17-12a102.   Definitions.In this act, unless the context otherwiserequires:

      (1)   "Administrator" means the securities commissioner ofKansas, appointed as provided in K.S.A. 75-6301, and amendmentsthereto.

      (2)   "Agent" means an individual, other than a broker-dealer,who represents a broker-dealer in effecting or attempting to effectpurchases or sales of securities or represents an issuer ineffecting or attempting to effect purchases or sales of theissuer's securities, but 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 this act.

      (3)   "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 consists ofreceiving deposits or exercising fiduciary powers similar to thosepermitted to be exercised by national banks under the authorityof the comptroller of the currency pursuant to section 1 of Public Law87-722 (12 U.S.C. section 92a), and which is supervised andexamined by a state or federal agency having supervision overbanks, and which is not operated for the purpose of evading thisact; and

      (D)   a receiver, conservator, or other liquidating agent of anyinstitution or firm included in subparagraph (A), (B), or (C).

      (4)   "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, savings institution, or trust company if:

      (i)   Its activities as a broker-dealer are limited to thosespecified in subsections 3(a)(4)(B)(i) through (vi) and (viii)through (x); 3(a)(4)(B)(xi) if limited to unsolicited transactions;3(a)(5)(B); and 3(a)(5)(C) of the securities exchange act of 1934(15 U.S.C. sections 78c(a)(4) and (5)); or

      (ii)   it is a bank that satisfies the conditions described insubsection 3(a)(4)(E) of the securities exchange act of 1934 (15U.S.C. section 78c(a)(4));

      (D)   an international banking institution; or

      (E)   a person excluded by rule adopted or order issued underthis act.

      (5)   "Depository institution" means:

      (A)   A bank; or

      (B)   a savings institution, trust company, credit union, orsimilar institution that is organized or chartered under the lawsof a state or of the United States, authorized to receive deposits,and supervised and examined by an official or agency of a state orthe United States if its deposits or share accounts are insured tothe maximum amount authorized by statute by the federal depositinsurance corporation, the national credit union share insurancefund, or a successor authorized by federal law. The term does notinclude:

      (i)   An insurance company or other organization primarilyengaged in the business of insurance;

      (ii)   a morris plan bank; or

      (iii)   an industrial loan company.

      (6)   "Federal covered investment adviser" means a personregistered under the investment advisers act of 1940.

      (7)   "Federal covered security" means a security that is, orupon completion of a transaction will be, a covered security undersection 18(b) of the securities act of 1933 (15 U.S.C. section77r(b)) or rules or regulations adopted pursuant to that provision.

      (8)   "Filing" means the receipt under this act of a record bythe administrator or a designee of the administrator.

      (9)   "Fraud," "deceit," and "defraud" are not limited tocommon law deceit.

      (10)   "Guaranteed" means guaranteed as to payment ofall principal and all 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 $10,000,000 or itsinvestment decisions are made by a named fiduciary, as defined inthe employee retirement income security act of 1974, that is abroker-dealer registered under the securities exchange act of 1934,an investment adviser registered or exempt from registration underthe investment advisers act of 1940, an investment adviserregistered under this act, a depository institution, or aninsurance company;

      (G)   a plan established and maintained by a state, a politicalsubdivision of a state, or an agency or instrumentality of a stateor a political subdivision of a state for the benefit of itsemployees, if the plan has total assets in excess of $10,000,000 orits investment decisions are made by a duly designated public officialor by anamed fiduciary, as defined in the employeeretirement income security act of 1974, that is a broker-dealerregistered under the securities exchange act of 1934, an investmentadviser registered or exempt from registration under the investmentadvisers act of 1940, an investment adviser registered under thisact, a depository institution, or an insurance company;

      (H)   a trust, if it has total assets in excess of $10,000,000,its trustee is a depository institution, and its participants areexclusively plans of the types identified in subparagraph (F) or(G), regardless of the size of their assets, except a trust thatincludes as participants self-directed individual retirementaccounts or similar self-directed plans;

