Section 421-B:2 Definitions.
When used in this chapter, unless the context otherwise requires:
I. ""Administrative hearing'' means a proceeding in which the legal rights, duties, immunities, or privileges of a respondent are required by law or rule to be determined by the department after an opportunity for a hearing.
I-a. ""Advertisement'' shall include any notice, circular, letter, or other written communication given to more than one person, or any notice or other announcement in any publication or verbal communication by radio, television, or other electronic media, which offers:
(a) Any analysis, report, or publication concerning securities or which is to be used in making any determination as when to buy or sell securities; or
(b) Any graph, chart, formula, or other device to be used in making any determination concerning when to buy or sell any security, or which security to buy or sell.
I-b. ""Affiliate'' means any person directly or indirectly controlling, controlled by, or under common control with another person.
II. ""Agent'' means any individual, other than a broker-dealer, issuer or issuer-dealer, who represents a broker-dealer, issuer or issuer-dealer in effecting or attempting to effect purchases or sales of securities or an individual other than an investment adviser who represents an investment adviser by providing investment advice or who is an investment adviser representative. ""Agent'' does not include an individual who represents an issuer in:
(a) Effecting transactions in a security exempted by RSA 421-B:17, I(a), (b), (c), (d), (e), (g), (h) or (j);
(b) Effecting transactions exempted from RSA 421-B:17, II(a), (d), (e), (f), (g), (i), (j), (k), (l), (m), (n), (o), (p)(1), or (q);
(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;
(d) Effecting transactions in securities registered by notification under RSA 421-B:12 if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state;
(e) Effecting other transactions, if such individual is an officer or director of the issuer, no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state, and upon application, such individual is specifically authorized by name in an order issued by the secretary of state; or
(f) Effecting transactions under RSA 421-B:11, I-a(e), if such individual is an officer or director of the issuer to whom no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state.
III. ""Broker-dealer'' means any person engaged in the business of effecting transactions in securities for the account of others or for his own account. ""Broker-dealer'' does not include:
(a) An agent;
(b) An issuer;
(c) A bank, savings institution or trust company;
(d) A person who has no place of business in this state if he effects transactions in this state exclusively with or through:
(1) The issuers of the securities involved in the transactions,
(2) Other broker-dealers, or
(3) Banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit sharing trusts, or other financial institutions or institutional buyers, or to broker-dealers, whether the purchaser is acting for itself or in some fiduciary capacity;
(e) A designated matching service; or
(f) Other persons not within the intent of this paragraph whom the secretary of state by rule or order designates.
IV. ""Attorney general'' means the attorney general or delegatee.
IV-a. (a) ""Branch office'' means:
(1) With regard to an investment adviser, any location other than the main office, identified by any means to broker-dealers or other investment advisers or to the public, customers, or clients as a location at which an investment adviser conducts an investment advisory business.
(2) With regard to a broker-dealer, any location where one or more agents, as defined in paragraph II, regularly conducts the business of effecting any transactions in, or inducing or attempting to induce the purchase or sale of, any security, or is held out as such, excluding:
(A) Any location that is established solely for customer service and/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 primary residence; provided that:
(i) Only one agent, or multiple agents who reside at that 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 does not meet with customers at the location;
(iii) Neither customer funds nor securities are handled at that location;
(iv) The 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;
(v) The agent's correspondence and communications with the public are subject to the broker-dealer's supervision;
(vi) Electronic communications, such as e-mail are made through the electronic system of the broker-dealer;
(vii) All orders for securities are entered through the designated branch office or an electronic system established by the 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; and
(ix) A list of the residence locations are maintained by the broker-dealer;
(C) Any location, other than a primary residence, that is used for securities business for less than 30 business days in any one calendar year, provided the broker-dealer complies with the provisions of IV-a (a)(2)(B)(ii) through (viii);
(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 non-securities activities and from which the agent effects no more than 25 securities transactions in any one calendar year; provided that any advertisement or sales literature identifying such location also sets forth the address and telephone number of the location from which the agent conducting business at the non-branch 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 paragraph as the secretary of state may determine.
