1.1 	A bill for an act
1.2 	relating to securities; enacting and modifying the 2002 Uniform Securities Act of 
1.3 	the National Conference of Commissioners on Uniform State Laws; prescribing 
1.4 	criminal penalties; amending Minnesota Statutes 2004, sections 60A.077, 
1.5 	subdivision 9; 82.23; 82.43, subdivision 7; 144A.01, subdivision 4; 245A.02, 
1.6 	subdivision 5a; 302A.011, subdivision 26; 302A.251, subdivision 4; 308A.505; 
1.7 	308B.465, subdivision 2; 322B.03, subdivision 43; 322B.663, subdivision 4; 
1.8 	356A.06, subdivision 6; proposing coding for new law in Minnesota Statutes, 
1.9 	chapter 80A; repealing Minnesota Statutes 2004, sections 80A.01; 80A.02; 
1.10 	80A.03; 80A.04; 80A.041; 80A.05; 80A.06; 80A.07; 80A.08; 80A.09; 80A.10; 
1.11 	80A.11; 80A.115; 80A.12; 80A.122; 80A.125; 80A.13; 80A.14; 80A.15; 
1.12 	80A.16; 80A.17; 80A.18; 80A.19; 80A.22; 80A.23; 80A.24; 80A.25; 80A.26; 
1.13 	80A.27; 80A.28; 80A.29; 80A.30; 80A.31.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	ARTICLE 1
1.16 	 UNIFORM SECURITIES ACT GENERAL PROVISIONS

1.17 	Section 1. [80A.40] SECTION 101; SHORT TITLE.
1.18 	This chapter may be cited as the Uniform Securities Act (2002).

1.19 	Sec. 2. [80A.41] SECTION 102; DEFINITIONS.
1.20 	In this chapter, unless the context otherwise requires:
1.21 	(1) "Administrator" means the commissioner of commerce.
1.22 	(2) "Agent" means an individual, other than a broker-dealer, who represents a 
1.23 	broker-dealer in effecting or attempting to effect purchases or sales of securities or 
1.24 	represents an issuer in effecting or attempting to effect purchases or sales of the issuer's 
1.25 	securities.  But a partner, officer, or director of a broker-dealer or issuer, or an individual 
1.26 	having a similar status or performing similar functions is an agent only if the individual 
2.1 	otherwise comes within the term.  The term does not include an individual excluded by 
2.2 	rule adopted or order issued under this chapter.
2.3 	(3) "Bank" means:
2.4 	(A) a banking institution organized under the laws of the United States;
2.5 	(B) a member bank of the Federal Reserve System;
2.6 	(C) any other banking institution, whether incorporated or not, doing business 
2.7 	under the laws of a state or of the United States, a substantial portion of the business 
2.8 	of which consists of receiving deposits or exercising fiduciary powers similar to those 
2.9 	permitted to be exercised by national banks under the authority of the Comptroller of the 
2.10 	Currency pursuant to Section 1 of Public Law 87-722 (12 U.S.C. Section 92a), and which 
2.11 	is supervised and examined by a state or federal agency having supervision over banks, 
2.12 	and which is not operated for the purpose of evading this chapter; and 
2.13 	(D) a receiver, conservator, or other liquidating agent of any institution or firm 
2.14 	included in subparagraph (A), (B), or (C).
2.15 	(4) "Broker-dealer" means a person engaged in the business of effecting transactions 
2.16 	in securities for the account of others or for the person's own account.  The term does 
2.17 	not include:
2.18 	(A) an agent;
2.19 	(B) an issuer;
2.20 	(C) a depository institution; provided such activities are conducted in accordance 
2.21 	with such rules as may be adopted by the administrator;
2.22 	(D) an international banking institution; or 
2.23 	(E) a person excluded by rule adopted or order issued under this chapter.
2.24 	(5) "Depository institution" means:
2.25 	(A) a bank; or 
2.26 	(B) a savings institution, trust company, credit union, or similar institution that 
2.27 	is organized or chartered under the laws of a state or of the United States, authorized 
2.28 	to receive deposits, and supervised and examined by an official or agency of a state or 
2.29 	the United States if its deposits or share accounts are insured to the maximum amount 
2.30 	authorized by statute by the Federal Deposit Insurance Corporation, the National Credit 
2.31 	Union Share Insurance Fund, or a successor authorized by federal law.  The term does 
2.32 	not include:
2.33 	(i) an insurance company or other organization primarily engaged in the business 
2.34 	of insurance;
2.35 	(ii) a Morris Plan bank; or 
3.1 	(iii) an industrial loan company that is not an "insured depository institution" as 
3.2 	defined in section 3(c)(2) of the Federal Deposit Insurance Act, United States Code, title 
3.3 	12, section 1813(c)(2), or any successor federal statute.
3.4 	(6) "Federal covered investment adviser" means a person registered under the 
3.5 	Investment Advisers Act of 1940.
3.6 	(7) "Federal covered security" means a security that is, or upon completion of a 
3.7 	transaction will be, a covered security under Section 18(b) of the Securities Act of 1933 
3.8 	(15 U.S.C. Section 77r(b)) or rules or regulations adopted pursuant to that provision.
3.9 	(8) "Filing" means the receipt under this chapter of a record by the administrator or 
3.10 	a designee of the administrator.
3.11 	(9) "Fraud," "deceit," and "defraud" are not limited to common law deceit.
3.12 	(10) "Guaranteed" means guaranteed as to payment of all principal and all interest.
3.13 	(11) "Institutional investor" means any of the following, whether acting for itself or 
3.14 	for others in a fiduciary capacity:
3.15 	(A) a depository institution or international banking institution;
3.16 	(B) an insurance company;
3.17 	(C) a separate account of an insurance company;
3.18 	(D) an investment company as defined in the Investment Company Act of 1940;
3.19 	(E) a broker-dealer registered under the Securities Exchange Act of 1934;
3.20 	(F) an employee pension, profit-sharing, or benefit plan if the plan has total assets 
3.21 	in excess of $10,000,000 or its investment decisions are made by a named fiduciary, as 
3.22 	defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer 
3.23 	registered under the Securities Exchange Act of 1934, an investment adviser registered 
3.24 	or exempt from registration under the Investment Advisers Act of 1940, an investment 
3.25 	adviser registered under this chapter, a depository institution, or an insurance company;
3.26 	(G) a plan established and maintained by a state, a political subdivision of a state, or 
3.27 	an agency or instrumentality of a state or a political subdivision of a state for the benefit 
3.28 	of its employees, if the plan has total assets in excess of $10,000,000 or its investment 
3.29 	decisions are made by a duly designated public official or by a named fiduciary, as 
3.30 	defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer 
3.31 	registered under the Securities Exchange Act of 1934, an investment adviser registered 
3.32 	or exempt from registration under the Investment Advisers Act of 1940, an investment 
3.33 	adviser registered under this chapter, a depository institution, or an insurance company;
3.34 	(H) a trust, if it has total assets in excess of $10,000,000, its trustee is a depository 
3.35 	institution, and its participants are exclusively plans of the types identified in subparagraph 
4.1 	(F) or (G), regardless of the size of their assets, except a trust that includes as participants 
4.2 	self-directed individual retirement accounts or similar self-directed plans;
4.3 	(I) an organization described in Section 501(c)(3) of the Internal Revenue Code (26 
4.4 	U.S.C. Section 501(c)(3)), corporation, Massachusetts trust or similar business trust, 
4.5 	limited liability company, or partnership, not formed for the specific purpose of acquiring 
4.6 	the securities offered, with total assets in excess of $10,000,000;
4.7 	(J) a small business investment company licensed by the Small Business 
4.8 	Administration under Section 301(c) of the Small Business Investment Act of 1958 (15 
4.9 	U.S.C. Section 681(c)) with total assets in excess of $10,000,000;
4.10 	(K) a private business development company as defined in Section 202(a)(22) of 
4.11 	the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(22)) with total assets 
4.12 	in excess of $10,000,000;
4.13 	(L) a federal covered investment adviser acting for its own account;
4.14 	(M) a "qualified institutional buyer" as defined in Rule 144A(a)(1), other than Rule 
4.15 	144A(a)(1)(i)(H), adopted under the Securities Act of 1933 (17 C.F.R. 230.144A);
4.16 	(N) a "major U.S. institutional investor" as defined in Rule 15a-6(b)(4)(i) adopted 
4.17 	under the Securities Exchange Act of 1934 (17 C.F.R. 240.15a-6);
4.18 	(O) any other person, other than an individual, of institutional character with total 
4.19 	assets in excess of $10,000,000 not organized for the specific purpose of evading this 
4.20 	chapter; or 
4.21 	(P) any other person specified by rule adopted or order issued under this chapter;
4.22 	(12) "Insurance company" means a company organized as an insurance company 
4.23 	whose primary business is writing insurance or reinsuring risks underwritten by insurance 
4.24 	companies and which is subject to supervision by the insurance commissioner or a similar 
4.25 	official or agency of a state.
4.26 	(13) "Insured" means insured as to payment of all principal and all interest.
4.27 	(14) "International banking institution" means an international financial institution 
4.28 	of which the United States is a member and whose securities are exempt from registration 
4.29 	under the Securities Act of 1933.
4.30 	(15) "Investment adviser" means a person that, for compensation, engages in the 
4.31 	business of advising others, either directly or through publications or writings, as to the 
4.32 	value of securities or the advisability of investing in, purchasing, or selling securities or 
4.33 	that, for compensation and as a part of a regular business, issues or promulgates analyses 
4.34 	or reports concerning securities.  The term includes a financial planner or other person 
4.35 	that, as an integral component of other financially related services, provides investment 
5.1 	advice to others for compensation as part of a business or that holds itself out as providing 
5.2 	investment advice to others for compensation.  The term does not include:
5.3 	(A) an investment adviser representative;
5.4 	(B) a lawyer, accountant, engineer, or teacher whose performance of investment 
5.5 	advice is solely incidental to the practice of the person's profession;
5.6 	(C) a broker-dealer or its agents whose performance of investment advice is solely 
5.7 	incidental to the conduct of business as a broker-dealer and that does not receive special 
5.8 	compensation for the investment advice;
5.9 	(D) a publisher of a bona fide newspaper, news magazine, or business or financial 
5.10 	publication of general and regular circulation;
5.11 	(E) a federal covered investment adviser;
5.12 	(F) a bank or savings institution;
5.13 	(G) any other person that is excluded by the Investment Advisers Act of 1940 from 
5.14 	the definition of investment adviser; or 
5.15 	(H) any other person excluded by rule adopted or order issued under this chapter.
5.16 	(16) "Investment adviser representative" means an individual employed by or 
5.17 	associated with an investment adviser or federal covered investment adviser and who 
5.18 	makes any recommendations or otherwise gives investment advice regarding securities, 
5.19 	manages accounts or portfolios of clients, determines which recommendation or advice 
5.20 	regarding securities should be given, provides investment advice or holds herself or 
5.21 	himself out as providing investment advice, receives compensation to solicit, offer, or 
5.22 	negotiate for the sale of or for selling investment advice, or supervises employees who 
5.23 	perform any of the foregoing.  The term does not include an individual who:
5.24 	(A) performs only clerical or ministerial acts;
5.25 	(B) is an agent whose performance of investment advice is solely incidental to 
5.26 	the individual acting as an agent and who does not receive special compensation for 
5.27 	investment advisory services;
5.28 	(C) is employed by or associated with a federal covered investment adviser, unless 
5.29 	the individual has a "place of business" in this state as that term is defined by rule adopted 
5.30 	under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a) 
5.31 	and is 
5.32 	(i) an "investment adviser representative" as that term is defined by rule adopted 
5.33 	under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a); or 
5.34 	(ii) not a "supervised person" as that term is defined in Section 202(a)(25) of the 
5.35 	Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(25)); or 
5.36 	(D) is excluded by rule adopted or order issued under this chapter.
6.1 	(17) "Issuer" means a person that issues or proposes to issue a security, subject to 
6.2 	the following:
6.3 	(A) The issuer of a voting trust certificate, collateral trust certificate, certificate of 
6.4 	deposit for a security, or share in an investment company without a board of directors or 
6.5 	individuals performing similar functions is the person performing the acts and assuming 
6.6 	the duties of depositor or manager pursuant to the trust or other agreement or instrument 
6.7 	under which the security is issued.
6.8 	(B) The issuer of an equipment trust certificate or similar security serving the same 
6.9 	purpose is the person by which the property is or will be used or to which the property 
6.10 	or equipment is or will be leased or conditionally sold or that is otherwise contractually 
6.11 	responsible for assuring payment of the certificate.
6.12 	(C) The issuer of a fractional undivided interest in an oil, gas, or other mineral lease 
6.13 	or in payments out of production under a lease, right, or royalty is the owner of an interest 
6.14 	in the lease or in payments out of production under a lease, right, or royalty, whether 
6.15 	whole or fractional, that creates fractional interests for the purpose of sale.
6.16 	(18) "Nonissuer transaction" or "nonissuer distribution" means a transaction or 
6.17 	distribution not directly or indirectly for the benefit of the issuer.
6.18 	(19) "Offer to purchase" includes an attempt or offer to obtain, or solicitation of an 
6.19 	offer to sell, a security or interest in a security for value.  The term does not include a 
6.20 	tender offer that is subject to Section 14(d) of the Securities Exchange Act of 1934 (15 
6.21 	U.S.C. Section 78n(d)).
6.22 	(20) "Person" means an individual; corporation; business trust; estate; trust; 
6.23 	partnership; limited liability company; association; joint venture; government; 
6.24 	governmental subdivision, agency, or instrumentality; public corporation; or any other 
6.25 	legal or commercial entity.
6.26 	(21) "Place of business" of a broker-dealer, an investment adviser, or a federal 
6.27 	covered investment adviser means:
6.28 	(A) an office at which the broker-dealer, investment adviser, or federal covered 
6.29 	investment adviser regularly provides brokerage or investment advice or solicits, meets 
6.30 	with, or otherwise communicates with customers or clients; or 
6.31 	(B) any other location that is held out to the general public as a location at which 
6.32 	the broker-dealer, investment adviser, or federal covered investment adviser provides 
6.33 	brokerage or investment advice or solicits, meets with, or otherwise communicates with 
6.34 	customers or clients.
6.35 	(22) "Predecessor Act" means Minnesota Statutes 2002, sections 80A.01 to 80A.31.
7.1 	(23) "Price amendment" means the amendment to a registration statement filed under 
7.2 	the Securities Act of 1933 or, if an amendment is not filed, the prospectus or prospectus 
7.3 	supplement filed under the Securities Act of 1933 that includes a statement of the offering 
7.4 	price, underwriting and selling discounts or commissions, amount of proceeds, conversion 
7.5 	rates, call prices, and other matters dependent upon the offering price.
7.6 	(24) "Principal place of business" of a broker-dealer or an investment adviser means 
7.7 	the executive office of the broker-dealer or investment adviser from which the officers, 
7.8 	partners, or managers of the broker-dealer or investment adviser direct, control, and 
7.9 	coordinate the activities of the broker-dealer or investment adviser.
7.10 	(24a) "Purchaser" does not include:
7.11 	(A) any relative, spouse, or relative of the spouse of a purchaser who has the same 
7.12 	principal residence as the purchaser;
7.13 	(B) any trust or estate in which a purchaser and any of the persons related to him as 
7.14 	specified in Regulation D, Rule 501(e)(1)(i) or (e)(1)(ii) collectively have more than 50 
7.15 	percent of the beneficial interest (excluding contingent interests);
7.16 	(C) any corporation or other organization of which a purchaser and any of the 
7.17 	persons related to the purchaser as specified in Regulation D, Rule 501(e)(1)(i) or 
7.18 	(e)(1)(ii) collectively are beneficial owners of more than 50 percent of the equity securities 
7.19 	(excluding directors' qualifying shares) or equity interests; and 
7.20 	(D) any accredited investor as defined by Regulation D, Rule 501(3).
7.21 	A corporation, partnership, or other entity must be counted as one purchaser.  If, 
7.22 	however, that entity is organized for the specific purpose of acquiring the securities offered 
7.23 	and is not an accredited investor, then each beneficial owner of equity securities or equity 
7.24 	interests in the entity shall count as a separate purchaser for all provisions of Regulation 
7.25 	D, except to the extent provided in Regulation D, Rule 501(e)(1).
7.26 	A noncontributory employee benefit plan within the meaning of Title I of the 
7.27 	Employee Retirement Income Security Act of 1974 shall be counted as one purchaser 
7.28 	where the trustee makes all investment decisions for the plan.
7.29 	(25) "Record," except in the phrases "of record," "official record," and "public 
7.30 	record," means information that is inscribed on a tangible medium or that is stored in an 
7.31 	electronic or other medium and is retrievable in perceivable form.
7.32 	(26) "Sale" includes every contract of sale, contract to sell, or disposition of, a 
7.33 	security or interest in a security for value, and "offer to sell" includes every attempt or 
7.34 	offer to dispose of, or solicitation of an offer to purchase, a security or interest in a 
7.35 	security for value.
8.1 	(A) A security given or delivered with, or as a bonus on account of, any purchase of 
8.2 	securities or any other thing is considered to constitute part of the subject of the purchase 
8.3 	and to have been offered and sold for value.
8.4 	(B) A gift of assessable stock is considered to involve an offer and sale.
8.5 	(C) A sale or offer of a warrant or right to purchase or subscribe to another security 
8.6 	of the same or another issuer and a sale or offer of a security that gives the holder a present 
8.7 	or future right or privilege to convert the security into another security of the same or 
8.8 	another issuer, are each considered to include an offer of the other security.
8.9 	(27) "Securities and Exchange Commission" means the United States Securities and 
8.10 	Exchange Commission.
8.11 	(28) "Security" means a note; stock; treasury stock; security future; bond; debenture; 
8.12 	evidence of indebtedness; certificate of interest or participation in a profit-sharing 
8.13 	agreement; collateral trust certificate; preorganization certificate or subscription; 
8.14 	transferable share; investment contract; voting trust certificate; certificate of deposit for a 
8.15 	security; fractional undivided interest in oil, gas, or other mineral rights; put, call, straddle, 
8.16 	option, or privilege on a security, certificate of deposit, or group or index of securities, 
8.17 	including an interest therein or based on the value thereof; put, call, straddle, option, or 
8.18 	privilege entered into on a national securities exchange relating to foreign currency; or, 
8.19 	in general, an interest or instrument commonly known as a "security"; or a certificate of 
8.20 	interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or 
8.21 	warrant or right to subscribe to or purchase, any of the foregoing.  The term:
8.22 	(A) includes both a certificated and an uncertificated security;
8.23 	(B) does not include an insurance or endowment policy or annuity contract under 
8.24 	which an insurance company promises to pay a fixed or variable sum of money either in a 
8.25 	lump sum or periodically for life or other specified period;
8.26 	(C) does not include an interest in a contributory or noncontributory pension or 
8.27 	welfare plan subject to the Employee Retirement Income Security Act of 1974;
8.28 	(D) includes as an "investment contract" an investment in a common enterprise with 
8.29 	the expectation of profits to be derived primarily from the efforts of a person other than 
8.30 	the investor and a "common enterprise" means an enterprise in which the fortunes of the 
8.31 	investor are interwoven with those of either the person offering the investment, a third 
8.32 	party, or other investors;
8.33 	(E) includes as an "investment contract," among other contracts, an interest in 
8.34 	a limited partnership and a limited liability company and an investment in a viatical 
8.35 	settlement or similar agreement; and 
9.1 	(F) does not include any equity interest of a closely held corporation or other entity 
9.2 	with not more than 35 holders of the equity interest of such entity offered or sold pursuant 
9.3 	to a transaction in which 100 percent of the equity interest of such entity is sold as a means 
9.4 	to effect the sale of the business of the entity if the transaction has been negotiated on 
9.5 	behalf of all purchasers and if all purchasers have access to inside information regarding 
9.6 	the entity before consummating the transaction.
9.7 	(29) "Self-regulatory organization" means a national securities exchange registered 
9.8 	under the Securities Exchange Act of 1934, a national securities association of 
9.9 	broker-dealers registered under the Securities Exchange Act of 1934, a clearing agency 
9.10 	registered under the Securities Exchange Act of 1934, or the Municipal Securities 
9.11 	Rulemaking Board established under the Securities Exchange Act of 1934.
9.12 	(30) "Sign" means, with present intent to authenticate or adopt a record:
9.13 	(A) to execute or adopt a tangible symbol; or 
9.14 	(B) to attach or logically associate with the record an electronic symbol, sound, 
9.15 	or process.
9.16 	(31) "State" means a state of the United States, the District of Columbia, Puerto 
9.17 	Rico, the United States Virgin Islands, or any territory or insular possession subject to the 
9.18 	jurisdiction of the United States.
9.19 	(32) "Associated with" with respect to a person means any partner, officer, director, 
9.20 	or manager of such person or any person occupying a similar status or performing 
9.21 	similar functions or any person directly or indirectly controlling, controlled by, or in 
9.22 	common control with, such person, but does not include a person whose primary duties 
9.23 	are ministerial or clerical.  

9.24 	Sec. 3. [80A.42] SECTION 103; REFERENCES TO FEDERAL STATUTES.
9.25 	"Securities Act of 1933" (15 U.S.C. Section 77a et seq.), "Securities Exchange 
9.26 	Act of 1934" (15 U.S.C. Section 78a et seq.), "Public Utility Holding Company Act of 
9.27 	1935" (15 U.S.C. Section 79 et seq.), "Investment Company Act of 1940" (15 U.S.C. 
9.28 	Section 80a-1 et seq.), "Investment Advisers Act of 1940" (15 U.S.C. Section 80b-1 et 
9.29 	seq.), "Employee Retirement Income Security Act of 1974" (29 U.S.C. Section 1001 et 
9.30 	seq.), "National Housing Act" (12 U.S.C. Section 1701 et seq.), "Commodity Exchange 
9.31 	Act" (7 U.S.C. Section 1 et seq.), "Internal Revenue Code" (26 U.S.C. Section 1 et seq.), 
9.32 	"Securities Investor Protection Act of 1970" (15 U.S.C. Section 78aaa et seq.), "Securities 
9.33 	Litigation Uniform Standards Act of 1998" (112 Stat. 3227), "Small Business Investment 
9.34 	Act of 1958" (15 U.S.C. Section 661 et seq.), and "Electronic Signatures in Global and 
9.35 	National Commerce Act" (15 U.S.C. Section 7001 et seq.) mean those statutes and the 
10.1 	rules and regulations adopted under those statutes, as in effect on the date of enactment of 
10.2 	this chapter, or as later amended.

10.3 	Sec. 4. [80A.43] SECTION 104; REFERENCES TO FEDERAL AGENCIES.
10.4 	A reference in this chapter to an agency or department of the United States is also a 
10.5 	reference to a successor agency or department.

