CSHB 194(L&C): "An Act relating to securities, registration, exempt securities, exempt transactions, broker-dealers, agents, investment advice, investment advisers, investment adviser representatives, federal covered securities, federal covered investment advisers, viatical settlement interests, small intrastate security offerings, Canadian broker-dealers, and Canadian agents; relating to administrative, civil, and criminal enforcement provisions, including restitution and civil penalties for violations; relating to an investor training fund; establishing increased civil penalties for harming older persons; relating to corporations organized under the Alaska Native Claims Settlement Act; amending Rules 4, 5, 54, 65, and 90, Alaska Rules of Civil Procedure, and Rule 602, Alaska Rules of Appellate Procedure; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 194(L&C) 01 "An Act relating to securities, registration, exempt securities, exempt transactions, 02 broker-dealers, agents, investment advice, investment advisers, investment adviser 03 representatives, federal covered securities, federal covered investment advisers, viatical 04 settlement interests, small intrastate security offerings, Canadian broker-dealers, and 05 Canadian agents; relating to administrative, civil, and criminal enforcement provisions, 06 including restitution and civil penalties for violations; relating to an investor training 07 fund; establishing increased civil penalties for harming older persons; relating to 08 corporations organized under the Alaska Native Claims Settlement Act; amending Rules 09 4, 5, 54, 65, and 90, Alaska Rules of Civil Procedure, and Rule 602, Alaska Rules of 10 Appellate Procedure; and providing for an effective date." 11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 12 * Section 1. AS 06.05.340 is amended to read:
01 Sec. 06.05.340. Certain remuneration prohibited. A bank may not pay 02 directly or indirectly a fee, commission, or bonus of any kind for its promotion and 03 organization or for securing a subscription to the original capital or to any increase in 04 capital. However, this section does not prohibit the payment of reasonable 05 compensation for legal, accounting, and econometric services, or payments to a 06 securities broker-dealer registered under AS 45.56 [AS 45.55] for services that have 07 been performed in connection with the sale of bank securities. 08 * Sec. 2. AS 06.26.020(a) is amended to read: 09 (a) Notwithstanding any other provision of this chapter, a person does not act 10 as a fiduciary under this chapter if the person 11 (1) is licensed to practice law in this state, the person is acting within 12 the scope of the license, and the person and any law firm of the person are not trustees 13 of more trusts than the number established for the person and law firm by the 14 department by regulation or order; in this paragraph, "law firm" means a partnership, a 15 professional corporation organized under AS 10.45, or another association organized 16 for the practice of law and in which the person practices law; 17 (2) acts as trustee under a deed of trust delivered only as security for 18 the payment of money or for the performance of another act; 19 (3) receives and distributes on behalf of a principal rents and proceeds 20 of sales as a real estate broker or other licensee under AS 08.88; 21 (4) engages in securities business activity [OR INVESTMENT 22 ADVISORY BUSINESS ACTIVITY] as a registered broker-dealer, a broker-dealer 23 agent, an [A STATE] investment adviser, or an investment adviser representative, or 24 as a federal covered investment adviser who has made a notice filing under 25 AS 45.56.445(c) [AS 45.55.040(h)], the person is acting within the scope of the 26 person's registration or notice filing, and the activity is regulated by the department 27 under AS 45.56 [AS 45.55] or by the United States Securities and Exchange 28 Commission; in this paragraph, "agent," "broker-dealer," "federal covered investment 29 adviser," "investment adviser," "investment adviser representative," and 30 ["INVESTMENT ADVISORY BUSINESS,"] "securities business [,]" [AND "STATE 31 INVESTMENT ADVISER"] have the meanings given in AS 45.56.900
01 [AS 45.55.990]; 02 (5) engages in the sale and administration of an insurance product as 03 an insurance company licensed under AS 21 or an insurance producer licensed under 04 AS 21 and is acting within the scope of that license; 05 (6) handles escrow transactions and is a title insurance company that 06 has a certificate of authority issued under AS 21.09, a title insurance limited producer 07 that is licensed as required by AS 21.66.270, or an employee of the title insurance 08 company or title insurance producer when acting in the scope of the employee's 09 employment; in this paragraph, 10 (A) "escrow transaction" has the meaning given in 11 AS 34.80.090; 12 (B) "title insurance company" has the meaning given in 13 AS 21.66.480; 14 (C) "title insurance limited producer" has the meaning given in 15 AS 21.66.480; 16 (7) is a cemetery association organized and acting under AS 10.30; 17 (8) is a trustee for a voting trust under AS 10.06 and is acting in that 18 capacity; 19 (9) has a certified public accountant license issued under AS 08.04.105 20 or 08.04.195, the person is acting within the scope of the license, and the person and 21 any accounting firm of the person are not trustees of more trusts than the number 22 established for the person and accounting firm by the department by regulation or 23 order; in this paragraph, "accounting firm" means a partnership, a professional 24 corporation organized under AS 10.45, or another association organized for the 25 practice of public accounting and in which the person practices public accounting; 26 (10) holds real property in trust for the primary purpose of subdivision, 27 development, or sale or to facilitate a business transaction with respect to the real 28 property; 29 (11) serves as a trustee of a trust created by the person's family 30 members; 31 (12) holds money or other assets as a homeowners' association or
01 similar organization to pay maintenance and other related costs for commonly owned 02 property; in this paragraph, "homeowners' association" includes an association of 03 apartment owners under AS 34.07.450 and a unit owners' association or master 04 association under AS 34.08.990; 05 (13) holds money or other assets in connection with the collection of 06 debts or payments on loans by a person acting solely as the agent or representative at 07 the sole direction of the person to whom the debt or payment is owed, including 08 engaging in the business of an escrow agent; 09 (14) acts as a conservator if the person is appointed by a court of this 10 or another state or is qualified to act as a conservator under AS 13.26.320; 11 (15) acts as a personal representative if the person is appointed a 12 personal representative by a court of this or another state or is qualified to act as a 13 personal representative under AS 13.21.035; 14 (16) acts as a guardian or receiver if the person is appointed as a 15 guardian or receiver by a court of this or another state; 16 (17) is a business partner acting with regard to the business, or a co- 17 owner of property acting with regard to the co-owned property; 18 (18) serves as a trustee of one or more trusts in which the settlor is not 19 a family member of the person, except that the person may not at any one time serve 20 as a trustee for trusts that cumulatively have more than 10 different settlors; however, 21 the department may change by regulation or order the maximum number of settlors 22 allowed for this exemption; in this paragraph, a husband and wife who create a joint 23 trust are considered to be one settlor. 24 * Sec. 3. AS 06.26.990(a)(21) is amended to read: 25 (21) "issuer" has the meaning given in AS 45.56.900 [AS 45.55.990]; 26 * Sec. 4. AS 12.62.400(a)(17) is amended to read: 27 (17) registration as a broker-dealer, agent, investment adviser 28 representative, or [STATE] investment adviser under AS 45.56.405 - 45.56.440 29 [AS 45.55.030 - 45.55.060]. 30 * Sec. 5. AS 14.43.148(h)(1) is amended to read: 31 (1) "license"
01 (A) means, except as provided in (B) of this paragraph, a 02 license, certificate, permit, registration, or other authorization that, at the time 03 of issuance, will be valid for more than 150 days and that may be acquired 04 from a state agency to perform an occupation, including the following: 05 (i) license relating to boxing or wrestling under 06 AS 05.10; 07 (ii) authorization to perform an occupation regulated 08 under AS 08; 09 (iii) teacher certificate under AS 14.20; 10 (iv) authorization under AS 18.08 to perform 11 emergency medical services; 12 (v) asbestos worker certification under AS 18.31; 13 (vi) boiler operator's license under AS 18.60.395; 14 (vii) certificate of fitness under AS 18.62; 15 (viii) hazardous painting certification under AS 18.63; 16 (ix) certification as a municipal correctional, 17 correctional, probation, or parole officer under AS 18.65.245; 18 (x) security guard license under AS 18.65.400 - 19 18.65.490; 20 (xi) license relating to insurance under AS 21.27; 21 (xii) employment agency permit under AS 23.15.330 - 22 23.15.520; 23 (xiii) registration as a broker-dealer, an agent, an [A 24 STATE] investment adviser, or an investment adviser representative 25 under AS 45.56.405 - 45.56.440 [AS 45.55.030]; 26 (xiv) certification as a pesticide applicator under 27 AS 46.03.320; 28 (xv) certification as a storage tank worker or contractor 29 under AS 46.03.375; 30 (xvi) certification as a water and wastewater works 31 operator under AS 46.30; and
01 (B) does not include 02 (i) a commercial fishing license under AS 16.05.480, 03 including a crewmember fishing license; 04 (ii) a vessel license issued under AS 16.05.490 or 05 16.05.530; 06 (iii) [REPEALED 07 (iv)] a business license issued under AS 43.70; 08 (iv) [(v)] an entry permit or interim-use permit issued 09 under AS 16.43; or 10 (v) [(vi)] a driver's license issued under AS 28.15; 11 * Sec. 6. AS 21.96.110(a) is amended to read: 12 (a) The director shall regulate the transaction of viatical settlement contracts 13 for the protection of viators, insureds, and insurers. The authority of the director under 14 this subsection extends to the regulation of transactions between a viator and a viatical 15 settlement provider and between a viator and a person acting as an agent in viaticating 16 a life insurance policy, while the authority of the commissioner extends to the 17 regulation of viatical settlement investments as provided under AS 45.56 18 [AS 45.55.905(c)]. 19 * Sec. 7. AS 25.27.244(s)(2) is amended to read: 20 (2) "license" 21 (A) means, except as provided in (B) of this paragraph, a 22 license, certificate, permit, registration, or other authorization that, at the time 23 of issuance, will be valid for more than 150 days and that may be acquired 24 from a state agency to perform an occupation, including the following: 25 (i) license relating to boxing or wrestling under 26 AS 05.10; 27 (ii) authorization to perform an occupation regulated 28 under AS 08; 29 (iii) teacher certificate under AS 14.20; 30 (iv) authorization under AS 18.08 to perform 31 emergency medical services;
01 (v) asbestos worker certification under AS 18.31; 02 (vi) boiler operator's license under AS 18.60.395; 03 (vii) certificate of fitness under AS 18.62; 04 (viii) hazardous painting certification under AS 18.63; 05 (ix) security guard license under AS 18.65.400 - 06 18.65.490; 07 (x) license relating to insurance under AS 21.27; 08 (xi) employment agency permit under AS 23.15.330 - 09 23.15.520; 10 (xii) registration as a broker-dealer, an agent, an [A 11 STATE] investment adviser, or an investment adviser representative 12 under AS 45.56.405 - 45.56.440 [AS 45.55.030]; 13 (xiii) certification as a pesticide applicator under 14 AS 46.03.320; 15 (xiv) certification as a storage tank worker or contractor 16 under AS 46.03.375; 17 (xv) certification as a water and wastewater works 18 operator under AS 46.30; 19 (xvi) commercial crewmember fishing license under 20 AS 16.05.480 other than an entry permit or interim-use permit under 21 AS 16.43; 22 (xvii) fish transporter permit under AS 16.05.671; 23 [(xviii) REPEALED 24 (xix) REPEALED] 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) a driver's license [(v)] issued under AS 28.15; 02 * Sec. 8. 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. 9. 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. 10. 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. 11. 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. 12. 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. 13. AS 44.64.030(a)(39) is repealed and reenacted to read: 20 (39) AS 45.56 (Alaska Securities Act); 21 * Sec. 14. AS 44.64.030(a) is amended by adding a new paragraph to read: 22 (51) AS 45.55 (Alaska Native Claims Settlement Act Corporations 23 Proxy Solicitations and Initial Issuance of Stock). 24 * Sec. 15. AS 45.55.138 is amended to read: 25 Sec. 45.55.138. Application to Alaska Native Claims Settlement Act 26 corporations. The initial issue of stock of a corporation organized under Alaska law 27 under [PURSUANT TO] 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement 28 Act) is not a sale of a security under AS 45.56.105 [AS 45.55.070] and 45.56.900(29) 29 [45.55.990(28)]. 30 * Sec. 16. AS 45.55.139 is amended to read: 31 Sec. 45.55.139. Reports of corporations. A copy of all annual reports,
01 proxies, consents or authorizations, proxy statements, and other materials relating to 02 proxy solicitations distributed, published, or made available by any person to at least 03 30 Alaska resident shareholders of a corporation organized under Alaska law under 04 43 U.S.C. 1601 et. seq. (Alaska Native Claims Settlement Act) that has total assets 05 exceeding $1,000,000 and a class of equity security held of record by 500 or more 06 persons [AND WHICH IS EXEMPTED FROM THE REGISTRATION 07 REQUIREMENTS OF AS 45.55.070 BY AS 45.55.138,] shall be filed with the 08 administrator concurrently with its distribution to shareholders. 09 * Sec. 17. AS 45.55.920(a) is amended to read: 10 (a) If it appears to the administrator that a person has engaged or is about to 11 engage in an act or practice in violation of a provision of this chapter or regulation or 12 order under this chapter, the administrator may 13 (1) in the public interest [OR FOR THE PROTECTION OF 14 INVESTORS,] issue an order 15 (A) directing the person to cease and desist from continuing the 16 act or practice; 17 (B) directing the person, for a period not to exceed three years, 18 to file the annual reports, proxies, consents or authorizations, proxy statements, 19 or other materials relating to proxy solicitations required under AS 45.55.139 20 with the administrator for examination and review 10 working days before a 21 distribution to shareholders; and 22 (C) voiding the proxies obtained by a person required to file 23 under AS 45.55.139, including their future exercise or actions resulting from 24 their past exercise, if the proxies were solicited by means of an untrue or 25 misleading statement prohibited under AS 45.55.160; or 26 (2) bring an action in the superior court to enjoin the acts or practices 27 and to enforce compliance with this chapter or regulation or order under this chapter, 28 and upon a proper showing, the appropriate remedy must be granted and a receiver or 29 conservator may be appointed for the defendant or the defendant's assets; the court 30 may not require the administrator to post a bond. 31 * Sec. 18. AS 45.55.920(b) is amended to read:
01 (b) The administrator may issue an order against a person [AN APPLICANT, 02 REGISTERED PERSON, OR OTHER PERSON] who knowingly or intentionally 03 violates this chapter or a regulation or order of the administrator under this chapter, 04 imposing a civil penalty of not more than $2,500 for a single violation, or not more 05 than $25,000 for multiple violations, in a single proceeding or a series of related 06 proceedings. 07 * Sec. 19. AS 45.55.920(c) is amended to read: 08 (c) For violations not covered by (b) of this section, the administrator may 09 issue an order against a person [AN APPLICANT, REGISTERED PERSON, OR 10 OTHER PERSON] who violates this chapter or a regulation or order of the 11 administrator under this chapter, imposing a civil penalty of not more than $500 for a 12 single violation, or not more than $5,000 for multiple violations, in a single 13 proceeding or a series of related proceedings. 14 * Sec. 20. AS 45.55.925(a) is amended to read: 15 (a) In addition to the civil penalties assessed under AS 45.55.920, a person 16 who wilfully violates a provision of this chapter except AS 45.55.160 17 [AS 45.55.030(e), 45.55.040(h), 45.55.075, OR 45.55.160], or who wilfully violates a 18 regulation or order under this chapter, or who wilfully violates AS 45.55.160 knowing 19 the statement made to be false or misleading in a material respect or the omission to be 20 misleading by any material respect, upon conviction, is punishable by a fine of not 21 more than $5,000, or by imprisonment for not less than one year nor more than five 22 years, or both. Upon conviction of an individual for a felony under this chapter, 23 imprisonment for not less than one year is mandatory. However, an individual may not 24 be imprisoned for the violation of a regulation or order if the individual proves that the 25 individual had no knowledge of the regulation or order. An indictment or information 26 may not be returned under this chapter more than five years after the alleged violation. 27 * Sec. 21. AS 45.55.935(a) is repealed and reenacted to read: 28 (a) The administrator shall adopt regulations, consistent with the provisions of 29 this chapter and with regulations adopted under AS 44.64.060, governing 30 administrative hearings conducted by the office of administrative hearings 31 (AS 44.64.010) for orders issued under AS 45.55.920.
