 (2) has not previously been communicated to the offeror, orally or in a 05 record, outside this state. 06 (e) An offer to sell or to purchase is not made in this state when a publisher 07 circulates or there is circulated on the publisher's behalf in this state a bona fide 08 newspaper or other publication of general, regular, and paid circulation that is not 09 published in this state, or that is published in this state but has had more than two- 10 thirds of its circulation outside this state during the previous 12 months, or when a 11 radio or television program or other electronic communication originating outside this 12 state is received in this state. A radio or television program or other electronic 13 communication is considered as having originated in this state if either the broadcast 14 studio or the originating source of transmission is located in this state, unless 15 (1) the program or communication is syndicated and distributed from 16 outside this state for redistribution to the general public in this state; 17 (2) the program or communication is supplied by a radio, television, or 18 other electronic network with the electronic signal originating from outside this state 19 for redistribution to the general public in this state; 20 (3) the program or communication is an electronic communication that 21 originates outside this state and is captured for redistribution to the general public in 22 this state by a community antenna or cable, radio, cable television, or other electronic 23 system; or 24 (4) the program or communication consists of an electronic 25 communication that originates in this state, but that is not intended for distribution to 26 the general public in this state. 27 (f) AS 45.56.435(a), 45.56.440(a), 45.56.445(a), 45.56.510, 45.56.520, and 28 45.56.530 apply to a person if the person engages in an act, practice, or course of 29 business instrumental in effecting prohibited or actionable conduct in this state, 30 whether or not either party is then present in this state. 31 Sec. 45.56.630. Service of process. (a) A consent to service of process
01 complying with this section required by this chapter shall be signed and filed in the 02 form required by a regulation adopted or order issued under this chapter. A consent 03 appointing the administrator the person's agent for service of process in a noncriminal 04 action or proceeding against the person or the person's successor or personal 05 representative under this chapter or a regulation adopted or order issued under this 06 chapter after the consent is filed has the same force and validity as if the service were 07 made personally on the person filing the consent. A person that has filed a consent 08 under this subsection in connection with a previous application for registration or 09 notice filing need not file an additional consent. 10 (b) If a person, including a nonresident of this state, engages in an act, 11 practice, or course of business prohibited or made actionable by this chapter or a 12 regulation adopted or order issued under this chapter and the person has not filed a 13 consent to service of process under (a) of this section, the act, practice, or course of 14 business constitutes the appointment of the administrator as the person's agent for 15 service of process in a noncriminal action or proceeding against the person or the 16 person's successor or personal representative. 17 (c) Service under (a) or (b) of this section may be made by providing a copy of 18 the process to the office of the administrator, but the service is not effective unless 19 (1) the plaintiff, which may be the administrator, promptly sends 20 notice of the service and a copy of the process, return receipt requested, to the 21 defendant or respondent at the address set out in the consent to service of process or, if 22 a consent to service of process has not been filed, at the last known address, or takes 23 other reasonable steps to give notice; and 24 (2) the plaintiff files an affidavit of compliance with this subsection in 25 the action or proceeding on or before the return day of the process, if any, or within 26 the time that the court, or the administrator in a proceeding before the administrator, 27 allows. 28 (d) Service under (c) of this section may be used in a proceeding before the 29 administrator or by the administrator in a civil action in which the administrator is the 30 moving party. 31 (e) If process is served under (c) of this section, the court, or the administrator
01 in a proceeding before the administrator, shall order continuances as are necessary or 02 appropriate to afford the defendant or respondent reasonable opportunity to defend. 03 (f) Unless the persons are exempt elsewhere in this chapter, AS 45.56 applies 04 to person who sell or offer to sell when an offer to 05 (1) sell is made in this state; or 06 (2) buy is made and accepted in this state. 07 Sec. 45.56.635. Applicability of the chapter. (a) Unless the persons are 08 exempt elsewhere in this chapter, AS 45.56 applies to persons who buy or offer to buy 09 when an offer to 10 (1) buy is made in this state; or 11 (2) sell is made and accepted in this state. 12 (b) For the purpose of this section, an offer to sell or to buy is made in this 13 state, whether or not either party is then present in this state, when the offer 14 (1) originates from this state; 15 (2) is directed by the offeror to this state and received at the place to 16 which it is directed or at a post office in this state in the case of a mailed offer; 17 (3) is for an interest or participation in an oil, gas, or mining right, title, 18 or lease on land in this state, including submerged land, regardless of where the offer 19 is made; 20 (4) is for an interest or participation in payments out of production 21 under an oil, gas, or mining right, title, or lease on land in this state, including 22 submerged land, regardless of where the offer is made; 23 (5) is for an interest or participation in real property located in this 24 state, or in a corporation, a partnership, a limited liability company, a limited 25 partnership, a limited liability partnership, an association, a joint-stock company; 26 jurisdiction under this paragraph may be exercised only when the exercise is not 27 inconsistent with the constitution of this state or of the United States. 28 (c) For the purpose of this section, an offer to buy or to sell is accepted in this 29 state when acceptance is communicated to the offeror in this state and has not 30 previously been communicated to the offeror, orally or in writing, outside this state. 31 Acceptance is communicated to the offeror in this state, whether or not either party is
01 then present in this state, when the offeree directs it to the offeror in this state 02 reasonably believing the offeror to be in this state and it is received at the place to 03 which it is directed or at a post office in this state in the case of a mailed acceptance. 04 (d) AS 45.56 applies to investment advisers, federal covered advisers, and 05 investment adviser representatives when any act instrumental in effecting prohibited 06 conduct is done in this state, regardless of whether either party is then present in this 07 state. 08 Sec. 45.56.640. Regulations, forms, orders, interpretative opinions, and 09 hearings. (a) The administrator may 10 (1) issue forms and orders; after notice and comment, adopt and amend 11 regulations necessary or appropriate to carry out this chapter; and repeal regulations, 12 including regulations and forms governing registration statements, applications, notice 13 filings, reports, and other records; 14 (2) by regulation, define terms, whether or not used in this chapter, but 15 those definitions may not be inconsistent with this chapter; and 16 (3) by regulation, classify securities, persons, and transactions and 17 adopt different requirements for different classes. 18 (b) Under this chapter, a regulation or form may not be adopted or amended, 19 or an order issued or amended, unless the administrator finds that the regulation, form, 20 order, or amendment is necessary or appropriate in the public interest or for the 21 protection of investors and is consistent with the purposes intended by this chapter. In 22 adopting, amending, and repealing regulations and forms, AS 45.56.620 applies in 23 order to achieve uniformity among the states and coordination with federal laws in the 24 form and content of registration statements, applications, reports, and other records, 25 including the adoption of uniform rules, forms, and procedures. 26 (c) Subject to 15 U.S.C. 78o(i) and 80b-18a, the administrator may require 27 that a financial statement filed under this chapter be prepared in accordance with 28 generally accepted accounting principles in the United States and comply with other 29 requirements specified by regulation adopted or order issued under this chapter. A 30 regulation adopted or order issued under this chapter may establish 31 (1) subject to 15 U.S.C. 78o(i) and 80b-18a, the form and content of
01 financial statements required under this chapter; 02 (2) whether unconsolidated financial statements must be filed; and 03 (3) whether required financial statements must be audited by an 04 independent certified public accountant. 05 (d) The administrator may provide interpretative opinions or issue 06 determinations that the administrator will not institute a proceeding or an action under 07 this chapter against a specified person for engaging in a specified act, practice, or 08 course of business if the determination is consistent with this chapter. A regulation 09 adopted or order issued under this chapter may establish a reasonable charge for 10 interpretative opinions or determinations that the administrator will not institute an 11 action or a proceeding under this chapter. 12 (e) A hearing in an administrative proceeding under this chapter must be 13 conducted in public unless the administrative law judge or the administrator for good 14 cause consistent with this chapter determines that the hearing may not be conducted in 15 public. 16 Sec. 45.56.645. Investigations and subpoenas. (a) The administrator may 17 (1) conduct public or private investigations in or outside of this state 18 that the administrator considers necessary or appropriate to determine whether a 19 person has violated, is violating, or is about to violate this chapter or a regulation 20 adopted or order issued under this chapter, or to aid in the enforcement of this chapter 21 or in the adoption of regulations and forms under this chapter; 22 (2) require or permit a person to testify, file a statement, or produce a 23 record, under oath or otherwise as the administrator determines, as to all the facts and 24 circumstances concerning a matter to be investigated or about which an action or 25 proceeding is to be instituted; and 26 (3) publish a record concerning an action, proceeding, or an 27 investigation under, or a violation of, this chapter or a regulation adopted or order 28 issued under this chapter if the administrator determines it is necessary or appropriate 29 in the public interest and for the protection of investors. 30 (b) For the purpose of an investigation under this chapter, the administrator or 31 the designated officer of the administrator may administer oaths and affirmations,
01 subpoena witnesses, seek compulsion of attendance, take evidence, require the filing 02 of statements, and require the production of any records that the administrator 03 considers relevant or material to the investigation. 04 (c) If a person does not appear or refuses to testify, file a statement, produce 05 records, or otherwise obey a subpoena as required by the administrator under this 06 chapter, the administrator may refer the matter to the attorney general, who may bring 07 an action in the superior court or a court of another state to enforce compliance. The 08 court may 09 (1) hold the person in contempt; 10 (2) order the person to appear before the administrator; 11 (3) order the person to testify about the matter under investigation or in 12 question; 13 (4) order the production of records; 14 (5) grant injunctive relief, including restricting or prohibiting the offer 15 or sale of securities or the providing of investment advice; 16 (6) impose a civil penalty of not more than $100,000 for a single 17 violation; and 18 (7) grant any other necessary or appropriate relief. 19 (d) This section does not preclude a person from applying to the superior court 20 or a court of another state for relief from a request to appear, testify, file a statement, 21 produce records, or obey a subpoena. 22 (e) An person is not excused from attending, testifying, filing a statement, 23 producing a record or other evidence, or obeying a subpoena of the administrator 24 under this chapter or in an action or proceeding instituted by the administrator under 25 this chapter on the ground that the required testimony, statement, record, or other 26 evidence, directly or indirectly, may tend to incriminate the individual or subject the 27 individual to a criminal fine, penalty, or forfeiture. If the person refuses to testify, file 28 a statement, or produce a record or other evidence on the basis of the individual's 29 privilege against self-incrimination, the administrator may apply to the superior court 30 to compel the testimony, the filing of the statement, the production of the record, or 31 the giving of other evidence. The testimony, record, or other evidence compelled
