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 SecuritiesAct.
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 toeffect purchases or sales of securities or represents an issuer ineffecting or attempting to effect purchases or sales of theissuer's securities. However, a partner, officer, or director of abroker-dealer or issuer, or an individual having a similar statusor performing similar functions is an agent only if the individualotherwise comes within the term. The term does not include anindividual excluded by rule adopted or order issued under thisarticle.
(2) "Bank" means:
(A) a banking institution organized under the laws of theUnited States;
(B) a member bank of the Federal Reserve System;
(C) any other banking institution, whether incorporated ornot, doing business under the laws of a state or of the UnitedStates, a substantial portion of the business of which consistsof receiving deposits or exercising fiduciary powers similarto those permitted to be exercised by national banks underthe authority of the Comptroller of the Currency underSection 1 of Public Law 87-722 (12 U.S.C. 92a), and whichis supervised and examined by a state or federal agencyhaving supervision over banks, and which is not operated forthe purpose of evading this article; and
(D) a receiver, conservator, or other liquidating agent of anyinstitution or firm included in clause (A), (B), or (C).
(3) "Broker-dealer" means a person engaged in the business ofeffecting transactions in securities for the account of others orfor 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 isa wholly owned subsidiary of a bank or savings institutionif its activities as a broker-dealer are limited to thosespecified 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 of1934 (15 U.S.C. 78c(a)(4) and 15 U.S.C. 78c(a)(5)) or abank that satisfies the conditions described in subsection3(a)(4)(E) of the Securities Exchange Act of 1934 (15U.S.C. 78c(a)(4));
(D) an international banking institution; or
(E) a person excluded by rule adopted or order issued underthis article.
(4) "Commissioner" means the securities commissionerappointed under IC 23-19-6-1(a).
(5) "Depository institution" means:
(A) a bank; or
(B) a savings institution, trust company, credit union, orsimilar institution that is organized or chartered under thelaws of a state or of the United States, authorized to receivedeposits, and supervised and examined by an official oragency of a state or the United States if its deposits or shareaccounts are insured to the maximum amount authorized bystatute by the Federal Deposit Insurance Corporation, theNational Credit Union Share Insurance Fund, or a successorauthorized by federal law. The term does not include:
(i) an insurance company or other organization primarilyengaged in the business of insurance;
(ii) a Morris Plan bank; or
(iii) an industrial loan company that is not an insureddepository institution as defined in Section 3(c)(2) of theFederal Deposit Insurance Act (12 U.S.C. 1813(c)(2)) orany successor federal statute.
(6) "Federal covered investment adviser" means a personregistered under the Investment Advisers Act of 1940.
(7) "Federal covered security" means a security that is, or uponcompletion of a transaction will be, a covered security underSection 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 bythe commissioner or a designee of the commissioner.
(9) "Fraud", "fraudulent", "deceit", and "defraud" mean amisrepresentation of a material fact, a promise, representation,or prediction not made honestly or in good faith, or the failureto disclose a material fact necessary in order to make thestatements made, in light of the circumstances under which theywere made, not misleading. This definition does not limit ordiminish the full meaning of the terms as applied by or definedin courts of law or equity. The terms are not limited to commonlaw deceit.
(10) "Guaranteed" means guaranteed as to payment of allprincipal, 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 bankinginstitution;
(B) an insurance company;
(C) a separate account of an insurance company;
(D) an investment company as defined in the InvestmentCompany Act of 1940;
(E) a broker-dealer registered under the Securities ExchangeAct of 1934;
(F) an employee pension, profit-sharing, or benefit plan ifthe plan has total assets in excess of ten million dollars($10,000,000) or its investment decisions are made by anamed fiduciary, as defined in the Employee RetirementIncome Security Act of 1974, that is a broker-dealerregistered under the Securities Exchange Act of 1934, aninvestment adviser registered or exempt from registrationunder the Investment Advisers Act of 1940, an investmentadviser registered under this article, a depository institution,or an insurance company;
(G) a plan established and maintained by a state, a politicalsubdivision of a state, or an agency or instrumentality of astate or a political subdivision of a state for the benefit of itsemployees, if the plan has total assets in excess of tenmillion dollars ($10,000,000) or its investment decisions aremade by a duly designated public official or by a namedfiduciary, as defined in the Employee Retirement IncomeSecurity Act of 1974, that is a broker-dealer registered underthe Securities Exchange Act of 1934, an investment adviserregistered or exempt from registration under the InvestmentAdvisers Act of 1940, an investment adviser registered underthis article, a depository institution, or an insurancecompany;
(H) a trust, if it has total assets in excess of ten milliondollars ($10,000,000), its trustee is a depository institution,and its participants are exclusively plans of the typesidentified in clause (F) or (G), regardless of the size of theirassets, except a trust that includes as participantsself-directed individual retirement accounts or similarself-directed plans;
(I) an organization described in Section 501(c)(3) of theInternal Revenue Code (26 U.S.C. 501(c)(3)), corporation,Massachusetts trust or similar business trust, limited liabilitycompany, or partnership, not formed for the specific purposeof acquiring the securities offered, with total assets in excessof ten million dollars ($10,000,000);
(J) a small business investment company licensed by theSmall Business Administration under Section 301(c) of theSmall 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 tenmillion dollars ($10,000,000);
(L) a federal covered investment adviser acting for its ownaccount;
(M) a "qualified institutional buyer", as defined in Rule144A(a)(1), other than Rule 144A(a)(1)(i)(H), adopted underthe Securities Act of 1933 (17 CFR 230.144A);
(N) a "major U.S. institutional investor", as defined in Rule15a-6(b)(4)(i) adopted under the Securities Exchange Act of1934 (17 CFR 240.15a-6);
(O) any other person, other than an individual, ofinstitutional character with total assets in excess of tenmillion dollars ($10,000,000) not organized for the specificpurpose of evading this article; or
(P) any other person specified by rule adopted or orderissued under this article.