01 * Sec. 22. AS 45.55.950(a) is amended to read: 02 (a) The administrator may make, adopt, amend, and rescind the regulations, 03 forms, and orders that are necessary to carry out this chapter [, INCLUDING 04 REGULATIONS AND FORMS GOVERNING REGISTRATION STATEMENTS, 05 APPLICATIONS, AND REPORTS, AND DEFINING TERMS, WHETHER OR 06 NOT USED IN THIS CHAPTER INSOFAR AS THE DEFINITIONS ARE NOT 07 INCONSISTENT WITH THIS CHAPTER. FOR THE PURPOSE OF 08 REGULATIONS AND FORMS, THE ADMINISTRATOR MAY CLASSIFY 09 SECURITIES, PERSONS, AND MATTERS WITHIN THE JURISDICTION OF 10 THE ADMINISTRATOR, AND PRESCRIBE DIFFERENT REQUIREMENTS FOR 11 DIFFERENT CLASSES]. 12 * Sec. 23. AS 45.55.950(b) is amended to read: 13 (b) A regulation, form, or order may not be made, adopted, amended, or 14 rescinded unless the administrator finds that the action is necessary or appropriate in 15 the public interest [OR FOR THE PROTECTION OF INVESTORS AND 16 CONSISTENT WITH THE PURPOSES FAIRLY INTENDED BY THE POLICY 17 AND PROVISIONS OF THIS CHAPTER. IN ADOPTING REGULATIONS AND 18 FORMS THE ADMINISTRATOR MAY COOPERATE WITH THE SECURITIES 19 ADMINISTRATORS OF THE OTHER STATES AND THE SECURITIES AND 20 EXCHANGE COMMISSION WITH A VIEW TO EFFECTUATING THE POLICY 21 OF THIS SECTION TO ACHIEVE MAXIMUM UNIFORMITY IN THE FORM 22 AND CONTENT OF REGISTRATION STATEMENTS, APPLICATIONS, AND 23 REPORTS WHEREVER PRACTICABLE]. 24 * Sec. 24. AS 45.55 is amended by adding a new section to read: 25 Sec. 45.55.985. Definition. In this chapter, unless the context otherwise 26 requires, "administrator" means the commissioner of commerce, community, and 27 economic development or a designee of the commissioner. 28 * Sec. 25. AS 45 is amended by adding a new chapter to read: 29 Chapter 56. Alaska Securities Act. 30 Article 1. General Provisions. 31 Sec. 45.56.105. Securities registration requirement. A person may not offer
01 or sell a security in this state unless the security 02 (1) is a federal covered security; 03 (2) is registered under this chapter; or 04 (3) or transaction is exempt from registration under AS 45.56.205 - 05 45.56.250. 06 Article 2. Exemptions from Registration of Securities. 07 Sec. 45.56.205. Exempt securities. The following securities are exempt from 08 the requirements of AS 45.56.105, 45.56.305 - 45.56.360, and 45.56.550: 09 (1) a security, including a revenue obligation or a separate security as 10 defined in 17 C.F.R. 230.131 adopted under 15 U.S.C. 77a - 77aa (Securities Act of 11 1933), issued, insured, or guaranteed by the United States; by a state; by a political 12 subdivision of a state; by a public authority, agency, or instrumentality of one or more 13 states; by a political subdivision of one or more states; or by a person controlled or 14 supervised by and acting as an instrumentality of the United States under authority 15 granted by the United States Congress; or a certificate of deposit for any of the 16 foregoing; 17 (2) a security issued, insured, or guaranteed by a foreign government 18 with which the United States maintains diplomatic relations, or by any of its political 19 subdivisions, if the security is recognized as a valid obligation by the issuer, insurer, or 20 guarantor; 21 (3) a security issued by and representing, or that will represent an 22 interest in or a direct obligation of or be guaranteed by, 23 (A) an international banking institution; 24 (B) a banking institution organized under the laws of the 25 United States; a member bank of the Federal Reserve System; or a depository 26 institution a substantial portion of the business of which consists or will consist 27 of receiving deposits or share accounts that are insured to the maximum 28 amount authorized by statute by the Federal Deposit Insurance Corporation, 29 the National Credit Union Share Insurance Fund, or a successor authorized by 30 federal law or exercising fiduciary powers that are similar to those permitted 31 for national banks under the authority of the United States Comptroller of the
01 Currency under 12 U.S.C. 92a; or 02 (C) any other depository institution, unless, by a regulation or 03 order, the administrator proceeds under AS 45.56.250; 04 (4) a security issued by and representing an interest in, or a debt of, or 05 insured or guaranteed by, an insurance company authorized to do business in this 06 state; 07 (5) a security issued or guaranteed by a railroad, other common carrier, 08 public utility, or public utility holding company that is 09 (A) regulated with respect to its rates and charges by the United 10 States or a state; 11 (B) regulated with respect to the issuance or guarantee of the 12 security by the United States, a state, Canada, or a Canadian province or 13 territory; or 14 (C) a public utility holding company registered under 42 15 U.S.C. 16451 - 16481 (Energy Policy Act of 2005) or a subsidiary of the 16 registered holding company within the meaning of that Act; 17 (6) a federal covered security specified in 15 U.S.C. 77r(b)(1) 18 (Securities Act of 1933) or adopted by rule under that provision or a security listed or 19 approved for listing on another securities market specified by regulation under this 20 chapter; a put or call option contract; a warrant; a subscription right on or with respect 21 to the security; an option or similar derivative security on a security or an index of 22 securities or foreign currencies issued by a clearing agency registered under 15 U.S.C. 23 78a - 78pp (Securities Exchange Act of 1934) and listed or designated for trading on a 24 national securities exchange, a facility of a national securities exchange, or a facility of 25 a national securities association registered under 15 U.S.C. 78a - 78pp (Securities 26 Exchange Act of 1934) or an offer or sale of the underlying security in connection 27 with the offer, sale, or exercise of an option or other security that was exempt when 28 the option or other security was written or issued; or an option or a derivative security 29 designated by the Securities and Exchange Commission under 15 U.S.C. 78i(b) 30 (Securities Exchange Act of 1934); 31 (7) a security issued by a person organized and operated exclusively
01 for religious, educational, benevolent, fraternal, charitable, social, athletic, or 02 reformatory purposes, or as a chamber of commerce, and not for pecuniary profit, no 03 part of the net earnings of which inures to the benefit of a private stockholder or other 04 person, or a security of a company that is excluded from the definition of an 05 investment company under 15 U.S.C. 80a-3(c)(10)(B) (Investment Company Act of 06 1940), except that, with respect to the offer or sale of a note, bond, debenture, or other 07 evidence of indebtedness issued by the person, a regulation may be adopted under this 08 chapter limiting the availability of this exemption by classifying securities, persons, 09 and transactions, imposing different requirements for different classes, specifying, 10 with respect to (B) of this paragraph, the scope of the exemption and the grounds for 11 denial or suspension, and requiring an issuer to 12 (A) file a notice specifying the material terms of the proposed 13 offer or sale and copies of any proposed sales and advertising literature to be 14 used and provide that the exemption becomes effective if the administrator 15 does not disallow the exemption within the period established by the 16 regulation; 17 (B) file a request for exemption authorization for which a 18 regulation adopted under this chapter may specify the 19 (i) scope of the exemption; 20 (ii) requirement of an offering statement; 21 (iii) filing of sales and advertising literature; 22 (iv) filing of consent to service of process complying 23 with AS 45.56.630; and 24 (v) grounds for denial or suspension of the exemption; 25 or 26 (C) register under AS 45.56.310; 27 (8) a member's or owner's interest in, or a retention certificate or like 28 security given in lieu of a cash patronage dividend issued by, a cooperative organized 29 and operated as a nonprofit membership cooperative under the cooperative laws of a 30 state, but not a member's or owner's interest, retention certificate, or like security sold 31 to persons other than bona fide members of the cooperative;
01 (9) an equipment trust certificate with respect to equipment leased or 02 conditionally sold to a person if any security issued by the person would be exempt 03 under this section or would be a federal covered security under 15 U.S.C. 77r(b)(1) 04 (Securities Act of 1933); and 05 (10) shares of membership stock in the Alaska Commercial Fishing 06 and Agriculture Bank issued under AS 44.81.010 and other securities issued by that 07 bank to members or in connection with loans to members. 08 Sec. 45.56.210. Exempt transactions. The following transactions are exempt 09 from the requirements of AS 45.56.105, 45.56.305 - 45.56.360, and 45.56.550: 10 (1) an isolated nonissuer transaction, whether effected by or through a 11 broker-dealer, if the seller is not a promoter or controlling person; the administrator 12 may define by regulation or order who is a promoter or a controlling person; 13 (2) a nonissuer transaction by or through a broker-dealer registered, or 14 exempt from registration under this chapter, and a resale transaction by a sponsor of a 15 unit investment trust registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company 16 Act of 1940), in a security of a class that has been outstanding in the hands of the 17 public for at least 90 days, if, at the date of the transaction, 18 (A) the issuer of the security is engaged in business, the issuer 19 is not in the organizational stage or in bankruptcy or receivership, and the 20 issuer is not a blank check, blind pool, or shell company that does not have a 21 specific business plan or purpose or has indicated that its primary business plan 22 is to engage in a merger or combination of the business with or an acquisition 23 of an unidentified person; 24 (B) the security is sold at a price reasonably related to its 25 current market price; 26 (C) the security does not constitute the whole or part of an 27 unsold allotment to or a subscription or participation by the broker-dealer as an 28 underwriter of the security or a redistribution; 29 (D) a nationally recognized securities manual or its electronic 30 equivalent designated by a regulation adopted or order issued under this 31 chapter or a record filed with the Securities and Exchange Commission that is
01 publicly available contains 02 (i) a description of the business and operations of the 03 issuer; 04 (ii) the names of the issuer's executive officers and the 05 names of the issuer's directors, if any; 06 (iii) an audited balance sheet of the issuer as of a date 07 within 18 months before the date of the transaction or, in the case of a 08 reorganization or merger when the parties to the reorganization or 09 merger each had an audited balance sheet, a pro forma balance sheet for 10 the combined organization; and 11 (iv) an audited income statement for each of the issuer's 12 two immediately previous fiscal years or for the period of existence of 13 the issuer, whichever is shorter, or, in the case of a reorganization or 14 merger when each party to the reorganization or merger had audited 15 income statements, a pro forma income statement; and 16 (E) any one of the following requirements is met: 17 (i) the issuer of the security has a class of equity 18 securities listed on a national securities exchange registered under 15 19 U.S.C. 78f (Securities Exchange Act of 1934) or designated for trading 20 on the National Association of Securities Dealers Automated Quotation 21 System; 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 of the 16 administrator in one of 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 19 (A) the entire mortgage, deed of trust, or agreement, together 20 with all the bonds or other evidence of indebtedness, secured under those 21 documents, is offered and sold as a unit; 22 (B) a general solicitation or general advertisement of the 23 transaction is not made; and 24 (C) a commission or other remuneration is not paid or given, 25 directly or indirectly, to a person not registered under this chapter as a broker- 26 dealer or as an agent; 27 (12) a transaction by an executor, administrator of an estate, sheriff, 28 marshal, receiver, trustee in bankruptcy, guardian, or conservator; 29 (13) a sale or offer to sell to 30 (A) an institutional investor; 31 (B) a federal covered investment adviser; or
01 (C) any other person exempted by a regulation adopted or order 02 issued under this chapter; 03 (14) a sale or offer to sell securities by or on behalf of an issuer if the 04 transaction is part of a single issue in which 05 (A) not more than 25 purchasers in this state during any 12 06 consecutive months, other than a person designated in (13) of this section, 07 regardless of whether the seller or any of the buyers is then present in this 08 state; 09 (B) a general solicitation or general advertising is not made in 10 connection with the sale of or offer to sell the securities; 11 (C) a commission or other remuneration is not paid or given, 12 directly or indirectly, to a person other than a broker-dealer registered under 13 this chapter or an agent registered under this chapter for soliciting a 14 prospective purchaser in this state; 15 (D) the issuer reasonably believes that all the purchasers in this 16 state, other than those designated in (13) of this section, are purchasing for 17 investment and not with a view to distribution; 18 (E) a legend is placed on the certificate or other document 19 evidencing ownership of the security, and the legend states that the security is 20 not registered under this chapter and cannot be resold without registration 21 under this chapter or exemption from this chapter; and 22 (F) before a sale, each prospective buyer is furnished with 23 information that is sufficient to make an informed investment decision; the 24 information shall be furnished to the administrator upon request; in this 25 subparagraph, "information that is sufficient to make an informed investment 26 decision" includes a business plan, an income and expense statement, a balance 27 sheet, a statement of risks, and a disclosure of any significant negative factors 28 that may affect the outcome of the investment; 29 (15) a transaction under an offer to existing security holders of the 30 issuer, including persons that, at the date of the transaction, are holders of convertible 31 securities, options, or warrants, if a commission or other remuneration, other than a
01 standby commission, is not paid or given, directly or indirectly, for soliciting a 02 security holder in this state; 03 (16) an offer to sell, but not a sale of, a security not exempt from 04 registration under 15 U.S.C. 77a - 77aa (Securities Act of 1933) if 05 (A) a registration, offering statement, or similar record as 06 required under 15 U.S.C. 77a - 77aa (Securities Act of 1933) has been filed but 07 is not effective, or the offer is made in compliance with 17 C.F.R. 230.165, 08 adopted under 15 U.S.C. 77a - 77aa (Securities Act of 1933); and 09 (B) a stop order of which the offeror is aware has not been 10 issued against the offeror by the administrator or the Securities and Exchange 11 Commission, and an audit, inspection, or proceeding that is public and that 12 may culminate in a stop order is not known by the offeror to be pending; 13 (17) an offer to sell, but not a sale of, a security exempt from 14 registration under 15 U.S.C. 77a - 77aa (Securities Act of 1933) if 15 (A) a registration statement has been filed under this chapter 16 but is not effective; 17 (B) a solicitation of interest is provided in a record to offerees 18 in compliance with a regulation adopted by the administrator under this 19 chapter; and 20 (C) a stop order of which the offeror is aware has not been 21 issued by the administrator under this chapter, and an audit, inspection, or 22 proceeding that may culminate in a stop order is not known by the offeror to be 23 pending; 24 (18) a transaction involving the distribution of the securities of an 25 issuer to the security holders of another person in connection with a merger, 26 consolidation, exchange of securities, sale of assets, or other reorganization to which 27 the issuer, or its parent or subsidiary, and the other person, or its parent or subsidiary, 28 are parties; 29 (19) a rescission offer, sale, or purchase under AS 45.56.665; 30 (20) an offer to sell or sale of a security to a person not a resident of 31 this state and not present in this state if the offer or sale does not constitute a violation
01 of the laws of this state or foreign jurisdiction in which the offeree or purchaser is 02 present and is not part of an unlawful plan or scheme to evade this chapter; 03 (21) employees' stock purchase, savings, option, profit-sharing, 04 pension, or similar benefit plan, including any securities, plan interests, and guarantees 05 issued under a compensatory benefit plan or compensation contract, contained in a 06 record, established by the issuer, the issuer's parent, the issuer's majority-owned 07 subsidiary, or the majority-owned subsidiary of the issuer's parent for the participation 08 of their employees, including offers to sell or sales of the securities to 09 (A) directors; general partners; managers and members if the 10 issuer is a limited liability company; trustees, if the issuer is a business trust; 11 officers; consultants; and advisors; 12 (B) family members who acquire the securities from those 13 persons through gifts or domestic relations orders; 14 (C) former employees, directors, general partners, trustees, 15 officers, consultants, limited liability managers or members, and advisors if 16 those individuals were employed by or providing services to the issuer when 17 the securities were offered; and 18 (D) insurance agents who are exclusive insurance agents of the 19 issuer or the issuer's subsidiary or parent or who derive more than 50 percent 20 of their annual income from those organizations; 21 (22) a transaction involving 22 (A) a stock dividend or equivalent equity distribution, 23 regardless of whether the corporation or other business organization 24 distributing the dividend or equivalent equity distribution is the issuer, if 25 nothing of value is given by stockholders or other equity holders for the 26 dividend or equivalent equity distribution other than the surrender of a right to 27 a cash or property dividend if each stockholder or other equity holder may 28 elect to take the dividend or equivalent equity distribution in cash, property, or 29 stock; 30 (B) a transaction incident to a right of conversion or judicially 31 approved reorganization in which a security is issued in exchange for one or
01 more outstanding securities, claims, or property interests, or partly in exchange 02 for one or more outstanding securities, claims, or property interests and partly 03 for cash; or 04 (C) the solicitation of tenders of securities by an offeror in a 05 tender offer in compliance with 17 C.F.R. 230.162, adopted under 15 U.S.C. 06 77a - 77aa (Securities Act of 1933); 07 (23) a nonissuer transaction in an outstanding security by or through a 08 broker-dealer registered or exempt from registration under this chapter, if the issuer is 09 a reporting issuer in a foreign jurisdiction designated by this paragraph or by a 10 regulation adopted or order issued under this chapter; the issuer has been subject to 11 continuous reporting requirements in the foreign jurisdiction for not less than 180 days 12 before the transaction; and the security is listed on the foreign jurisdiction's securities 13 exchange that has been designated by this paragraph or by a regulation adopted or 14 order issued under this chapter, or is a security of the same issuer that is of senior or 15 substantially equal rank to the listed security or is a warrant or right to purchase or 16 subscribe to any of the foregoing; for purposes of this paragraph, Canada, together 17 with its provinces and territories, is a designated foreign jurisdiction, and TSX, Inc., 18 formerly known as the Toronto Stock Exchange, Inc., is a designated securities 19 exchange; after an administrative hearing in compliance with AS 45.56.650(c), the 20 administrator, by a regulation adopted or order issued under this chapter, may revoke 21 the designation of a securities exchange under this paragraph if the administrator finds 22 that revocation is necessary or appropriate in the public interest and for the protection 23 of investors; 24 (24) a sale by an issuer to the buyer of an enterprise or a business and 25 the assets and liabilities of the enterprise or business if 26 (A) the transfer of stock to the buyer is solely incidental to the 27 sale of the enterprise or business and its assets and liabilities; 28 (B) the seller provides the buyer with full access to the books 29 and records of the enterprise or business; and 30 (C) a legend is placed on the certificate or other document 31 evidencing ownership of the security, stating that the security is not registered
01 under this chapter and cannot be resold without registration under this chapter 02 or exemption from it; 03 (25) an offer or sale of a certificate of interest or participation in oil, 04 gas, or mining rights, titles, or leases, or in payments out of production under the 05 rights, titles, or leases, if the purchaser 06 (A) is or has been, during the preceding two years, engaged 07 primarily in the business of exploring for, mining, producing, or refining oil, 08 gas, or minerals; or 09 (B) has been found by the administrator upon written 10 application to be substantially engaged in the business of exploring for, 11 mining, producing, or refining oil, gas, or minerals so as not to require the 12 protection provided by this chapter; 13 (26) a transaction involving only family members, or involving only 14 family members and the corporations, partnerships, limited liability companies, 15 limited partnerships, limited liability partnerships, associations, joint-stock companies, 16 or trusts that are organized, formed, or created by family members or at the direction 17 of family members; in this paragraph, "family members" means persons who are 18 related, including related by adoption, within the fourth degree of affinity or 19 consanguinity; or 20 (27) a transaction relating to a security that is not part of an initial issue 21 of stock covered by AS 45.55.138, but that is issued by a corporation organized under 22 Alaska law under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act), if the 23 corporation qualifies 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 exempt from the requirements of AS 45.56.105, 45.56.305 - 45.56.360, and 45.56.550 28 and is subject to the following limitations: 29 (1) the issuer of the security shall be a for-profit corporation, another 30 for-profit entity, or a business cooperative, have its principal place of business in this 31 state, and be licensed by the department;
01 (2) the transaction must meet the requirements of the federal 02 exemption for intrastate offerings in 15 U.S.C. 77c(a)(11) (Securities Act of 1933) and 03 17 C.F.R. 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 may 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 may 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. 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 may not be paid or given, directly or 19 indirectly, for any person's participation in the offer or sale of securities for the issuer 20 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, if general 27 solicitation has not been used before the sale, whichever occurs first, the issuer shall 28 provide a notice to the administrator as prescribed in regulations for this section; the 29 notice must specify that the issuer is conducting an offering in reliance on this 30 exemption and must 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 may 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 subject to 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 may 14 not be resold unless the securities are registered or qualify for an exemption from 15 registration under AS 45.56.205, 45.56.210, or 45.56.240; in addition, the issuer shall 16 make the disclosures required by 17 C.F.R. 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 20 afford the loss of my investment"; 21 (12) this exemption may not be used in conjunction with any other 22 exemption under this chapter, 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 may not count toward the limitation in (3) of this 25 subsection; 26 (13) this exemption may not be construed to remove any person from 27 the anti-fraud provisions under AS 45.56.505 - 45.56.560, and the exemption may not 28 be construed to provide relief from any other provision of this chapter other than as 29 expressly stated. 30 (b) The administrator may by order deny or revoke the exemption specified in 31 this section with respect to a specific security if the administrator finds that the sale of
01 the security would work or tend to work a fraud on the purchasers of the security. An 02 order under this subsection may not operate retroactively. A person may not be 03 considered to have violated AS 45.56.205 - 45.56.250 because of any offer or sale 04 effected after the entry of an order under this subsection if the person sustains the 05 burden of proof that the person did not know and, in the exercise of reasonable care, 06 could not have known of the order. 07 (c) A person who makes application to the department for an exemption under 08 this section shall be assessed a filing fee as prescribed in regulations for this section. 09 (d) In this section, "residency" has the meaning given in AS 01.10.055. 10 Sec. 45.56.230. Disqualifier. Exemption from registration under AS 45.56.205 11 - 45.56.250 is not available for a security or transaction if the issuer, or any of its 12 officers, controlling persons, or promoters, is subject to a disqualifier described in the 13 regulations adopted under 15 U.S.C. 78c(a)(39) (Dodd-Frank Wall Street Reform and 14 Consumer Protection Act) as of the date of the transaction or offer. 15 Sec. 45.56.240. Waiver and modification. For any security or transaction or 16 any type of security or transaction, the administrator may by order, waive, withdraw, 17 or modify any of the requirements or conditions of AS 45.56.205 - 45.56.250. 18 Sec. 45.56.250. Denial, suspension, revocation, condition, or limitation of 19 exemptions. (a) Except with respect to a federal covered security or a transaction 20 involving a federal covered security, an order under this chapter may deny, suspend 21 application of, condition, limit, or revoke an exemption created under 22 AS 45.56.205(3)(C), (7), or (8), 45.56.210, or 45.56.220, or an exemption or waiver 23 created under AS 45.56.240 with respect to a specific security, transaction, or offer. 24 An order under this subsection may be issued only under the procedures in 25 AS 45.56.360(d) or 45.56.650 and only prospectively. 26 (b) A person does not violate AS 45.56.105, 45.56.305 - 45.56.320, 45.56.340, 27 45.56.360, 45.56.550, or 45.56.665 by an offer to sell, offer to purchase, sale, or 28 purchase effected after the entry of an order issued under this section if the person did 29 not know and, in the exercise of reasonable care, could not have known, of the order. 30 Article 3. Registration of Securities and Notice Filing of Federal Covered Securities. 31 Sec. 45.56.305. Securities registration by coordination. (a) A security for
