§ 71-201. Repealed by Laws 2003, c. 347, § 53, eff. July 1, 2004.

NOTE:  Prior to repeal, this section was amended to read as follows:

(a)  (1)  It is unlawful for any person to transact business in this state as a broker-dealer or agent unless the person is so registered under this act or unless the person is exempt from registration as provided in paragraph (2) or (3) of this subsection.

(2)  A person shall be exempt from registration as a broker-dealer if the person has no place of business in this state and:

(A)effects transactions in this state exclusively with or through:

(i)the issuers of the securities involved in the transactions,

(ii)other broker-dealers, or

(iii)financial or institutional investors, whether acting for themselves or as trustees;

(B)is licensed under the securities act of a state in which that person maintains a place of business and offers and sells securities in this state to a person who is an existing customer of the broker-dealer and whose principal place of residence is not in this state; or

(C)during any period of twelve (12) consecutive months, does not direct more than fifteen offers and sales in this state to persons other than those specified in division (iii) of subparagraph (A) of paragraph (2) of this subsection, whether or not the offeror or any of the offerees is then present in this state, so long as that person is licensed under the laws of a state in which he or she maintains a place of business.

(3)  An individual shall be exempt from registration as an agent if the individual:

(A)is representing a broker-dealer exempt under paragraph (2) of this subsection;

(B)is representing an issuer in effecting transactions in a security exempted by paragraph (1), (2), (3), (4), (5), (7), (8), or (9) of Section 401(a) of this title;

(C)is representing an issuer in effecting transactions exempted by paragraphs (1) through (18), (21) or (22) of Section 401(b) of this title or transactions in securities that are federal covered securities under Section 18(b)(4)(D) of the Securities Act of 1933, except when:

(i)a commission is to be paid to such individual, or

(ii)such individual is or has been within the past five (5) years subject to the following in connection with a violation of a state or federal securities law or regulation:  an order denying, suspending or revoking registration or a cease and desist order of the Administrator; any similar order, judgment, or decree by another state securities agency, the United States Securities and Exchange Commission, or any self-regulatory securities organization; or an order of any court of competent jurisdiction temporarily, preliminarily or permanently enjoining such person;

(D)is representing an issuer in effecting transactions with existing employees, partners, members or directors of the issuer, or a subsidiary or affiliate of the issuer as those terms may be defined by rule or order, if no commission or other remuneration is paid or given, directly or indirectly, for soliciting any person in this state; or

(E)is representing a broker-dealer in effecting in this state only those transactions described in Section 15(h) of the Securities Exchange Act of 1934 and satisfies the conditions set forth in Section 15(h) of the Securities Exchange Act of 1934.

(b)  It is unlawful for any broker-dealer or issuer to employ an agent unless the agent is registered or is exempt from registration.  The registration of an agent is not effective during any period when the agent is not associated with a particular broker-dealer registered under this act or a particular issuer.  When an agent begins or terminates a connection with a broker-dealer or issuer, or begins or terminates those activities which make the person an agent, the agent as well as the broker-dealer or issuer shall promptly notify the Administrator.

(c)  (1)  It is unlawful for any person to transact business in this state as an investment adviser unless registered under this act or unless exempt from registration as provided in paragraph (2) of this subsection.

(2)  Subject to paragraph (3) of this subsection, a person shall be exempt from registration as an investment adviser if:

(A)the person's only clients in this state are investment companies as defined in and registered under the Investment Company Act of 1940 or insurance companies;

(B)the person is licensed as an investment adviser under the laws of another state, has no place of business within this state, and the person's only clients in this state are other investment advisers, broker-dealers, or financial or institutional investors, whether acting for themselves or as trustees;

(C)the person has no place of business located within this state and during any period of twelve (12) consecutive months, has no more than five clients, other than those clients specified in subparagraph (B) of this paragraph, who are residents of this state;

(D)the person is registered under Section 203 of the Investment Advisers Act of 1940 as an investment adviser or is not registered under Section 203 of the Investment Advisers Act of 1940 because that person is excepted from the definition of an investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940; however, such exemption shall not apply to such a person if such person fails or refuses to pay the notice filing fee required by paragraph (5) of subsection (a) of Section 412 of this title and such failure or refusal to pay is not promptly remedied in accordance with this title or an order or other administrative action of the Administrator; or

(E)the person is a full-time employee of this state, any county, municipality or school district of this state; or any other political subdivision of this state; or any agency or corporate or other instrumentality of any such political subdivision; and such person's activities as an investment adviser are required as part of such person's employment with such entity and limited to providing advice to such entity.

