<div class="xtend">
         <div class="xtend_ce"><a id="pl.1.1"></a><var>1.1</var>A bill for an act<br />
            		
         </div><a id="pl.1.2"></a><var>1.2</var>relating to commerce; modifying securities registration and franchise registration <br />
         		<a id="pl.1.3"></a><var>1.3</var>provisions;amending Minnesota Statutes 2012, sections 80A.41; 80A.54; <br />
         		<a id="pl.1.4"></a><var>1.4</var>80A.58; 80A.61; 80A.66; 80C.08, by adding a subdivision.<br />
         		<a id="pl.1.5"></a><var>1.5</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br />
         		<br />
         		<a id="bill.0.1.0"></a><a id="pl.1.6"></a><var>1.6</var>&nbsp;&nbsp;&nbsp;&nbsp;Section 1. Minnesota Statutes 2012, section 80A.41, is amended to read:<br />
         		<a id="pl.1.7"></a><var>1.7</var><b>80A.41 SECTION 102; DEFINITIONS.</b><br />
         		<a id="pl.1.8"></a><var>1.8</var>&nbsp;&nbsp;&nbsp;&nbsp;In this chapter, unless the context otherwise requires:<br />
         		<a id="pl.1.9"></a><var>1.9</var>(1) "Accredited investor" means an accredited investor as the term is defined in Rule <br />
         		<a id="pl.1.10"></a><var>1.10</var>501(a) of Regulation D adopted pursuant to the Securities Act of 1933.<br />
         		<a id="pl.1.11"></a><var>1.11</var>&nbsp;&nbsp;&nbsp;&nbsp;(2) "Administrator" means the commissioner of commerce.<br />
         		<a id="pl.1.12"></a><var>1.12</var>&nbsp;&nbsp;&nbsp;&nbsp;(3) "Agent" means an individual, other than a broker-dealer, who represents a <br />
         		<a id="pl.1.13"></a><var>1.13</var>broker-dealer in effecting or attempting to effect purchases or sales of securities or <br />
         		<a id="pl.1.14"></a><var>1.14</var>represents an issuer in effecting or attempting to effect purchases or sales of the issuer's <br />
         		<a id="pl.1.15"></a><var>1.15</var>securities. But a partner, officer, or director of a broker-dealer or issuer, or an individual <br />
         		<a id="pl.1.16"></a><var>1.16</var>having a similar status or performing similar functions is an agent only if the individual <br />
         		<a id="pl.1.17"></a><var>1.17</var>otherwise comes within the term. The term does not include an individual excluded by <br />
         		<a id="pl.1.18"></a><var>1.18</var>rule adopted or order issued under this chapter.<br />
         		<a id="pl.1.19"></a><var>1.19</var>&nbsp;&nbsp;&nbsp;&nbsp;(4) "Bank" means:<br />
         		<a id="pl.1.20"></a><var>1.20</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) a banking institution organized under the laws of the United States;<br />
         		<a id="pl.1.21"></a><var>1.21</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) a member bank of the Federal Reserve System;<br />
         		<a id="pl.1.22"></a><var>1.22</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) any other banking institution, whether incorporated or not, doing business <br />
         		<a id="pl.1.23"></a><var>1.23</var>under the laws of a state or of the United States, a substantial portion of the business <br />
         		<a id="pl.1.24"></a><var>1.24</var>of which consists of receiving deposits or exercising fiduciary powers similar to those <br />
         		<a id="pl.2.1"></a><var>2.1</var>permitted to be exercised by national banks under the authority of the Comptroller of the <br />
         		<a id="pl.2.2"></a><var>2.2</var>Currency pursuant to Section 1 of Public Law 87-722 (12 U.S.C. Section 92a), and which <br />
         		<a id="pl.2.3"></a><var>2.3</var>is supervised and examined by a state or federal agency having supervision over banks, <br />
         		<a id="pl.2.4"></a><var>2.4</var>and which is not operated for the purpose of evading this chapter; and<br />
         		<a id="pl.2.5"></a><var>2.5</var>&nbsp;&nbsp;&nbsp;&nbsp;(D) a receiver, conservator, or other liquidating agent of any institution or firm <br />
         		<a id="pl.2.6"></a><var>2.6</var>included in subparagraph (A), (B), or (C).<br />
         		<a id="pl.2.7"></a><var>2.7</var>&nbsp;&nbsp;&nbsp;&nbsp;(5) "Broker-dealer" means a person engaged in the business of effecting transactions <br />
         		<a id="pl.2.8"></a><var>2.8</var>in securities for the account of others or for the person's own account. The term does <br />
         		<a id="pl.2.9"></a><var>2.9</var>not include:<br />
         		<a id="pl.2.10"></a><var>2.10</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) an agent;<br />
         		<a id="pl.2.11"></a><var>2.11</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) an issuer;<br />
         		<a id="pl.2.12"></a><var>2.12</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) a depository institution; provided such activities are conducted in accordance <br />
         		<a id="pl.2.13"></a><var>2.13</var>with such rules as may be adopted by the administrator;<br />
         		<a id="pl.2.14"></a><var>2.14</var>&nbsp;&nbsp;&nbsp;&nbsp;(D) an international banking institution; or<br />
         		<a id="pl.2.15"></a><var>2.15</var>&nbsp;&nbsp;&nbsp;&nbsp;(E) a person excluded by rule adopted or order issued under this chapter.<br />
         		<a id="pl.2.16"></a><var>2.16</var>&nbsp;&nbsp;&nbsp;&nbsp;(6) "Depository institution" means:<br />
         		<a id="pl.2.17"></a><var>2.17</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) a bank; or<br />
         		<a id="pl.2.18"></a><var>2.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) a savings institution, trust company, credit union, or similar institution that is <br />
         		<a id="pl.2.19"></a><var>2.19</var>organized or chartered under the laws of a state or of the United States, authorized to receive <br />
         		<a id="pl.2.20"></a><var>2.20</var>deposits, and supervised and examined by an official or agency of a state or the United <br />
         		<a id="pl.2.21"></a><var>2.21</var>States if its deposits or share accounts are insured to the maximum amount authorized by <br />
         		<a id="pl.2.22"></a><var>2.22</var>statute by the Federal Deposit Insurance Corporation, the National Credit Union Share <br />
         		<a id="pl.2.23"></a><var>2.23</var>Insurance Fund, or a successor authorized by federal law. The term does not include:<br />
         		<a id="pl.2.24"></a><var>2.24</var>&nbsp;&nbsp;&nbsp;&nbsp;(i) an insurance company or other organization primarily engaged in the business <br />
         		<a id="pl.2.25"></a><var>2.25</var>of insurance;<br />
         		<a id="pl.2.26"></a><var>2.26</var>&nbsp;&nbsp;&nbsp;&nbsp;(ii) a Morris Plan bank; or<br />
         		<a id="pl.2.27"></a><var>2.27</var>&nbsp;&nbsp;&nbsp;&nbsp;(iii) an industrial loan company that is not an "insured depository institution" as <br />
         		<a id="pl.2.28"></a><var>2.28</var>defined in section 3(c)(2) of the Federal Deposit Insurance Act, United States Code, title <br />
         		<a id="pl.2.29"></a><var>2.29</var>12, section 1813(c)(2), or any successor federal statute.<br />
         		<a id="pl.2.30"></a><var>2.30</var>&nbsp;&nbsp;&nbsp;&nbsp;(7) "Federal covered investment adviser" means a person registered under the <br />
         		<a id="pl.2.31"></a><var>2.31</var>Investment Advisers Act of 1940.<br />
         		<a id="pl.2.32"></a><var>2.32</var>&nbsp;&nbsp;&nbsp;&nbsp;(8) "Federal covered security" means a security that is, or upon completion of a <br />
         		<a id="pl.2.33"></a><var>2.33</var>transaction will be, a covered security under Section 18(b) of the Securities Act of 1933 <br />
         		<a id="pl.2.34"></a><var>2.34</var>(15 U.S.C. Section 77r(b)) or rules or regulations adopted pursuant to that provision.<br />
         		<a id="pl.2.35"></a><var>2.35</var>&nbsp;&nbsp;&nbsp;&nbsp;(9) "Filing" means the receipt under this chapter of a record by the administrator or <br />
         		<a id="pl.2.36"></a><var>2.36</var>a designee of the administrator.<br />
         		<a id="pl.3.1"></a><var>3.1</var>&nbsp;&nbsp;&nbsp;&nbsp;(10) "Fraud," "deceit," and "defraud" are not limited to common law deceit.<br />
         		<a id="pl.3.2"></a><var>3.2</var>&nbsp;&nbsp;&nbsp;&nbsp;(11) "Guaranteed" means guaranteed as to payment of all principal and all interest.<br />
         		<a id="pl.3.3"></a><var>3.3</var>&nbsp;&nbsp;&nbsp;&nbsp;(12) "Institutional investor" means any of the following, whether acting for itself or <br />
         		<a id="pl.3.4"></a><var>3.4</var>for others in a fiduciary capacity:<br />
         		<a id="pl.3.5"></a><var>3.5</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) a depository institution or international banking institution;<br />
         		<a id="pl.3.6"></a><var>3.6</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) an insurance company;<br />
         		<a id="pl.3.7"></a><var>3.7</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) a separate account of an insurance company;<br />
         		<a id="pl.3.8"></a><var>3.8</var>&nbsp;&nbsp;&nbsp;&nbsp;(D) an investment company as defined in the Investment Company Act of 1940;<br />
         		<a id="pl.3.9"></a><var>3.9</var>&nbsp;&nbsp;&nbsp;&nbsp;(E) a broker-dealer registered under the Securities Exchange Act of 1934;<br />
         		<a id="pl.3.10"></a><var>3.10</var>&nbsp;&nbsp;&nbsp;&nbsp;(F) an employee pension, profit-sharing, or benefit plan if the plan has total assets <br />
         		<a id="pl.3.11"></a><var>3.11</var>in excess of $10,000,000 or its investment decisions are made by a named fiduciary, as <br />
         		<a id="pl.3.12"></a><var>3.12</var>defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer <br />
         		<a id="pl.3.13"></a><var>3.13</var>registered under the Securities Exchange Act of 1934, an investment adviser registered <br />
         		<a id="pl.3.14"></a><var>3.14</var>or exempt from registration under the Investment Advisers Act of 1940, an investment <br />
         		<a id="pl.3.15"></a><var>3.15</var>adviser registered under this chapter, a depository institution, or an insurance company;<br />
         		<a id="pl.3.16"></a><var>3.16</var>&nbsp;&nbsp;&nbsp;&nbsp;(G) a plan established and maintained by a state, a political subdivision of a state, or <br />
         		<a id="pl.3.17"></a><var>3.17</var>an agency or instrumentality of a state or a political subdivision of a state for the benefit <br />
         		<a id="pl.3.18"></a><var>3.18</var>of its employees, if the plan has total assets in excess of $10,000,000 or its investment <br />
         		<a id="pl.3.19"></a><var>3.19</var>decisions are made by a duly designated public official or by a named fiduciary, as <br />