(b) Notwithstanding the exclusions provided in subparagraph IV-a(a)(2), any location that is responsible for supervising the activities of agents of the broker dealer at one or more non-branch locations of the broker-dealer shall be a branch office.
(c) ""Business day'' as used in this paragraph shall not include any partial day provided that the agent or investment adviser representative spends at least 4 hours of such day at his or her designated branch office during the hours that such office is normally open for business.
IV-b. ""Complaint'' means a written statement submitted within a reasonable time following the incident complained of by a person, association, partnership, corporation, state agency (including the staff of the department) or by any other legal entity that sets forth specific allegations and requests administrative action by the department.
V. ""Department'' means the department of state.
V-a. ""Designated matching service'' means a matching service designated by rule or order by the secretary of state under this section in accordance with RSA 421-B:17, II(s).
V-b. ""Designated matching service facility'' means an Internet location or computer system operated, or a seminar or meeting conducted, by a designated matching service in accordance with RSA 421-B:17, II(s).
V-c. ""Ex parte communication'' means the transmittal of information or argument concerning the merits of the subject matter of any adjudicatory proceeding to or from a decision maker in that proceeding without proper notice to and opportunity to participate in by all parties.
V-d. ""Federal covered adviser'' means a person who is registered under section 203 of the Investment Advisers Act of 1940.
V-e. ""Federal covered security'' means any security that is a covered security under Section 18(b) of the Securities Act of 1933 or rules or regulations promulgated thereunder.
VI. ""Fraud,'' ""deceit,'' and ""defraud'' are not limited to common law deceit.
VII. ""Guaranteed'' means guaranteed as to payment of principal and interest or principal and dividends.
VII-a. ""Hearing'' means the receipt and consideration by the department of evidence or argument, or both, in accordance with these rules and applicable law, and includes:
(a) Conducting trial-type evidentiary hearings;
(b) Directing the filing of exhibits, affidavits, memoranda or briefs;
(c) Directing the delivery of oral argument; or
(d) Any combination of these or similar methods.
VIII. ""Industrial bond'' means any obligation issued by a governmental unit (including the United States, any state, any political subdivision of a state, or any agency, or corporate or other instrumentality, of one or more of them) other than a general obligation of a governmental unit having power to tax property or of an agency of the state of New Hampshire:
(a) Which is issued as part of an issue, all or a major portion of the proceeds of which are to be used directly or indirectly in any trade or business, and
(b) The payment of the principal or interest on which (under the terms of such obligation or any underlying arrangement) is, in whole or in major part:
(1) Secured by any interest in property used or to be used in a trade or business or in payment in respect of such property, or
(2) To be derived from payments in respect of property or borrowed money, used or to be used in a trade or business.
IX. ""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 other investments, or as to the advisability of investing in, purchasing or selling securities, or as to the advisability of making other investments, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities, or other investments. ""Investment adviser'' also includes financial planners and other persons who, as an integral component of other financially related services, provide the foregoing investment advisory services to others for compensation and as part of a business or who hold themselves out as providing the foregoing investment advisory services to others for compensation. ""Investment adviser'' does not include:
(a) A bank, savings institution or trust company;
(b) A lawyer, accountant, engineer or teacher whose performance of these services is solely incidental to the practice of the profession;
(c) A broker-dealer whose performance of these services is solely incidental to the conduct of business as a broker-dealer and who receives no special compensation for them;
(d) A publisher of any bona fide newspaper, news magazine or business or financial publication of general, regular, and paid circulation;
(e) A person whose advice, analyses, or reports relate only to securities exempted by RSA 421-B:17, I(a);
(f) A person who has no place of business in this state if the person's only clients in this state are other investment advisers, federal covered advisers, broker-dealers or persons to whom sales are exempted under RSA 421-B:17, II(g);
(g) A person who transacts business in the field of insurance, provided such business is solely and exclusively in the field of insurance;
(h) Any real estate broker who does not promote or sell any interest in any limited partnership;
(i) Any person that is a federal covered adviser;
(j) A person who has no place of business in this state and who, during the preceding 12 month period, has had not more than 5 clients, other than those specified in subparagraph (f), who are residents of this state;
(k) Such other persons not within the intent of this paragraph as the secretary of state may by rule or order designate.
