Sec. 36b-3. (Formerly Sec. 36-471). Definitions.
Sec. 36b-3. (Formerly Sec. 36-471). Definitions. As used in sections 36b-2 to
36b-33, inclusive, unless the context otherwise requires:
(1) "Agent" means any individual, other than a broker-dealer, who represents a
broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities.
"Agent" does not include an individual who represents an issuer in (A) effecting transactions in a security exempted by subdivision (1), (2), (3), (4), (6), (9), (10), (11) or (22)
of subsection (a) of section 36b-21, (B) effecting transactions exempted by subsection
(b) of section 36b-21, except for transactions exempted by subdivisions (10), (13) or
(14) of said subsection, (C) effecting transactions with existing employees, partners or
directors of the issuer if no commission or other remuneration is paid or given directly
or indirectly for soliciting any person in this state, or (D) effecting transactions in any
covered security, except for covered securities within the meaning of Sections 18(b)(2)
or 18(b)(4)(D) of the Securities Act of 1933. "Agent" does not include such other persons
not within the intent of this subdivision as the commissioner may by regulation or order
determine. A general partner, officer or director of a broker-dealer or issuer, or a person
occupying a similar status or performing similar functions, is an agent only if such
person otherwise comes within this definition and any compensation that such person
receives is directly or indirectly related to purchases or sales of securities.
(2) "Associated person" has the meaning given to that term in Section 3(a)(21) of
the Securities Exchange Act of 1934.
(3) "Blank check company" means any company that (A) devotes substantially all
of its efforts to establishing a new business in which planned principal operations have
not commenced or, that has commenced planned principal operations, but has not derived significant revenue from such operations; and (B) has no specific business plan
or purpose or has indicated that its business plan is to engage in a merger or acquisition
with an unidentified company or companies, or other entity or person.
(4) "Branch office" means any location other than the main office at which an agent
or investment adviser agent regularly conducts business on behalf of a broker-dealer or
investment adviser, or any location that is held out as such, excluding: (A) Any location
that is established solely for customer service or back-office-type functions where no
sales activities are conducted and that is not held out to the public as a branch office,
(B) any location that is the agent's or investment adviser agent's primary residence,
provided (i) only agents or investment adviser agents who reside at the location and are
members of the same immediate family conduct business at the location, (ii) the location
is not held out to the public as an office and the agent or investment adviser agent does
not meet with customers at the location, (iii) neither customer funds nor securities are
handled at that location, (iv) the agent or investment adviser agent is assigned to a
designated branch office, and such designated branch office is reflected on all business
cards, stationery, advertisements and other communications to the public by such agent
or investment adviser agent, (v) the agent's or investment adviser agent's correspondence and communications with the public are subject to the supervision of the broker-dealer or investment adviser with which such agent or investment adviser agent is associated, (vi) electronic communications, including e-mail, are made through the electronic
system of the broker-dealer or investment adviser, (vii) all orders for securities are
entered through the designated branch office or an electronic system established by a
broker-dealer that is reviewable at the branch office, (viii) written supervisory procedures pertaining to supervision of activities conducted at the residence are maintained
by the broker-dealer or investment adviser, and (ix) a list of the residence locations is
maintained by the broker-dealer or investment adviser, (C) any location, other than a
primary residence, that is used for securities or investment advisory business for less than
thirty business days in any one calendar year, provided the broker-dealer or investment
adviser complies with the provisions of subparagraph (B)(ii), (iii), (iv), (v), (vi), (vii)
and (viii) of this subdivision, (D) any office of convenience, where associated persons
occasionally and exclusively by appointment meet with customers, which is not held out
to the public as an office, (E) any location that is used primarily to engage in nonsecurities
activities and from which the agent or investment adviser agent effects no more than
twenty-five securities transactions in any one calendar year, provided any advertisement
or sales literature identifying such location also sets forth the address and telephone
number of the location from which the agent or investment adviser agent conducting
business at the nonbranch locations is directly supervised, (F) the floor of a registered
national securities exchange where a broker-dealer conducts a direct access business
with public customers, (G) a temporary location established in response to the implementation of a business continuity plan, or (H) any other location not within the intent
of this subdivision as the commissioner may determine. As used in this subdivision, the
term "business day" does not include any partial business day, provided the agent or
investment adviser agent spends at least four hours on such day at the designated branch
office of such agent or investment adviser agent during the hours that such office is
normally open for business.