01 which a registration statement has been filed under 15 U.S.C. 77a - 77aa (Securities 02 Act of 1933) in connection with the same offering may be registered by coordination 03 under this section. 04 (b) A registration statement and accompanying records under this section must 05 contain or be accompanied by the following records, in addition to the information 06 specified in AS 45.56.320, and a consent to service of process complying with 07 AS 45.56.630: 08 (1) a copy of the latest form of prospectus filed under 15 U.S.C. 77a - 09 77aa (Securities Act of 1933); 10 (2) if the administrator requires, a copy of the articles of incorporation 11 and bylaws or their substantial equivalents currently in effect; a copy of any other 12 information or any other records filed by the issuer under 15 U.S.C. 77a - 77aa 13 (Securities Act of 1933) requested by the administrator; a copy of any agreement with 14 or among underwriters; a copy of any indenture or other instrument governing the 15 issuance of the security to be registered; and a specimen, copy, or description of the 16 security that is required by a regulation adopted or order issued under this chapter; and 17 (3) an undertaking to forward each amendment to the federal 18 prospectus, other than an amendment that delays the effective date of the registration 19 statement, promptly after it is filed with the Securities and Exchange Commission. 20 (c) A registration statement under this section becomes effective 21 simultaneously with or subsequent to the federal registration statement when all the 22 following conditions are satisfied: 23 (1) a stop order under (d) of this section or AS 45.56.360 or issued by 24 the Securities and Exchange Commission is not in effect, and a proceeding is not 25 pending against the issuer under AS 45.56.480; and 26 (2) the registration statement has been on file for at least 20 days or a 27 shorter period provided by a regulation adopted or order issued under this chapter. 28 (d) The registrant shall promptly notify the administrator in a record of the 29 date when the federal registration statement becomes effective and the content of any 30 price amendment and shall promptly file a record containing the price amendment. If 31 the notice is not timely received, the administrator may issue a stop order, without
01 prior notice or hearing, retroactively denying effectiveness to the registration 02 statement or suspending its effectiveness until compliance with this section. The 03 administrator shall promptly notify the registrant of an order by telephone or 04 electronic means and promptly confirm this notice by a record. If the registrant later 05 complies with the notice requirements of this subsection, the stop order is void as of 06 the date of its issuance. 07 (e) If the federal registration statement becomes effective before each of the 08 conditions in this section is satisfied or is waived by the administrator, the registration 09 statement is automatically effective under this chapter when all the conditions are 10 satisfied or waived. If the registrant notifies the administrator of the date when the 11 federal registration statement is expected to become effective, the administrator shall 12 promptly notify the registrant by telephone or electronic means and promptly confirm 13 this notice by a record, indicating whether all the conditions are satisfied or waived 14 and whether the administrator intends the institution of a proceeding under 15 AS 45.56.360. The notice by the administrator does not preclude the institution of a 16 proceeding under AS 45.56.360. 17 Sec. 45.56.310. Securities registration by qualification. (a) A security may 18 be registered by qualification under this section. 19 (b) A registration statement under this section must contain the information or 20 records specified in AS 45.56.320, a consent to service of process complying with 21 AS 45.56.630, and the following information or records: 22 (1) with respect to the issuer and any significant subsidiary, the name, 23 address, and form of organization of the issuer and subsidiary; the state or foreign 24 jurisdiction and date of organization of the issuer and subsidiary; the general character 25 and location of the business of the issuer and subsidiary; a description of the physical 26 properties and equipment of the issuer and subsidiary; and a statement of the general 27 competitive conditions in the industry or business in which the issuer and subsidiary 28 are or will be engaged; 29 (2) with respect to each director and officer of the issuer and other 30 person having a similar status or performing similar functions, the person's name, 31 address, and principal occupation for the previous five years; the amount of securities
01 of the issuer held by the person as of the 30th day before the filing of the registration 02 statement; the amount of the securities covered by the registration statement to which 03 the person has indicated an intention to subscribe; and a description of any material 04 interest of the person in any material transaction with the issuer or a significant 05 subsidiary effected within the previous three years or proposed to be effected; 06 (3) with respect to persons covered by (2) of this subsection, the 07 aggregate sum of the remuneration paid to those persons during the previous 12 08 months and estimated to be paid during the next 12 months, directly or indirectly, by 09 the issuer and all predecessors, parents, subsidiaries, and affiliates of the issuer; 10 (4) with respect to a person owning of record or owning beneficially, if 11 known, 10 percent or more of the outstanding shares of any class of equity security of 12 the issuer, the information specified in (2) of this subsection, other than the person's 13 occupation; 14 (5) with respect to a promoter, if the issuer was organized within the 15 previous three years, the information or records specified in (2) of this subsection, any 16 amount paid to the promoter within that period or intended to be paid to the promoter, 17 and the consideration for the payment; 18 (6) with respect to a person on whose behalf any part of the offering is 19 to be made in a nonissuer distribution, the person's name and address; the amount of 20 securities of the issuer held by the person as of the date of the filing of the registration 21 statement; a description of any material interest of the person in any material 22 transaction with the issuer or any significant subsidiary effected within the previous 23 three years or proposed to be effected; and a statement of the reasons for making the 24 offering; 25 (7) the capitalization and long-term debt, on both a current and pro 26 forma basis, of the issuer and any significant subsidiary, including a description of 27 each security outstanding or being registered or otherwise offered, and a statement of 28 the amount and kind of consideration, whether in the form of cash, physical assets, 29 services, patents, goodwill, or anything else of value, for which the issuer or any 30 subsidiary has issued its securities within the previous two years or is obligated to 31 issue its securities;
01 (8) the kind and amount of securities to be offered; the proposed 02 offering price or the method by which the offering price is to be computed; any 03 variation at which a proportion of the offering is to be made to a person or class of 04 persons other than the underwriters, with a specification of the person or class; the 05 basis on which the offering is to be made if otherwise than for cash; the estimated 06 aggregate underwriting and selling discounts or commissions and finders' fees, 07 including separately cash, securities, contracts, or anything else of value to accrue to 08 the underwriters or finders in connection with the offering or, if the selling discounts 09 or commissions are variable, the basis of determining them and their maximum and 10 minimum amounts; the estimated amounts of other selling expenses, including legal, 11 engineering, and accounting charges; the name and address of each underwriter and 12 each recipient of a finder's fee; a copy of any underwriting or selling group agreement 13 under which the distribution is to be made, or the proposed form of an underwriting or 14 selling group agreement whose terms have not yet been determined; and a description 15 of the plan of distribution of any securities that are to be offered other than through an 16 underwriter; 17 (9) the estimated monetary proceeds to be received by the issuer from 18 the offering; the purposes for which the proceeds are to be used by the issuer; the 19 estimated amount to be used for each purpose; the order or priority in which the 20 proceeds will be used for the purposes stated; the amounts of any funds to be raised 21 from other sources to achieve the purposes stated; the sources of the funds; and, if a 22 part of the proceeds is to be used to acquire property, including goodwill, other than in 23 the ordinary course of business, the names and addresses of the vendors, the purchase 24 price, the names of any persons that have received commissions in connection with the 25 acquisition, and the amounts of the commissions and other expenses in connection 26 with the acquisition, including the cost of borrowing money to finance the acquisition; 27 (10) a description of any stock options or other security options 28 outstanding or to be created in connection with the offering, and the amount of those 29 options held or to be held by each person required to be named in (2), (4), (5), (6), or 30 (8) of this subsection and by any person that holds or will hold 10 percent or more in 31 the aggregate of those options;
01 (11) the dates of, parties to, and general effect, concisely stated, of 02 each managerial or other material contract made or to be made other than in the 03 ordinary course of business to be performed in whole or in part at or after the filing of 04 the registration statement or that was made within the previous two years, and a copy 05 of each contract; 06 (12) a description of any pending litigation, action, or proceeding to 07 which the issuer is a party and that materially affects the issuer's business or assets and 08 any litigation, action, or proceeding known to be contemplated; 09 (13) a copy of any prospectus, pamphlet, circular, form letter, 10 advertisement, or other sales literature intended as of the effective date of the 11 registration statement to be used in connection with the offering and any solicitation of 12 interest used in compliance with AS 45.56.210(17)(B); 13 (14) a specimen or copy of the security being registered, unless the 14 security is uncertificated; a copy of the issuer's articles of incorporation and bylaws or 15 their substantial equivalents, in effect; and a copy of any indenture or other instrument 16 covering the security to be registered; 17 (15) a signed or conformed copy of an opinion of counsel concerning 18 the legality of the security being registered, with an English translation if the opinion 19 is in a language other than English, that states whether the security when sold will be 20 validly issued, fully paid, nonassessable, and, if a debt security, a binding obligation of 21 the issuer; 22 (16) a signed or conformed copy of a consent of any accountant, 23 engineer, appraiser, or other person whose profession gives authority for a statement 24 made by the person if the person is named as having prepared or certified a report or 25 valuation, other than an official record, that is public, and that is used in connection 26 with the registration statement; 27 (17) a balance sheet of the issuer as of a date within four months 28 before the filing of the registration statement; a statement of income and a statement of 29 cash flows for each of the three fiscal years preceding the date of the balance sheet and 30 for any period between the close of the immediately previous fiscal year and the date 31 of the balance sheet, or for the period of the issuer's and any predecessor's existence if
01 less than three years; and, if any part of the proceeds of the offering is to be applied to 02 the purchase of a business, the financial statements that would be required if that 03 business were the registrant; and 04 (18) any additional information or records required by a regulation 05 adopted or order issued under this chapter. 06 (c) A registration statement under this section becomes effective when the 07 administrator orders that the registration is effective. 08 (d) A regulation adopted or order issued under this chapter may require as a 09 condition of registration under this section that a prospectus containing a specified part 10 of the information or record specified in (b) of this section be sent or given to each 11 person to which an offer is made before or concurrently with the earliest of 12 (1) the first offer made in a record to the person other than by means of 13 a public advertisement, by or for the account of the issuer or another person on whose 14 behalf the offering is being made or by an underwriter or broker-dealer that is offering 15 part of an unsold allotment or subscription taken by the person as a participant in the 16 distribution; 17 (2) the confirmation of a sale made by or for the account of the person; 18 (3) payment under the sale; or 19 (4) delivery of the security under the sale. 20 Sec. 45.56.320. Securities registration filings. (a) A registration statement 21 may be filed by the issuer, a person on whose behalf the offering is to be made, or a 22 broker-dealer registered under this chapter. 23 (b) A person filing a registration statement shall pay a filing fee established by 24 a regulation adopted under this chapter and consent to service of process as described 25 under AS 45.56.630. 26 (c) A registration statement filed under AS 45.56.305 or 45.56.310 must 27 specify 28 (1) the amount of securities to be offered in this state; 29 (2) the states in which a registration statement or similar record in 30 connection with the offering has been or is to be filed; and 31 (3) any adverse order, judgment, or decree issued in connection with
01 the offering by a state securities regulator, the Securities and Exchange Commission, 02 or a court. 03 (d) A record filed under this chapter or former AS 45.55 within five years 04 preceding the filing of a registration statement may be incorporated by reference in the 05 registration statement to the extent that the record is currently accurate. 06 (e) In the case of a nonissuer distribution, information or a record may not be 07 required under (i) of this section or AS 45.56.310 unless it is known to the person 08 filing the registration statement or to the person on whose behalf the distribution is to 09 be made or unless it can be furnished by those persons without unreasonable effort or 10 expense. 11 (f) A regulation adopted or order issued under this chapter may require as a 12 condition of registration that a security issued within the previous five years or to be 13 issued to a promoter for a consideration substantially less than the public offering 14 price or to a person for a consideration other than cash be deposited in escrow and that 15 the proceeds from the sale of the registered security in this state be impounded until 16 the issuer receives a specified amount from the sale of the security, either in this state 17 or elsewhere. The conditions of any escrow or impoundment required under this 18 subsection may be established by a regulation adopted or order issued under this 19 chapter, but the administrator may not reject a depository institution solely because of 20 its location in another state. 21 (g) A regulation adopted or order issued under this chapter may require as a 22 condition of registration that a security registered under this chapter be sold only on a 23 specified form of subscription or sale contract and that a signed or conformed copy of 24 each contract be filed under this chapter or preserved for a period specified by the 25 regulation or order, not to exceed five years. 26 (h) Except while a stop order is in effect under AS 45.56.360, a registration 27 statement is effective for one year after the effective date of the registration statement 28 or for any longer period designated in an order under this chapter during which the 29 security is being offered or distributed in a nonexempted transaction by or for the 30 account of the issuer or other person on whose behalf the offering is being made or by 31 an underwriter or broker-dealer that is still offering part of an unsold allotment or
01 subscription taken as a participant in the distribution. For the purposes of a nonissuer 02 transaction, all outstanding securities of the same class identified in the registration 03 statement as a security registered under this chapter are considered to be registered 04 while the registration statement is effective. If any securities of the same class are 05 outstanding, a registration statement may not be withdrawn until one year after the 06 effective date of the registration statement. A registration statement may be withdrawn 07 only with the approval of the administrator. 08 (i) While a registration statement is effective, a regulation adopted or order 09 issued under this chapter may require the person that filed the registration statement to 10 file reports, not more often than quarterly, to keep the information or other record in 11 the registration statement reasonably current and to disclose the progress of the 12 offering. 13 (j) A registration statement may be amended after the effective date of the 14 registration statement. The post-effective amendment becomes effective when the 15 administrator so orders. If a post-effective amendment is made to increase the number 16 of securities specified to be offered or sold, the person filing the amendment shall pay 17 a registration fee established by a regulation adopted under this chapter. A post- 18 effective amendment relates back to the date of the offering of the additional securities 19 being registered if, within one year after the date of the sale, the amendment is filed 20 and the additional registration fee is paid. 21 Sec. 45.56.330. Notice filing of federal covered securities. (a) With respect to 22 a federal covered security, as defined in 15 U.S.C. 77r(b) (Securities Act of 1933), that 23 is not otherwise exempt under AS 45.56.205 - 45.56.240, a regulation adopted or order 24 issued under this chapter may require the filing of any or all of the following records: 25 (1) before the initial offer of a federal covered security in this state, all 26 records that are part of a federal registration statement filed with the Securities and 27 Exchange Commission under 15 U.S.C. 77a - 77aa (Securities Act of 1933), a consent 28 to service of process complying with AS 45.56.630 signed by the issuer, and the 29 payment of a fee established in a regulation adopted under this chapter; 30 (2) after the initial offer of the federal covered security in this state, all 31 records that are part of an amendment to a federal registration statement filed with the
01 Securities and Exchange Commission under 15 U.S.C. 77a - 77aa (Securities Act of 02 1933); and 03 (3) to the extent necessary or appropriate to compute fees, a report of 04 the value of the federal covered securities sold or offered to persons present in this 05 state if the sales data are not included in records filed with the Securities and 06 Exchange Commission and payment of a fee established in a regulation adopted under 07 this chapter. 08 (b) A notice filing under (a) of this section is effective for one year 09 commencing on the later of the notice filing or the effectiveness of the offering filed 10 with the Securities and Exchange Commission. On or before expiration, the issuer 11 may renew a notice filing by filing with the Securities and Exchange Commission a 12 copy of those records filed by the issuer that are required by a regulation adopted or 13 order issued under this chapter to be filed and by paying a renewal fee established in a 14 regulation adopted under this chapter. A previously filed consent to service of process 15 complying with AS 45.56.630 may be incorporated by reference in a renewal. A 16 renewed notice filing becomes effective upon the expiration of the filing being 17 renewed. 18 (c) With respect to a security that is a federal covered security under 15 U.S.C. 19 77r(b)(4)(D) (Securities Act of 1933), a regulation adopted under this chapter may 20 require a notice filing by or on behalf of an issuer to include a copy of Form D, 21 including the Appendix, as adopted by the Securities and Exchange Commission, and 22 a consent to service of process complying with AS 45.56.630 signed by the issuer not 23 later than 15 days after the first sale of the federal covered security in this state and the 24 payment of a fee established in a regulation adopted under this chapter; and the 25 payment of a fee established in a regulation adopted under this chapter for any late 26 filing. 27 (d) Except with respect to a federal covered security under 15 U.S.C. 77r(b)(1) 28 (Securities Act of 1933), if the administrator finds that there is a failure to comply 29 with a notice or fee requirement of this section, the administrator may issue a stop 30 order suspending the offer and sale of a federal covered security in this state. If the 31 deficiency is corrected, the stop order is void as of the time of its issuance and a
01 penalty may not be imposed by the administrator. 02 Sec. 45.56.340. Viatical settlement interests. (a) Before the sale of a viatical 03 settlement interest, an issuer shall provide a prospective buyer with information that is 04 sufficient to make an informed investment decision. The issuer shall also provide the 05 information to the administrator upon request if the issuer is not otherwise required to 06 file the information with the administrator. In this subsection, "information that is 07 sufficient to make an informed investment decision" includes state-mandated 08 disclosure forms and a disclosure of any significant factors that may affect the 09 outcome of the investment. 10 (b) Except as may be required in the course of conduct of the responsibilities 11 of the administrator, an issuer of a viatical settlement interest may not disclose to 12 another person the identity of the viator or insured of the insurance policy that is the 13 subject of the viatical settlement interest. The viator may waive this prohibition 14 against disclosure if the waiver is in writing and signed by the viator. 15 (c) The administrator shall regulate transactions between a viatical settlement 16 provider or person acting as an agent of a viatical settlement provider and a 17 subsequent investor, while the authority of the director of the division of insurance 18 extends to the regulation of viatical settlement contracts under AS 21.96.110. 19 (d) In this section, 20 (1) "viatical settlement contract" has the meaning given in 21 AS 21.96.110(h); 22 (2) "viatical settlement interest" 23 (A) means the entire interest or any fractional interest in a life 24 insurance policy or in the death benefit under a life insurance policy that is the 25 subject of a viatical settlement contract; 26 (B) does not include the initial purchase from the viator by a 27 viatical settlement provider; 28 (3) "viatical settlement provider" has the meaning given in 29 AS 21.96.110(h); 30 (4) "viator" has the meaning given in AS 21.96.110(h). 31 Sec. 45.56.350. Waiver and modification. The administrator may waive or
01 modify, in whole or in part, any or all of the requirements of AS 45.56.305 and 02 45.56.320 or the requirement of any information or record in a registration statement 03 or in a periodic report filed under AS 45.56.320(i). 04 Sec. 45.56.360. Denial, suspension, and revocation of securities 05 registration. (a) The administrator may issue a stop order denying effectiveness to, or 06 suspending or revoking the effectiveness of, a registration statement if the 07 administrator finds that the order is in the public interest and that 08 (1) the registration statement as of the effective date of the registration 09 statement or before the effective date in the case of an order denying effectiveness, an 10 amendment under AS 45.56.320(j) as of the effective date of the amendment, or a 11 report under AS 45.56.320(i) is incomplete in a material respect or contains a 12 statement that, in the light of the circumstances under which it was made, was false or 13 misleading with respect to a material fact; 14 (2) this chapter or a regulation adopted, order issued, or condition 15 imposed under this chapter has been wilfully violated in connection with the offering 16 by 17 (A) the person filing the registration statement; 18 (B) the issuer, a partner, officer, or director of the issuer or a 19 person having a similar status or performing a similar function; 20 (C) a promoter of the issuer; 21 (D) a person directly or indirectly controlling or controlled by 22 the issuer, but only if the person filing the registration statement is directly or 23 indirectly controlled by or acting for the issuer; or 24 (E) an underwriter; 25 (3) the security registered or sought to be registered is the subject of a 26 permanent or temporary injunction of a court of competent jurisdiction or an 27 administrative stop order or similar order issued under any federal, foreign, or state 28 law other than this chapter applicable to the offering; the administrator may not 29 institute a proceeding against an effective registration statement under this paragraph 30 more than one year after the date of the order or injunction on which it is based, and 31 the administrator may not issue an order under this paragraph based on an order or
01 injunction issued under the securities act of another state unless the order or injunction 02 was based on conduct that would constitute, as of the date of the order, a ground for a 03 stop order under this section; 04 (4) the issuer's enterprise or method of business includes or would 05 include activities that are unlawful where performed; 06 (5) with respect to a security sought to be registered under 07 AS 45.56.305, there has been a failure to comply with the undertaking required by 08 AS 45.56.305(b)(3); 09 (6) the applicant or registrant has not paid the filing fee; the 10 administrator shall void the order if the deficiency is corrected and the order was 11 based solely on the nonpayment of the filing fee; or 12 (7) the offering 13 (A) will work or tend to work a fraud on purchasers or would 14 operate to work or tend to work a fraud on purchasers; 15 (B) has been or would be made with unreasonable amounts of 16 underwriters' and sellers' discounts, commissions, or other compensation, or 17 promoters' profits or participations, or unreasonable amounts or kinds of 18 options; or 19 (C) is being made on terms that are unfair, unjust, or 20 inequitable. 21 (b) To the extent practicable, the administrator shall, by a regulation adopted 22 or order issued under this chapter, publish standards that provide notice of conduct 23 that violates (a)(7) of this section. 24 (c) The administrator may not institute a stop order proceeding against an 25 effective registration statement based on conduct or a transaction known to the 26 administrator when the registration statement became effective unless the proceeding 27 is instituted within 30 days after the registration statement became effective. 28 (d) The administrator may summarily revoke, deny, postpone, or suspend the 29 effectiveness of a registration statement pending final determination of an 30 administrative proceeding. Upon the issuance of the order, the administrator shall 31 promptly notify each person specified in (e) of this section that the order has been
01 issued, the reasons for the revocation, denial, postponement, or suspension, and that, 02 within 15 days after the receipt of a request in a record from the person, the matter will 03 be scheduled for a hearing. If, within 30 days after the date of service of the order, a 04 hearing is not requested and none is ordered by the administrator, the order becomes 05 final. If a hearing is requested or ordered, the administrator, after notice of and 06 opportunity for hearing for each person subject to the order, may modify or vacate the 07 order or extend the order until final determination. 08 (e) A stop order may not be issued under this section without 09 (1) appropriate notice to the applicant or registrant, the issuer, and the 10 person on whose behalf the securities are to be or have been offered; 11 (2) an opportunity for hearing conducted in the manner provided in 12 AS 45.56.650(c); and 13 (3) findings of fact and conclusions of law in a record. 14 (f) The administrator may modify or vacate a stop order issued under this 15 section if the administrator finds that the conditions that caused its issuance have 16 changed or that it is necessary or appropriate in the public interest or for the protection 17 of investors. 18 Article 4. Broker-Dealers, Agents, Investment Advisers, Investment Adviser 19 Representatives, and Federal Covered Investment Advisers. 20 Sec. 45.56.405. Broker-dealer registration requirement and exemptions. 21 (a) A person may not transact business in this state as a broker-dealer unless the 22 person is registered under this chapter as a broker-dealer or is exempt from registration 23 as a broker-dealer under (b) of this section. 24 (b) The following persons are exempt from the registration requirement of (a) 25 of this section: 26 (1) a broker-dealer without a place of business in this state if the 27 broker-dealer's only transactions effected in this state are with 28 (A) the issuer of the securities involved in the transactions; 29 (B) a broker-dealer registered as a broker-dealer under this 30 chapter or not required to be registered as a broker-dealer under this chapter; 31 (C) an institutional investor;