10.6 	Sec. 5. [80A.44] SECTION 105; ELECTRONIC RECORDS AND SIGNATURES.
10.7 	This chapter modifies, limits, and supersedes the federal Electronic Signatures in 
10.8 	Global and National Commerce Act, but does not modify, limit, or supersede Section 
10.9 	101(c) of that act (15 U.S.C. Section 7001(c)) or authorize electronic delivery of any of 
10.10 	the notices described in Section 103(b) of that act (15 U.S.C. Section 7003(b)).  This 
10.11 	chapter authorizes the filing of records and signatures, when specified by provisions of 
10.12 	this chapter or by a rule adopted or order issued under this chapter, in a manner consistent 
10.13 	with Section 104(a) of that act (15 U.S.C. Section 7004(a)).
10.14 	EXEMPTIONS FROM REGISTRATION OF SECURITIES

10.15 	Sec. 6. [80A.45] SECTION 201; EXEMPT SECURITIES.
10.16 	The following securities are exempt from the requirements of sections 80A.49 
10.17 	through 80A.54 and 80A.71:
10.18 	(1) a security, including a revenue obligation or a separate security as defined in 
10.19 	Rule 131 (17 C.F.R. 230.131) adopted under the Securities Act of 1933, issued, insured, 
10.20 	or guaranteed by the United States; by a state; by a political subdivision of a state; 
10.21 	by a public authority, agency, or instrumentality of one or more states; by a political 
10.22 	subdivision of one or more states or by a person controlled or supervised by and acting 
10.23 	as an instrumentality of the United States under authority granted by Congress; or a 
10.24 	certificate of deposit for any of the foregoing;
10.25 	(2) a security issued, insured, or guaranteed by a foreign government with which the 
10.26 	United States maintains diplomatic relations, or any of its political subdivisions, if the 
10.27 	security is recognized as a valid obligation by the issuer, insurer, or guarantor;
10.28 	(3) a security issued by and representing or that will represent an interest in or a 
10.29 	direct obligation of, or be guaranteed by:
10.30 	(A) an international banking institution;
10.31 	(B) a banking institution organized under the laws of the United States; a member 
10.32 	bank of the Federal Reserve System; or a depository institution a substantial portion of 
10.33 	the business of which consists or will consist of receiving deposits or share accounts 
10.34 	that are insured to the maximum amount authorized by statute by the Federal Deposit 
11.1 	Insurance Corporation, the National Credit Union Share Insurance Fund, or a successor 
11.2 	authorized by federal law or exercising fiduciary powers that are similar to those permitted 
11.3 	for national banks under the authority of the Comptroller of Currency pursuant to Section 
11.4 	1 of Public Law 87-722 (12 U.S.C. Section 92a); or 
11.5 	(C) any other depository institution, unless by rule or order the administrator 
11.6 	proceeds under section 80A.48;
11.7 	(4) a security issued by and representing an interest in, or a debt of, or insured or 
11.8 	guaranteed by, an insurance company authorized to do business in this state;
11.9 	(5) a security issued or guaranteed by a railroad, other common carrier, public utility, 
11.10 	or public utility holding company that is:
11.11 	(A) regulated in respect to its rates and charges by the United States or a state;
11.12 	(B) regulated in respect to the issuance or guarantee of the security by the United 
11.13 	states, a state, Canada, or a Canadian province or territory; or 
11.14 	(C) a public utility holding company registered under the Public Utility Holding 
11.15 	Company Act of 1935 or a subsidiary of such a registered holding company within the 
11.16 	meaning of that act;
11.17 	(6) a federal covered security specified in Section 18(b)(1) of the Securities Act of 
11.18 	1933 (15 U.S.C. Section 77r(b)(1)) or by rule adopted under that provision or a security 
11.19 	listed or approved for listing on another securities market specified by rule under this 
11.20 	chapter; a put or a call option contract; a warrant; a subscription right on or with respect 
11.21 	to such securities; or an option or similar derivative security on a security or an index of 
11.22 	securities or foreign currencies issued by a clearing agency registered under the Securities 
11.23 	Exchange Act of 1934 and listed or designated for trading on a national securities 
11.24 	exchange, a facility of a national securities exchange, or a facility of a national securities 
11.25 	association registered under the Securities Exchange Act of 1934 or an offer or sale, of the 
11.26 	underlying security in connection with the offer, sale, or exercise of an option or other 
11.27 	security that was exempt when the option or other security was written or issued; or an 
11.28 	option or a derivative security designated by the Securities and Exchange Commission 
11.29 	under Section 9(b) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78i(b));
11.30 	(7) a security issued by a person organized and operated exclusively for religious, 
11.31 	educational, benevolent, fraternal, charitable, social, athletic, or reformatory purposes, 
11.32 	or as a chamber of commerce, and not for pecuniary profit, no part of the net earnings 
11.33 	of which inures to the benefit of a private stockholder or other person, or a security of a 
11.34 	company that is excluded from the definition of an investment company under Section 
11.35 	3(c)(10)(B) of the Investment Company Act of 1940 (15 U.S.C. Section 80a-3(c)(10)(B)); 
11.36 	except that with respect to the offer or sale, an issuer of such a note, bond, debenture, or 
12.1 	other evidence of indebtedness is required to file a notice specifying the material terms of 
12.2 	the proposed offer or sale and copies of any proposed sales and advertising literature to be 
12.3 	used together with the fee required by section 80A.65 and provided that this exemption 
12.4 	shall be effective if the administrator does not disallow the exemption in writing within 15 
12.5 	days following the date of the notice filing.  

12.6 	Sec. 7. [80A.46] SECTION 202; EXEMPT TRANSACTIONS.
12.7 	The following transactions are exempt from the requirements of sections 80A.49 
12.8 	through 80A.54 and 80A.71:
12.9 	(1) isolated nonissuer transactions, consisting of sale to not more than ten purchasers 
12.10 	in Minnesota during any period of 12 consecutive months, whether effected by or through 
12.11 	a broker-dealer or not;
12.12 	(2) a nonissuer transaction by or through a broker-dealer registered, or exempt from 
12.13 	registration under this chapter, and a resale transaction by a sponsor of a unit investment 
12.14 	trust registered under the Investment Company Act of 1940, in a security of a class that 
12.15 	has been outstanding in the hands of the public for at least 90 days, if, at the date of 
12.16 	the transaction:
12.17 	(A) the issuer of the security is engaged in business, the issuer is not in the 
12.18 	organizational stage or in bankruptcy or receivership, and the issuer is not a blank check, 
12.19 	blind pool, or shell company that has no specific business plan or purpose or has indicated 
12.20 	that its primary business plan is to engage in a merger or combination of the business with, 
12.21 	or an acquisition of, an unidentified person;
12.22 	(B) the security is sold at a price reasonably related to its current market price;
12.23 	(C) the security does not constitute the whole or part of an unsold allotment to, or 
12.24 	a subscription or participation by, the broker-dealer as an underwriter of the security 
12.25 	or a redistribution;
12.26 	(D) a nationally recognized securities manual or its electronic equivalent designated 
12.27 	by rule adopted or order issued under this chapter or a record filed with the Securities and 
12.28 	Exchange Commission that is publicly available contains:
12.29 	(i) a description of the business and operations of the issuer;
12.30 	(ii) the names of the issuer's executive officers and the names of the issuer's 
12.31 	directors, if any;
12.32 	(iii) an audited balance sheet of the issuer as of a date within 18 months before the 
12.33 	date of the transaction or, in the case of a reorganization or merger when the parties to 
12.34 	the reorganization or merger each had an audited balance sheet, a pro forma balance 
12.35 	sheet for the combined organization; and 
13.1 	(iv) an audited income statement for each of the issuer's two immediately previous 
13.2 	fiscal years or for the period of existence of the issuer, whichever is shorter, or, in the case 
13.3 	of a reorganization or merger when each party to the reorganization or merger had audited 
13.4 	income statements, a pro forma income statement; and 
13.5 	(E) any one of the following requirements is met:
13.6 	(i) the issuer of the security has a class of equity securities listed on a national 
13.7 	securities exchange registered under Section 6 of the Securities Exchange Act of 1934 
13.8 	or designated for trading on the National Association of Securities Dealers Automated 
13.9 	Quotation System;
13.10 	(ii) the issuer of the security is a unit investment trust registered under the Investment 
13.11 	Company Act of 1940;
13.12 	(iii) the issuer of the security, including its predecessors, has been engaged in 
13.13 	continuous business for at least three years; or 
13.14 	(iv) the issuer of the security has total assets of at least $2,000,000 based on an 
13.15 	audited balance sheet as of a date within 18 months before the date of the transaction or, in 
13.16 	the case of a reorganization or merger when the parties to the reorganization or merger 
13.17 	each had such an audited balance sheet, a pro forma balance sheet for the combined 
13.18 	organization;
13.19 	(3) a nonissuer transaction by or through a broker-dealer registered or exempt from 
13.20 	registration under this chapter in a security of a foreign issuer that is a margin security 
13.21 	defined in regulations or rules adopted by the Board of Governors of the Federal Reserve 
13.22 	System;
13.23 	(4) a nonissuer transaction by or through a broker-dealer registered or exempt 
13.24 	from registration under this chapter in an outstanding security if the guarantor of the 
13.25 	security files reports with the Securities and Exchange Commission under the reporting 
13.26 	requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 
13.27 	Sections 78m or 78o(d));
13.28 	(5) a nonissuer transaction by or through a broker-dealer registered or exempt from 
13.29 	registration under this chapter in a security that:
13.30 	(A) is rated at the time of the transaction by a nationally recognized statistical rating 
13.31 	organization in one of its four highest rating categories; or 
13.32 	(B) has a fixed maturity or a fixed interest or dividend, if:
13.33 	(i) a default has not occurred during the current fiscal year or within the three 
13.34 	previous fiscal years or during the existence of the issuer and any predecessor if less than 
13.35 	three fiscal years, in the payment of principal, interest, or dividends on the security; and 
14.1 	(ii) the issuer is engaged in business, is not in the organizational stage or in 
14.2 	bankruptcy or receivership, and is not and has not been within the previous 12 months a 
14.3 	blank check, blind pool, or shell company that has no specific business plan or purpose or 
14.4 	has indicated that its primary business plan is to engage in a merger or combination of the 
14.5 	business with, or an acquisition of, an unidentified person;
14.6 	(6) a nonissuer transaction by or through a broker-dealer registered or exempt from 
14.7 	registration under this chapter effecting an unsolicited order or offer to purchase;
14.8 	(7) a nonissuer transaction executed by a bona fide pledgee without the purpose 
14.9 	of evading this chapter;
14.10 	(8) a nonissuer transaction by a federal covered investment adviser with investments 
14.11 	under management in excess of $100,000,000 acting in the exercise of discretionary 
14.12 	authority in a signed record for the account of others;
14.13 	(9) a transaction in a security, whether or not the security or transaction is otherwise 
14.14 	exempt, in exchange for one or more bona fide outstanding securities, claims, or property 
14.15 	interests, or partly in such exchange and partly for cash, if the terms and conditions of 
14.16 	the issuance and exchange or the delivery and exchange and the fairness of the terms and 
14.17 	conditions have been approved by the administrator after a hearing;
14.18 	(10) a transaction between the issuer or other person on whose behalf the offering is 
14.19 	made and an underwriter, or among underwriters;
14.20 	(11) a transaction in a note, bond, debenture, or other evidence of indebtedness 
14.21 	secured by a mortgage or other security agreement if:
14.22 	(A) the note, bond, debenture, or other evidence of indebtedness is offered and sold 
14.23 	with the mortgage or other security agreement as a unit;
14.24 	(B) a general solicitation or general advertisement of the transaction is not made; and 
14.25 	(C) a commission or other remuneration is not paid or given, directly or indirectly, to 
14.26 	a person not registered under this chapter as a broker-dealer or as an agent;
14.27 	(12) a transaction by an executor, administrator of an estate, sheriff, marshal, 
14.28 	receiver, trustee in bankruptcy, guardian, or conservator;
14.29 	(13) a sale or offer to sell to:
14.30 	(A) an institutional investor;
14.31 	(B) an accredited investor as that term is defined in Regulation D, Rule 501(a);
14.32 	(C) a federal covered investment adviser; or 
14.33 	(D) any other person exempted by rule adopted or order issued under this chapter;
14.34 	(14) a sale or an offer to sell securities by an issuer, if the transaction is part of 
14.35 	a single issue in which:
15.1 	(A) not more than 35 purchasers are present in this state during any 12 consecutive 
15.2 	months, other than those designated in paragraph (13);
15.3 	(B) a general solicitation or general advertising is not made in connection with 
15.4 	the offer to sell or sale of the securities;
15.5 	(C) a commission or other remuneration is not paid or given, directly or indirectly, to 
15.6 	a person other than a broker-dealer registered under this chapter or an agent registered 
15.7 	under this chapter for soliciting a prospective purchaser in this state; and 
15.8 	(D) the issuer reasonably believes that all the purchasers in this state, other than 
15.9 	those designated in paragraph (13), are purchasing for investment;
15.10 	(15) a transaction under an offer to existing security holders of the issuer, including 
15.11 	persons that at the date of the transaction are holders of convertible securities, options, or 
15.12 	warrants, if a commission or other remuneration, other than a standby commission, is not 
15.13 	paid or given, directly or indirectly, for soliciting a security holder in this state;
15.14 	(16) an offer to sell, but not a sale, of a security not exempt from registration under 
15.15 	the Securities Act of 1933 if:
15.16 	(A) a registration or offering statement or similar record as required under the 
15.17 	Securities Act of 1933 has been filed, but is not effective, or the offer is made in compliance 
15.18 	with Rule 165 adopted under the Securities Act of 1933 (17 C.F.R. 230.165); and 
15.19 	(B) a stop order of which the offeror is aware has not been issued against the offeror 
15.20 	by the administrator or the Securities and Exchange Commission, and an audit, inspection, 
15.21 	or proceeding that is public and that may culminate in a stop order is not known by the 
15.22 	offeror to be pending;
15.23 	(17) an offer to sell, but not a sale, of a security exempt from registration under the 
15.24 	Securities Act of 1933 if:
15.25 	(A) a registration statement has been filed under this chapter, but is not effective;
15.26 	(B) a solicitation of interest is provided in a record to offerees in compliance with a 
15.27 	rule adopted by the administrator under this chapter; and 
15.28 	(c) a stop order of which the offeror is aware has not been issued by the administrator 
15.29 	under this chapter and an audit, inspection, or proceeding that may culminate in a stop 
15.30 	order is not known by the offeror to be pending;
15.31 	(18) a transaction involving the distribution of the securities of an issuer to the 
15.32 	security holders of another person in connection with a merger, consolidation, exchange 
15.33 	of securities, sale of assets, or other reorganization to which the issuer, or its parent or 
15.34 	subsidiary and the other person, or its parent or subsidiary, are parties;
15.35 	(19) a rescission offer, sale, or purchase under section 80A.77;
16.1 	(20) an offer or sale of a security to a person not a resident of this state and not 
16.2 	present in this state if the offer or sale does not constitute a violation of the laws of the 
16.3 	state or foreign jurisdiction in which the offeree or purchaser is present and is not part of 
16.4 	an unlawful plan or scheme to evade this chapter;
16.5 	(21) employees' stock purchase, savings, option, profit-sharing, pension, or 
16.6 	similar employees' benefit plan, including any securities, plan interests, and guarantees 
16.7 	issued under a compensatory benefit plan or compensation contract, contained in a 
16.8 	record, established by the issuer, its parents, its majority-owned subsidiaries, or the 
16.9 	majority-owned subsidiaries of the issuer's parent for the participation of their employees 
16.10 	including offers or sales of such securities to:
16.11 	(A) directors; general partners; trustees, if the issuer is a business trust; officers; 
16.12 	consultants; and advisors;
16.13 	(B) family members who acquire such securities from those persons through gifts or 
16.14 	domestic relations orders;
16.15 	(C) former employees, directors, general partners, trustees, officers, consultants, and 
16.16 	advisors if those individuals were employed by or providing services to the issuer when 
16.17 	the securities were offered; and 
16.18 	(D) insurance agents who are exclusive insurance agents of the issuer, or the issuer's 
16.19 	subsidiaries or parents, or who derive more than 50 percent of their annual income from 
16.20 	those organizations;
16.21 	(22) a transaction involving:
16.22 	(A) a stock dividend or equivalent equity distribution, whether the corporation or 
16.23 	other business organization distributing the dividend or equivalent equity distribution is 
16.24 	the issuer or not, if nothing of value is given by stockholders or other equity holders for 
16.25 	the dividend or equivalent equity distribution other than the surrender of a right to a cash 
16.26 	or property dividend if each stockholder or other equity holder may elect to take the 
16.27 	dividend or equivalent equity distribution in cash, property, or stock;
16.28 	(B) an act incident to a judicially approved reorganization in which a security is 
16.29 	issued in exchange for one or more outstanding securities, claims, or property interests, or 
16.30 	partly in such exchange and partly for cash; or 
16.31 	(C) the solicitation of tenders of securities by an offeror in a tender offer in 
16.32 	compliance with Rule 162 adopted under the Securities Act of 1933 (17 C.F.R. 230.162);
16.33 	(23) a nonissuer transaction in an outstanding security by or through a broker-dealer 
16.34 	registered or exempt from registration under this chapter, if the issuer is a reporting 
16.35 	issuer in a foreign jurisdiction designated by this paragraph or by rule adopted or order 
16.36 	issued under this chapter; has been subject to continuous reporting requirements in the 
17.1 	foreign jurisdiction for not less than 180 days before the transaction; and the security is 
17.2 	listed on the foreign jurisdiction's securities exchange that has been designated by this 
17.3 	paragraph or by rule adopted or order issued under this chapter, or is a security of the same 
17.4 	issuer that is of senior or substantially equal rank to the listed security or is a warrant or 
17.5 	right to purchase or subscribe to any of the foregoing.  For purposes of this paragraph, 
17.6 	Canada, together with its provinces and territories, is a designated foreign jurisdiction 
17.7 	and The Toronto Stock Exchange, Inc., is a designated securities exchange.  After an 
17.8 	administrative hearing in compliance with chapter 14, the administrator, by rule adopted 
17.9 	or order issued under this chapter, may revoke the designation of a securities exchange 
17.10 	under this paragraph, if the administrator finds that revocation is necessary or appropriate 
17.11 	in the public interest and for the protection of investors;
17.12 	(24) any transaction effected by or through a Canadian broker-dealer exempted from 
17.13 	broker-dealer registration pursuant to section 80A.56(b)(3); or 
17.14 	(25)(A) the offer and sale by a cooperative organized under chapter 308A, or 
17.15 	under the laws of another state, of its securities when the securities are offered and sold 
17.16 	only to its members, or when the purchase of the securities is necessary or incidental to 
17.17 	establishing membership in the cooperative, or when the securities are issued as patronage 
17.18 	dividends. This paragraph applies to a cooperative organized under the laws of another 
17.19 	state only if the cooperative has filed with the administrator a consent to service of process 
17.20 	under section 80A.88 and has, not less than ten days before the issuance or delivery, 
17.21 	furnished the administrator with a written general description of the transaction and any 
17.22 	other information that the administrator requires by rule or otherwise;
17.23 	(B) the offer and sale by a cooperative organized under chapter 308B of its securities 
17.24 	when the securities are offered and sold to its existing members or when the purchase of the 
17.25 	securities is necessary or incidental to establishing patron membership in the cooperative, 
17.26 	or when such securities are issued as patronage dividends. The administrator has the 
17.27 	power to define "patron membership" for purposes of this paragraph. This paragraph 
17.28 	applies to securities, other than securities issued as patronage dividends, only when:
17.29 	(i) the issuer, before the completion of the sale of the securities, provides each 
17.30 	offeree or purchaser disclosure materials that, to the extent material to an understanding of 
17.31 	the issuer, its business, and the securities being offered, substantially meet the disclosure 
17.32 	conditions and limitations found in rule 502(b) of Regulation D promulgated by the 
17.33 	Securities and Exchange Commission, Code of Federal Regulations, title 17, section 
17.34 	230.502; and
17.35 	(ii) within 15 days after the completion of the first sale in each offering completed in 
17.36 	reliance upon this exemption, the cooperative has filed with the administrator a consent to 
18.1 	service of process under section 80A.88 (or has previously filed such a consent), and has 
18.2 	furnished the administrator with a written general description of the transaction and any 
18.3 	other information that the administrator requires by rule or otherwise; and
18.4 	(C) a cooperative may, at or about the same time as offers or sales are being 
18.5 	completed in reliance upon the exemptions from registration found in this subpart and as 
18.6 	part of a common plan of financing, offer or sell its securities in reliance upon any other 
18.7 	exemption from registration available under this chapter.  The offer or sale of securities in 
18.8 	reliance upon the exemptions found in this subpart will not be considered or deemed a part 
18.9 	of or be integrated with any offer or sale of securities conducted by the cooperative in 
18.10 	reliance upon any other exemption from registration available under this chapter, nor will 
18.11 	offers or sales of securities by the cooperative in reliance upon any other exemption from 
18.12 	registration available under this chapter be considered or deemed a part of or be integrated 
18.13 	with any offer or sale conducted by the cooperative in reliance upon this paragraph.

18.14 	Sec. 8. [80A.47] SECTION 203; ADDITIONAL EXEMPTIONS AND WAIVERS.
18.15 	A rule adopted or order issued under this chapter may exempt a security, transaction, 
18.16 	or offer; a rule under this chapter may exempt a class of securities, transactions, or offers 
18.17 	from any or all of the requirements of sections 80A.49 through 80A.54 and 80A.71; and 
18.18 	an order under this chapter may waive, in whole or in part, any or all of the conditions for 
18.19 	an exemption or offer under sections 80A.45 and 80A.46.

18.20 	Sec. 9. [80A.48] SECTION 204; DENIAL, SUSPENSION, REVOCATION, 
18.21 	CONDITION, OR LIMITATION OF EXEMPTIONS.
18.22 	(a) Enforcement related powers. Except with respect to a federal covered security 
18.23 	or a transaction involving a federal covered security, an order under this chapter may 
18.24 	deny, suspend application of, condition, limit, or revoke an exemption created under 
18.25 	section 80A.45(3)(C), (7) or (8) or 80A.46 or an exemption or waiver created under 
18.26 	section 80A.47 with respect to a specific security, transaction, or offer.  An order under this 
18.27 	section may be issued only pursuant to the procedures in section 80A.54(d) or 80A.81 
18.28 	and only prospectively.
18.29 	(b) Knowledge of order required. A person does not violate sections 80A.49, 
18.30 	80A.51 through 80A.54, 80A.71, or 80A.77 by an offer to sell, offer to purchase, sale, or 
18.31 	purchase effected after the entry of an order issued under this section if the person did not 
18.32 	know, and in the exercise of reasonable care could not have known, of the order.
18.33 	REGISTRATION OF SECURITIES AND NOTICE FILING OF 
18.34 	FEDERAL COVERED SECURITIES

19.1 	Sec. 10. [80A.49] SECTION 301; SECURITIES REGISTRATION 
19.2 	REQUIREMENT.
19.3 	It is unlawful for a person to offer or sell a security in this state unless:
19.4 	(1) the security is a federal covered security;
19.5 	(2) the security, transaction, or offer is exempted from registration under sections 
19.6 	80A.45 through 80A.47; or 
19.7 	(3) the security is registered under this chapter.