      (I)   an organization described in section 501(c)(3) of theinternal revenue code (26 U.S.C. section 501(c)(3)), corporation,Massachusetts trust or similar business trust, limited liabilitycompany, or partnership, not formed for the specific purpose ofacquiring the securities offered, with total assets in excess of$10,000,000;

      (J)   a small business investment company licensed by the smallbusiness administration under Section 301(c) of the small businessinvestment act of 1958 (15 U.S.C. section 681(c)) with total assetsin excess of $10,000,000;

      (K)   a private business development company as defined insection 202(a)(22) of the investment advisers act of 1940 (15U.S.C. section 80b-2(a)(22)) with total assets in excess of $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 under thesecurities act of 1933 (17 C.F.R. 230.144A);

      (N)   a "major U.S. institutional investor" as defined in rule 15a-6(b)(4)(i)adopted under the securities exchange act of 1934 (17 C.F.R. 240.15a-6);

      (O)   any other person, other thananindividual, of institutional character with total assets in excess of$10,000,000 not organized for the specific purpose of evading this act; or

      (P)   any other person specified by rule adopted or order issuedunder this act.

      (12)   "Insurance company" means a company organized as aninsurance company whose primary business is writing insurance orreinsuring risks underwritten by insurance companies and which issubject to supervision by the insurance commissioner or a similarofficial or agency of a state.

      (13)   "Insured" means insured as to payment of all principaland all interest.

      (14)   "International banking institution" means aninternational financial institution of which the United States isa member and whose securities are exempt from registration underthe securities 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 of securities orthe 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. The termdoes 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 of businessas a broker-dealer and that does not receive special compensationfor the investment advice;

      (D)   a publisher of a bona fide newspaper, news magazine, orbusiness or financial publication of general and regularcirculation;

      (E)   a federal covered investment adviser;

      (F)   a bank, savings institution or trust company;

      (G)   any other person that is excluded by the investmentadvisers act of 1940 from the definition of investment adviser; or

      (H)   any other person excluded by rule adopted or order issued under this act.

      (16)   "Investment adviser representative" means an individualemployed by or associated with an investment adviser or federalcovered investment adviser and who makes any recommendations orotherwise gives investment advice regarding securities, managesaccounts or portfolios of clients, determines which recommendationor advice regarding securities should be given, provides investmentadvice or holds herself or himself out as providing investmentadvice, receives compensation to solicit, offer, or negotiate forthe sale of or for selling investment advice, or supervisesemployees who perform any of the foregoing. The term does notinclude an individual 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 who doesnot receive special compensation for investment advisory services;

      (C)   is employed by or associated with a federal coveredinvestment adviser, unless the individual has a "place of business"in this state,as that term is defined by rule adopted under section 203A of the investmentadvisers act of 1940 (15 U.S.C. section 80b-3a),and is:

      (i)   An "investment adviser representative" as that term isdefined by rule adopted under section 203A of the investmentadvisers act of 1940 (15 U.S.C. section 80b-3a); or

      (ii)   not a "supervised person" as that term is defined in Section202(a)(25) of the Investment Advisers Act of 1940 (15 U.S.C.Section 80b-2(a)(25)); or

      (D)   is excluded by rule adopted or order issued under thisact.

      (17)   "Issuer" means a person that issues or proposes to issuea security, subject to the following:

      (A)   The issuer of a voting trust certificate, collateraltrust certificate, certificate of deposit for a security, or sharein an investment company without a board of directors orindividuals performing similar functions is the person performingthe acts and assuming the duties of depositor or manager pursuantto the trust or other agreement or instrument under which thesecurity is issued.

      (B)   The issuer of an equipment trust certificate or similarsecurity serving the same purpose is the person by which theproperty is or will be used or to which the property or equipmentis or will be leased or conditionally sold or that is otherwisecontractually responsible for assuring payment of the certificate.

      (C)   The issuer of a fractional undivided interest in an oil,gas, or other mineral lease or in payments out of production undera lease, right, or royalty is the owner of an interest in the leaseor in payments out of production under a lease, right, or royalty,whether whole or fractional, that creates fractional interests forthe 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 toobtain, or solicitation of an offer to sell, a security or interestin a security for value. The term does not include a tender offerthat is subject to section 14(d) of the securities exchange act of1934 (15 U.S.C. 78n(d)).

