IC 23-19-2
Chapter 2. Exemptions From Registration of Securities
IC 23-19-2-1 Exempt securities
Sec. 1. The following securities are exempt from the requirements
of IC 23-19-3-1 through IC 23-19-3-6 and IC 23-19-5-4:
(1) A security, including a revenue obligation or a separate
security as defined in Rule 131 (17 CFR 230.131) adopted
under the Securities Act of 1933, issued, insured, or guaranteed
by the United States; by a state; by a political subdivision of a
state; by a public authority, agency, or instrumentality of one
(1) or more states; by a political subdivision of one (1) or more
states; or by a person controlled or supervised by and acting as
an instrumentality of the United States under authority granted
by Congress; or a certificate of deposit for any of the foregoing.
(2) A security issued, insured, or guaranteed by a foreign
government with which the United States maintains diplomatic
relations, or any of its political subdivisions, if the security is
recognized as a valid obligation by the issuer, insurer, or
guarantor.
(3) A security issued by and representing or that will represent
an interest in or a direct obligation of, or be guaranteed by:
(A) an international banking institution;
(B) a banking institution organized under the laws of the
United States; a member bank of the Federal Reserve
System; or a depository institution a substantial part of the
business of which consists or will consist of receiving
deposits or share accounts that 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 or
exercising fiduciary powers that are similar to those
permitted for national banks under the authority of the
Comptroller of Currency under Section 1 of Public Law
87-722 (12 U.S.C. 92a); or
(C) any other depository institution, unless by rule or order
the commissioner proceeds under section 4 of this chapter.
(4) A security issued by and representing an interest in or a debt
of, or insured or guaranteed by, an insurance company
authorized to do business in Indiana.
(5) A security issued or guaranteed by a railroad, other common
carrier, public utility, or public utility holding company that is:
(A) regulated in respect to its rates and charges by the
United States or a state;
(B) regulated in respect to the issuance or guarantee of the
security by the United States, a state, Canada, or a Canadian
province or territory; or
(C) a public utility holding company registered under the
Public Utility Holding Company Act of 1935 or a subsidiary
of such a registered holding company within the meaning of
that act.
(6) A federal covered security specified in Section 18(b)(1) of
the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) or by rule
adopted under that provision or a security listed or approved for
listing on another securities market specified by rule under this
article; a put or a call option contract; a warrant; a subscription
right on or with respect to such securities; an option or similar
derivative security on a security or an index of securities or
foreign currencies issued by a clearing agency registered under
the Securities Exchange Act of 1934 and listed or designated
for trading on a national securities exchange, a facility of a
national securities exchange, or a facility of a national securities
association registered under the Securities Exchange Act of
1934 or an offer or sale, of the underlying security in
connection with the offer, sale, or exercise of an option or other
security that was exempt when the option or other security was
written or issued; or an option or a derivative security
designated by the Securities and Exchange Commission under
Section 9(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78i(b)).
(7) A member's or owner's interest in, or a retention certificate
or like security given in lieu of a cash patronage dividend issued
by, a cooperative organized and operated as a nonprofit
membership cooperative under the cooperative laws of a state,
but not a member's or owner's interest, retention certificate, or
like security sold to persons other than bona fide members of
the cooperative.
(8) An equipment trust certificate with respect to equipment
leased or conditionally sold to a person, if any security issued
by the person would be exempt under this section or would be
a federal covered security under Section 18(b)(1) of the
Securities Act of 1933 (15 U.S.C. 77r(b)(1)).
(9) A security issued by a nonprofit corporation as defined by
Section 501(c)(3) of the Internal Revenue Code that is
designated by the governor as the secondary market for
guaranteed student loans under IC 20-12-21.2. As added by P.L.27-2007, SEC.23.
IC 23-19-2-2 Exempt transactions
Sec. 2. The following transactions are exempt from the
requirements of IC 23-19-3-1 through IC 23-19-3-6 and
IC 23-19-5-4:
(1) An isolated nonissuer transaction, whether effected by or
through a broker-dealer or not.
(2) A nonissuer transaction by or through a broker-dealer
registered, or exempt from registration under this article, and a
resale transaction by a sponsor of a unit investment trust
registered under the Investment Company Act of 1940, in a
security of a class that has been outstanding in the hands of the
public for at least ninety (90) days, if, at the date of the
transaction:
(A) the issuer of the security is engaged in business, the
issuer is not in the organizational stage or in bankruptcy or
receivership, and the issuer is not a blank check, blind pool,
or shell company that has no specific business plan or
purpose or has indicated that its primary business plan is to
engage in a merger or combination of the business with, or
an acquisition of, an unidentified person;
(B) the security is sold at a price reasonably related to its
current market price;
(C) the security does not constitute the whole or part of an
unsold allotment to, or a subscription or participation by, the
broker-dealer as an underwriter of the security or a
redistribution;
(D) a nationally recognized securities manual or its
electronic equivalent designated by rule adopted or order
issued under this article or a record filed with the Securities
and Exchange Commission that is publicly available
contains:
(i) a description of the business and operations of the
issuer;
(ii) the names of the issuer's executive officers and the
names of the issuer's directors, if any;
(iii) an audited balance sheet of the issuer as of a date
within eighteen (18) months before the date of the
transaction or, in the case of a reorganization or merger
when the parties to the reorganization or merger each had
an audited balance sheet, a pro forma balance sheet for the
combined organization; and
(iv) an audited income statement for each of the issuer's
two (2) immediately previous fiscal years or for the period
of existence of the issuer, whichever is shorter, or, in the
case of a reorganization or merger when each party to the
reorganization or merger had audited income statements,
a pro forma income statement; and
(E) any one (1) of the following requirements is met:
(i) The issuer of the security has a class of equity
securities listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act
of 1934 or designated for trading on the National
Association of Securities Dealers Automated Quotation
System.