19.8 	Sec. 11. [80A.50] SECTION 302; FEDERAL COVERED SECURITIES; SMALL 
19.9 	CORPORATE OFFERING REGISTRATION.
19.10 	(a) Federal covered securities.
19.11 	(1) Required filing of records. With respect to a federal covered security, as defined 
19.12 	in Section 18(b)(2) of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(2)), that is not 
19.13 	otherwise exempt under sections 80A.45 through 80A.47, a rule adopted or order issued 
19.14 	under this chapter may require the filing of any or all of the following records:
19.15 	(A) before the initial offer of a federal covered security in this state, all records 
19.16 	that are part of a federal registration statement filed with the Securities and Exchange 
19.17 	Commission under the Securities Act of 1933 and a consent to service of process 
19.18 	complying with section 80A.88 signed by the issuer;
19.19 	(B) after the initial offer of the federal covered security in this state, all records that 
19.20 	are part of an amendment to a federal registration statement filed with the Securities and 
19.21 	Exchange Commission under the Securities Act of 1933; and 
19.22 	(C) to the extent necessary or appropriate to compute fees, a report of the value of 
19.23 	the federal covered securities sold or offered to persons present in this state, if the sales 
19.24 	data are not included in records filed with the Securities and Exchange Commission.
19.25 	(2) Notice filing effectiveness and renewal. A notice filing under subsection (a) is 
19.26 	effective for one year commencing on the later of the notice filing or the effectiveness of 
19.27 	the offering filed with the Securities and Exchange Commission.  On or before expiration, 
19.28 	the issuer may renew a notice filing by filing a copy of those records filed by the issuer 
19.29 	with the Securities and Exchange Commission that are required by rule or order under 
19.30 	this chapter to be filed.  A previously filed consent to service of process complying with 
19.31 	section 80A.88 may be incorporated by reference in a renewal.  A renewed notice filing 
19.32 	becomes effective upon the expiration of the filing being renewed.
19.33 	(3) Notice filings for federal covered securities under section 18(b)(4)(D). With 
19.34 	respect to a security that is a federal covered security under Section 18(b)(4)(D) of the 
19.35 	Securities Act of 1933 (15 U.S.C. Section 77r(b)(4)(D)), a rule under this chapter may 
20.1 	require a notice filing by or on behalf of an issuer to include a copy of Form D, including 
20.2 	the Appendix, as promulgated by the Securities and Exchange Commission, and a consent 
20.3 	to service of process complying with section 80A.88 signed by the issuer not later than 15 
20.4 	days after the first sale of the federal covered security in this state.
20.5 	(4) Stop orders. Except with respect to a federal security under Section 18(b)(1) 
20.6 	of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)), if the administrator finds 
20.7 	that there is a failure to comply with a notice or fee requirement of this section, the 
20.8 	administrator may issue a stop order suspending the offer and sale of a federal covered 
20.9 	security in this state.  If the deficiency is corrected, the stop order is void as of the time of 
20.10 	its issuance and no penalty may be imposed by the administrator.
20.11 	(b) Small corporation offering registration.
20.12 	(1) Registration required. A security meeting the conditions set forth in this section 
20.13 	may be registered as set forth in this section.
20.14 	(2) Availability. Registration under this section is available only to the issuer of 
20.15 	securities and not to an affiliate of the issuer or to any other person for resale of the issuer's 
20.16 	securities.  The issuer must be organized under the laws of one of the states or possessions 
20.17 	of the United States. The securities offered must be exempt from registration under the 
20.18 	Securities Act of 1933 pursuant to Rule 504 of Regulation D (15 U.S.C. section 77c).
20.19 	(3) Disqualification. Registration under this section is not available to any of the 
20.20 	following issuers:
20.21 	(A) an issuer subject to the reporting requirements of section 13 or 15(d) of the 
20.22 	Securities Exchange Act of 1934;
20.23 	(B) an investment company;
20.24 	(C) a development stage company that either has no specific business plan or 
20.25 	purpose or has indicated that its business plan is to engage in a merger or acquisition with 
20.26 	an unidentified company or companies or other entity or person;
20.27 	(D) an issuer if the issuer or any of its predecessors, officers, directors, governors, 
20.28 	partners, ten percent stock or equity holders, promoters, or any selling agents of the 
20.29 	securities to be offered, or any officer, director, governor, or partner of the selling agent:
20.30 	(i) has filed a registration statement that is the subject of a currently effective 
20.31 	registration stop order entered under a federal or state securities law within five years 
20.32 	before the filing of the small corporate offering registration application;
20.33 	(ii) has been convicted within five years before the filing of the small corporate 
20.34 	offering registration application of a felony or misdemeanor in connection with the 
20.35 	offer, purchase, or sale of a security or a felony involving fraud or deceit, including, but 
21.1 	not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny, 
21.2 	or conspiracy to defraud;
21.3 	(iii) is currently subject to a state administrative enforcement order or judgment 
21.4 	entered by a state securities administrator or the Securities and Exchange Commission 
21.5 	within five years before the filing of the small corporate offering registration application, 
21.6 	or is subject to a federal or state administrative enforcement order or judgment in which 
21.7 	fraud or deceit, including, but not limited to, making untrue statements of material facts or 
21.8 	omitting to state material facts, was found and the order or judgment was entered within 
21.9 	five years before the filing of the small corporate offering registration application;
21.10 	(iv) is currently subject to an order, judgment, or decree of a court of competent 
21.11 	jurisdiction temporarily restraining or enjoining, or is subject to an order, judgment, or 
21.12 	decree of a court of competent jurisdiction permanently restraining or enjoining the party 
21.13 	from engaging in or continuing any conduct or practice in connection with the purchase 
21.14 	or sale of any security or involving the making of a false filing with a state or with the 
21.15 	Securities and Exchange Commission entered within five years before the filing of the 
21.16 	small corporate offering registration application; or 
21.17 	(v) is subject to a state's administrative enforcement order, or judgment that 
21.18 	prohibits, denies, or revokes the use of an exemption for registration in connection with 
21.19 	the offer, purchase, or sale of securities,
21.20 	(I) except that clauses (i) to (iv) do not apply if the person subject to the 
21.21 	disqualification is duly licensed or registered to conduct securities-related business in the 
21.22 	state in which the administrative order or judgment was entered against the person or if 
21.23 	the dealer employing the party is licensed or registered in this state and the form BD filed 
21.24 	in this state discloses the order, conviction, judgment, or decree relating to the person, and 
21.25 	(II) except that the disqualification under this subdivision is automatically 
21.26 	waived if the state securities administrator or federal agency that created the basis for 
21.27 	disqualification determines upon a showing of good cause that it is not necessary under 
21.28 	the circumstances to deny the registration.
21.29 	(4) Filing and effectiveness of registration statement. A small corporate offering 
21.30 	registration statement must be filed with the administrator.  If no stop order is in effect 
21.31 	and no proceeding is pending under section 80A.54, such registration statement shall 
21.32 	become effective automatically at the close of business on the 20th day after filing of the 
21.33 	registration statement or the last amendment of the registration statement or at such earlier 
21.34 	time as the administrator may designate by rule or order.
21.35 	(5) Contents of registration statement. A small corporate offering registration 
21.36 	statement under this section shall be on Form U-7, including exhibits required by 
22.1 	the instructions thereto, as adopted by the North American Securities Administrators 
22.2 	Association, or such alternative form as may be designated by the administrator by rule or 
22.3 	order and must include:
22.4 	(A) a consent to service of process complying with section 80A.88;
22.5 	(B) a statement of the type and amount of securities to be offered and the amount of 
22.6 	securities to be offered in this state;
22.7 	(C) a specimen or copy of the security being registered, unless the security is 
22.8 	uncertificated, a copy of the issuer's articles of incorporation and bylaws or their 
22.9 	substantial equivalents in effect, and a copy of any indenture or other instrument covering 
22.10 	the security to be registered;
22.11 	(D) a signed or conformed copy of an opinion of counsel concerning the legality 
22.12 	of the securities being registered which states whether the securities, when sold, will be 
22.13 	validly issued, fully paid, and nonassessable and, if debt securities, binding obligations 
22.14 	of the issuer;
22.15 	(E) the states (i) in which the securities are proposed to be offered; (ii) in which a 
22.16 	registration statement or similar filing has been made in connection with the offering 
22.17 	including information as to effectiveness of each such filing; and (iii) in which a stop 
22.18 	order or similar proceeding has been entered or in which proceedings or actions seeking 
22.19 	such an order are pending;
22.20 	(F) a copy of the offering document proposed to be delivered to offerees; and 
22.21 	(G) a copy of any other pamphlet, circular, form letter, advertisement, or other sales 
22.22 	literature intended as of the effective date to be used in connection with the offering and 
22.23 	any solicitation of interest used in compliance with section 80A.46(17)(B).
22.24 	(6) Copy to purchaser. A copy of the offering document as filed with the 
22.25 	administrator must be delivered to each person purchasing the securities prior to sale 
22.26 	of the securities to such person.

22.27 	Sec. 12. [80A.51] SECTION 303; SECURITIES REGISTRATION BY 
22.28 	COORDINATION.
22.29 	(a) Registration permitted. A security for which a registration statement has been 
22.30 	filed under the Securities Act of 1933 in connection with the same offering may be 
22.31 	registered by coordination under this section.
22.32 	(b) Required records. A registration statement and accompanying records under 
22.33 	this section must contain or be accompanied by the following records in addition to the 
22.34 	information specified in section 80A.53 and a consent to service of process complying 
22.35 	with section 80A.88:
23.1 	(1) a copy of the latest form of prospectus filed under the Securities Act of 1933;
23.2 	(2) a copy of the articles of incorporation and bylaws or their substantial equivalents 
23.3 	currently in effect; a copy of any agreement with or among underwriters; a copy of any 
23.4 	indenture or other instrument governing the issuance of the security to be registered; 
23.5 	and a specimen, copy, or description of the security that is required by rule adopted or 
23.6 	order issued under this chapter;
23.7 	(3) copies of any other information or any other records filed by the issuer under the 
23.8 	Securities Act of 1933 requested by the administrator; and 
23.9 	(4) an undertaking to forward each amendment to the federal prospectus, other than 
23.10 	an amendment that delays the effective date of the registration statement, promptly after 
23.11 	it is filed with the Securities and Exchange Commission.
23.12 	(c) Conditions for effectiveness of registration statement. A registration statement 
23.13 	under this section becomes effective simultaneously with or subsequent to the federal 
23.14 	registration statement when all of the following conditions are satisfied:
23.15 	(1) a stop order under subsection (d) or section 80A.54 or issued by the Securities 
23.16 	and Exchange Commission is not in effect and a proceeding is not pending against the 
23.17 	issuer under section 80A.54; and 
23.18 	(2) the registration statement has been on file for at least 20 days or a shorter period 
23.19 	provided by rule adopted or order issued under this chapter.
23.20 	(d) Notice of federal registration statement effectiveness. The registrant shall 
23.21 	promptly notify the administrator in a record of the date when the federal registration 
23.22 	statement becomes effective and the content of any price amendment and shall promptly 
23.23 	file a record containing the price amendment.  If the notice is not timely received, the 
23.24 	administrator may issue a stop order, without prior notice or hearing, retroactively denying 
23.25 	effectiveness to the registration statement or suspending its effectiveness until compliance 
23.26 	with this section.  The administrator shall promptly notify the registrant of an order by 
23.27 	telegram, telephone, or electronic means and promptly confirm this notice by a record.  If 
23.28 	the registrant subsequently complies with the notice requirement of this section, the stop 
23.29 	order is void as of the date of its issuance.
23.30 	(e) Effectiveness of registration statement. If the federal registration statement 
23.31 	becomes effective before each of the conditions in this section is satisfied or is waived 
23.32 	by the administrator, the registration statement is automatically effective under this 
23.33 	chapter when all the conditions are satisfied or waived.  If the registrant notifies the 
23.34 	administrator of the date when the federal registration statement is expected to become 
23.35 	effective, the administrator shall promptly notify the registrant by telegram, telephone, or 
23.36 	electronic means and promptly confirm this notice by a record, indicating whether all the 
24.1 	conditions are satisfied or waived and whether the administrator intends the institution of a 
24.2 	proceeding under section 80A.54.  The notice by the administrator does not preclude the 
24.3 	institution of such a proceeding.

24.4 	Sec. 13. [80A.52] SECTION 304; SECURITIES REGISTRATION BY 
24.5 	QUALIFICATION.
24.6 	(a) Registration permitted. A security may be registered by qualification under 
24.7 	this section.
24.8 	(b) Required records. A registration statement under this section must contain 
24.9 	the information or records specified in section 80A.53, a consent to service of process 
24.10 	complying with section 80A.88, and, if required by rule adopted under this chapter, the 
24.11 	following information or records:
24.12 	(1) with respect to the issuer and any significant subsidiary, its name, address, and 
24.13 	form of organization; the state or foreign jurisdiction and date of its organization; the 
24.14 	general character and location of its business; a description of its physical properties 
24.15 	and equipment; and a statement of the general competitive conditions in the industry or 
24.16 	business in which it is or will be engaged;
24.17 	(2) with respect to each director and officer of the issuer, and other person having a 
24.18 	similar status or performing similar functions, the person's name, address, and principal 
24.19 	occupation for the previous five years; the amount of securities of the issuer held by 
24.20 	the person as of the 30th day before the filing of the registration statement; the amount 
24.21 	of the securities covered by the registration statement to which the person has indicated 
24.22 	an intention to subscribe; and a description of any material interest of the person in any 
24.23 	material transaction with the issuer or a significant subsidiary effected within the previous 
24.24 	three years or proposed to be effected;
24.25 	(3) with respect to persons covered by paragraph (2), the aggregate sum of the 
24.26 	remuneration paid to those persons during the previous 12 months and estimated to be 
24.27 	paid during the next 12 months, directly or indirectly, by the issuer, and all predecessors, 
24.28 	parents, subsidiaries, and affiliates of the issuer;
24.29 	(4) with respect to a person owning of record or owning beneficially, if known, ten 
24.30 	percent or more of the outstanding shares of any class of equity security of the issuer, the 
24.31 	information specified in paragraph (2) other than the person's occupation;
24.32 	(5) with respect to a promoter, if the issuer was organized within the previous three 
24.33 	years, the information or records specified in paragraph (2), any amount paid to the 
24.34 	promoter within that period or intended to be paid to the promoter, and the consideration 
24.35 	for the payment;
25.1 	(6) with respect to a person on whose behalf any part of the offering is to be made 
25.2 	in a nonissuer distribution, the person's name and address; the amount of securities of 
25.3 	the issuer held by the person as of the date of the filing of the registration statement; a 
25.4 	description of any material interest of the person in any material transaction with the issuer 
25.5 	or any significant subsidiary effected within the previous three years or proposed to be 
25.6 	effected, and a statement of the reasons for making the offering;
25.7 	(7) the capitalization and long-term debt, on both a current and pro forma basis, 
25.8 	of the issuer and any significant subsidiary, including a description of each security 
25.9 	outstanding or being registered or otherwise offered, and a statement of the amount and 
25.10 	kind of consideration, whether in the form of cash, physical assets, services, patents, 
25.11 	goodwill, or anything else of value, for which the issuer or any subsidiary has issued its 
25.12 	securities within the previous two years or is obligated to issue its securities;
25.13 	(8) the kind and amount of securities to be offered; the proposed offering price or the 
25.14 	method by which it is to be computed; any variation at which a proportion of the offering is 
25.15 	to be made to a person or class of persons other than the underwriters, with a specification 
25.16 	of the person or class; the basis on which the offering is to be made if otherwise than for 
25.17 	cash; the estimated aggregate underwriting and selling discounts or commissions and 
25.18 	finders' fees, including separately cash, securities, contracts, or anything else of value to 
25.19 	accrue to the underwriters or finders in connection with the offering or, if the selling 
25.20 	discounts or commissions are variable, the basis of determining them and their maximum 
25.21 	and minimum amounts; the estimated amounts of other selling expenses, including legal, 
25.22 	engineering, and accounting charges; the name and address of each underwriter and each 
25.23 	recipient of a finder's fee; a copy of any underwriting or selling group agreement under 
25.24 	which the distribution is to be made or the proposed form of any such agreement whose 
25.25 	terms have not yet been determined; and a description of the plan of distribution of any 
25.26 	securities that are to be offered otherwise than through an underwriter;
25.27 	(9) the estimated monetary proceeds to be received by the issuer from the offering; 
25.28 	the purposes for which the proceeds are to be used by the issuer; the estimated amount to 
25.29 	be used for each purpose; the order or priority in which the proceeds will be used for the 
25.30 	purposes stated; the amounts of any funds to be raised from other sources to achieve the 
25.31 	purposes stated; the sources of the funds; and, if a part of the proceeds is to be used to 
25.32 	acquire property, including goodwill, otherwise than in the ordinary course of business, 
25.33 	the names and addresses of the vendors, the purchase price, the names of any persons that 
25.34 	have received commissions in connection with the acquisition, and the amounts of the 
25.35 	commissions and other expenses in connection with the acquisition, including the cost of 
25.36 	borrowing money to finance the acquisition;
26.1 	(10) a description of any stock options or other security options outstanding, or to 
26.2 	be created in connection with the offering, and the amount of those options held or to be 
26.3 	held by each person required to be named in paragraph (2), (4), (5), (6), or (8) and by any 
26.4 	person that holds or will hold ten percent or more in the aggregate of those options;
26.5 	(11) the dates of, parties to, and general effect concisely stated of each managerial 
26.6 	or other material contract made or to be made otherwise than in the ordinary course of 
26.7 	business to be performed in whole or in part at or after the filing of the registration 
26.8 	statement or that was made within the previous two years, and a copy of the contract;
26.9 	(12) a description of any pending litigation, action, or proceeding to which the issuer 
26.10 	is a party and that materially affects its business or assets, and any litigation, action, or 
26.11 	proceeding known to be contemplated by governmental authorities;
26.12 	(13) a copy of any prospectus, pamphlet, circular, form letter, advertisement, or other 
26.13 	sales literature intended as of the effective date to be used in connection with the offering 
26.14 	and any solicitation of interest used in compliance with section 80A.46(17)(B);
26.15 	(14) a specimen or copy of the security being registered, unless the security 
26.16 	is uncertificated; a copy of the issuer's articles of incorporation and bylaws or their 
26.17 	substantial equivalents, in effect; and a copy of any indenture or other instrument covering 
26.18 	the security to be registered;
26.19 	(15) a signed or conformed copy of an opinion of counsel concerning the legality of 
26.20 	the security being registered, with an English translation if it is in a language other than 
26.21 	English, which states whether the security when sold will be validly issued, fully paid, and 
26.22 	nonassessable and, if a debt security, a binding obligation of the issuer;
26.23 	(16) a signed or conformed copy of a consent of any accountant, engineer, appraiser, 
26.24 	or other person whose profession gives authority for a statement made by the person, if the 
26.25 	person is named as having prepared or certified a report or valuation, other than an official 
26.26 	record, that is public, which is used in connection with the registration statement;
26.27 	(17) a balance sheet of the issuer as of a date within four months before the filing of 
26.28 	the registration statement; a statement of income and a statement of case flows for each of 
26.29 	the three fiscal years preceding the date of the balance sheet and for any period between 
26.30 	the close of the immediately previous fiscal year and the date of the balance sheet, or for 
26.31 	the period of the issuer's and any predecessor's existence if less than three years; and, if 
26.32 	any part of the proceeds of the offering is to be applied to the purchase of a business, the 
26.33 	financial statements that would be required if that business were the registrant; and 
26.34 	(18) any additional information or records required by rule adopted or order issued 
26.35 	under this chapter.
27.1 	(c) Conditions for effectiveness of registration statement. A registration statement 
27.2 	under this section becomes effective 30 days, or any shorter period provided by rule 
27.3 	adopted or order issued under this chapter, after the date the registration statement or the 
27.4 	last amendment other than a price amendment is filed, if:
27.5 	(1) a stop order is not in effect and a proceeding is not pending under section 80A.54;
27.6 	(2) the administrator has not issued an order under section 80A.54 delaying 
27.7 	effectiveness; and 
27.8 	(3) the applicant or registrant has not requested that effectiveness be delayed.
27.9 	(d) Delay of effectiveness of registration statement. The administrator may 
27.10 	delay effectiveness once for not more than 90 days if the administrator determines the 
27.11 	registration statement is not complete in all material respects and promptly notifies 
27.12 	the applicant or registrant of that determination.  The administrator may also delay 
27.13 	effectiveness for a further period of not more than 30 days if the administrator determines 
27.14 	that the delay is necessary or appropriate.
27.15 	(e) Prospectus distribution may be required. A rule adopted or order issued 
27.16 	under this chapter may require as a condition of registration under this section that a 
27.17 	prospectus containing a specified part of the information or record specified in subsection 
27.18 	(b) be sent or given to each person to which an offer is made, before or concurrently, 
27.19 	with the earliest of:
27.20 	(1) the first offer made in a record to the person otherwise than by means of a public 
27.21 	advertisement, by or for the account of the issuer or another person on whose behalf the 
27.22 	offering is being made or by an underwriter or broker-dealer that is offering part of an 
27.23 	unsold allotment or subscription taken by the person as a participant in the distribution;
27.24 	(2) the confirmation of a sale made by or for the account of the person;
27.25 	(3) payment pursuant to such a sale; or 
27.26 	(4) delivery of the security pursuant to such a sale.

27.27 	Sec. 14. [80A.53] SECTION 305; SECURITIES REGISTRATION FILINGS.
27.28 	(a) Who may file. A registration statement may be filed by the issuer, a person on 
27.29 	whose behalf the offering is to be made, or a broker-dealer registered under this chapter.
27.30 	(b) Status of offering. A registration statement filed under section 80A.51 or 
27.31 	80A.52 must specify:
27.32 	(1) the amount of securities to be offered in this state;
27.33 	(2) the states in which a registration statement or similar record in connection with 
27.34 	the offering has been or is to be filed; and 
28.1 	(3) any adverse order, judgment, or decree issued in connection with the offering by 
28.2 	a state securities regulator, the Securities and Exchange Commission, or a court.
28.3 	(c) Incorporation by reference. A record filed under this chapter or the predecessor 
28.4 	act within five years preceding the filing of a registration statement may be incorporated 
28.5 	by reference in the registration statement to the extent that the record is currently accurate.
28.6 	(d) Nonissuer distribution. In the case of a nonissuer distribution, information 
28.7 	or a record may not be required under subsection (i) or section 80A.52, unless it is 
28.8 	known to the person filing the registration statement or to the person on whose behalf 
28.9 	the distribution is to be made or unless it can be furnished by those persons without 
28.10 	unreasonable effort or expense.
28.11 	(e) Escrow and impoundment. A rule adopted or order issued under this chapter 
28.12 	may require as a condition of registration that a security issued within the previous five 
28.13 	years or to be issued to a promoter for a consideration substantially less than the public 
28.14 	offering price or to a person for a consideration other than cash be deposited in escrow; and 
28.15 	that the proceeds from the sale of the registered security in this state be impounded until 
28.16 	the issuer receives a specified amount from the sale of the security either in this state or 
28.17 	elsewhere.  The conditions of any escrow or impoundment required under this subsection 
28.18 	may be established by rule adopted or order issued under this chapter, but the administrator 
28.19 	may not reject a depository institution solely because of its location in another state.
28.20 	(f) Form of subscription. A rule adopted or order issued under this chapter may 
28.21 	require as a condition of registration that a security registered under this chapter be sold 
28.22 	only on a specified form of subscription or sale contract and that a signed or conformed 
28.23 	copy of each contract be filed under this chapter or preserved for a period specified by 
28.24 	the rule or order, which may not be longer than five years.
28.25 	(g) Effective period. Except while a stop order is in effect under section 80A.54, a 
28.26 	registration statement is effective for one year after its effective date, or for any longer 
28.27 	period designated in an order under this chapter during which the security is being offered 
28.28 	or distributed in a nonexempted transaction by or for the account of the issuer or other 
28.29 	person on whose behalf the offering is being made or by an underwriter or broker-dealer 
28.30 	that is still offering part of an unsold allotment or subscription taken as a participant in 
28.31 	the distribution.  For the purposes of a nonissuer transaction, all outstanding securities of 
28.32 	the same class identified in the registration statement as a security registered under this 
28.33 	chapter are considered to be registered while the registration statement is effective.  If any 
28.34 	securities of the same class are outstanding, a registration statement may not be withdrawn 
28.35 	until one year after its effective date.  A registration statement may be withdrawn only 
28.36 	with the approval of the administrator.
29.1 	(h) Periodic reports. While a registration statement is effective, a rule adopted or 
29.2 	order issued under this chapter may require the person that filed the registration statement 
29.3 	to file reports, not more often than quarterly, to keep the information or other record in the 
29.4 	registration statement reasonably current and to disclose the progress of the offering.
29.5 	(i) Posteffective amendments. A registration statement may be amended after its 
29.6 	effective date.  The posteffective amendment becomes effective when the administrator 
29.7 	so orders. If a posteffective amendment is made to increase the number of securities 
29.8 	specified to be offered or sold, the person filing the amendment shall pay a registration 
29.9 	fee.  A posteffective amendment relates back to the date of the offering of the additional 
29.10 	securities being registered if, within one year after the date of the sale, the amendment is 
29.11 	filed and the additional registration fee is paid.