01 (D) a nonaffiliated federal covered investment adviser with 02 investments under management in excess of $100,000,000 acting for the 03 account of others under discretionary authority in a signed record; 04 (E) a bona fide preexisting customer whose principal place of 05 residence is not in this state if the person is registered as a broker-dealer under 06 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) or not required to be 07 registered under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) and 08 is registered under the securities act of the state in which the customer 09 maintains a principal place of residence; 10 (F) a bona fide preexisting customer whose principal place of 11 residence is in this state but who was not present in this state when the 12 customer relationship was established if 13 (i) the broker-dealer is registered under 15 U.S.C. 78a - 14 78pp (Securities Exchange Act of 1934) or not required to be registered 15 under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) and is 16 registered under the securities act of the state in which the customer 17 relationship was established and where the customer had maintained a 18 principal place of residence; and 19 (ii) within 45 days after the customer's first transaction 20 in this state, the person files an application for registration as a broker- 21 dealer in this state and a further transaction is not effected more than 75 22 days after the date on which the application is filed, or, if earlier, the 23 date on which the administrator notifies the person that the 24 administrator has denied the application for registration or has stayed 25 the pendency of the application for good cause; 26 (G) not more than three customers in this state during the 27 previous 12 months, in addition to those customers specified in (A) - (F) of this 28 paragraph and under (H) of this paragraph if the broker-dealer is registered 29 under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) or not required 30 to be registered under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934) 31 and is registered under the securities act of the state in which the broker-dealer
01 has its principal place of business; and 02 (H) any other person exempted by a regulation adopted or order 03 issued under this chapter; and 04 (2) a person that deals solely in United States government securities 05 and is supervised as a dealer in government securities by the Board of Governors of 06 the Federal Reserve System, the United States Comptroller of the Currency, or the 07 Federal Deposit Insurance Corporation. 08 (c) A broker-dealer or an issuer engaged in offering, offering to purchase, 09 purchasing, or selling securities in this state may not, directly or indirectly, employ or 10 associate with an individual to engage in an activity related to securities transactions in 11 this state if the registration of the individual is suspended or revoked or the individual 12 is barred from employment or association with a broker-dealer, an issuer, an 13 investment adviser, or a federal covered investment adviser by an order of the 14 administrator under this chapter, the Securities and Exchange Commission, or a self- 15 regulatory organization. A broker-dealer or issuer does not violate this subsection if 16 the broker-dealer or issuer did not know and, in the exercise of reasonable care, could 17 not have known of the suspension, revocation, or bar. Upon request from a broker- 18 dealer or issuer and for good cause, an order under this chapter may modify or waive, 19 in whole or in part, the application of the prohibitions of this subsection to the broker- 20 dealer. 21 Sec. 45.56.410. Limited registration of Canadian broker-dealers and 22 agents. (a) If a broker-dealer is registered under this section and its principal office is 23 located in a province or territory of Canada that provides at least equivalent 24 registration for a broker-dealer that is resident in the United States, a broker-dealer 25 that is resident in Canada and does not have an office or other physical presence in this 26 state may effect transactions in securities with or for or induce or attempt to induce the 27 purchase or sale of a security by a person from Canada who is 28 (1) temporarily resident in this state and with whom the Canadian 29 broker-dealer had a bona fide broker-dealer-client relationship before the person 30 entered the United States; or 31 (2) resident in this state and whose transactions are in a self-directed
01 tax-advantaged retirement plan in Canada if the person is the holder of or contributor 02 to the plan. 03 (b) An agent who represents a Canadian broker-dealer registered under this 04 section may, if the agent is registered under this section, effect transactions in 05 securities in this state as permitted for the broker-dealer under (a) of this section. 06 (c) Subject to the requirements of (a) of this section, a Canadian broker-dealer 07 may register under this section if the broker-dealer 08 (1) files an application in the form required by the jurisdiction in which 09 the broker-dealer has its principal office; 10 (2) files a written consent to service of process under AS 45.56.630; 11 (3) is registered as a broker or dealer in good standing in the 12 jurisdiction from which the broker-dealer is effecting transactions into this state and 13 files evidence of the registration; and 14 (4) is a member of a self-regulating organization or stock exchange in 15 Canada. 16 (d) An agent may register under this section to effect transactions in securities 17 in this state if the agent represents a Canadian broker-dealer that is registered under 18 this section, and the agent 19 (1) files an application in the form required by the jurisdiction in which 20 the broker-dealer has its principal office; 21 (2) files a written consent to service of process under AS 45.56.630; 22 and 23 (3) is registered and files evidence of good standing in the jurisdiction 24 from which the agent is effecting transactions into this state. 25 (e) Registration under this section becomes effective on the 30th day after an 26 application is filed unless it is made effective earlier by the administrator or a denial 27 order is in effect and a proceeding is pending under AS 45.56.480. 28 (f) A Canadian broker-dealer registered under this section shall 29 (1) maintain provincial or territorial registration and membership in 30 good standing in a self-regulating organization or stock exchange; 31 (2) provide the administrator on request with books and records
01 relating to its business in this state as a broker-dealer; 02 (3) inform the administrator promptly of any criminal action taken 03 against the broker-dealer or of any finding or sanction imposed on the broker-dealer as 04 a result of regulatory action, including that of a self-regulating organization, involving 05 fraud, theft, deceit, misrepresentation, or similar conduct; and 06 (4) disclose to its clients in this state that the broker-dealer and its 07 agents are not subject to the full regulatory requirements of this chapter. 08 (g) An agent of a Canadian broker-dealer registered under this section shall 09 (1) maintain provincial or territorial registration in good standing; and 10 (2) inform the administrator promptly of any criminal action taken 11 against the agent or of any finding or sanction imposed on the broker-dealer or agent 12 as a result of regulatory action, including that of a self-regulating organization, 13 involving fraud, theft, deceit, misrepresentation, or similar conduct. 14 (h) A Canadian broker-dealer or agent registered under this section may renew 15 its registration by filing by midnight on December 31 of each year the most recent 16 renewal application, if any, filed in the jurisdiction in which the broker-dealer or agent 17 has its principal office or, if a renewal application is not required, the most recent 18 application filed under (c)(1) or (d)(1) of this section. 19 (i) An applicant for registration or renewal registration under this section shall 20 pay the fee for broker-dealers and agents required by this chapter. 21 (j) A Canadian broker-dealer or agent registered under this section may not 22 effect transactions in this state except 23 (1) as permitted under (a) or (b) of this section; 24 (2) with or through 25 (A) the issuers of the securities involved in the transactions; 26 (B) other broker-dealers; or 27 (C) banks, savings institutions, trust companies, insurance 28 companies, investment companies as defined in 15 U.S.C. 80a-3 (Investment 29 Company Act of 1940), pension or profit-sharing trusts, or other financial 30 institutions or institutional buyers, whether acting for themselves or as trustees; 31 or
01 (3) as otherwise permitted by this chapter. 02 (k) A Canadian broker-dealer or agent registered under this section and acting 03 in accordance with the limitations in (j) of this section is exempt from all of the 04 requirements of this chapter except the anti-fraud provisions under AS 45.56.505 and 05 the requirements of this section. The registration of a Canadian broker-dealer or agent 06 under this section may not be denied, suspended, or revoked except in accordance with 07 the provisions of AS 45.56.480 for a breach of the anti-fraud provisions under 08 AS 45.56.505 or the requirements of this section. 09 (l) In this section, "Canadian broker-dealer" means a broker-dealer that has its 10 principal office in a province or territory of Canada. 11 Sec. 45.56.420. Registration exemption for merger and acquisition broker. 12 (a) Except as provided in (b) and (c) of this section, a merger and acquisition broker is 13 exempt from registration under AS 45.56.405. 14 (b) A merger and acquisition broker is not exempt from registration under 15 AS 45.56.405 if the broker 16 (1) directly or indirectly, in connection with the transfer of ownership 17 of an eligible privately held company, receives, holds, transmits, or has custody of the 18 funds or securities to be exchanged by the parties to the transaction; 19 (2) engages on behalf of an issuer in a public offering of any class of 20 securities that is registered, or is required to be registered, with the United States 21 Securities and Exchange Commission under 15 U.S.C. 78l(b) (Securities Exchange 22 Act of 1934) or with respect to which the issuer files, or is required to file, periodic 23 information, documents, and reports under 15 U.S.C. 78o(d) (Securities Exchange Act 24 of 1934); or 25 (3) engages on behalf of any party in a transaction involving a public 26 shell company. 27 (c) A merger and acquisition broker is not exempt from registration under 28 AS 45.56.405 if the broker is subject to 29 (1) suspension or revocation of registration under 15 U.S.C. 78o(b)(4) 30 (Securities Exchange Act of 1934); 31 (2) a statutory disqualification described in 15 U.S.C. 78c(a)(39)
01 (Securities Exchange Act of 1934); 02 (3) a disqualification under the rules adopted by the United States 03 Securities and Exchange Commission under 15 U.S.C. 77d note (Dodd-Frank Wall 04 Street Reform and Consumer Protection Act); or 05 (4) a final order described in 15 U.S.C. 78o(b)(4)(H) (Securities 06 Exchange Act of 1934). 07 (d) This section may not be construed to limit any other authority of the 08 department to exempt any person, or any class of persons, from a provision of this 09 chapter, or a provision of a rule or regulation adopted under this chapter. 10 (e) In this section, 11 (1) "control" means the power, directly or indirectly, to direct the 12 management or policies of a company, whether through ownership of securities, by 13 contract, or otherwise; there is a presumption of control for any person who 14 (A) is a director, general partner, limited liability company 15 member, limited liability company manager, an officer who exercises 16 executive responsibility, or an officer who has status or functions similar to an 17 officer who exercises executive responsibility; 18 (B) has the right to vote 20 percent or more of a class of voting 19 securities or the power to sell or direct the sale of 20 percent or more of a class 20 of voting securities; or 21 (C) in the case of a partnership or limited liability company, 22 has the right to receive upon dissolution, or has contributed, 20 percent or more 23 of the capital; 24 (2) "eligible privately held company" means a company that 25 (A) does not have any class of securities registered, or required 26 to be registered, with the United States Securities and Exchange Commission 27 under 15 U.S.C. 78l(b) (Securities Exchange Act of 1934), or with respect to 28 which the company files, or is required to file, periodic information, 29 documents, and reports under 15 U.S.C. 78o(d) (Securities Exchange Act of 30 1934); and 31 (B) in the fiscal year ending immediately before the fiscal year
01 in which the services of the merger and acquisition broker are initially engaged 02 with respect to the securities transaction, meets either or both of the following 03 conditions, determined in accordance with the historical financial accounting 04 records of the company: 05 (i) the earnings of the company before interest, taxes, 06 depreciation, and amortization are less than $25,000,000; 07 (ii) the gross revenue of the company is less than 08 $250,000,000; 09 (3) "merger and acquisition broker" means a broker, and a person 10 associated with the broker, engaged in the business of effecting securities transactions 11 solely in connection with the transfer of ownership of an eligible privately held 12 company, regardless of whether that broker acts on behalf of a seller or buyer, through 13 the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business 14 combination involving, securities or assets of the eligible privately held company, if 15 the broker reasonably believes that 16 (A) upon consummation of the transaction, a person acquiring 17 securities or assets of the eligible privately held company, acting alone or in 18 concert, will control and, directly or indirectly, be active in the management of 19 the eligible privately held company or the business conducted with the assets 20 of the eligible privately held company; and 21 (B) if a person is offered securities in exchange for securities or 22 assets of the eligible privately held company, the person will, before becoming 23 legally bound to consummate the transaction, receive or have reasonable 24 access to the most recent fiscal year-end financial statements of the issuer of 25 the securities as customarily prepared by its management in the normal course 26 of operations and, if the financial statements of the issuer are audited, 27 reviewed, or compiled, any related statement by the independent accountant; a 28 balance sheet dated not more than 120 days before the date of the exchange 29 offer; and information pertaining to the management, business, results of 30 operations for the period covered by the foregoing financial statements, and 31 any material loss contingencies of the issuer;
01 (4) "public shell company" means a company that, at the time of a 02 transaction with an eligible privately held company, 03 (A) has any class of securities registered, or required to be 04 registered, with the United States Securities and Exchange Commission under 05 15 U.S.C. 78l(b), or with respect to which the company files, or is required to 06 file, periodic information, documents, and reports under 15 U.S.C. 78o(d); 07 (B) has no assets or has nominal operations; and 08 (C) has 09 (i) no assets or has nominal assets; 10 (ii) assets consisting solely of cash and cash 11 equivalents; or 12 (iii) assets consisting of any amount of cash and cash 13 equivalents and nominal other assets. 14 Sec. 45.56.430. Agent registration requirement and exemptions. (a) An 15 individual may not transact business in this state as an agent unless the individual is 16 registered under this chapter as an agent or is exempt from registration as an agent 17 under (b) of this section. 18 (b) The following individuals are exempt from the registration requirement of 19 (a) of this section: 20 (1) an individual who represents a broker-dealer in effecting 21 transactions in this state limited to those described in 15 U.S.C. 78o(i); 22 (2) an individual who represents a broker-dealer that is exempt under 23 AS 45.56.405(b) or 45.56.410; 24 (3) an individual who represents an issuer with respect to an offer or 25 sale of the issuer's own securities or those of the issuer's parent or any of the issuer's 26 subsidiaries and who is not compensated in connection with the individual's 27 participation by the payment of commissions or other remuneration based, directly or 28 indirectly, on transactions in those securities; 29 (4) an individual who represents an issuer and who effects transactions 30 in the issuer's securities exempted by AS 45.56.210, other than AS 45.56.210(11) and 31 (14);
01 (5) an individual who represents an issuer that effects transactions 02 solely in federal covered securities of the issuer, but an individual who effects 03 transactions in a federal covered security under 15 U.S.C. 77r(b)(3) or (b)(4)(D) 04 (Securities Act of 1933) is not exempt if the individual is compensated in connection 05 with the agent's participation by the payment of commissions or other remuneration 06 based, directly or indirectly, on transactions in those securities; 07 (6) an individual who represents a broker-dealer registered in this state 08 under AS 45.56.405(a) or exempt from registration under AS 45.56.405(b) in the offer 09 and sale of securities for an account of a nonaffiliated federal covered investment 10 adviser with investments under management in excess of $100,000,000 acting for the 11 account of others under discretionary authority in a signed record; 12 (7) an individual who represents an issuer in connection with the 13 purchase of the issuer's own securities; 14 (8) an individual who represents an issuer and who restricts 15 participation to performing clerical or ministerial acts; or 16 (9) any other individual exempted by a regulation adopted or order 17 issued under this chapter. 18 (c) The registration of an agent is effective only while the agent is employed 19 by or associated with a broker-dealer registered under this chapter or an issuer that is 20 offering, selling, or purchasing the issuer's securities in this state. 21 (d) A broker-dealer or an issuer engaged in offering, selling, or purchasing 22 securities in this state may not employ or associate with an agent who transacts 23 business in this state on behalf of broker-dealers or issuers unless the agent is 24 registered under (a) of this section or exempt from registration under (b) of this 25 section. 26 (e) An individual may not act as an agent for more than one broker-dealer or 27 one issuer at a time, unless the broker-dealer or the issuer for which the agent acts is 28 affiliated by direct or indirect common control or is authorized by a regulation or order 29 issued under this chapter. 30 Sec. 45.56.435. Investment adviser registration requirement and 31 exemptions. (a) A person may not transact business in this state as an investment
01 adviser unless the person is registered under this chapter as an investment adviser or is 02 exempt from registration as an investment adviser under (b) of this section. 03 (b) The following persons are exempt from the registration requirement in (a) 04 of this section: 05 (1) a person without a place of business in this state that is registered 06 under the securities act of the state in which the person has the person's principal place 07 of business if the person's only clients in this state are 08 (A) federal covered investment advisers, investment advisers 09 registered under this chapter, or broker-dealers registered under this chapter; 10 (B) institutional investors; 11 (C) bona fide preexisting clients whose principal places of 12 residence are not in this state if the investment adviser is registered under the 13 securities act of the state in which the clients maintain principal places of 14 residence; or 15 (D) exempt by a regulation adopted or order issued under this 16 chapter; 17 (2) a person without a place of business in this state if the person has 18 had, during the preceding 12 months, not more than five clients that are resident in this 19 state in addition to those specified under (1) of this subsection; or 20 (3) any other person exempted by a regulation adopted or order issued 21 under this chapter. 22 (c) An investment adviser may not, directly or indirectly, employ or associate 23 with an individual to engage in an activity related to investment advice in this state if 24 the registration of the individual is suspended or revoked or the individual is barred 25 from employment or association with an investment adviser, federal covered 26 investment adviser, or broker-dealer by an order under this chapter, the Securities and 27 Exchange Commission, or a self-regulatory organization, unless the investment 28 adviser did not know and, in the exercise of reasonable care, could not have known of 29 the suspension, revocation, or bar. Upon request from the investment adviser and for 30 good cause, the administrator may by order, waive, in whole or in part, the application 31 of the prohibitions of this subsection to the investment adviser.
01 (d) An investment adviser may not employ or associate with an individual 02 required to be registered under this chapter as an investment adviser representative 03 who transacts business in this state on behalf of the investment adviser unless the 04 individual is registered under AS 45.56.440(a) or is exempt from registration under 05 AS 45.56.440(b). 06 Sec. 45.56.440. Investment adviser representative registration requirement 07 and exemptions. (a) An individual may not transact business in this state as an 08 investment adviser representative unless the individual is registered under this chapter 09 as an investment adviser representative or is exempt from registration as an investment 10 adviser representative under (b) of this section. 11 (b) The following individuals are exempt from the registration requirement of 12 (a) of this section: 13 (1) an individual who is employed by or associated with an investment 14 adviser that is exempt from registration under AS 45.56.435(b) or a federal covered 15 investment adviser that is excluded from the notice filing requirements of 16 AS 45.56.445; and 17 (2) any other individual exempted by a regulation adopted or order 18 issued under this chapter. 19 (c) The registration of an investment adviser representative is not effective 20 while the investment adviser representative is not employed by or associated with an 21 investment adviser registered under this chapter or a federal covered investment 22 adviser that has made or is required to make a notice filing under AS 45.56.445. 23 (d) An individual may transact business as an investment adviser 24 representative for more than one investment adviser or federal covered investment 25 adviser unless a regulation adopted or order issued under this chapter prohibits or 26 limits an individual from acting as an investment adviser representative for more than 27 one investment adviser or federal covered investment adviser. 28 (e) An individual acting as an investment adviser representative may not, 29 directly or indirectly, conduct business in this state on behalf of an investment adviser 30 or a federal covered investment adviser if the registration of the individual as an 31 investment adviser representative is suspended or revoked or the individual is barred
01 from employment or association with an investment adviser or a federal covered 02 investment adviser by an order under this chapter, the Securities and Exchange 03 Commission, or a self-regulatory organization. Upon request from a federal covered 04 investment adviser and for good cause, the administrator may by order, waive, in 05 whole or in part, the application of the requirements of this subsection to the federal 06 covered investment adviser. 07 (f) An investment adviser registered under this chapter, a federal covered 08 investment adviser that has filed a notice under AS 45.56.445, or a broker-dealer 09 registered under this chapter is not required to employ or associate with an individual 10 as an investment adviser representative if the only compensation paid to the individual 11 for a referral of investment advisory clients is paid to an investment adviser registered 12 under this chapter, a federal covered investment adviser who has filed a notice under 13 AS 45.56.445, or a broker-dealer registered under this chapter with which the 14 individual is employed or associated as an investment adviser representative. 15 Sec. 45.56.445. Federal covered investment adviser notice filing 16 requirement. (a) Except with respect to a federal covered investment adviser 17 described in (b) of this section, a federal covered investment adviser may not transact 18 business in this state as a federal covered investment adviser unless the federal 19 covered investment adviser complies with (c) of this section. 20 (b) The following federal covered investment advisers are not required to 21 comply with (c) of this section: 22 (1) a federal covered investment adviser without a place of business in 23 this state if the only clients of the federal covered investment adviser in this state are 24 (A) federal covered investment advisers, investment advisers 25 registered under this chapter, and broker-dealers registered under this chapter; 26 (B) institutional investors; 27 (C) bona fide preexisting clients whose principal places of 28 residence are not in this state; or 29 (D) other clients specified by a regulation adopted or order 30 issued under this chapter; 31 (2) a federal covered investment adviser without a place of business in
01 this state if the person has had, during the preceding 12 months, not more than five 02 clients that are resident in this state in addition to those specified under (1) of this 03 subsection; and 04 (3) any other person excluded by a regulation adopted or order issued 05 under this chapter. 06 (c) A person acting as a federal covered investment adviser not excluded 07 under (b) of this section shall file a notice, a consent to service of process complying 08 with AS 45.56.630, and the records that have been filed with the Securities and 09 Exchange Commission under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 10 1940) as required by a regulation adopted or order issued under this chapter and shall 11 pay the fees specified by regulation adopted under AS 45.56.470. 12 (d) The notice under (c) of this section becomes effective upon filing. 13 Sec. 45.56.450. Registration by broker-dealer, agent, investment adviser, 14 and investment adviser representative. (a) A person shall register as a broker-dealer, 15 agent, investment adviser, or investment adviser representative by filing an application 16 and a consent to service of process complying with AS 45.56.630 and by paying the 17 fee specified in AS 45.56.470 and any reasonable fees charged by the designee of the 18 administrator for processing the filing. The application must contain 19 (1) the information or record required for the filing of a uniform 20 application; and 21 (2) upon request by the administrator, any other financial or other 22 information or record that the administrator determines is appropriate. 23 (b) If the information or record contained in an application filed under (a) of 24 this section is or becomes inaccurate or incomplete in a material respect, the registrant 25 shall promptly file a correcting amendment. 26 (c) If an order is not in effect, and a proceeding is not pending under 27 AS 45.56.480, and the administrator has not initiated an investigation, registration 28 becomes effective at noon on the 45th day after a completed application is filed, unless 29 the registration is denied. A regulation adopted or order issued under this chapter may 30 set an earlier effective date or may defer the effective date until noon on the 45th day 31 after the filing of any amendment completing the application.