         		<a id="pl.3.20"></a><var>3.20</var>defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer <br />
         		<a id="pl.3.21"></a><var>3.21</var>registered under the Securities Exchange Act of 1934, an investment adviser registered <br />
         		<a id="pl.3.22"></a><var>3.22</var>or exempt from registration under the Investment Advisers Act of 1940, an investment <br />
         		<a id="pl.3.23"></a><var>3.23</var>adviser registered under this chapter, a depository institution, or an insurance company;<br />
         		<a id="pl.3.24"></a><var>3.24</var>&nbsp;&nbsp;&nbsp;&nbsp;(H) a trust, if it has total assets in excess of $10,000,000, its trustee is a depository <br />
         		<a id="pl.3.25"></a><var>3.25</var>institution, and its participants are exclusively plans of the types identified in subparagraph <br />
         		<a id="pl.3.26"></a><var>3.26</var>(F) or (G), regardless of the size of their assets, except a trust that includes as participants <br />
         		<a id="pl.3.27"></a><var>3.27</var>self-directed individual retirement accounts or similar self-directed plans;<br />
         		<a id="pl.3.28"></a><var>3.28</var>&nbsp;&nbsp;&nbsp;&nbsp;(I) an organization described in Section 501(c)(3) of the Internal Revenue Code (26 <br />
         		<a id="pl.3.29"></a><var>3.29</var>U.S.C. Section 501(c)(3)), corporation, Massachusetts trust or similar business trust, <br />
         		<a id="pl.3.30"></a><var>3.30</var>limited liability company, or partnership, not formed for the specific purpose of acquiring <br />
         		<a id="pl.3.31"></a><var>3.31</var>the securities offered, with total assets in excess of $10,000,000;<br />
         		<a id="pl.3.32"></a><var>3.32</var>&nbsp;&nbsp;&nbsp;&nbsp;(J) a small business investment company licensed by the Small Business <br />
         		<a id="pl.3.33"></a><var>3.33</var>Administration under Section 301(c) of the Small Business Investment Act of 1958 (15 <br />
         		<a id="pl.3.34"></a><var>3.34</var>U.S.C. Section 681(c)) with total assets in excess of $10,000,000;<br />
         		<a id="pl.4.1"></a><var>4.1</var>&nbsp;&nbsp;&nbsp;&nbsp;(K) a private business development company as defined in Section 202(a)(22) of <br />
         		<a id="pl.4.2"></a><var>4.2</var>the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(22)) with total assets <br />
         		<a id="pl.4.3"></a><var>4.3</var>in excess of $10,000,000;<br />
         		<a id="pl.4.4"></a><var>4.4</var>&nbsp;&nbsp;&nbsp;&nbsp;(L) a federal covered investment adviser acting for its own account;<br />
         		<a id="pl.4.5"></a><var>4.5</var>&nbsp;&nbsp;&nbsp;&nbsp;(M) a "qualified institutional buyer" as defined in Rule 144A(a)(1), other than Rule <br />
         		<a id="pl.4.6"></a><var>4.6</var>144A(a)(1)(i)(H), adopted under the Securities Act of 1933 (17 C.F.R. 230.144A);<br />
         		<a id="pl.4.7"></a><var>4.7</var>&nbsp;&nbsp;&nbsp;&nbsp;(N) a "major U.S. institutional investor" as defined in Rule 15a-6(b)(4)(i) adopted <br />
         		<a id="pl.4.8"></a><var>4.8</var>under the Securities Exchange Act of 1934 (17 C.F.R. 240.15a-6);<br />
         		<a id="pl.4.9"></a><var>4.9</var>&nbsp;&nbsp;&nbsp;&nbsp;(O) any other person, other than an individual or a private fund, of institutional <br />
         		<a id="pl.4.10"></a><var>4.10</var>character with total assets in excess of $10,000,000 not organized for the specific purpose <br />
         		<a id="pl.4.11"></a><var>4.11</var>of evading this chapter; or<br />
         		<a id="pl.4.12"></a><var>4.12</var>&nbsp;&nbsp;&nbsp;&nbsp;(P) any other person specified by rule adopted or order issued under this chapter;<br />
         		<a id="pl.4.13"></a><var>4.13</var>&nbsp;&nbsp;&nbsp;&nbsp;(13) "Insurance company" means a company organized as an insurance company <br />
         		<a id="pl.4.14"></a><var>4.14</var>whose primary business is writing insurance or reinsuring risks underwritten by insurance <br />
         		<a id="pl.4.15"></a><var>4.15</var>companies and which is subject to supervision by the insurance commissioner or a similar <br />
         		<a id="pl.4.16"></a><var>4.16</var>official or agency of a state.<br />
         		<a id="pl.4.17"></a><var>4.17</var>&nbsp;&nbsp;&nbsp;&nbsp;(14) "Insured" means insured as to payment of all principal and all interest.<br />
         		<a id="pl.4.18"></a><var>4.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(15) "International banking institution" means an international financial institution <br />
         		<a id="pl.4.19"></a><var>4.19</var>of which the United States is a member and whose securities are exempt from registration <br />
         		<a id="pl.4.20"></a><var>4.20</var>under the Securities Act of 1933.<br />
         		<a id="pl.4.21"></a><var>4.21</var>&nbsp;&nbsp;&nbsp;&nbsp;(16) "Investment adviser" means a person that, for compensation, engages in the <br />
         		<a id="pl.4.22"></a><var>4.22</var>business of advising others, either directly or through publications or writings, as to the <br />
         		<a id="pl.4.23"></a><var>4.23</var>value of securities or the advisability of investing in, purchasing, or selling securities or <br />
         		<a id="pl.4.24"></a><var>4.24</var>that, for compensation and as a part of a regular business, issues or promulgates analyses <br />
         		<a id="pl.4.25"></a><var>4.25</var>or reports concerning securities. The term includes a financial planner or other person <br />
         		<a id="pl.4.26"></a><var>4.26</var>that, as an integral component of other financially related services, provides investment <br />
         		<a id="pl.4.27"></a><var>4.27</var>advice to others for compensation as part of a business or that holds itself out as providing <br />
         		<a id="pl.4.28"></a><var>4.28</var>investment advice to others for compensation. The term does not include:<br />
         		<a id="pl.4.29"></a><var>4.29</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) an investment adviser representative;<br />
         		<a id="pl.4.30"></a><var>4.30</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) a lawyer, accountant, engineer, or teacher whose performance of investment <br />
         		<a id="pl.4.31"></a><var>4.31</var>advice is solely incidental to the practice of the person's profession;<br />
         		<a id="pl.4.32"></a><var>4.32</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) a broker-dealer or its agents whose performance of investment advice is solely <br />
         		<a id="pl.4.33"></a><var>4.33</var>incidental to the conduct of business as a broker-dealer and that does not receive special <br />
         		<a id="pl.4.34"></a><var>4.34</var>compensation for the investment advice;<br />
         		<a id="pl.4.35"></a><var>4.35</var>&nbsp;&nbsp;&nbsp;&nbsp;(D) a publisher of a bona fide newspaper, news magazine, or business or financial <br />
         		<a id="pl.4.36"></a><var>4.36</var>publication of general and regular circulation;<br />
         		<a id="pl.5.1"></a><var>5.1</var>&nbsp;&nbsp;&nbsp;&nbsp;(E) a federal covered investment adviser;<br />
         		<a id="pl.5.2"></a><var>5.2</var>&nbsp;&nbsp;&nbsp;&nbsp;(F) a bank or savings institution;<br />
         		<a id="pl.5.3"></a><var>5.3</var>&nbsp;&nbsp;&nbsp;&nbsp;(G) any other person that is excluded by the Investment Advisers Act of 1940 from <br />
         		<a id="pl.5.4"></a><var>5.4</var>the definition of investment adviser; or<br />
         		<a id="pl.5.5"></a><var>5.5</var>&nbsp;&nbsp;&nbsp;&nbsp;(H) any other person excluded by rule adopted or order issued under this chapter.<br />
         		<a id="pl.5.6"></a><var>5.6</var>&nbsp;&nbsp;&nbsp;&nbsp;(17) "Investment adviser representative" means an individual employed by or <br />
         		<a id="pl.5.7"></a><var>5.7</var>associated with an investment adviser or federal covered investment adviser and who <br />
         		<a id="pl.5.8"></a><var>5.8</var>makes any recommendations or otherwise gives investment advice regarding securities, <br />
         		<a id="pl.5.9"></a><var>5.9</var>manages accounts or portfolios of clients, determines which recommendation or advice <br />
         		<a id="pl.5.10"></a><var>5.10</var>regarding securities should be given, provides investment advice or holds herself or <br />
         		<a id="pl.5.11"></a><var>5.11</var>himself out as providing investment advice, receives compensation to solicit, offer, or <br />
         		<a id="pl.5.12"></a><var>5.12</var>negotiate for the sale of or for selling investment advice, or supervises employees who <br />
         		<a id="pl.5.13"></a><var>5.13</var>perform any of the foregoing. The term does not include an individual who:<br />
         		<a id="pl.5.14"></a><var>5.14</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) performs only clerical or ministerial acts;<br />
         		<a id="pl.5.15"></a><var>5.15</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) is an agent whose performance of investment advice is solely incidental to <br />
         		<a id="pl.5.16"></a><var>5.16</var>the individual acting as an agent and who does not receive special compensation for <br />
         		<a id="pl.5.17"></a><var>5.17</var>investment advisory services;<br />
         		<a id="pl.5.18"></a><var>5.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) is employed by or associated with a federal covered investment adviser, unless the <br />
         		<a id="pl.5.19"></a><var>5.19</var>individual has a "place of business" in this state as that term is defined by rule adopted under <br />
         		<a id="pl.5.20"></a><var>5.20</var>Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a) and is<br />
         		<a id="pl.5.21"></a><var>5.21</var>&nbsp;&nbsp;&nbsp;&nbsp;(i) an "investment adviser representative" as that term is defined by rule adopted <br />
         		<a id="pl.5.22"></a><var>5.22</var>under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a); or<br />
         		<a id="pl.5.23"></a><var>5.23</var>&nbsp;&nbsp;&nbsp;&nbsp;(ii) not a "supervised person" as that term is defined in Section 202(a)(25) of the <br />
         		<a id="pl.5.24"></a><var>5.24</var>Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(25)); or<br />
         		<a id="pl.5.25"></a><var>5.25</var>&nbsp;&nbsp;&nbsp;&nbsp;(D) is excluded by rule adopted or order issued under this chapter.<br />
         		<a id="pl.5.26"></a><var>5.26</var>&nbsp;&nbsp;&nbsp;&nbsp;(18) "Issuer" means a person that issues or proposes to issue a security, subject to <br />
         		<a id="pl.5.27"></a><var>5.27</var>the following:<br />