01 under an order of the superior court may not be used, directly or indirectly, against the 02 individual in a criminal case, except in a prosecution for perjury or contempt or 03 otherwise failing to comply with the order. 04 (f) At the request of the securities regulator of another state or a foreign 05 jurisdiction, the administrator may provide assistance if the requesting regulator states 06 that it is conducting an investigation to determine whether a person has violated, is 07 violating, or is about to violate a law or regulation of the other state or foreign 08 jurisdiction relating to securities matters that the requesting regulator administers or 09 enforces. The administrator may provide the assistance by using the authority to 10 investigate and the powers conferred by this section as the administrator determines is 11 necessary or appropriate. The assistance may be provided without regard to whether 12 the conduct described in the request would also constitute a violation of this chapter or 13 other law of this state if occurring in this state. In deciding whether to provide the 14 assistance, the administrator may consider whether the requesting regulator is 15 permitted and has agreed to provide assistance reciprocally within its state or foreign 16 jurisdiction to the administrator on securities matters when requested, whether 17 compliance with the request would violate or prejudice the public policy of this state, 18 and the availability of resources and employees of the administrator to carry out the 19 request for assistance. 20 Sec. 45.56.650. Administrative enforcement. (a) If the administrator 21 determines that a person has engaged, is engaging, or is about to engage in an act, 22 practice, or course of business constituting a violation of this chapter or a regulation 23 adopted or order issued under this chapter or that a person has materially aided, is 24 materially aiding, or is about to materially aid an act, practice, or course of business 25 constituting a violation of this chapter or a regulation adopted or order issued under 26 this chapter, the administrator may issue an order 27 (1) directing the person to cease and desist from engaging in the act, 28 practice, or course of business or to take other action necessary or appropriate to 29 comply with this chapter; 30 (2) denying, suspending, revoking, or conditioning the exemptions for 31 a broker-dealer under AS 45.56.405(b)(1)(D) or (F) or an investment adviser under
01 AS 45.56.435(b)(1)(C); or 02 (3) denying, suspending, conditioning, or limiting an exemption as 03 provided under AS 45.56.250. 04 (b) An order under (a) of this section is effective on the date of issuance. Upon 05 issuance of the order, the administrator shall promptly serve each person subject to the 06 order with a copy of the order and a notice that the order has been entered. The order 07 must include a statement of any civil penalty, restitution, 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, including the imposition of a civil penalty, the imposition of 13 restitution, or requirement for payment of the costs of investigation sought in a 14 statement in the order, becomes final as to that person by operation of law. If a hearing 15 is requested or ordered, the administrator, after notice of and opportunity for hearing 16 to each person subject to the order, may modify or vacate the order or extend it until 17 final determination. 18 (c) If a hearing is requested or ordered under (b) of this section, a hearing must 19 be conducted by the office of administrative hearings (AS 44.64.010) and 20 AS 44.64.040 - 44.64.200 shall apply and govern. 21 (d) In a final order under (b) of this section, the administrator may impose a 22 civil penalty of not more than $100,000 for a single violation, unless the violation of 23 this chapter is against an older Alaskan. In addition to a civil penalty imposed under 24 this subsection, a person or entity who engages in any conduct prohibited by the 25 provisions of this chapter against an older Alaskan, may be liable for an additional 26 civil penalty of treble statutory damages. In determining whether to impose a 27 supplemental civil penalty under this subsection, the administrator shall consider, in 28 addition to other appropriate factors, the extent to which the following factors are 29 present: 30 (1) whether the respondent knew that the respondent's conduct was 31 directed to an older Alaskan;
01 (2) whether the respondent's conduct caused an older Alaskan to suffer 02 severe loss or encumbrance of a primary residence, principal employment or source of 03 income, substantial loss of property set aside for retirement or for personal and family 04 care and maintenance; or 05 (3) whether the respondent's conduct caused substantial loss of 06 payments received under a pension or retirement plan or a government benefits 07 program. 08 (e) In a final order under (b) of this section, the administrator may 09 (1) impose restitution to any person in interest for any monies or 10 property, real or personal, that may have been acquired or transferred in violation of 11 this chapter; 12 (2) charge the actual cost of an investigation or proceeding for a 13 violation of this chapter or a regulation adopted or order issued under this chapter; and 14 (3) deny the violator of the use of any exemptions listed under this 15 chapter. 16 (f) The administrator may petition the superior court to enter a judgment 17 against a person who is a respondent in the order for the amount of the civil penalty 18 levied against the person. Subject to AS 44.62.570, the filing of the petition for a 19 judgment does not reopen the final order to further substantive review unless the court 20 orders otherwise. A judgment entered under this subsection may be executed on and 21 levied under in the manner provided in AS 09.35. 22 (g) If a person does not comply with an order under this section, the 23 administrator may petition a court of competent jurisdiction to enforce the order. The 24 court may not require the administrator to post a bond in an action or proceeding under 25 this section. If the court finds, after service and opportunity for hearing, that the person 26 was not in compliance with the order, the court may adjudge the person in civil 27 contempt of the order. The court may impose a further civil penalty against the person 28 for contempt in an amount not less than $5,000 but not greater than $100,000 for each 29 violation and may grant any other relief the court determines is just and proper in the 30 circumstances. 31 Sec. 45.56.655. Civil enforcement. (a) If the administrator believes that a
01 person has engaged, is engaging, or is about to engage in an act, practice, or course of 02 business constituting a violation of this chapter or a regulation adopted or order issued 03 under this chapter, or that a person has, is, or is about to engage in an act, practice, or 04 course of business that materially aids a violation of this chapter or a regulation 05 adopted or order issued under this chapter, the administrator may maintain an action in 06 the superior court to enjoin the act, practice, or course of business and to enforce 07 compliance with this chapter or a regulation adopted or order issued under this 08 chapter. 09 (b) In an action under this section and on a proper showing, the court may 10 (1) issue a permanent or temporary injunction, restraining order, or 11 declaratory judgment; 12 (2) order other appropriate or ancillary relief, which may include 13 (A) an asset freeze, accounting, writ of attachment, writ of 14 general or specific execution, and appointment of a receiver or conservator that 15 may be the administrator for the defendant or the defendant's assets; 16 (B) ordering the administrator to take charge and control of a 17 defendant's property, including investment accounts and accounts in a 18 depository institution, rents, and profits; to collect debts; and to acquire and 19 dispose of property; 20 (C) imposing a civil penalty of not more than $100,000 for a 21 single violation, unless the violation of this chapter is against an older Alaskan; 22 in determining whether to impose a supplemental civil penalty for a violation 23 of this chapter against an older Alaskan, the court shall consider, in addition to 24 other appropriate factors, the extent to which the following factors are present: 25 (i) whether the respondent knew that the respondent's 26 conduct was directed to an older Alaskan; 27 (ii) whether the respondent's conduct caused an older 28 Alaskan to suffer severe loss or encumbrance of a primary residence, 29 principal employment or source of income, substantial loss of property 30 set aside for retirement or for personal and family care and 31 maintenance, or
01 (iii) whether the respondent's conduct caused 02 substantial loss of payments received under a pension or retirement 03 plan or a government benefits program; 04 (D) imposing an order of rescission, or disgorgement directed 05 to a person that has engaged in an act, practice, or course of business 06 constituting a violation of this chapter or former AS 45.55.010 - 45.55.120, 07 45.55.150, 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 08 45.55.930, 45.55.935, and 45.55.960 - 45.55.995 or a regulation adopted or 09 order issued under this chapter or former AS 45.55.010 - 45.55.120, 45.55.150, 10 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 11 45.55.935, and 45.55.960 - 45.55.995; 12 (E) imposing an order of restitution to any person in interest for 13 any monies or property, real or personal, that may have been acquired or 14 transferred in violation of this chapter; and 15 (F) ordering the payment of prejudgment and post judgment 16 interest; or 17 (3) order other relief that the court considers appropriate. 18 (c) The administrator may not be required to post a bond in an action or 19 proceeding under this chapter. 20 (d) After an order issued by the court under (b) of this section becomes final 21 and all rights of appeal are exhausted, the administrator may petition the superior court 22 to enter a judgment against a person who is a respondent in the order for the amount of 23 the civil penalty levied against the person. Subject to AS 44.62.570, the filing of the 24 petition for a judgment does not reopen the final order to further substantive review 25 unless the court orders otherwise. A judgment entered under this subsection may be 26 executed on and levied under in the manner provided in AS 09.35. 27 Sec. 45.56.660. Civil liability. (a) Enforcement of civil liability under this 28 section is subject to P.L. 105-353 (Securities Litigation Uniform Standards Act of 29 1998). 30 (b) A person is liable to the purchaser if the person sells a security in violation 31 of AS 45.56.105, or by means of an untrue statement of a material fact or an omission