(ii) The issuer of the security is a unit investment trust
registered under the Investment Company Act of 1940.
(iii) The issuer of the security, including its predecessors,
has been engaged in continuous business for at least three
(3) years.
(iv) The issuer of the security has total assets of at least
two million dollars ($2,000,000) based on an audited
balance sheet as of a date within eighteen (18) months
before the date of the transaction or, in the case of a
reorganization or merger when the parties to the
reorganization or merger each had such an audited balance
sheet, a pro forma balance sheet for the combined
organization.
(3) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in a
security of a foreign issuer that is a margin security defined in
regulations or rules adopted by the Board of Governors of the
Federal Reserve System.
(4) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in an
outstanding security if the guarantor of the security files reports
with the Securities and Exchange Commission under the
reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)).
(5) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in a
security that:
(A) is rated at the time of the transaction by a nationally
recognized statistical rating organization in one (1) of its
four (4) highest rating categories; or
(B) has a fixed maturity or a fixed interest or dividend, if:
(i) a default has not occurred during the current fiscal year
or within the three (3) previous fiscal years, or during the
existence of the issuer and any predecessor if less than
three (3) fiscal years, in the payment of principal, interest,
or dividends on the security; and
(ii) the issuer is engaged in business, is not in the
organizational stage or in bankruptcy or receivership, and
is not and has not been within the previous twelve (12)
months a blank check, blind pool, or shell company that
has no specific business plan or purpose or has indicated
that its primary business plan is to engage in a merger or
combination of the business with, or an acquisition of, an
unidentified person.
(6) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article
effecting an unsolicited order or offer to purchase.
(7) A nonissuer transaction executed by a bona fide pledgee
without the purpose of evading this article.
(8) A nonissuer transaction by a federal covered investment
adviser with investments under management in excess of one
hundred million dollars ($100,000,000) acting in the exercise of
discretionary authority in a signed record for the account of
others.
(9) A transaction in a security, whether or not the security or
transaction is otherwise exempt, in exchange for one (1) or
more bona fide outstanding securities, claims, or property
interests, or partly in such exchange and partly for cash, if the
terms and conditions of the issuance and exchange or the
delivery and exchange and the fairness of the terms and
conditions have been approved by the commissioner after a
hearing.
(10) A transaction between the issuer or other person on whose
behalf the offering is made and an underwriter, or among
underwriters.
(11) A transaction in a note, bond, debenture, or other evidence
of indebtedness secured by a mortgage or other security
agreement if:
(A) the note, bond, debenture, or other evidence of
indebtedness is offered and sold with the mortgage or other
security agreement as a unit;
(B) a general solicitation or general advertisement of the
transaction is not made; and
(C) a commission or other remuneration is not paid or given,
directly or indirectly, to a person not registered under this
article as a broker-dealer or as an agent.
(12) A transaction by an executor, administrator of an estate,
sheriff, marshal, receiver, trustee in bankruptcy, guardian, or
conservator.
(13) A sale or offer to sell to:
(A) an institutional investor;
(B) a federal covered investment adviser; or
(C) any other person exempted by rule adopted or order
issued under this article.
(14) A sale or an offer to sell securities of an issuer, if the
transaction is part of a single issue in which:
(A) not more than twenty-five (25) purchasers are present in
this state during any twelve (12) consecutive months, other
than those designated in subdivision (13);
(B) a general solicitation or general advertising is not made
in connection with the offer to sell or sale of the securities;
(C) a commission or other remuneration is not paid or given,
directly or indirectly, to a person other than a broker-dealer
registered under this article or an agent registered under this
article for soliciting a prospective purchaser in this state; and
(D) the issuer reasonably believes that all the purchasers in
this state, other than those designated in subdivision (13),
are purchasing for investment.
(15) A transaction under an offer to existing security holders of
the issuer, including persons that at the date of the transaction
are holders of convertible securities, options, or warrants, if a
commission or other remuneration, other than a standby
commission, is not paid or given, directly or indirectly, for
soliciting a security holder in this state.
(16) An offer to sell, but not a sale, of a security not exempt
from registration under the Securities Act of 1933 if:
(A) a registration or offering statement or similar record as
required under the Securities Act of 1933 has been filed, but
is not effective, or the offer is made in compliance with Rule
165 adopted under the Securities Act of 1933 (17 CFR
230.165); and
(B) a stop order of which the offeror is aware has not been
issued against the offeror by the commissioner or the
Securities and Exchange Commission, and an audit,
inspection, or proceeding that is public and that may
culminate in a stop order is not known by the offeror to be
pending.
(17) An offer to sell, but not a sale of, a security exempt from
registration under the Securities Act of 1933 if:
(A) a registration statement has been filed under this article,
but is not effective;
(B) a solicitation of interest is provided in a record to
offerees in compliance with a rule adopted by the
commissioner under this article; and
(C) a stop order of which the offeror is aware has not been
issued by the commissioner under this article and an audit,
inspection, or proceeding that may culminate in a stop order
is not known by the offeror to be pending.
(18) A transaction involving the distribution of the securities of
an issuer to the security holders of another person in connection
with a merger, consolidation, exchange of securities, sale of
assets, or other reorganization to which the issuer, or its parent
or subsidiary and the other person, or its parent or subsidiary,
are parties.
(19) A rescission offer, sale, or purchase under IC 23-19-5-10.
(20) An offer or sale of a security to a person not a resident of
this state and not present in this state if the offer or sale does
not constitute a violation of the laws of the state or foreign
jurisdiction in which the offeree or purchaser is present and is
not part of an unlawful plan or scheme to evade this article.