         		<a id="pl.5.28"></a><var>5.28</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) The issuer of a voting trust certificate, collateral trust certificate, certificate of <br />
         		<a id="pl.5.29"></a><var>5.29</var>deposit for a security, or share in an investment company without a board of directors or <br />
         		<a id="pl.5.30"></a><var>5.30</var>individuals performing similar functions is the person performing the acts and assuming <br />
         		<a id="pl.5.31"></a><var>5.31</var>the duties of depositor or manager pursuant to the trust or other agreement or instrument <br />
         		<a id="pl.5.32"></a><var>5.32</var>under which the security is issued.<br />
         		<a id="pl.5.33"></a><var>5.33</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) The issuer of an equipment trust certificate or similar security serving the same <br />
         		<a id="pl.5.34"></a><var>5.34</var>purpose is the person by which the property is or will be used or to which the property <br />
         		<a id="pl.5.35"></a><var>5.35</var>or equipment is or will be leased or conditionally sold or that is otherwise contractually <br />
         		<a id="pl.5.36"></a><var>5.36</var>responsible for assuring payment of the certificate.<br />
         		<a id="pl.6.1"></a><var>6.1</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) The issuer of a fractional undivided interest in an oil, gas, or other mineral lease <br />
         		<a id="pl.6.2"></a><var>6.2</var>or in payments out of production under a lease, right, or royalty is the owner of an interest <br />
         		<a id="pl.6.3"></a><var>6.3</var>in the lease or in payments out of production under a lease, right, or royalty, whether <br />
         		<a id="pl.6.4"></a><var>6.4</var>whole or fractional, that creates fractional interests for the purpose of sale.<br />
         		<a id="pl.6.5"></a><var>6.5</var>&nbsp;&nbsp;&nbsp;&nbsp;(19) "Nonissuer transaction" or "nonissuer distribution" means a transaction or <br />
         		<a id="pl.6.6"></a><var>6.6</var>distribution not directly or indirectly for the benefit of the issuer.<br />
         		<a id="pl.6.7"></a><var>6.7</var>&nbsp;&nbsp;&nbsp;&nbsp;(20) "Offer to purchase" includes an attempt or offer to obtain, or solicitation of an <br />
         		<a id="pl.6.8"></a><var>6.8</var>offer to sell, a security or interest in a security for value. The term does not include a <br />
         		<a id="pl.6.9"></a><var>6.9</var>tender offer that is subject to Section 14(d) of the Securities Exchange Act of 1934 (15 <br />
         		<a id="pl.6.10"></a><var>6.10</var>U.S.C. Section 78n(d)).<br />
         		<a id="pl.6.11"></a><var>6.11</var>&nbsp;&nbsp;&nbsp;&nbsp;(21) "Person" means an individual; corporation; business trust; estate; trust; <br />
         		<a id="pl.6.12"></a><var>6.12</var>partnership; limited liability company; association; joint venture; government; <br />
         		<a id="pl.6.13"></a><var>6.13</var>governmental subdivision, agency, or instrumentality; public corporation; or any other <br />
         		<a id="pl.6.14"></a><var>6.14</var>legal or commercial entity.<br />
         		<a id="pl.6.15"></a><var>6.15</var>&nbsp;&nbsp;&nbsp;&nbsp;(22) "Place of business" of a broker-dealer, an investment adviser, or a federal <br />
         		<a id="pl.6.16"></a><var>6.16</var>covered investment adviser means:<br />
         		<a id="pl.6.17"></a><var>6.17</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) an office at which the broker-dealer, investment adviser, or federal covered <br />
         		<a id="pl.6.18"></a><var>6.18</var>investment adviser regularly provides brokerage or investment advice or solicits, meets <br />
         		<a id="pl.6.19"></a><var>6.19</var>with, or otherwise communicates with customers or clients; or<br />
         		<a id="pl.6.20"></a><var>6.20</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) any other location that is held out to the general public as a location at which <br />
         		<a id="pl.6.21"></a><var>6.21</var>the broker-dealer, investment adviser, or federal covered investment adviser provides <br />
         		<a id="pl.6.22"></a><var>6.22</var>brokerage or investment advice or solicits, meets with, or otherwise communicates with <br />
         		<a id="pl.6.23"></a><var>6.23</var>customers or clients.<br />
         		<a id="pl.6.24"></a><var>6.24</var>&nbsp;&nbsp;&nbsp;&nbsp;(23) "Predecessor Act" means Minnesota Statutes 2002, sections 80A.01 to 80A.31.<br />
         		<a id="pl.6.25"></a><var>6.25</var>&nbsp;&nbsp;&nbsp;&nbsp;(24) "Price amendment" means the amendment to a registration statement filed under <br />
         		<a id="pl.6.26"></a><var>6.26</var>the Securities Act of 1933 or, if an amendment is not filed, the prospectus or prospectus <br />
         		<a id="pl.6.27"></a><var>6.27</var>supplement filed under the Securities Act of 1933 that includes a statement of the offering <br />
         		<a id="pl.6.28"></a><var>6.28</var>price, underwriting and selling discounts or commissions, amount of proceeds, conversion <br />
         		<a id="pl.6.29"></a><var>6.29</var>rates, call prices, and other matters dependent upon the offering price.<br />
         		<a id="pl.6.30"></a><var>6.30</var>&nbsp;&nbsp;&nbsp;&nbsp;(25) "Principal place of business" of a broker-dealer or an investment adviser means <br />
         		<a id="pl.6.31"></a><var>6.31</var>the executive office of the broker-dealer or investment adviser from which the officers, <br />
         		<a id="pl.6.32"></a><var>6.32</var>partners, or managers of the broker-dealer or investment adviser direct, control, and <br />
         		<a id="pl.6.33"></a><var>6.33</var>coordinate the activities of the broker-dealer or investment adviser.<br />
         		<a id="pl.6.34"></a><var>6.34</var>&nbsp;&nbsp;&nbsp;&nbsp;(26) Only for purposes of calculating the number of purchasers under section <br />
         		
         <statute_ref><a id="pl.6.35"></a><var>6.35</var>80A.46, 
         </statute_ref>clauses (1) and (14), "purchaser" does not include:<br />
         		<a id="pl.7.1"></a><var>7.1</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) any relative, spouse, or relative of the spouse of a purchaser who has the same <br />
         		<a id="pl.7.2"></a><var>7.2</var>principal residence as the purchaser;<br />
         		<a id="pl.7.3"></a><var>7.3</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) any trust or estate in which a purchaser and any of the persons related to him as <br />
         		<a id="pl.7.4"></a><var>7.4</var>specified in Regulation D, Rule 501(e)(1)(i) or (e)(1)(ii) collectively have more than 50 <br />
         		<a id="pl.7.5"></a><var>7.5</var>percent of the beneficial interest (excluding contingent interests);<br />
         		<a id="pl.7.6"></a><var>7.6</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) any corporation or other organization of which a purchaser and any of the <br />
         		<a id="pl.7.7"></a><var>7.7</var>persons related to the purchaser as specified in Regulation D, Rule 501(e)(1)(i) or <br />
         		<a id="pl.7.8"></a><var>7.8</var>(e)(1)(ii) collectively are beneficial owners of more than 50 percent of the equity securities <br />
         		<a id="pl.7.9"></a><var>7.9</var>(excluding directors' qualifying shares) or equity interests; and<br />
         		<a id="pl.7.10"></a><var>7.10</var>&nbsp;&nbsp;&nbsp;&nbsp;(D) any accredited investor.<br />
         		<a id="pl.7.11"></a><var>7.11</var>&nbsp;&nbsp;&nbsp;&nbsp;A corporation, partnership, or other entity must be counted as one purchaser. If, <br />
         		<a id="pl.7.12"></a><var>7.12</var>however, that entity is organized for the specific purpose of acquiring the securities offered <br />
         		<a id="pl.7.13"></a><var>7.13</var>and is not an accredited investor, then each beneficial owner of equity securities or equity <br />
         		<a id="pl.7.14"></a><var>7.14</var>interests in the entity shall count as a separate purchaser for all provisions of Regulation <br />
         		<a id="pl.7.15"></a><var>7.15</var>D, except to the extent provided in Regulation D, Rule 501(e)(1).<br />
         		<a id="pl.7.16"></a><var>7.16</var>&nbsp;&nbsp;&nbsp;&nbsp;A noncontributory employee benefit plan within the meaning of Title I of the <br />
         		<a id="pl.7.17"></a><var>7.17</var>Employee Retirement Income Security Act of 1974 shall be counted as one purchaser <br />
         		<a id="pl.7.18"></a><var>7.18</var>where the trustee makes all investment decisions for the plan.<br />
         		<a id="pl.7.19"></a><var>7.19</var>&nbsp;&nbsp;&nbsp;&nbsp;(27) "Record," except in the phrases "of record," "official record," and "public <br />
         		<a id="pl.7.20"></a><var>7.20</var>record," means information that is inscribed on a tangible medium or that is stored in an <br />
         		<a id="pl.7.21"></a><var>7.21</var>electronic or other medium and is retrievable in perceivable form.<br />
         		<a id="pl.7.22"></a><var>7.22</var>&nbsp;&nbsp;&nbsp;&nbsp;(28) "Sale" includes every contract of sale, contract to sell, or disposition of, a <br />
         		<a id="pl.7.23"></a><var>7.23</var>security or interest in a security for value, and "offer to sell" includes every attempt or <br />
         		<a id="pl.7.24"></a><var>7.24</var>offer to dispose of, or solicitation of an offer to purchase, a security or interest in a <br />
         		<a id="pl.7.25"></a><var>7.25</var>security for value.<br />
         		<a id="pl.7.26"></a><var>7.26</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) A security given or delivered with, or as a bonus on account of, any purchase of <br />
         		<a id="pl.7.27"></a><var>7.27</var>securities or any other thing is considered to constitute part of the subject of the purchase <br />
         		<a id="pl.7.28"></a><var>7.28</var>and to have been offered and sold for value.<br />
         		<a id="pl.7.29"></a><var>7.29</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) A gift of assessable stock is considered to involve an offer and sale.<br />
         		<a id="pl.7.30"></a><var>7.30</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) A sale or offer of a warrant or right to purchase or subscribe to another security <br />
         		<a id="pl.7.31"></a><var>7.31</var>of the same or another issuer and a sale or offer of a security that gives the holder a present <br />
         		<a id="pl.7.32"></a><var>7.32</var>or future right or privilege to convert the security into another security of the same or <br />
         		<a id="pl.7.33"></a><var>7.33</var>another issuer, are each considered to include an offer of the other security.<br />