01 to state a material fact necessary in order to make the statement made, in light of the 02 circumstances under which it is made, not misleading, the purchaser not knowing the 03 untruth or omission and the seller not sustaining the burden of proof that the seller did 04 not know and, in the exercise of reasonable care, could not have known of the untruth 05 or omission. An action under this subsection is governed by the following: 06 (1) the purchaser may maintain an action to recover the consideration 07 paid for the security, less the amount of any income received on the security, and 08 interest at the legal rate of interest under AS 09.30.070 from the date of the purchase, 09 costs, and reasonable attorney fees determined by the court, upon the tender of the 10 security, or for actual damages as provided in (3) of this subsection; 11 (2) the tender referred to in (1) of this subsection may be made any 12 time before entry of judgment; tender requires only notice in a record of ownership of 13 the security and willingness to exchange the security for the amount specified; a 14 purchaser that no longer owns the security may recover actual damages as provided in 15 (3) of this subsection; 16 (3) actual damages in an action arising under this subsection are the 17 amount that would be recoverable upon a tender less the value of the security when the 18 purchaser disposed of it and interest at the legal rate of interest under AS 09.30.070 19 from the date of the purchase, costs, and reasonable attorney fees determined by the 20 court. 21 (c) A person is liable to the seller if the person buys a security by means of an 22 untrue statement of a material fact or omission to state a material fact necessary in 23 order to make the statement made, in light of the circumstances under which it is 24 made, not misleading, the seller not knowing of the untruth or omission, and the 25 purchaser not sustaining the burden of proof that the purchaser did not know and, in 26 the exercise of reasonable care, could not have known of the untruth or omission. An 27 action under this subsection is governed by the following: 28 (1) the seller may maintain an action to recover the security and any 29 income received on the security, costs, and reasonable attorney fees determined by the 30 court, upon the tender of the purchase price, or for actual damages as provided in (3) 31 of this subsection;
01 (2) the tender referred to in (1) of this subsection may be made any 02 time before entry of judgment; tender requires only notice in a record of the present 03 ability to pay the amount tendered and willingness to take delivery of the security for 04 the amount specified; if the purchaser no longer owns the security, the seller may 05 recover actual damages as provided in (3) of this subsection; 06 (3) actual damages in an action arising under this subsection are the 07 difference between the price at which the security was sold and the value the security 08 would have had at the time of the sale in the absence of the purchaser's conduct 09 causing liability and interest at the legal rate of interest under AS 09.30.070 from the 10 date of the sale of the security, costs, and reasonable attorney fees determined by the 11 court. 12 (d) A person acting as a broker-dealer or agent that sells or buys a security in 13 violation of AS 45.56.405(a), 45.56.435(a), or 45.56.530 is liable to the customer. The 14 customer, if a purchaser, may maintain an action for recovery of actual damages as 15 specified in (b)(1) - (3) of this section or, if a seller, for a remedy as specified in (c)(1) 16 - (3) of this section. 17 (e) A person acting as an investment adviser or investment adviser 18 representative that provides investment advice for compensation in violation of 19 AS 45.56.435(a), 45.56.440(a), or 45.56.530 is liable to the client. The client may 20 maintain an action to recover the consideration paid for the advice, interest at the legal 21 rate of interest under AS 09.30.070 from the date of payment, costs, and reasonable 22 attorney fees determined by the court. 23 (f) A person that receives, directly or indirectly, any consideration for 24 providing investment advice to another person and that employs a device, scheme, or 25 artifice to defraud the other person or engages in an act, practice, or course of business 26 that operates or would operate as a fraud or deceit on the other person is liable to the 27 other person. An action under this subsection is governed by the following: 28 (1) the person defrauded may maintain an action to recover the 29 consideration paid for the advice and the amount of any actual damages caused by the 30 fraudulent conduct, interest at the legal rate of interest under AS 09.30.070 from the 31 date of the fraudulent conduct, costs, and reasonable attorney fees determined by the
01 court, less the amount of any income received as a result of the fraudulent conduct; 02 (2) this subsection does not apply to a broker-dealer or its agents if the 03 investment advice provided is solely incidental to transacting business as a broker- 04 dealer and special compensation is not received for the investment advice. 05 (g) The following persons are liable jointly and severally with and to the same 06 extent as persons liable under (b) - (f) of this section: 07 (1) a person that directly or indirectly controls a person liable under (b) 08 - (f) of this section, unless the controlling person sustains the burden of proof that the 09 person did not know and, in the exercise of reasonable care, could not have known of 10 the existence of conduct by reason of which the liability is alleged to exist; 11 (2) an individual who is a managing partner, executive officer, or 12 director of a person liable under (b) - (f) of this section, including an individual having 13 a similar status or performing similar functions, unless the individual sustains the 14 burden of proof that the individual did not know and, in the exercise of reasonable 15 care, could not have known of the existence of conduct by reason of which the liability 16 is alleged to exist; 17 (3) an individual who is an employee of or associated with a person 18 liable under (b) - (f) of this section and who materially aids the conduct giving rise to 19 the liability, unless the individual sustains the burden of proof that the individual did 20 not know and, in the exercise of reasonable care, could not have known of the 21 existence of conduct by reason of which the liability is alleged to exist; and 22 (4) a person that is a broker-dealer, agent, investment adviser, or 23 investment adviser representative that materially aids the conduct giving rise to the 24 liability under (b) - (f) of this section, unless the person sustains the burden of proof 25 that the person did not know and, in the exercise of reasonable care, could not have 26 known of the existence of conduct by reason of which liability is alleged to exist. 27 (h) A person liable under this section has a right of contribution as in cases of 28 contract against any other person liable under this section for the same conduct. 29 (i) A cause of action under this section survives the death of an individual who 30 might have been a plaintiff or defendant. 31 (j) A person may not obtain relief under (b) of this section
01 (1) for a violation of AS 45.56.105, or under (d) or (e) of this section, 02 unless the action is instituted within three years after the violation occurred; or 03 (2) other than for violation of AS 45.56.105, or under (c) or (f) of this 04 section, unless the action is instituted within the earlier of two years after discovery of 05 the facts constituting the violation or five years after the violation. 06 (k) A person that has made, or has engaged in the performance of, a contract 07 in violation of this chapter or a regulation adopted or order issued under this chapter or 08 that has acquired a purported right under the contract with knowledge of conduct by 09 reason of which its making or performance was in violation of this chapter may not 10 base an action on the contract. 11 (l) A condition, stipulation, or provision binding a person purchasing or 12 selling a security or receiving investment advice to waive compliance with this chapter 13 or a regulation adopted or order issued under this chapter is void. 14 (m) The rights and remedies provided by this chapter are in addition to any 15 other rights or remedies that may exist, but this chapter does not create a cause of 16 action not specified in this section or AS 45.56.475(e). 17 Sec. 45.56.665. Rescission offers. (a) A purchaser, seller, or recipient of 18 investment advice may not maintain an action under AS 45.56.660 if 19 (1) the purchaser, seller, or recipient of investment advice receives, in 20 a record, before the action is instituted, 21 (A) an offer stating the respect in which liability under 22 AS 45.56.660 may have arisen and fairly advising the purchaser, seller, or 23 recipient of investment advice of that person's rights in connection with the 24 offer and any financial or other information necessary to correct all material 25 misrepresentations or omissions in the information that was required by this 26 chapter to be furnished to that person at the time of the purchase, sale, or 27 investment advice; 28 (B) if the basis for relief under this section may have been a 29 violation of AS 45.56.660(b), an offer to repurchase the security for cash, 30 payable on delivery of the security, equal to the consideration paid, and interest 31 at the legal rate of interest under AS 09.30.070 from the date of the purchase,
01 less the amount of any income received on the security, or, if the purchaser no 02 longer owns the security, an offer to pay the purchaser, upon acceptance of the 03 offer, damages in an amount that would be recoverable upon a tender, less the 04 value of the security when the purchaser disposed of it, and interest at the legal 05 rate of interest under AS 09.30.070 from the date of the purchase in cash equal 06 to the damages computed in the manner provided in this subparagraph; 07 (C) if the basis for relief under this section may have been a 08 violation of AS 45.56.660(c), an offer to tender the security, on payment by the 09 seller of an amount equal to the purchase price paid, less income received on 10 the security by the purchaser and interest at the legal rate of interest under 11 AS 09.30.070 from the date of the sale, or, if the purchaser no longer owns the 12 security, an offer to pay the seller, upon acceptance of the offer, in cash, 13 damages in the amount of the difference between the price at which the 14 security was purchased and the value the security would have had at the time 15 of the purchase in the absence of the purchaser's conduct that may have caused 16 liability and interest at the legal rate of interest in AS 09.30.070 from the date 17 of the sale; 18 (D) if the basis for relief under this section may have been a 19 violation of AS 45.56.660(d); and if the customer is a purchaser, an offer to 20 pay as specified in (B) of this paragraph; or, if the customer is a seller, an offer 21 to tender or to pay as specified in (C) of this paragraph; 22 (E) if the basis for relief under this section may have been a 23 violation of AS 45.56.660(e), an offer to reimburse in cash the consideration 24 paid for the advice and interest at the legal rate of interest under AS 09.30.070 25 from the date of payment; or 26 (F) if the basis for relief under this section may have been a 27 violation of AS 45.56.660(f), an offer to reimburse in cash the consideration 28 paid for the advice, the amount of any actual damages that may have been 29 caused by the conduct, and interest at the legal rate of interest under 30 AS 09.30.070 from the date of the violation causing the loss; 31 (2) the offer under (1) of this subsection states that it must be accepted
01 by the purchaser, seller, or recipient of investment advice within 30 days after the date 02 of its receipt by the purchaser, seller, or recipient of investment advice or any shorter 03 period of not less than three days that the administrator, by order, specifies; 04 (3) the offeror has the present ability to pay the amount offered or to 05 tender the security under (1) of this subsection; 06 (4) the offer under (1) of this subsection is delivered to the purchaser, 07 seller, or recipient of investment advice or sent in a manner that ensures receipt by the 08 purchaser, seller, or recipient of investment advice; and 09 (5) the purchaser, seller, or recipient of investment advice that accepts 10 the offer under (1) of this subsection, in a record, within the period specified under (2) 11 of this subsection, is paid in accordance with the terms of the offer. 12 (b) The offer under this section must be filed with the administrator 10 13 business days before the offering and conform in form and content with a regulation 14 adopted under this chapter. 15 Sec. 45.56.670. Criminal enforcement. (a) A person who knowingly violates 16 this chapter, a regulation adopted under this chapter, or an order issued under this 17 chapter, except AS 45.56.550 or the notice filing requirements of AS 45.56.330 or 18 45.56.445, or that wilfully violates AS 45.56.520 knowing the statement made to be 19 false or misleading in a material respect is guilty of a class C felony punishable by 20 imprisonment under AS 12.55.125 or punishable by a fine of not more than $100,000, 21 or both. A person convicted of violating a regulation or order issued under this chapter 22 may be fined, but may not be imprisoned, if the person did not know of the regulation 23 or order. 24 (b) A person who violates a regulation under this chapter or an order issued 25 under this chapter without knowledge of the regulation or order commits a class A 26 misdemeanor. A person convicted of violating this subsection is punishable by a fine 27 of not more than $100,000. 28 (c) A person who knowingly alters, destroys, shreds, mutilates, or conceals a 29 record, document, or other object, or attempts to do so, with the intent to alter or 30 impair the record, document, or object for use in an official proceeding under this 31 chapter, is guilty of a class C felony under AS 12.55.125. A person convicted of