      (20)   "Person" means an individual; corporation; businesstrust; estate; trust; partnership; limited liability company;association; joint venture; government; governmental subdivision,agency, or instrumentality; public corporation; or any other legalor commercial 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, orfederal covered investment adviser regularly provides brokerage orinvestment advice or solicits, meets with, or otherwisecommunicates 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, orfederal covered investment adviser provides brokerage or investmentadvice or solicits, meets with, or otherwise communicates withcustomers or clients.

      (22)   "Predecessor act" means the Kansas securities actrepealed by K.S.A. 17-12a703, and amendmentsthereto.

      (23)   "Price amendment" means the amendment to a registrationstatement filed under the securities act of 1933 or, if an amendment is notfiled, the prospectus or prospectus supplementfiled under the securities act of 1933 that includes a statement ofthe offering price, underwriting and selling discounts orcommissions, amount of proceeds, conversion rates, call prices, andother matters dependent upon the offering price.

      (24)   "Principal place of business" of a broker-dealer or aninvestment adviser means the executive office of the broker-dealeror investment adviser from which the officers, partners, ormanagers of the broker-dealer or investment adviser direct,control, and coordinate the activities of the broker-dealer orinvestment adviser.

      (25)   "Record," except in the phrases "of record," "officialrecord," and "public record," means information that is inscribedon a tangible medium or that is stored in an electronic or othermedium and is retrievable in perceivable form.

      (26)   "Sale" includes every contract of sale, contract to sell,or disposition of, a security or interest in a security for value,and "offer to sell" includes every attempt or offer to dispose of,or solicitation of an offer to purchase, a security or interest ina security for value.

      (A)   A security given or delivered with, or as a bonus onaccount of, a purchase of securities or any other thing isconsidered to constitute part of the subject of the purchase and tohave been offered and sold for value.

      (B)   A gift of assessable stock is considered to involve anoffer and sale.

      (C)   A sale or offer of a warrant or right to purchase orsubscribe to another security of the same or another issuer, and asale or offer of a security that gives the holder a present orfuture right or privilege to convert the security into anothersecurity of the same or another issuer, is considered to include anoffer 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 undividedinterest in oil, gas, or other mineral rights; put, call, straddle,option, or privilege on a security, certificate of deposit, orgroup or index of securities, including an interest therein orbased on the value thereof; put, call, straddle, option, orprivilege entered into on a national securities exchange relatingto foreign currency; or, in general, an interest or instrumentcommonly known as a "security"; or a certificate of interest orparticipation in, temporary or interim certificate for, receiptfor, guarantee of, or warrant or right to subscribe to or purchase,any of the foregoing. 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 company promises to paya fixed or variable sum of money either in a lump sum or periodically for lifeor other specified period;

      (C)   does not include an interest in a contributory ornoncontributory pension or welfare plan subject to the employeeretirement income security act of 1974;

      (D)   includes as an "investment contract" an investment in acommon enterprise with the expectation of profits to be derivedprimarily from the efforts of a person other than the investor. A"common enterprise" means an enterprise in which the fortunes ofthe investor are interwoven with those of either the personoffering the investment, a third party or other investors; and

      (E)   "investment contract"may include an interest in a limited partnership and a limitedliability company and shall include a viaticalinvestment as defined by rule adopted or order issued under this act.

      (29)   "Self-regulatory organization" means a nationalsecurities exchange registered under the securities exchange act of1934, a national securities association of broker-dealersregistered under the securities exchange act of 1934, a clearingagency registered under the securities exchange act of 1934, or themunicipal securities rulemaking board established under the securities exchangeact of 1934.

      (30)   "Sign" means, with present intent to authenticate oradopt a 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 Districtof Columbia, Puerto Rico, the United States Virgin Islands, or anyterritory or insular possession subject to the jurisdiction of theUnited States.

      (32)   "Rules" when used in the context of the rules adopted bythe administrator, means rules and regulations adopted by theadministrator pursuant to this act.

      History:   L. 2004, ch. 154, § 2;L. 2006, ch. 47, § 1; July 1.