         		<a id="pl.7.34"></a><var>7.34</var>&nbsp;&nbsp;&nbsp;&nbsp;(29) "Securities and Exchange Commission" means the United States Securities and <br />
         		<a id="pl.7.35"></a><var>7.35</var>Exchange Commission.<br />
         		<a id="pl.8.1"></a><var>8.1</var>&nbsp;&nbsp;&nbsp;&nbsp;(30) "Security" means a note; stock; treasury stock; security future; bond; debenture; <br />
         		<a id="pl.8.2"></a><var>8.2</var>evidence of indebtedness; certificate of interest or participation in a profit-sharing <br />
         		<a id="pl.8.3"></a><var>8.3</var>agreement; collateral trust certificate; preorganization certificate or subscription; <br />
         		<a id="pl.8.4"></a><var>8.4</var>transferable share; investment contract; voting trust certificate; certificate of deposit for a <br />
         		<a id="pl.8.5"></a><var>8.5</var>security; fractional undivided interest in oil, gas, or other mineral rights; put, call, straddle, <br />
         		<a id="pl.8.6"></a><var>8.6</var>option, or privilege on a security, certificate of deposit, or group or index of securities, <br />
         		<a id="pl.8.7"></a><var>8.7</var>including an interest therein or based on the value thereof; put, call, straddle, option, or <br />
         		<a id="pl.8.8"></a><var>8.8</var>privilege entered into on a national securities exchange relating to foreign currency; or, <br />
         		<a id="pl.8.9"></a><var>8.9</var>in general, an interest or instrument commonly known as a "security"; or a certificate of <br />
         		<a id="pl.8.10"></a><var>8.10</var>interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or <br />
         		<a id="pl.8.11"></a><var>8.11</var>warrant or right to subscribe to or purchase, any of the foregoing. The term:<br />
         		<a id="pl.8.12"></a><var>8.12</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) includes both a certificated and an uncertificated security;<br />
         		<a id="pl.8.13"></a><var>8.13</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) does not include an insurance or endowment policy or annuity contract under <br />
         		<a id="pl.8.14"></a><var>8.14</var>which an insurance company promises to pay a fixed or variable sum of money either in a <br />
         		<a id="pl.8.15"></a><var>8.15</var>lump sum or periodically for life or other specified period;<br />
         		<a id="pl.8.16"></a><var>8.16</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) does not include an interest in a contributory or noncontributory pension or <br />
         		<a id="pl.8.17"></a><var>8.17</var>welfare plan subject to the Employee Retirement Income Security Act of 1974;<br />
         		<a id="pl.8.18"></a><var>8.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(D) includes as an "investment contract," among other contracts, an interest in <br />
         		<a id="pl.8.19"></a><var>8.19</var>a limited partnership and a limited liability company and an investment in a viatical <br />
         		<a id="pl.8.20"></a><var>8.20</var>settlement or similar agreement; and<br />
         		<a id="pl.8.21"></a><var>8.21</var>&nbsp;&nbsp;&nbsp;&nbsp;(E) does not include any equity interest of a closely held corporation or other entity <br />
         		<a id="pl.8.22"></a><var>8.22</var>with not more than 35 holders of the equity interest of such entity offered or sold pursuant <br />
         		<a id="pl.8.23"></a><var>8.23</var>to a transaction in which 100 percent of the equity interest of such entity is sold as a means <br />
         		<a id="pl.8.24"></a><var>8.24</var>to effect the sale of the business of the entity if the transaction has been negotiated on <br />
         		<a id="pl.8.25"></a><var>8.25</var>behalf of all purchasers and if all purchasers have access to inside information regarding <br />
         		<a id="pl.8.26"></a><var>8.26</var>the entity before consummating the transaction.<br />
         		<a id="pl.8.27"></a><var>8.27</var>&nbsp;&nbsp;&nbsp;&nbsp;(31) "Self-regulatory organization" means a national securities exchange registered <br />
         		<a id="pl.8.28"></a><var>8.28</var>under the Securities Exchange Act of 1934, a national securities association of <br />
         		<a id="pl.8.29"></a><var>8.29</var>broker-dealers registered under the Securities Exchange Act of 1934, a clearing agency <br />
         		<a id="pl.8.30"></a><var>8.30</var>registered under the Securities Exchange Act of 1934, or the Municipal Securities <br />
         		<a id="pl.8.31"></a><var>8.31</var>Rulemaking Board established under the Securities Exchange Act of 1934.<br />
         		<a id="pl.8.32"></a><var>8.32</var>&nbsp;&nbsp;&nbsp;&nbsp;(32) "Sign" means, with present intent to authenticate or adopt a record:<br />
         		<a id="pl.8.33"></a><var>8.33</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) to execute or adopt a tangible symbol; or<br />
         		<a id="pl.8.34"></a><var>8.34</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) to attach or logically associate with the record an electronic symbol, sound, <br />
         		<a id="pl.8.35"></a><var>8.35</var>or process.<br />
         		<a id="pl.9.1"></a><var>9.1</var>&nbsp;&nbsp;&nbsp;&nbsp;(33) "State" means a state of the United States, the District of Columbia, Puerto <br />
         		<a id="pl.9.2"></a><var>9.2</var>Rico, the United States Virgin Islands, or any territory or insular possession subject to the <br />
         		<a id="pl.9.3"></a><var>9.3</var>jurisdiction of the United States.<br />
         		<a id="pl.9.4"></a><var>9.4</var>&nbsp;&nbsp;&nbsp;&nbsp;(34) "Associated with" with respect to a person means any partner, officer, director, <br />
         		<a id="pl.9.5"></a><var>9.5</var>~~or~~ manager, or employee of such person or any person occupying a similar status or <br />
         		<a id="pl.9.6"></a><var>9.6</var>performing similar functions or any person directly or indirectly controlling, controlled <br />
         		<a id="pl.9.7"></a><var>9.7</var>by, or in common control with, such person, but does not include a person whose primary <br />
         		<a id="pl.9.8"></a><var>9.8</var>duties are ministerial or clerical. "Employee" includes an independent contractor who <br />
         		<a id="pl.9.9"></a><var>9.9</var>performs advisory functions on behalf of an investment adviser.<br />
         		<a id="pl.9.10"></a><var>9.10</var>&nbsp;&nbsp;&nbsp;&nbsp;(35) "Private fund" means an issuer that would be an investment company as <br />
         		<a id="pl.9.11"></a><var>9.11</var>defined in Section 3 of the Investment Company Act of 1940 but for section 3(c)(1) or <br />
         		<a id="pl.9.12"></a><var>9.12</var>3(c)(7) of that act.<br />
         		<a id="pl.9.13"></a><var>9.13</var>&nbsp;&nbsp;&nbsp;&nbsp;(36) "Private fund adviser" means an investment adviser whose only advisory clients <br />
         		<a id="pl.9.14"></a><var>9.14</var>are one or more qualifying private funds.<br />
         		<a id="pl.9.15"></a><var>9.15</var>&nbsp;&nbsp;&nbsp;&nbsp;(37) "Qualifying private fund" means a private fund that meets the definition of a <br />
         		<a id="pl.9.16"></a><var>9.16</var>qualifying private fund in SEC Rule 203(m)-1, Code of Federal Regulations, title 17, <br />
         		<a id="pl.9.17"></a><var>9.17</var>section 275.203(m)-1.<br />
         		<a id="pl.9.18"></a><var>9.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(38) "3(c)(1) fund" means a qualifying private fund that is eligible for the exclusion <br />
         		<a id="pl.9.19"></a><var>9.19</var>from the definition of an investment company under section 3(c)(1) of the Investment <br />
         		<a id="pl.9.20"></a><var>9.20</var>Company Act of 1940, United States Code, title 15, section 80a-3(c)(1).<br />
         		<a id="pl.9.21"></a><var>9.21</var>&nbsp;&nbsp;&nbsp;&nbsp;(39) "Venture capital fund" means a private fund that meets the definition of a <br />
         		<a id="pl.9.22"></a><var>9.22</var>venture capital fund in SEC Rule 203(1)-1, Code of Federal Regulations, title 17, section <br />
         		<a id="pl.9.23"></a><var>9.23</var>275.203(1)-1.<br />
         		<a id="pl.9.24"></a><var>9.24</var>(40) "Funding portal" means any person acting as a funding portal as defined in <br />
         		<a id="pl.9.25"></a><var>9.25</var>section 3(a)(80) of the Securities Exchange Act of 1934, United States Code, title 15, <br />
         		<a id="pl.9.26"></a><var>9.26</var>section 78c(a)(80), and any rule adopted or order issued thereunder.<br />
         		<br />
         		<a id="bill.0.2.0"></a><a id="pl.9.27"></a><var>9.27</var>&nbsp;&nbsp;&nbsp;&nbsp;Sec. 2. Minnesota Statutes 2012, section 80A.54, is amended to read:<br />
         		<a id="pl.9.28"></a><var>9.28</var><b>80A.54 SECTION 306; DENIAL, SUSPENSION, AND REVOCATION OF </b><br />
         		<a id="pl.9.29"></a><var>9.29</var><b>SECURITIES REGISTRATION.</b><br />
         		<a id="pl.9.30"></a><var>9.30</var>&nbsp;&nbsp;&nbsp;&nbsp;(a) <b>Stop orders.</b> The administrator may issue a stop order denying effectiveness to, <br />
         		<a id="pl.9.31"></a><var>9.31</var>or suspending or revoking the effectiveness of, a registration statement if the administrator <br />
         		<a id="pl.9.32"></a><var>9.32</var>finds that the order is in the public interest and that:<br />
         		<a id="pl.9.33"></a><var>9.33</var>&nbsp;&nbsp;&nbsp;&nbsp;(1) the registration statement as of its effective date or before the effective date in the <br />
         		<a id="pl.9.34"></a><var>9.34</var>case of an order denying effectiveness, an amendment under section 
         <statute_ref>80A.53</statute_ref>(i) as of its <br />
         		<a id="pl.9.35"></a><var>9.35</var>effective date, or a report under section 
         <statute_ref>80A.53</statute_ref>(h), is incomplete in a material respect or <br />
         		<a id="pl.10.1"></a><var>10.1</var>contains a statement that, in the light of the circumstances under which it was made, was <br />
         		<a id="pl.10.2"></a><var>10.2</var>false or misleading with respect to a material fact;<br />
         		<a id="pl.10.3"></a><var>10.3</var>&nbsp;&nbsp;&nbsp;&nbsp;(2) this chapter or a rule adopted or order issued under this chapter or a condition <br />
         		<a id="pl.10.4"></a><var>10.4</var>imposed under this chapter has been willfully violated, in connection with the offering, by:<br />
         		<a id="pl.10.5"></a><var>10.5</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) the person filing the registration statement, if the person is directly or indirectly <br />