01 violating this subsection is punishable by imprisonment as provided in AS 12.55.125, 02 a fine of not more than $500,000, or by both. 03 (d) The attorney general, with or without a reference from the administrator, 04 may institute criminal proceedings under this chapter. 05 (e) This chapter does not limit the power of this state to punish a person for 06 conduct that constitutes a crime under other laws of this state. 07 Sec. 45.56.675. Judicial review. (a) Judicial review by the superior court of a 08 final order issued by the administrator under this chapter may be had by filing a notice 09 of appeal in accordance with the applicable rules of court governing appeals in civil 10 matters. The notice of appeal shall be filed within 30 days after the order becomes 11 final under AS 44.64.060. 12 (b) A regulation adopted under this chapter is subject to judicial review under 13 AS 44.62.300. 14 Article 7. Miscellaneous and Additional General Provisions. 15 Sec. 45.56.710. Reimbursement of expenses incident to examination or 16 investigation. (a) The administrator may require an issuer, broker-dealer, agent, 17 investment adviser representative, federal covered adviser, or investment adviser to 18 reimburse the administrator for actual travel expenses and per diem incurred in 19 connection with an examination or investigation under this chapter. 20 (b) The administrator may by regulation or order adopt a schedule of charges 21 for annual examination and investigation of issuers, broker-dealers, agents, investment 22 adviser representatives, federal covered advisers, and investment advisers. 23 (c) If an issuer, broker-dealer, agent, investment adviser representative, federal 24 covered adviser, or investment adviser fails to pay the fees and expenses provided for 25 in this section, the fees and expenses shall be paid out of funds of the administrator in 26 the same manner as other disbursements made by the administrator. The amounts paid 27 from the funds of the administrator are a lien on all of the assets and property of the 28 issuer, broker-dealer, agent, investment adviser representative, federal covered 29 adviser, or investment adviser, and the amount may be recovered by the attorney 30 general on behalf of this state. 31 (d) Failure of the issuer, broker-dealer, agent, investment adviser
01 representative, federal covered adviser, or investment adviser to pay fees and expenses 02 under this section is a willful violation of this chapter, and the violation falls within 03 the provisions of AS 45.56.350, 45.56.440, and 45.56.615. 04 Sec. 45.56.720. Electronic records and signatures. This chapter modifies, 05 limits, and supersedes 15 U.S.C. 7001 - 7031 (Electronic Signatures in Global and 06 National Commerce Act), but does not modify, limit, or supersede 15 U.S.C. 7001(c) 07 or authorize electronic delivery of any of the notices described in 15 U.S.C. 7003(b). 08 This chapter authorizes the filing of records and signatures, when specified by 09 provisions of this chapter or by a regulation adopted or order issued under this chapter, 10 in a manner consistent with 15 U.S.C. 7004(a). 11 Sec. 45.56.730. References to federal statutes. 15 U.S.C. 77a - 77aa 12 (Securities Act of 1933), 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934), 42 13 U.S.C. 16451 et seq. (Energy Policy Act of 2005) , 15 U.S.C. 80a-1 - 80a-64 14 (Investment Company Act of 1940), 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers 15 Act of 1940), 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security Act of 16 1974), 12 U.S.C. 1701 - 1749aaa (National Housing Act), 7 U.S.C. 1 - 27 (Commodity 17 Exchange Act), 26 U.S.C). (Internal Revenue Code), 15 U.S.C. 78a - 78pp (Securities 18 Exchange Act of 1934), 15 U.S.C. 77b, 77k, 77m, 77p, 77r, 77v, 77z-1 - 77z-3, 77aa, 19 77ccc - 77ddd, 77mmm, 77sss, 78a, 78c - 78d, 78g, 78n, 78o, 78o-4 - 78o-5, 78s, 78t - 20 78u, 78u-4, 78z, 78bb, 78ee, 78kk, 78ll, 80a-2 - 80a-3, 80a-12, 80a-18, 80a-29 - 80a- 21 30, 80b-3, 80b-18a, (Securities Litigation Uniform Standards Act of 1998), 15 U.S.C. 22 661 - 697g (Small Business Investment Act of 1958), and 15 U.S.C. 7001 - 7031 23 (Electronic Signatures in Global and National Commerce Act) mean those statutes and 24 the rules and regulations adopted under those statutes, as in effect on the date of 25 enactment of this chapter, or as later amended. 26 Sec. 45.56.740. References to federal agencies. A reference in this chapter to 27 an agency or department of the United States is also a reference to a successor agency 28 or department. 29 Sec. 45.56.900. Definitions. In this chapter, unless the context otherwise 30 requires, 31 (1) "administrator" means the commissioner of commerce, community,
01 and economic development or a designee of the commissioner; 02 (2) "agent" means an individual, other than a broker-dealer, who 03 represents a broker-dealer in effecting or attempting to effect purchases or sales of 04 securities or represents an issuer in effecting or attempting to effect purchases or sales 05 of the issuer's securities; however, a partner, officer, or director of a broker-dealer or 06 issuer, or an individual having a similar status or performing similar functions is an 07 agent only if the individual otherwise comes within the term; "agent" does not include 08 an individual excluded by regulation adopted or order issued under this chapter; 09 (3) "bank" means 10 (A) a banking institution organized under the laws of the 11 United States; 12 (B) a member bank of the Federal Reserve System; 13 (C) any other banking institution, whether incorporated or not, 14 doing business under the laws of a state or of the United States, a substantial 15 portion of the business of which consists of receiving deposits or exercising 16 fiduciary powers similar to those permitted to be exercised by national banks 17 under the authority of the United States Comptroller of the Currency under 12 18 U.S.C. 92a, that is supervised and examined by a state or federal agency 19 having supervision over banks, and that is not operated for the purpose of 20 evading this chapter; and 21 (D) a receiver, conservator, or other liquidating agent of any 22 institution or firm included in (A), (B), or (C) of this paragraph; 23 (4) "broker-dealer" means a person engaged in the business of 24 effecting transactions in securities for the accounts of others or for the person's own 25 account; the term does not include 26 (A) an agent; 27 (B) an issuer; 28 (C) a bank, trust company organized or chartered under the 29 laws of this state, or savings institution if its activities as a broker-dealer are 30 limited to those specified in 15 U.S.C. 78c(a)(4)(B)(i) - (vi), (viii) - (x), and 31 (xi) if limited to unsolicited transactions, or 15 U.S.C. 78c(a)(5)(B) and (C), or
01 a bank that satisfies the conditions described in 15 U.S.C. 78c(a)(4); 02 (D) an international banking institution; or 03 (E) a person excluded by a regulation adopted or order issued 04 under this chapter; 05 (5) "depository institution" means 06 (A) a bank; or 07 (B) a savings institution, trust company, credit union, or similar 08 institution that is organized or chartered under the laws of a state or of the 09 United States, authorized to receive deposits and supervised and examined by 10 an official or agency of a state or the United States if its deposits or share 11 accounts are insured to the maximum amount authorized by statute by the 12 Federal Deposit Insurance Corporation, the National Credit Union Share 13 Insurance Fund, or a successor authorized by federal law; the term does not 14 include 15 (i) an insurance company or other organization 16 primarily engaged in the business of insurance; 17 (ii) a Morris Plan bank; or 18 (iii) an industrial loan company that is not an "insured 19 depository institution" as defined in 12 U.S.C. 1813(c)(2), or any 20 successor federal statute; 21 (6) "disqualifier" means a disqualifying event as described in the 22 regulations adopted in accordance with 15 U.S.C. 78c(a)(39) (Dodd-Frank Wall Street 23 Reform and Consumer Protection Act). 24 (7) "federal covered investment adviser" means a person registered 25 under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 1940); 26 (8) "federal covered security" means a security that is, or upon 27 completion of a transaction will be, a covered security under 15 U.S.C. 77r(b) or rules 28 or regulations adopted under that provision; 29 (9) "filing" means the receipt under this chapter of a record by the 30 administrator or a designee of the administrator; 31 (10) "fraud," "deceit," and "defraud" include common law deceit;
01 (11) "guaranteed" means guaranteed as to payment of all principal and 02 all interest; 03 (12) "institutional investor" means any of the following, whether 04 acting for itself or for others in a fiduciary capacity: 05 (A) a depository institution, a trust company organized or 06 chartered under the laws of this state, or international banking institution; 07 (B) an insurance company; 08 (C) a separate account of an insurance company; 09 (D) an investment company as defined in 15 U.S.C. 80a-1 - 10 80a-64 (Investment Company Act of 1940); 11 (E) a broker-dealer registered under 15 U.S.C. 78a - 78pp 12 (Securities Exchange Act of 1934); 13 (F) an employee pension, profit-sharing, or benefit plan if the 14 plan has total assets in excess of $10,000,000 or its investment decisions are 15 made by a named fiduciary, as defined in 29 U.S.C. 1102(a)(2) (Employee 16 Retirement Income Security Act of 1974), that is a broker-dealer registered 17 under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934), an investment 18 adviser registered or exempt from registration under 15 U.S.C. 80b-1 - 80b-21 19 (Investment Advisers Act of 1940), an investment adviser registered under this 20 chapter, a depository institution, or an insurance company; 21 (G) a plan established and maintained by a state, a political 22 subdivision of a state, or an agency or instrumentality of a state or a political 23 subdivision of a state for the benefit of its employees if the plan has total assets 24 in excess of $10,000,000 or its investment decisions are made by a legally 25 designated public official or by a named fiduciary, as defined in 29 U.S.C. 26 1102(a)(2), that is a broker-dealer registered under 15 U.S.C. 78a - 78pp 27 (Securities Exchange Act of 1934), an investment adviser registered or exempt 28 from registration under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 29 1940), an investment adviser registered under this chapter, a depository 30 institution, or an insurance company; 31 (H) a trust if that trust has total assets in excess of $10,000,000,
01 the trustee of the trust is a depository institution, and the participants in the 02 trust are exclusively plans of the types identified in (F) or (G) of this 03 paragraph, regardless of the size of their assets, except a trust that includes as 04 participants self-directed individual retirement accounts or similar self-directed 05 plans; 06 (I) an organization described in 26 U.S.C. 501(c)(3), 07 corporation, Massachusetts trust or similar business trust, limited liability 08 company, or partnership, not formed for the specific purpose of acquiring the 09 securities offered, with total assets in excess of $10,000,000; 10 (J) a small business investment company licensed by the 11 United States Small Business Administration under 15 U.S.C. 681(c) with total 12 assets in excess of $10,000,000; 13 (K) a private business development company as defined in 15 14 U.S.C. 80b-2(a)(22) with total assets in excess of $10,000,000; 15 (L) a federal covered investment adviser acting for its own 16 account; 17 (M) a qualified institutional buyer, as defined in 17 C.F.R. 18 230.144A, other than 17 C.F.R. 230.144A(a)(1)(i)(H), adopted under 15 19 U.S.C. 77a - 77aa (Securities Act of 1933); 20 (N) a major United States institutional investor, as defined in 21 17 C.F.R. 240.15a-6(b)(4)(i), adopted under 15 U.S.C. 78a - 78pp (Securities 22 Exchange Act of 1934); 23 (O) any other person, other than an individual, of institutional 24 character with total assets in excess of $10,000,000 not organized for the 25 specific purpose of evading this chapter; or 26 (P) any other person specified by regulation adopted or order 27 issued under this chapter; 28 (13) "insurance company" means a company organized as an insurance 29 company whose primary business is writing insurance or reinsuring risks underwritten 30 by insurance companies and that is subject to supervision by the insurance 31 commissioner or a similar official or agency of a state;