IX-a. ""Investment adviser representative'' means any partner, officer, director, or a person occupying a similar status or performing similar functions, or other individual, except clerical or ministerial personnel, who is employed by or associated with an investment adviser that is licensed or required to be licensed under this chapter, or who has a place of business located in this state and is employed by or associated with a federal covered adviser; and who does any of the following:
(a) Makes any recommendations or otherwise renders advice regarding securities or other investments;
(b) Manages accounts or portfolios of clients;
(c) Determines which recommendation or advice regarding securities or other investments should be given;
(d) Solicits, offers, or negotiates for the sale of or sells investment advisory services; or
(e) Supervises employees who perform any of the functions in subparagraphs (a)-(d).
IX-b. ""Investment advisory contract'' means any contract or agreement whereby a person agrees to act as an investment adviser or to manage any investment or trading account for a person other than an investment adviser as defined in RSA 421-B:2, IX.
X. ""Investment metal'' means any object which contains gold, silver, or platinum, or any other metal which the secretary of state may specify by rule upon a showing that such other metal is being purchased and sold by the public as an investment.
XI. ""Investment gem'' means any gem which the secretary of state may specify by rule upon a showing that such gem is being purchased and sold by the public as an investment.
XII. ""Investment metal contract'' or ""investment gem contract'':
(a) Means:
(1) A sale of an investment metal or investment gem in which the seller or an affiliate of the seller retains physical possession of the investment metal or investment gem; or
(2) A contract of purchase or sale which provides for the future delivery of an investment metal or investment gem, or any option to purchase or option to sell such a contract; or
(3) A sale of an investment metal or investment gem pursuant to a contract known to the trade as a margin account, margin contract, leverage account, or leverage contract provided, however, that, for the purposes of this paragraph, the term ""leverage contract'' shall also mean any contract for the purchase or sale of any investment metal or investment gem, whereby the seller, or an agent, affiliate or representative of the seller, directly or indirectly arranges, or offers to arrange, for the financing of any portion of the total amount of the purchase or sale of the investment metal or investment gem.
(b) But shall not include:
(1) The sale of an investment metal or investment gem where the seller has reasonable grounds to believe that the investment metal or investment gem is being acquired for manufacturing, commercial or industrial purposes; or
(2) The sale, or contract for the future purchase or sale, of jewelry, art objects or other manufactured or crafted goods other than bullion or bulk sales of coins; or
(3) The sale of an investment metal or investment gem where full payment is made to the seller and physical delivery is made to the purchaser personally, and not to an agent, within 20 days of the date of purchase provided that a purchaser may designate a bank, savings institution, trust company, or licensed broker-dealer, within this state only, and not within any other state, to accept physical delivery on his behalf if such bank, savings institution, trust company or licensed broker-dealer maintains such investment metal or investment gem in safekeeping and as the specifically identifiable property of the purchaser; or
(4) Any futures contracts traded on a commodities exchange registered under the Federal Commodity Futures Trading Commission Act of 1974.
XII-a. ""Investor member'' means an investor who has been properly qualified by and uses a designated matching service. Any of the following investors are properly qualified: any institutional buyer as described in RSA 421-B:17, II(g), any accredited investor as defined in Regulation D, 230.501 of the Securities and Exchange Act of 1933; or any individual investor who certifies that such investor possesses sufficient knowledge and experience in business and financial matters so as to be capable of evaluating the merits and the risks of prospective investments.