29.12 	Sec. 15. [80A.54] SECTION 306; DENIAL, SUSPENSION, AND REVOCATION 
29.13 	OF SECURITIES REGISTRATION.
29.14 	(a) Stop orders. The administrator may issue a stop order denying effectiveness to, 
29.15 	or suspending or revoking the effectiveness of, a registration statement if the administrator 
29.16 	finds that the order is in the public interest and that:
29.17 	(1) the registration statement as of its effective date or before the effective date in the 
29.18 	case of an order denying effectiveness, an amendment under section 80A.53(j) as of its 
29.19 	effective date, or a report under section 80A.53(i), is incomplete in a material respect or 
29.20 	contains a statement that, in the light of the circumstances under which it was made, was 
29.21 	false or misleading with respect to a material fact;
29.22 	(2) this chapter or a rule adopted or order issued under this chapter or a condition 
29.23 	imposed under this chapter has been willfully violated, in connection with the offering, by:
29.24 	(A) the person filing the registration statement, if the person is directly or indirectly 
29.25 	controlled by or acting for the issuer;
29.26 	(B) the issuer;
29.27 	(C) a partner, officer, or director of the issuer or a person having a similar status 
29.28 	or performing similar functions;
29.29 	(D) a promoter of the issuer;
29.30 	(E) a person directly or indirectly controlling or controlled by the issuer; or 
29.31 	(F) an underwriter;
29.32 	(3) the security registered or sought to be registered is the subject of a permanent or 
29.33 	temporary injunction of a court of competent jurisdiction or an administrative stop order 
29.34 	or similar order issued under any federal, foreign, or state law other than this chapter 
29.35 	applicable to the offering, but the administrator may not institute a proceeding against an 
30.1 	effective registration statement under this paragraph more than one year after the date of 
30.2 	the order or injunction on which it is based, and the administrator may not issue an order 
30.3 	under this paragraph on the basis of an order or injunction issued under the securities act 
30.4 	of another state unless the order or injunction was based on conduct that would constitute, 
30.5 	as of the date of the order, a ground for a stop order under this section;
30.6 	(4) the issuer's enterprise or method of business includes or would include activities 
30.7 	that are unlawful where performed;
30.8 	(5) with respect to a security sought to be registered under section 80A.51, there has 
30.9 	been a failure to comply with the undertaking required by section 80A.51(b)(4); or 
30.10 	(6) the applicant or registrant has not paid the filing fee, but the administrator shall 
30.11 	void the order if the deficiency is corrected.
30.12 	(b) Institution of stop order. The administrator may not institute a stop order 
30.13 	proceeding against an effective registration statement on the basis of conduct or a 
30.14 	transaction known to the administrator when the registration statement became effective 
30.15 	unless the proceeding is instituted within 30 days after the registration statement became 
30.16 	effective.
30.17 	(c) Summary process. The administrator may summarily revoke, deny, postpone, 
30.18 	or suspend the effectiveness of a registration statement pending final determination of 
30.19 	an administrative proceeding.  Upon the issuance of the order, the administrator shall 
30.20 	promptly notify each person specified in subsection (d) that the order has been issued; 
30.21 	the reasons for the revocation, denial, postponement, or suspension; and that within 15 
30.22 	days after the receipt of a request in a record from the person the matter will be scheduled 
30.23 	for a hearing.  If a hearing is not requested and none is ordered by the administrator, 
30.24 	within 30 days after the date of service of the order, the order becomes final. If a hearing 
30.25 	is requested or ordered, the administrator, after notice of and opportunity for hearing for 
30.26 	each person subject to the order, may modify or vacate the order or extend the order 
30.27 	until final determination.
30.28 	(d) Procedural requirements for stop order. A stop order may not be issued 
30.29 	under this section without:
30.30 	(1) appropriate notice to the applicant or registrant, the issuer, and the person on 
30.31 	whose behalf the securities are to be or have been offered;
30.32 	(2) an opportunity for hearing; and 
30.33 	(3) findings of fact and conclusions of law in a record in accordance with chapter 14.
30.34 	(e) Modification or vacation of stop order. The administrator may modify or 
30.35 	vacate a stop order issued under this section if the administrator finds that the conditions 
31.1 	that caused its issuance have changed or that it is necessary or appropriate in the public 
31.2 	interest or for the protection of investors.

31.3 	Sec. 16. [80A.55] SECTION 307; WAIVER AND MODIFICATION.
31.4 	The administrator may waive or modify, in whole or in part, any or all of the 
31.5 	requirements of sections 80A.50, 80A.51, and 80A.52(b) or the requirement of any 
31.6 	information or record in a registration statement or in a periodic report filed pursuant to 
31.7 	section 80A.53(i).
31.8 	BROKER-DEALERS, AGENTS, INVESTMENT ADVISERS, 
31.9 	INVESTMENT ADVISER REPRESENTATIVES, AND FEDERAL 
31.10 	COVERED INVESTMENT ADVISERS

31.11 	Sec. 17. [80A.56] SECTION 401; BROKER-DEALER REGISTRATION 
31.12 	REQUIREMENT AND EXEMPTIONS.
31.13 	(a) Registration requirement. It is unlawful for a person to transact business in this 
31.14 	state as a broker-dealer unless the person is registered under this chapter as a broker-dealer 
31.15 	or is exempt from registration as a broker-dealer under subsection (b) or (d).
31.16 	(b) Exemptions from registration. The following persons are exempt from the 
31.17 	registration requirement of subsection (a):
31.18 	(1) a broker-dealer without a place of business in this state if its only transactions 
31.19 	effected in the state are with:
31.20 	(A) the issuer of the securities involved in the transactions;
31.21 	(B) a broker-dealer registered under this chapter or not required to be registered as a 
31.22 	broker-dealer under this chapter;
31.23 	(C) an institutional investor;
31.24 	(D) a nonaffiliated federal covered investment adviser with investments under 
31.25 	management in excess of $100,000,000 acting for the account of others pursuant to 
31.26 	discretionary authority in a signed record;
31.27 	(E) a bona fide preexisting customer whose principal place of residence is not in 
31.28 	this state and the person is registered as a broker-dealer under the Securities Exchange 
31.29 	Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 
31.30 	and is registered under the securities act of the state in which the customer maintains a 
31.31 	principal place of residence;
31.32 	(F) a bona fide preexisting customer whose principal place of residence is in this 
31.33 	state but was not present in this state when the customer relationship was established, if:
31.34 	(i) the broker-dealer is registered under the Securities Exchange Act of 1934 or not 
31.35 	required to be registered under the Securities Exchange Act of 1934 and is registered 
32.1 	under the securities laws of the state in which the customer relationship was established 
32.2 	and where the customer had maintained a principal place of residence; and 
32.3 	(ii) within 45 days after the customer's first transaction in this state, the person files 
32.4 	an application for registration as a broker-dealer in this state and a further transaction is not 
32.5 	effected more than 75 days after the date on which the application is filed, or, if earlier, the 
32.6 	date on which the administrator notifies the person that the administrator has denied the 
32.7 	application for registration or has stayed the pendency of the application for good cause;
32.8 	(G) not more than three customers in this state during the previous 12 months, 
32.9 	in addition to those customers specified in subparagraphs (A) through (F) and under 
32.10 	subparagraph (H), if the broker-dealer is registered under the Securities Exchange Act of 
32.11 	1934 or not required to be registered under the Securities Exchange Act of 1934 and is 
32.12 	registered under the securities act of the state in which the broker-dealer has its principal 
32.13 	place of business; and 
32.14 	(H) any other person exempted by rule adopted or order issued under this chapter; 
32.15 	and 
32.16 	(2) a person that deals solely in United States government securities and is supervised 
32.17 	as a dealer in government securities by the Board of Governors of the Federal Reserve 
32.18 	System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, 
32.19 	or the Office of Thrift Supervision; and 
32.20 	(3) a broker-dealer that is registered in Canada and who has no office or other 
32.21 	physical presence in this state if the broker-dealer complies with the following conditions:
32.22 	(A) the broker-dealer is registered with or is a member of a self-regulatory 
32.23 	organization in Canada, a stock exchange in Canada, or the Bureau des services financiers;
32.24 	(B) the broker-dealer maintains in good standing its provincial or territorial 
32.25 	registration and its registration with or membership in a self-regulatory organization in 
32.26 	Canada, a stock exchange in Canada, or the Bureau des services financiers; and 
32.27 	(C) the broker-dealer effects or attempts to effect transactions in securities:
32.28 	(i) with or for a person from Canada who is temporarily present in this state, with 
32.29 	whom the broker-dealer had a bona fide broker-dealer-client relationship before the person 
32.30 	entered the United States; or 
32.31 	(ii) with or for a person from Canada who is present in this state, whose transactions 
32.32 	are in a Canadian self-directed tax advantaged retirement account of which the person is 
32.33 	the holder or contributor.
32.34 	(c) Limits on employment or association. It is unlawful for a broker-dealer, or 
32.35 	for an issuer engaged in offering, offering to purchase, purchasing, or selling securities in 
32.36 	this state, directly or indirectly, to employ or associate with an individual to engage in an 
33.1 	activity related to securities transactions in this state if the registration of the individual is 
33.2 	suspended or revoked or the individual is barred from employment or association with a 
33.3 	broker-dealer, an issuer, an investment adviser, or a federal covered investment adviser by 
33.4 	an order of the administrator under this chapter, the Securities and Exchange Commission, 
33.5 	or a self-regulatory organization.  A broker-dealer or issuer does not violate this subsection 
33.6 	if the broker-dealer or issuer did not know and in the exercise of reasonable care could not 
33.7 	have known, of the suspension, revocation, or bar.  Upon request from a broker-dealer or 
33.8 	issuer and for good cause, an order under this chapter may modify or waive, in whole or in 
33.9 	part, the application of the prohibitions of this subsection to the broker-dealer.
33.10 	(d) Foreign transactions. A rule adopted or order issued under this chapter may 
33.11 	permit:
33.12 	(1) a broker-dealer that is registered in Canada or other foreign jurisdiction and that 
33.13 	does not have a place of business in this state to effect transactions in securities with or 
33.14 	for, or attempt to effect the purchase or sale of any securities by:
33.15 	(A) an individual from Canada or other foreign jurisdiction who is temporarily 
33.16 	present in this state and with whom the broker-dealer had a bona fide customer relationship 
33.17 	before the individual entered the United States;
33.18 	(B) an individual from Canada or other foreign jurisdiction who is present in the 
33.19 	state and whose transactions are in a self-directed tax advantaged retirement plan of which 
33.20 	the individual is the holder or contributor in that foreign jurisdiction; or 
33.21 	(C) an individual who is present in this state, with whom the broker-dealer customer 
33.22 	relationship arose while the individual was temporarily or permanently resident in Canada 
33.23 	or the other foreign jurisdiction; and 
33.24 	(2) an agent who represents a broker-dealer that is exempt under this subsection to 
33.25 	effect transactions in securities or attempt to effect the purchase or sale of securities in this 
33.26 	state as permitted for a broker-dealer described in paragraph (1).

33.27 	Sec. 18. [80A.57] SECTION 402; AGENT REGISTRATION REQUIREMENT 
33.28 	AND EXEMPTIONS.
33.29 	(a) Registration requirement. It is unlawful for an individual to transact business 
33.30 	in the state as an agent unless the individual is registered under this chapter as an agent or 
33.31 	is exempt from registration as an agent under subsection (b).
33.32 	(b) Exemptions from registration. The following individuals are exempt from the 
33.33 	registration requirement of subsection (a):
34.1 	(1) an individual who represents a broker-dealer in effecting transactions in this state 
34.2 	limited to those described in Section 15(h)(2) of the Securities Exchange Act of 1934 (15 
34.3 	U.S.C. Section 78(o)(2));
34.4 	(2) an individual who represents a broker-dealer that is exempt under section 
34.5 	80A.56(b) or (d);
34.6 	(3) an individual who represents an issuer with respect to an offer or sale of the 
34.7 	issuer's own securities or those of the issuer's parent or any of the issuer's subsidiaries, 
34.8 	and who is not compensated in connection with the individual's participation by 
34.9 	the payment of commissions or other remuneration based, directly or indirectly, on 
34.10 	transactions in those securities;
34.11 	(4) an individual who represents an issuer and who effects transactions in the issuer's 
34.12 	securities exempted by section 80A.46, other than section 80A.46(11) and (14);
34.13 	(5) an individual who represents an issuer that effects transactions solely in federal 
34.14 	covered securities of the issuer, but an individual who effects transactions in a federal 
34.15 	covered security under Section 18(b)(3) or 18(b)(4)(D) of the Securities Act of 1933 (15 
34.16 	U.S.C. Section 77r(b)(3) or 77r(b)(4)(D)) is not exempt if the individual is compensated 
34.17 	in connection with the agent's participation by the payment of commissions or other 
34.18 	remuneration based, directly or indirectly, on transactions in those securities;
34.19 	(6) an individual who represents a broker-dealer registered in this state under section 
34.20 	80A.56(a) or exempt from registration under section 80A.56(b) in the offer and sale 
34.21 	of securities for an account of a nonaffiliated federal covered investment adviser with 
34.22 	investments under management in excess of $100,000,000 acting for the account of others 
34.23 	pursuant to discretionary authority in a signed record;
34.24 	(7) an individual who represents an issuer in connection with the purchase of the 
34.25 	issuer's own securities;
34.26 	(8) an individual who represents an issuer and who restricts participation to 
34.27 	performing clerical or ministerial acts;  
34.28 	(9) an individual who represents an issuer in effecting transactions in a security 
34.29 	exempted by section 80A.45;
34.30 	(10) an individual who represents an issuer in effecting transactions with existing 
34.31 	employees, partners, or directors of the issuer if no commission or other remuneration is 
34.32 	paid or given directly or indirectly for soliciting any person in this state;
34.33 	(11) an individual who represents one or more issuers with respect to an offer or sale 
34.34 	of the issuer's securities if the offer or sale of the securities is exempted by section 80A.46 
34.35 	and the individual complies with or satisfies each of the following conditions:
35.1 	(A) the individual (i) would not be deemed disqualified pursuant to section 80A.50 
35.2 	(b)(3)(D)(ii) to (iv); (ii) is not employed by or associated with a broker-dealer; and 
35.3 	(iii) has not been the subject of (a) an action, order, or decision by any self-regulatory 
35.4 	organization, commodities exchange, or securities exchange resulting in a censure or 
35.5 	other sanction within 12 months prior to the offer or sale or (b) a denial, revocation, or 
35.6 	restriction of any license or membership by any self-regulatory organization, commodities 
35.7 	exchange, or securities exchange that has been effective at any time within 12 months 
35.8 	prior to the offer or sale;
35.9 	(B) neither the individual nor any person associated with the individual handles 
35.10 	or takes possession of funds or securities;
35.11 	(C) the individual files with the administrator a consent to service of process 
35.12 	complying with Section 611 before commencing any such representation; and
35.13 	(D) the individual files with the administrator a notice that contains (i) the full legal 
35.14 	name, address, and phone of the individual; (ii) any other names used by the individual in 
35.15 	the prior five years; (iii) a statement whether the individual is, or within the last prior years 
35.16 	has been, licensed by or registered with any state or federal government, government 
35.17 	agency, or any self-regulatory organization, commodities exchange, or securities exchange 
35.18 	as a broker-dealer, registered representative, investment advisor, or investment advisor 
35.19 	representative, including, if applicable, the individual's IARD/CRD number; (iv) an 
35.20 	undertaking to notify the administrator in writing of a change in any of the foregoing 
35.21 	within five business days of such change; and (v) any additional information that may be 
35.22 	required by rule adopted or order issued under this chapter. This notice must be filed 
35.23 	before the individual commences any issuer representation. The notice is effective through 
35.24 	December 31 of the year following the year in which it is filed and may be renewed 
35.25 	annually in such manner as prescribed by the administrator; and
35.26 	(12) any other individual exempted by rule adopted or order issued under this chapter.
35.27 	(c) Registration effective only while employed or associated. The registration of 
35.28 	an agent is effective only while the agent is employed by or associated with a broker-dealer 
35.29 	registered under this chapter or an issuer that is offering, selling, or purchasing its 
35.30 	securities in this state.
35.31 	(d) Limit on employment or association. It is unlawful for a broker-dealer, or an 
35.32 	issuer engaged in offering, selling, or purchasing securities in this state, to employ or 
35.33 	associate with an agent who transacts business in the state on behalf of broker-dealers or 
35.34 	issuers unless the agent is registered under subsection (a) or exempt from registration 
35.35 	under subsection (b).
36.1 	(e) Limit on affiliations. An individual may not act as an agent for more than one 
36.2 	broker-dealer or one issuer at a time, unless the broker-dealer or the issuer for which the 
36.3 	agent acts are affiliated by direct or indirect common control or are authorized by rule or 
36.4 	order under this chapter.

36.5 	Sec. 19. [80A.58] SECTION 403; INVESTMENT ADVISER REGISTRATION 
36.6 	REQUIREMENT AND EXEMPTIONS.
36.7 	(a) Registration requirement. It is unlawful for a person to transact business in 
36.8 	this state as an investment adviser unless the person is registered under this chapter as 
36.9 	an investment adviser or is exempt from registration as an investment adviser under 
36.10 	subsection (b).
36.11 	(b) Exemptions from registration. The following persons are exempt from the 
36.12 	registration requirement of subsection (a):
36.13 	(1) any person whose only clients in this state are:
36.14 	(A) federal covered investment advisers, investment advisers registered under this 
36.15 	chapter, or broker-dealers registered under this chapter;
36.16 	(B) institutional investors;
36.17 	(C) bona fide preexisting clients whose principal places of residence are not in this 
36.18 	state if the investment adviser is registered under the securities act of the state in which the 
36.19 	clients maintain principal places of residence; or 
36.20 	(D) any other client exempted by rule adopted or order issued under this chapter;
36.21 	(2) a person without a place of business in this state if the person has had, during the 
36.22 	preceding 12 months, not more than five clients that are resident in this state in addition 
36.23 	to those specified under paragraph (1); or 
36.24 	(3) any other person exempted by rule adopted or order issued under this chapter.
36.25 	(c) Limits on employment or association. It is unlawful for an investment adviser, 
36.26 	directly or indirectly, to employ or associate with an individual to engage in an activity 
36.27 	related to investment advice in this state if the registration of the individual is suspended 
36.28 	or revoked or the individual is barred from employment or association with an investment 
36.29 	adviser, federal covered investment adviser, or broker-dealer by an order under this 
36.30 	chapter, the Securities and Exchange Commission, or a self-regulatory organization, 
36.31 	unless the investment adviser did not know, and in the exercise of reasonable care could 
36.32 	not have known, of the suspension, revocation, or bar. Upon request from the investment 
36.33 	adviser and for good cause, the administrator, by order, may waive, in whole or in part, the 
36.34 	application of the prohibitions of this subsection to the investment adviser.

37.1 	Sec. 20. [80A.60] SECTION 405; FEDERAL COVERED INVESTMENT 
37.2 	ADVISER NOTICE FILING REQUIREMENT.
37.3 	(a) Notice filing requirement. Except with respect to a federal covered investment 
37.4 	adviser described in subsection (b), it is unlawful for a federal covered investment adviser 
37.5 	to transact business in this state as a federal covered investment adviser unless the federal 
37.6 	covered investment adviser complies with subsection (c).
37.7 	(b) Notice filing requirement not required. The following federal covered 
37.8 	investment advisers are not required to comply with subsection (c):
37.9 	(1) a federal covered investment adviser without a place of business in this state if 
37.10 	its only clients in this state are:
37.11 	(A) federal covered investment advisers, investment advisers registered under this 
37.12 	chapter, and broker-dealers registered under this chapter;
37.13 	(B) institutional investors;
37.14 	(C) bona fide preexisting clients whose principal places of residence are not in 
37.15 	this state; or 
37.16 	(D) other clients specified by rule adopted or order issued under this chapter;
37.17 	(2) a federal covered investment adviser without a place of business in this state if 
37.18 	the person has had, during the preceding 12 months, not more than five clients that are 
37.19 	resident in this state in addition to those specified under paragraph (1); and 
37.20 	(3) any other person excluded by rule adopted or order issued under this chapter.
37.21 	(c) Notice filing procedure. A person acting as a federal covered investment adviser, 
37.22 	not excluded under subsection (b), shall file a notice, a consent to service of process 
37.23 	complying with section 80A.88, and such records as have been filed with the Securities 
37.24 	and Exchange Commission under the Investment Advisers Act of 1940 required by rule 
37.25 	adopted or order issued under this chapter and pay the fees specified in section 80A.65(e).
37.26 	(d) Effectiveness of filing. The notice under subsection (c) becomes effective upon 
37.27 	its filing.

37.28 	Sec. 21. [80A.61] SECTION 406; REGISTRATION BY BROKER-DEALER, 
37.29 	AGENT, AND INVESTMENT ADVISER.
37.30 	(a) Application for initial registration. A person shall register as a broker-dealer, 
37.31 	agent, or investment adviser by filing an application and a consent to service of process 
37.32 	complying with section 80A.88, and paying the fee specified in section 80A.65 and any 
37.33 	reasonable fees charged by the designee of the administrator for processing the filing.  The 
37.34 	application must contain:
37.35 	(1) the information or record required for the filing of a uniform application; and 
38.1 	(2) upon request by the administrator, any other financial or other information or 
38.2 	record that the administrator determines is appropriate.
38.3 	(b) Amendment. If the information or record contained in an application filed under 
38.4 	subsection (a) is or becomes inaccurate or incomplete in a material respect, the registrant 
38.5 	shall promptly file a correcting amendment.
38.6 	(c) Effectiveness of registration. If an order is not in effect and a proceeding is not 
38.7 	pending under section 80A.67, registration becomes effective at noon on the 45th day after 
38.8 	a completed application is filed, unless the registration is denied.  A rule adopted or order 
38.9 	issued under this chapter may set an earlier effective date or may defer the effective date 
38.10 	until noon on the 45th day after the filing of any amendment completing the application.
38.11 	(d) Registration renewal. A registration is effective until midnight on December 
38.12 	31 of the year for which the application for registration is filed.  Unless an order is in 
38.13 	effect under section 80A.67, a registration may be automatically renewed each year by 
38.14 	filing such records as are required by rule adopted or order issued under this chapter, by 
38.15 	paying the fee specified in section 80A.65, and by paying costs charged by the designee of 
38.16 	the administrator for processing the filings.
38.17 	(e) Additional conditions or waivers. A rule adopted or order issued under this 
38.18 	chapter may impose such other conditions, not inconsistent with the National Securities 
38.19 	Markets Improvement Act of 1996.  An order issued under this chapter may waive, in 
38.20 	whole or in part, specific requirements in connection with registration as are in the public 
38.21 	interest and for the protection of investors.

