CHAPTER 1. GENERAL PROVISIONS
IC 23-19
ARTICLE 19. INDIANA UNIFORM SECURITIES ACT
IC 23-19-1
Chapter 1. General Provisions
IC 23-19-1-1
Short title
Sec. 1. This article may be cited as the Indiana Uniform Securities
Act.
As added by P.L.27-2007, SEC.23.
IC 23-19-1-2
Definitions
Sec. 2. In this article, unless the context otherwise requires:
(1) "Agent" means an individual, other than a broker-dealer,
who represents a broker-dealer in effecting or attempting to
effect purchases or sales of securities or represents an issuer in
effecting or attempting to effect purchases or sales of the
issuer's securities. However, a partner, officer, or director of a
broker-dealer or issuer, or an individual having a similar status
or performing similar functions is an agent only if the individual
otherwise comes within the term. The term does not include an
individual excluded by rule adopted or order issued under this
article.
(2) "Bank" means:
(A) a banking institution organized under the laws of the
United States;
(B) a member bank of the Federal Reserve System;
(C) any other banking institution, whether incorporated or
not, doing business under the laws of a state or of the United
States, a substantial portion of the business of which consists
of receiving deposits or exercising fiduciary powers similar
to those permitted to be exercised by national banks under
the authority of the Comptroller of the Currency under
Section 1 of Public Law 87-722 (12 U.S.C. 92a), and which
is supervised and examined by a state or federal agency
having supervision over banks, and which is not operated for
the purpose of evading this article; and
(D) a receiver, conservator, or other liquidating agent of any
institution or firm included in clause (A), (B), or (C).
(3) "Broker-dealer" means a person engaged in the business of
effecting transactions in securities for the account of others or
for the person's own account. The term does not include:
(A) an agent;
(B) an issuer;
(C) a bank, a savings institution, or a trust company that is
a wholly owned subsidiary of a bank or savings institution
if its activities as a broker-dealer are limited to those
specified in subsections 3(a)(4)(B)(i) through (vi), (viii)
through (x), and (xi) if limited to unsolicited transactions;
3(a)(5)(B); and 3(a)(5)(C) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)(4) and 15 U.S.C. 78c(a)(5)) or a
bank that satisfies the conditions described in subsection
3(a)(4)(E) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(4));
(D) an international banking institution; or
(E) a person excluded by rule adopted or order issued under
this article.
(4) "Commissioner" means the securities commissioner
appointed under IC 23-19-6-1(a).
(5) "Depository institution" means:
(A) a bank; or
(B) a savings institution, trust company, credit union, or
similar institution that is organized or chartered under the
laws of a state or of the United States, authorized to receive
deposits, and supervised and examined by an official or
agency of a state or the United States if its deposits or share
accounts are insured to the maximum amount authorized by
statute by the Federal Deposit Insurance Corporation, the
National Credit Union Share Insurance Fund, or a successor
authorized by federal law. The term does not include:
(i) an insurance company or other organization primarily
engaged in the business of insurance;
(ii) a Morris Plan bank; or
(iii) an industrial loan company that is not an insured
depository institution as defined in Section 3(c)(2) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2)) or
any successor federal statute.
(6) "Federal covered investment adviser" means a person
registered under the Investment Advisers Act of 1940.
(7) "Federal covered security" means a security that is, or upon
completion of a transaction will be, a covered security under
Section 18(b) of the Securities Act of 1933 (15 U.S.C. 77r(b))
or rules or regulations adopted under that provision.
(8) "Filing" means the receipt under this article of a record by
the commissioner or a designee of the commissioner.
(9) "Fraud", "fraudulent", "deceit", and "defraud" mean a
misrepresentation of a material fact, a promise, representation,
or prediction not made honestly or in good faith, or the failure
to disclose a material fact necessary in order to make the
statements made, in light of the circumstances under which they
were made, not misleading. This definition does not limit or
diminish the full meaning of the terms as applied by or defined
in courts of law or equity. The terms are not limited to common
law deceit.
(10) "Guaranteed" means guaranteed as to payment of all
principal, dividends, and interest.