(21) Employees' stock purchase, savings, option, profit-sharing,
pension, or similar employees' benefit plan, including any
securities, plan interests, and guarantees issued under a
compensatory benefit plan or compensation contract, contained
in a record, established by the issuer, its parents, its
majority-owned subsidiaries, or the majority-owned subsidiaries
of the issuer's parent for the participation of their employees
including offers or sales of such securities to:
(A) directors; general partners; trustees, if the issuer is a
business trust; officers; consultants; and advisers;
(B) family members who acquire such securities from those
persons through gifts or domestic relations orders;
(C) former employees, directors, general partners, trustees,
officers, consultants, and advisers if those individuals were
employed by or providing services to the issuer when the
securities were offered; and
(D) insurance agents who are exclusive insurance agents of
the issuer, or the issuer's subsidiaries or parents, or who
derive more than fifty percent (50%) of their annual income
from those organizations.
(22) A transaction involving:
(A) a stock dividend or equivalent equity distribution,
whether the corporation or other business organization
distributing the dividend or equivalent equity distribution is
the issuer or not, if nothing of value is given by stockholders
or other equity holders for the dividend or equivalent equity
distribution other than the surrender of a right to a cash or
property dividend if each stockholder or other equity holder
may elect to take the dividend or equivalent equity
distribution in cash, property, or stock;
(B) an act incident to a judicially approved reorganization in
which a security is issued in exchange for one (1) or more
outstanding securities, claims, or property interests, or partly
in such exchange and partly for cash; or
(C) the solicitation of tenders of securities by an offeror in
a tender offer in compliance with Rule 162 adopted under
the Securities Act of 1933 (17 CFR 230.162).
(23) A nonissuer transaction in an outstanding security by or
through a broker-dealer registered or exempt from registration
under this article, if the issuer is a reporting issuer in a foreign
jurisdiction designated by this subdivision or by rule adopted or
order issued under this article; has been subject to continuous
reporting requirements in the foreign jurisdiction for not less
than one hundred eighty (180) days before the transaction; and
the security is listed on the foreign jurisdiction's securities
exchange that has been designated by this subdivision or by rule
adopted or order issued under this article, or is a security of the
same issuer that is of senior or substantially equal rank to the
listed security or is a warrant or right to purchase or subscribe
to any of the foregoing. For purposes of this subdivision,
Canada, together with its provinces and territories, is a
designated foreign jurisdiction and The Toronto Stock
Exchange, Inc., is a designated securities exchange. After an
administrative hearing in compliance with this article, the
commissioner, by rule adopted or order issued under this article,
may revoke the designation of a securities exchange under this
subdivision, if the commissioner finds that revocation is
necessary or appropriate in the public interest and for the
protection of investors. As added by P.L.27-2007, SEC.23.
IC 23-19-2-3 Additional exemptions; waivers
Sec. 3. A rule adopted or order issued under this article may
exempt a security, transaction, or offer; a rule under this article may
exempt a class of securities, transactions, or offers from any or all of
the requirements of IC 23-19-3-1 through IC 23-19-3-6 and
IC 23-19-5-4; and an order under this article may waive, in whole or
in part, any or all of the conditions for an exemption or offer under
sections 1 and 2 of this chapter. As added by P.L.27-2007, SEC.23.
IC 23-19-2-4 Denial, suspension, revocation, condition, or limitation of
exemptions; knowledge of order
Sec. 4. (a) Except with respect to a federal covered security or a
transaction involving a federal covered security, an order under this
article may deny, suspend application of, condition, limit, or revoke
an exemption created under section 1(3)(C), (1)(7), 1(8), or 2 of this
chapter or an exemption or waiver created under section 3 of this
chapter with respect to a specific security, transaction, or offer. An
order under this section may be issued only under the procedures in
IC 23-19-3-6(d) or IC 23-19-6-4 and only prospectively.
(b) A person does not violate IC 23-19-3-1, IC 23-19-3-3 through
IC 23-19-3-6, IC 23-19-5-4, or IC 23-19-5-10 by an offer to sell, offer
to purchase, sale, or purchase effected after the entry of an order
issued under this section if the person did not know, and in the
exercise of reasonable care could not have known, of the order. As added by P.L.27-2007, SEC.23.
IC 23-19-2
Chapter 2. Exemptions From Registration of Securities
IC 23-19-2-1 Exempt securities
Sec. 1. The following securities are exempt from the requirements
of IC 23-19-3-1 through IC 23-19-3-6 and IC 23-19-5-4:
(1) A security, including a revenue obligation or a separate
security as defined in Rule 131 (17 CFR 230.131) adopted
under the Securities Act of 1933, issued, insured, or guaranteed
by the United States; by a state; by a political subdivision of a
state; by a public authority, agency, or instrumentality of one
(1) or more states; by a political subdivision of one (1) or more
states; or by a person controlled or supervised by and acting as
an instrumentality of the United States under authority granted
by Congress; or a certificate of deposit for any of the foregoing.
(2) A security issued, insured, or guaranteed by a foreign
government with which the United States maintains diplomatic
relations, or any of its political subdivisions, if the security is
recognized as a valid obligation by the issuer, insurer, or
guarantor.
(3) A security issued by and representing or that will represent
an interest in or a direct obligation of, or be guaranteed by:
(A) an international banking institution;
(B) a banking institution organized under the laws of the
United States; a member bank of the Federal Reserve
System; or a depository institution a substantial part of the
business of which consists or will consist of receiving
deposits or share accounts that 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 or
exercising fiduciary powers that are similar to those
permitted for national banks under the authority of the
Comptroller of Currency under Section 1 of Public Law
87-722 (12 U.S.C. 92a); or
(C) any other depository institution, unless by rule or order
the commissioner proceeds under section 4 of this chapter.
(4) A security issued by and representing an interest in or a debt
of, or insured or guaranteed by, an insurance company
authorized to do business in Indiana.
(5) A security issued or guaranteed by a railroad, other common
carrier, public utility, or public utility holding company that is:
(A) regulated in respect to its rates and charges by the
United States or a state;
(B) regulated in respect to the issuance or guarantee of the
security by the United States, a state, Canada, or a Canadian
province or territory; or
(C) a public utility holding company registered under the
Public Utility Holding Company Act of 1935 or a subsidiary
of such a registered holding company within the meaning of
that act.