38.22 	Sec. 22. [80A.62] SECTION 407; SUCCESSION AND CHANGE IN 
38.23 	REGISTRATION OF BROKER-DEALER OR INVESTMENT ADVISER.
38.24 	(a) Succession. A broker-dealer or investment adviser may succeed to the current 
38.25 	registration of another broker-dealer or investment adviser or a notice filing of a federal 
38.26 	covered investment adviser, and a federal covered investment adviser may succeed to the 
38.27 	current registration of an investment adviser or notice filing of another federal covered 
38.28 	investment adviser, by filing as a successor an application for registration pursuant to 
38.29 	section 80A.56 or 80A.58 or a notice pursuant to section 80A.60 for the unexpired portion 
38.30 	of the current registration or notice filing.
38.31 	(b) Organizational change. A broker-dealer or investment adviser that changes its 
38.32 	form of organization or state of incorporation or organization may continue its registration 
38.33 	by filing an amendment to its registration if the change does not involve a material change 
38.34 	in its financial condition or management.  The amendment becomes effective when filed or 
38.35 	on a date designated by the registrant in its filing.  The new organization is a successor 
39.1 	to the original registrant for the purposes of this chapter.  If there is a material change in 
39.2 	financial condition or management, the broker-dealer or investment adviser shall file a 
39.3 	new application for registration.  A predecessor registered under this chapter shall stop 
39.4 	conducting its securities business other than winding down transactions and shall file 
39.5 	for withdrawal of broker-dealer or investment adviser registration within 45 days after 
39.6 	filing its amendment to effect succession.
39.7 	(c) Name change. A broker-dealer or investment adviser that changes its name 
39.8 	may continue its registration by filing an amendment to its registration.  The amendment 
39.9 	becomes effective when filed or on a date designated by the registrant.
39.10 	(d) Change of control. A change of control of a broker-dealer or investment adviser 
39.11 	may be made in accordance with a rule adopted or order issued under this chapter.

39.12 	Sec. 23. [80A.63] SECTION 408; TERMINATION OF EMPLOYMENT 
39.13 	OR ASSOCIATION OF AGENT AND TRANSFER OF EMPLOYMENT OR 
39.14 	ASSOCIATION.
39.15 	(a) Notice of termination. If an agent registered under this chapter terminates 
39.16 	employment by or association with a broker-dealer or issuer, or terminates activities that 
39.17 	require registration as an agent, the broker-dealer, or issuer shall promptly file a notice 
39.18 	of termination.  If the registrant learns that the broker-dealer or issuer has not filed the 
39.19 	notice, the registrant may do so.
39.20 	(b) Transfer of employment or association. If an agent registered under this 
39.21 	chapter terminates employment by or association with a broker-dealer registered under this 
39.22 	chapter and begins employment by or association with another broker-dealer registered 
39.23 	under this chapter, then upon the filing by or on behalf of the registrant, within 30 days 
39.24 	after the termination, of an application for registration that complies with the requirement 
39.25 	of section 80A.61(a) and payment of the filing fee required under section 80A.65, the 
39.26 	registration of the agent is:
39.27 	(1) immediately effective as of the date of the completed filing, if the agent's Central 
39.28 	Registration Depository record or successor record does not contain a new or amended 
39.29 	disciplinary disclosure within the previous 12 months; or 
39.30 	(2) temporarily effective as of the date of the completed filing, if the agent's 
39.31 	Central Registration Depository record or successor record contains a new or amended 
39.32 	disciplinary disclosure within the preceding 12 months.
39.33 	(c) Withdrawal of temporary registration. The administrator may withdraw a 
39.34 	temporary registration if there are or were grounds for discipline as specified in section 
39.35 	80A.67 and the administrator does so within 30 days after the filing of the application.  If 
40.1 	the administrator does not withdraw the temporary registration within the 30 day period, 
40.2 	registration becomes automatically effective on the 31st day after filing.
40.3 	(d) Power to prevent registration. The administrator may prevent the effectiveness 
40.4 	of a transfer of an agent under subsection (b)(1) or (2) based on the public interest and the 
40.5 	protection of investors.
40.6 	(e) Termination of registration or application for registration. If the 
40.7 	administrator determines that a registrant or applicant for registration is no longer in 
40.8 	existence or has ceased to act as a broker-dealer, agent, or investment adviser, or is 
40.9 	the subject of an adjudication of incapacity or is subject to the control of a committee, 
40.10 	conservator, or guardian, or cannot reasonably be located, a rule adopted or order issued 
40.11 	under this chapter may require the registration be canceled or terminated or the application 
40.12 	denied.  The administrator may reinstate a canceled or terminated registration, with or 
40.13 	without hearing, and may make the registration retroactive.

40.14 	Sec. 24. [80A.64] SECTION 409; WITHDRAWAL OF REGISTRATION OF 
40.15 	BROKER-DEALER, AGENT, AND INVESTMENT ADVISER.
40.16 	Withdrawal of registration by a broker-dealer, agent, or investment adviser becomes 
40.17 	effective 60 days after the filing of the application to withdraw or within any shorter 
40.18 	period as provided by rule adopted or order issued under this chapter unless a revocation 
40.19 	or suspension proceeding is pending when the application is filed.  If a proceeding is 
40.20 	pending, withdrawal becomes effective when and upon such conditions as required by rule 
40.21 	adopted or order issued under this chapter.  The administrator may institute a revocation or 
40.22 	suspension proceeding under section 80A.67 within one year after the withdrawal became 
40.23 	effective automatically and issue a revocation or suspension order as of the last date on 
40.24 	which registration was effective if a proceeding is not pending.

40.25 	Sec. 25. [80A.65] SECTION 410; FEES AND EXPENSES.
40.26 		Subdivision 1.Registration or notice filing fee. (a) There shall be a filing fee of 
40.27 	$100 for every application for registration or notice filing.  There shall be an additional fee 
40.28 	of one-tenth of one percent of the maximum aggregate offering price at which the securities 
40.29 	are to be offered in this state, and the maximum combined fees shall not exceed $300.
40.30 	(b) When an application for registration is withdrawn before the effective date 
40.31 	or a preeffective stop order is entered under section 80A.54, all but the $100 filing fee 
40.32 	shall be returned.  If an application to register securities is denied, the total of all fees 
40.33 	received shall be retained.
41.1 	(c) Where a filing is made in connection with a federal covered security under 
41.2 	section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing. 
41.3 	If the filing is made in connection with redeemable securities issued by an open end 
41.4 	management company or unit investment trust, as defined in the Investment Company Act 
41.5 	of 1940, there is an additional annual fee of 1/20 of one percent of the maximum aggregate 
41.6 	offering price at which the securities are to be offered in this state during the notice filing 
41.7 	period.  The fee must be paid at the time of the initial filing and thereafter in connection 
41.8 	with each renewal no later than July 1 of each year and must be sufficient to cover the 
41.9 	shares the issuer expects to sell in this state over the next 12 months.  If during a current 
41.10 	notice filing the issuer determines it is likely to sell shares in excess of the shares for which 
41.11 	fees have been paid to the administrator, the issuer shall submit an amended notice filing 
41.12 	to the administrator under section 80A.50, together with a fee of 1/20 of one percent of the 
41.13 	maximum aggregate offering price of the additional shares.  Shares for which a fee has 
41.14 	been paid, but which have not been sold at the time of expiration of the notice filing, may 
41.15 	not be sold unless an additional fee to cover the shares has been paid to the administrator 
41.16 	as provided in this section and section 80A.50.  If the filing is made in connection with 
41.17 	redeemable securities issued by such a company or trust, there is no maximum fee for 
41.18 	securities filings made according to this paragraph.  If the filing is made in connection 
41.19 	with any other federal covered security under Section 18(b)(2) of the Securities Act of 
41.20 	1933, there is an additional fee of one-tenth of one percent of the maximum aggregate 
41.21 	offering price at which the securities are to be offered in this state, and the combined fees 
41.22 	shall not exceed $300.  Beginning with fiscal year 2001 and continuing each fiscal year 
41.23 	thereafter, as of the last day of each fiscal year, the administrator shall determine the total 
41.24 	amount of all fees that were collected under this paragraph in connection with any filings 
41.25 	made for that fiscal year for securities of an open-end investment company on behalf of a 
41.26 	security that is a federal covered security pursuant to section 18(b)(2) of the Securities 
41.27 	Act of 1933.  To the extent the total fees collected by the administrator in connection 
41.28 	with these filings exceed $25,000,000 in a fiscal year, the administrator shall refund, on 
41.29 	a pro rata basis, to all persons who paid any fees for that fiscal year, the amount of fees 
41.30 	collected by the administrator in excess of $25,000,000.  No individual refund is required 
41.31 	of amounts of $100 or less for a fiscal year.
41.32 		Subd. 2.Registration application and renewal filing fee. Every applicant for an 
41.33 	initial or renewal registration shall pay a filing fee of $200 in the case of a broker-dealer, 
41.34 	$50 in the case of an agent, and $100 in the case of an investment adviser.  When an 
41.35 	application is denied or withdrawn, the filing fee shall be retained.  A registered agent who 
41.36 	has terminated employment with one broker-dealer shall, before beginning employment 
42.1 	with another broker-dealer, pay a transfer fee of $25.  The fee for a filing made according 
42.2 	to section 80A.56 is $100.
42.3 		Subd. 3.Amendment fee. Any amendment to an existing registration requiring 
42.4 	an order of the administrator shall require payment of an amendment fee of $25.  If the 
42.5 	amendment increases the aggregate amount of securities to be registered, there shall be 
42.6 	an additional fee calculated in accordance with subdivision 1, provided the maximum 
42.7 	additional fees, if applicable, have not previously been paid.  The administrator shall by 
42.8 	rule designate those amendments which require an order of the administrator.
42.9 		Subd. 4.Periodic report fee. Every periodic report required by section 80A.53 
42.10 	shall be accompanied by a fee of $100.
42.11 		Subd. 5.Exemption filing fee. The filing of any exemption for which notice is 
42.12 	required to be given the administrator under section 80A.45 shall be accompanied by a 
42.13 	fee of $50.
42.14 		Subd. 6.Rescission offer filing fee. The filing of a rescission offer under section 
42.15 	80A.77 shall be accompanied by the fees as calculated in subdivision 1.
42.16 		Subd. 7.Written opinion request fee. Every request for a written opinion from 
42.17 	the administrator shall be accompanied by a fee of $50.
42.18 		Subd. 7a.Excess securities registration filing fee. If securities of an issuer are sold 
42.19 	in this state in excess of the quantity registered, the excess securities may be registered by 
42.20 	paying a filing fee of $100, and an additional fee in the amount of three times that which 
42.21 	is prescribed under subdivision 1, for the excess securities to be registered.  There shall 
42.22 	be no maximum combined fees under this subdivision, notwithstanding the limitation set 
42.23 	forth in subdivision 1, clause (a).
42.24 	Registration of the excess securities shall be effective retroactively to the date of sale.
42.25 		Subd. 8.Expense deposits. When the administrator deems it necessary to incur any 
42.26 	expense in connection with any application or registration, the administrator shall have the 
42.27 	power to require the interested person to make an advance deposit with the administrator 
42.28 	in an amount estimated as sufficient to cover such expense.  All such deposits shall be 
42.29 	covered into the state treasury and credited to the state administrator's investigation fund, 
42.30 	from which fund the administrator shall have power to make disbursements to pay for 
42.31 	expenses necessarily incurred in the investigation.  Any unexpended portion shall be 
42.32 	refunded.  On field examinations made by the administrator or an employee away from 
42.33 	the office of the administrator, a per diem of $10 for each such person may be charged in 
42.34 	addition to actual expenses.  Where additional technical, expert, or special services are 
42.35 	used, the actual cost of such services may be charged in addition to actual expenses.
43.1 		Subd. 9.Generally. No filing for which a fee is required shall be deemed to be filed 
43.2 	or given any effect until the proper fee is paid.  All fees and charges collected by the 
43.3 	administrator shall be covered into the state treasury. When any person is entitled to a 
43.4 	refund under this section, the administrator shall certify to the commissioner of finance 
43.5 	the amount of the fee to be refunded to the applicant, and the commissioner of finance 
43.6 	shall issue a warrant in payment thereof out of the fund to which such fee was credited in 
43.7 	the manner provided by law.  There is hereby appropriated to the person entitled to such 
43.8 	refunds from the fund in the state treasury to which such fees were credited an amount to 
43.9 	make such refunds and payments.

43.10 	Sec. 26. [80A.66] SECTION 411; POSTREGISTRATION REQUIREMENTS.
43.11 	(a) Financial requirements. Subject to Section 15(h) of the Securities Exchange 
43.12 	Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act 
43.13 	of 1940 (15 U.S.C. Section 80b-22), a rule adopted or order issued under this chapter 
43.14 	may establish minimum financial requirements for broker-dealers registered or required 
43.15 	to be registered under this chapter and investment advisers registered or required to be 
43.16 	registered under this chapter.
43.17 	(b) Financial reports. Subject to Section 15(h) of the Securities Exchange Act of 
43.18 	1934 (15 U.S.C. Section 78o(h)) or Section 222(b) of the Investment Advisers Act of 1940 
43.19 	(15 U.S.C. Section 80b-22), a broker-dealer registered or required to be registered under 
43.20 	this chapter and an investment adviser registered or required to be registered under this 
43.21 	chapter shall file such financial reports as are required by a rule adopted or order issued 
43.22 	under this chapter.  If the information contained in a record filed under this subsection is or 
43.23 	becomes inaccurate or incomplete in a material respect, the registrant shall promptly file 
43.24 	a correcting amendment.
43.25 	(c) Record keeping. Subject to Section 15(h) of the Securities Exchange Act of 
43.26 	1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 
43.27 	(15 U.S.C. Section 80b-22):
43.28 	(1) a broker-dealer registered or required to be registered under this chapter and an 
43.29 	investment adviser registered or required to be registered under this chapter shall make 
43.30 	and maintain the accounts, correspondence, memoranda, papers, books, and other records 
43.31 	required by rule adopted or order issued under this chapter;
43.32 	(2) broker-dealer records required to be maintained under paragraph (1) may be 
43.33 	maintained in any form of data storage acceptable under Section 17(a) of the Securities 
43.34 	Exchange Act of 1934 (15 U.S.C. Section 78q(a)) if they are readily accessible to the 
43.35 	administrator; and 
44.1 	(3) investment adviser records required to be maintained under paragraph (1) 
44.2 	may be maintained in any form of data storage required by rule adopted or order issued 
44.3 	under this chapter.
44.4 	(d) Audits or inspections. The records of a broker-dealer registered or required 
44.5 	to be registered under this chapter and of an investment adviser registered or required to 
44.6 	be registered under this chapter are subject to such reasonable periodic, special, or other 
44.7 	audits or inspections by a representative of the administrator, within or without this state, 
44.8 	as the administrator considers necessary or appropriate in the public interest and for the 
44.9 	protection of investors.  An audit or inspection may be made at any time and without prior 
44.10 	notice. The administrator may copy, and remove for audit or inspection copies of, all 
44.11 	records the administrator reasonably considers necessary or appropriate to conduct the 
44.12 	audit or inspection. The administrator may assess a reasonable charge for conducting an 
44.13 	audit or inspection under this subsection.
44.14 	(e) Custody and discretionary authority bond or insurance. Subject to Section 
44.15 	15(h) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 
44.16 	of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22), a rule adopted or 
44.17 	order issued under this chapter may require a broker-dealer or investment adviser that has 
44.18 	custody of or discretionary authority over funds or securities of a customer or client to 
44.19 	obtain insurance or post a bond or other satisfactory form of security in an amount not 
44.20 	to exceed $25,000. The administrator may determine the requirements of the insurance, 
44.21 	bond, or other satisfactory form of security. Insurance or a bond or other satisfactory form 
44.22 	of security may not be required of a broker-dealer registered under this chapter whose net 
44.23 	capital exceeds, or of an investment adviser registered under this chapter whose minimum 
44.24 	financial requirements exceed, the amounts required by rule or order under this chapter. 
44.25 	The insurance, bond, or other satisfactory form of security must permit an action by 
44.26 	a person to enforce any liability on the insurance, bond, or other satisfactory form of 
44.27 	security if instituted within the time limitations in section 80A.76(j)(2).
44.28 	(f) Requirements for custody. Subject to Section 15(h) of the Securities Exchange 
44.29 	Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 
44.30 	1940 (15 U.S.C. Section 80b-22), an agent may not have custody of funds or securities 
44.31 	of a customer except under the supervision of a broker-dealer and an investment adviser 
44.32 	representative may not have custody of funds or securities of a client except under the 
44.33 	supervision of an investment adviser or a federal covered investment adviser.  A rule 
44.34 	adopted or order issued under this chapter may prohibit, limit, or impose conditions on a 
44.35 	broker-dealer regarding custody of funds or securities of a customer and on an investment 
44.36 	adviser regarding custody of securities or funds of a client.
45.1 	(g) Investment adviser brochure rule. With respect to an investment adviser 
45.2 	registered or required to be registered under this chapter, a rule adopted or order 
45.3 	issued under this chapter may require that information or other record be furnished or 
45.4 	disseminated to clients or prospective clients in this state as necessary or appropriate in the 
45.5 	public interest and for the protection of investors and advisory clients.
45.6 	(h) Continuing education. A rule adopted or order issued under this chapter 
45.7 	may require an individual registered under section 80A.57 or 80A.59 to participate in a 
45.8 	continuing education program approved by the Securities and Exchange Commission and 
45.9 	administered by a self-regulatory organization or, in the absence of such a program, a 
45.10 	rule adopted or order issued under this chapter may require continuing education for an 
45.11 	individual registered under section 80A.59.

45.12 	Sec. 27. [80A.67] SECTION 412; DENIAL, REVOCATION, SUSPENSION, 
45.13 	WITHDRAWAL, RESTRICTION, CONDITION, OR LIMITATION OF 
45.14 	REGISTRATION.
45.15 	(a) Disciplinary conditions-applicants. If the administrator finds that the order is 
45.16 	in the public interest and subsection (d) authorizes the action, an order issued under this 
45.17 	chapter may deny an application, or may condition or limit registration of an applicant to 
45.18 	be a broker-dealer, agent, or investment adviser, and, if the applicant is a broker-dealer 
45.19 	or investment adviser, of a partner, officer, director, or person having a similar status 
45.20 	or performing similar functions, or a person directly or indirectly in control of the 
45.21 	broker-dealer or investment adviser.
45.22 	(b) Disciplinary conditions-registrants. If the administrator finds that the order is 
45.23 	in the public interest and subsection (d) authorizes the action an order issued under this 
45.24 	chapter may revoke, suspend, condition, or limit the registration of a registrant and, if the 
45.25 	registrant is a broker-dealer or investment adviser, of a partner, officer, director, or person 
45.26 	having a similar status or performing similar functions, or a person directly or indirectly in 
45.27 	control of the broker-dealer or investment adviser. However, the administrator may not:
45.28 	(1) institute a revocation or suspension proceeding under this subsection based on an 
45.29 	order issued under a law of another state that is reported to the administrator or a designee 
45.30 	of the administrator more than one year after the date of the order on which it is based; or 
45.31 	(2) under subsection (d)(5)(A) or (B), issue an order on the basis of an order issued 
45.32 	under the securities act of another state unless the other order was based on conduct for 
45.33 	which subsection (d) would authorize the action had the conduct occurred in this state.
45.34 	(c) Disciplinary penalties-registrants. If the administrator finds that the order is 
45.35 	in the public interest and subsection (d)(1) through (6), (8), (9), (10), or (12) and (13) 
46.1 	authorizes the action, an order under this chapter may censure, impose a bar, or impose a 
46.2 	civil penalty in an amount up to  $10,000 for each violation, on a registrant, and, if the 
46.3 	registrant is a broker-dealer or investment adviser, a partner, officer, director, person 
46.4 	having a similar status or performing similar functions, or a person directly or indirectly in 
46.5 	control, of the broker-dealer or investment adviser.
46.6 	(d) Grounds for discipline. A person may be disciplined under subsections (a) 
46.7 	through (c) if the person:
46.8 	(1) has filed an application for registration in this state under this chapter or the 
46.9 	predecessor act within the previous ten years, which, as of the effective date of registration 
46.10 	or as of any date after filing in the case of an order denying effectiveness, was incomplete 
46.11 	in any material respect or contained a statement that, in light of the circumstances under 
46.12 	which it was made, was false or misleading with respect to a material fact;
46.13 	(2) willfully violated or willfully failed to comply with this chapter or the 
46.14 	predecessor act or a rule adopted or order issued under this chapter or the predecessor 
46.15 	act within the previous ten years;
46.16 	(3) has been convicted of a felony or within the previous ten years has been 
46.17 	convicted of a misdemeanor involving a security, a commodity future or option contract, 
46.18 	or an aspect of a business involving securities, commodities, investments, franchises, 
46.19 	insurance, banking, or finance;
46.20 	(4) is enjoined or restrained by a court of competent jurisdiction in an action 
46.21 	instituted by the administrator under this chapter or the predecessor act, a state, the 
46.22 	Securities and Exchange Commission, or the United States from engaging in or continuing 
46.23 	an act, practice, or course of business involving an aspect of a business involving 
46.24 	securities, commodities, investments, franchises, insurance, banking, or finance.
46.25 	(5) is the subject of an order, issued after notice and opportunity for hearing by:
46.26 	(A) the securities, depository institution, insurance, or other financial services 
46.27 	regulator of a state or by the Securities and Exchange Commission or other federal agency 
46.28 	denying, revoking, barring, or suspending registration as a broker-dealer, agent, investment 
46.29 	adviser, federal covered investment adviser, or investment adviser representative;
46.30 	(B) the securities regulator of a state or the Securities and Exchange Commission 
46.31 	against a broker-dealer, agent, investment adviser, investment adviser representative, or 
46.32 	federal covered investment adviser;
46.33 	(C) the Securities and Exchange Commission or a self-regulatory organization 
46.34 	suspending or expelling the registrant from membership in the self-regulatory organization;
46.35 	(D) a court adjudicating a United States Postal Service fraud order;
47.1 	(E) the insurance regulator of a state denying, suspending, or revoking registration 
47.2 	as an insurance agent; or 
47.3 	(F) a depository institution regulator suspending or barring the person from the 
47.4 	depository institution business;
47.5 	(6) is the subject of an adjudication or determination, after notice and opportunity 
47.6 	for hearing, by the Securities and Exchange Commission, the Commodity Futures Trading 
47.7 	Commission; the Federal Trade Commission; a federal depository institution regulator, 
47.8 	or a depository institution, insurance, or other financial services regulator of a state that 
47.9 	the person willfully violated the Securities Act of 1933, the Securities Exchange Act of 
47.10 	1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, or the 
47.11 	Commodity Exchange Act, the securities or commodities law of a state, or a federal or 
47.12 	state law under which a business involving investments, franchises, insurance, banking, or 
47.13 	finance is regulated;
47.14 	(7) is insolvent, either because the person's liabilities exceed the person's assets 
47.15 	or because the person cannot meet the person's obligations as they mature, but the 
47.16 	administrator may not enter an order against an applicant or registrant under this paragraph 
47.17 	without a finding of insolvency as to the applicant or registrant;
47.18 	(8) refuses to allow or otherwise impedes the administrator from conducting an audit 
47.19 	or inspection under section 80A.66(d) or refuses access to a registrant's office to conduct 
47.20 	an audit or inspection under section 80A.66(d);
47.21 	(9) has failed to reasonably supervise an agent, investment adviser representative, 
47.22 	or other individual, if the agent, investment adviser representative, or other individual 
47.23 	was subject to the person's supervision and committed a violation of this chapter or the 
47.24 	predecessor act or a rule adopted or order issued under this chapter or the predecessor 
47.25 	act within the previous ten years;
47.26 	(10) has not paid the proper filing fee within 30 days after having been notified by 
47.27 	the administrator of a deficiency, but the administrator shall vacate an order under this 
47.28 	paragraph when the deficiency is corrected;
47.29 	(11) after notice and opportunity for a hearing, has been found within the previous 
47.30 	ten years:
47.31 	(A) by a court of competent jurisdiction to have willfully violated the laws of a 
47.32 	foreign jurisdiction under which the business of securities, commodities, investment, 
47.33 	franchises, insurance, banking, or finance is regulated;
47.34 	(B) to have been the subject of an order of a securities regulator of a foreign 
47.35 	jurisdiction denying, revoking, or suspending the right to engage in the business of 
48.1 	securities as a broker-dealer, agent, investment adviser, investment adviser representative, 
48.2 	or similar person; or 
48.3 	(C) to have been suspended or expelled from membership by or participation in 
48.4 	a securities exchange or securities association operating under the securities laws of a 
48.5 	foreign jurisdiction;
48.6 	(12) is the subject of a cease and desist order issued by the Securities and Exchange 
48.7 	Commission or issued under the securities, commodities, investment, franchise, banking, 
48.8 	finance, or insurance laws of a state;
48.9 	(13) has engaged in dishonest or unethical practices in the securities, commodities, 
48.10 	investment, franchise, banking, finance, or insurance business within the previous ten 
48.11 	years; or 
48.12 	(14) is not qualified on the basis of factors such as training, experience, and 
48.13 	knowledge of the securities business. However, in the case of an application by an agent 
48.14 	for a broker-dealer that is a member of a self-regulatory organization or by an individual 
48.15 	for registration as an investment adviser representative, a denial order may not be based on 
48.16 	this paragraph if the individual has successfully completed all examinations required by 
48.17 	subsection (e).  The administrator may require an applicant for registration under section 
48.18 	80A.57 or 80A.59 who has not been registered in a state within the two years preceding 
48.19 	the filing of an application in this state to successfully complete an examination.
48.20 	(e) Examinations. A rule adopted or order issued under this chapter may require that 
48.21 	an examination, including an examination developed or approved by an organization of 
48.22 	securities regulators, be successfully completed by a class of individuals or all individuals. 
48.23 	An order issued under this chapter may waive, in whole or in part, an examination as to 
48.24 	an individual and a rule adopted under this chapter may waive, in whole or in part, an 
48.25 	examination as to a class of individuals if the administrator determines that the examination 
48.26 	is not necessary or appropriate in the public interest and for the protection of investors.
48.27 	(f) Summary process. The administrator may suspend or deny an application 
48.28 	summarily; restrict, condition, limit, or suspend a registration; or censure, bar, or impose a 
48.29 	civil penalty on a registrant before final determination of an administrative proceeding. 
48.30 	Upon the issuance of an order, the administrator shall promptly notify each person subject 
48.31 	to the order that the order has been issued, the reasons for the action, and that within 15 
48.32 	days after the receipt of a request in a record from the person the matter will be scheduled 
48.33 	for a hearing.  If a hearing is not requested and none is ordered by the administrator within 
48.34 	30 days after the date of service of the order, the order becomes final by operation of law. 
48.35 	If a hearing is requested or ordered, the administrator, after notice of and opportunity for 
49.1 	hearing to each person subject to the order, may modify or vacate the order or extend the 
49.2 	order until final determination.
49.3 	(g) PROCEDURAL REQUIREMENTS. An order issued may not be issued under 
49.4 	this section, except under subsection (f), without:
49.5 	(1) appropriate notice to the applicant or registrant;
49.6 	(2) opportunity for hearing; and 
49.7 	(3) findings of fact and conclusions of law in a record in accordance with chapter 14.
49.8 	(h) CONTROL PERSON LIABILITY. A person that controls, directly or 
49.9 	indirectly, a person not in compliance with this section may be disciplined by order of the 
49.10 	administrator under subsections (a) through (c) to the same extent as the noncomplying 
49.11 	person, unless the controlling person did not know, or knowingly or recklessly disregarded 
49.12 	evidence, of the existence of conduct that is a ground for discipline under this section.
49.13 	(i) LIMIT ON INVESTIGATION OR PROCEEDING. The administrator may 
49.14 	not institute a proceeding under subsection (a), (b), or (c) based solely on material facts 
49.15 	actually known by the administrator unless an investigation or the proceeding is instituted 
49.16 	within one year after the administrator actually acquires knowledge of the material facts.
49.17 	FRAUD AND LIABILITIES