(5) "Broker-dealer" means any person engaged in the business of effecting transactions in securities for the account of others or for such person's own account. "Broker-dealer" does not include (A) an agent, (B) an issuer, (C) a bank, as defined in Section
3(a)(6) of the Securities Exchange Act of 1934, when conducting activities that would
except it from the definitions of "broker" or "dealer" under Sections 3(a)(4) or 3(a)(5)
of the Securities Exchange Act of 1934, (D) a person who has no place of business in
this state if such person effects transactions in this state exclusively with or through (i)
the issuers of the securities involved in the transactions, (ii) other broker-dealers, or (iii)
a bank and trust company, a national banking association, a savings bank, a savings and
loan association, a federal savings bank, a federal savings and loan association, a credit
union, a federal credit union, a trust company, an insurance company, an investment
company as defined in the Investment Company Act of 1940, a pension or profit-sharing
trust, or other financial institution or institutional buyer, whether acting for itself or
as trustee, or (E) such other persons not within the intent of this subdivision as the
commissioner may by regulation or order determine.
(6) "Commissioner" means the Banking Commissioner or any person appointed
or designated by the Banking Commissioner to administer sections 36b-2 to 36b-33,
inclusive.
(7) "Covered security" has the meaning given to that term in Section 18(b) of the
Securities Act of 1933.
(8) "Fraud", "deceit" and "defraud" are not limited to common-law deceit.
(9) "Guaranteed" means guaranteed as to payment of principal, interest or dividends.
(10) "International banking institution" means an international financial institution,
as defined in 22 USC 262r, as from time to time amended, of which the United States
is a member and whose securities are exempt from registration under the Securities Act
of 1933.
(11) "Investment adviser" means any person who, for compensation, engages in
the business of advising others, either directly or through publications or writings, as
to the value of securities or as to the advisability of investing in, purchasing or selling
securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. "Investment adviser" does not include
(A) an investment adviser agent; (B) a bank, as defined in Section 202(a)(2) of the
Investment Advisers Act of 1940, or a bank holding company, as defined in the Bank
Holding Company Act of 1956, that is excepted from the definition of "investment
adviser" in Section 202(a)(11) of the Investment Advisers Act of 1940; (C) a lawyer,
accountant, engineer, or teacher whose performance of these services is solely incidental
to the practice of such person's profession; (D) a broker-dealer whose performance of
these services is solely incidental to the conduct of such person's business as a broker-dealer and who receives no special compensation for them; (E) a publisher of any bona
fide newspaper, news magazine, or business or financial publication of general, regular,
and paid circulation; (F) a person whose advice, analyses or reports relate only to securities exempted by subdivision (1) of subsection (a) of section 36b-21; (G) any insurance
company under the supervision of the Insurance Commissioner or any affiliate thereof,
as defined in subsection (b) of section 38a-129, when providing services to separate
accounts of that insurance company or registered investment companies all of whose
shares are owned by such insurance company or its insurance company affiliates or by
the separate accounts of that insurance company or its insurance company affiliates;
and (H) such other persons not within the intent of this subdivision as the commissioner
may by regulation or order designate.
(12) (A) "Investment adviser agent" includes (i) any individual, including an officer, partner or director of an investment adviser, or an individual occupying a similar
status or performing similar functions, employed, appointed or authorized by or associated with an investment adviser to solicit business from any person for such investment
adviser in this state and who receives compensation or other remuneration, directly or
indirectly, for such solicitation; or (ii) any partner, officer, or director of an investment
adviser, or an individual occupying a similar status or performing similar functions, or
other individual employed, appointed, or authorized by or associated with an investment
adviser, who makes any recommendation or otherwise renders advice regarding securities to clients and who receives compensation or other remuneration, directly or indirectly, for such advisory services.