(11) "Institutional investor" means any of the following,
whether acting for itself or for others in a fiduciary capacity:
(A) a depository institution or international banking
institution;
(B) an insurance company;
(C) a separate account of an insurance company;
(D) an investment company as defined in the Investment
Company Act of 1940;
(E) a broker-dealer registered under the Securities Exchange
Act of 1934;
(F) an employee pension, profit-sharing, or benefit plan if
the plan has total assets in excess of ten million dollars
($10,000,000) or its investment decisions are made by a
named fiduciary, as defined in the Employee Retirement
Income Security Act of 1974, that is a broker-dealer
registered under the Securities Exchange Act of 1934, an
investment adviser registered or exempt from registration
under the Investment Advisers Act of 1940, an investment
adviser registered under this article, a depository institution,
or an insurance company;
(G) a plan established and maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a
state or a political subdivision of a state for the benefit of its
employees, if the plan has total assets in excess of ten
million dollars ($10,000,000) or its investment decisions are
made by a duly designated public official or by a named
fiduciary, as defined in the Employee Retirement Income
Security Act of 1974, that is a broker-dealer registered under
the Securities Exchange Act of 1934, an investment adviser
registered or exempt from registration under the Investment
Advisers Act of 1940, an investment adviser registered under
this article, a depository institution, or an insurance
company;
(H) a trust, if it has total assets in excess of ten million
dollars ($10,000,000), its trustee is a depository institution,
and its participants are exclusively plans of the types
identified in clause (F) or (G), regardless of the size of their
assets, except a trust that includes as participants
self-directed individual retirement accounts or similar
self-directed plans;
(I) an organization described in Section 501(c)(3) of the
Internal Revenue Code (26 U.S.C. 501(c)(3)), corporation,
Massachusetts trust or similar business trust, limited liability
company, or partnership, not formed for the specific purpose
of acquiring the securities offered, with total assets in excess
of ten million dollars ($10,000,000);
(J) a small business investment company licensed by the
Small Business Administration under Section 301(c) of the
Small Business Investment Act of 1958 (15 U.S.C. 681(c))
with total assets in excess of ten million dollars
($10,000,000);
(K) a private business development company, as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-2(a)(22)) with total assets in excess of ten
million dollars ($10,000,000);
(L) a federal covered investment adviser acting for its own
account;
(M) a "qualified institutional buyer", as defined in Rule
144A(a)(1), other than Rule 144A(a)(1)(i)(H), adopted under
the Securities Act of 1933 (17 CFR 230.144A);
(N) a "major U.S. institutional investor", as defined in Rule
15a-6(b)(4)(i) adopted under the Securities Exchange Act of
1934 (17 CFR 240.15a-6);
(O) any other person, other than an individual, of
institutional character with total assets in excess of ten
million dollars ($10,000,000) not organized for the specific
purpose of evading this article; or
(P) any other person specified by rule adopted or order
issued under this article.
(12) "Insurance company" means a company organized as an
insurance company whose primary business is writing insurance
or reinsuring risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner
or a similar official or agency of a state.
(13) "Insured" means insured as to payment of all principal and
all interest.
(14) "International banking institution" means an international
financial institution of which the United States is a member and
whose securities are exempt from registration under the
Securities Act of 1933.
(15) "Investment adviser" means a person that, for
compensation, engages in the business of advising others, either
directly or through publications or writings, as to the value of
securities or the advisability of investing in, purchasing, or
selling securities or that, for compensation and as a part of a
regular business, issues or promulgates analyses or reports
concerning securities. The term includes a financial planner or
other person that, as an integral component of other financially
related services, provides investment advice to others for
compensation as part of a business or that holds itself out as
providing investment advice to others for compensation. The
term does not include:
(A) an investment adviser representative;
(B) a lawyer, accountant, engineer, or teacher whose
performance of investment advice is solely incidental to the
practice of the person's profession;
(C) a broker-dealer or its agents whose performance of
investment advice is solely incidental to the conduct of
business as a broker-dealer and that does not receive special
compensation for the investment advice;
(D) a publisher of a bona fide newspaper, news magazine, or
business or financial publication of general and regular
circulation;
(E) a federal covered investment adviser;
(F) a bank, a savings institution, or a trust company that is a
wholly owned subsidiary of a bank or savings institution;
(G) any other person that is excluded by the Investment
Advisers Act of 1940 from the definition of investment
adviser; or
(H) any other person excluded by rule adopted or order
issued under this article.