(12) "Insurance company" means a company organized as aninsurance company whose primary business is writing insuranceor reinsuring risks underwritten by insurance companies andwhich is subject to supervision by the insurance commissioneror a similar official or agency of a state.
(13) "Insured" means insured as to payment of all principal andall interest.
(14) "International banking institution" means an internationalfinancial institution of which the United States is a member andwhose securities are exempt from registration under theSecurities Act of 1933.
(15) "Investment adviser" means a person that, forcompensation, engages in the business of advising others, eitherdirectly or through publications or writings, as to the value ofsecurities or the advisability of investing in, purchasing, orselling securities or that, for compensation and as a part of aregular business, issues or promulgates analyses or reportsconcerning securities. The term includes a financial planner orother person that, as an integral component of other financiallyrelated services, provides investment advice to others forcompensation as part of a business or that holds itself out asproviding investment advice to others for compensation. Theterm does not include:
(A) an investment adviser representative;
(B) a lawyer, accountant, engineer, or teacher whoseperformance of investment advice is solely incidental to thepractice of the person's profession;
(C) a broker-dealer or its agents whose performance ofinvestment advice is solely incidental to the conduct ofbusiness as a broker-dealer and that does not receive specialcompensation for the investment advice;
(D) a publisher of a bona fide newspaper, news magazine, orbusiness 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 awholly owned subsidiary of a bank or savings institution;
(G) any other person that is excluded by the InvestmentAdvisers Act of 1940 from the definition of investmentadviser; or
(H) any other person excluded by rule adopted or orderissued under this article.
(16) "Investment adviser representative" means an individualemployed by or associated with an investment adviser or federalcovered investment adviser and who makes anyrecommendations or otherwise gives investment adviceregarding securities, manages accounts or portfolios of clients,determines which recommendation or advice regardingsecurities should be given, provides investment advice or holdsherself or himself out as providing investment advice, receivescompensation to solicit, offer, or negotiate for the sale of or forselling investment advice, or supervises employees whoperform any of the foregoing. The term does not include anindividual who:
(A) performs only clerical or ministerial acts;
(B) is an agent whose performance of investment advice issolely incidental to the individual acting as an agent and whodoes not receive special compensation for investmentadvisory services;
(C) is employed by or associated with a federal coveredinvestment adviser, unless the individual has a "place ofbusiness" in this state, as that term is defined by rule adoptedunder 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 isdefined by rule adopted under Section 203A of theInvestment Advisers Act of 1940 (15 U.S.C. 80b-3a); or
(ii) not a "supervised person", as that term is defined inSection 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 thisarticle.
(17) "Issuer" means a person that issues or proposes to issue asecurity, subject to the following:
(A) The issuer of a voting trust certificate, collateral trustcertificate, certificate of deposit for a security, or share in aninvestment company without a board of directors orindividuals performing similar functions is the personperforming the acts and assuming the duties of depositor ormanager under the trust or other agreement or instrumentunder which the security is issued.
(B) The issuer of an equipment trust certificate or similarsecurity serving the same purpose is the person by which the
property is or will be used or to which the property orequipment is or will be leased or conditionally sold or thatis otherwise contractually responsible for assuring paymentof the certificate.
(C) The issuer of a fractional undivided interest in an oil,gas, or other mineral lease or in payments out of productionunder a lease, right, or royalty is the owner of an interest inthe lease or in payments out of production under a lease,right, or royalty, whether whole or fractional, that createsfractional interests for the purpose of sale.
(18) "Nonissuer transaction" or "nonissuer distribution" meansa transaction or distribution not directly or indirectly for thebenefit 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 asecurity for value. The term does not include a tender offer thatis subject to Section 14(d) of the Securities Exchange Act of1934 (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 orcommercial entity.