01 (d) A registration is effective until midnight on December 31 of the year for 02 which the application for registration is filed. Unless an order is in effect under 03 AS 45.56.480, a registration may be automatically renewed each year by filing the 04 records required by a regulation adopted or order issued under this chapter, by paying 05 the fee specified in AS 45.56.470, and by paying costs charged by the designee of the 06 administrator for processing the filings. 07 (e) A regulation adopted or order issued under this chapter may impose other 08 conditions, not inconsistent with 15 U.S.C. 77b, 77c, 77e, 77f, 77r, 77z-3, 77ddd, 78b 09 - 78d, 78g, 78h, 78n, 78o, 78q, 78bb, 78ee, 78kk, 78mm, 80a-2, 80a-3, 80a-6, 80a-12, 10 80a-24, 80a-26, 80a-27, 80a-29, 80a-30, 80a-34, 80a-51, 80a-54, 80a-60, 80a-63, 80b- 11 2, 80b-3a, 80b-5, 80b-10, 80b-18a, and 80b-20, and 29 U.S.C. 1002 (National 12 Securities Markets Improvement Act of 1996). An order issued under this chapter may 13 waive, in whole or in part, specific requirements in connection with registration that 14 are in the public interest and for the protection of investors. 15 Sec. 45.56.455. Succession and change in registration of broker-dealer or 16 investment adviser. (a) A broker-dealer or investment adviser may succeed to the 17 current registration of another broker-dealer or investment adviser or a notice filing of 18 a federal covered investment adviser, and a federal covered investment adviser may 19 succeed to the current registration of an investment adviser or notice filing of another 20 federal covered investment adviser, by filing as a successor an application for 21 registration under AS 45.56.405 or 45.56.435 or a notice under AS 45.56.445 for the 22 unexpired portion of the current registration or notice filing. 23 (b) A broker-dealer or investment adviser that changes its form of 24 organization or state of incorporation or organization may continue its registration by 25 filing an amendment to its registration if the change does not involve a material 26 change in its financial condition or management. The amendment becomes effective 27 when filed or on a date designated by the registrant in its filing. The new organization 28 is a successor to the original registrant for the purposes of this chapter. If there is a 29 material change in financial condition or management, the broker-dealer or investment 30 adviser shall file a new application for registration. A predecessor registered under this 31 chapter shall stop conducting its securities business other than winding down
01 transactions and shall file for withdrawal of broker-dealer or investment adviser 02 registration within 45 days after filing its amendment to effect succession. 03 (c) A broker-dealer or investment adviser that changes its name may continue 04 its registration by filing an amendment to its registration. The amendment becomes 05 effective when filed or on a date designated by the registrant. 06 (d) A change of control of a broker-dealer or investment adviser may be made 07 in accordance with a regulation adopted or order issued under this chapter. 08 Sec. 45.56.460. Termination of employment or association of agent and 09 investment adviser representative and transfer of employment or association. (a) 10 If an agent registered under this chapter terminates employment by or association with 11 a broker-dealer or issuer, or if an investment adviser representative registered under 12 this chapter terminates employment by or association with an investment adviser or 13 federal covered investment adviser, or if either registrant terminates activities that 14 require registration as an agent or investment adviser representative, the broker-dealer, 15 issuer, investment adviser, or federal covered investment adviser shall promptly file a 16 notice of termination. The registrant may file the notice of termination if the registrant 17 learns that the broker-dealer, issuer, investment adviser, or federal covered investment 18 adviser has not filed the notice. 19 (b) If an agent registered under this chapter terminates employment by or 20 association with a broker-dealer registered under this chapter and begins employment 21 by or association with another broker-dealer registered under this chapter, or if an 22 investment adviser representative registered under this chapter terminates employment 23 by or association with an investment adviser registered under this chapter or a federal 24 covered investment adviser that has filed a notice under AS 45.56.445 and begins 25 employment by or association with another investment adviser registered under this 26 chapter or a federal covered investment adviser that has filed a notice under 27 AS 45.56.445, then, within 30 days after the termination, upon the filing by or on 28 behalf of the registrant of an application for registration that complies with the 29 requirement of AS 45.56.450(a) and payment of the filing fee required under 30 AS 45.56.470, the registration of the agent or investment adviser representative is 31 (1) immediately effective as of the date of the completed filing, if the
01 agent's record or successor record in the Central Registration Depository operated by 02 the Financial Industry Regulatory Authority or the investment adviser representative's 03 record or successor record in the Investment Adviser Registration Depository operated 04 by the Financial Industry Regulatory Authority does not contain a new or amended 05 disciplinary disclosure within the previous 12 months; or 06 (2) temporarily effective as of the date of the completed filing, if the 07 agent's record or successor record in the Central Registration Depository operated by 08 the Financial Industry Regulatory Authority or the investment adviser representative's 09 record or successor record in the Investment Adviser Registration Depository operated 10 by the Financial Industry Regulatory Authority contains a new or amended 11 disciplinary disclosure within the preceding 12 months. 12 (c) The administrator may withdraw a temporary registration if there are or 13 were grounds for discipline as specified in AS 45.56.480 and the administrator does so 14 within 30 days after the filing of the application. If the administrator does not 15 withdraw the temporary registration within the 30-day period, registration becomes 16 automatically effective on the 31st day after filing. 17 (d) The administrator may prevent the effectiveness of a transfer of an agent 18 or investment adviser representative under (b)(1) or (2) of this section based on the 19 public interest and the protection of investors. 20 (e) If the administrator determines that a registrant or applicant for registration 21 is no longer in existence, has ceased to act as a broker-dealer, agent, investment 22 adviser, or investment adviser representative, is the subject of an adjudication of 23 incapacity, is subject to the control of a committee, conservator, or guardian, or cannot 24 reasonably be located, a regulation adopted or order issued under this chapter may 25 require that the registration be cancelled or terminated or the application be denied. 26 The administrator may reinstate a cancelled or terminated registration, with or without 27 hearing, and may make the registration retroactive. 28 Sec. 45.56.465. Withdrawal of registration of broker-dealer, agent, 29 investment adviser, and investment adviser representative. Withdrawal of 30 registration by a broker-dealer, agent, investment adviser, or investment adviser 31 representative becomes effective 60 days after the filing of the application to withdraw
01 or within any shorter period as provided by a regulation adopted or order issued under 02 this chapter unless a revocation or suspension proceeding is pending when the 03 application is filed. If a proceeding is pending, withdrawal becomes effective when 04 and upon the conditions required by a regulation adopted or order issued under this 05 chapter. The administrator may institute a revocation or suspension proceeding under 06 AS 45.56.480 within one year after the withdrawal became effective automatically and 07 issue a revocation or suspension order as of the last date on which registration was 08 effective if a proceeding is not pending. 09 Sec. 45.56.470. Filing fees. (a) The administrator shall establish fees by 10 regulation for 11 (1) an initial filing of an application as a broker-dealer and renewal of 12 an application by a broker-dealer for registration; 13 (2) an application for registration as an agent and renewal of 14 registration as an agent; 15 (3) an application for registration as an investment adviser and renewal 16 of registration as an investment adviser; 17 (4) an application for registration as an investment adviser 18 representative, a renewal of registration as an investment adviser representative, and a 19 change of registration as an investment adviser representative; and 20 (5) an initial fee and annual notice fee for a federal covered investment 21 adviser required to file a notice under AS 45.56.445. 22 (b) A person required to pay a filing or notice fee under this section may 23 transmit the fee through or to a designee as provided by a regulation adopted or order 24 issued under this chapter. 25 Sec. 45.56.475. Post registration requirements. (a) Subject to 15 U.S.C. 26 78o(i) or 80b-18a, a regulation adopted or order issued under this chapter may 27 establish minimum financial requirements for broker-dealers registered or required to 28 be registered under this chapter and investment advisers registered or required to be 29 registered under this chapter. 30 (b) Subject to 15 U.S.C. 78o(i) or 80b-18a, a broker-dealer registered or 31 required to be registered under this chapter and an investment adviser registered or
01 required to be registered under this chapter shall file the financial reports required by a 02 regulation adopted or order issued under this chapter. If the information contained in a 03 record filed under this subsection is or becomes inaccurate or incomplete in a material 04 respect, the registrant shall promptly file a correcting amendment. 05 (c) Subject to 15 U.S.C. 78o(i) or 80b-18a, 06 (1) a broker-dealer registered or required to be registered under this 07 chapter and an investment adviser registered or required to be registered under this 08 chapter shall make and maintain the accounts, correspondence, memoranda, papers, 09 books, and other records required by a regulation adopted or order issued under this 10 chapter; 11 (2) broker-dealer records required to be maintained under (1) of this 12 subsection may be maintained in any form of data storage acceptable under 15 U.S.C. 13 78q(a) if they are readily accessible to the administrator; and 14 (3) investment adviser records required to be maintained under (1) of 15 this subsection may be maintained in any form of data storage required by a regulation 16 adopted or order issued under this chapter. 17 (d) The records of a broker-dealer registered or required to be registered under 18 this chapter and of an investment adviser registered or required to be registered under 19 this chapter are subject to the reasonable periodic, special, or other audits or 20 inspections by a representative of the administrator, in or outside this state, that the 21 administrator considers necessary or appropriate in the public interest and for the 22 protection of investors. An audit or inspection may be made at any time and without 23 prior notice. The administrator may copy and remove for audit or inspection copies of 24 all records the administrator reasonably considers necessary or appropriate to conduct 25 the audit or inspection. The administrator may assess a reasonable charge for 26 conducting an audit or inspection under this subsection. 27 (e) Subject to 15 U.S.C. 78o(i) or 80b-18a, a regulation adopted or order 28 issued under this chapter may require a broker-dealer or investment adviser that has 29 custody of or discretionary authority over funds or securities of a customer or client to 30 obtain insurance or post a bond or other satisfactory form of security in an amount 31 established by a regulation adopted under this chapter. The administrator may
01 determine the requirements of the insurance, bond, or other satisfactory form of 02 security. Insurance or a bond or other satisfactory form of security may not be required 03 of a broker-dealer registered under this chapter whose net capital exceeds, or of an 04 investment adviser registered under this chapter whose minimum financial 05 requirements exceed, the amounts required by a regulation adopted or order issued 06 under this chapter. The insurance, bond, or other satisfactory form of security must 07 permit an action by a person to enforce any liability on the insurance, bond, or other 08 satisfactory form of security if instituted within the time limitations in 09 AS 45.56.660(j)(2). 10 (f) Subject to 15 U.S.C. 78o(i) or 80b-18a, an agent may not have custody of 11 funds or securities of a customer except under the supervision of a broker-dealer, and 12 an investment adviser representative may not have custody of funds or securities of a 13 client except under the supervision of an investment adviser or a federal covered 14 investment adviser. A regulation adopted or order issued under this chapter may 15 prohibit, limit, or impose conditions on a broker-dealer regarding custody of funds or 16 securities of a customer and on an investment adviser regarding custody of securities 17 or funds of a client. 18 (g) With respect to an investment adviser registered or required to be 19 registered under this chapter, a regulation adopted or order issued under this chapter 20 may require that information or other records be furnished or disseminated to clients 21 or prospective clients in this state as necessary or appropriate in the public interest and 22 for the protection of investors and advisory clients. 23 (h) A regulation adopted or order issued under this chapter may require an 24 individual registered under AS 45.56.430 or 45.56.440 to participate in a continuing 25 education program approved by the Securities and Exchange Commission and 26 administered by a self-regulatory organization, or, in the absence of a continuing 27 education program, a regulation adopted or order issued under this chapter may 28 require continuing education for an individual registered under AS 45.56.440. 29 Sec. 45.56.480. Denial, revocation, suspension, withdrawal, restriction, 30 condition, or limitation of registration. (a) If the administrator finds that the order is 31 in the public interest and (d) of this section authorizes the action, an order issued under
01 this chapter may deny an application, or may condition or limit registration of an 02 applicant to be a broker-dealer, agent, investment adviser, or investment adviser 03 representative, and, if the applicant is a broker-dealer or investment adviser, of a 04 partner, officer, director, or person having a similar status or performing similar 05 functions, or a person directly or indirectly in control, of the broker-dealer or 06 investment adviser. 07 (b) If the administrator finds that the order is in the public interest and (d) of 08 this section authorizes the action, an order issued under this chapter may revoke, 09 suspend, condition, or limit the registration of a registrant, and, if the registrant is a 10 broker-dealer or investment adviser, of a partner, officer, director, or person having a 11 similar status or performing similar functions, or a person directly or indirectly in 12 control, of the broker-dealer or investment adviser. However, the administrator may 13 not 14 (1) institute a revocation or suspension proceeding under this 15 subsection based on an order issued under a law of another state that is reported to the 16 administrator or a designee of the administrator more than three years after the date of 17 the order on which it is based; or 18 (2) under (d)(5)(A) and (B) of this section, issue an order based on an 19 order issued under the securities act of another state unless the other order was based 20 on conduct for which (d) of this section would authorize the action had the conduct 21 occurred in this state. 22 (c) If the administrator finds that the order is in the public interest and (d)(1) - 23 (6), (8) - (10), (12), or (13) of this section authorize the action, an order under this 24 chapter may censure, impose a bar, or impose a civil penalty of not more than 25 $100,000 for a single violation on a registrant and, if the registrant is a broker-dealer 26 or investment adviser, on a partner, officer, director, or person having a similar status 27 or performing similar functions, or on a person directly or indirectly in control of the 28 broker-dealer or investment adviser. 29 (d) A person may be disciplined under (a) - (c) of this section if the person 30 (1) has filed, within the previous 10 years under this chapter or former 31 AS 45.55, an application for registration in this state that, as of the effective date of
01 registration or as of any date after filing in the case of an order denying effectiveness, 02 was incomplete in any material respect or contained a statement that, in light of the 03 circumstances under which it was made, was false or misleading with respect to a 04 material fact; 05 (2) wilfully violated or wilfully failed to comply with this chapter or 06 former AS 45.55 or a regulation adopted or order issued under this chapter or former 07 AS 45.55 within the previous 10 years; 08 (3) has been convicted of a felony or within the previous 10 years has 09 been convicted of a misdemeanor involving a security, a commodity future or option 10 contract, or an aspect of a business involving securities, commodities, investments, 11 franchises, insurance, banking, or finance; 12 (4) is enjoined or restrained by a court of competent jurisdiction in an 13 action instituted by the administrator under this chapter or former AS 45.55, by a state, 14 by the Securities and Exchange Commission, or by the United States from engaging in 15 or continuing an act, practice, or course of business involving an aspect of a business 16 involving securities, commodities, investments, franchises, insurance, banking, or 17 finance; 18 (5) is the subject of an order issued after notice and opportunity for 19 hearing by 20 (A) the securities or other financial services regulator of a state 21 or the Securities and Exchange Commission or other federal agency denying, 22 revoking, barring, or suspending registration as a broker-dealer, agent, 23 investment adviser, federal covered investment adviser, or investment adviser 24 representative; 25 (B) the securities regulator of a state or the Securities and 26 Exchange Commission against a broker-dealer, agent, investment adviser, 27 investment adviser representative, or federal covered investment adviser; 28 (C) the Securities and Exchange Commission or a self- 29 regulatory organization suspending or expelling the registrant from 30 membership in the self-regulatory organization; 31 (D) a court adjudicating a United States Postal Service fraud
01 order; 02 (E) the insurance regulator of a state denying, suspending, or 03 revoking registration as an insurance agent; or 04 (F) a depository institution or financial services regulator 05 suspending or barring the person from the depository institution or other 06 financial services business; 07 (6) is the subject of an adjudication or determination, after notice and 08 opportunity for hearing, by the Securities and Exchange Commission, the Commodity 09 Futures Trading Commission, the Federal Trade Commission, a federal depository 10 institution regulator, or a depository institution, insurance, or other financial services 11 regulator of a state that the person wilfully violated 15 U.S.C. 77a - 77aa (Securities 12 Act of 1933), 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934), 15 U.S.C. 80b- 13 1 - 80b-21 (Investment Advisers Act of 1940), 15 U.S.C. 80a-1 - 80a-64 (Investment 14 Company Act of 1940), or 7 U.S.C. 1 - 27 (Commodity Exchange Act), the securities 15 or commodities law of a state, or a federal or state law under which a business 16 involving investments, franchises, insurance, banking, or finance is regulated; 17 (7) is insolvent, either because the person's liabilities exceed the 18 person's assets or because the person cannot meet the person's obligations as they 19 mature, but the administrator may not enter an order against an applicant or registrant 20 under this paragraph without a finding of insolvency as to the applicant or registrant; 21 (8) refuses to allow or otherwise impedes the administrator from 22 conducting an audit or inspection under AS 45.56.475(d) or refuses access to a 23 registrant's office to conduct an audit or inspection under AS 45.56.475(d); 24 (9) has failed to reasonably supervise an agent, investment adviser 25 representative, or other individual, if the agent, investment adviser representative, or 26 other individual was subject to the person's supervision and committed a violation of 27 this chapter or former AS 45.55 or a regulation adopted or order issued under this 28 chapter or former AS 45.55; 29 (10) has not paid the proper filing fee within 30 days after having been 30 notified by the administrator of a deficiency, but the administrator shall vacate an 31 order under this paragraph when the deficiency is corrected;
01 (11) after notice and opportunity for a hearing, has been found 02 (A) by a court of competent jurisdiction to have wilfully 03 violated the laws of a foreign jurisdiction under which the business of 04 securities, commodities, investment, franchises, insurance, banking, or finance 05 is regulated; 06 (B) to have been the subject of an order of a securities regulator 07 of a foreign jurisdiction denying, revoking, or suspending the right to engage 08 in the business of securities as a broker-dealer, agent, investment adviser, 09 investment adviser representative, or similar person; or 10 (C) to have been suspended or expelled from membership by or 11 participation in a securities exchange or securities association operating under 12 the securities laws of a foreign jurisdiction; 13 (12) is the subject of a cease and desist order issued by the Securities 14 and Exchange Commission or issued under the securities, commodities, investment, 15 franchise, banking, finance, or insurance laws of a state; 16 (13) has engaged in dishonest or unethical practices in the securities, 17 commodities, investment, franchise, banking, finance, or insurance business; 18 (14) is not qualified based on factors that may include training, 19 experience, and knowledge of the securities business; however, in the case of an 20 application by an agent for a broker-dealer that is a member of a self-regulatory 21 organization or by an individual for registration as an investment adviser 22 representative, a denial order may not be based on this paragraph if the individual has 23 successfully completed all examinations required by (e) of this section; the 24 administrator may require an applicant for registration under AS 45.56.430 or 25 45.56.440 who has not been registered in a state within the two years preceding the 26 filing of an application in this state to complete successfully an examination; or 27 (15) is a person whose license renewal is denied under AS 14.43.148 28 or whose license issuance or renewal is denied under AS 25.27.244. 29 (e) A regulation adopted or order issued under this chapter may require that an 30 examination, including an examination developed or approved by an organization of 31 securities regulators, be successfully completed by a class of individuals or all
01 individuals. An order issued under this chapter may waive, in whole or in part, an 02 examination as to an individual and a regulation adopted under this chapter may 03 waive, in whole or in part, an examination as to a class of individuals if the 04 administrator determines that the examination is not necessary or appropriate in the 05 public interest and for the protection of investors. 06 (f) The administrator may suspend or deny an application summarily; restrict, 07 condition, limit, or suspend a registration; or censure, bar, or impose a civil penalty on 08 a registrant before final determination of an administrative proceeding. Upon the 09 issuance of an order, the administrator shall promptly notify each person subject to the 10 order that the order has been issued, the reasons for the action, and that, within 15 days 11 after the receipt of a request in a record from the person, the matter will be scheduled 12 for a hearing. If a hearing is not requested and none is ordered by the administrator 13 within 30 days after the date of service of the order, the order becomes final by 14 operation of law. If a hearing is requested or ordered, the administrator, after notice of 15 and opportunity for hearing to each person subject to the order, may modify or vacate 16 the order or extend the order until final determination. 17 (g) An order may not be issued under this section, except under (f) of this 18 section, without appropriate notice to the applicant or registrant, and an opportunity 19 for hearing under AS 45.56.650(c). 20 (h) A person that controls, directly or indirectly, a person not in compliance 21 with this section may be disciplined by order of the administrator under (a) - (c) of this 22 section to the same extent as the noncomplying person, unless the controlling person 23 did not know, and in the exercise of reasonable care could not have known, of the 24 existence of conduct that is a ground for discipline under this section. 25 (i) The administrator may not institute a proceeding under (a) - (c) of this 26 section based solely on material facts actually known by the administrator unless an 27 investigation or the proceeding is instituted within one year after the administrator 28 actually acquires knowledge of the material facts. 29 Article 5. Fraud and Liabilities. 30 Sec. 45.56.505. General fraud. A person may not, in connection with the 31 offer, sale, or purchase of a security, directly or indirectly,
01 (1) employ a device, scheme, or artifice to defraud; 02 (2) make an untrue statement of a material fact or omit to state a 03 material fact necessary to make the statements made, in light of the circumstances 04 under which they were made, not misleading; or 05 (3) engage in an act, practice, or course of business that operates or 06 would operate as a fraud or deceit on another person. 07 Sec. 45.56.510. Prohibited conduct in providing investment advice. (a) A 08 person that advises others for compensation, either directly or indirectly or through 09 publications or writings, as to the value of securities or the advisability of investing in, 10 purchasing, or selling securities or that, for compensation and as part of a regular 11 business, issues or adopts analyses or reports relating to securities may not 12 (1) employ a device, scheme, or artifice to defraud another person; or 13 (2) engage in an act, practice, or course of business that operates or 14 would operate as a fraud or deceit on another person. 15 (b) A regulation adopted under this chapter may define an act, practice, or 16 course of business of an investment adviser or an investment adviser representative, 17 other than a supervised person of a federal covered investment adviser, as fraudulent, 18 deceptive, or manipulative and may prescribe means reasonably designed to prevent 19 investment advisers and investment adviser representatives, other than supervised 20 persons of a federal covered investment adviser, from engaging in acts, practices, and 21 courses of business defined as fraudulent, deceptive, or manipulative. 22 (c) A regulation adopted under this chapter may specify the contents of an 23 investment advisory contract entered into, extended, or renewed by an investment 24 adviser. 25 Sec. 45.56.520. Misleading filings. A person may not, in a document filed 26 with the administrator or in a proceeding under this chapter, make or cause to be made 27 an untrue statement of a material fact or omit to state a material fact necessary in order 28 to make the statements made, in the light of the circumstances under which they are 29 made, not misleading. 30 Sec. 45.56.530. Misrepresentations concerning registration or exemption. 31 The filing of an application for registration, a registration statement, a notice filing
01 under this chapter, the registration of a person, the notice filing by a person, or the 02 registration of a security under this chapter does not constitute a finding by the 03 administrator that a record filed under this chapter is true, complete, and not 04 misleading. The filing or registration or the availability of an exemption, exception, 05 preemption, or exclusion for a security or a transaction does not mean that the 06 administrator has passed on the merits or qualifications of, or recommended or given 07 approval to, a person, security, or transaction. A person may not make, or cause to be 08 made, to a purchaser, customer, client, or prospective customer or client a 09 representation inconsistent with this section. 10 Sec. 45.56.540. Evidentiary burden. (a) In a civil action or administrative 11 proceeding under this chapter, a person claiming an exemption, exception, 12 preemption, or exclusion has the burden to prove the applicability of the claim. 13 (b) In a criminal proceeding under this chapter, a person claiming an 14 exemption, exception, preemption, or exclusion has the burden of going forward with 15 evidence of the claim. 16 Sec. 45.56.550. Filing of sales and advertising literature. (a) Except as 17 otherwise provided in (b) of this section, a regulation adopted or order issued under 18 this chapter may require the filing of a prospectus, pamphlet, circular, form letter, 19 advertisement, sales literature, or other advertising record relating to a security or 20 investment advice, addressed or intended for distribution to prospective investors, 21 including clients or prospective clients of a person registered or required to be 22 registered as an investment adviser under this chapter. 23 (b) This section does not apply to sales and advertising literature specified in 24 (a) of this section that relates to a federal covered security, a federal covered 25 investment adviser, or a security or transaction exempted by AS 45.56.205, 45.56.210, 26 45.56.220, or 45.56.240, except as required under AS 45.56.205(7). 27 (c) The administrator may by regulation or order prohibit the publication, 28 circulation, or use of any advertising considered false or misleading. 29 Sec. 45.56.560. Qualified immunity. A broker-dealer, agent, investment 30 adviser, federal covered investment adviser, or investment adviser representative is not 31 liable to another broker-dealer, agent, investment adviser, federal covered investment
01 adviser, or investment adviser representative for defamation relating to a statement 02 that is contained in a record required by the administrator, a designee of the 03 administrator, the Securities and Exchange Commission, or a self-regulatory 04 organization, unless the person knew, or should have known at the time the statement 05 was made, that it was false in a material respect or the person acted in reckless 06 disregard of the statement's truth or falsity. 07 Article 6. Administration and Judicial Review. 08 Sec. 45.56.605. Administration. (a) The department shall administer this 09 chapter. 10 (b) The administrator or an officer, employee, or designee of the administrator 11 may not use for personal benefit or the benefit of others records or other information 12 obtained by or filed with the administrator that is not public under AS 45.56.615(b). 13 This chapter does not authorize the administrator or an officer, employee, or designee 14 of the administrator to disclose the record or information, except in accordance with 15 AS 45.56.615(c), 45.56.620, or 45.56.645. 16 (c) This chapter does not create or diminish a privilege or exemption that 17 exists at common law, by statute or regulation, or otherwise. 18 (d) The administrator may develop and implement investor education 19 initiatives to inform the public about investing in securities, with particular emphasis 20 on the prevention and detection of securities fraud. In developing and implementing 21 these initiatives, the administrator may collaborate with public and nonprofit 22 organizations with an interest in investor education. The administrator may accept a 23 grant or donation from a person that is not affiliated with the securities industry or 24 from a nonprofit organization, regardless of whether the organization is affiliated with 25 the securities industry, to develop and implement investor education initiatives. This 26 subsection does not authorize the administrator to require participation or monetary 27 contributions of a registrant in an investor education program. 28 Sec. 45.56.610. Administrative files and opinions. (a) The administrator shall 29 maintain, or designate a person to maintain, a register of applications for registration 30 of securities; registration statements; notice filings; applications for registration of 31 broker-dealers, agents, investment advisors, and investment adviser representatives;
01 notice filings by federal covered investment advisors that are or have been effective 02 under this chapter or former AS 45.55; notices of claims of exemption from 03 registration or notice filing requirements contained in a record; orders issued under 04 this chapter or former AS 45.55; and interpretative opinions or no-action 05 determinations issued under this chapter. The register must be kept according to the 06 existing retention schedule mandated by the department. 07 (b) The administrator shall make all regulations, forms, interpretative 08 opinions, and orders available to the public. 09 (c) The administrator shall furnish a copy of a record that is a public record or 10 a certification that the public record does not exist to a person upon request. A copy of 11 the record certified or a certificate by the administrator of a record's nonexistence is 12 prima facie evidence of a record or its nonexistence. 13 Sec. 45.56.615. Public records; confidentiality. (a) Except as otherwise 14 provided in (b) of this section, records obtained by the administrator or filed under this 15 chapter, including a record contained in or filed with a registration statement, 16 application, notice filing, or report are public records and are available for public 17 examination under AS 40.25.100 - 40.25.295 (Alaska Public Records Act). 18 (b) The following records are not public records under AS 40.25.100 - 19 40.25.295 (Alaska Public Records Act) and are not available for public examination 20 under (a) of this section: 21 (1) a record obtained by the administrator in connection with an audit, 22 examination or inspection under AS 45.56.475(d) or an investigation under 23 AS 45.56.645; 24 (2) a part of a record filed in connection with a registration statement 25 under AS 45.56.105 and 45.56.305 - 45.56.320 or a record under AS 45.56.475(d) that 26 contains trade secrets or confidential information if the person filing the registration 27 statement or report has asserted a claim of confidentiality or privilege that is 28 authorized by law; 29 (3) a record that is not required to be provided to the administrator or 30 filed under this chapter and is provided to the administrator only on the condition that 31 the record may not be subject to public examination or disclosure;
01 (4) a nonpublic record received from a person specified in 02 AS 45.56.620(a); and 03 (5) a social security number, residential address unless used as a 04 business address, and residential telephone number unless used as a business 05 telephone number, contained in a record that is filed. 06 (c) If disclosure is for the purpose of a civil, administrative, or criminal 07 investigation, action, or proceeding or to a person specified in AS 45.56.620(a), the 08 administrator may disclose a record obtained in connection with an audit or inspection 09 under AS 45.56.475(d) or a record obtained in connection with an investigation under 10 AS 45.56.645. 11 Sec. 45.56.620. Uniformity and cooperation with other agencies. (a) The 12 administrator may cooperate, coordinate, consult, and, subject to AS 45.56.615, share 13 records and information with the securities regulator of another state, Canada, a 14 Canadian province or territory, a foreign jurisdiction, the Securities and Exchange 15 Commission, the United States Department of Justice, the Commodity Futures 16 Trading Commission, the Federal Trade Commission, the Securities Investor 17 Protection Corporation, a self-regulatory organization, a national or international 18 organization of securities regulators, a federal or state banking and insurance 19 regulator, and a governmental law enforcement agency to bring about greater 20 uniformity in securities matters among the federal government, self-regulatory 21 organizations, states, and foreign governments. 22 (b) In cooperating, coordinating, consulting, and sharing records and 23 information under this section and in acting by regulation, order, or waiver under this 24 chapter, the administrator may take into consideration in carrying out the public 25 interest the following general policies: 26 (1) maximizing effectiveness of regulation for the protection of 27 investors; 28 (2) maximizing uniformity in federal and state regulatory standards; 29 and 30 (3) minimizing burdens on the business of capital formation, without 31 adversely affecting essentials of investor protection.