(16) "Investment adviser representative" means an individual
employed by or associated with an investment adviser or federal
covered investment adviser and who makes any
recommendations or otherwise gives investment advice
regarding securities, manages accounts or portfolios of clients,
determines which recommendation or advice regarding
securities should be given, provides investment advice or holds
herself or himself out as providing investment advice, receives
compensation to solicit, offer, or negotiate for the sale of or for
selling investment advice, or supervises employees who
perform any of the foregoing. The term does not include an
individual who:
(A) performs only clerical or ministerial acts;
(B) is an agent whose performance of investment advice is
solely incidental to the individual acting as an agent and who
does not receive special compensation for investment
advisory services;
(C) is employed by or associated with a federal covered
investment adviser, unless the individual has a "place of
business" in this state, as that term is defined by rule adopted
under Section 203A of the Investment Advisers Act of 1940
(15 U.S.C. 80b-3a), and is:
(i) an "investment adviser representative", as that term is
defined by rule adopted under Section 203A of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-3a); or
(ii) not a "supervised person", as that term is defined in
Section 202(a)(25) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-2(a)(25)); or
(D) is excluded by rule adopted or order issued under this
article.
(17) "Issuer" means a person that issues or proposes to issue a
security, subject to the following:
(A) The issuer of a voting trust certificate, collateral trust
certificate, certificate of deposit for a security, or share in an
investment company without a board of directors or
individuals performing similar functions is the person
performing the acts and assuming the duties of depositor or
manager under the trust or other agreement or instrument
under which the security is issued.
(B) The issuer of an equipment trust certificate or similar
security serving the same purpose is the person by which the
property is or will be used or to which the property or
equipment is or will be leased or conditionally sold or that
is otherwise contractually responsible for assuring payment
of the certificate.
(C) The issuer of a fractional undivided interest in an oil,
gas, or other mineral lease or in payments out of production
under a lease, right, or royalty is the owner of an interest in
the lease or in payments out of production under a lease,
right, or royalty, whether whole or fractional, that creates
fractional interests for the purpose of sale.
(18) "Nonissuer transaction" or "nonissuer distribution" means
a transaction or distribution not directly or indirectly for the
benefit of the issuer.
(19) "Offer to purchase" includes an attempt or offer to obtain,
or solicitation of an offer to sell, a security or interest in a
security for value. The term does not include a tender offer that
is subject to Section 14(d) of the Securities Exchange Act of
1934 (15 U.S.C. 78n(d)).
(20) "Person" means an individual; corporation; business trust;
estate; trust; partnership; limited liability company; association;
joint venture; government; governmental subdivision, agency,
or instrumentality; public corporation; or any other legal or
commercial entity.
(21) "Place of business" of a broker-dealer, an investment
adviser, or a federal covered investment adviser means:
(A) an office at which the broker-dealer, investment adviser,
or federal covered investment adviser regularly provides
brokerage or investment advice or solicits, meets with, or
otherwise communicates with customers or clients; or
(B) any other location that is held out to the general public
as a location at which the broker-dealer, investment adviser,
or federal covered investment adviser provides brokerage or
investment advice or solicits, meets with, or otherwise
communicates with customers or clients.
(22) "Predecessor act" means IC 23-2-1 (before its repeal).
(23) "Price amendment" means the amendment to a registration
statement filed under the Securities Act of 1933 or, if an
amendment is not filed, the prospectus or prospectus
supplement filed under the Securities Act of 1933 that includes
a statement of the offering price, underwriting and selling
discounts or commissions, amount of proceeds, conversion
rates, call prices, and other matters dependent upon the offering
price.
(24) "Principal place of business" of a broker-dealer or an
investment adviser means the executive office of the
broker-dealer or investment adviser from which the officers,
partners, or managers of the broker-dealer or investment adviser
direct, control, and coordinate the activities of the broker-dealer
or investment adviser.
(25) "Record", except in the phrases "of record", "official
record", and "public record", means information that is
inscribed on a tangible medium or that is stored in an electronic
or other medium and is retrievable in perceivable form.
(26) "Sale" includes every contract of sale, contract to sell, or
disposition of a security or interest in a security for value, and
"offer to sell" includes every attempt or offer to dispose of, or
solicitation of an offer to purchase, a security or interest in a
security for value. Both terms include:
(A) a security given or delivered with, or as a bonus on
account of, a purchase of securities or any other thing
constituting part of the subject of the purchase and having
been offered and sold for value;
(B) a gift of assessable stock involving an offer and sale; and
(C) a sale or offer of a warrant or right to purchase or
subscribe to another security of the same or another issuer
and a sale or offer of a security that gives the holder a
present or future right or privilege to convert the security
into another security of the same or another issuer, including
an offer of the other security.