(B) "Investment adviser agent" does not include an individual employed, appointed
or authorized by, associated with or acting on behalf of an investment adviser exempt
from registration under subdivision (1) or (2) of subsection (e) of section 36b-6, who
is a "supervised person", as defined in Section 202(a)(25) of the Investment Advisers
Act of 1940, unless such supervised person is an "investment adviser representative",
as defined in Securities and Exchange Commission Rule 203A-3, 17 CFR 275.203A-3.
(C) "Investment adviser agent" does not include such other individuals not within
the intent of this subdivision as the commissioner may by regulation or order designate.
(13) "Issuer" means any person who issues or proposes to issue any security; except
that (A) with respect to a certificate of deposit, a voting-trust certificate, or a collateral-trust certificate, or with respect to a certificate of interest or a share in an unincorporated
investment trust not having a board of directors or persons performing similar functions
or of the fixed, restricted management, or unit type, "issuer" means any person performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which the security is issued;
(B) with respect to an equipment trust certificate or similar security serving the same
purpose, "issuer" means any person who uses or will use the property, any person to
whom the property or equipment is or will be leased or conditionally sold or any person
who is otherwise contractually responsible for assuring payment of the certificate; and
(C) with respect to a fractional undivided interest in oil, gas or other mineral leases or
in payments out of production under a lease, right or royalty, "issuer" means any owner
of an interest in the lease or in payments out of production under a lease, right or royalty,
whether whole or fractional, who creates fractional interests for the purpose of sale.
(14) "Nonissuer" means not directly or indirectly for the benefit of the issuer.
(15) "Person" means an individual, a corporation, a limited liability company, a
partnership, a limited partnership, a limited liability partnership, an association, a joint-stock company, a trust where the interests of the beneficiaries are evidenced by a security,
an unincorporated organization, a government or a political subdivision of a government.
(16) (A) "Sale" or "sell" includes every contract of sale of, contract to sell, or
disposition of, a security or interest in a security for value. (B) "Offer" or "offer to sell"
includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security
or interest in a security for value. (C) Any security given or delivered with, or as a
bonus on account of, any purchase of securities or any other thing shall be conclusively
presumed to constitute a part of the subject of such purchase and to have been sold for
value. (D) Nothing in this subdivision shall limit or diminish the full meaning of the
terms "sale", "sell", "offer" or "offer to sell" as construed by the courts of this state. (E)
A purported gift of assessable stock is considered to involve an offer and sale. (F) Every
sale or offer of a warrant or right to purchase or subscribe to another security of the
same or another issuer, as well as every sale or offer of a security which gives the holder
a present or future right or privilege to convert into another security of the same or
another issuer, is considered to include an offer of the other security. (G) The terms
defined in this subdivision do not include: (i) Any bona fide pledge or loan; (ii) any
stock dividend, whether the corporation distributing the dividend is the issuer of the
stock or not, if nothing of value is given by stockholders for the dividend other than the
surrender of a right to a cash or property dividend when each stockholder may elect to
take the dividend in cash or property or in stock; (iii) any act incident to a class vote
by security holders on a merger, exchange of securities for securities, consolidation,
reclassification of securities, or sale of assets in consideration of the issuance of securities or securities and cash of another person other than an individual; or (iv) any security
which is issued in exchange for one or more bona fide outstanding securities, claims or
property interests, or partly in such exchange and partly for cash, where the terms and
conditions of such issuance and exchange are approved by any state or federal court.
(17) "Securities Act of 1933", "Securities Exchange Act of 1934", "Public Utility
Holding Company Act of 1935", "Investment Advisers Act of 1940" and "Investment
Company Act of 1940" mean the federal statutes of those names, as from time to time
amended.