(6) A federal covered security specified in Section 18(b)(1) of
the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) or by rule
adopted under that provision or a security listed or approved for
listing on another securities market specified by rule under this
article; a put or a call option contract; a warrant; a subscription
right on or with respect to such securities; an option or similar
derivative security on a security or an index of securities or
foreign currencies issued by a clearing agency registered under
the Securities Exchange Act of 1934 and listed or designated
for trading on a national securities exchange, a facility of a
national securities exchange, or a facility of a national securities
association registered under the Securities Exchange Act of
1934 or an offer or sale, of the underlying security in
connection with the offer, sale, or exercise of an option or other
security that was exempt when the option or other security was
written or issued; or an option or a derivative security
designated by the Securities and Exchange Commission under
Section 9(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78i(b)).
(7) A member's or owner's interest in, or a retention certificate
or like security given in lieu of a cash patronage dividend issued
by, a cooperative organized and operated as a nonprofit
membership cooperative under the cooperative laws of a state,
but not a member's or owner's interest, retention certificate, or
like security sold to persons other than bona fide members of
the cooperative.
(8) An equipment trust certificate with respect to equipment
leased or conditionally sold to a person, if any security issued
by the person would be exempt under this section or would be
a federal covered security under Section 18(b)(1) of the
Securities Act of 1933 (15 U.S.C. 77r(b)(1)).
(9) A security issued by a nonprofit corporation as defined by
Section 501(c)(3) of the Internal Revenue Code that is
designated by the governor as the secondary market for
guaranteed student loans under IC 20-12-21.2. As added by P.L.27-2007, SEC.23.
IC 23-19-2-2 Exempt transactions
Sec. 2. The following transactions are exempt from the
requirements of IC 23-19-3-1 through IC 23-19-3-6 and
IC 23-19-5-4:
(1) An isolated nonissuer transaction, whether effected by or
through a broker-dealer or not.
(2) A nonissuer transaction by or through a broker-dealer
registered, or exempt from registration under this article, and a
resale transaction by a sponsor of a unit investment trust
registered under the Investment Company Act of 1940, in a
security of a class that has been outstanding in the hands of the
public for at least ninety (90) days, if, at the date of the
transaction:
(A) the issuer of the security is engaged in business, the
issuer is not in the organizational stage or in bankruptcy or
receivership, and the issuer is not a blank check, blind pool,
or shell company that has no specific business plan or
purpose or has indicated that its primary business plan is to
engage in a merger or combination of the business with, or
an acquisition of, an unidentified person;
(B) the security is sold at a price reasonably related to its
current market price;
(C) the security does not constitute the whole or part of an
unsold allotment to, or a subscription or participation by, the
broker-dealer as an underwriter of the security or a
redistribution;
(D) a nationally recognized securities manual or its
electronic equivalent designated by rule adopted or order
issued under this article or a record filed with the Securities
and Exchange Commission that is publicly available
contains:
(i) a description of the business and operations of the
issuer;
(ii) the names of the issuer's executive officers and the
names of the issuer's directors, if any;
(iii) an audited balance sheet of the issuer as of a date
within eighteen (18) months before the date of the
transaction or, in the case of a reorganization or merger
when the parties to the reorganization or merger each had
an audited balance sheet, a pro forma balance sheet for the
combined organization; and
(iv) an audited income statement for each of the issuer's
two (2) immediately previous fiscal years or for the period
of existence of the issuer, whichever is shorter, or, in the
case of a reorganization or merger when each party to the
reorganization or merger had audited income statements,
a pro forma income statement; and
(E) any one (1) of the following requirements is met:
(i) The issuer of the security has a class of equity
securities listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act
of 1934 or designated for trading on the National
Association of Securities Dealers Automated Quotation
System.
(ii) The issuer of the security is a unit investment trust
registered under the Investment Company Act of 1940.
(iii) The issuer of the security, including its predecessors,
has been engaged in continuous business for at least three
(3) years.
(iv) The issuer of the security has total assets of at least
two million dollars ($2,000,000) based on an audited
balance sheet as of a date within eighteen (18) months
before the date of the transaction or, in the case of a
reorganization or merger when the parties to the
reorganization or merger each had such an audited balance
sheet, a pro forma balance sheet for the combined
organization.
(3) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in a
security of a foreign issuer that is a margin security defined in
regulations or rules adopted by the Board of Governors of the
Federal Reserve System.
(4) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in an
outstanding security if the guarantor of the security files reports
with the Securities and Exchange Commission under the
reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)).
(5) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in a
security that:
(A) is rated at the time of the transaction by a nationally
recognized statistical rating organization in one (1) of its
four (4) highest rating categories; or
(B) has a fixed maturity or a fixed interest or dividend, if:
(i) a default has not occurred during the current fiscal year
or within the three (3) previous fiscal years, or during the
existence of the issuer and any predecessor if less than
three (3) fiscal years, in the payment of principal, interest,
or dividends on the security; and
(ii) the issuer is engaged in business, is not in the
organizational stage or in bankruptcy or receivership, and
is not and has not been within the previous twelve (12)
months a blank check, blind pool, or shell company that
has no specific business plan or purpose or has indicated
that its primary business plan is to engage in a merger or
combination of the business with, or an acquisition of, an
unidentified person.
(6) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article
effecting an unsolicited order or offer to purchase.
(7) A nonissuer transaction executed by a bona fide pledgee
without the purpose of evading this article.
(8) A nonissuer transaction by a federal covered investment
adviser with investments under management in excess of one
hundred million dollars ($100,000,000) acting in the exercise of
discretionary authority in a signed record for the account of
others.