01 (c) The cooperation, coordination, consultation, and sharing of records and 02 information authorized by this section includes 03 (1) establishing or employing one or more designees as a central 04 depository for registration and notice filings under this chapter and for records 05 required or allowed to be maintained under this chapter; 06 (2) developing and maintaining uniform forms; 07 (3) conducting a joint examination or investigation; 08 (4) holding a joint administrative hearing; 09 (5) instituting and prosecuting a joint civil or administrative 10 proceeding; 11 (6) sharing and exchanging personnel; 12 (7) coordinating registrations under AS 45.56.105 and 45.56.405 - 13 45.56.440 and exemptions under AS 45.56.240; 14 (8) sharing and exchanging records, subject to AS 45.56.615; 15 (9) formulating regulations, statements of policy, guidelines, forms, 16 and interpretative opinions and releases; 17 (10) formulating common systems and procedures; 18 (11) notifying the public of proposed regulations, forms, statements of 19 policy, and guidelines; 20 (12) attending conferences and other meetings among securities 21 regulators, that may include representatives of governmental and private sector 22 organizations involved in capital formation, considered necessary or appropriate to 23 promote or achieve uniformity; and 24 (13) developing and maintaining a uniform exemption from 25 registration for small issuers and taking other steps to reduce the burden of raising 26 investment capital by small businesses. 27 Sec. 45.56.625. Securities investor education and training fund. The 28 securities investor education and training fund is created as a special fund in the 29 general fund to provide funds for the purposes specified in 45.56.605(d). The 30 legislature may appropriate 33 percent of the money received by this state from civil 31 penalties under this chapter into the fund for securities investor education and training.
01 Nothing in this section exempts money deposited into the fund from the requirements 02 of AS 37.07 (Executive Budget Act) or dedicates money for a specific purpose. 03 Sec. 45.56.630. Service of process. (a) A consent to service of process 04 complying with this section required by this chapter shall be signed and filed in the 05 form required by a regulation adopted or order issued under this chapter. A consent 06 appointing the administrator the person's agent for service of process in a noncriminal 07 action or proceeding against the person or the person's successor or personal 08 representative under this chapter or a regulation adopted or order issued under this 09 chapter after the consent is filed has the same force and validity as if the service were 10 made personally on the person filing the consent. A person that has filed a consent 11 under this subsection in connection with a previous application for registration or 12 notice filing need not file an additional consent. 13 (b) If a person, including a nonresident of this state, engages in an act, 14 practice, or course of business prohibited or made actionable by this chapter or a 15 regulation adopted or order issued under this chapter and the person has not filed a 16 consent to service of process under (a) of this section, the act, practice, or course of 17 business constitutes the appointment of the administrator as the person's agent for 18 service of process in a noncriminal action or proceeding against the person or the 19 person's successor or personal representative. 20 (c) Service under (a) or (b) of this section may be made by providing a copy of 21 the process to the office of the administrator, but the service is not effective unless 22 (1) the plaintiff, which may be the administrator, promptly sends 23 notice of the service and a copy of the process, return receipt requested, to the 24 defendant or respondent at the address set out in the consent to service of process or, if 25 a consent to service of process has not been filed, at the last known address, or takes 26 other reasonable steps to give notice; and 27 (2) the plaintiff files an affidavit of compliance with this subsection in 28 the action or proceeding on or before the return day of the process, if any, or within 29 the time that the court, or the administrator in a proceeding before the administrator, 30 allows. 31 (d) Service under (c) of this section may be used in a proceeding before the
01 administrator or by the administrator in a civil action in which the administrator is the 02 moving party. 03 (e) If process is served under (c) of this section, the court, or the administrator 04 in a proceeding before the administrator, shall order continuances as are necessary or 05 appropriate to afford the defendant or respondent reasonable opportunity to defend. 06 Sec. 45.56.635. Applicability of the chapter. (a) Unless the persons are 07 exempt elsewhere in this chapter, this chapter applies to persons who buy or offer to 08 buy when an offer to 09 (1) buy is made in this state; or 10 (2) sell is made and accepted in this state. 11 (b) Unless the person is exempt elsewhere in this chapter, this chapter applies 12 to a person who sells or offers to sell when an offer to 13 (1) sell is made in this state; or 14 (2) buy is made and accepted in this state. 15 (c) For the purpose of this section, an offer to sell or to buy is made in this 16 state, whether or not either party is then present in this state, when the offer 17 (1) originates from this state; 18 (2) is directed by the offeror to this state and received at the place to 19 which it is directed or at a post office in this state in the case of a mailed offer; 20 (3) is for an interest or participation in an oil, gas, or mining right, title, 21 or lease on land in this state, including submerged land, regardless of where the offer 22 is made; 23 (4) is for an interest or participation in payments out of production 24 under an oil, gas, or mining right, title, or lease on land in this state, including 25 submerged land, regardless of where the offer is made; 26 (5) is for an interest or participation in real property located in this 27 state, or in a corporation, a partnership, a limited liability company, a limited 28 partnership, a limited liability partnership, an association, or a joint-stock company; 29 jurisdiction under this paragraph may be exercised only when the exercise is 30 consistent with the constitution of this state or of the United States. 31 (d) For the purpose of this section, an offer to buy or to sell is accepted in this
01 state when acceptance is communicated to the offeror in this state and has not 02 previously been communicated to the offeror, orally or in writing, outside this state. 03 Acceptance is communicated to the offeror in this state, whether or not either party is 04 then present in this state, when the offeree directs the acceptance to the offeror in this 05 state reasonably believing the offeror to be in this state and the acceptance is received 06 at the place to which it is directed or, in the case of a mailed acceptance, at a post 07 office in this state. 08 (e) This chapter applies to investment advisers, federal covered advisers, and 09 investment adviser representatives when any act instrumental in effecting prohibited 10 conduct is done in this state, regardless of whether either party is then present in this 11 state. 12 Sec. 45.56.640. Regulations, forms, orders, interpretative opinions, and 13 hearings. (a) The administrator may 14 (1) issue forms and orders; after notice and comment, adopt and amend 15 regulations necessary or appropriate to carry out this chapter; and repeal regulations, 16 including regulations and forms governing registration statements, applications, notice 17 filings, reports, and other records; 18 (2) by regulation, define terms, whether or not used in this chapter, but 19 those definitions may not be inconsistent with this chapter; and 20 (3) by regulation, classify securities, persons, and transactions and 21 adopt different requirements for different classes. 22 (b) Under this chapter, a regulation or form may not be adopted or amended, 23 or an order issued or amended, unless the administrator finds that the regulation, form, 24 order, or amendment is necessary or appropriate in the public interest or for the 25 protection of investors and is consistent with the purposes intended by this chapter. In 26 adopting, amending, and repealing regulations and forms, AS 45.56.620 applies to 27 achieve uniformity among the states and coordination with federal laws in the form 28 and content of registration statements, applications, reports, and other records, 29 including the adoption of uniform rules, forms, and procedures. 30 (c) Subject to 15 U.S.C. 78o(i) and 80b-18a, the administrator may require 31 that a financial statement filed under this chapter be prepared in accordance with
01 generally accepted accounting principles in the United States and comply with other 02 requirements specified by regulation adopted or order issued under this chapter. A 03 regulation adopted or order issued under this chapter may establish 04 (1) subject to 15 U.S.C. 78o(i) and 80b-18a, the form and content of 05 financial statements required under this chapter; 06 (2) whether unconsolidated financial statements must be filed; and 07 (3) whether required financial statements must be audited by an 08 independent certified public accountant. 09 (d) The administrator may provide interpretative opinions or issue 10 determinations that the administrator will not institute a proceeding or an action under 11 this chapter against a specified person for engaging in a specified act, practice, or 12 course of business if the determination is consistent with this chapter. A regulation 13 adopted or order issued under this chapter may establish a reasonable charge for 14 interpretative opinions or determinations that the administrator will not institute an 15 action or a proceeding under this chapter. 16 (e) A hearing in an administrative proceeding under this chapter shall be 17 conducted in public unless the administrative law judge or the administrator for good 18 cause consistent with this chapter determines that the hearing may not be conducted in 19 public. 20 (f) AS 44.62 (Administrative Procedure Act) applies to all regulations adopted 21 or authorized under this chapter. 22 Sec. 45.56.645. Investigations and subpoenas. (a) The administrator may 23 (1) conduct public or private investigations in or outside of this state 24 that the administrator considers necessary or appropriate to determine whether a 25 person has violated, is violating, or is about to violate this chapter or a regulation 26 adopted or order issued under this chapter, or to aid in the enforcement of this chapter 27 or in the adoption of regulations and forms under this chapter; 28 (2) require or permit a person to testify, file a statement, or produce a 29 record, under oath or otherwise as the administrator determines, as to all the facts and 30 circumstances concerning a matter to be investigated or about which an action or 31 proceeding is to be instituted; and
01 (3) publish a record concerning an action, proceeding, or an 02 investigation under, or a violation of, this chapter or a regulation adopted or order 03 issued under this chapter if the administrator determines it is necessary or appropriate 04 in the public interest and for the protection of investors. 05 (b) For the purpose of an investigation under this chapter, the administrator or 06 the designated officer of the administrator may administer oaths and affirmations, 07 subpoena witnesses, seek compulsion of attendance, take evidence, require the filing 08 of statements, and require the production of any records that the administrator 09 considers relevant or material to the investigation. 10 (c) If a person does not appear or refuses to testify, file a statement, produce 11 records, or otherwise obey a subpoena as required by the administrator under this 12 chapter, the administrator may refer the matter to the attorney general, who may bring 13 an action in the superior court or a court of another state to enforce compliance. The 14 court may 15 (1) hold the person in contempt; 16 (2) order the person to appear before the administrator; 17 (3) order the person to testify about the matter under investigation or in 18 question; 19 (4) order the production of records; 20 (5) grant injunctive relief, including restricting or prohibiting the offer 21 or sale of securities or the providing of investment advice; 22 (6) impose a civil penalty of not more than $100,000 for a single 23 violation; and 24 (7) grant any other necessary or appropriate relief. 25 (d) This section does not preclude a person from applying to the superior court 26 or a court of another state for relief from a request to appear, testify, file a statement, 27 produce records, or obey a subpoena. 28 (e) A person is not excused from attending, testifying, filing a statement, 29 producing a record or other evidence, or obeying a subpoena of the administrator 30 under this chapter or in an action or proceeding instituted by the administrator under 31 this chapter on the ground that the required testimony, statement, record, or other
01 evidence, directly or indirectly, may tend to incriminate the individual or subject the 02 individual to a criminal fine, penalty, or forfeiture. If the person refuses to testify, file 03 a statement, or produce a record or other evidence based on the individual's privilege 04 against self-incrimination, the administrator may apply to the superior court to compel 05 the testimony, the filing of the statement, the production of the record, or the giving of 06 other evidence. The testimony, record, or other evidence compelled under an order of 07 the superior court may not be used, directly or indirectly, against the individual in a 08 criminal case, except in a prosecution for perjury, contempt, or otherwise failing to 09 comply with the order. 10 (f) At the request of the securities regulator of another state or a foreign 11 jurisdiction, the administrator may provide assistance if the requesting regulator states 12 that it is conducting an investigation to determine whether a person has violated, is 13 violating, or is about to violate a law or regulation of the other state or foreign 14 jurisdiction relating to securities matters that the requesting regulator administers or 15 enforces. The administrator may provide the assistance by using the authority to 16 investigate and the powers conferred by this section as the administrator determines is 17 necessary or appropriate. The assistance may be provided without regard to whether 18 the conduct described in the request would also constitute a violation of this chapter or 19 other law of this state if occurring in this state. In deciding whether to provide the 20 assistance, the administrator may consider whether the requesting regulator is 21 permitted and has agreed to provide assistance reciprocally within its state or foreign 22 jurisdiction to the administrator on securities matters when requested, whether 23 compliance with the request would violate or prejudice the public policy of this state, 24 and the availability of resources and employees of the administrator to carry out the 25 request for assistance. 26 Sec. 45.56.650. Administrative enforcement. (a) If the administrator 27 determines that a person has engaged, is engaging, or is about to engage in an act, 28 practice, or course of business constituting a violation of this chapter or a regulation 29 adopted or order issued under this chapter or that a person has materially aided, is 30 materially aiding, or is about to aid materially an act, practice, or course of business 31 constituting a violation of this chapter or a regulation adopted or order issued under
01 this chapter, the administrator may issue an order 02 (1) directing the person to cease and desist from engaging in the act, 03 practice, or course of business or to take other action necessary or appropriate to 04 comply with this chapter; 05 (2) denying, suspending, revoking, or conditioning the exemptions for 06 a broker-dealer under AS 45.56.405(b)(1)(D) or (F) or an investment adviser under 07 AS 45.56.435(b)(1)(C); or 08 (3) denying, suspending, conditioning, or limiting an exemption as 09 provided under AS 45.56.250. 10 (b) An order under (a) of this section is effective on the date of issuance. Upon 11 issuance of the order, the administrator shall promptly serve each person subject to the 12 order with a copy of the order and a notice that the order has been entered. The order 13 must include a statement of any civil penalty, restitution, or costs of investigation the 14 administrator will seek, a statement of the reasons for the order, and notice that, within 15 15 days after receipt of a request in a record from the person, the matter will be 16 scheduled for a hearing. If a person subject to the order does not request a hearing and 17 none is ordered by the administrator within 30 days after the date of service of the 18 order, the order, including the imposition of a civil penalty, the imposition of 19 restitution, or requirement for payment of the costs of investigation sought in a 20 statement in the order, becomes final as to that person by operation of law. If a hearing 21 is requested or ordered, the administrator, after notice of and opportunity for hearing 22 provided to each person subject to the order, may modify or vacate the order or extend 23 it until final determination. 24 (c) If a hearing is requested or ordered under (b) of this section, a hearing shall 25 be conducted by the office of administrative hearings (AS 44.64.010), and 26 AS 44.64.040 - 44.64.200 apply to and govern the hearing. 27 (d) In a final order under (b) of this section, the administrator may impose a 28 civil penalty of not more than $100,000 for a single violation, unless the violation of 29 this chapter is against an older person. In addition to a civil penalty imposed under this 30 subsection, a person or entity who engages in conduct prohibited under this chapter 31 against an older person may be liable for an additional civil penalty of treble statutory
01 damages. In determining whether to impose a supplemental civil penalty under this 02 subsection, the administrator shall consider, in addition to other appropriate factors, 03 the extent to which the following factors are present: 04 (1) whether the respondent knew that the respondent's conduct was 05 directed to an older person; 06 (2) whether the respondent's conduct caused an older person to suffer 07 (A) severe loss or encumbrance of a primary residence, 08 principal employment, or source of income; or 09 (B) substantial loss of property set aside for retirement or for 10 personal and family care and maintenance; or 11 (3) whether the respondent's conduct caused substantial loss of 12 payments received under a pension or retirement plan or a government benefits 13 program. 14 (e) In a final order under (b) of this section, the administrator may 15 (1) impose restitution to any person in interest for any money or 16 property, real or personal, that may have been acquired or transferred in violation of 17 this chapter; 18 (2) charge the actual cost of an investigation or proceeding for a 19 violation of this chapter or a regulation adopted or order issued under this chapter; and 20 (3) deny the violator of the use of any exemptions listed under this 21 chapter. 22 (f) The administrator may petition the superior court to enter a judgment 23 against a person who is a respondent in the order for the amount of the civil penalty 24 levied against the person. Subject to AS 44.62.570, the filing of the petition for a 25 judgment does not reopen the final order to further substantive review. A judgment 26 entered under this subsection may be executed on and levied under in the manner 27 provided in AS 09.35. 28 (g) If a person does not comply with an order under this section, the 29 administrator may petition a court of competent jurisdiction to enforce the order. The 30 court may not require the administrator to post a bond in an action or proceeding under 31 this section. If the court finds, after service and opportunity for hearing, that the person
01 was not in compliance with the order, the court may adjudge the person in civil 02 contempt of the order. The court may impose a further civil penalty against the person 03 for contempt in an amount not less than $5,000 but not greater than $100,000 for each 04 violation and may grant any other relief the court determines is just and proper in the 05 circumstances. 06 Sec. 45.56.655. Civil enforcement. (a) If the administrator believes that a 07 person has engaged, is engaging, or is about to engage in an act, practice, or course of 08 business constituting a violation of this chapter or a regulation adopted or order issued 09 under this chapter, or that a person has engaged, is engaging, or is about to engage in 10 an act, practice, or course of business that materially aids a violation of this chapter or 11 a regulation adopted or order issued under this chapter, the administrator may maintain 12 an action in the superior court to enjoin the act, practice, or course of business and to 13 enforce compliance with this chapter or a regulation adopted or order issued under this 14 chapter. 15 (b) In an action under this section and on a proper showing, the court may 16 (1) issue a permanent or temporary injunction, restraining order, or 17 declaratory judgment; 18 (2) order other appropriate or ancillary relief, which may include 19 (A) an asset freeze, accounting, writ of attachment, writ of 20 general or specific execution, and appointment of a receiver or conservator that 21 may be the administrator for the defendant or the defendant's assets; 22 (B) ordering the administrator to take charge and control of a 23 defendant's property, including investment accounts and accounts in a 24 depository institution, rents, and profits; to collect debts; and to acquire and 25 dispose of property; 26 (C) imposing a civil penalty of not more than $100,000 for a 27 single violation, unless the violation of this chapter is against an older person; 28 in determining whether to impose a supplemental civil penalty for a violation 29 of this chapter against an older person, the court shall consider, in addition to 30 other appropriate factors, the extent to which the following factors are present: 31 (i) whether the respondent knew that the respondent's
01 conduct was directed to an older person; 02 (ii) whether the respondent's conduct caused an older 03 person to suffer severe loss or encumbrance of a primary residence, 04 principal employment, or source of income; or substantial loss of 05 property set aside for retirement or for personal and family care and 06 maintenance; or 07 (iii) whether the respondent's conduct caused 08 substantial loss of payments received under a pension or retirement 09 plan or a government benefits program; 10 (D) imposing an order of rescission, or disgorgement directed 11 to a person that has engaged in an act, practice, or course of business 12 constituting a violation of this chapter or former AS 45.55 or a regulation 13 adopted or order issued under this chapter or former AS 45.55; 14 (E) imposing an order of restitution to any person in interest for 15 any money or property, real or personal, that may have been acquired or 16 transferred in violation of this chapter; and 17 (F) ordering the payment of prejudgment and post judgment 18 interest; or 19 (3) order other relief that the court considers appropriate. 20 (c) The administrator may not be required to post a bond in an action or 21 proceeding under this chapter. 22 (d) After an order issued by the court under (b) of this section becomes final 23 and all rights of appeal are exhausted, the administrator may petition the superior court 24 to enter a judgment against a person who is a respondent in the order for the amount of 25 the civil penalty levied against the person. Subject to AS 44.62.570, the filing of the 26 petition for a judgment does not reopen the final order to further substantive review. A 27 judgment entered under this subsection may be executed on and levied under in the 28 manner provided in AS 09.35. 29 Sec. 45.56.660. Civil liability. (a) Enforcement of civil liability under this 30 section is subject to P.L. 105-353 (Securities Litigation Uniform Standards Act of 31 1998).