01 (14) "insured" means insured as to payment of all principal and all 02 interest; 03 (15) "international banking institution" means an international 04 financial institution of which the United States is a member and whose securities are 05 exempt from registration under 15 U.S.C. 77a - 77aa (Securities Act of 1933); 06 (16) "investment adviser" means a person that, for compensation, 07 engages in the business of advising others, either directly or through publications or 08 writings, as to the value of securities or the advisability of investing in, purchasing, or 09 selling securities or that, for compensation and as a part of a regular business, issues or 10 produces analyses or reports concerning securities; the term includes a financial 11 planner or other person that, as an integral component of other financially related 12 services, provides investment advice to others for compensation as part of a business 13 or that holds itself out as providing investment advice to others for compensation; the 14 term does not include 15 (A) an investment adviser representative; 16 (B) a lawyer, accountant, engineer, or teacher whose 17 performance of investment advice is solely incidental to the practice of the 18 person's profession; 19 (C) a broker-dealer or its agents whose performance of 20 investment advice is solely incidental to the conduct of business as a broker- 21 dealer and that does not receive special compensation for the investment 22 advice; 23 (D) a publisher of a bona fide newspaper, news magazine, or 24 business or financial publication of general and regular circulation; 25 (E) a federal covered investment adviser; 26 (F) a bank, a trust company organized or chartered under the 27 laws of this state, or savings institution; 28 (G) any other person that is excluded by 15 U.S.C. 80b-1 - 80b- 29 21 (Investment Advisers Act of 1940) from the definition of investment 30 adviser; or 31 (H) any other person excluded by a regulation adopted or order
01 issued under this chapter; 02 (17) "investment adviser representative" means an individual 03 employed by or associated with an investment adviser or federal covered investment 04 adviser and who makes any recommendations or otherwise gives investment advice 05 regarding securities, manages accounts or portfolios of clients, determines which 06 recommendation or advice regarding securities should be given, provides investment 07 advice or offers to provide investment advice, receives compensation to solicit, offer, 08 or negotiate for the sale of or for selling investment advice, or supervises employees 09 who perform any of the foregoing; the term does not include an individual who 10 (A) performs only clerical or ministerial acts; 11 (B) is an agent whose performance of investment advice is 12 solely incidental to the individual's acting as an agent and who does not receive 13 special compensation for investment advisory services; 14 (C) is employed by or associated with a federal covered 15 investment adviser, unless the individual has a place of business in this state, as 16 that term is defined by rule adopted under 15 U.S.C. 80b-3a and is 17 (i) an investment adviser representative, as that term is 18 defined by rule adopted under 15 U.S.C. 80b-3a; or 19 (ii) not a supervised person, as that term is defined in 15 20 U.S.C. 80b-2(a)(25); or 21 (D) is excluded by a regulation adopted or order issued under 22 this chapter; 23 (18) "issuer" means a person that issues or proposes to issue a security, 24 subject to the following: 25 (A) the issuer of a voting trust certificate, collateral trust 26 certificate, certificate of deposit for a security, or share in an investment 27 company without a board of directors or individuals performing similar 28 functions is the person performing the acts and assuming the duties of 29 depositor or manager under the trust or other agreement or instrument under 30 which the security is issued; 31 (B) the issuer of an equipment trust certificate or similar
01 security serving the same purpose is the person by which the property is or will 02 be used or to which the property or equipment is or will be leased or 03 conditionally sold or that is otherwise contractually responsible for ensuring 04 payment of the certificate; 05 (C) the issuer of a fractional undivided interest in an oil, gas, or 06 other mineral lease or in payments out of production under a lease, right, or 07 royalty is the owner of an interest in the lease or in payments out of production 08 under a lease, right, or royalty, whether whole or fractional, that creates 09 fractional interests for the purpose of sale; 10 (19) "nonissuer transaction" or "nonissuer distribution" means a 11 transaction or distribution not directly or indirectly for the benefit of the issuer; 12 (20) "offer to purchase" includes an attempt or offer to obtain, or 13 solicitation of an offer to sell, a security or interest in a security for value; the term 14 does not include a tender offer that is subject to 15 U.S.C. 78n(d); 15 (21) "older Alaskan" means a person residing in this state who is 60 16 years of age or older; 17 (22) "person" means an individual, a corporation, a partnership, a 18 limited liability company, a limited partnership, a limited liability partnership, an 19 association, a joint-stock company, a trust in which the interests of the beneficiaries 20 are evidenced by a security, an unincorporated organization, a government, or a 21 political subdivision of a government; 22 (23) "place of business" of a broker-dealer, an investment adviser, or a 23 federal covered investment adviser means 24 (A) an office at which the broker-dealer, investment adviser, or 25 federal covered investment adviser regularly provides brokerage or investment 26 advice or solicits, meets with, or otherwise communicates with customers or 27 clients; or 28 (B) any other location that is held out to the general public as a 29 location at which the broker-dealer, investment adviser, or federal covered 30 investment adviser provides brokerage or investment advice or solicits, meets 31 with, or otherwise communicates with customers or clients;
01 (24) "price amendment" means the amendment to a registration 02 statement filed under 15 U.S.C. 77a - 77aa (Securities Act of 1933) or, if an 03 amendment is not filed, the prospectus or prospectus supplement filed under 15 U.S.C. 04 77a - 77aa (Securities Act of 1933) that includes a statement of the offering price, 05 underwriting and selling discounts or commissions, amount of proceeds, conversion 06 rates, call prices, and other matters dependent upon the offering price; 07 (25) "principal place of business" of a broker-dealer or an investment 08 adviser means the executive office of the broker-dealer or investment adviser from 09 which the officers, partners, or managers of the broker-dealer or investment adviser 10 direct, control, and coordinate the activities of the broker-dealer or investment adviser; 11 (26) "record," except in the phrases "of record," "official record," and 12 "public record," means information that is inscribed on a tangible medium or that is 13 stored in an electronic or other medium and is retrievable in perceivable form; 14 (27) "sale" includes every contract of sale, contract to sell, or 15 disposition of a security or interest in a security for value, and "offer to sell" includes 16 every attempt or offer to dispose of, or solicitation of an offer to purchase, a security 17 or interest in a security for value; both terms include 18 (A) a security given or delivered with, or as a bonus on account 19 of, a purchase of securities or any other thing constituting part of the subject of 20 the purchase and having been offered and sold for value; 21 (B) a gift of assessable stock involving an offer and sale; and 22 (C) a sale or offer of a warrant or right to purchase or subscribe 23 to another security of the same or another issuer and a sale or offer of a 24 security that gives the holder a present or future right or privilege to convert 25 the security into another security of the same or another issuer, including an 26 offer of the other security; 27 (28) "Securities and Exchange Commission" means the United States 28 Securities and Exchange Commission; 29 (29) "securities business" means a business that provides the services 30 provided by 31 (A) investment advisers, federal covered investment advisers,
01 or investment adviser representatives; or 02 (B) broker-dealers, issuers, or agents of broker-dealers or 03 issuers; 04 (30) "security" means a note; stock; treasury stock; security future; 05 bond; debenture; evidence of indebtedness; certificate of interest or participation in a 06 profit-sharing agreement; collateral trust certificate; preorganization certificate or 07 subscription; transferable share; investment contract; voting trust certificate; certificate 08 of deposit for a security; viatical settlement; variable annuity; fractional undivided 09 interest in oil, gas, or other mineral rights; put, call, straddle, option, or privilege on a 10 security, certificate of deposit, or group or index of securities, including an interest or 11 based on the value of a put, call, straddle, option, or privilege on a security, certificate 12 of deposit, or group or index of securities; put, call, straddle, option, or privilege 13 entered into on a national securities exchange relating to foreign currency; or, in 14 general, an interest or instrument commonly known as a "security"; or a certificate of 15 interest or participation in, temporary or interim certificate for, receipt for, guarantee 16 of, or warrant or right to subscribe to or purchase any of the foregoing; the term 17 (A) includes both a certificated and an uncertificated security; 18 (B) does not include a participation agreement entered under 19 AS 14.40.802 or an insurance or endowment policy subject to Title 21, except 20 for a variable annuity; 21 (C) does not include an interest in a contributory or 22 noncontributory pension or welfare plan subject to 29 U.S.C. 1001 - 1461 23 (Employee Retirement Income Security Act of 1974); 24 (D) includes an investment in a common enterprise with the 25 expectation of profits to be derived primarily from the efforts of a person other 26 than the investor; in this subparagraph, "common enterprise" means an 27 enterprise in which the fortunes of the investor are interwoven with those of 28 either the person offering the investment, a third party, or other investors; 29 (E) includes as an investment contract, among other contracts, 30 an interest in a limited partnership and a limited liability company, and an 31 investment in a viatical settlement or similar agreement; and
01 (F) includes a viatical settlement interest; 02 (31) "self-regulatory organization" means a national securities 03 exchange registered under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934), a 04 national securities association of broker-dealers registered under 15 U.S.C. 78a - 78pp 05 (Securities Exchange Act of 1934), a clearing agency registered under 15 U.S.C. 78a - 06 78pp (Securities Exchange Act of 1934), or the Municipal Securities Rulemaking 07 Board established under 15 U.S.C. 78o-4; 08 (32) "sign" means, with present intent to authenticate or adopt a 09 record, 10 (A) to execute or adopt a tangible symbol; or 11 (B) to attach or logically associate with the record an electronic 12 symbol, sound, or process; 13 (33) "state" means a state of the United States, the District of 14 Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular 15 possession subject to the jurisdiction of the United States; 16 (34) "viatical settlement interest" 17 (A) means the entire interest or any fractional interest in a life 18 insurance policy or in the death benefit under a life insurance policy that is the 19 subject of a viatical settlement contract; 20 (B) does not include the initial purchase from the viator by a 21 viatical settlement provider; 22 (35) "viator" means the owner of a life insurance policy insuring the 23 life of an individual who enters or seeks to enter a viatical settlement contract. 24 Sec. 45.56.735. Short title. This chapter may be cited as the Alaska Securities 25 Act. 26 * Sec. 2. AS 06.05.340 is amended to read: 27 Sec. 06.05.340. Certain remuneration prohibited. A bank may not pay 28 directly or indirectly a fee, commission, or bonus of any kind for its promotion and 29 organization or for securing a subscription to the original capital or to any increase in 30 capital. However, this section does not prohibit the payment of reasonable 31 compensation for legal, accounting, and econometric services, or payments to a