         		<a id="pl.10.6"></a><var>10.6</var>controlled by or acting for the issuer;<br />
         		<a id="pl.10.7"></a><var>10.7</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) the issuer;<br />
         		<a id="pl.10.8"></a><var>10.8</var>&nbsp;&nbsp;&nbsp;&nbsp;(C) a partner, officer, or director of the issuer or a person having a similar status <br />
         		<a id="pl.10.9"></a><var>10.9</var>or performing similar functions;<br />
         		<a id="pl.10.10"></a><var>10.10</var>&nbsp;&nbsp;&nbsp;&nbsp;(D) a promoter of the issuer;<br />
         		<a id="pl.10.11"></a><var>10.11</var>&nbsp;&nbsp;&nbsp;&nbsp;(E) a person directly or indirectly controlling or controlled by the issuer; or<br />
         		<a id="pl.10.12"></a><var>10.12</var>&nbsp;&nbsp;&nbsp;&nbsp;(F) an underwriter;<br />
         		<a id="pl.10.13"></a><var>10.13</var>&nbsp;&nbsp;&nbsp;&nbsp;(3) the security registered or sought to be registered is the subject of a permanent or <br />
         		<a id="pl.10.14"></a><var>10.14</var>temporary injunction of a court of competent jurisdiction or an administrative stop order <br />
         		<a id="pl.10.15"></a><var>10.15</var>or similar order issued under any federal, foreign, or state law other than this chapter <br />
         		<a id="pl.10.16"></a><var>10.16</var>applicable to the offering, but the administrator may not institute a proceeding against an <br />
         		<a id="pl.10.17"></a><var>10.17</var>effective registration statement under this paragraph more than one year after the date of <br />
         		<a id="pl.10.18"></a><var>10.18</var>the order or injunction on which it is based, and the administrator may not issue an order <br />
         		<a id="pl.10.19"></a><var>10.19</var>under this paragraph on the basis of an order or injunction issued under the securities act <br />
         		<a id="pl.10.20"></a><var>10.20</var>of another state unless the order or injunction was based on conduct that would constitute, <br />
         		<a id="pl.10.21"></a><var>10.21</var>as of the date of the order, a ground for a stop order under this section;<br />
         		<a id="pl.10.22"></a><var>10.22</var>&nbsp;&nbsp;&nbsp;&nbsp;(4) the issuer's enterprise or method of business includes or would include activities <br />
         		<a id="pl.10.23"></a><var>10.23</var>that are unlawful where performed;<br />
         		<a id="pl.10.24"></a><var>10.24</var>(5) the terms of the securities offering are unfair and inequitable; provided, however, <br />
         		<a id="pl.10.25"></a><var>10.25</var>that the commissioner may not determine that an offering is unfair and inequitable solely on <br />
         		<a id="pl.10.26"></a><var>10.26</var>the grounds that the securities are to be sold at an excessive price where the offering price <br />
         		<a id="pl.10.27"></a><var>10.27</var>has been determined by arm's-length negotiation between nonaffiliated parties. The selling <br />
         		<a id="pl.10.28"></a><var>10.28</var>price of any security being sold by a broker-dealer licensed in this state who is unaffiliated <br />
         		<a id="pl.10.29"></a><var>10.29</var>with the issuer shall be presumed to have been determined by arm's-length negotiation;<br />
         		<a id="pl.10.30"></a><var>10.30</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(5)~~ (6) with respect to a security sought to be registered under section 80A.51, there <br />
         		<a id="pl.10.31"></a><var>10.31</var>has been a failure to comply with the undertaking required by section 80A.51(b)(4); or<br />
         		<a id="pl.10.32"></a><var>10.32</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(6)~~ (7) the applicant or registrant has not paid the filing fee, but the administrator <br />
         		<a id="pl.10.33"></a><var>10.33</var>shall void the order if the deficiency is corrected.<br />
         		<a id="pl.10.34"></a><var>10.34</var>&nbsp;&nbsp;&nbsp;&nbsp;(b) <b>Institution of stop order.</b> The administrator may not institute a stop order <br />
         		<a id="pl.10.35"></a><var>10.35</var>proceeding against an effective registration statement on the basis of conduct or a <br />
         		<a id="pl.10.36"></a><var>10.36</var>transaction known to the administrator when the registration statement became effective <br />
         		<a id="pl.11.1"></a><var>11.1</var>unless the proceeding is instituted within 30 days after the registration statement became <br />
         		<a id="pl.11.2"></a><var>11.2</var>effective.<br />
         		<a id="pl.11.3"></a><var>11.3</var>&nbsp;&nbsp;&nbsp;&nbsp;(c) <b>Summary process.</b> The administrator may summarily revoke, deny, postpone, <br />
         		<a id="pl.11.4"></a><var>11.4</var>or suspend the effectiveness of a registration statement pending final determination of an <br />
         		<a id="pl.11.5"></a><var>11.5</var>administrative proceeding. Upon the issuance of the order, the administrator shall promptly <br />
         		<a id="pl.11.6"></a><var>11.6</var>notify each person specified in subsection (d) that the order has been issued; the reasons <br />
         		<a id="pl.11.7"></a><var>11.7</var>for the revocation, denial, postponement, or suspension; and that within 15 days after the <br />
         		<a id="pl.11.8"></a><var>11.8</var>receipt of a request in a record from the person the matter will be scheduled for a hearing. If <br />
         		<a id="pl.11.9"></a><var>11.9</var>a hearing is not requested and none is ordered by the administrator, within 30 days after the <br />
         		<a id="pl.11.10"></a><var>11.10</var>date of service of the order, the order becomes final. If a hearing is requested or ordered, <br />
         		<a id="pl.11.11"></a><var>11.11</var>the administrator, after notice of and opportunity for hearing for each person subject to the <br />
         		<a id="pl.11.12"></a><var>11.12</var>order, may modify or vacate the order or extend the order until final determination.<br />
         		<a id="pl.11.13"></a><var>11.13</var>&nbsp;&nbsp;&nbsp;&nbsp;(d) <b>Procedural requirements for stop order.</b> A stop order may not be issued <br />
         		<a id="pl.11.14"></a><var>11.14</var>under this section without:<br />
         		<a id="pl.11.15"></a><var>11.15</var>&nbsp;&nbsp;&nbsp;&nbsp;(1) appropriate notice to the applicant or registrant, the issuer, and the person on <br />
         		<a id="pl.11.16"></a><var>11.16</var>whose behalf the securities are to be or have been offered;<br />
         		<a id="pl.11.17"></a><var>11.17</var>&nbsp;&nbsp;&nbsp;&nbsp;(2) an opportunity for hearing; and<br />
         		<a id="pl.11.18"></a><var>11.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(3) findings of fact and conclusions of law in a record in accordance with chapter 14.<br />
         		<a id="pl.11.19"></a><var>11.19</var>&nbsp;&nbsp;&nbsp;&nbsp;(e) <b>Modification or vacation of stop order.</b> The administrator may modify or <br />
         		<a id="pl.11.20"></a><var>11.20</var>vacate a stop order issued under this section if the administrator finds that the conditions <br />
         		<a id="pl.11.21"></a><var>11.21</var>that caused its issuance have changed or that it is necessary or appropriate in the public <br />
         		<a id="pl.11.22"></a><var>11.22</var>interest or for the protection of investors.<br />
         		<br />
         		<a id="bill.0.3.0"></a><a id="pl.11.23"></a><var>11.23</var>&nbsp;&nbsp;&nbsp;&nbsp;Sec. 3. Minnesota Statutes 2012, section 80A.58, is amended to read:<br />
         		<a id="pl.11.24"></a><var>11.24</var><b>80A.58 SECTION 403; INVESTMENT ADVISER REGISTRATION </b><br />
         		<a id="pl.11.25"></a><var>11.25</var><b>REQUIREMENT AND EXEMPTIONS.</b><br />
         		<a id="pl.11.26"></a><var>11.26</var>&nbsp;&nbsp;&nbsp;&nbsp;(a) <b>Registration requirement.</b> It is unlawful for a person to transact business in this <br />
         		<a id="pl.11.27"></a><var>11.27</var>state as an investment adviser or investment adviser representative unless the person is <br />
         		<a id="pl.11.28"></a><var>11.28</var>registered under this chapter ~~as an investment adviser~~ or is exempt from registration ~~as an~~ <br />
         		<a id="pl.11.29"></a><var>11.29</var>~~investment adviser~~ under subsection (b).<br />
         		<a id="pl.11.30"></a><var>11.30</var>&nbsp;&nbsp;&nbsp;&nbsp;(b) <b>Exemptions from registration.</b> The following persons are exempt from the <br />
         		<a id="pl.11.31"></a><var>11.31</var>registration requirement of subsection (a):<br />
         		<a id="pl.11.32"></a><var>11.32</var>(1) any person whose only clients in this state are:<br />
         		<a id="pl.11.33"></a><var>11.33</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) federal covered investment advisers, investment advisers registered under this <br />
         		<a id="pl.11.34"></a><var>11.34</var>chapter, or broker-dealers registered under this chapter;<br />
         		<a id="pl.11.35"></a><var>11.35</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(B) institutional investors;~~<br />
         		<a id="pl.12.1"></a><var>12.1</var>~~(C) accredited investors;~~<br />
         		<a id="pl.12.2"></a><var>12.2</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(D)~~ (B) bona fide preexisting clients whose principal places of residence are not in <br />
         		<a id="pl.12.3"></a><var>12.3</var>this state if the investment adviser is registered under the securities act of the state in <br />
         		<a id="pl.12.4"></a><var>12.4</var>which the clients maintain principal places of residence; or<br />
         		<a id="pl.12.5"></a><var>12.5</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(E)~~ (C) any other client exempted by rule adopted or order issued under this chapter;<br />
         		<a id="pl.12.6"></a><var>12.6</var>&nbsp;&nbsp;&nbsp;&nbsp;(2) a person without a place of business in this state if the person has had, during the <br />
         		<a id="pl.12.7"></a><var>12.7</var>preceding 12 months, not more than five clients that are resident in this state in addition <br />
         		<a id="pl.12.8"></a><var>12.8</var>to those specified under paragraph (1); ~~or~~<br />
         		<a id="pl.12.9"></a><var>12.9</var>&nbsp;&nbsp;&nbsp;&nbsp;(3) A private fund advisor, subject to the additional requirements of subsection (c), if <br />
         		<a id="pl.12.10"></a><var>12.10</var>the private fund adviser satisfies each of the following conditions:<br />
         		<a id="pl.12.11"></a><var>12.11</var>&nbsp;&nbsp;&nbsp;&nbsp;(i) neither the private fund adviser nor any of its advisory affiliates are subject <br />