49.18 	Sec. 28. [80A.68] SECTION 501; GENERAL FRAUD.
49.19 	It is unlawful for a person, in connection with the offer, sale, or purchase of a 
49.20 	security, directly or indirectly:
49.21 	(1) to employ a device, scheme, or artifice to defraud;
49.22 	(2) to make an untrue statement of a material fact or to omit to state a material fact 
49.23 	necessary in order to make a statement made, in the light of the circumstances under 
49.24 	which it is made, not misleading; or 
49.25 	(3) to engage in an act, practice, or course of business that operates or would operate 
49.26 	as a fraud or deceit upon another person.

49.27 	Sec. 29. [80A.69] SECTION 502; PROHIBITED CONDUCT IN PROVIDING 
49.28 	INVESTMENT ADVICE.
49.29 	(a) Fraud in providing investment advice. It is unlawful for a person that advises 
49.30 	others for compensation, either directly or indirectly or through publications or writings, 
49.31 	as to the value of securities or the advisability of investing in, purchasing, or selling 
49.32 	securities or that, for compensation and as part of a regular business, issues or promulgates 
49.33 	analyses or reports relating to securities:
49.34 	(1) to employ a device, scheme, or artifice to defraud another person; or 
50.1 	(2) to engage in an act, practice, or course of business that operates or would operate 
50.2 	as a fraud or deceit upon another person.
50.3 	(b) Rules defining fraud. A rule adopted under this chapter may define an act, 
50.4 	practice, or course of business of an investment adviser or an investment adviser 
50.5 	representative, other than a supervised person of a federal covered investment adviser, 
50.6 	as fraudulent, deceptive, or manipulative, and prescribe means reasonably designed to 
50.7 	prevent investment advisers and investment adviser representatives, other than supervised 
50.8 	persons of a federal covered investment adviser, from engaging in acts, practices, and 
50.9 	courses of business defined as fraudulent, deceptive, or manipulative.
50.10 	(c) Rules specifying contents of advisory contract. A rule adopted under this 
50.11 	chapter may specify the contents of an investment advisory contract entered into, 
50.12 	extended, or renewed by an investment adviser.

50.13 	Sec. 30. [80A.70] SECTION 503; EVIDENTIARY BURDEN.
50.14 	(a) Civil. In a civil action or administrative proceeding under this chapter, a person 
50.15 	claiming an exemption, exception, preemption, or exclusion has the burden to prove the 
50.16 	applicability of the claim.
50.17 	(b) Criminal. In a criminal proceeding under this chapter, a person claiming an 
50.18 	exemption, exception, preemption, or exclusion has the burden of going forward with 
50.19 	evidence of the claim.

50.20 	Sec. 31. [80A.71] SECTION 504; FILING OF SALES AND ADVERTISING 
50.21 	LITERATURE.
50.22 	(a) Filing requirement. Except as otherwise provided in subsection (b), a rule 
50.23 	adopted or order issued under this chapter may require the filing of a prospectus, pamphlet, 
50.24 	circular, form letter, advertisement, sales literature, or other advertising record relating 
50.25 	to a security or investment advice, addressed or intended for distribution to prospective 
50.26 	investors, including clients or prospective clients of a person registered or required to be 
50.27 	registered as an investment adviser under this chapter.
50.28 	(b) Excluded communications. This section does not apply to sales and advertising 
50.29 	literature specified in subsection (a) which relates to a federal covered security, a federal 
50.30 	covered investment adviser, or a security or transaction exempted by section 80A.45, 
50.31 	80A.46, or 80A.47 except as required pursuant to section 80A.45(7).

50.32 	Sec. 32. [80A.72] SECTION 505; MISLEADING FILINGS.
51.1 	It is unlawful for a person to make or cause to be made, in a record that is used in 
51.2 	an action or proceeding or filed under this chapter other than a contested case hearing, 
51.3 	a statement that, at the time and in the light of the circumstances under which it is 
51.4 	made, is false or misleading in a material respect, or, in connection with the statement, 
51.5 	to omit to state a material fact necessary to make the statement made, in the light of the 
51.6 	circumstances under which it was made, not false or misleading.

51.7 	Sec. 33. [80A.73] SECTION 506; MISREPRESENTATIONS CONCERNING 
51.8 	REGISTRATION OR EXEMPTION.
51.9 	The filing of an application for registration, a registration statement, a notice 
51.10 	filing under this chapter, the registration of a person, the notice filing by a person, or 
51.11 	the registration of a security under this chapter does not constitute a finding by the 
51.12 	administrator that a record filed under this chapter is true, complete, and not misleading. 
51.13 	The filing or registration or the availability of an exemption, exception, preemption, or 
51.14 	exclusion for a security or a transaction does not mean that the administrator has passed 
51.15 	upon the merits or qualifications of, or recommended or given approval to, a person, 
51.16 	security, or transaction.  It is unlawful to make, or cause to be made, to a purchaser, 
51.17 	customer, client, or prospective customer or client a representation inconsistent with 
51.18 	this section.

51.19 	Sec. 34. [80A.74] SECTION 507; QUALIFIED IMMUNITY.
51.20 	A broker-dealer, agent, investment adviser, federal covered investment adviser, or 
51.21 	investment adviser representative is not liable to another broker-dealer, agent, investment 
51.22 	adviser, federal covered investment adviser, or investment adviser representative 
51.23 	for defamation relating to a statement that is contained in a record required by the 
51.24 	administrator, or designee of the administrator, the Securities and Exchange Commission, 
51.25 	or a self-regulatory organization, unless the person knew, or should have known at the 
51.26 	time that the statement was made, that is was false in a material respect or the person acted 
51.27 	in reckless disregard of the statement's truth or falsity.

51.28 	Sec. 35. [80A.75] SECTION 508; CRIMINAL PENALTIES.
51.29 	(a) Criminal penalties. A person that willfully violates this chapter, or a rule adopted 
51.30 	or order issued under this chapter, except section 80A.71 or the notice filing requirements 
51.31 	of section 80A.50 or 80A.60, or that willfully violates section 80A.72 knowing the 
51.32 	statement made to be false or misleading in a material respect, upon conviction, shall be 
51.33 	fined not more than $10,000 or imprisoned not more than five years or both. Each of the 
52.1 	acts specified constitutes a separate offense and a prosecution or conviction for any such 
52.2 	offense does not bar prosecution or conviction for any other offense.  
52.3 	(b) Criminal reference not required. The attorney general with or without a 
52.4 	reference from the administrator, may institute criminal proceedings under this chapter.
52.5 	(c) No limitation on other criminal enforcement. This chapter does not limit 
52.6 	the power of this state to punish a person for conduct that constitutes a crime under 
52.7 	other laws of this state.

52.8 	Sec. 36. [80A.76] SECTION 509; CIVIL LIABILITY.
52.9 	(a) Securities Litigation Uniform Standards Act. Enforcement of civil liability 
52.10 	under this section is subject to the Securities Litigation Uniform Standards Act of 1998.
52.11 	(b) Liability of seller to purchaser. A person is liable to the purchaser if the person 
52.12 	sells a security in violation of section 80A.49 or, by means of an untrue statement of a 
52.13 	material fact or an omission to state a material fact necessary in order to make the statement 
52.14 	made, in light of the circumstances under which it is made, not misleading, the purchaser 
52.15 	not knowing the untruth or omission and the seller not sustaining the burden of proof that 
52.16 	the seller did not know and, in the exercise of reasonable care, could not have known of 
52.17 	the untruth or omission.  An action under this subsection is governed by the following:
52.18 	(1) The purchaser may maintain an action to recover the consideration paid for the 
52.19 	security, less the amount of any income received on the security, and interest from the date 
52.20 	of the purchase, costs, and reasonable attorneys' fees determined by the court, upon the 
52.21 	tender of the security, or for actual damages as provided in paragraph (3).
52.22 	(2) The tender referred to in paragraph (1) may be made any time before entry 
52.23 	of judgment.  Tender requires only notice in a record of ownership of the security and 
52.24 	willingness to exchange the security for the amount specified.  A purchaser that no longer 
52.25 	owns the security may recover actual damages as provided in paragraph (3).
52.26 	(3) Actual damages in an action arising under this subsection are the amount that 
52.27 	would be recoverable upon a tender less the value of the security when the purchaser 
52.28 	disposed of it, and interest from the date of the purchase, costs, and reasonable attorneys' 
52.29 	fees determined by the court.
52.30 	(c) Liability of purchaser to seller. person is liable to the seller if the person buys a 
52.31 	security by means of an untrue statement of a material fact or omission to state a material 
52.32 	fact necessary in order to make the statement made, in light of the circumstances under 
52.33 	which it is made, not misleading, the seller not knowing of the untruth or omission, and 
52.34 	the purchaser not sustaining the burden of proof that the purchaser did not know, and in 
53.1 	the exercise of reasonable care, could not have known of the untruth or omission.  An 
53.2 	action under this subsection is governed by the following:
53.3 	(1) The seller may maintain an action to recover the security, and any income 
53.4 	received on the security, costs, and reasonable attorneys' fees determined by the court, 
53.5 	upon the tender of the purchase price, or for actual damages as provided in paragraph (3).
53.6 	(2) The tender referred to in paragraph (1) may be made any time before entry 
53.7 	of judgment.  Tender requires only notice in a record of the present ability to pay the 
53.8 	amount tendered and willingness to take delivery of the security for the amount specified. 
53.9 	If the purchaser no longer owns the security, the seller may recover actual damages as 
53.10 	provided in paragraph (3).
53.11 	(3) Actual damages in an action arising under this subsection are the difference 
53.12 	between the price at which the security was sold and the value the security would have 
53.13 	had at the time of the sale in the absence of the purchaser's conduct causing liability, and 
53.14 	interest from the date of the sale of the security, costs, and reasonable attorneys' fees 
53.15 	determined by the court.
53.16 	(d) Liability of unregistered broker-dealer and agent. A person acting as a 
53.17 	broker-dealer or agent that sells or buys a security in violation of section 80A.56(a), 
53.18 	80A.57(a), or 80A.73 is liable to the customer.  The customer, if a purchaser, may maintain 
53.19 	an action for recovery of actual damages as specified in subsections (b)(1) through (3), or, 
53.20 	if a seller, for a remedy as specified in subsections (c)(1) through (3).
53.21 	(e) Liability of unregistered investment adviser and investment adviser 
53.22 	representative. A person acting as an investment adviser or investment adviser 
53.23 	representative that provides investment advice for compensation in violation of section 
53.24 	80A.58(a), 80A.59(a), or 80A.73 is liable to the client. The client may maintain an action 
53.25 	to recover the consideration paid for the advice, interest from the date of payment, costs, 
53.26 	and reasonable attorneys' fees determined by the court.
53.27 	(f) Liability for investment advice. A person that receives directly or indirectly 
53.28 	any consideration for providing investment advice to another person and that employs a 
53.29 	device, scheme, or artifice to defraud the other person or engages in an act, practice, or 
53.30 	course of business that operates or would operate as a fraud or deceit on the other person, 
53.31 	is liable to the other person.  An action under this subsection is governed by the following:
53.32 	(1) The person defrauded may maintain an action to recover the consideration 
53.33 	paid for the advice and the amount of any actual damages caused by the fraudulent 
53.34 	conduct, interest from the date of the fraudulent conduct, costs, and reasonable attorneys' 
53.35 	fees determined by the court, less the amount of any income received as a result of the 
53.36 	fraudulent conduct.
54.1 	(2) This subsection does not apply to a broker-dealer or its agents if the investment 
54.2 	advice provided is solely incidental to transacting business as a broker-dealer and no 
54.3 	special compensation is received for the investment advice.
54.4 	(g) Joint and several liability. The following persons are liable jointly and severally 
54.5 	with and to the same extent as persons liable under subsections (b) through (f):
54.6 	(1) a person that directly or indirectly controls a person liable under subsections (b) 
54.7 	through (f), unless the controlling person sustains the burden of proof that the person did 
54.8 	not know, and in the exercise of reasonable care could not have known, of the existence of 
54.9 	conduct by reason of which the liability is alleged to exist;
54.10 	(2) an individual who is a managing partner, executive officer, or director of a person 
54.11 	liable under subsections (b) through (f), including an individual having a similar status or 
54.12 	performing similar functions, unless the individual sustains the burden of proof that the 
54.13 	individual did not know and, in the exercise of reasonable care could have known, of the 
54.14 	existence of conduct by reason of which the liability is alleged to exist;
54.15 	(3) an individual who is an employee of or associated with a person liable under 
54.16 	subsections (b) through (f) and who materially aids the conduct giving rise to the liability, 
54.17 	unless the individual sustains the burden of proof that the individual did not know and, 
54.18 	in the exercise of reasonable care could not have known, of the existence of conduct by 
54.19 	reason of which the liability is alleged to exist; and 
54.20 	(4) a person that is a broker-dealer, agent, investment adviser, or investment adviser 
54.21 	representative that materially aids the conduct giving rise to the liability under subsections 
54.22 	(b) through (f), unless the person sustains the burden of proof that the person did not know 
54.23 	and, in the exercise of reasonable care could not have known, of the existence of conduct 
54.24 	by reason of which liability is alleged to exist.
54.25 	(h) Right of contribution. A person liable under this section has a right of 
54.26 	contribution as in cases of tort against any other person liable under this section for the 
54.27 	same conduct.
54.28 	(i) Survival of cause of action. A cause of action under this section survives the 
54.29 	death of an individual who might have been a plaintiff or defendant.
54.30 	(j) Statute of limitations. A person may not obtain relief:
54.31 	(1) under subsection (b) for violation of section 80A.49, or under subsection (d) or 
54.32 	(e), unless the action is instituted within one year after the violation occurred; or 
54.33 	(2) under subsection (b), other than for violation of section 80A.49, or under 
54.34 	subsection (c) or (f), unless the action is instituted within the earlier of two years after 
54.35 	discovery of the facts constituting the violation or five years after the violation.
55.1 	(k) No enforcement of violative contract. A person that has made, or has engaged 
55.2 	in the performance of, a contract in violation of this chapter or a rule adopted or order 
55.3 	issued under this chapter, or that has acquired a purported right under the contract with 
55.4 	knowledge of conduct by reason of which its making or performance was in violation of 
55.5 	this chapter, may not base an action on the contract.
55.6 	(l) No contractual waiver. A condition, stipulation, or provision binding a person 
55.7 	purchasing or selling a security or receiving investment advice to waive compliance with 
55.8 	this chapter or a rule adopted or order issued under this chapter is void.
55.9 	(m) Survival of other right or remedies. The rights and remedies provided by this 
55.10 	chapter are in addition to any other rights or remedies that may exist, but this chapter does 
55.11 	not create a cause of action not specified in this section or section 80A.66(e).

55.12 	Sec. 37. [80A.77] SECTION 510; RESCISSION OFFERS.
55.13 	A purchaser, seller, or recipient of investment advice may not maintain an action 
55.14 	under section 80A.76 if:
55.15 	(1) the purchaser, seller, or recipient of investment advice receives in a record, 
55.16 	before the action is instituted:
55.17 	(A) an offer stating the respect in which liability under section 80A.76 may have 
55.18 	arisen and fairly advising the purchaser, seller, or recipient of investment advice of 
55.19 	that person's rights in connection with the offer, and any financial or other information 
55.20 	necessary to correct all material misrepresentations or omissions in the information that 
55.21 	was required by this chapter to be furnished to that person at the time of this purchase, 
55.22 	sale, or investment advice;
55.23 	(B) if the basis for relief under this section may have been a violation of section 
55.24 	80A.76(b), an offer to repurchase the security for cash, payable on delivery of the security, 
55.25 	equal to the consideration paid, and interest from the date of the purchase, less the amount 
55.26 	of any income received on the security, or, if the purchaser no longer owns the security, an 
55.27 	offer to pay the purchaser upon acceptance of the offer damages in an amount that would 
55.28 	be recoverable upon a tender, less the value of the security when the purchaser disposed 
55.29 	of it, and interest from the date of the purchase in cash equal to the damages computed 
55.30 	in the manner provided in this subsection.
55.31 	(C) if the basis for relief under this section may have been a violation of section 
55.32 	80A.76(c), an offer to tender the security, on payment by the seller of an amount equal to 
55.33 	the purchase price paid, less income received on the security by the purchaser and interest 
55.34 	from the date of the sale; or if the purchaser no longer owns the security, an offer to pay 
55.35 	the seller upon acceptance of the offer, in cash, damages in the amount of the difference 
56.1 	between the price at which the security was purchased and the value the security would 
56.2 	have had at the time of the purchase in the absence of the purchaser's conduct that may 
56.3 	have caused liability and interest from the date of the sale.
56.4 	(D) if the basis for relief under this section may have been a violation of section 
56.5 	80A.76(d); and if the customer is a purchaser, an offer to pay as specified in subparagraph 
56.6 	(B); or, if the customer is a seller, an offer to tender or to pay as specified in subparagraph 
56.7 	(C);
56.8 	(E) if the basis for relief under this section may have been a violation of section 
56.9 	80A.76(e), an offer to reimburse in cash the consideration paid for the advice and interest 
56.10 	from the date of payment; or 
56.11 	(F) if the basis for relief under this section may have been a violation of section 
56.12 	80A.76(f), an offer to reimburse in cash the consideration paid for the advice, the amount 
56.13 	of any actual damages that may have been caused by the conduct, and interest from the 
56.14 	date of the violation causing the loss;
56.15 	(2) the offer under paragraph (1) states that it must be accepted by the purchaser, 
56.16 	seller, or recipient of investment advice within 30 days after the date of its receipt by the 
56.17 	purchaser, seller, or recipient of investment advice or any shorter period, of not less than 
56.18 	three days, that the administrator, by order, specifies;
56.19 	(3) the offeror has the present ability to pay the amount offered or to tender the 
56.20 	security under paragraph (1);
56.21 	(4) the offer under paragraph (1) is delivered to the purchaser, seller, or recipient 
56.22 	of investment advice, or sent in a manner that ensures receipt by the purchaser, seller, or 
56.23 	recipient of investment advice; and 
56.24 	(5) the purchaser, seller, or recipient of investment advice that accepts the offer 
56.25 	under paragraph (1) in a record within the period specified under paragraph (2) is paid 
56.26 	in accordance with the terms of the offer.
56.27 	 ADMINISTRATION AND JUDICIAL REVIEW

56.28 	Sec. 38. [80A.78] SECTION 601; ADMINISTRATION.
56.29 	(a) Administration. The administrator shall administer this chapter.
56.30 	(b) Unlawful use of records or information. It is unlawful for the administrator 
56.31 	or an officer, employee, or designee of the administrator to use for personal benefit 
56.32 	or the benefit of others records or other information obtained by or filed with the 
56.33 	administrator that are not public under section 80A.84(b).  This chapter does not authorize 
56.34 	the administrator or an officer, employee, or designee of the administrator to disclose the 
56.35 	record or information, except in accordance with section 80A.79, 80A.84(c), or 80A.85.
57.1 	(c) No privilege or exemption created or diminished. This chapter does not 
57.2 	create or diminish a privilege or exemption that exists at common law, by statute or rule, 
57.3 	or otherwise.
57.4 	(d) Investor education. The administrator may develop and implement investor 
57.5 	education initiatives to inform the public about investing in securities, with particular 
57.6 	emphasis on the prevention and detection of securities fraud.  In developing and 
57.7 	implementing these initiatives, the administrator may collaborate with public and 
57.8 	nonprofit organizations with an interest in investor education.  The administrator may 
57.9 	accept a grant or donation from a person that is not affiliated with the securities industry 
57.10 	or from a nonprofit organization, regardless of whether the organization is affiliated with 
57.11 	the securities industry, to develop and implement investor education initiatives.  This 
57.12 	subsection does not authorize the administrator to require participation or monetary 
57.13 	contributions of a registrant in an investor education program.