(3)  The exemption from registration provided by subparagraph (B) of paragraph (2) of this subsection shall not be available to any person who acts as an investment adviser to this state, any county, municipality or school district of this state, or any other political subdivision of this state; any agency or corporate or other instrumentality of any such entity; or any pension fund for the benefit of employees of any such entity.

(d)  (1)  It is unlawful for any person to transact business in this state as an investment adviser representative unless registered under this act or unless such person is exempt from registration as provided in paragraph (3) of this subsection.  It is unlawful for any person required to be registered as an investment adviser under this act, or any person exempt from registration as an investment adviser under this act, to employ, supervise, be represented by or be associated with an investment adviser representative unless the investment adviser representative is registered under this act or unless the investment adviser representative is exempt from registration as provided in paragraph (3) of this subsection.

(2)  It is unlawful for an investment adviser representative of an investment adviser exempt from registration under subparagraph (D) of paragraph (2) of subsection (c) of this section to transact business in this state as an investment adviser representative as defined by the United States Securities and Exchange Commission in Rule 203A-3 of the Investment Advisers Act of 1940, if such person has a place of business located within this state unless registered under this act or unless the person is exempt from registration as provided in subparagraphs (B) or (C) of paragraph (3) of this subsection.

(3)  Subject to paragraph (4) of this subsection, a person shall be exempt from registration as an investment adviser representative if:

(A)the person is employed by, supervised by, represents or is associated with an investment adviser required to be registered as an investment adviser under Section 203 of the Investment Advisers Act of 1940, or with an investment adviser who is not registered under Section 203 of the Investment Advisers Act of 1940 because that person is excepted from the definition of an investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and such investment adviser representative has no place of business located within this state.  However, such exemption shall not apply to such a person if his or her affiliated investment adviser fails or refuses to pay the fifty-dollar-fee for investment adviser representatives as required under subsection (a) of Section 202.1 of this title and such failure or refusal to pay is not promptly remedied in accordance with this title or an order or other administrative action of the Administrator;

(B)the person is licensed as an investment adviser representative under the laws of another state, has no place of business within this state, and the person's only clients in this state are investment advisers, broker-dealers, or financial or institutional investors, whether acting for themselves or as trustees; or

(C)the person has no place of business located within this state and during any period of twelve (12) consecutive months, has no more than five clients, other than those clients specified in subparagraph (B) of this paragraph, who are residents of this state.

(4)  The exemption from registration provided by subparagraph (B) of paragraph (3) of this subsection shall not be available to any person who acts as an investment adviser representative to this state, any county, municipality or school district of this state, or any other political subdivision of this state; any agency or corporate or other instrumentality of any such entity; or any pension fund for the benefit of employees of any such entity.

(5)  The registration of an investment adviser representative is not effective during any period when the person is not associated with a particular investment adviser registered or exempt from registration under this act.  When an investment adviser representative begins or terminates a connection with an investment adviser, or begins or terminates those activities which make the person an investment adviser representative, the investment adviser representative as well as the investment adviser shall promptly notify the Administrator.

(e)  Every registration as a broker-dealer, agent, investment adviser or investment adviser representative and every exemption from registration as an investment adviser representative under this section expires on December 31 each year and may be renewed annually upon written application, as specified by the Administrator by rule or order, and payment of the fee set forth in Section 412 of this title without furnishing any further information unless specifically required by the Administrator.  Application for renewals must be made no later than December 31 in each year; otherwise, the requirements for initial registration must be satisfied.

(f)  For purposes of this section, "place of business" means:

(1)  A place or office at which the investment adviser or investment adviser representative regularly provides investment advisory services, solicits, meets with, or otherwise communicates with clients; and

(2)  Any other location that is held out to the general public as a location at which the investment adviser representative provides investment advisory services, solicits, meets with, or otherwise communicates with clients.

Added by Laws 1959, p. 330, § 201, eff. July 1, 1959.  Amended by Laws 1988, c. 108, § 8, eff. Nov. 1, 1988; Laws 1991, c. 79, § 1, eff. Sept. 1, 1991; Laws 1995, c. 196, § 4, eff. July 1, 1995; Laws 1997, c. 279, § 3, eff. July 1, 1997; Laws 1998, c. 152, § 3, eff. July 1, 1998; Laws 1998, c. 412, § 4, eff. July 1, 1998; Laws 2003, c. 493, § 1, eff. Nov. 1, 2003.

Note

NOTE:  Laws 1998, c. 141, § 14 repealed by Laws 1998, c. 412, § 6, eff. July 1, 1998.