XIII. ""Issuer'' means any person who issues or proposes to issue any security and any promoter who acts for an issuer to be formed, except:
(a) With respect to certificates of deposit or trust certificates, ""issuer'' means the person performing the act and assuming the duties of depositor, manager or trustee pursuant to the provisions of the trust or other instrument under which the security is issued;
(b) With respect to certificates of interest or participation in oil, gas or mining rights, titles or leases, ""issuer'' means the owner of any such right, title or lease, who creates a fractional interest therein for the purposes of sale.
XIII-a. ""Issuer-dealer'' means any person including, but not limited to, a corporation, partnership, limited liability company, association, joint stock company, trust where the interests of the beneficiaries are evidenced by a security, unincorporated organization, government, political subdivision of a government, or any other entity, organized in this state or having its principal office in this state, and issuing its own securities for sale directly to any member of the general public who is not a general partner, executive officer, manager, or director of the issuer.
XIII-b. ""Issuer-member'' means an issuer who uses a designated matching service facility in accordance with RSA 421-B:17, II(s).
XIV. ""Non-issuer'' means not directly or indirectly for the benefit of the issuer or an affiliate of the issuer.
XIV-a. ""NSMIA'' means the National Securities Improvement Act of 1996, or rules or regulations promulgated thereunder.
XV. ""Open end mutual fund'' means an open end management company as defined in the Investment Company Act of 1940.
XV-a. ""Order'' means an order issued pursuant to this chapter.
XV-b. ""Other investment company'' means a closed end management company, face amount certificate company, or unit investment trust as such terms are defined in the Investment Company Act of 1940.
XVI. ""Person'' means an individual, corporation, partnership, association, joint stock company, trust where the interests of the beneficiaries are evidenced by a security, unincorporated organization, a government, political subdivision of a government, or any other entity.
XVI-a. ""Petition'' means a written request for action by the secretary of state including a staff petition for relief and any petition for rehearing pursuant to RSA 541.
XVI-b. ""Presiding officer'' means a person to whom the secretary of state has delegated the authority to preside over some or all of an administrative hearing.
XVII. ""Purchasing for investment'' means a purchase made for investment and not for the purpose of resale. In determining whether securities have been purchased for investment, the length of the period for which the securities are held will be one of the factors considered. Securities held for 2 years after their purchase shall be conclusively deemed to have been purchased for investment.
XVII-a. ""Revocation'' means the recall and cancellation of a license, registration, or privilege for either a definite or indefinite period of time. A new application and fee shall be submitted prior to the issuance of a new license or registration if the applicant otherwise qualifies.
XVIII. ""Rule'' means a rule as defined in RSA 541-A:1, XV, subject to all of the requirements of RSA 541-A.
XIX. ""Sale,'' ""sell,'' ""offer for sale,'' or ""offer to sell'' includes the following meanings and transactions:
(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 is considered to constitute part of the subject of the purchase and to have been offered and sold for value.
(d) A purported gift of assessable stock is considered to involve an offer and sale.
(e) 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.
(f) The terms defined in this paragraph do not include:
(1) Any bona fide pledge or loan; or
(2) Any stock dividend, whether or not the corporation distributing the dividend is the issuer of the stock.
XIX-a. ""Sanction'' means any penalty imposed or authorized for imposition by the secretary of state, pursuant to RSA 421-B, including but not limited to license suspension or revocation, order to cease and desist or monetary penalties.
XIX-b. ""Secretary of state'' means the secretary of state or designee.
XIX-c. ""Securities Act of 1933,'' ""Securities Exchange Act of 1934,'' ""Investment Advisers Act of 1940,'' and ""Investment Company Act of 1940'' mean the federal statutes of those names as amended before or after the effective date of this paragraph.
XX. (a) ""Security'' means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit sharing agreement; membership interest in a limited liability company; partnership interest in a registered limited liability partnership; partnership interest in a limited partnership; collateral trust certificate; preorganization certificate or subscription; transferable shares; investment contract; investment metal contract or investment gem contract; voting trust certificate; certificate of deposit for a security; certificate of interest or participation in an oil, gas or mining right, title or lease or in payments out of production under such a right, title or lease; 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'' does not include any insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or for some other specified period.