         		<a id="pl.12.12"></a><var>12.12</var>to a disqualification as described in Rule 262 of SEC Regulation A, Code of Federal <br />
         		<a id="pl.12.13"></a><var>12.13</var>Regulations, title 17, section 230.262;<br />
         		<a id="pl.12.14"></a><var>12.14</var>&nbsp;&nbsp;&nbsp;&nbsp;(ii) the private fund adviser files with the state each report and amendment thereto <br />
         		<a id="pl.12.15"></a><var>12.15</var>that an exempt reporting adviser is required to file with the Securities and Exchange <br />
         		<a id="pl.12.16"></a><var>12.16</var>Commission pursuant to SEC Rule 204-4, Code of Federal Regulations, title 17, section <br />
         		<a id="pl.12.17"></a><var>12.17</var>275.204-4; or<br />
         		<a id="pl.12.18"></a><var>12.18</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(3)~~ (4) any other person exempted by rule adopted or order issued under this chapter.<br />
         		<a id="pl.12.19"></a><var>12.19</var>&nbsp;&nbsp;&nbsp;&nbsp;(c) <b>Additional requirements for private fund advisers to certain 3(c)(1) funds.</b><br />
         		<a id="pl.12.20"></a><var>12.20</var> In order to qualify for the exemption described in subsection (b)(3), a private fund adviser <br />
         		<a id="pl.12.21"></a><var>12.21</var>who advises at least one 3(c)(1) fund that is not a venture capital fund shall, in addition to <br />
         		<a id="pl.12.22"></a><var>12.22</var>satisfying each of the conditions specified in subsection (b)(3), comply with the following <br />
         		<a id="pl.12.23"></a><var>12.23</var>requirements:<br />
         		<a id="pl.12.24"></a><var>12.24</var>&nbsp;&nbsp;&nbsp;&nbsp;(1) The private fund adviser shall advise only those 3(c)(1) funds, other than venture <br />
         		<a id="pl.12.25"></a><var>12.25</var>capital funds, whose outstanding securities, other than short-term paper, are beneficially <br />
         		<a id="pl.12.26"></a><var>12.26</var>owned entirely by persons who, after deducting the value of the primary residence from <br />
         		<a id="pl.12.27"></a><var>12.27</var>the person's net worth, would each meet the definition of a qualified client in SEC Rule <br />
         		<a id="pl.12.28"></a><var>12.28</var>205-3, Code of Federal Regulations, title 17, section 275.205-3, at the time the securities <br />
         		<a id="pl.12.29"></a><var>12.29</var>are purchased from the issuer;<br />
         		<a id="pl.12.30"></a><var>12.30</var>&nbsp;&nbsp;&nbsp;&nbsp;(2) At the time of purchase, the private fund adviser shall disclose the following in <br />
         		<a id="pl.12.31"></a><var>12.31</var>writing to each beneficial owner of a 3(c)(1) fund that is not a venture capital fund:<br />
         		<a id="pl.12.32"></a><var>12.32</var>&nbsp;&nbsp;&nbsp;&nbsp;(i) all services, if any, to be provided to individual beneficial owners;<br />
         		<a id="pl.12.33"></a><var>12.33</var>&nbsp;&nbsp;&nbsp;&nbsp;(ii) all duties, if any, the investment adviser owes to the beneficial owners; and<br />
         		<a id="pl.12.34"></a><var>12.34</var>&nbsp;&nbsp;&nbsp;&nbsp;(iii) any other material information affecting the rights or responsibilities of the <br />
         		<a id="pl.12.35"></a><var>12.35</var>beneficial owners; and<br />
         		<a id="pl.13.1"></a><var>13.1</var>&nbsp;&nbsp;&nbsp;&nbsp;(3) The private fund adviser shall obtain on an annual basis audited financial <br />
         		<a id="pl.13.2"></a><var>13.2</var>statements of each 3(c)(1) fund that is not a venture capital fund and shall deliver a copy <br />
         		<a id="pl.13.3"></a><var>13.3</var>of such audited financial statements to each beneficial owner of the fund.<br />
         		<a id="pl.13.4"></a><var>13.4</var>&nbsp;&nbsp;&nbsp;&nbsp;(d) <b>Federal covered investment advisers.</b> If a private fund adviser is registered <br />
         		<a id="pl.13.5"></a><var>13.5</var>with the Securities and Exchange Commission, the adviser shall not be eligible for the <br />
         		<a id="pl.13.6"></a><var>13.6</var>private fund adviser exemption under paragraph (b), clause (3), and shall comply with <br />
         		<a id="pl.13.7"></a><var>13.7</var>the state notice filing requirements applicable to federal covered investment advisers <br />
         		<a id="pl.13.8"></a><var>13.8</var>in section 80A.58.<br />
         		<a id="pl.13.9"></a><var>13.9</var>&nbsp;&nbsp;&nbsp;&nbsp;(e) <b>Investment adviser representatives.</b> A person is exempt from the registration <br />
         		<a id="pl.13.10"></a><var>13.10</var>requirements of section 80A.58, paragraph (a), if he or she is employed by or associated <br />
         		<a id="pl.13.11"></a><var>13.11</var>with an investment adviser that is exempt from registration in this state pursuant to the <br />
         		<a id="pl.13.12"></a><var>13.12</var>private fund adviser exemption, under paragraph (b), clause (3), and does not otherwise <br />
         		<a id="pl.13.13"></a><var>13.13</var>engage in activities that would require registration as an investment adviser representative.<br />
         		<a id="pl.13.14"></a><var>13.14</var>&nbsp;&nbsp;&nbsp;&nbsp;(f) <b>Electronic filings.</b> The report filings described in subsection (b)(3)(ii) shall be <br />
         		<a id="pl.13.15"></a><var>13.15</var>made electronically through the IARD. A report shall be deemed filed when the report <br />
         		<a id="pl.13.16"></a><var>13.16</var>and the fee required by sections 80A.60 and 80A.65 are filed and accepted by the IARD <br />
         		<a id="pl.13.17"></a><var>13.17</var>on the state's behalf.<br />
         		<a id="pl.13.18"></a><var>13.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(g) <b>Transition.</b> An investment adviser who becomes ineligible for the exemption <br />
         		<a id="pl.13.19"></a><var>13.19</var>provided by this section must comply with all applicable laws and rules requiring <br />
         		<a id="pl.13.20"></a><var>13.20</var>registration or notice filing within 90 days from the date of the investment adviser's <br />
         		<a id="pl.13.21"></a><var>13.21</var>eligibility for this exemption ceases.<br />
         		<a id="pl.13.22"></a><var>13.22</var>(h) <b>Grandfathering for investment advisers to 3(c)(1) funds with nonqualified </b><br />
         		<a id="pl.13.23"></a><var>13.23</var><b>clients.</b> An investment adviser to a 3(c)(1) fund (other than a venture capital fund) that <br />
         		<a id="pl.13.24"></a><var>13.24</var>has one or more beneficial owners who are not qualified clients as described in paragraph <br />
         		<a id="pl.13.25"></a><var>13.25</var>(c), clause (1), is eligible for the exemption contained in paragraph (b), clause (3), if the <br />
         		<a id="pl.13.26"></a><var>13.26</var>following conditions are satisfied:<br />
         		<a id="pl.13.27"></a><var>13.27</var>(1) the subject fund existed prior to the effective date of this legislation;<br />
         		<a id="pl.13.28"></a><var>13.28</var>(2) as of the effective date of this legislation, the subject fund ceases to accept <br />
         		<a id="pl.13.29"></a><var>13.29</var>beneficial owners who are not qualified clients, as described in paragraph (c), clause (1);<br />
         		<a id="pl.13.30"></a><var>13.30</var>(3) the investment adviser discloses in writing the information described in <br />
         		<a id="pl.13.31"></a><var>13.31</var>paragraph (c), clause (2), to all beneficial owners of the fund; and<br />
         		<a id="pl.13.32"></a><var>13.32</var>(4) as of the effective date of this legislation, the investment adviser delivers audited <br />
         		<a id="pl.13.33"></a><var>13.33</var>financial statements as required by paragraph (c), clause (3).<br />
         		<a id="pl.13.34"></a><var>13.34</var>&nbsp;&nbsp;&nbsp;&nbsp;(i) <b>Limits on employment or association.</b> It is unlawful for an investment adviser, <br />
         		<a id="pl.13.35"></a><var>13.35</var>directly or indirectly, to employ or associate with an individual to engage in an activity <br />
         		<a id="pl.13.36"></a><var>13.36</var>related to investment advice in this state if the registration of the individual is suspended <br />
         		<a id="pl.14.1"></a><var>14.1</var>or revoked or the individual is barred from employment or association with an investment <br />
         		<a id="pl.14.2"></a><var>14.2</var>adviser, federal covered investment adviser, or broker-dealer by an order under this <br />
         		<a id="pl.14.3"></a><var>14.3</var>chapter, the Securities and Exchange Commission, or a self-regulatory organization, <br />
         		<a id="pl.14.4"></a><var>14.4</var>unless the investment adviser did not know, and in the exercise of reasonable care could <br />
         		<a id="pl.14.5"></a><var>14.5</var>not have known, of the suspension, revocation, or bar. Upon request from the investment <br />
         		<a id="pl.14.6"></a><var>14.6</var>adviser and for good cause, the administrator, by order, may waive, in whole or in part, the <br />
         		<a id="pl.14.7"></a><var>14.7</var>application of the prohibitions of this subsection to the investment adviser.<br />
         		<br />
         		<a id="bill.0.4.0"></a><a id="pl.14.8"></a><var>14.8</var>&nbsp;&nbsp;&nbsp;&nbsp;Sec. 4. Minnesota Statutes 2012, section 80A.61, is amended to read:<br />
         		<a id="pl.14.9"></a><var>14.9</var><b>80A.61 SECTION 406; REGISTRATION BY BROKER-DEALER, AGENT, </b><br />
         		<a id="pl.14.10"></a><var>14.10</var>~~<b>AND</b>~~<b> </b><b>FUNDING PORTAL, </b><b>INVESTMENT ADVISER</b><b>, AND INVESTMENT </b><br />
         		<a id="pl.14.11"></a><var>14.11</var><b>ADVISER REPRESENTATIVE</b><b>.</b><br />
         		<a id="pl.14.12"></a><var>14.12</var>&nbsp;&nbsp;&nbsp;&nbsp;(a) <b>Application for initial registration</b><b> by broker-dealer, agent, or investment </b><br />
         		<a id="pl.14.13"></a><var>14.13</var><b>adviser</b><b>.</b> A person shall register as a broker-dealer, agent, or investment adviser by filing <br />
         		<a id="pl.14.14"></a><var>14.14</var>an application and a consent to service of process complying with section 80A.88, and <br />
         		<a id="pl.14.15"></a><var>14.15</var>paying the fee specified in section 80A.65 and any reasonable fees charged by the designee <br />
         		<a id="pl.14.16"></a><var>14.16</var>of the administrator for processing the filing. The application must contain:<br />
         		<a id="pl.14.17"></a><var>14.17</var>&nbsp;&nbsp;&nbsp;&nbsp;(1) the information or record required for the filing of a uniform application; and<br />