01 (b) A person is liable to the purchaser if the person sells a security in violation 02 of AS 45.56.105, or by means of an untrue statement of a material fact or an omission 03 to state a material fact necessary to make the statement made, in light of the 04 circumstances under which it is made, not misleading, the purchaser not knowing the 05 untruth or omission and the seller not sustaining the burden of proof that the seller did 06 not know and, in the exercise of reasonable care, could not have known of the untruth 07 or omission. An action under this subsection is governed by the following: 08 (1) the purchaser may maintain an action to recover the consideration 09 paid for the security, less the amount of any income received on the security, and 10 interest at the legal rate of interest under AS 09.30.070, or eight percent a year, 11 whichever is greater, from the date of the purchase, costs, and attorney fees as 12 determined by the court, upon the tender of the security, or for actual damages as 13 provided in (3) of this subsection; 14 (2) the tender referred to in (1) of this subsection may be made any 15 time before entry of judgment; tender requires only notice in a record of ownership of 16 the security and willingness to exchange the security for the amount specified; a 17 purchaser that no longer owns the security may recover actual damages as provided in 18 (3) of this subsection; 19 (3) actual damages in an action arising under this subsection are the 20 amount that would be recoverable upon a tender less the value of the security when the 21 purchaser disposed of it, and interest at the legal rate of interest under AS 09.30.070, 22 or eight percent a year, whichever is greater, from the date of the purchase, costs, and 23 attorney fees as determined by the court. 24 (c) A person is liable to the seller if the person buys a security by means of an 25 untrue statement of a material fact or omission to state a material fact necessary to 26 make the statement made, in light of the circumstances under which it is made, not 27 misleading, the seller not knowing of the untruth or omission, and the purchaser not 28 sustaining the burden of proof that the purchaser did not know and, in the exercise of 29 reasonable care, could not have known of the untruth or omission. An action under 30 this subsection is governed by the following: 31 (1) the seller may maintain an action to recover the security and any
01 income received on the security, costs, and attorney fees as determined by the court, 02 upon the tender of the purchase price, or for actual damages as provided in (3) of this 03 subsection; 04 (2) the tender referred to in (1) of this subsection may be made any 05 time before entry of judgment; tender requires only notice in a record of the present 06 ability to pay the amount tendered and willingness to take delivery of the security for 07 the amount specified; if the purchaser no longer owns the security, the seller may 08 recover actual damages as provided in (3) of this subsection; 09 (3) actual damages in an action arising under this subsection are the 10 difference between the price at which the security was sold and the value the security 11 would have had at the time of the sale in the absence of the purchaser's conduct 12 causing liability, and interest at the legal rate of interest under AS 09.30.070, or eight 13 percent a year, whichever is greater, from the date of the sale of the security, costs, 14 and attorney fees as determined by the court. 15 (d) A person acting as a broker-dealer or agent that sells or buys a security in 16 violation of AS 45.56.405(a), 45.56.435(a), or 45.56.530 is liable to the customer. The 17 customer, if a purchaser, may maintain an action for recovery of actual damages as 18 specified in (b)(1) - (3) of this section or, if a seller, for a remedy as specified in (c)(1) 19 - (3) of this section. 20 (e) A person acting as an investment adviser or investment adviser 21 representative that provides investment advice for compensation in violation of 22 AS 45.56.435(a), 45.56.440(a), or 45.56.530 is liable to the client. The client may 23 maintain an action to recover the consideration paid for the advice, interest at the legal 24 rate of interest under AS 09.30.070, or eight percent a year, whichever is greater, from 25 the date of payment, costs, and attorney fees as determined by the court. 26 (f) A person that receives, directly or indirectly, any consideration for 27 providing investment advice to another person and that employs a device, scheme, or 28 artifice to defraud the other person or engages in an act, practice, or course of business 29 that operates or would operate as a fraud or deceit on the other person is liable to the 30 other person. An action under this subsection is governed by the following: 31 (1) the person defrauded may maintain an action to recover the
01 consideration paid for the advice and the amount of any actual damages caused by the 02 fraudulent conduct, interest at the legal rate of interest under AS 09.30.070, or eight 03 percent a year, whichever is greater, from the date of the fraudulent conduct, costs, 04 and reasonable attorney fees as determined by the court, less the amount of any 05 income received as a result of the fraudulent conduct; 06 (2) this subsection does not apply to a broker-dealer or its agents if the 07 investment advice provided is solely incidental to transacting business as a broker- 08 dealer and special compensation is not received for the investment advice. 09 (g) The following persons are liable jointly and severally with and to the same 10 extent as persons liable under (b) - (f) of this section: 11 (1) a person that directly or indirectly controls a person liable under (b) 12 - (f) of this section, unless the controlling person sustains the burden of proof that the 13 person did not know and, in the exercise of reasonable care, could not have known of 14 the existence of conduct because of which the liability is alleged to exist; 15 (2) an individual who is a managing partner, executive officer, or 16 director of a person liable under (b) - (f) of this section, including an individual having 17 a similar status or performing similar functions, unless the individual sustains the 18 burden of proof that the individual did not know and, in the exercise of reasonable 19 care, could not have known of the existence of conduct because of which the liability 20 is alleged to exist; 21 (3) an individual who is an employee of or associated with a person 22 liable under (b) - (f) of this section and who materially aids the conduct giving rise to 23 the liability, unless the individual sustains the burden of proof that the individual did 24 not know and, in the exercise of reasonable care, could not have known of the 25 existence of conduct because of which the liability is alleged to exist; and 26 (4) a person that is a broker-dealer, agent, investment adviser, or 27 investment adviser representative that materially aids the conduct giving rise to the 28 liability under (b) - (f) of this section, unless the person sustains the burden of proof 29 that the person did not know and, in the exercise of reasonable care, could not have 30 known of the existence of conduct because of which the liability is alleged to exist. 31 (h) A person liable under this section has a right of contribution as in cases of
01 contract against any other person liable under this section for the same conduct. 02 (i) A cause of action under this section survives the death of an individual who 03 might have been a plaintiff or defendant. 04 (j) A person may not obtain relief under (b) of this section 05 (1) for a violation of AS 45.56.105, or under (d) or (e) of this section, 06 unless the action is instituted within three years after the violation occurred; or 07 (2) other than for a violation of AS 45.56.105, or under (c) or (f) of this 08 section, unless the action is instituted within the earlier of two years after discovery of 09 the facts constituting the violation or five years after the violation. 10 (k) A person that has made, or has engaged in the performance of, a contract 11 in violation of this chapter or a regulation adopted or order issued under this chapter or 12 that has acquired a purported right under the contract with knowledge of conduct 13 because of which its making or performance was in violation of this chapter may not 14 base an action on the contract. 15 (l) A condition, stipulation, or provision binding a person purchasing or 16 selling a security or receiving investment advice to waive compliance with this chapter 17 or a regulation adopted or order issued under this chapter is void. 18 (m) The rights and remedies provided by this chapter are in addition to any 19 other rights or remedies that may exist, but this chapter does not create a cause of 20 action not specified in this section or AS 45.56.475(e). 21 Sec. 45.56.665. Rescission offers. (a) A purchaser, seller, or recipient of 22 investment advice may not maintain an action under AS 45.56.660 if 23 (1) the purchaser, seller, or recipient of investment advice receives, in 24 a record, before the action is instituted, 25 (A) an offer stating the respect in which liability under 26 AS 45.56.660 may have arisen and fairly advising the purchaser, seller, or 27 recipient of investment advice of that person's rights in connection with the 28 offer and any financial or other information necessary to correct all material 29 misrepresentations or omissions in the information that was required by this 30 chapter to be furnished to that person at the time of the purchase, sale, or 31 investment advice;
01 (B) if the basis for relief under this section may have been a 02 violation of AS 45.56.660(b), an offer to repurchase the security for cash, 03 payable on delivery of the security, equal to the consideration paid, and interest 04 at the legal rate of interest under AS 09.30.070, or eight percent a year, 05 whichever is greater, from the date of the purchase, less the amount of any 06 income received on the security, or, if the purchaser no longer owns the 07 security, an offer to pay the purchaser, upon acceptance of the offer, damages 08 in an amount that would be recoverable upon a tender, less the value of the 09 security when the purchaser disposed of it, and interest at the legal rate of 10 interest under AS 09.30.070, or eight percent a year, whichever is greater, from 11 the date of the purchase in cash equal to the damages computed in the manner 12 provided in this subparagraph; 13 (C) if the basis for relief under this section may have been a 14 violation of AS 45.56.660(c), an offer to tender the security, on payment by the 15 seller of an amount equal to the purchase price paid, less income received on 16 the security by the purchaser and interest at the legal rate of interest under 17 AS 09.30.070, or eight percent a year, whichever is greater, from the date of 18 the sale, or, if the purchaser no longer owns the security, an offer to pay the 19 seller, upon acceptance of the offer, in cash, damages in the amount of the 20 difference between the price at which the security was purchased and the value 21 the security would have had at the time of the purchase in the absence of the 22 purchaser's conduct that may have caused liability and interest at the legal rate 23 of interest in AS 09.30.070, or eight percent a year, whichever is greater, from 24 the date of the sale; 25 (D) if the basis for relief under this section may have been a 26 violation of AS 45.56.660(d); and if the customer is a purchaser, an offer to 27 pay as specified in (B) of this paragraph; or, if the customer is a seller, an offer 28 to tender or to pay as specified in (C) of this paragraph; 29 (E) if the basis for relief under this section may have been a 30 violation of AS 45.56.660(e), an offer to reimburse in cash the consideration 31 paid for the advice and interest at the legal rate of interest under AS 09.30.070,
01 or eight percent a year, whichever is greater, from the date of payment; or 02 (F) if the basis for relief under this section may have been a 03 violation of AS 45.56.660(f), an offer to reimburse in cash the consideration 04 paid for the advice, the amount of any actual damages that may have been 05 caused by the conduct, and interest at the legal rate of interest under 06 AS 09.30.070, or eight percent a year, whichever is greater, from the date of 07 the violation causing the loss; 08 (2) the offer under (1) of this subsection states that it must be accepted 09 by the purchaser, seller, or recipient of investment advice within 30 days after the date 10 of its receipt by the purchaser, seller, or recipient of investment advice or any shorter 11 period of not less than three days that the administrator, by order, specifies; 12 (3) the offeror has the present ability to pay the amount offered or to 13 tender the security under (1) of this subsection; 14 (4) the offer under (1) of this subsection is delivered to the purchaser, 15 seller, or recipient of investment advice or sent in a manner that ensures receipt by the 16 purchaser, seller, or recipient of investment advice; and 17 (5) the purchaser, seller, or recipient of investment advice that accepts 18 the offer under (1) of this subsection, in a record, within the period specified under (2) 19 of this subsection, is paid in accordance with the terms of the offer. 20 (b) The offer under this section shall be filed with the administrator 10 21 business days before the offering and conform in form and content with a regulation 22 adopted under this chapter. 23 Sec. 45.56.670. Criminal enforcement. (a) A person who knowingly violates 24 this chapter, a regulation adopted under this chapter, or an order issued under this 25 chapter, except AS 45.56.550 or the notice filing requirements of AS 45.56.330 or 26 45.56.445, is guilty of a class C felony punishable by imprisonment under 27 AS 12.55.125 or by a fine of not more than $100,000, or by both. A person convicted 28 of violating a regulation or order issued under this chapter may be fined, but may not 29 be imprisoned, if the person did not know of the regulation or order. 30 (b) A person who knowingly alters, destroys, shreds, mutilates, or conceals a 31 record, document, or other object, or attempts to do so, with the intent to alter or
01 impair the record, document, or object for use in an official proceeding under this 02 chapter, is guilty of a class C felony. A person convicted of violating this subsection is 03 punishable by imprisonment as provided in AS 12.55.125, by a fine of not more than 04 $500,000, or by both. 05 (c) The attorney general, with or without a reference from the administrator, 06 may institute criminal proceedings under this chapter. 07 (d) This chapter does not limit the power of this state to punish a person for 08 conduct that constitutes a crime under other laws of this state. 09 (e) In this section, "knowingly" has the meaning given in AS 11.81.900(a). 10 Sec. 45.56.675. Judicial review. (a) A person may obtain judicial review by 11 the superior court of a final order issued by the administrator under this chapter by 12 filing a notice of appeal in accordance with the applicable rules of court governing 13 appeals in civil matters. The notice of appeal shall be filed within 30 days after the 14 order becomes final under AS 44.64.060. 15 (b) A regulation adopted under this chapter is subject to judicial review under 16 AS 44.62.300. 17 Article 7. Miscellaneous and Additional General Provisions. 18 Sec. 45.56.710. Reimbursement of expenses incident to examination or 19 investigation. (a) The administrator may require an issuer, broker-dealer, agent, 20 investment adviser representative, federal covered adviser, or investment adviser to 21 reimburse the administrator for actual travel expenses and per diem incurred in 22 connection with an examination or investigation under this chapter. 23 (b) The administrator may by regulation or order adopt a schedule of charges 24 for annual examination and investigation of issuers, broker-dealers, agents, investment 25 adviser representatives, federal covered advisers, and investment advisers. 26 (c) If an issuer, broker-dealer, agent, investment adviser representative, federal 27 covered adviser, or investment adviser fails to pay the fees and expenses provided for 28 in this section, the fees and expenses shall be paid out of funds of the administrator in 29 the same manner as other disbursements made by the administrator. The amounts paid 30 from the funds of the administrator are a lien on all of the assets and property of the 31 issuer, broker-dealer, agent, investment adviser representative, federal covered
01 adviser, or investment adviser, and the amount may be recovered by the attorney 02 general on behalf of this state. 03 (d) Failure of the issuer, broker-dealer, agent, investment adviser 04 representative, federal covered adviser, or investment adviser to pay fees and expenses 05 under this section is a willful violation of this chapter, and the violation falls within 06 the provisions of AS 45.56.350, 45.56.440, and 45.56.615. 07 Sec. 45.56.720. Electronic records and signatures. This chapter modifies, 08 limits, and supersedes 15 U.S.C. 7001 - 7031 (Electronic Signatures in Global and 09 National Commerce Act), but does not modify, limit, or supersede 15 U.S.C. 7001(c) 10 or authorize electronic delivery of any of the notices described in 15 U.S.C. 7003(b). 11 This chapter authorizes the filing of records and signatures, when specified by 12 provisions of this chapter or by a regulation adopted or order issued under this chapter, 13 in a manner consistent with 15 U.S.C. 7004(a). 14 Sec. 45.56.730. References to federal statutes. In this chapter, a reference to 15 the following federal statutes, including a statute within a spanned reference, means 16 those statutes and the rules and regulations adopted under those statutes, as in effect on 17 the date of enactment of this chapter, or as later amended: 18 (1) 7 U.S.C. 1 - 27 (Commodity Exchange Act); 19 (2) 15 U.S.C. 77a - 77aa (Securities Act of 1933); 20 (3) 15 U.S.C. 77b, 77k, 77m, 77p, 77r, 77v, 77z-1 - 77z-3, 77aa, 21 77ccc, 77ddd, 77mmm, 77sss, 78a, 78c, 78d, 78g, 78n, 78o, 78o-4, 78o-5, 78s, 78t, 22 78u, 78u-4, 78z, 78bb, 78ee, 78kk, 78ll, 80a-2, 80a-3, 80a-12, 80a-18, 80a-29, 80a-30, 23 80b-3, and 80b-18a (Securities Litigation Uniform Standards Act of 1998); 24 (4) 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934); 25 (5) 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940); 26 (6) 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 1940); 27 (7) 15 U.S.C. 661 - 697g (Small Business Investment Act of 1958); 28 (8) 15 U.S.C. 7001 - 7031 (Electronic Signatures in Global and 29 National Commerce Act); 30 (9) 26 U.S.C. (Internal Revenue Code); 31 (10) 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security
01 Act of 1974); 02 (11) 42 U.S.C. 16451 - 16481 (Energy Policy Act of 2005). 03 Sec. 45.56.740. References to federal agencies. A reference in this chapter to 04 an agency or department of the United States is also a reference to a successor agency 05 or department. 06 Sec. 45.56.900. Definitions. In this chapter, unless the context otherwise 07 requires, 08 (1) "administrator" means the commissioner of commerce, community, 09 and economic development or a designee of the commissioner; 10 (2) "agent" means an individual, other than a broker-dealer, who 11 represents a broker-dealer in effecting or attempting to effect purchases or sales of 12 securities or represents an issuer in effecting or attempting to effect purchases or sales 13 of the issuer's securities; however, a partner, officer, or director of a broker-dealer or 14 issuer, or an individual having a similar status or performing similar functions is an 15 agent only if the individual otherwise comes within the term; "agent" does not include 16 an individual excluded by a regulation adopted or order issued under this chapter; 17 (3) "bank" means 18 (A) a banking institution organized under the laws of the 19 United States; 20 (B) a member bank of the Federal Reserve System; 21 (C) any other banking institution, whether incorporated or not, 22 doing business under the laws of a state or of the United States, a substantial 23 portion of the business of which consists of receiving deposits or exercising 24 fiduciary powers similar to those permitted to be exercised by national banks 25 under the authority of the United States Comptroller of the Currency under 12 26 U.S.C. 92a, that is supervised and examined by a state or federal agency 27 having supervision over banks, and that is not operated for the purpose of 28 evading this chapter; and 29 (D) a receiver, conservator, or other liquidating agent of any 30 institution or firm included in (A), (B), or (C) of this paragraph; 31 (4) "broker-dealer" means a person engaged in the business of
01 effecting transactions in securities for the accounts of others or for the person's own 02 account; the term does not include 03 (A) an agent; 04 (B) an issuer; 05 (C) a bank, trust company organized or chartered under the 06 laws of this state, or savings institution if its activities as a broker-dealer are 07 limited to those specified in 15 U.S.C. 78c(a)(4)(B)(i) - (vi), (viii) - (x), and 08 (xi) if limited to unsolicited transactions, or 15 U.S.C. 78c(a)(5)(B) and (C), or 09 a bank that satisfies the conditions described in 15 U.S.C. 78c(a)(4); 10 (D) an international banking institution; or 11 (E) a person excluded by a regulation adopted or order issued 12 under this chapter; 13 (5) "defraud" includes engaging in common law deceit; 14 (6) "department" means the Department of Commerce, Community, 15 and Economic Development; 16 (7) "depository institution" means 17 (A) a bank; or 18 (B) a savings institution, trust company, credit union, or similar 19 institution that is organized or chartered under the laws of a state or of the 20 United States, authorized to receive deposits and supervised and examined by 21 an official or agency of a state or the United States if its deposits or share 22 accounts are insured to the maximum amount authorized by statute by the 23 Federal Deposit Insurance Corporation, the National Credit Union Share 24 Insurance Fund, or a successor authorized by federal law; the term does not 25 include 26 (i) an insurance company or other organization 27 primarily engaged in the business of insurance; 28 (ii) a Morris Plan bank; or 29 (iii) an industrial loan company that is not an "insured 30 depository institution" as defined in 12 U.S.C. 1813(c)(2) (Federal 31 Deposit Insurance Act), or any successor federal statute;
01 (8) "federal covered investment adviser" means a person registered 02 under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 1940); 03 (9) "federal covered security" means a security that is, or upon 04 completion of a transaction will be, a covered security under 15 U.S.C. 77r(b) 05 (Securities Act of 1933) or rules or regulations adopted under that provision; 06 (10) "filing" means the receipt under this chapter of a record by the 07 administrator or a designee of the administrator; 08 (11) "former AS 45.55" means AS 45.55 as it existed immediately 09 before July 1, 2016; 10 (12) "fraud" and "deceit" include common law deceit; 11 (13) "guaranteed" means guaranteed as to payment of all principal and 12 all interest; 13 (14) "institutional investor" means any of the following, whether 14 acting for itself or for others in a fiduciary capacity: 15 (A) a depository institution, a trust company organized or 16 chartered under the laws of this state, or an international banking institution; 17 (B) an insurance company; 18 (C) a separate account of an insurance company; 19 (D) an investment company as defined in 15 U.S.C. 80a-1 - 20 80a-64 (Investment Company Act of 1940); 21 (E) a broker-dealer registered under 15 U.S.C. 78a - 78pp 22 (Securities Exchange Act of 1934); 23 (F) an employee pension, profit-sharing, or benefit plan if the 24 plan has total assets in excess of $10,000,000 or its investment decisions are 25 made by a named fiduciary, as defined in 29 U.S.C. 1102(a)(2) (Employee 26 Retirement Income Security Act of 1974), that is a broker-dealer registered 27 under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934), an investment 28 adviser registered or exempt from registration under 15 U.S.C. 80b-1 - 80b-21 29 (Investment Advisers Act of 1940), an investment adviser registered under this 30 chapter, a depository institution, or an insurance company; 31 (G) a plan established and maintained by a state, a political
01 subdivision of a state, or an agency or instrumentality of a state or a political 02 subdivision of a state for the benefit of its employees if the plan has total assets 03 in excess of $10,000,000 or its investment decisions are made by a legally 04 designated public official or by a named fiduciary, as defined in 29 U.S.C. 05 1102(a)(2) (Employee Retirement Income Security Act of 1974), that is a 06 broker-dealer registered under 15 U.S.C. 78a - 78pp (Securities Exchange Act 07 of 1934), an investment adviser registered or exempt from registration under 08 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 1940), an investment 09 adviser registered under this chapter, a depository institution, or an insurance 10 company; 11 (H) a trust if that trust has total assets in excess of $10,000,000, 12 the trustee of the trust is a depository institution, and the participants in the 13 trust are exclusively plans of the types identified in (F) or (G) of this 14 paragraph, regardless of the size of their assets, except a trust that includes as 15 participants self-directed individual retirement accounts or similar self-directed 16 plans; 17 (I) an organization described in 26 U.S.C. 501(c)(3) (Internal 18 Revenue Code), corporation, Massachusetts trust or similar business trust, 19 limited liability company, or partnership, not formed for the specific purpose 20 of acquiring the securities offered, with total assets in excess of $10,000,000; 21 (J) a small business investment company licensed by the 22 United States Small Business Administration under 15 U.S.C. 681(c) (Small 23 Business Investment Act of 1958) with total assets in excess of $10,000,000; 24 (K) a private business development company as defined in 15 25 U.S.C. 80b-2(a)(22) (Investment Advisers Act of 1940) with total assets in 26 excess of $10,000,000; 27 (L) a federal covered investment adviser acting for its own 28 account; 29 (M) a qualified institutional buyer, as defined in 17 C.F.R. 30 230.144A, other than 17 C.F.R. 230.144A(a)(1)(i)(H), adopted under 15 31 U.S.C. 77a - 77aa (Securities Act of 1933);