(b) Notwithstanding subparagraph (a), a membership interest in a limited liability company or a partnership interest in a registered limited liability partnership is not a security if:
(1) The secretary of state, by rule or order, determines that it is not a security;
(2) The limited liability company is a professional limited liability company or foreign professional limited liability company under RSA 304-D; or
(3) The registered limited liability partnership or foreign registered limited liability partnership:
(A) Is licensed, registered, certified, or otherwise authorized under the provisions of RSA 309-B, 310-A, 311, 315, 316, 317-A, 318, 326-B, 327, 329, 330-A or 332-B to render professional services, as defined in RSA 304-D:1, VI, including necessary related services, or
(B) Is related to a registered limited liability partnership or foreign registered limited liability partnership licensed, registered, certified, or otherwise authorized under the provisions of RSA 309-B, 310-A, 311, 315, 316, 317-A, 318, 326-B, 327, 329, 330-A or 332-B to render professional services, as defined in RSA 304-D:1, VI.
(c) For purposes of subparagraph (b)(3) of this paragraph, a registered limited liability partnership or foreign registered limited liability partnership is related to a registered limited liability partnership or foreign registered limited liability partnership engaged in the rendering of professional services if:
(1) Such registered limited liability partnership or foreign registered limited liability partnership provides services related or complementary to the professional services rendered by, or provides services or facilities to, the registered limited liability partnership or foreign registered limited liability partnership engaged in the rendering of professional services; and
(2) Either:
(A) At least a majority of the partners in one partnership are partners in the other partnership, or
(B) At least a majority of partners in each partnership also hold interests or are members in another person, and each partnership renders services pursuant to an agreement with such other person, or
(C) The partnerships are affiliates within the meaning of RSA 421-B:2, I.
(D) In connection with the issuance of a cease and desist order issued by the secretary of state, and any hearings conducted, under RSA 421-B:23, I(a), the secretary may presume that a membership interest in a limited liability company or a partnership interest in a registered limited liability partnership is a security, and the person relying on subparagraph (b) of this paragraph has the burden of proving that the interest is not a security under the provisions of subparagraph (b).
XX-a. ""Staff'' means the employees of the department including but not limited to classified employees, contract employees, and shall include students involved in paid or unpaid programs.
XX-b. ""Solicitor'' means an investment adviser, investment adviser agent, or investment adviser representative that:
(a) Is licensed under this chapter;
(b) Conducts an investment advisory business solely for the purpose of soliciting, directly or indirectly, any client for, or referring any client to, an investment adviser licensed under this chapter;
(c) Receives a cash fee for such solicitation or referral; and
(d) Operates pursuant to a written agreement with the investment adviser that:
(1) Describes the solicitation activities to be engaged in on behalf of the investment adviser and the compensation to be received therefor;
(2) Contains an undertaking to perform the duties under the agreement in a manner consistent with the instructions of the investment adviser and the provisions of this chapter; and
(3) Requires, at the time of any solicitation activities for which compensation is paid or to be paid by the investment adviser, that the client be provided with a current copy of the investment adviser's written disclosure statement that describes the solicitation arrangement.
XXI. ""State'' means any state, territory, or possession of the United States, the District of Columbia or Puerto Rico.
XXII. ""Suspension'' means the temporary recall or denial of any license, registration or privilege granted for a specified period of time. Such license, registration or privilege shall be reinstated and returned to the person when he otherwise qualifies without the necessity of a new application or fee, provided any suspended license, registration, or privilege has not expired in the interim.
Source. 1981, 214:1. 1987, 183:1; 411:2, 3. 1990, 100:1. 1991, 43:1-3; 126:1; 355:71, 72, 89, II. 1992, 288:31, 34-37. 1994, 388:1, 2; 412:49. 1996, 212:13; 239:6-20. 1997, 112:1; 296:1-7. 2001, 260:1, 2. 2003, 156:1, eff. Aug. 16, 2003. 2006, 245:1, eff. July 1, 2006. 2007, 104:3, 6, eff. July 1, 2007.