         		<a id="pl.14.18"></a><var>14.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(2) upon request by the administrator, any other financial or other information or <br />
         		<a id="pl.14.19"></a><var>14.19</var>record that the administrator determines is appropriate.<br />
         		<a id="pl.14.20"></a><var>14.20</var>&nbsp;&nbsp;&nbsp;&nbsp;(b) <b>Amendment.</b> If the information or record contained in an application filed under <br />
         		<a id="pl.14.21"></a><var>14.21</var>subsection (a) is or becomes inaccurate or incomplete in a material respect, the registrant <br />
         		<a id="pl.14.22"></a><var>14.22</var>shall promptly file a correcting amendment.<br />
         		<a id="pl.14.23"></a><var>14.23</var>&nbsp;&nbsp;&nbsp;&nbsp;(c) <b>Effectiveness of registration.</b> If an order is not in effect and a proceeding is not <br />
         		<a id="pl.14.24"></a><var>14.24</var>pending under section 80A.67, registration becomes effective at noon on the 45th day after <br />
         		<a id="pl.14.25"></a><var>14.25</var>a completed application is filed, unless the registration is denied. A rule adopted or order <br />
         		<a id="pl.14.26"></a><var>14.26</var>issued under this chapter may set an earlier effective date or may defer the effective date <br />
         		<a id="pl.14.27"></a><var>14.27</var>until noon on the 45th day after the filing of any amendment completing the application.<br />
         		<a id="pl.14.28"></a><var>14.28</var>&nbsp;&nbsp;&nbsp;&nbsp;(d) <b>Registration renewal.</b> A registration is effective until midnight on December <br />
         		<a id="pl.14.29"></a><var>14.29</var>31 of the year for which the application for registration is filed. Unless an order is in <br />
         		<a id="pl.14.30"></a><var>14.30</var>effect under section 80A.67, a registration may be automatically renewed each year by <br />
         		<a id="pl.14.31"></a><var>14.31</var>filing such records as are required by rule adopted or order issued under this chapter, by <br />
         		<a id="pl.14.32"></a><var>14.32</var>paying the fee specified in section 80A.65, and by paying costs charged by the designee of <br />
         		<a id="pl.14.33"></a><var>14.33</var>the administrator for processing the filings.<br />
         		<a id="pl.14.34"></a><var>14.34</var>&nbsp;&nbsp;&nbsp;&nbsp;(e) <b>Additional conditions or waivers.</b> A rule adopted or order issued under this <br />
         		<a id="pl.14.35"></a><var>14.35</var>chapter may impose such other conditions, not inconsistent with the National Securities <br />
         		<a id="pl.15.1"></a><var>15.1</var>Markets Improvement Act of 1996. An order issued under this chapter may waive, in <br />
         		<a id="pl.15.2"></a><var>15.2</var>whole or in part, specific requirements in connection with registration as are in the public <br />
         		<a id="pl.15.3"></a><var>15.3</var>interest and for the protection of investors.<br />
         		<a id="pl.15.4"></a><var>15.4</var>(f) A funding portal that has its principal place of business in the state of Minnesota <br />
         		<a id="pl.15.5"></a><var>15.5</var>shall register with the state of Minnesota by filing with the administrator a copy of the <br />
         		<a id="pl.15.6"></a><var>15.6</var>information or record required for the filing of an application for registration as a funding <br />
         		<a id="pl.15.7"></a><var>15.7</var>portal in the manner established by the Securities and Exchange Commission and/or the <br />
         		<a id="pl.15.8"></a><var>15.8</var>Financial Institutions Regulatory Authority (FINRA), along with any rule adopted or <br />
         		<a id="pl.15.9"></a><var>15.9</var>order issued, and any amendments thereto.<br />
         		<a id="pl.15.10"></a><var>15.10</var>&nbsp;&nbsp;&nbsp;&nbsp;(g) <b>Application for investment adviser representative registration.</b><br />
         		<a id="pl.15.11"></a><var>15.11</var>&nbsp;&nbsp;&nbsp;&nbsp;(1) The application for initial registration as an investment adviser representative <br />
         		<a id="pl.15.12"></a><var>15.12</var>pursuant to section 80A.58 is made by completing Form U-4 (Uniform Application for <br />
         		<a id="pl.15.13"></a><var>15.13</var>Securities Industry Registration or Transfer) in accordance with the form instructions <br />
         		<a id="pl.15.14"></a><var>15.14</var>and by filing the form U-4 with the IARD. The application for initial registration must <br />
         		<a id="pl.15.15"></a><var>15.15</var>also include the following:<br />
         		<a id="pl.15.16"></a><var>15.16</var>&nbsp;&nbsp;&nbsp;&nbsp;(i) proof of compliance by the investment adviser representative with the <br />
         		<a id="pl.15.17"></a><var>15.17</var>examination requirements of:<br />
         		<a id="pl.15.18"></a><var>15.18</var>&nbsp;&nbsp;&nbsp;&nbsp;(A) the Uniform Investment Adviser Law Examination (Series 65); or<br />
         		<a id="pl.15.19"></a><var>15.19</var>&nbsp;&nbsp;&nbsp;&nbsp;(B) the General Securities Representative Examination (Series 7) and the Uniform <br />
         		<a id="pl.15.20"></a><var>15.20</var>Combined State Law Examination (Series 66);<br />
         		<a id="pl.15.21"></a><var>15.21</var>&nbsp;&nbsp;&nbsp;&nbsp;(ii) any other information the administrator may reasonably require.<br />
         		<a id="pl.15.22"></a><var>15.22</var>&nbsp;&nbsp;&nbsp;&nbsp;(2) The application for the annual renewal registration as an investment adviser <br />
         		<a id="pl.15.23"></a><var>15.23</var>representative shall be filed with the IARD.<br />
         		<a id="pl.15.24"></a><var>15.24</var>&nbsp;&nbsp;&nbsp;&nbsp;(3)(i) The investment adviser representative is under a continuing obligation to <br />
         		<a id="pl.15.25"></a><var>15.25</var>update information required by Form U-4 as changes occur.<br />
         		<a id="pl.15.26"></a><var>15.26</var>&nbsp;&nbsp;&nbsp;&nbsp;(ii) An investment adviser representative and the investment adviser must file <br />
         		<a id="pl.15.27"></a><var>15.27</var>promptly with the IARD any amendments to the representative's Form U-4; and<br />
         		<a id="pl.15.28"></a><var>15.28</var>&nbsp;&nbsp;&nbsp;&nbsp;(iii) An amendment will be considered to be filed promptly if the amendment is filed <br />
         		<a id="pl.15.29"></a><var>15.29</var>within 30 days of the event that requires the filing of the amendment.<br />
         		<a id="pl.15.30"></a><var>15.30</var>&nbsp;&nbsp;&nbsp;&nbsp;(4) An application for initial or renewal of registration is not considered filed for <br />
         		<a id="pl.15.31"></a><var>15.31</var>purposes of section 80A.58 until the required fee and all required submissions have been <br />
         		<a id="pl.15.32"></a><var>15.32</var>received by the administrator.<br />
         		<a id="pl.15.33"></a><var>15.33</var>&nbsp;&nbsp;&nbsp;&nbsp;(5) The application for withdrawal of registration as an investment adviser <br />
         		<a id="pl.15.34"></a><var>15.34</var>representative pursuant to section 80A.58 shall be completed by following the instructions <br />
         		<a id="pl.15.35"></a><var>15.35</var>on Form U-5 (Uniform Termination Notice for Securities Industry Registration) and filed <br />
         		<a id="pl.15.36"></a><var>15.36</var>upon Form U-5 with the IARD.<br />
         		<br />
         		<a id="bill.0.5.0"></a><a id="pl.16.1"></a><var>16.1</var>&nbsp;&nbsp;&nbsp;&nbsp;Sec. 5. Minnesota Statutes 2012, section 80A.66, is amended to read:<br />
         		<a id="pl.16.2"></a><var>16.2</var><b>80A.66 SECTION 411; POSTREGISTRATION REQUIREMENTS.</b><br />
         		<a id="pl.16.3"></a><var>16.3</var>&nbsp;&nbsp;&nbsp;&nbsp;(a) <b>Financial requirements.</b> Subject to Section 15(h) of the Securities Exchange <br />
         		<a id="pl.16.4"></a><var>16.4</var>Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act <br />
         		<a id="pl.16.5"></a><var>16.5</var>of 1940 (15 U.S.C. Section 80b-22), a rule adopted or order issued under this chapter <br />
         		<a id="pl.16.6"></a><var>16.6</var>may establish minimum financial requirements for broker-dealers registered or required <br />
         		<a id="pl.16.7"></a><var>16.7</var>to be registered under this chapter and investment advisers registered or required to be <br />
         		<a id="pl.16.8"></a><var>16.8</var>registered under this chapter.<br />
         		<a id="pl.16.9"></a><var>16.9</var>&nbsp;&nbsp;&nbsp;&nbsp;(b) <b>Financial reports.</b> Subject to Section 15(h) of the Securities Exchange Act of <br />
         		<a id="pl.16.10"></a><var>16.10</var>1934 (15 U.S.C. Section 78o(h)) or Section 222(b) of the Investment Advisers Act of 1940 <br />
         		<a id="pl.16.11"></a><var>16.11</var>(15 U.S.C. Section 80b-22), a broker-dealer registered or required to be registered under <br />
         		<a id="pl.16.12"></a><var>16.12</var>this chapter and an investment adviser registered or required to be registered under this <br />
         		<a id="pl.16.13"></a><var>16.13</var>chapter shall file such financial reports as are required by a rule adopted or order issued <br />
         		<a id="pl.16.14"></a><var>16.14</var>under this chapter. If the information contained in a record filed under this subsection is or <br />
         		<a id="pl.16.15"></a><var>16.15</var>becomes inaccurate or incomplete in a material respect, the registrant shall promptly file <br />
         		<a id="pl.16.16"></a><var>16.16</var>a correcting amendment.<br />
         		<a id="pl.16.17"></a><var>16.17</var>&nbsp;&nbsp;&nbsp;&nbsp;(c) <b>Record keeping.</b> Subject to Section 15(h) of the Securities Exchange Act of <br />
         		<a id="pl.16.18"></a><var>16.18</var>1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 <br />
         		<a id="pl.16.19"></a><var>16.19</var>(15 U.S.C. Section 80b-22):<br />
         		<a id="pl.16.20"></a><var>16.20</var>&nbsp;&nbsp;&nbsp;&nbsp;(1) a broker-dealer registered or required to be registered under this chapter and an <br />
         		<a id="pl.16.21"></a><var>16.21</var>investment adviser registered or required to be registered under this chapter shall make <br />
         		<a id="pl.16.22"></a><var>16.22</var>and maintain the accounts, correspondence, memoranda, papers, books, and other records <br />
         		<a id="pl.16.23"></a><var>16.23</var>required by rule adopted or order issued under this chapter;<br />
         		<a id="pl.16.24"></a><var>16.24</var>&nbsp;&nbsp;&nbsp;&nbsp;(2) broker-dealer records required to be maintained under paragraph (1) may be <br />