(9) A transaction in a security, whether or not the security or
transaction is otherwise exempt, in exchange for one (1) or
more bona fide outstanding securities, claims, or property
interests, or partly in such exchange and partly for cash, if the
terms and conditions of the issuance and exchange or the
delivery and exchange and the fairness of the terms and
conditions have been approved by the commissioner after a
hearing.
(10) A transaction between the issuer or other person on whose
behalf the offering is made and an underwriter, or among
underwriters.
(11) A transaction in a note, bond, debenture, or other evidence
of indebtedness secured by a mortgage or other security
agreement if:
(A) the note, bond, debenture, or other evidence of
indebtedness is offered and sold with the mortgage or other
security agreement as a unit;
(B) a general solicitation or general advertisement of the
transaction is not made; and
(C) a commission or other remuneration is not paid or given,
directly or indirectly, to a person not registered under this
article as a broker-dealer or as an agent.
(12) A transaction by an executor, administrator of an estate,
sheriff, marshal, receiver, trustee in bankruptcy, guardian, or
conservator.
(13) A sale or offer to sell to:
(A) an institutional investor;
(B) a federal covered investment adviser; or
(C) any other person exempted by rule adopted or order
issued under this article.
(14) A sale or an offer to sell securities of an issuer, if the
transaction is part of a single issue in which:
(A) not more than twenty-five (25) purchasers are present in
this state during any twelve (12) consecutive months, other
than those designated in subdivision (13);
(B) a general solicitation or general advertising is not made
in connection with the offer to sell or sale of the securities;
(C) a commission or other remuneration is not paid or given,
directly or indirectly, to a person other than a broker-dealer
registered under this article or an agent registered under this
article for soliciting a prospective purchaser in this state; and
(D) the issuer reasonably believes that all the purchasers in
this state, other than those designated in subdivision (13),
are purchasing for investment.
(15) A transaction under an offer to existing security holders of
the issuer, including persons that at the date of the transaction
are holders of convertible securities, options, or warrants, if a
commission or other remuneration, other than a standby
commission, is not paid or given, directly or indirectly, for
soliciting a security holder in this state.
(16) An offer to sell, but not a sale, of a security not exempt
from registration under the Securities Act of 1933 if:
(A) a registration or offering statement or similar record as
required under the Securities Act of 1933 has been filed, but
is not effective, or the offer is made in compliance with Rule
165 adopted under the Securities Act of 1933 (17 CFR
230.165); and
(B) a stop order of which the offeror is aware has not been
issued against the offeror by the commissioner or the
Securities and Exchange Commission, and an audit,
inspection, or proceeding that is public and that may
culminate in a stop order is not known by the offeror to be
pending.
(17) An offer to sell, but not a sale of, a security exempt from
registration under the Securities Act of 1933 if:
(A) a registration statement has been filed under this article,
but is not effective;
(B) a solicitation of interest is provided in a record to
offerees in compliance with a rule adopted by the
commissioner under this article; and
(C) a stop order of which the offeror is aware has not been
issued by the commissioner under this article and an audit,
inspection, or proceeding that may culminate in a stop order
is not known by the offeror to be pending.
(18) A transaction involving the distribution of the securities of
an issuer to the security holders of another person in connection
with a merger, consolidation, exchange of securities, sale of
assets, or other reorganization to which the issuer, or its parent
or subsidiary and the other person, or its parent or subsidiary,
are parties.
(19) A rescission offer, sale, or purchase under IC 23-19-5-10.
(20) An offer or sale of a security to a person not a resident of
this state and not present in this state if the offer or sale does
not constitute a violation of the laws of the state or foreign
jurisdiction in which the offeree or purchaser is present and is
not part of an unlawful plan or scheme to evade this article.
(21) Employees' stock purchase, savings, option, profit-sharing,
pension, or similar employees' benefit plan, including any
securities, plan interests, and guarantees issued under a
compensatory benefit plan or compensation contract, contained
in a record, established by the issuer, its parents, its
majority-owned subsidiaries, or the majority-owned subsidiaries
of the issuer's parent for the participation of their employees
including offers or sales of such securities to:
(A) directors; general partners; trustees, if the issuer is a
business trust; officers; consultants; and advisers;
(B) family members who acquire such securities from those
persons through gifts or domestic relations orders;
(C) former employees, directors, general partners, trustees,
officers, consultants, and advisers if those individuals were
employed by or providing services to the issuer when the
securities were offered; and
(D) insurance agents who are exclusive insurance agents of
the issuer, or the issuer's subsidiaries or parents, or who
derive more than fifty percent (50%) of their annual income
from those organizations.
(22) A transaction involving:
(A) a stock dividend or equivalent equity distribution,
whether the corporation or other business organization
distributing the dividend or equivalent equity distribution is
the issuer or not, if nothing of value is given by stockholders
or other equity holders for the dividend or equivalent equity
distribution other than the surrender of a right to a cash or
property dividend if each stockholder or other equity holder
may elect to take the dividend or equivalent equity
distribution in cash, property, or stock;
(B) an act incident to a judicially approved reorganization in
which a security is issued in exchange for one (1) or more
outstanding securities, claims, or property interests, or partly
in such exchange and partly for cash; or
(C) the solicitation of tenders of securities by an offeror in
a tender offer in compliance with Rule 162 adopted under
the Securities Act of 1933 (17 CFR 230.162).
(23) A nonissuer transaction in an outstanding security by or
through a broker-dealer registered or exempt from registration
under this article, if the issuer is a reporting issuer in a foreign
jurisdiction designated by this subdivision or by rule adopted or
order issued under this article; has been subject to continuous
reporting requirements in the foreign jurisdiction for not less
than one hundred eighty (180) days before the transaction; and
the security is listed on the foreign jurisdiction's securities
exchange that has been designated by this subdivision or by rule
adopted or order issued under this article, or is a security of the
same issuer that is of senior or substantially equal rank to the
listed security or is a warrant or right to purchase or subscribe
to any of the foregoing. For purposes of this subdivision,
Canada, together with its provinces and territories, is a
designated foreign jurisdiction and The Toronto Stock
Exchange, Inc., is a designated securities exchange. After an
administrative hearing in compliance with this article, the
commissioner, by rule adopted or order issued under this article,
may revoke the designation of a securities exchange under this
subdivision, if the commissioner finds that revocation is
necessary or appropriate in the public interest and for the
protection of investors. As added by P.L.27-2007, SEC.23.