57.14 	Sec. 39. [80A.79] SECTION 602; INVESTIGATIONS AND SUBPOENAS.
57.15 	(a) Authority to investigate. The administrator may:
57.16 	(1) conduct public or private investigations within or outside of this state which 
57.17 	the administrator considers necessary or appropriate to determine whether a person has 
57.18 	violated, is violating, or is about to violate this chapter or a rule adopted or order issued 
57.19 	under this chapter, or to aid in the enforcement of this chapter or in the adoption of rules 
57.20 	and forms under this chapter;
57.21 	(2) require or permit a person to testify, file a statement, or produce a record, under 
57.22 	oath or otherwise as the administrator determines, as to all the facts and circumstances 
57.23 	concerning a matter to be investigated or about which an action or proceeding is to be 
57.24 	instituted; and 
57.25 	(3) publish a record concerning an action, proceeding, or an investigation under, 
57.26 	or a violation of, this chapter or a rule adopted or order issued under this chapter if the 
57.27 	administrator determines it is necessary or appropriate in the public interest and for the 
57.28 	protection of investors.
57.29 	(b) Administrator powers to investigate. For the purpose of an investigation 
57.30 	under this chapter, the administrator or its designated officer may administer oaths and 
57.31 	affirmations, subpoena witnesses, seek compulsion of attendance, take evidence, require 
57.32 	the filing of statements, and require the production of any records that the administrator 
57.33 	considers relevant or material to the investigation.
57.34 	(c) Procedure and remedies for noncompliance. If a person does not appear or 
57.35 	refuses to testify, file a statement, produce records, or otherwise does not obey a subpoena 
58.1 	as required by the administrator under this chapter, the administrator may refer the matter 
58.2 	to the attorney general, who may apply to the district court or a court of another state to 
58.3 	enforce compliance.  The court may:
58.4 	(1) hold the person in contempt;
58.5 	(2) order the person to appear before the administrator;
58.6 	(3) order the person to testify about the matter under investigation or in question;
58.7 	(4) order the production of records;
58.8 	(5) grant injunctive relief, including restricting or prohibiting the offer or sale of 
58.9 	securities or the providing of investment advice;
58.10 	(6) impose a civil penalty up to $10,000 for each violation; and
58.11 	(7) grant any other necessary or appropriate relief.
58.12 	(d) Application for relief. This section does not preclude a person from applying to 
58.13 	the district court or a court of another state for relief from a request to appear, testify, file a 
58.14 	statement, produce records, or obey a subpoena.
58.15 	(e) Use immunity procedure. An individual is not excused from attending, 
58.16 	testifying, filing a statement, producing a record or other evidence, or obeying a subpoena 
58.17 	of the administrator under this chapter or in an action or proceeding instituted by the 
58.18 	administrator under this chapter on the ground that the required testimony, statement, 
58.19 	record, or other evidence, directly or indirectly, may tend to incriminate the individual or 
58.20 	subject the individual to a criminal fine, penalty, or forfeiture.  If the individual refuses to 
58.21 	testify, file a statement or produce a record or other evidence on the basis of the individual's 
58.22 	privilege against self-incrimination, the administrator may apply to the district court to 
58.23 	compel the testimony, the filing of the statement, the production of the record, or the giving 
58.24 	of other evidence.  The testimony, record, or other evidence compelled under such an order 
58.25 	may not be used, directly or indirectly, against the individual in a criminal case, except in 
58.26 	a prosecution for perjury or contempt or otherwise failing to comply with the order.
58.27 	(f) Assistance to securities regulator of another jurisdiction. At the request of 
58.28 	the securities regulator of another state or a foreign jurisdiction, the administrator may 
58.29 	provide assistance if the requesting regulator states that it is conducting an investigation to 
58.30 	determine whether a person has violated, is violating, or is about to violate a law or rule 
58.31 	of the other state or foreign jurisdiction relating to securities matters that the requesting 
58.32 	regulator administers or enforces. The administrator may provide the assistance by using 
58.33 	the authority to investigate and the powers conferred by this section as the administrator 
58.34 	determines is necessary or appropriate.  The assistance may be provided without regard 
58.35 	to whether the conduct described in the request would also constitute a violation of this 
58.36 	chapter or other law of this state if occurring in this state. In deciding whether to provide 
59.1 	the assistance, the administrator may consider whether the requesting regulator is permitted 
59.2 	and has agreed to provide assistance reciprocally within its state or foreign jurisdiction 
59.3 	to the administrator on securities matters when requested; whether compliance with the 
59.4 	request would violate or prejudice the public policy of this state; and the availability of 
59.5 	resources and employees of the administrator to carry out the request for assistance.

59.6 	Sec. 40. [80A.80] SECTION 603; CIVIL ENFORCEMENT.
59.7 	(a) Civil action instituted by administrator. If the administrator believes that a 
59.8 	person has engaged, is engaging, or is about to engage in an act, practice, or course of 
59.9 	business constituting a violation of this chapter or a rule adopted or order issued under 
59.10 	this chapter or that a person has, is, or is about to engage in an act, practice, or course of 
59.11 	business that materially aids a violation of this chapter or a rule adopted or order issued 
59.12 	under this chapter, the administrator may maintain an action in the district court to enjoin 
59.13 	the act, practice, or course of business and to enforce compliance with this chapter or a 
59.14 	rule adopted or order issued under this chapter.
59.15 	(b) Relief available. In an action under this section and on a proper showing, the 
59.16 	court may:
59.17 	(1) issue a permanent or temporary injunction, restraining order, or declaratory 
59.18 	judgment;
59.19 	(2) order other appropriate or ancillary relief, which may include:
59.20 	(A) an asset freeze, accounting, writ of attachment, writ of general or specific 
59.21 	execution, and appointment of a receiver or conservator, that may be the administrator, 
59.22 	for the defendant or the defendant's assets;
59.23 	(B) ordering the administrator to take charge and control of a defendant's property, 
59.24 	including investment accounts and accounts in a depository institution, rents, and profits; 
59.25 	to collect debts; and to acquire and dispose of property;
59.26 	(C) imposing a civil penalty up to $10,000 for each violation; an order of rescission, 
59.27 	restitution, or disgorgement directed to a person that has engaged in an act, practice, or 
59.28 	course of business constituting a violation of this chapter or the predecessor act or a rule 
59.29 	adopted or order issued under this chapter or the predecessor act; and 
59.30 	(D) ordering the payment of prejudgment and postjudgment interest; or 
59.31 	(3) order such other relief as the court considers appropriate.
59.32 	(c) No bond required. The administrator may not be required to post a bond in an 
59.33 	action or proceeding under this chapter.

59.34 	Sec. 41. [80A.81] SECTION 604; ADMINISTRATIVE ENFORCEMENT.
60.1 	(a) Issuance of an order or notice. If the administrator determines that a person 
60.2 	has engaged, is engaging, or is about to engage in an act, practice, or course of business 
60.3 	constituting a violation of this chapter or a rule adopted or order issued under this chapter 
60.4 	or that a person has materially aided, is materially aiding, or is about to materially aid an 
60.5 	act, practice, or course of business constituting a violation of this chapter or a rule adopted 
60.6 	or order issued under this chapter, the administrator may:
60.7 	(1) issue an order directing the person to cease and desist from engaging in the 
60.8 	act, practice, or course of business or to take other action necessary or appropriate to 
60.9 	comply with this chapter;
60.10 	(2) issue an order denying, suspending, revoking, or conditioning the exemptions 
60.11 	for a broker-dealer under section 80A.56(b)(1)(D) or (F) or an investment adviser under 
60.12 	section 80A.58(b)(1)(C); or 
60.13 	(3) issue an order under section 80A.48.
60.14 	(b) Summary process. An order under subsection (a) is effective on the date of 
60.15 	issuance.  Upon issuance of the order, the administrator shall promptly serve each person 
60.16 	subject to the order with a copy of the order and a notice that the order has been entered. 
60.17 	The order must include a statement whether the administrator will seek a civil penalty or 
60.18 	costs of the investigation, a statement of the reasons for the order, and notice that, within 
60.19 	15 days after receipt of a request in a record from the person, the matter will be scheduled 
60.20 	for a hearing.  If a person subject to the order does not request a hearing and none is 
60.21 	ordered by the administrator within 30 days after the date of service of the order, the order, 
60.22 	which may include a civil penalty or costs of the investigation if a civil penalty or costs 
60.23 	were sought in the statement accompanying the order, becomes final as to that person by 
60.24 	operation of law.  If a hearing is requested or ordered, the administrator, after notice of 
60.25 	an opportunity for hearing to each person subject to the order, may modify or vacate the 
60.26 	order or extend it until final determination.
60.27 	(c) Procedure for final order. If a hearing is requested or ordered pursuant to 
60.28 	subsection (b), a hearing must be held under chapter 14.  A final order may not be issued 
60.29 	unless the administrator makes findings of fact and conclusions of law in a record 
60.30 	according to chapter 14.  The final order may make final, vacate, or modify the order 
60.31 	issued under subsection (a).
60.32 	(d) Civil penalty. In a final order under subsection (c), the administrator may 
60.33 	impose a civil penalty up to $10,000 for each violation. 
60.34 	(e) Costs. In a final order, the administrator may charge the actual cost of an 
60.35 	investigation or proceeding for a violation of this chapter or a rule adopted or order issued 
60.36 	under this chapter.
61.1 	(f) Filing of certified final order with court; effect of filing. If a petition for 
61.2 	judicial review of a final order is not filed in accordance with section 80A.86, the 
61.3 	administrator may file a certified copy of the final order with the clerk of a court of 
61.4 	competent jurisdiction.  The order so filed has the same effect as a judgment of the court 
61.5 	and may be recorded, enforced, or satisfied in the same manner as a judgment of the court.
61.6 	(g) Enforcement by court; further civil penalty. If a person does not comply 
61.7 	with an order under this section, the administrator may petition a court of competent 
61.8 	jurisdiction to enforce the order.  The court may not require the administrator to post a 
61.9 	bond in an action or proceeding under this section. If the court finds, after service and 
61.10 	opportunity for hearing, that the person was not in compliance with the order, the court 
61.11 	may adjudge the person in civil contempt of the order.  The court may impose a further 
61.12 	civil penalty against the person for contempt in an amount up to $10,000 for each violation 
61.13 	and may grant any other relief   the court determines is just and proper in the circumstances.

61.14 	Sec. 42. [80A.82] SECTION 605; RULES, FORMS, ORDERS, 
61.15 	INTERPRETATIVE OPINIONS, AND HEARINGS.
61.16 	(a) Issuance and adoption of forms, orders, and rules.The administrator may:
61.17 	(1) issue forms and orders and, after notice and comment, may adopt and amend 
61.18 	rules necessary or appropriate to carry out this chapter and may repeal rules, including 
61.19 	rules and forms governing registration statements, applications, notice filings, reports, 
61.20 	and other records;
61.21 	(2) by rule, define terms, whether or not used in this chapter, but those definitions 
61.22 	may not be inconsistent with this chapter; and 
61.23 	(3) by rule, classify securities, persons, and transactions and adopt different 
61.24 	requirements for different classes.
61.25 	(b) Findings and cooperation. Under this chapter, a rule or form may not be 
61.26 	adopted or amended, or an order issued or amended, unless the administrator finds that the 
61.27 	rule, form, order, or amendment is necessary or appropriate in the public interest or for the 
61.28 	protection of investors and is consistent with the purposes intended by this chapter.  In 
61.29 	adopting, amending, and repealing rules and forms, section 80A.85 applies in order to 
61.30 	achieve uniformity among the states and coordination with federal laws in the form and 
61.31 	content of registration statements, applications, reports, and other records, including the 
61.32 	adoption of uniform rules, forms, and procedures.
61.33 	(c) Financial statements. Subject to Section 15(h) of the Securities Exchange Act 
61.34 	and Section 222 of the Investment Advisers Act of 1940, the administrator may require 
61.35 	that a financial statement filed under this chapter be prepared in accordance with generally 
62.1 	accepted accounting principles in the United States and comply with other requirements 
62.2 	specified by rule adopted or order issued under this chapter.  A rule adopted or order 
62.3 	issued under this chapter may establish:
62.4 	(1) subject to Section 15(h) of the Securities Exchange Act and Section 222 of the 
62.5 	Investment Advisors Act of 1940, the form and content of financial statements required 
62.6 	under this chapter;
62.7 	(2) whether unconsolidated financial statements must be filed; and 
62.8 	(3) whether required financial statements must be audited by an independent 
62.9 	certified public accountant.
62.10 	(d) Interpretative opinions.The administrator may provide interpretive opinions 
62.11 	or issue determinations that the administrator will not institute a proceeding or an 
62.12 	action under this chapter against a specified person for engaging in a specified act, 
62.13 	practice, or course of business if the determination is consistent with this chapter.  A 
62.14 	rule adopted or order issued under this chapter may establish a reasonable charge for 
62.15 	interpretative opinions or determinations that the administrator will not institute an action 
62.16 	or a proceeding under this chapter.
62.17 	(e) Effect of compliance. A penalty under this chapter may not be imposed for, and 
62.18 	liability does not arise from conduct that is engaged in or omitted in good faith believing it 
62.19 	conforms to a rule, form, or order of the administrator under this chapter.
62.20 	(f) Presumption for public hearings. A hearing in an administrative proceeding 
62.21 	under this chapter must be conducted in public unless the administrator for good cause 
62.22 	consistent with this chapter determines that the hearing will not be so conducted.

62.23 	Sec. 43. [80A.83] SECTION 606; ADMINISTRATIVE FILES AND OPINIONS.
62.24 	(a) Public register of filings.The administrator shall maintain, or designate a person 
62.25 	to maintain, a register of applications for registration of securities; registration statements; 
62.26 	notice filings; applications for registration of broker-dealers, agents, investment advisers, 
62.27 	and investment adviser representatives; notice filings by federal covered investment 
62.28 	advisers that are or have been effective under this chapter or the predecessor act; notices of 
62.29 	claims of exemption from registration or notice filing requirements contained in a record; 
62.30 	orders issued under this chapter or the predecessor act; and interpretative opinions or no 
62.31 	action determinations issued under this chapter.
62.32 	(b) Public availability. The administrator shall make all rules, forms, interpretative 
62.33 	opinions, and orders available to the public.
62.34 	(c) Copies of public records. The administrator shall furnish a copy of a record 
62.35 	that is a public record or a certification that the public record does not exist to a person 
63.1 	that so requests.  A rule adopted under this chapter may establish a reasonable charge 
63.2 	for furnishing the record or certification.  A copy of the record certified or a certificate 
63.3 	by the administrator of a record's nonexistence is prima facie evidence of a record or its 
63.4 	nonexistence.

63.5 	Sec. 44. [80A.84] SECTION 607; PUBLIC RECORDS; CONFIDENTIALITY.
63.6 	(a) Presumption of public records. Except as otherwise provided in subsection 
63.7 	(b), records obtained by the administrator or filed under this chapter, including a record 
63.8 	contained in or filed with a registration statement, application, notice filing, or report, are 
63.9 	public records and are available for public examination.
63.10 	(b) Nonpublic records. The following records are not public records and are not 
63.11 	available for public examination under subsection (a):
63.12 	(1) a record obtained by the administrator in connection with an audit or inspection 
63.13 	under section 80A.66(d) or an investigation under section 80A.79;
63.14 	(2) a part of a record filed in connection with a registration statement under sections 
63.15 	80A.49 and 80A.51 through 80A.53 or a record under section 80A.66(d) that contains 
63.16 	trade secrets or confidential information if the person filing the registration statement or 
63.17 	report has asserted a claim of confidentiality or privilege that is authorized by law;
63.18 	(3) a record that is not required to be provided to the administrator or filed under this 
63.19 	chapter and is provided to the administrator only on the condition that the record will not 
63.20 	be subject to public examination or disclosure;
63.21 	(4) a nonpublic record received from a person specified in section 80A.85(a);
63.22 	(5) any social security number, residential address unless used as a business address, 
63.23 	and residential telephone number contained in a record that is filed; and 
63.24 	(6) a record obtained by the administrator through a designee of the administrator 
63.25 	that a rule or order under this chapter determines has been:
63.26 	(A) expunged from the administrator's records by the designee; or 
63.27 	(B) determined to be nonpublic or nondisclosable by that designee if the 
63.28 	administrator finds the determination to be in the public interest and for the protection of 
63.29 	investors.
63.30 	(c) Administrator discretion to disclose. If disclosure is for the purpose of a civil, 
63.31 	administrative, or criminal investigation, action, or proceeding or to a person specified 
63.32 	in section 80A.85(a), the administrator may disclose a record obtained in connection 
63.33 	with an audit or inspection under section 80A.66(d) or a record obtained in connection 
63.34 	with an investigation under section 80A.79.

64.1 	Sec. 45. [80A.85] SECTION 608; UNIFORMITY AND COOPERATION WITH 
64.2 	OTHER AGENCIES.
64.3 	(a) Objective of uniformity. The administrator shall, in its discretion, cooperate, 
64.4 	coordinate, consult, and, subject to section 80A.84, share records and information with the 
64.5 	securities regulator of another state, Canada, a Canadian province or territory, a foreign 
64.6 	jurisdiction, the Securities and Exchange Commission, the United States Department of 
64.7 	Justice, the Commodity Futures Trading Commission, the Federal Trade Commission, the 
64.8 	Securities Investor Protection Corporation, a self-regulatory organization, a national or 
64.9 	international organization of securities regulators, a federal or state banking and insurance 
64.10 	regulator, and a governmental law enforcement agency to effectuate greater uniformity in 
64.11 	securities matters among the federal government, self-regulatory organizations, states, 
64.12 	and foreign governments.
64.13 	(b) Policies to consider. In cooperating, coordinating, consulting, and sharing 
64.14 	records and information under this section and in acting by rule, order, or waiver under 
64.15 	this chapter, the administrator shall, in its discretion, take into consideration in carrying 
64.16 	out the public interest the following general policies:
64.17 	(1) maximizing effectiveness of regulation for the protection of investors;
64.18 	(2) maximizing uniformity in federal and state regulatory standards; and 
64.19 	(3) minimizing burdens on the business of capital formation, without adversely 
64.20 	effecting essentials of investor protection.
64.21 	(c) Subjects for cooperation. The cooperation, coordination, consultation, and 
64.22 	sharing of records and information authorized by this section includes:
64.23 	(1) establishing or employing one or more designees as a central depository for 
64.24 	registration and notice filings under this chapter and for records required or allowed to 
64.25 	be maintained under this chapter;
64.26 	(2) developing and maintaining uniform forms;
64.27 	(3) conducting a joint examination or investigation;
64.28 	(4) holding a joint administrative hearing;
64.29 	(5) instituting and prosecuting a joint civil or administrative proceeding;
64.30 	(6) sharing and exchanging personnel;
64.31 	(7) coordinating registrations under sections 80A.49 and 80A.56 through 80A.59 
64.32 	and exemptions under section 80A.47;
64.33 	(8) sharing and exchanging records, subject to section 80A.84;
64.34 	(9) formulating rules, statements of policy, guidelines, forms, and interpretative 
64.35 	opinions and releases;
64.36 	(10) formulating common systems and procedures;
65.1 	(11) notifying the public of proposed rules, forms, statements of policy, and 
65.2 	guidelines;
65.3 	(12) attending conferences and other meetings among securities regulators, which 
65.4 	may include representatives of governmental and private sector organizations involved in 
65.5 	capital formation, deemed necessary or appropriate to promote or achieve uniformity; and 
65.6 	(13) developing and maintaining a uniform exemption from registration for small 
65.7 	issuers, and taking other steps to reduce the burden of raising investment capital by small 
65.8 	businesses.

65.9 	Sec. 46. [80A.86] SECTION 609; JUDICIAL REVIEW.
65.10 	(a) Judicial review of orders. A final order issued by the administrator under this 
65.11 	chapter is subject to judicial review in accordance with chapter 14.
65.12 	(b) Judicial review of rules. A rule adopted under this chapter is subject to judicial 
65.13 	review in accordance with chapter 14.

65.14 	Sec. 47. [80A.87] SECTION 610; JURISDICTION.
65.15 	(a) Sales and offers to sell. Sections 80A.49, 80A.50, 80A.56(a), 80A.57(a), 
65.16 	80A.58(a), 80A.59(a), 80A.68, 80A.73, 80A.76, and 80A.77 do not apply to a person that 
65.17 	sells or offers to sell a security unless the offer to sell or the sale is made in this state or the 
65.18 	offer to purchase or the purchase is made and accepted in this state.
65.19 	(b) Purchases and offers to purchase. Sections 80A.56(a), 80A.57(a), 80A.58(a), 
65.20 	80A.59(a), 80A.68, 80A.73, 80A.76, and 80A.77 do not apply to a person that purchases 
65.21 	or offers to purchase a security unless the offer to purchase or the purchase is made in this 
65.22 	state or the offer to sell or the sale is made and accepted in this state.
65.23 	(c) Offers in this state. For the purpose of this section, an offer to sell or to purchase 
65.24 	a security is made in this state, whether or not either party is then present in this state, if 
65.25 	the offer:
65.26 	(1) originates from within this state; or 
65.27 	(2) is directed by the offeror to a place in this state and received at the place to 
65.28 	which it is directed.
65.29 	(d) Acceptances in this state. For the purpose of this section, an offer to purchase 
65.30 	or to sell is accepted in this state, whether or not either party is then present in this 
65.31 	state, if the acceptance:
65.32 	(1) is communicated to the offeror in this state and the offeree reasonably believes 
65.33 	the offeror to be present in this state and the acceptance is received at the place in this 
65.34 	state to which it is directed; and 
66.1 	(2) has not previously been communicated to the offeror, orally or in a record, 
66.2 	outside this state.
66.3 	(e) Publications, radio, television, or electronic communications. An offer 
66.4 	to sell or to purchase is not made in this state when a publisher circulates or there is 
66.5 	circulated on the publisher's behalf in this state a bona fide newspaper or other publication 
66.6 	of general, regular, and paid circulation that is not published in this state, or that is 
66.7 	published in this state but has had more than two-thirds of its circulation outside this state 
66.8 	during the previous 12 months or when a radio or television program or other electronic 
66.9 	communication originating outside this state is received in this state.  A radio or television 
66.10 	program, or other electronic communication is considered as having originated in this 
66.11 	state if either the broadcast studio or the originating source of transmission is located 
66.12 	in this state, unless:
66.13 	(1) the program or communication is syndicated and distributed from outside this 
66.14 	state for redistribution to the general public in this state;
66.15 	(2) the program or communication is supplied by a radio, television, or other 
66.16 	electronic network with the electronic signal originating from outside this state for 
66.17 	redistribution to the general public in this state;
66.18 	(3) the program or communication is an electronic communication that originates 
66.19 	outside this state and is captured for redistribution to the general public in this state by a 
66.20 	community antenna or cable, radio, cable television, or other electronic system; or 
66.21 	(4) the program or communication consists of an electronic communication that 
66.22 	originates in this state, but which is not intended for distribution to the general public in 
66.23 	this state.
66.24 	(f) Investment advice and misrepresentations. Sections 80A.58(a), 80A.59(a), 
66.25 	80A.60(a), 80A.69, 80A.72, and 80A.73 apply to a person if the person engages in an act, 
66.26 	practice, or course of business instrumental in effecting prohibited or actionable conduct 
66.27 	in this state, whether or not either party is then present in this state.