01 (N) a major United States institutional investor, as defined in 02 17 C.F.R. 240.15a-6(b)(4)(i), adopted under 15 U.S.C. 78a - 78pp (Securities 03 Exchange Act of 1934); 04 (O) any other person, other than an individual, of institutional 05 character with total assets in excess of $10,000,000 not organized for the 06 specific purpose of evading this chapter; or 07 (P) any other person specified by regulation adopted or order 08 issued under this chapter; 09 (15) "insurance company" means a company organized as an insurance 10 company whose primary business is writing insurance or reinsuring risks underwritten 11 by insurance companies and that is subject to supervision by the insurance 12 commissioner or a similar official or agency of a state; 13 (16) "insured" means insured as to payment of all principal and all 14 interest; 15 (17) "international banking institution" means an international 16 financial institution of which the United States is a member and whose securities are 17 exempt from registration under 15 U.S.C. 77a - 77aa (Securities Act of 1933); 18 (18) "investment adviser" means a person that, for compensation, 19 engages in the business of advising others, either directly or through publications or 20 writings, as to the value of securities or the advisability of investing in, purchasing, or 21 selling securities or that, for compensation and as a part of a regular business, issues or 22 produces analyses or reports concerning securities; the term includes a financial 23 planner or other person that, as an integral component of other financially related 24 services, provides investment advice to others for compensation as part of a business 25 or that holds itself out as providing investment advice to others for compensation; the 26 term does not include 27 (A) an investment adviser representative; 28 (B) a lawyer, accountant, engineer, or teacher whose 29 performance of investment advice is solely incidental to the practice of the 30 person's profession; 31 (C) a broker-dealer or its agents whose performance of
01 investment advice is solely incidental to the conduct of business as a broker- 02 dealer and that does not receive special compensation for the investment 03 advice; 04 (D) a publisher of a bona fide newspaper, news magazine, or 05 business or financial publication of general and regular circulation; 06 (E) a federal covered investment adviser; 07 (F) a bank, a trust company organized or chartered under the 08 laws of this state, or a savings institution; 09 (G) any other person that is excluded by 15 U.S.C. 80b-1 - 80b- 10 21 (Investment Advisers Act of 1940) from the definition of investment 11 adviser; or 12 (H) any other person excluded by a regulation adopted or order 13 issued under this chapter; 14 (19) "investment adviser representative" means an individual 15 employed by or associated with an investment adviser or federal covered investment 16 adviser and who makes any recommendations or otherwise gives investment advice 17 regarding securities, manages accounts or portfolios of clients, determines which 18 recommendation or advice regarding securities should be given, provides investment 19 advice or offers to provide investment advice, receives compensation to solicit, offer, 20 or negotiate for the sale of or for selling investment advice, or supervises employees 21 who perform any of the foregoing; the term does not include an individual who 22 (A) performs only clerical or ministerial acts; 23 (B) is an agent whose performance of investment advice is 24 solely incidental to the individual's acting as an agent and who does not receive 25 special compensation for investment advisory services; 26 (C) is employed by or associated with a federal covered 27 investment adviser, unless the individual has a place of business in this state, as 28 that term is defined by rule adopted under 15 U.S.C. 80b-3a (Investment 29 Advisers Act of 1940) and is 30 (i) an investment adviser representative, as that term is 31 defined by rule adopted under 15 U.S.C. 80b-3a (Investment Advisers
01 Act of 1940); or 02 (ii) not a supervised person, as that term is defined in 15 03 U.S.C. 80b-2(a)(25) (Investment Advisers Act of 1940); or 04 (D) is excluded by a regulation adopted or order issued under 05 this chapter; 06 (20) "issuer" means a person that issues or proposes to issue a security, 07 subject to the following: 08 (A) the issuer of a voting trust certificate, collateral trust 09 certificate, certificate of deposit for a security, or share in an investment 10 company without a board of directors or individuals performing similar 11 functions is the person performing the acts and assuming the duties of 12 depositor or manager under the trust or other agreement or instrument under 13 which the security is issued; 14 (B) the issuer of an equipment trust certificate or similar 15 security serving the same purpose is the person by which the property is or will 16 be used or to which the property or equipment is or will be leased or 17 conditionally sold or that is otherwise contractually responsible for ensuring 18 payment of the certificate; 19 (C) the issuer of a fractional undivided interest in an oil, gas, or 20 other mineral lease or in payments out of production under a lease, right, or 21 royalty is the owner of an interest in the lease or in payments out of production 22 under a lease, right, or royalty, whether whole or fractional, that creates 23 fractional interests for the purpose of sale; 24 (21) "nonissuer transaction" or "nonissuer distribution" means a 25 transaction or distribution not directly or indirectly for the benefit of the issuer; 26 (22) "offer to purchase" includes an attempt or offer to obtain, or 27 solicitation of an offer to sell, a security or interest in a security for value; the term 28 does not include a tender offer that is subject to 15 U.S.C. 78n(d) (Securities Exchange 29 Act of 1934); 30 (23) "older person" means a natural person who is 60 years of age or 31 older;
01 (24) "person" means an individual, a corporation, a partnership, a 02 limited liability company, a limited partnership, a limited liability partnership, an 03 association, a joint-stock company, a trust in which the interests of the beneficiaries 04 are evidenced by a security, an unincorporated organization, a government, or a 05 political subdivision of a government; 06 (25) "place of business" of a broker-dealer, an investment adviser, or a 07 federal covered investment adviser means 08 (A) an office at which the broker-dealer, investment adviser, or 09 federal covered investment adviser regularly provides brokerage or investment 10 advice or solicits, meets with, or otherwise communicates with customers or 11 clients; or 12 (B) any other location that is held out to the general public as a 13 location at which the broker-dealer, investment adviser, or federal covered 14 investment adviser provides brokerage or investment advice or solicits, meets 15 with, or otherwise communicates with customers or clients; 16 (26) "price amendment" means the amendment to a registration 17 statement filed under 15 U.S.C. 77a - 77aa (Securities Act of 1933) or, if an 18 amendment is not filed, the prospectus or prospectus supplement filed under 15 U.S.C. 19 77a - 77aa (Securities Act of 1933) that includes a statement of the offering price, 20 underwriting and selling discounts or commissions, amount of proceeds, conversion 21 rates, call prices, and other matters dependent on the offering price; 22 (27) "principal place of business" of a broker-dealer or an investment 23 adviser means the executive office of the broker-dealer or investment adviser from 24 which the officers, partners, or managers of the broker-dealer or investment adviser 25 direct, control, and coordinate the activities of the broker-dealer or investment adviser; 26 (28) "record," except in the phrases "of record," "official record," and 27 "public record," means information that is inscribed on a tangible medium or that is 28 stored in an electronic or other medium and is retrievable in perceivable form; 29 (29) "sale" includes every contract of sale, contract to sell, or 30 disposition of a security or interest in a security for value, and "offer to sell" includes 31 every attempt or offer to dispose of, or solicitation of an offer to purchase, a security
01 or interest in a security for value; both terms include 02 (A) a security given or delivered with, or as a bonus because of, 03 a purchase of securities or any other thing constituting part of the subject of the 04 purchase and having been offered and sold for value; 05 (B) a gift of assessable stock involving an offer and sale; and 06 (C) a sale or offer of a warrant or right to purchase or subscribe 07 to another security of the same or another issuer and a sale or offer of a 08 security that gives the holder a present or future right or privilege to convert 09 the security into another security of the same or another issuer, including an 10 offer of the other security; 11 (30) "Securities and Exchange Commission" means the United States 12 Securities and Exchange Commission; 13 (31) "securities business" means a business that provides the services 14 provided by 15 (A) investment advisers, federal covered investment advisers, 16 or investment adviser representatives; or 17 (B) broker-dealers, issuers, or agents of broker-dealers or 18 issuers; 19 (32) "security" means a note; stock; treasury stock; security future; 20 bond; debenture; evidence of indebtedness; certificate of interest or participation in a 21 profit-sharing agreement; collateral trust certificate; preorganization certificate or 22 subscription; transferable share; investment contract; voting trust certificate; certificate 23 of deposit for a security; viatical settlement; fractional undivided interest in oil, gas, or 24 other mineral rights; put, call, straddle, option, or privilege on a security, certificate of 25 deposit, or group or index of securities, including an interest in or based on the value 26 of a put, call, straddle, option, or privilege on a security, certificate of deposit, or 27 group or index of securities; put, call, straddle, option, or privilege entered into on a 28 national securities exchange relating to foreign currency; or, in general, an interest or 29 instrument commonly known as a "security"; or a certificate of interest or participation 30 in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to 31 subscribe to or purchase any of the foregoing; the term
01 (A) includes both a certificated and an uncertificated security; 02 (B) does not include a participation agreement entered under 03 AS 14.40.802 or an insurance or endowment policy subject to AS 21; 04 (C) does not include an interest in a contributory or 05 noncontributory pension or welfare plan subject to 29 U.S.C. 1001 - 1461 06 (Employee Retirement Income Security Act of 1974); 07 (D) includes an investment in a common enterprise with the 08 expectation of profits to be derived primarily from the efforts of a person other 09 than the investor; in this subparagraph, "common enterprise" means an 10 enterprise in which the fortunes of the investor are interwoven with those of 11 the person offering the investment, a third party, or other investors; 12 (E) includes as an investment contract, among other contracts, 13 an interest in a limited partnership and a limited liability company, and an 14 investment in a viatical settlement or similar agreement; and 15 (F) includes a viatical settlement interest; 16 (33) "self-regulatory organization" means a national securities 17 exchange registered under 15 U.S.C. 78a - 78pp (Securities Exchange Act of 1934), a 18 national securities association of broker-dealers registered under 15 U.S.C. 78a - 78pp 19 (Securities Exchange Act of 1934), a clearing agency registered under 15 U.S.C. 78a - 20 78pp (Securities Exchange Act of 1934), or the Municipal Securities Rulemaking 21 Board established under 15 U.S.C. 78o-4 (Securities Exchange Act of 1934); 22 (34) "sign" means, with present intent to authenticate or adopt a 23 record, 24 (A) to execute or adopt a tangible symbol; or 25 (B) to attach or logically associate with the record an electronic 26 symbol, sound, or process; 27 (35) "state" means a state of the United States, the District of 28 Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular 29 possession subject to the jurisdiction of the United States. 30 Sec. 45.56.995. Short title. This chapter may be cited as the Alaska Securities 31 Act.
01 * Sec. 26. AS 45.63.080(a) is amended to read: 02 (a) AS 45.63.010, 45.63.015, 45.63.020, and AS 45.63.030(c) and (d) do not 03 apply to a sale or attempted sale 04 (1) of a security regulated under AS 45.56 [AS 45.55] or a security that 05 is exempted by AS 45.56.205 [AS 45.55.900] from regulation under AS 45.56 06 [AS 45.55]; 07 (2) by a person registered with the United States Securities and 08 Exchange Commission when acting within the scope of the person's Securities and 09 Exchange Commission license; 10 (3) by an issuer, or a subsidiary of an issuer, of a class of securities that 11 is 12 (A) subject to 15 U.S.C. 78a - 78pp [15 U.S.C. 78a - 78lll] 13 (Securities Exchange Act of 1934); and 14 (B) either registered under 15 U.S.C. 78a - 78pp [15 U.S.C. 15 78a - 78lll] (Securities Exchange Act of 1934) or exempt from registration 16 under 15 U.S.C. 78l(g)(2)(A) - (C) or (E) - (H); 17 (4) by a real estate broker, associate real estate broker, or real estate 18 salesperson licensed under AS 08.88 and acting in a capacity covered by the license; 19 (5) by a person who has a certificate of registration under AS 08.18 to 20 operate as a contractor and is acting in a capacity covered by the certificate of 21 registration; 22 (6) by an embalmer or funeral director licensed under AS 08.42 and 23 acting in a capacity covered by the license; 24 (7) by an insurance agent, general agent, broker, solicitor, or adjuster 25 licensed under AS 21.27 and acting in a capacity covered by the license; 26 (8) by a person who is primarily soliciting the sale of a subscription to, 27 or advertising in, a newspaper of general circulation; 28 (9) by a charitable organization or paid solicitor if the organization or 29 solicitor is registered to make charitable solicitations under AS 45.68 and is acting in a 30 capacity that is covered by the registration; 31 (10) by a person who is primarily soliciting the sale of a sound
01 recording or book 02 (A) if the person 03 (i) has no minimum purchase requirements; 04 (ii) provides written notice of the buyer's right to cancel 05 at any time; and 06 (iii) allows the buyer to return the sound recording or 07 book and obtain a full refund; or 08 (B) through a membership in a book or record club 09 (i) where the club provides the buyer with a form that 10 the buyer may use to instruct the club not to ship the offered 11 merchandise; and 12 (ii) that is regulated by the Federal Trade Commission 13 as a negative option plan under 16 C.F.R. Part 425; 14 (11) by a publisher, or a publisher's agent operating under a written 15 agreement between a publisher and the agent, who is soliciting the sale of a publisher's 16 magazine if 17 (A) the buyer has the right to review the magazine and cancel 18 the subscription for the magazine within seven days after receipt of the 19 magazine or at the time the invoice is received by the buyer, whichever is later; 20 a cancellation request is timely if the request is mailed, properly addressed and 21 postmarked, postage prepaid, within seven days after receipt of the magazine; 22 (B) the right of cancellation and refund is fully disclosed in 23 writing to the buyer before or at the time the initial invoice is received by the 24 buyer; 25 (12) of services provided by a cable television system operating under 26 a franchise issued by a municipality; 27 (13) by a person who is soliciting for a business, or for an affiliate of a 28 business, that is regulated by the Regulatory Commission of Alaska; 29 (14) by a person whose solicitation is solely for telephone answering 30 services provided by the person or the person's employer; 31 (15) of property from a mail order catalog that is published on a
01 regular, periodic basis and that describes or pictures the items for sale and prominently 02 provides the specific price of each item; 03 (16) by a supervised financial institution or the parent, subsidiary, or 04 affiliate of a supervised financial institution; in this paragraph, "supervised financial 05 institution" means a commercial bank, savings bank, mutual savings bank, trust 06 company, savings and loan association, credit union, industrial loan company, 07 personal property broker, consumer finance lender, commercial finance lender, or 08 other financial institution if the financial institution is subject to regulation by this 09 state or the United States; 10 (17) by an insurer or the parent, subsidiary, or affiliate of an insurer; 11 (18) by a person who solicits a sale by a contact by telephonic means 12 without intending to complete the sales presentation during the contact, who does not 13 complete the sales presentation during the contact, and who only completes the sales 14 presentation at a later meeting in person, unless at the later meeting the solicitor 15 attempts to collect payment for property or services delivered before the later meeting; 16 (19) of an item of personal property, including a food product, that is 17 made by hand by an individual, if the sale or attempted sale of the item is made by the 18 individual who made the item; in this paragraph, "made by hand" includes the use of 19 ordinary household devices if the majority of the value of the item is added by the 20 labor of the individual. 21 * Sec. 27. AS 45.66.220 is amended to read: 22 Sec. 45.66.220. Exemptions. This chapter does not apply to a sale of or an 23 offer to sell 24 (1) a business opportunity if the total amount of the payments to be 25 made by the buyer under the contract is less than $250; 26 (2) a franchise under 16 C.F.R. Part 436 [16 C.F.R. 436]; 27 (3) an ongoing business operated by the seller that is to be sold in its 28 entirety; 29 (4) a business opportunity to an ongoing business if the seller will 30 provide products, equipment, supplies, or services that are to be sold by the buyer in 31 connection with the buyer's ongoing business;
01 (5) sales demonstration equipment, materials, or samples for use in 02 sales demonstrations and not for resale, or product inventory sold to the buyer at a 03 bona fide wholesale price; 04 (6) a business opportunity by an executor, an administrator, a marshal, 05 a receiver, a trustee in bankruptcy, or a guardian or conservator, or under a judicial 06 sale; 07 (7) a security registered under AS 45.56 [AS 45.55] or a security that 08 is exempted by AS 45.56.205 [AS 45.55.900] from registration under AS 45.56 09 [AS 45.55]; 10 (8) a business opportunity if the sale or offer is made by a person 11 registered with the United States Securities and Exchange Commission when acting 12 within the scope of the person's Securities and Exchange Commission license or by a 13 person registered by the state under AS 45.56 [AS 45.55] when acting within the 14 scope of registration; 15 (9) a business opportunity by an issuer or a subsidiary of an issuer of a 16 class of securities that is 17 (A) subject to 15 U.S.C. 78a - 78pp [15 U.S.C. 78a - 78lll] 18 (Securities Exchange Act of 1934); and 19 (B) registered under 15 U.S.C. 78a - 78pp [15 U.S.C. 78a - 20 78lll] (Securities Exchange Act of 1934) unless exempt from registration under 21 15 U.S.C. 78l(g)(2)(A) - (C) or (E) - (H); 22 (10) a business opportunity in which the buyer is 23 (A) a bank, savings and loan association, trust company, 24 insurance company, credit union, or investment company under 15 U.S.C. 80a- 25 1 - 80a-64 (Investment Company Act of 1940), pension or profit sharing trust, 26 or other financial institution or institutional buyer; or 27 (B) a broker-dealer registered under AS 45.56.405 [AS 45.55]; 28 (11) a business opportunity that involves a marketing plan made in 29 conjunction with the registration of a trademark or service mark under 15 U.S.C. 1051 30 - 1127 (Trademark Act of 1946) if the seller has a minimum net worth of $1,000,000 31 as determined on the basis of the seller's most recent audited financial statement
01 prepared within 13 months of the first offer to sell in this state; net worth may be 02 determined on a consolidated basis if one person owns at least 80 percent of the seller 03 and that one person expressly guarantees the obligations of the seller that arise under 04 the sale or offer claimed to be exempt under this paragraph; or 05 (12) a business opportunity in which either the seller or the buyer is 06 licensed as a real estate broker, associate real estate broker, or real estate salesperson 07 under AS 08.88 and the sale or offer is regulated by AS 08.88. 08 * Sec. 28. AS 45.66.900(11) is amended to read: 09 (11) "securities or investment laws" means AS 45.56 [AS 45.55] 10 (Alaska Securities Act) or a substantially similar statute of another jurisdiction, 15 11 U.S.C. 77a - 77aa [15 U.S.C. 77a - 77bbbb] (Securities Exchange Act of 1933), 15 12 U.S.C. 78a - 78pp [15 U.S.C. 78a - 78lll] (Securities Exchange Act of 1934), or 15 13 U.S.C. 80a-1 - 80b-21 (Investment Company Act of 1940/Investment Advisers Act of 14 1940); 15 * Sec. 29. AS 45.55.010, 45.55.020, 45.55.023, 45.55.025, 45.55.027, 45.55.028, 45.55.030, 16 45.55.035, 45.55.040, 45.55.050, 45.55.060, 45.55.070, 45.55.075, 45.55.080, 45.55.090, 17 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), 18 45.55.915, 45.55.930, 45.55.935(b), 45.55.970, 45.55.980, 45.55.990, and 45.55.995 are 19 repealed. 20 * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 INDIRECT COURT RULE AMENDMENTS. (a) The provisions of AS 45.56.630(c) 23 - (e), enacted by sec. 25 of this Act, have the effect of changing Rules 4 and 5, Alaska Rules 24 of Civil Procedure, by allowing service on the administrator in certain cases. 25 (b) The provisions of AS 45.56.650(f), enacted by sec. 25 of this Act, have the effect 26 of changing Rule 54, Alaska Rules of Civil Procedure, by expanding the definition of 27 judgments to include final judgments of the administrator issued under AS 45.56.650, enacted 28 by sec. 25 of this Act. 29 (c) The provisions of AS 45.56.650(g), enacted by sec. 25 of this Act, have the effect 30 of changing Rule 90, Alaska Rules of Civil Procedure, by changing the contempt procedure in 31 certain cases.
01 (d) The provisions of AS 45.56.655(c), enacted by sec. 25 of this Act, have the effect 02 of changing Rule 65, Alaska Rules of Civil Procedure, by changing the procedure for 03 injunctions in certain cases by prohibiting requiring the administrator to post a bond. 04 (e) The provisions of AS 45.56.675(a), enacted by sec. 25 of this Act, have the effect 05 of changing Rule 602, Alaska Rules of Appellate Procedure, by changing the time for filing a 06 notice of appeal. 07 * Sec. 31. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 10 Economic Development may adopt regulations necessary to implement AS 45.56, enacted by 11 sec. 25 of this Act. The regulations take effect under AS 44.62 (Administrative Procedure 12 Act), but not before the effective date of this Act. 13 * Sec. 32. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 TRANSITION: APPLICATION OF ACT TO EXISTING PROCEEDINGS AND 16 EXISTING RIGHTS AND DUTIES. (a) Former AS 45.55 exclusively governs all actions or 17 proceedings that are pending on the effective date of sec. 25 of this Act or that may be 18 instituted based on conduct occurring before the effective date of sec. 25 of this Act, but a 19 civil action may not be maintained to enforce any liability under former AS 45.55, unless 20 instituted within any period of limitation that applied when the cause of action accrued or 21 within five years after the effective date of this Act, whichever is earlier. 22 (b) All effective registrations under former AS 45.55 and all administrative orders 23 relating to the registrations, regulations, statements of policy, interpretative opinions, 24 declaratory rulings, determinations to take no action, and conditions imposed on the 25 registrations under former AS 45.55 remain in effect while they would have remained in 26 effect if this Act had not been enacted. They are considered to have been filed, issued, or 27 imposed under this Act, but are exclusively governed by former AS 45.55, unless removed or 28 replaced by the administrator. 29 (c) Former AS 45.55 exclusively applies to an offer or sale made within one year after 30 the effective date of sec. 25 of this Act under an offering made in good faith before the 31 effective date of sec. 25 of this Act based on an exemption available under former AS 45.55.
01 (d) In this section, "former AS 45.55" means AS 45.55 as it existed immediately 02 before July 1, 2016. 03 * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 REVISOR'S INSTRUCTION. The revisor of statutes is requested to change the 06 chapter heading of AS 45.55 from "Alaska Securities Act" to "Alaska Native Claims 07 Settlement Act Corporations Proxy Solicitations and Initial Issuance of Stock." 08 * Sec. 34. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 CONDITIONAL EFFECT. AS 45.56.630(c) - (e), 45.56.650(f) and (g), 45.56.655(c), 11 and 45.56.675(a), enacted by sec. 25 of this Act, take effect only if sec. 30 of this Act receives 12 the two-thirds majority vote of each house required by art. IV, sec. 15, Constitution of the 13 State of Alaska. 14 * Sec. 35. This Act takes effect July 1, 2016.