IC 23-19-2-3 Additional exemptions; waivers
Sec. 3. A rule adopted or order issued under this article may
exempt a security, transaction, or offer; a rule under this article may
exempt a class of securities, transactions, or offers from any or all of
the requirements of IC 23-19-3-1 through IC 23-19-3-6 and
IC 23-19-5-4; and an order under this article may waive, in whole or
in part, any or all of the conditions for an exemption or offer under
sections 1 and 2 of this chapter. As added by P.L.27-2007, SEC.23.
IC 23-19-2-4 Denial, suspension, revocation, condition, or limitation of
exemptions; knowledge of order
Sec. 4. (a) Except with respect to a federal covered security or a
transaction involving a federal covered security, an order under this
article may deny, suspend application of, condition, limit, or revoke
an exemption created under section 1(3)(C), (1)(7), 1(8), or 2 of this
chapter or an exemption or waiver created under section 3 of this
chapter with respect to a specific security, transaction, or offer. An
order under this section may be issued only under the procedures in
IC 23-19-3-6(d) or IC 23-19-6-4 and only prospectively.
(b) A person does not violate IC 23-19-3-1, IC 23-19-3-3 through
IC 23-19-3-6, IC 23-19-5-4, or IC 23-19-5-10 by an offer to sell, offer
to purchase, sale, or purchase effected after the entry of an order
issued under this section if the person did not know, and in the
exercise of reasonable care could not have known, of the order. As added by P.L.27-2007, SEC.23.
IC 23-19-2
Chapter 2. Exemptions From Registration of Securities
IC 23-19-2-1 Exempt securities
Sec. 1. The following securities are exempt from the requirements
of IC 23-19-3-1 through IC 23-19-3-6 and IC 23-19-5-4:
(1) A security, including a revenue obligation or a separate
security as defined in Rule 131 (17 CFR 230.131) adopted
under the Securities Act of 1933, issued, insured, or guaranteed
by the United States; by a state; by a political subdivision of a
state; by a public authority, agency, or instrumentality of one
(1) or more states; by a political subdivision of one (1) or more
states; or by a person controlled or supervised by and acting as
an instrumentality of the United States under authority granted
by Congress; or a certificate of deposit for any of the foregoing.
(2) A security issued, insured, or guaranteed by a foreign
government with which the United States maintains diplomatic
relations, or any of its political subdivisions, if the security is
recognized as a valid obligation by the issuer, insurer, or
guarantor.
(3) A security issued by and representing or that will represent
an interest in or a direct obligation of, or be guaranteed by:
(A) an international banking institution;
(B) a banking institution organized under the laws of the
United States; a member bank of the Federal Reserve
System; or a depository institution a substantial part of the
business of which consists or will consist of receiving
deposits or share accounts that 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 or
exercising fiduciary powers that are similar to those
permitted for national banks under the authority of the
Comptroller of Currency under Section 1 of Public Law
87-722 (12 U.S.C. 92a); or
(C) any other depository institution, unless by rule or order
the commissioner proceeds under section 4 of this chapter.
(4) A security issued by and representing an interest in or a debt
of, or insured or guaranteed by, an insurance company
authorized to do business in Indiana.
(5) A security issued or guaranteed by a railroad, other common
carrier, public utility, or public utility holding company that is:
(A) regulated in respect to its rates and charges by the
United States or a state;
(B) regulated in respect to the issuance or guarantee of the
security by the United States, a state, Canada, or a Canadian
province or territory; or
(C) a public utility holding company registered under the
Public Utility Holding Company Act of 1935 or a subsidiary
of such a registered holding company within the meaning of
that act.
(6) A federal covered security specified in Section 18(b)(1) of
the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) or by rule
adopted under that provision or a security listed or approved for
listing on another securities market specified by rule under this
article; a put or a call option contract; a warrant; a subscription
right on or with respect to such securities; an option or similar
derivative security on a security or an index of securities or
foreign currencies issued by a clearing agency registered under
the Securities Exchange Act of 1934 and listed or designated
for trading on a national securities exchange, a facility of a
national securities exchange, or a facility of a national securities
association registered under the Securities Exchange Act of
1934 or an offer or sale, of the underlying security in
connection with the offer, sale, or exercise of an option or other
security that was exempt when the option or other security was
written or issued; or an option or a derivative security
designated by the Securities and Exchange Commission under
Section 9(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78i(b)).
(7) A member's or owner's interest in, or a retention certificate
or like security given in lieu of a cash patronage dividend issued
by, a cooperative organized and operated as a nonprofit
membership cooperative under the cooperative laws of a state,
but not a member's or owner's interest, retention certificate, or
like security sold to persons other than bona fide members of
the cooperative.
(8) An equipment trust certificate with respect to equipment
leased or conditionally sold to a person, if any security issued
by the person would be exempt under this section or would be
a federal covered security under Section 18(b)(1) of the
Securities Act of 1933 (15 U.S.C. 77r(b)(1)).
(9) A security issued by a nonprofit corporation as defined by
Section 501(c)(3) of the Internal Revenue Code that is
designated by the governor as the secondary market for
guaranteed student loans under IC 20-12-21.2. As added by P.L.27-2007, SEC.23.
IC 23-19-2-2 Exempt transactions
Sec. 2. The following transactions are exempt from the
requirements of IC 23-19-3-1 through IC 23-19-3-6 and
IC 23-19-5-4:
(1) An isolated nonissuer transaction, whether effected by or
through a broker-dealer or not.