(18) "Securities and Exchange Commission" means the United States Securities
and Exchange Commission.
(19) "Security" means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, interests of limited partners in a limited partnership, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights, put, call, straddle, option, or privilege on any
security or group or index of securities, including any interest in or based on the value
of such security, group or index, put, call, straddle, option or privilege entered into on
a national securities exchange relating to foreign currency, or, in general, any interest
or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right
to subscribe to or purchase, any of the foregoing. "Security" includes (A) a certificated
and an uncertificated security, and (B) as an "investment contract", an interest in a
limited liability company or limited liability partnership, but does not include any insurance or endowment policy or annuity contract issued by an insurance company that is
subject to regulation by the Insurance Commissioner.
(20) "Self-regulatory organization" means a national securities exchange, a national
securities association of broker-dealers or a clearing agency registered under the Securities Exchange Act of 1934 or the Municipal Securities Rulemaking Board established
under the Securities Exchange Act of 1934.
(21) "Shell company" or "dormant company" means any company which does not
pursue nor has the financial capacity to pursue a business plan or purpose.
(22) "State" means any state, territory or possession of the United States, the District
of Columbia and Puerto Rico.
(P.A. 77-482, S. 2; 77-614, S. 161, 163, 587, 610; P.A. 78-5, S. 1-3; 78-34, S. 1, 2, 17; 78-303, S. 85, 136; P.A. 79-396, S. 1-4, 11; P.A. 80-88, S. 1-3, 12; 80-482, S. 265, 345, 348; P.A. 81-292, S. 1, 2; P.A. 82-149, S. 1-3, 16; P.A. 83-368, S. 1, 2, 11; P.A. 85-169, S. 1, 2, 11; P.A. 87-9, S. 2, 3; 87-375, S. 1; P.A. 88-208, S. 1; P.A. 89-220, S. 1; P.A. 91-145, S. 1; P.A. 92-12, S. 94; P.A. 93-157, S. 1, 4; P.A. 95-66, S. 1; 95-79, S. 136, 189; P.A. 96-192, S. 1; P.A. 97-220, S.
1, 15; P.A. 98-162, S. 1, 2; 98-177, S. 6; P.A. 99-36, S. 35; 99-38, S. 1; P.A. 01-48, S. 1, 2; P.A. 03-84, S. 26; P.A. 05-177, S. 1; P.A. 06-165, S. 2.)
History: P.A. 77-614 and P.A. 78-303 replaced bank commissioner with banking commissioner within the department
of business regulation, likewise placed insurance commissioner within said department, reflecting incorporation of their
respective departments as divisions within said department, effective January 1, 1979; P.A. 78-5 extensively redefined
"agent" and "broker-dealer"; P.A. 78-34 extensively redefined "investment advisor" and "sell"; P.A. 79-396 redefined
"agent" to specifically exclude "person not within the intent of this subsection" as determined by commissioner, redefined
"broker-dealer" to include similar reference in Subdiv. (5), added "in this state" for clarity in Subsec. (f)(7), defining
"investment advisor", and rephrased Subsec. (k)(3)(D); P.A. 80-88 added provisions re investment advisory publications
in Subsec. (f), added reference to issuance of "securities and cash" in Subsec. (k) and added Subsec. (o) defining "investment
advisory publication"; P.A. 80-482 restored banking and insurance divisions as independent departments and abolished
the department of business regulation, allowing changes in commissioners' names accordingly; P.A. 81-292 amended
Subsec. (h) by deleting the provision that with respect to certificates of interest or participation in oil, gas or mining titles
or leases, or in payments out of production under such titles or leases, there is not considered to be any "issuer", and
amended Subsec. (k)(3)(C) by replacing "stockholders" with "security holders" and deleting the restriction that the sale
be of "corporate" assets and replacing securities and cash of another "corporation" with the securities and cash of another
"person"; P.A. 82-149 amended Subsec. (b) by including and excluding additional individuals under the definition of
"agent" depending on the transaction involved, added Subsec. (h)(2), and amended Subsec. (k) by deleting the definitions
of "sell" and "offer for sale" and defining "sale", "sell", "offer" and "offer to sell" and revised the subdivision indicators;
P.A. 83-368 made technical changes in Subsec. (b), deleted the provisions of Subsec. (c)(B) whereby a person directing
fifteen or less offers to sell or buy into the state for 12 consecutive months was not considered a broker-dealer and made
technical changes in Subsec. (g); P.A. 85-169 amended Subsecs. (c) and (f) deleting "mutual" from "mutual savings bank";
(Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner
of banking"); P.A. 87-375 made technical change in Subsec. (b); P.A. 88-208 redefined "investment advisor agent" by
substituting the references to individual for person and adding the provision re receipt of compensation for a solicitation
and redefined "security" to include interests of limited partners in a limited partnership; P.A. 89-220 added Subsec. (p)
defining "branch office"; P.A. 91-145 removed the exception for certain investment advisory publications from Subsec.