66.28 	Sec. 48. [80A.88] SECTION 611; SERVICE OF PROCESS.
66.29 	(a) Signed consent to service of process. A consent to service of process complying 
66.30 	with this section required by this chapter must be signed and filed in the form required by 
66.31 	a rule or order under this chapter.  A consent appointing the administrator the person's 
66.32 	agent for service of process in a noncriminal action or proceeding against the person, or 
66.33 	the person's successor or personal representative under this chapter or a rule adopted or 
66.34 	order issued under this chapter after the consent is filed, has the same force and validity as 
66.35 	if the service were made personally on the person filing the consent. A person that has 
67.1 	filed a consent complying with this subsection in connection with a previous application 
67.2 	for registration or notice filing need not file an additional consent.
67.3 	(b) Conduct constituting appointment of agent for service. If a person, including 
67.4 	a nonresident of this state, engages in an act, practice, or course of business prohibited 
67.5 	or made actionable by this chapter or a rule adopted or order issued under this chapter 
67.6 	and the person has not filed a consent to service of process under subsection (a), the act, 
67.7 	practice, or course of business constitutes the appointment of the administrator as the 
67.8 	person's agent for service of process in a noncriminal action or proceeding against the 
67.9 	person or the person's successor or personal representative.
67.10 	(c) Procedure for service of process. Service under subsection (a) or (b) may be 
67.11 	made by providing a copy of the process to the office of the administrator, but it is not 
67.12 	effective unless:
67.13 	(1) the plaintiff, which may be the administrator, promptly sends notice of the 
67.14 	service and a copy of the process, return receipt requested, to the defendant or respondent 
67.15 	at the address set forth in the consent to service of process or, if a consent to service of 
67.16 	process has not been filed, at the last known address, or takes other reasonable steps 
67.17 	to give notice; and 
67.18 	(2) the plaintiff files an affidavit of compliance with this subsection in the action or 
67.19 	proceeding on or before the return day of the process, if any, or within the time that the 
67.20 	court, or the administrator in a proceeding before the administrator, allows.
67.21 	(d) Service in administrative proceedings or civil actions by administrator.
67.22 	Service pursuant to subsection (c) may be used in a proceeding before the administrator or 
67.23 	by the administrator in a civil action in which the administrator is the moving party.
67.24 	(e) Opportunity to defend. If process is served under subsection (c), the court, or 
67.25 	the administrator in a proceeding before the administrator, shall order continuances as are 
67.26 	necessary or appropriate to afford the defendant or respondent reasonable opportunity 
67.27 	to defend.

67.28 	Sec. 49. [80A.89] SECTION 612; SEVERABILITY CLAUSE.
67.29 	If any provision of this chapter or its application to any person or circumstances is 
67.30 	held invalid, the invalidity does not affect other provisions or applications of this chapter 
67.31 	that can be given effect without the invalid provision or application, and to this end the 
67.32 	provisions of this chapter are severable.
67.33 	TRANSITION

67.34 	Sec. 50. [80A.90] SECTION 703; APPLICATION OF ACT TO EXISTING 
67.35 	PROCEEDING AND EXISTING RIGHTS AND DUTIES.
68.1 	(a) Applicability of predecessor act to pending proceedings and existing rights.
68.2 	The predecessor act exclusively governs all actions or proceedings that are pending on the 
68.3 	effective date of this chapter or may be instituted on the basis of conduct occurring before 
68.4 	the effective date of this chapter, but a civil action may not be maintained to enforce any 
68.5 	liability under the predecessor act unless instituted within any period of limitation that 
68.6 	applied when the cause of action accrued or within five years after the effective date of 
68.7 	this chapter, whichever is earlier.
68.8 	(b) Continued effectiveness under predecessor act. All effective registrations 
68.9 	under the predecessor act, all administrative orders relating to the registrations, rules, 
68.10 	statements of policy, interpretative opinions, declaratory rulings, no action determinations, 
68.11 	and conditions imposed on the registrations under the predecessor act remain in effect 
68.12 	while they would have remained in effect if this chapter had not been enacted.  They are 
68.13 	considered to have been filed, issued, or composed under this chapter, but are exclusively 
68.14 	governed by the predecessor act.
68.15 	(c) Applicability of predecessor act to offers or sales. The predecessor act 
68.16 	exclusively applies to an offer or sale made within one year after the effective date of this 
68.17 	chapter pursuant to an offering made in good faith before the effective date of this chapter 
68.18 	on the basis of an exemption available under the predecessor act.

68.19 	Sec. 51.  REPEALER.
 68.20 	Minnesota Statutes 2004, sections 80A.01; 80A.02; 80A.03; 80A.04; 80A.041; 
68.21 	80A.05; 80A.06; 80A.07; 80A.08; 80A.09; 80A.10; 80A.11; 80A.115; 80A.12; 80A.122; 
68.22 	80A.125; 80A.13; 80A.14; 80A.15; 80A.16; 80A.17; 80A.18; 80A.19; 80A.22; 80A.23; 
68.23 	80A.24; 80A.25; 80A.26; 80A.27; 80A.28; 80A.29; 80A.30; and 80A.31, are repealed.

68.24 	Sec. 52. EFFECTIVE DATE.
 68.25 	This act is effective August 1, 2007.

68.26 	ARTICLE 2
68.27 	 CONFORMING CHANGES

68.28 	Section 1. Minnesota Statutes 2004, section 60A.077, subdivision 9, is amended to 
68.29 	read:
68.30 		Subd. 9.Membership interests.  A membership interest in a domestic mutual 
68.31 	insurance holding company does not constitute a security as defined in section 80A.14, 
68.32 	subdivision 18 80A.41(28).  No member of a mutual insurance holding company may 
68.33 	transfer or pledge membership in the mutual insurance holding company or any right 
69.1 	arising from the membership except as attendant to the valid transfer or assignment 
69.2 	of the member's policy in any reorganized company that gave rise to the member's 
69.3 	membership interest.  A member of a mutual insurance holding company is not, as a 
69.4 	member, personally liable for the acts, debts, liabilities, or obligations of the company.  
69.5 	No assessments of any kind may be imposed upon the members of a mutual insurance 
69.6 	holding company by the directors or members, or because of any liability of any company 
69.7 	owned or controlled by the mutual insurance holding company or because of any act, debt, 
69.8 	or liability of the mutual insurance holding company.  A member's interest in the mutual 
69.9 	insurance holding company shall automatically terminate upon cancellation, nonrenewal, 
69.10 	expiration, or termination of the member's policy in any insurance company that gave 
69.11 	rise to the member's membership interest.

69.12 	Sec. 2. Minnesota Statutes 2004, section 82.23, is amended to read:
69.13 	82.23 EXCEPTIONS.
69.14 	Unless a person is licensed or otherwise required to be licensed under this chapter, 
69.15 	the term real estate broker does not include:
69.16 	(a) a licensed practicing attorney if the attorney complies in all respects with the 
69.17 	trust account provisions of this chapter;
69.18 	(b) a receiver, trustee, administrator, guardian, executor, or other person appointed 
69.19 	by or acting under the judgment or order of any court;
69.20 	(c) any person owning and operating a cemetery and selling lots therein solely for 
69.21 	use as burial plots;
69.22 	(d) any custodian, janitor, or employee of the owner or manager of a residential 
69.23 	building who leases residential units in the building;
69.24 	(e) any bank, trust company, savings association, industrial loan and thrift company, 
69.25 	regulated lender under chapter 56, public utility, or land mortgage or farm loan association 
69.26 	organized under the laws of this state or the United States, when engaged in the transaction 
69.27 	of business within the scope of its corporate powers as provided by law;
69.28 	(f) public officers while performing their official duties;
69.29 	(g) employees of persons enumerated in clauses (b), (e), and (f), when engaged in 
69.30 	the specific performance of their duties;
69.31 	(h) any person who acts as an auctioneer bonded in conformity with section 330.02, 
69.32 	when that person is engaged in the specific performance of duties as an auctioneer, and 
69.33 	when that person has been employed to auction real estate by a person licensed under this 
69.34 	chapter or when the auctioneer has engaged a licensed attorney to supervise the real 
69.35 	estate transaction;
70.1 	(i) any person who acquires real estate for the purpose of engaging in and does 
70.2 	engage in, or who is engaged in the business of constructing residential, commercial or 
70.3 	industrial buildings for the purpose of resale if no more than 25 such transactions occur in 
70.4 	any 12-month period and the person complies with section 82.50;
70.5 	(j) any person who is licensed as a securities broker-dealer or is licensed as a 
70.6 	securities agent representing a broker-dealer pursuant to chapter 80A and who offers to 
70.7 	sell or sells an interest or estate in real estate which is a security as defined in section 
70.8 	80A.14, subdivision 18 80A.41(28), and is registered or exempt from registration or part 
70.9 	of a transaction exempt from registration pursuant to chapter 80A, when acting solely as 
70.10 	an incident to the sale of these securities;
70.11 	(k) any person who offers to sell or sells a business opportunity which is a franchise 
70.12 	registered pursuant to chapter 80C, when acting solely to sell the franchise;
70.13 	(l) any person who contracts with or solicits on behalf of a provider a contract 
70.14 	with a resident or prospective resident to provide continuing care in a facility, pursuant 
70.15 	to the Continuing Care Facility Disclosure and Rehabilitation Act (chapter 80D), when 
70.16 	acting solely as incident to the contract;
70.17 	(m) any broker-dealer or agent of a broker-dealer when participating in a transaction 
70.18 	in which all or part of a business opportunity or business, including any interest therein, is 
70.19 	conveyed or acquired pursuant to an asset purchase, merger, exchange of securities, or 
70.20 	other business combination, if the agent or broker-dealer is licensed pursuant to chapter 
70.21 	80A;
70.22 	(n) an accountant acting incident to the practice of the accounting profession if the 
70.23 	accountant complies in all respects with the trust account provisions of this chapter.

70.24 	Sec. 3. Minnesota Statutes 2004, section 82.43, subdivision 7, is amended to read:
70.25 		Subd. 7.Application for recovery.  When any aggrieved person obtains a final 
70.26 	judgment in any court of competent jurisdiction regardless of whether the judgment 
70.27 	has been discharged by a bankruptcy court against an individual licensed under this 
70.28 	chapter, on grounds of fraudulent, deceptive, or dishonest practices, or conversion of 
70.29 	trust funds arising directly out of any transaction when the judgment debtor was licensed 
70.30 	and performed acts for which a license is required under this chapter, or performed acts 
70.31 	permitted by section 327B.04, subdivision 5, the aggrieved person may, upon the judgment 
70.32 	becoming final, and upon termination of all proceedings, including reviews and appeals, 
70.33 	file a verified application in the court in which the judgment was entered.  The application 
70.34 	shall state with specificity the grounds upon which the application seeks to recover from 
70.35 	the fund, and request an order directing payment out of the fund of the amount of actual 
71.1 	and direct out of pocket loss in the transaction, but excluding any attorney's fees, interest 
71.2 	on the loss and on any judgment obtained as a result of the loss, up to the sum of $150,000 
71.3 	of the amount unpaid upon the judgment, provided that nothing in this chapter shall be 
71.4 	construed to obligate the fund for more than $150,000 per claimant, per transaction, 
71.5 	subject to the limitations set forth in subdivision 14, regardless of the number of persons 
71.6 	aggrieved or parcels of real estate involved in the transaction, provided that regardless 
71.7 	of the number of claims against a licensee, nothing in this chapter may obligate the fund 
71.8 	for more than $250,000 per licensee.  An aggrieved person who has a cause of action 
71.9 	under section 80A.23 80A.76  shall first seek recovery as provided in section 80A.05, 
71.10 	subdivision 5 80A.66(e), before the commissioner may order payment from the recovery 
71.11 	fund.  For purposes of this section, persons who are joint tenants or tenants in common are 
71.12 	deemed to be a single claimant.  A copy of the verified application shall be served upon 
71.13 	the commissioner and upon the judgment debtor, and a certificate or affidavit of service 
71.14 	filed with the court. For the purpose of this section, "aggrieved person" does not include 
71.15 	a government agency, financial institution, or other entity that purchases, guarantees, or 
71.16 	insures a loan secured by real estate, and does not include a licensee unless (1) the licensee 
71.17 	is acting in the capacity of principal in the sale of interests in real property owned by the 
71.18 	licensee; or (2) the licensee is acting in the capacity of principal in the purchase of interests 
71.19 	in real property to be owned by the licensee. Under no circumstances shall a licensee be 
71.20 	entitled to payment under this section for the loss of a commission or similar fee.
71.21 	For the purposes of this section, recovery is limited to transactions where the property 
71.22 	involved is intended for the direct personal habitation or commercial use of the buyer.
71.23 	Except for securities permitted to be sold by a licensee pursuant to section 82.41, 
71.24 	subdivision 8, for any action commenced after July 1, 1993, recovery under this section 
71.25 	is not available where the buyer's participation is for investment purposes only, and is 
71.26 	limited to providing capital to fund the transaction.

71.27 	Sec. 4. Minnesota Statutes 2004, section 144A.01, subdivision 4, is amended to read:
71.28 		Subd. 4.Controlling person.  "Controlling person" means any public body, 
71.29 	governmental agency, business entity, officer, nursing home administrator, or director 
71.30 	whose responsibilities include the direction of the management or policies of a nursing 
71.31 	home.  "Controlling person" also means any person who, directly or indirectly, beneficially 
71.32 	owns any interest in:
71.33 	(a) Any corporation, partnership or other business association which is a controlling 
71.34 	person;
71.35 	(b) The land on which a nursing home is located;
72.1 	(c) The structure in which a nursing home is located;
72.2 	(d) Any mortgage, contract for deed, or other obligation secured in whole or part by 
72.3 	the land or structure comprising a nursing home; or
72.4 	(e) Any lease or sublease of the land, structure, or facilities comprising a nursing 
72.5 	home.
72.6 	"Controlling person" does not include:
72.7 	(a) A bank, savings bank, trust company, savings association, credit union, industrial 
72.8 	loan and thrift company, investment banking firm, or insurance company unless the entity 
72.9 	directly or through a subsidiary operates a nursing home;
72.10 	(b) An individual state official or state employee, or a member or employee of the 
72.11 	governing body of a political subdivision of the state which operates one or more nursing 
72.12 	homes, unless the individual is also an officer or director of a nursing home, receives any 
72.13 	remuneration from a nursing home, or owns any of the beneficial interests not excluded 
72.14 	in this subdivision;
72.15 	(c) A natural person who is a member of a tax-exempt organization under section 
72.16 	290.05, subdivision 1, clause (i), unless the individual is also an officer or director of a 
72.17 	nursing home, or owns any of the beneficial interests not excluded in this subdivision; and
72.18 	(d) A natural person who owns less than five percent of the outstanding common 
72.19 	shares of a corporation:
72.20 	(1) whose securities are exempt by virtue of section 80A.15, subdivision 1, clause (f) 
72.21 	80A.45(6); or
72.22 	(2) whose transactions are exempt by virtue of section 80A.15, subdivision 2, clause 
72.23 	(b) 80A.46(7).

72.24 	Sec. 5. Minnesota Statutes 2004, section 245A.02, subdivision 5a, is amended to read:
72.25 		Subd. 5a.Controlling individual.  "Controlling individual" means a public body, 
72.26 	governmental agency, business entity, officer, owner, or managerial official whose 
72.27 	responsibilities include the direction of the management or policies of a program.  For 
72.28 	purposes of this subdivision, owner means an individual who has direct or indirect 
72.29 	ownership interest in a corporation, partnership, or other business association issued a 
72.30 	license under this chapter.  For purposes of this subdivision, managerial official means 
72.31 	those individuals who have the decision-making authority related to the operation of 
72.32 	the program, and the responsibility for the ongoing management of or direction of the 
72.33 	policies, services, or employees of the program.  Controlling individual does not include:
73.1 	(1) a bank, savings bank, trust company, savings association, credit union, industrial 
73.2 	loan and thrift company, investment banking firm, or insurance company unless the entity 
73.3 	operates a program directly or through a subsidiary;
73.4 	(2) an individual who is a state or federal official, or state or federal employee, or a 
73.5 	member or employee of the governing body of a political subdivision of the state or 
73.6 	federal government that operates one or more programs, unless the individual is also an 
73.7 	officer, owner, or managerial official of the program, receives remuneration from the 
73.8 	program, or owns any of the beneficial interests not excluded in this subdivision;
73.9 	(3) an individual who owns less than five percent of the outstanding common 
73.10 	shares of a corporation:
73.11 	(i) whose securities are exempt under section 80A.15, subdivision 1, clause (f) 
73.12 	80A.45(6); or
73.13 	(ii) whose transactions are exempt under section 80A.15, subdivision 2, clause (b) 
73.14 	80A.46(2); or
73.15 	(4) an individual who is a member of an organization exempt from taxation under 
73.16 	section 290.05, unless the individual is also an officer, owner, or managerial official of 
73.17 	the program or owns any of the beneficial interests not excluded in this subdivision.  This 
73.18 	clause does not exclude from the definition of controlling individual an organization that 
73.19 	is exempt from taxation.

73.20 	Sec. 6. Minnesota Statutes 2004, section 302A.011, subdivision 26, is amended to read:
73.21 		Subd. 26.Security.  "Security" has the meaning given it in section 80A.14, 
73.22 	subdivision 18 80A.41(28).

73.23 	Sec. 7. Minnesota Statutes 2004, section 302A.251, subdivision 4, is amended to read:
73.24 		Subd. 4.Elimination or limitation of liability.  A director's personal liability to the 
73.25 	corporation or its shareholders for monetary damages for breach of fiduciary duty as a 
73.26 	director may be eliminated or limited in the articles.  The articles shall not eliminate or 
73.27 	limit the liability of a director:
73.28 	(a) for any breach of the director's duty of loyalty to the corporation or its 
73.29 	shareholders;
73.30 	(b) for acts or omissions not in good faith or that involve intentional misconduct 
73.31 	or a knowing violation of law;
73.32 	(c) under section 302A.559 or 80A.23 80A.76;
73.33 	(d) for any transaction from which the director derived an improper personal benefit; 
73.34 	or
74.1 	(e) for any act or omission occurring prior to the date when the provision in the 
74.2 	articles eliminating or limiting liability becomes effective.

74.3 	Sec. 8. Minnesota Statutes 2004, section 308A.505, is amended to read:
74.4 	308A.505 SUBJECT TO SECURITIES LAW.
74.5 	Cooperatives are subject to the provisions of chapter 80A, except as specifically 
74.6 	provided in section 80A.15 sections 80A.45 and 80A.46.

74.7 	Sec. 9. Minnesota Statutes 2004, section 308B.465, subdivision 2, is amended to read:
74.8 		Subd. 2.Restrictions on liability limitation.  The articles or bylaws may not 
74.9 	eliminate or limit the liability of a director:
74.10 	(1) for a breach of the director's duty of loyalty to the cooperative or its members;
74.11 	(2) for acts or omissions that are not in good faith or involve intentional misconduct 
74.12 	or a knowing violation of law;
74.13 	(3) for knowing violations of securities laws under section 80A.23 or for illegal 
74.14 	distributions;
74.15 	(4) for a transaction from which the director derived an improper personal benefit; or
74.16 	(5) for an act or omission occurring before the date when the provision in the articles 
74.17 	or bylaws eliminating or limiting liability becomes effective.

74.18 	Sec. 10. Minnesota Statutes 2004, section 322B.03, subdivision 43, is amended to read:
74.19 		Subd. 43.Security.  "Security" has the meaning given it in section 80A.14, 
74.20 	subdivision 18 80A.41(28).

74.21 	Sec. 11. Minnesota Statutes 2004, section 322B.663, subdivision 4, is amended to read:
74.22 		Subd. 4.Elimination or limitation of liability.  A governor's personal liability to 
74.23 	the limited liability company or its members for monetary damages for breach of fiduciary 
74.24 	duty as a governor may be eliminated or limited in the articles of organization or a 
74.25 	member control agreement.  Neither the articles nor a member control agreement may 
74.26 	eliminate or limit the liability of a governor:
74.27 	(1) for any breach of the governor's duty of loyalty to the limited liability company 
74.28 	or its members;
74.29 	(2) for acts or omissions not in good faith or that involve intentional misconduct 
74.30 	or a knowing violation of law;
74.31 	(3) under section 80A.23 80A.76 or 322B.56;
75.1 	(4) for any transaction from which the governor derived an improper personal 
75.2 	benefit; or
75.3 	(5) for any act or omission occurring before the date when the provision in the 
75.4 	articles of organization or a member control agreement eliminating or limiting liability 
75.5 	becomes effective.

75.6 	Sec. 12. Minnesota Statutes 2004, section 356A.06, subdivision 6, is amended to read:
75.7 		Subd. 6.Limited list of authorized investment securities.  (a) Except to the 
75.8 	extent otherwise authorized by law, a covered pension plan may invest its assets only in 
75.9 	investment securities authorized by this subdivision if the plan does not:
75.10 	(1) have assets with a book value in excess of $1,000,000;
75.11 	(2) use the services of an investment advisor registered with the Securities and 
75.12 	Exchange Commission in accordance with the Investment Advisers Act of 1940, or 
75.13 	licensed registered as an investment advisor in accordance with sections 80A.04, 
75.14 	subdivision 4 80A.58, and 80A.14, subdivision 9 80A.59, for the investment of at least 60 
75.15 	percent of its assets, calculated on book value;
75.16 	(3) use the services of the State Board of Investment for the investment of at least 60 
75.17 	percent of its assets, calculated on book value; or
75.18 	(4) use a combination of the services of an investment advisor meeting the 
75.19 	requirements of clause (2) and the services of the State Board of Investment for the 
75.20 	investment of at least 75 percent of its assets, calculated on book value.
75.21 	(b) Investment securities authorized for a pension plan covered by this subdivision 
75.22 	are:
75.23 	(1) certificates of deposit issued, to the extent of available insurance or 
75.24 	collateralization, by a financial institution that is a member of the Federal Deposit 
75.25 	Insurance Corporation or the Federal Savings and Loan Insurance Corporation, is insured 
75.26 	by the National Credit Union Administration, or is authorized to do business in this state 
75.27 	and has deposited with the chief administrative officer of the plan a sufficient amount of 
75.28 	marketable securities as collateral in accordance with section 118A.03;
75.29 	(2) savings accounts, to the extent of available insurance, with a financial institution 
75.30 	that is a member of the Federal Deposit Insurance Corporation or the Federal Savings 
75.31 	and Loan Insurance Corporation;
75.32 	(3) governmental obligations, including bonds, notes, bills, or other fixed 
75.33 	obligations, issued by the United States, an agency or instrumentality of the United States, 
75.34 	an organization established and regulated by an act of Congress or by a state, state agency 
75.35 	or instrumentality, municipality, or other governmental or political subdivision that:
76.1 	(i) for the obligation in question, issues an obligation that equals or exceeds the 
76.2 	stated investment yield of debt securities not exempt from federal income taxation and of 
76.3 	comparable quality;
76.4 	(ii) for an obligation that is a revenue bond, has been completely self-supporting 
76.5 	for the last five years; and
76.6 	(iii) for an obligation other than a revenue bond, has issued an obligation backed by 
76.7 	the full faith and credit of the applicable taxing jurisdiction and has not been in default on 
76.8 	the payment of principal or interest on the obligation in question or any other nonrevenue 
76.9 	bond obligation during the preceding ten years;
76.10 	(4) corporate obligations, including bonds, notes, debentures, or other regularly 
76.11 	issued and readily marketable evidences of indebtedness issued by a corporation organized 
76.12 	under the laws of any state that during the preceding five years has had on average 
76.13 	annual net pretax earnings at least 50 percent greater than the annual interest charges 
76.14 	and principal payments on the total issued debt of the corporation during that period 
76.15 	and that, for the obligation in question, has issued an obligation rated in one of the top 
76.16 	three quality categories by Moody's Investors Service, Incorporated, or Standard and 
76.17 	Poor's Corporation; and
76.18 	(5) shares in an open-end investment company registered under the federal 
76.19 	Investment Company Act of 1940, if the portfolio investments of the company are limited 
76.20 	to investments that meet the requirements of clauses (1) to (4).