01 securities broker-dealer registered under AS 45.56 [AS 45.55] for services that have 02 been performed in connection with the sale of bank securities. 03 * Sec. 3. AS 06.26.020(a) is amended to read: 04 (a) Notwithstanding any other provision of this chapter, a person does not act 05 as a fiduciary under this chapter if the person 06 (1) is licensed to practice law in this state, the person is acting within 07 the scope of the license, and the person and any law firm of the person are not trustees 08 of more trusts than the number established for the person and law firm by the 09 department by regulation or order; in this paragraph, "law firm" means a partnership, a 10 professional corporation organized under AS 10.45, or another association organized 11 for the practice of law and in which the person practices law; 12 (2) acts as trustee under a deed of trust delivered only as security for 13 the payment of money or for the performance of another act; 14 (3) receives and distributes on behalf of a principal rents and proceeds 15 of sales as a real estate broker or other licensee under AS 08.88; 16 (4) engages in securities business activity [OR INVESTMENT 17 ADVISORY BUSINESS ACTIVITY] as a registered broker-dealer, a broker-dealer 18 agent, an [A STATE] investment adviser, or an investment adviser representative, or 19 as a federal covered investment adviser who has made a notice filing under 20 AS 45.56.445(c) [AS 45.55.040(h)], the person is acting within the scope of the 21 person's registration or notice filing, and the activity is regulated by the department 22 under AS 45.56 [AS 45.55] or by the United States Securities and Exchange 23 Commission; in this paragraph, "agent," "broker-dealer," "federal covered investment 24 adviser," "investment adviser representative," and ["INVESTMENT ADVISORY 25 BUSINESS,"] "securities business [,]" [AND "STATE INVESTMENT ADVISER"] 26 have the meanings given in AS 45.56.900 [AS 45.55.990]; 27 (5) engages in the sale and administration of an insurance product as 28 an insurance company licensed under AS 21 or an insurance producer licensed under 29 AS 21 and is acting within the scope of that license; 30 (6) handles escrow transactions and is a title insurance company that 31 has a certificate of authority issued under AS 21.09, a title insurance limited producer
01 that is licensed as required by AS 21.66.270, or an employee of the title insurance 02 company or title insurance producer when acting in the scope of the employee's 03 employment; in this paragraph, 04 (A) "escrow transaction" has the meaning given in 05 AS 34.80.090; 06 (B) "title insurance company" has the meaning given in 07 AS 21.66.480; 08 (C) "title insurance limited producer" has the meaning given in 09 AS 21.66.480; 10 (7) is a cemetery association organized and acting under AS 10.30; 11 (8) is a trustee for a voting trust under AS 10.06 and is acting in that 12 capacity; 13 (9) has a certified public accountant license issued under AS 08.04.105 14 or 08.04.195, the person is acting within the scope of the license, and the person and 15 any accounting firm of the person are not trustees of more trusts than the number 16 established for the person and accounting firm by the department by regulation or 17 order; in this paragraph, "accounting firm" means a partnership, a professional 18 corporation organized under AS 10.45, or another association organized for the 19 practice of public accounting and in which the person practices public accounting; 20 (10) holds real property in trust for the primary purpose of subdivision, 21 development, or sale or to facilitate a business transaction with respect to the real 22 property; 23 (11) serves as a trustee of a trust created by the person's family 24 members; 25 (12) holds money or other assets as a homeowners' association or 26 similar organization to pay maintenance and other related costs for commonly owned 27 property; in this paragraph, "homeowners' association" includes an association of 28 apartment owners under AS 34.07.450 and a unit owners' association or master 29 association under AS 34.08.990; 30 (13) holds money or other assets in connection with the collection of 31 debts or payments on loans by a person acting solely as the agent or representative at
01 the sole direction of the person to whom the debt or payment is owed, including 02 engaging in the business of an escrow agent; 03 (14) acts as a conservator if the person is appointed by a court of this 04 or another state or is qualified to act as a conservator under AS 13.26.320; 05 (15) acts as a personal representative if the person is appointed a 06 personal representative by a court of this or another state or is qualified to act as a 07 personal representative under AS 13.21.035; 08 (16) acts as a guardian or receiver if the person is appointed as a 09 guardian or receiver by a court of this or another state; 10 (17) is a business partner acting with regard to the business, or a co- 11 owner of property acting with regard to the co-owned property; 12 (18) serves as a trustee of one or more trusts in which the settlor is not 13 a family member of the person, except that the person may not at any one time serve 14 as a trustee for trusts that cumulatively have more than 10 different settlors; however, 15 the department may change by regulation or order the maximum number of settlors 16 allowed for this exemption; in this paragraph, a husband and wife who create a joint 17 trust are considered to be one settlor. 18 * Sec. 4. AS 06.26.990(a)(21) is amended to read: 19 (21) "issuer" has the meaning given in AS 45.56.900 [AS 45.55.990]; 20 * Sec. 5. AS 12.62.400(a)(17) is amended to read: 21 (17) registration as a broker-dealer, agent, investment adviser 22 representative, or [STATE] investment adviser under AS 45.56.405 - 45.56.440 23 [AS 45.55.030 - 45.55.060]. 24 * Sec. 6. AS 14.43.148(h)(1) is amended to read: 25 (1) "license" 26 (A) means, except as provided in (B) of this paragraph, a 27 license, certificate, permit, registration, or other authorization that, at the time 28 of issuance, will be valid for more than 150 days and that may be acquired 29 from a state agency to perform an occupation, including the following: 30 (i) license relating to boxing or wrestling under 31 AS 05.10;
01 (ii) authorization to perform an occupation regulated 02 under AS 08; 03 (iii) teacher certificate under AS 14.20; 04 (iv) authorization under AS 18.08 to perform 05 emergency medical services; 06 (v) asbestos worker certification under AS 18.31; 07 (vi) boiler operator's license under AS 18.60.395; 08 (vii) certificate of fitness under AS 18.62; 09 (viii) hazardous painting certification under AS 18.63; 10 (ix) certification as a municipal correctional, 11 correctional, probation, or parole officer under AS 18.65.245; 12 (x) security guard license under AS 18.65.400 - 13 18.65.490; 14 (xi) license relating to insurance under AS 21.27; 15 (xii) employment agency permit under AS 23.15.330 - 16 23.15.520; 17 (xiii) registration as a broker-dealer, an agent, an [A 18 STATE] investment adviser, or an investment adviser representative 19 under AS 45.56.405 - 45.56.440 [AS 45.55.030]; 20 (xiv) certification as a pesticide applicator under 21 AS 46.03.320; 22 (xv) certification as a storage tank worker or contractor 23 under AS 46.03.375; 24 (xvi) certification as a water and wastewater works 25 operator under AS 46.30; and 26 (B) does not include 27 (i) a commercial fishing license under AS 16.05.480, 28 including a crewmember fishing license; 29 (ii) a vessel license issued under AS 16.05.490 or 30 16.05.530; 31 (iii) [REPEALED
01 (iv)] a business license issued under AS 43.70; 02 (iv) [(v)] an entry permit or interim-use permit issued 03 under AS 16.43; or 04 (v) [(vi)] a driver's license issued under AS 28.15; 05 * Sec. 7. AS 21.42.315(k) is amended to read: 06 (k) Except as provided in AS 45.56.605(f), the [THE] director has sole 07 authority to regulate the issuance and sale of variable contracts, to examine and license 08 agents to sell variable contracts, and to adopt regulations considered appropriate to 09 carry out the purposes and provisions of this section. 10 * Sec. 8. AS 21.96.110(a) is amended to read: 11 (a) The director shall regulate the transaction of viatical settlement contracts 12 for the protection of viators, insureds, and insurers. The authority of the director under 13 this subsection extends to the regulation of transactions between a viator and a viatical 14 settlement provider and between a viator and a person acting as an agent in viaticating 15 a life insurance policy, while the authority of the commissioner extends to the 16 regulation of viatical settlement investments as provided under AS 45.56 17 [AS 45.55.905(c)]. 18 * Sec. 9. AS 25.27.244(s)(2) is amended to read: 19 (2) "license" 20 (A) means, except as provided in (B) of this paragraph, a 21 license, certificate, permit, registration, or other authorization that, at the time 22 of issuance, will be valid for more than 150 days and that may be acquired 23 from a state agency to perform an occupation, including the following: 24 (i) license relating to boxing or wrestling under 25 AS 05.10; 26 (ii) authorization to perform an occupation regulated 27 under AS 08; 28 (iii) teacher certificate under AS 14.20; 29 (iv) authorization under AS 18.08 to perform 30 emergency medical services; 31 (v) asbestos worker certification under AS 18.31;
01 (vi) boiler operator's license under AS 18.60.395; 02 (vii) certificate of fitness under AS 18.62; 03 (viii) hazardous painting certification under AS 18.63; 04 (ix) security guard license under AS 18.65.400 - 05 18.65.490; 06 (x) license relating to insurance under AS 21.27; 07 (xi) employment agency permit under AS 23.15.330 - 08 23.15.520; 09 (xii) registration as a broker-dealer, an agent, an [A 10 STATE] investment adviser, or an investment adviser representative 11 under AS 45.56.405 - 45.56.440 [AS 45.55.030]; 12 (xiii) certification as a pesticide applicator under 13 AS 46.03.320; 14 (xiv) certification as a storage tank worker or contractor 15 under AS 46.03.375; 16 (xv) certification as a water and wastewater works 17 operator under AS 46.30; 18 (xvi) commercial crewmember fishing license under 19 AS 16.05.480 other than an entry permit or interim-use permit under 20 AS 16.43; 21 (xvii) fish transporter permit under AS 16.05.671; 22 (xviii) sport fishing operator license under 23 AS 16.40.260; 24 (xix) sport fishing guide license under AS 16.40.270; 25 (B) does not include 26 (i) a vessel license issued under AS 16.05.490 or 27 16.05.530; 28 (ii) [REPEALED 29 (iii)] a business license issued under AS 43.70; 30 (iii) [(iv)] an entry permit or interim-use permit issued 31 under AS 16.43; or
01 (iv) [(v)] a driver's license issued under AS 28.15; 02 * Sec. 10. AS 34.08.570 is amended to read: 03 Sec. 34.08.570. Common interest community securities. If an interest in a 04 common interest community is currently registered with the Securities and Exchange 05 Commission of the United States, a declarant satisfies each requirement relating to the 06 preparation of a public offering statement of this chapter if the declarant delivers to the 07 purchaser a copy of the public offering statement filed with the Securities and 08 Exchange Commission. An interest in a common interest community is not subject to 09 the registration requirements of AS 45.56 [AS 45.55]. 10 * Sec. 11. AS 37.23.010(c) is amended to read: 11 (c) The registration requirements of AS 45.56 [AS 45.55] do not apply to an 12 investment pool formed under this chapter or to participating public entities with 13 respect to activities of the pool. 14 * Sec. 12. AS 37.23.050 is amended to read: 15 Sec. 37.23.050. Investment management. The public entities participating in 16 an investment pool under this chapter shall provide for management of investments in 17 the pool by contracting for investment management and related services with 18 (1) a securities broker-dealer registered under AS 45.56.405 19 [AS 45.55.030] and under 15 U.S.C. 78o (Securities Exchange Act of 1934); 20 (2) an [A STATE] investment adviser registered under AS 45.56.435 21 [AS 45.55.030] or a federal covered investment adviser that has made a notice filing 22 under AS 45.56.445(c) [AS 45.55.040(h)]; 23 (3) the Department of Revenue; or 24 (4) a financial institution that is a state or federally chartered 25 commercial or mutual bank, savings and loan association, or credit union if the 26 institution's accounts are insured through the appropriate federal insuring agency of 27 the United States and if the institution has trust powers under state or federal law. 28 * Sec. 13. AS 40.25.120(a) is amended to read: 29 (a) Every person has a right to inspect a public record in the state, including 30 public records in recorders' offices, except 31 (1) records of vital statistics and adoption proceedings, which shall be