(f)(4); P.A. 92-12 redesignated Subsecs., Subdivs. and Subparas., and made a technical change; P.A. 93-157 added Subdivs.
(17) and (18) defining "blank check company" and "shell company" or "dormant company", respectively, effective July
1, 1993; Sec. 36-471 transferred to Sec. 36b-3 in 1995; P.A. 95-66 and 95-79 redefined "person" to include a limited liability
company, effective May 31, 1995; P.A. 96-192 amended Subpara. (2)(B), defining "agent", re transactions exempted by
both Sec. 36b-21(b)(13) and the Securities Act of 1933; P.A. 97-220 redefined "agent" and "investment adviser", added
definitions of "associated person", "covered security" and "Investment Advisers Act of 1940", deleted definition of "investment advisory publication", renumbered all definitions and made technical changes, effective July 1, 1997; P.A. 98-162 redefined "investment advisor" to exclude investment adviser agents and to make technical changes and redefined
"investment adviser agent"; P.A. 98-177 made technical changes; P.A. 99-36 made a technical change in Subdiv. (1); P.A.
99-38 redefined "investment adviser agent" in Subdiv. (11); P.A. 01-48 redefined "broker-dealer" in Subdiv. (5) and
"investment adviser" in Subdiv. (10); P.A. 03-84 changed "Commissioner of Banking" to "Banking Commissioner" in
Subdiv. (6), effective June 3, 2003; P.A. 05-177 made technical changes in definitions of "agent" in Subdiv. (1) and "blank
check company" in Subdiv. (3), redefined "branch office" in Subdiv. (4), inserted "a federal savings bank" in Subdiv.
(5)(D)(iii), defined "international banking institution" in new Subdiv. (10), redesignated existing Subdivs. (10) to (16) as
Subdivs. (11) to (17), made a technical change in definition of "investment adviser agent" in Subdiv. (12)(A), redefined
"issuer" in Subdiv. (13), added limited partnership and limited liability partnership in definition of "person" in Subdiv.
(15), defined "Securities and Exchange Commission" in new Subdiv. (18), redesignated existing Subdiv. (17) as Subdiv.
(19) and redefined "security" therein, defined "self-regulatory organization" in new Subdiv. (20), and redesignated existing
Subdivs. (18) and (19) as Subdivs. (21) and (22); P.A. 06-165 amended Subdiv. (4)(C) to make a technical change, effective
June 6, 2006.
Annotations to former section 36-471:
Subdivs. (2), (6), and (10) cited. 242 C. 17.
Subdiv. (12):
Cited. 42 CS 439.
Annotations to present section:
Subdiv. (2):
Cited. 242 C. 17.
Subdiv. (6):
Subpara. (A) cited. 242 C. 17.
Subdiv. (10):
Cited. 242 C. 17.
Subdiv. (11):
Cited. 45 CS 24.