(27) "Securities and Exchange Commission" means the United
States Securities and Exchange Commission.
(28) "Security" means a note; stock; treasury stock; security
future; bond; debenture; evidence of indebtedness; certificate of
interest or participation in a profit-sharing agreement; 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 a security, certificate of deposit, or group or index
of securities, including an interest therein or based on the value
thereof; put, call, straddle, option, or privilege entered into on
a national securities exchange relating to foreign currency; or,
in general, an interest or instrument commonly known as a
"security"; or a 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. The term:
(A) includes both a certificated and an uncertificated
security;
(B) does not include an insurance or endowment policy or
annuity contract under which an insurance company
promises to pay a fixed or variable sum of money either in
a lump sum or periodically for life or another specified
period;
(C) does not include an interest in a contributory or
noncontributory pension or welfare plan subject to the
Employee Retirement Income Security Act of 1974;
(D) includes as an "investment contract" an investment in a
common enterprise with the expectation of profits to be
derived primarily from the efforts of a person other than the
investor and a "common enterprise" means an enterprise in
which the fortunes of the investor are interwoven with those
of either the person offering the investment, a third party, or
other investors; and
(E) includes as an "investment contract", among other
contracts, an interest in a limited partnership and a limited
liability company and an investment in a viatical settlement
or similar agreement.
(29) "Self-regulatory organization" means a national securities
exchange registered under the Securities Exchange Act of 1934,
a national securities association of broker-dealers registered
under the Securities Exchange Act of 1934, 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.
(30) "Sign" means, with present intent to authenticate or adopt
a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach or logically associate with the record an
electronic symbol, sound, or process.
(31) "State" means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
As added by P.L.27-2007, SEC.23.
IC 23-19-1-3
Federal statutes
Sec. 3. As used in this article:
(1) "Securities Act of 1933" (15 U.S.C. 77a et seq.);
(2) "Securities Exchange Act of 1934" (15 U.S.C. 78a et seq.);
(3) "Public Utility Holding Company Act of 1935" (15 U.S.C.
79 et seq.);
(4) "Investment Company Act of 1940" (15 U.S.C. 80a-1 et
seq.);
(5) "Investment Advisers Act of 1940" (15 U.S.C. 80b-1 et
seq.);
(6) "Employee Retirement Income Security Act of 1974" (29
U.S.C. 1001 et seq.);
(7) "National Housing Act" (12 U.S.C. 1701 et seq.);
(8) "Commodity Exchange Act" (7 U.S.C. 1 et seq.);
(9) "Internal Revenue Code" (26 U.S.C. 1 et seq.);
(10) "Securities Investor Protection Act of 1970" (15 U.S.C.
78a et seq.);
(11) "Securities Litigation Uniform Standards Act of 1998"
(112 Stat. 3227);
(12) "Small Business Investment Act of 1958" (15 U.S.C. 661
et seq.); and
(13) "Electronic Signatures in Global and National Commerce
Act" (15 U.S.C. 7001 et seq.);
mean those statutes, and the rules and regulations adopted under
those statutes, as in effect on July 1, 2008.
As added by P.L.27-2007, SEC.23. Amended by P.L.3-2008,
SEC.171.
IC 23-19-1-4
Construction in relation to corporation
Sec. 4. Nothing in this article shall be construed to relieve
corporations from making reports required by law to be made to the
secretary of state or any other state officer, or paying the fees to be
paid by corporations. This article shall not be construed to repeal any
law regulating the organization of corporations in this state, or the
admission of any foreign corporation, but the provisions of this
article shall be construed to be additional to any provisions
regulating the organization of a corporation under the laws of this
state, or the admission of a foreign corporation to do business in this
state.
As added by P.L.27-2007, SEC.23.
IC 23-19-1-5
Official comments incorporated
Sec. 5. Official comments adopted and published by the:
(1) secretary of state Indiana uniform securities act advisory
committee; and
(2) National Conference of Commissioners on Uniform State
Laws to the extent the comments are not inconsistent with the
comments adopted by the committee under subdivision (1);
may be consulted by the courts to determine the underlying reasons,
purposes, and policies of this article and may be used as a guide in
this article's construction and application.
As added by P.L.27-2007, SEC.23.