01 treated in the manner required by AS 18.50; 02 (2) records pertaining to juveniles unless disclosure is authorized by 03 law; 04 (3) medical and related public health records; 05 (4) records required to be kept confidential by a federal law or 06 regulation or by state law; 07 (5) to the extent the records are required to be kept confidential under 08 20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure 09 or retain federal assistance; 10 (6) records or information compiled for law enforcement purposes, but 11 only to the extent that the production of the law enforcement records or information 12 (A) could reasonably be expected to interfere with enforcement 13 proceedings; 14 (B) would deprive a person of a right to a fair trial or an 15 impartial adjudication; 16 (C) could reasonably be expected to constitute an unwarranted 17 invasion of the personal privacy of a suspect, defendant, victim, or witness; 18 (D) could reasonably be expected to disclose the identity of a 19 confidential source; 20 (E) would disclose confidential techniques and procedures for 21 law enforcement investigations or prosecutions; 22 (F) would disclose guidelines for law enforcement 23 investigations or prosecutions if the disclosure could reasonably be expected to 24 risk circumvention of the law; or 25 (G) could reasonably be expected to endanger the life or 26 physical safety of an individual; 27 (7) names, addresses, and other information identifying a person as a 28 participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the 29 advance college tuition savings program under AS 14.40.803 - 14.40.817; 30 (8) public records containing information that would disclose or might 31 lead to the disclosure of a component in the process used to execute or adopt an
01 electronic signature if the disclosure would or might cause the electronic signature to 02 cease being under the sole control of the person using it; 03 (9) reports submitted under AS 05.25.030 concerning certain 04 collisions, accidents, or other casualties involving boats; 05 (10) records or information pertaining to a plan, program, or 06 procedures for establishing, maintaining, or restoring security in the state, or to a 07 detailed description or evaluation of systems, facilities, or infrastructure in the state, 08 but only to the extent that the production of the records or information 09 (A) could reasonably be expected to interfere with the 10 implementation or enforcement of the security plan, program, or procedures; 11 (B) would disclose confidential guidelines for investigations or 12 enforcement and the disclosure could reasonably be expected to risk 13 circumvention of the law; or 14 (C) could reasonably be expected to endanger the life or 15 physical safety of an individual or to present a real and substantial risk to the 16 public health and welfare; 17 (11) the written notification regarding a proposed regulation provided 18 under AS 24.20.105 to the Department of Law and the affected state agency and 19 communications between the Legislative Affairs Agency, the Department of Law, and 20 the affected state agency under AS 24.20.105; 21 (12) records that are 22 (A) proprietary, privileged, or a trade secret in accordance with 23 AS 43.90.150 or 43.90.220(e); 24 (B) applications that are received under AS 43.90 until notice is 25 published under AS 43.90.160; 26 (13) information of the Alaska Gasline Development Corporation 27 created under AS 31.25.010 or a subsidiary of the Alaska Gasline Development 28 Corporation that is confidential by law or under a valid confidentiality agreement; 29 (14) information under AS 38.05.020(b)(11) that is subject to a 30 confidentiality agreement under AS 38.05.020(b)(12); 31 (15) records that are
01 (A) investigative files under AS 45.55.910; or 02 (B) confidential under AS 45.56.615. 03 * Sec. 14. AS 43.70.105(a) is amended to read: 04 (a) This chapter does not apply to 05 (1) a fisheries business; 06 (2) the sale of liquor under a license issued under AS 04.11; 07 (3) an insurance business; 08 (4) a mining business; 09 (5) supplying services as an employee; 10 (6) furnishing goods or services by a person who does not represent to 11 be regularly engaged in furnishing goods or services; 12 (7) the activities of an investment club; in this paragraph, 13 (A) "investment club" means a group of individuals, 14 incorporated or otherwise organized, that engages primarily in investing in 15 securities, that does not sell investment services to another person, that does 16 not advertise, and the primary purpose of which is educational; 17 (B) "security" has the meaning given in AS 45.56.900 18 [AS 45.55.990]. 19 * Sec. 15. AS 44.64.030(a)(39) is repealed and reenacted to read: 20 (39) AS 45.56 (Alaska Securities Act); 21 * Sec. 16. AS 45.55.138 is amended to read: 22 Sec. 45.55.138. Application to Alaska Native Claims Settlement Act 23 corporations. The initial issue of stock of a corporation organized under Alaska law 24 under [PURSUANT TO] 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement 25 Act) is not a sale of a security under AS 45.56.105 [AS 45.55.070] and 26 AS 45.56.900(27) [45.55.990(28)]. 27 * Sec. 17. AS 45.55.139 is amended to read: 28 Sec. 45.55.139. Reports of corporations. A copy of all annual reports, 29 proxies, consents or authorizations, proxy statements, and other materials relating to 30 proxy solicitations distributed, published, or made available by any person to at least 31 30 Alaska resident shareholders of a corporation organized under Alaska law under
01 43 U.S.C. 1601 et. seq. (Alaska Native Claims Settlement Act) that has total assets 02 exceeding $1,000,000 and a class of equity security held of record by 500 or more 03 persons [AND WHICH IS EXEMPTED FROM THE REGISTRATION 04 REQUIREMENTS OF AS 45.55.070 BY 45.55.138], shall be filed with the 05 administrator concurrently with its distribution to shareholders. 06 * Sec. 18. AS 45.55.905(b) is amended to read: 07 (b) The administrator or an officer or employee of the administrator may not 08 use for personal benefit information that is filed with or obtained by the administrator 09 and that is not made public. A [NO] provision of this chapter does not authorize 10 [AUTHORIZES] the administrator or an officer or employee of the administrator to 11 disclose the information except among themselves or when necessary or appropriate in 12 a proceeding or investigation under this chapter. A [NO] provision of this chapter does 13 not either create or derogate [CREATES OR DEROGATES] from any privilege that 14 exists at common law or otherwise when documentary or other evidence is sought 15 under a subpoena directed to the administrator or an officer or employee of the 16 administrator. 17 * Sec. 19. AS 45.55.920(a) is amended to read: 18 (a) If it appears to the administrator that a person has engaged or is about to 19 engage in an act or practice in violation of a provision of this chapter or regulation or 20 order under this chapter, the administrator may 21 (1) in the public interest [OR FOR THE PROTECTION OF 22 INVESTORS,] issue an order 23 (A) directing the person to cease and desist from continuing the 24 act or practice; 25 (B) directing the person, for a period not to exceed three years, 26 to file the annual reports, proxies, consents or authorizations, proxy statements, 27 or other materials relating to proxy solicitations required under AS 45.55.139 28 with the administrator for examination and review 10 working days before a 29 distribution to shareholders; and 30 (C) voiding the proxies obtained by a person required to file 31 under AS 45.55.139, including their future exercise or actions resulting from
01 their past exercise, if the proxies were solicited by means of an untrue or 02 misleading statement prohibited under AS 45.55.160; or 03 (2) bring an action in the superior court to enjoin the acts or practices 04 and to enforce compliance with this chapter or regulation or order under this chapter, 05 and upon a proper showing, the appropriate remedy must be granted and a receiver or 06 conservator may be appointed for the defendant or the defendant's assets; the court 07 may not require the administrator to post a bond. 08 * Sec. 20. AS 45.55.920(b) is amended to read: 09 (b) The administrator may issue an order against a person [AN APPLICANT, 10 REGISTERED PERSON, OR OTHER PERSON] who knowingly or intentionally 11 violates this chapter or a regulation or order of the administrator under this chapter, 12 imposing a civil penalty of not more than $2,500 for a single violation, or not more 13 than $25,000 for multiple violations, in a single proceeding or a series of related 14 proceedings. 15 * Sec. 21. AS 45.55.920(c) is amended to read: 16 (c) For violations not covered by (b) of this section, the administrator may 17 issue an order against a person [AN APPLICANT, REGISTERED PERSON, OR 18 OTHER PERSON] who violates this chapter or a regulation or order of the 19 administrator under this chapter, imposing a civil penalty of not more than $500 for a 20 single violation, or not more than $5,000 for multiple violations, in a single 21 proceeding or a series of related proceedings. 22 * Sec. 22. AS 45.55.925(a) is amended to read: 23 (a) In addition to the civil penalties assessed under AS 45.55.920, a person 24 who wilfully violates a provision of this chapter except AS 45.55.160 25 [AS 45.55.030(e), 45.55.040(h), 45.55.075, or 45.55.160], or who wilfully violates a 26 regulation or order under this chapter, or who wilfully violates AS 45.55.160 knowing 27 the statement made to be false or misleading in a material respect or the omission to be 28 misleading by any material respect, upon conviction, is punishable by a fine of not 29 more than $5,000, or by imprisonment of not less than one year nor more than five 30 years, or both. Upon conviction of an individual for a felony under this chapter, 31 imprisonment for not less than one year is mandatory. However, an individual may not
01 be imprisoned for the violation of a regulation or order if the individual proves that the 02 individual had no knowledge of the regulation or order. An indictment or information 03 may not be returned under this chapter more than five years after the alleged violation. 04 * Sec. 23. AS 45.55.950(a) is amended to read: 05 (a) The administrator may make, adopt, amend, and rescind the regulations, 06 forms, and orders that are necessary to carry out this chapter [,INCLUDING 07 REGULATIONS AND FORMS GOVERNING REGISTRATION STATEMENTS, 08 APPLICATIONS, AND REPORTS, AND DEFINING TERMS, WHETHER OR 09 NOT USED IN THIS CHAPTER INSOFAR AS THE DEFINITIONS ARE NOT 10 INCONSISTENT WITH THIS CHAPTER. FOR THE PURPOSE OF 11 REGULATIONS AND FORMS, THE ADMINISTRATOR MAY CLASSIFY 12 SECURITIES, PERSONS, AND MATTERS WITHIN THE JURISDICTION OF 13 THE ADMINISTRATOR, AND PRESCRIBE DIFFERENT REQURIEMENTS FOR 14 DIFFERENT CLASSES]. 15 * Sec. 24. AS 45.55.950(b) is amended to read: 16 (b) A regulation, form, or order may not be made, adopted, amended, or 17 rescinded unless the administrator finds that the action is necessary or appropriate in 18 the public interest [OR FOR THE PROTECTION OF INVESTORS AND 19 CONSISTENT WITH THE PURPOSES FAIRLY INTENDED BY THE POLICY 20 AND PROVISIONS OF THIS CHAPTER. IN ADOPTING REGULATIONS AND 21 FORMS THE ADMINISTRATOR MAY COOPERATE WITH THE SECURITIES 22 ADMINISTRATORS OF THE OTHER STATES AND THE SECURITIES AND 23 EXCHANGE COMMISSION WITH A VIEW TO EFFECTUATING THE POLICY 24 OF THIS SECTION TO ACHIEVE MAXIMUM UNIFORMITY IN THE FORM 25 AND CONTENT OF REGISTRATION STATEMENTS, APPLICATIONS, AND 26 REPORTS WHEREVER PRACTICABLE]. 27 * Sec. 25. AS 45.55 is amended by adding a new section to read: 28 Sec. 45.55.985. Definitions. In this chapter, unless the context otherwise 29 requires, "administrator" means the commissioner of commerce, community, and 30 economic development or a designee of the commissioner. 31 * Sec. 26. AS 45.63.080(a) is amended to read:
01 (a) AS 45.63.010, 45.63.015, 45.63.020, and AS 45.63.030(c) and (d) do not 02 apply to a sale or attempted sale 03 (1) of a security regulated under AS 45.56 [AS 45.55] or a security that 04 is exempted by AS 45.56.205 [AS 45.55.900] from regulation under AS 45.56 05 [AS 45.55]; 06 (2) by a person registered with the United States Securities and 07 Exchange Commission when acting within the scope of the person's Securities and 08 Exchange Commission license; 09 (3) by an issuer, or a subsidiary of an issuer, of a class of securities that 10 is 11 (A) subject to 15 U.S.C. 78a - 78pp [15 U.S.C. 78a - 78lll] 12 (Securities Exchange Act of 1934); and 13 (B) either registered under 15 U.S.C. 78a - 78pp [15 U.S.C. 14 78a - 78lll] (Securities Exchange Act of 1934) or exempt from registration 15 under 15 U.S.C. 78l(g)(2)(A) - (C) or (E) - (H); 16 (4) by a real estate broker, associate real estate broker, or real estate 17 salesperson licensed under AS 08.88 and acting in a capacity covered by the license; 18 (5) by a person who has a certificate of registration under AS 08.18 to 19 operate as a contractor and is acting in a capacity covered by the certificate of 20 registration; 21 (6) by an embalmer or funeral director licensed under AS 08.42 and 22 acting in a capacity covered by the license; 23 (7) by an insurance agent, general agent, broker, solicitor, or adjuster 24 licensed under AS 21.27 and acting in a capacity covered by the license; 25 (8) by a person who is primarily soliciting the sale of a subscription to, 26 or advertising in, a newspaper of general circulation; 27 (9) by a charitable organization or paid solicitor if the organization or 28 solicitor is registered to make charitable solicitations under AS 45.68 and is acting in a 29 capacity that is covered by the registration; 30 (10) by a person who is primarily soliciting the sale of a sound 31 recording or book
01 (A) if the person 02 (i) has no minimum purchase requirements; 03 (ii) provides written notice of the buyer's right to cancel 04 at any time; and 05 (iii) allows the buyer to return the sound recording or 06 book and obtain a full refund; or 07 (B) through a membership in a book or record club 08 (i) where the club provides the buyer with a form that 09 the buyer may use to instruct the club not to ship the offered 10 merchandise; and 11 (ii) that is regulated by the Federal Trade Commission 12 as a negative option plan under 16 C.F.R. 425; 13 (11) by a publisher, or a publisher's agent operating under a written 14 agreement between a publisher and the agent, who is soliciting the sale of a publisher's 15 magazine if 16 (A) the buyer has the right to review the magazine and cancel 17 the subscription for the magazine within seven days after receipt of the 18 magazine or at the time the invoice is received by the buyer, whichever is later; 19 a cancellation request is timely if the request is mailed, properly addressed and 20 postmarked, postage prepaid, within seven days after receipt of the magazine; 21 (B) the right of cancellation and refund is fully disclosed in 22 writing to the buyer before or at the time the initial invoice is received by the 23 buyer; 24 (12) of services provided by a cable television system operating under 25 a franchise issued by a municipality; 26 (13) by a person who is soliciting for a business, or for an affiliate of a 27 business, that is regulated by the Regulatory Commission of Alaska; 28 (14) by a person whose solicitation is solely for telephone answering 29 services provided by the person or the person's employer; 30 (15) of property from a mail order catalog that is published on a 31 regular, periodic basis and that describes or pictures the items for sale and prominently
01 provides the specific price of each item; 02 (16) by a supervised financial institution or the parent, subsidiary, or 03 affiliate of a supervised financial institution; in this paragraph, "supervised financial 04 institution" means a commercial bank, savings bank, mutual savings bank, trust 05 company, savings and loan association, credit union, industrial loan company, 06 personal property broker, consumer finance lender, commercial finance lender, or 07 other financial institution if the financial institution is subject to regulation by this 08 state or the United States; 09 (17) by an insurer or the parent, subsidiary, or affiliate of an insurer; 10 (18) by a person who solicits a sale by a contact by telephonic means 11 without intending to complete the sales presentation during the contact, who does not 12 complete the sales presentation during the contact, and who only completes the sales 13 presentation at a later meeting in person, unless at the later meeting the solicitor 14 attempts to collect payment for property or services delivered before the later meeting; 15 (19) of an item of personal property, including a food product, that is 16 made by hand by an individual, if the sale or attempted sale of the item is made by the 17 individual who made the item; in this paragraph, "made by hand" includes the use of 18 ordinary household devices if the majority of the value of the item is added by the 19 labor of the individual. 20 * Sec. 27. AS 45.66.220 is amended to read: 21 Sec. 45.66.220. Exemptions. This chapter does not apply to a sale of or an 22 offer to sell 23 (1) a business opportunity if the total amount of the payments to be 24 made by the buyer under the contract is less than $250; 25 (2) a franchise under 16 C.F.R. 436; 26 (3) an ongoing business operated by the seller that is to be sold in its 27 entirety; 28 (4) a business opportunity to an ongoing business if the seller will 29 provide products, equipment, supplies, or services that are to be sold by the buyer in 30 connection with the buyer's ongoing business; 31 (5) sales demonstration equipment, materials, or samples for use in
01 sales demonstrations and not for resale, or product inventory sold to the buyer at a 02 bona fide wholesale price; 03 (6) a business opportunity by an executor, an administrator, a marshal, 04 a receiver, a trustee in bankruptcy, or a guardian or conservator, or under a judicial 05 sale; 06 (7) a security registered under AS 45.56 [AS 45.55] or a security that 07 is exempted by AS 45.56.205 [AS 45.55.900] from registration under AS 45.56 08 [AS 45.55]; 09 (8) a business opportunity if the sale or offer is made by a person 10 registered with the United States Securities and Exchange Commission when acting 11 within the scope of the person's Securities and Exchange Commission license or by a 12 person registered by the state under AS 45.56 [AS 45.55] when acting within the 13 scope of registration; 14 (9) a business opportunity by an issuer or a subsidiary of an issuer of a 15 class of securities that is 16 (A) subject to 15 U.S.C. 78a - 78pp [15 U.S.C. 78a - 78lll] 17 (Securities Exchange Act of 1934); and 18 (B) registered under 15 U.S.C. 78a - 78pp [15 U.S.C. 78a - 19 78lll] (Securities Exchange Act of 1934) unless exempt from registration under 20 15 U.S.C. 78l (g)(2)(A) - (C) or (E) - (H); 21 (10) a business opportunity in which the buyer is 22 (A) a bank, savings and loan association, trust company, 23 insurance company, credit union, or investment company under 15 U.S.C. 80a- 24 1 - 80a-64 (Investment Company Act of 1940), pension or profit sharing trust, 25 or other financial institution or institutional buyer; or 26 (B) a broker-dealer registered under AS 45.56.405 [AS 45.55]; 27 (11) a business opportunity that involves a marketing plan made in 28 conjunction with the registration of a trademark or service mark under 15 U.S.C. 1051 29 - 1127 (Trademark Act of 1946) if the seller has a minimum net worth of $1,000,000 30 as determined on the basis of the seller's most recent audited financial statement 31 prepared within 13 months of the first offer to sell in this state; net worth may be
01 determined on a consolidated basis if one person owns at least 80 percent of the seller 02 and that one person expressly guarantees the obligations of the seller that arise under 03 the sale or offer claimed to be exempt under this paragraph; or 04 (12) a business opportunity in which either the seller or the buyer is 05 licensed as a real estate broker, associate real estate broker, or real estate salesperson 06 under AS 08.88 and the sale or offer is regulated by AS 08.88. 07 * Sec. 28. AS 45.66.900(11) is amended to read: 08 (11) "securities or investment laws" means AS 45.56 [AS 45.55] 09 (Alaska Securities Act) or a substantially similar statute of another jurisdiction, 15 10 U.S.C. 77a - 77aa [15 U.S.C. 77a - 77bbbb] (Securities Exchange Act of 1933), 15 11 U.S.C. 78a - 78pp [15 U.S.C. 78a - 78lll] (Securities Exchange Act of 1934), or 15 12 U.S.C. 80a-1 - 80b-21 (Investment Company Act of 1940/Investment Advisers Act of 13 1940); 14 * Sec. 29. AS 45.55.010, 45.55.020, 45.55.023, 45.55.025, 45.55.027, 45.55.028, 45.55.030, 15 45.55.035, 45.55.040, 45.55.050, 45.55.060, 45.55.070, 45.55.075, 45.55.080, 45.55.090, 16 45.55.100, 45.55.110, 45.55.120, 45.55.150, 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 17 45.55.915, 45.55.930, 45.55.935, 45.55.960, 45.55.970, 45.55.980, 45.55.990, and 45.55.995 18 are repealed. 19 * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 INDIRECT COURT RULE AMENDMENTS. (a) The provisions of AS 45.56.630(c) 22 - (e), enacted by sec. 1 of this Act, have the effect of changing Rules 4 and 5, Alaska Rules of 23 Civil Procedure, by allowing service on the administrator in certain cases. 24 (b) The provisions of AS 45.56.650(f), enacted by sec. 1 of this Act, have the effect of 25 changing Rule 54, Alaska Rules of Civil Procedure, by expanding the definition of judgments 26 to include final judgments of the administrator issued under AS 45.56.650. 27 (c) The provisions of AS 45.56.655(c), enacted by sec. 1 of this Act, have the effect 28 of changing Rule 65, Alaska Rules of Civil Procedure, by changing the procedure for 29 injunctions in certain cases. 30 (d) The provisions of AS 45.56.650(g), enacted by sec. 1 of this Act, have the effect 31 of changing Rule 90, Alaska Rules of Civil Procedure, by changing the contempt procedure in
01 certain cases. 02 * Sec. 31. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 05 Economic Development may proceed to adopt regulations necessary to implement AS 45.56, 06 enacted by secs. 1 and 16 - 25 of this Act. The regulations take effect under AS 44.62 07 (Administrative Procedure Act), but not before the effective date of secs. 1 and 16 - 25 of this 08 Act. 09 * Sec. 32. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 TRANSITION: APPLICATION OF ACT TO EXISTING PROCEEDINGS AND 12 EXISTING RIGHTS AND DUTIES. (a) Former AS 45.55.010 - 45.55.120, 45.55.150, 13 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, and 14 45.55.960 - 45.55.995 exclusively governs all actions or proceedings that are pending on the 15 effective date of sec. 1 of this Act or may be instituted on the basis of conduct occurring 16 before the effective date of sec. 1 of this Act, but a civil action may not be maintained to 17 enforce any liability under former AS 45.55.010 - 45.55.120, 45.55.150, 45.55.155, 18 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, and 45.55.960 - 19 45.55.995 unless instituted within any period of limitation that applied when the cause of 20 action accrued or within five years after the effective date of this Act, whichever is earlier. 21 (b) All effective registrations under former AS 45.55.010 - 45.55.120, 45.55.150, 22 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, and 23 45.55.960 - 45.55.995, all administrative orders relating to the registrations, regulations, 24 statements of policy, interpretative opinions, declaratory rulings, no action determinations, 25 and conditions imposed on the registrations under former AS 45.55.010 - 45.55.120, 26 45.55.150, 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, 27 and 45.55.960 - 45.55.995 remain in effect while they would have remained in effect if this 28 Act had not been enacted. They are considered to have been filed, issued, or imposed under 29 this Act, but are exclusively governed by former AS 45.55.010 - 45.55.120, 45.55.150, 30 45.55.155, 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, and 31 45.55.960 - 45.55.995 unless removed or replaced by the administrator.
01 (c) Former AS 45.55.010 - 45.55.120, 45.55.150, 45.55.155, 45.55.170, 45.55.900, 02 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, and 45.55.960 - 45.55.995 exclusively applies 03 to an offer or sale made within one year after the effective date of sec. 1 of this Act under an 04 offering made in good faith before the effective date of sec. 1 of this Act on the basis of an 05 exemption available under former AS 45.55.010 - 45.55.120, 45.55.150, 45.55.155, 06 45.55.170, 45.55.900, 45.55.905(c), 45.55.915, 45.55.930, 45.55.935, and 45.55.960 - 07 45.55.995. 08 * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 REVISOR'S INSTRUCTION. The Revisor of Statutes is requested to change the 11 chapter heading of AS 45.55 from "Alaska Securities Act" to "Alaska Native Claims 12 Settlement Act Corporations Proxy Solicitations." 13 * Sec. 34. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 CONDITIONAL EFFECT. AS 45.56.630(c) - (e), 45.56.650(f) and (g), and 16 45.56.655(c), enacted by sec. 1 of this Act, take effect only if sec. 29 of this Act receives the 17 two-thirds majority vote of each house required by art. IV, sec. 15, Constitution of the State of 18 Alaska. 19 * Sec. 35. This Act takes effect July 1, 2015.