(2) A nonissuer transaction by or through a broker-dealer
registered, or exempt from registration under this article, and a
resale transaction by a sponsor of a unit investment trust
registered under the Investment Company Act of 1940, in a
security of a class that has been outstanding in the hands of the
public for at least ninety (90) days, if, at the date of the
transaction:
(A) the issuer of the security is engaged in business, the
issuer is not in the organizational stage or in bankruptcy or
receivership, and the issuer is not a blank check, blind pool,
or shell company that has no specific business plan or
purpose or has indicated that its primary business plan is to
engage in a merger or combination of the business with, or
an acquisition of, an unidentified person;
(B) the security is sold at a price reasonably related to its
current market price;
(C) the security does not constitute the whole or part of an
unsold allotment to, or a subscription or participation by, the
broker-dealer as an underwriter of the security or a
redistribution;
(D) a nationally recognized securities manual or its
electronic equivalent designated by rule adopted or order
issued under this article or a record filed with the Securities
and Exchange Commission that is publicly available
contains:
(i) a description of the business and operations of the
issuer;
(ii) the names of the issuer's executive officers and the
names of the issuer's directors, if any;
(iii) an audited balance sheet of the issuer as of a date
within eighteen (18) months before the date of the
transaction or, in the case of a reorganization or merger
when the parties to the reorganization or merger each had
an audited balance sheet, a pro forma balance sheet for the
combined organization; and
(iv) an audited income statement for each of the issuer's
two (2) immediately previous fiscal years or for the period
of existence of the issuer, whichever is shorter, or, in the
case of a reorganization or merger when each party to the
reorganization or merger had audited income statements,
a pro forma income statement; and
(E) any one (1) of the following requirements is met:
(i) The issuer of the security has a class of equity
securities listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act
of 1934 or designated for trading on the National
Association of Securities Dealers Automated Quotation
System.
(ii) The issuer of the security is a unit investment trust
registered under the Investment Company Act of 1940.
(iii) The issuer of the security, including its predecessors,
has been engaged in continuous business for at least three
(3) years.
(iv) The issuer of the security has total assets of at least
two million dollars ($2,000,000) based on an audited
balance sheet as of a date within eighteen (18) months
before the date of the transaction or, in the case of a
reorganization or merger when the parties to the
reorganization or merger each had such an audited balance
sheet, a pro forma balance sheet for the combined
organization.
(3) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in a
security of a foreign issuer that is a margin security defined in
regulations or rules adopted by the Board of Governors of the
Federal Reserve System.
(4) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in an
outstanding security if the guarantor of the security files reports
with the Securities and Exchange Commission under the
reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)).
(5) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article in a
security that:
(A) is rated at the time of the transaction by a nationally
recognized statistical rating organization in one (1) of its
four (4) highest rating categories; or
(B) has a fixed maturity or a fixed interest or dividend, if:
(i) a default has not occurred during the current fiscal year
or within the three (3) previous fiscal years, or during the
existence of the issuer and any predecessor if less than
three (3) fiscal years, in the payment of principal, interest,
or dividends on the security; and
(ii) the issuer is engaged in business, is not in the
organizational stage or in bankruptcy or receivership, and
is not and has not been within the previous twelve (12)
months a blank check, blind pool, or shell company that
has no specific business plan or purpose or has indicated
that its primary business plan is to engage in a merger or
combination of the business with, or an acquisition of, an
unidentified person.
(6) A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this article
effecting an unsolicited order or offer to purchase.
(7) A nonissuer transaction executed by a bona fide pledgee
without the purpose of evading this article.
(8) A nonissuer transaction by a federal covered investment
adviser with investments under management in excess of one
hundred million dollars ($100,000,000) acting in the exercise of
discretionary authority in a signed record for the account of
others.
(9) A transaction in a security, whether or not the security or
transaction is otherwise exempt, in exchange for one (1) or
more bona fide outstanding securities, claims, or property
interests, or partly in such exchange and partly for cash, if the
terms and conditions of the issuance and exchange or the
delivery and exchange and the fairness of the terms and
conditions have been approved by the commissioner after a
hearing.
(10) A transaction between the issuer or other person on whose
behalf the offering is made and an underwriter, or among
underwriters.
(11) A transaction in a note, bond, debenture, or other evidence
of indebtedness secured by a mortgage or other security
agreement if:
(A) the note, bond, debenture, or other evidence of
indebtedness is offered and sold with the mortgage or other
security agreement as a unit;
(B) a general solicitation or general advertisement of the
transaction is not made; and
(C) a commission or other remuneration is not paid or given,
directly or indirectly, to a person not registered under this
article as a broker-dealer or as an agent.
(12) A transaction by an executor, administrator of an estate,
sheriff, marshal, receiver, trustee in bankruptcy, guardian, or
conservator.
(13) A sale or offer to sell to:
(A) an institutional investor;
(B) a federal covered investment adviser; or
(C) any other person exempted by rule adopted or order
issued under this article.
(14) A sale or an offer to sell securities of an issuer, if the
transaction is part of a single issue in which:
(A) not more than twenty-five (25) purchasers are present in
this state during any twelve (12) consecutive months, other
than those designated in subdivision (13);
(B) a general solicitation or general advertising is not made
in connection with the offer to sell or sale of the securities;
(C) a commission or other remuneration is not paid or given,
directly or indirectly, to a person other than a broker-dealer
registered under this article or an agent registered under this
article for soliciting a prospective purchaser in this state; and
(D) the issuer reasonably believes that all the purchasers in
this state, other than those designated in subdivision (13),
are purchasing for investment.
(15) A transaction under an offer to existing security holders of
the issuer, including persons that at the date of the transaction
are holders of convertible securities, options, or warrants, if a
commission or other remuneration, other than a standby
commission, is not paid or given, directly or indirectly, for
soliciting a security holder in this state.