(21) "Place of business" of a broker-dealer, an investmentadviser, or a federal covered investment adviser means:
(A) an office at which the broker-dealer, investment adviser,or federal covered investment adviser regularly providesbrokerage or investment advice or solicits, meets with, orotherwise communicates with customers or clients; or
(B) any other location that is held out to the general publicas a location at which the broker-dealer, investment adviser,or federal covered investment adviser provides brokerage orinvestment advice or solicits, meets with, or otherwisecommunicates with customers or clients.
(22) "Predecessor act" means IC 23-2-1 (before its repeal).
(23) "Price amendment" means the amendment to a registrationstatement filed under the Securities Act of 1933 or, if anamendment is not filed, the prospectus or prospectussupplement filed under the Securities Act of 1933 that includesa statement of the offering price, underwriting and sellingdiscounts or commissions, amount of proceeds, conversionrates, call prices, and other matters dependent upon the offeringprice.
(24) "Principal place of business" of a broker-dealer or aninvestment adviser means the executive office of thebroker-dealer or investment adviser from which the officers,partners, or managers of the broker-dealer or investment adviserdirect, control, and coordinate the activities of the broker-dealeror investment adviser.
(25) "Record", except in the phrases "of record", "official
record", and "public record", means information that isinscribed on a tangible medium or that is stored in an electronicor other medium and is retrievable in perceivable form.
(26) "Sale" includes every contract of sale, contract to sell, ordisposition of a security or interest in a security for value, and"offer to sell" includes every attempt or offer to dispose of, orsolicitation of an offer to purchase, a security or interest in asecurity for value. Both terms include:
(A) a security given or delivered with, or as a bonus onaccount of, a purchase of securities or any other thingconstituting part of the subject of the purchase and havingbeen 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 orsubscribe to another security of the same or another issuerand a sale or offer of a security that gives the holder apresent or future right or privilege to convert the securityinto another security of the same or another issuer, includingan offer of the other security.
(27) "Securities and Exchange Commission" means the UnitedStates Securities and Exchange Commission.
(28) "Security" means a note; stock; treasury stock; securityfuture; bond; debenture; evidence of indebtedness; certificate ofinterest or participation in a profit-sharing agreement; collateraltrust certificate; preorganization certificate or subscription;transferable share; investment contract; voting trust certificate;certificate of deposit for a security; fractional undivided interestin oil, gas, or other mineral rights; put, call, straddle, option, orprivilege on a security, certificate of deposit, or group or indexof securities, including an interest therein or based on the valuethereof; put, call, straddle, option, or privilege entered into ona 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, orwarrant or right to subscribe to or purchase, any of theforegoing. The term:
(A) includes both a certificated and an uncertificatedsecurity;
(B) does not include an insurance or endowment policy orannuity contract under which an insurance companypromises to pay a fixed or variable sum of money either ina lump sum or periodically for life or another specifiedperiod;
(C) does not include an interest in a contributory ornoncontributory pension or welfare plan subject to theEmployee Retirement Income Security Act of 1974;
(D) includes as an "investment contract" an investment in acommon enterprise with the expectation of profits to bederived primarily from the efforts of a person other than the
investor and a "common enterprise" means an enterprise inwhich the fortunes of the investor are interwoven with thoseof either the person offering the investment, a third party, orother investors; and
(E) includes as an "investment contract", among othercontracts, an interest in a limited partnership and a limitedliability company and an investment in a viatical settlementor similar agreement.
(29) "Self-regulatory organization" means a national securitiesexchange registered under the Securities Exchange Act of 1934,a national securities association of broker-dealers registeredunder the Securities Exchange Act of 1934, a clearing agencyregistered under the Securities Exchange Act of 1934, or theMunicipal Securities Rulemaking Board established under theSecurities Exchange Act of 1934.
(30) "Sign" means, with present intent to authenticate or adopta record:
(A) to execute or adopt a tangible symbol; or
(B) to attach or logically associate with the record anelectronic symbol, sound, or process.
(31) "State" means a state of the United States, the District ofColumbia, Puerto Rico, the United States Virgin Islands, or anyterritory or insular possession subject to the jurisdiction of theUnited 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 etseq.);
(5) "Investment Advisers Act of 1940" (15 U.S.C. 80b-1 etseq.);
(6) "Employee Retirement Income Security Act of 1974" (29U.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. 661et seq.); and
(13) "Electronic Signatures in Global and National CommerceAct" (15 U.S.C. 7001 et seq.);mean those statutes, and the rules and regulations adopted underthose 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 relievecorporations from making reports required by law to be made to thesecretary of state or any other state officer, or paying the fees to bepaid by corporations. This article shall not be construed to repeal anylaw regulating the organization of corporations in this state, or theadmission of any foreign corporation, but the provisions of thisarticle shall be construed to be additional to any provisionsregulating the organization of a corporation under the laws of thisstate, or the admission of a foreign corporation to do business in thisstate.
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 advisorycommittee; and
(2) National Conference of Commissioners on Uniform StateLaws to the extent the comments are not inconsistent with thecomments 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 inthis article's construction and application.
As added by P.L.27-2007, SEC.23.