(16) An offer to sell, but not a sale, of a security not exempt
from registration under the Securities Act of 1933 if:
(A) a registration or offering statement or similar record as
required under the Securities Act of 1933 has been filed, but
is not effective, or the offer is made in compliance with Rule
165 adopted under the Securities Act of 1933 (17 CFR
230.165); and
(B) a stop order of which the offeror is aware has not been
issued against the offeror by the commissioner or the
Securities and Exchange Commission, and an audit,
inspection, or proceeding that is public and that may
culminate in a stop order is not known by the offeror to be
pending.
(17) An offer to sell, but not a sale of, a security exempt from
registration under the Securities Act of 1933 if:
(A) a registration statement has been filed under this article,
but is not effective;
(B) a solicitation of interest is provided in a record to
offerees in compliance with a rule adopted by the
commissioner under this article; and
(C) a stop order of which the offeror is aware has not been
issued by the commissioner under this article and an audit,
inspection, or proceeding that may culminate in a stop order
is not known by the offeror to be pending.
(18) A transaction involving the distribution of the securities of
an issuer to the security holders of another person in connection
with a merger, consolidation, exchange of securities, sale of
assets, or other reorganization to which the issuer, or its parent
or subsidiary and the other person, or its parent or subsidiary,
are parties.
(19) A rescission offer, sale, or purchase under IC 23-19-5-10.
(20) An offer or sale of a security to a person not a resident of
this state and not present in this state if the offer or sale does
not constitute a violation of the laws of the state or foreign
jurisdiction in which the offeree or purchaser is present and is
not part of an unlawful plan or scheme to evade this article.
(21) Employees' stock purchase, savings, option, profit-sharing,
pension, or similar employees' benefit plan, including any
securities, plan interests, and guarantees issued under a
compensatory benefit plan or compensation contract, contained
in a record, established by the issuer, its parents, its
majority-owned subsidiaries, or the majority-owned subsidiaries
of the issuer's parent for the participation of their employees
including offers or sales of such securities to:
(A) directors; general partners; trustees, if the issuer is a
business trust; officers; consultants; and advisers;
(B) family members who acquire such securities from those
persons through gifts or domestic relations orders;
(C) former employees, directors, general partners, trustees,
officers, consultants, and advisers if those individuals were
employed by or providing services to the issuer when the
securities were offered; and
(D) insurance agents who are exclusive insurance agents of
the issuer, or the issuer's subsidiaries or parents, or who
derive more than fifty percent (50%) of their annual income
from those organizations.
(22) A transaction involving:
(A) a stock dividend or equivalent equity distribution,
whether the corporation or other business organization
distributing the dividend or equivalent equity distribution is
the issuer or not, if nothing of value is given by stockholders
or other equity holders for the dividend or equivalent equity
distribution other than the surrender of a right to a cash or
property dividend if each stockholder or other equity holder
may elect to take the dividend or equivalent equity
distribution in cash, property, or stock;
(B) an act incident to a judicially approved reorganization in
which a security is issued in exchange for one (1) or more
outstanding securities, claims, or property interests, or partly
in such exchange and partly for cash; or
(C) the solicitation of tenders of securities by an offeror in
a tender offer in compliance with Rule 162 adopted under
the Securities Act of 1933 (17 CFR 230.162).
(23) A nonissuer transaction in an outstanding security by or
through a broker-dealer registered or exempt from registration
under this article, if the issuer is a reporting issuer in a foreign
jurisdiction designated by this subdivision or by rule adopted or
order issued under this article; has been subject to continuous
reporting requirements in the foreign jurisdiction for not less
than one hundred eighty (180) days before the transaction; and
the security is listed on the foreign jurisdiction's securities
exchange that has been designated by this subdivision or by rule
adopted or order issued under this article, or is a security of the
same issuer that is of senior or substantially equal rank to the
listed security or is a warrant or right to purchase or subscribe
to any of the foregoing. For purposes of this subdivision,
Canada, together with its provinces and territories, is a
designated foreign jurisdiction and The Toronto Stock
Exchange, Inc., is a designated securities exchange. After an
administrative hearing in compliance with this article, the
commissioner, by rule adopted or order issued under this article,
may revoke the designation of a securities exchange under this
subdivision, if the commissioner finds that revocation is
necessary or appropriate in the public interest and for the
protection of investors. As added by P.L.27-2007, SEC.23.
IC 23-19-2-3 Additional exemptions; waivers
Sec. 3. A rule adopted or order issued under this article may
exempt a security, transaction, or offer; a rule under this article may
exempt a class of securities, transactions, or offers from any or all of
the requirements of IC 23-19-3-1 through IC 23-19-3-6 and
IC 23-19-5-4; and an order under this article may waive, in whole or
in part, any or all of the conditions for an exemption or offer under
sections 1 and 2 of this chapter. As added by P.L.27-2007, SEC.23.
IC 23-19-2-4 Denial, suspension, revocation, condition, or limitation of
exemptions; knowledge of order
Sec. 4. (a) Except with respect to a federal covered security or a
transaction involving a federal covered security, an order under this
article may deny, suspend application of, condition, limit, or revoke
an exemption created under section 1(3)(C), (1)(7), 1(8), or 2 of this
chapter or an exemption or waiver created under section 3 of this
chapter with respect to a specific security, transaction, or offer. An
order under this section may be issued only under the procedures in
IC 23-19-3-6(d) or IC 23-19-6-4 and only prospectively.
(b) A person does not violate IC 23-19-3-1, IC 23-19-3-3 through
IC 23-19-3-6, IC 23-19-5-4, or IC 23-19-5-10 by an offer to sell, offer
to purchase, sale, or purchase effected after the entry of an order
issued under this section if the person did not know, and in the
exercise of reasonable care could not have known, of the order. As added by P.L.27-2007, SEC.23.