         		<a id="pl.16.25"></a><var>16.25</var>maintained in any form of data storage acceptable under Section 17(a) of the Securities <br />
         		<a id="pl.16.26"></a><var>16.26</var>Exchange Act of 1934 (15 U.S.C. Section 78q(a)) if they are readily accessible to the <br />
         		<a id="pl.16.27"></a><var>16.27</var>administrator; and<br />
         		<a id="pl.16.28"></a><var>16.28</var>&nbsp;&nbsp;&nbsp;&nbsp;(3) Investment adviser records required to be maintained under paragraph (d)(1) <br />
         		<a id="pl.16.29"></a><var>16.29</var>may be maintained in any form of data storage required by rule adopted or order issued <br />
         		<a id="pl.16.30"></a><var>16.30</var>under this chapter.<br />
         		<a id="pl.16.31"></a><var>16.31</var>(d) <b>Records and reports of private funds.</b><br />
         		<a id="pl.16.32"></a><var>16.32</var>(1) <b>In general.</b> An investment adviser to a private fund shall maintain such records <br />
         		<a id="pl.16.33"></a><var>16.33</var>of, and file with the administrator such reports and amendments thereto, that an exempt <br />
         		<a id="pl.16.34"></a><var>16.34</var>reporting adviser is required to file with the Securities and Exchange Commission pursuant <br />
         		<a id="pl.16.35"></a><var>16.35</var>to SEC Rule 204-4, Code of Federal Regulations, title 17, section 275.204-4.<br />
         		<a id="pl.17.1"></a><var>17.1</var>(2) <b>Treatment of records.</b> The records and reports of any private fund to which <br />
         		<a id="pl.17.2"></a><var>17.2</var>an investment adviser provides investment advice shall be deemed to be the records and <br />
         		<a id="pl.17.3"></a><var>17.3</var>reports of the investment adviser.<br />
         		<a id="pl.17.4"></a><var>17.4</var>(3) <b>Required information.</b> The records and reports required to be maintained <br />
         		<a id="pl.17.5"></a><var>17.5</var>by an investment adviser, which are subject to inspection by a representative of the <br />
         		<a id="pl.17.6"></a><var>17.6</var>administrator at any time, shall include for each private fund advised by the investment <br />
         		<a id="pl.17.7"></a><var>17.7</var>adviser, a description of:<br />
         		<a id="pl.17.8"></a><var>17.8</var>(A) the amount of assets under management;<br />
         		<a id="pl.17.9"></a><var>17.9</var>(B) the use of leverage, including off-balance-sheet leverage, as to the assets under <br />
         		<a id="pl.17.10"></a><var>17.10</var>management;<br />
         		<a id="pl.17.11"></a><var>17.11</var>(C) counterparty credit risk exposure;<br />
         		<a id="pl.17.12"></a><var>17.12</var>(D) trading and investment positions;<br />
         		<a id="pl.17.13"></a><var>17.13</var>(E) valuation policies and practices of the fund;<br />
         		<a id="pl.17.14"></a><var>17.14</var>(F) types of assets held;<br />
         		<a id="pl.17.15"></a><var>17.15</var>(G) side arrangements or side letters, whereby certain investors in a fund obtain <br />
         		<a id="pl.17.16"></a><var>17.16</var>more favorable rights or entitlements than other investors;<br />
         		<a id="pl.17.17"></a><var>17.17</var>(H) trading practices; and<br />
         		<a id="pl.17.18"></a><var>17.18</var>(I) such other information as the administrator determines is necessary and <br />
         		<a id="pl.17.19"></a><var>17.19</var>appropriate in the public interest and for the protection of investors, which may include <br />
         		<a id="pl.17.20"></a><var>17.20</var>the establishment of different reporting requirements for different classes of fund advisers, <br />
         		<a id="pl.17.21"></a><var>17.21</var>based on the type or size of the private fund being advised.<br />
         		<a id="pl.17.22"></a><var>17.22</var>(4) <b>Filing of records.</b> A rule or order under this chapter may require each investment <br />
         		<a id="pl.17.23"></a><var>17.23</var>adviser to a private fund to file reports containing such information as the administrator <br />
         		<a id="pl.17.24"></a><var>17.24</var>deems necessary and appropriate in the public interest and for the protection of investors.<br />
         		<a id="pl.17.25"></a><var>17.25</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(d)~~ (e) <b>Audits or inspections.</b> The records of a broker-dealer registered or required <br />
         		<a id="pl.17.26"></a><var>17.26</var>to be registered under this chapter and of an investment adviser registered or required to <br />
         		<a id="pl.17.27"></a><var>17.27</var>be registered under this chapter, including the records of a private fund described in <br />
         		<a id="pl.17.28"></a><var>17.28</var>paragraph (d) and the records of investment advisers to private funds, are subject to such <br />
         		<a id="pl.17.29"></a><var>17.29</var>reasonable periodic, special, or other audits or inspections by a representative of the <br />
         		<a id="pl.17.30"></a><var>17.30</var>administrator, within or without this state, as the administrator considers necessary or <br />
         		<a id="pl.17.31"></a><var>17.31</var>appropriate in the public interest and for the protection of investors. An audit or inspection <br />
         		<a id="pl.17.32"></a><var>17.32</var>may be made at any time and without prior notice. The administrator may copy, and <br />
         		<a id="pl.17.33"></a><var>17.33</var>remove for audit or inspection copies of, all records the administrator reasonably considers <br />
         		<a id="pl.17.34"></a><var>17.34</var>necessary or appropriate to conduct the audit or inspection. The administrator may assess <br />
         		<a id="pl.17.35"></a><var>17.35</var>a reasonable charge for conducting an audit or inspection under this subsection.<br />
         		<a id="pl.18.1"></a><var>18.1</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(e)~~ (f) <b>Custody and discretionary authority bond or insurance.</b> Subject to Section <br />
         		<a id="pl.18.2"></a><var>18.2</var>15(h) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of <br />
         		<a id="pl.18.3"></a><var>18.3</var>the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22), a rule adopted or order <br />
         		<a id="pl.18.4"></a><var>18.4</var>issued under this chapter may require a broker-dealer or investment adviser that has custody <br />
         		<a id="pl.18.5"></a><var>18.5</var>of or discretionary authority over funds or securities of a customer or client to obtain <br />
         		<a id="pl.18.6"></a><var>18.6</var>insurance or post a bond or other satisfactory form of security in an amount ~~not to exceed~~<br />
         		<a id="pl.18.7"></a><var>18.7</var> of at least $25,000, but not to exceed $100,000. The administrator may determine the <br />
         		<a id="pl.18.8"></a><var>18.8</var>requirements of the insurance, bond, or other satisfactory form of security. Insurance or a <br />
         		<a id="pl.18.9"></a><var>18.9</var>bond or other satisfactory form of security may not be required of a broker-dealer registered <br />
         		<a id="pl.18.10"></a><var>18.10</var>under this chapter whose net capital exceeds, or of an investment adviser registered under <br />
         		<a id="pl.18.11"></a><var>18.11</var>this chapter whose minimum financial requirements exceed, the amounts required by rule <br />
         		<a id="pl.18.12"></a><var>18.12</var>or order under this chapter. The insurance, bond, or other satisfactory form of security <br />
         		<a id="pl.18.13"></a><var>18.13</var>must permit an action by a person to enforce any liability on the insurance, bond, or other <br />
         		<a id="pl.18.14"></a><var>18.14</var>satisfactory form of security if instituted within the time limitations in section 80A.76(j)(2).<br />
         		<a id="pl.18.15"></a><var>18.15</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(f)~~ (g) <b>Requirements for custody.</b> Subject to Section 15(h) of the Securities <br />
         		<a id="pl.18.16"></a><var>18.16</var>Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment <br />
         		<a id="pl.18.17"></a><var>18.17</var>Advisers Act of 1940 (15 U.S.C. Section 80b-22), an agent may not have custody of <br />
         		<a id="pl.18.18"></a><var>18.18</var>funds or securities of a customer except under the supervision of a broker-dealer and an <br />
         		<a id="pl.18.19"></a><var>18.19</var>investment adviser representative may not have custody of funds or securities of a client <br />
         		<a id="pl.18.20"></a><var>18.20</var>except under the supervision of an investment adviser or a federal covered investment <br />
         		<a id="pl.18.21"></a><var>18.21</var>adviser. A rule adopted or order issued under this chapter may prohibit, limit, or impose <br />
         		<a id="pl.18.22"></a><var>18.22</var>conditions on a broker-dealer regarding custody of funds or securities of a customer and <br />
         		<a id="pl.18.23"></a><var>18.23</var>on an investment adviser regarding custody of securities or funds of a client.<br />
         		<a id="pl.18.24"></a><var>18.24</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(g)~~ (h) <b>Investment adviser brochure rule.</b> With respect to an investment adviser <br />
         		<a id="pl.18.25"></a><var>18.25</var>registered or required to be registered under this chapter, a rule adopted or order <br />
         		<a id="pl.18.26"></a><var>18.26</var>issued under this chapter may require that information or other record be furnished or <br />
         		<a id="pl.18.27"></a><var>18.27</var>disseminated to clients or prospective clients in this state as necessary or appropriate in the <br />
         		<a id="pl.18.28"></a><var>18.28</var>public interest and for the protection of investors and advisory clients.<br />
         		<a id="pl.18.29"></a><var>18.29</var>&nbsp;&nbsp;&nbsp;&nbsp;~~(h)~~ (i) <b>Continuing education.</b> A rule adopted or order issued under this <br />
         		<a id="pl.18.30"></a><var>18.30</var>chapter may require an individual registered under section 80A.57 to participate in a <br />
         		<a id="pl.18.31"></a><var>18.31</var>continuing education program approved by the Securities and Exchange Commission and <br />
         		<a id="pl.18.32"></a><var>18.32</var>administered by a self-regulatory organization.<br />
         		<br />
         		<a id="bill.0.6.0"></a><a id="pl.18.33"></a><var>18.33</var>&nbsp;&nbsp;&nbsp;&nbsp;Sec. 6. Minnesota Statutes 2012, section 80C.08, is amended by adding a subdivision <br />
         		<a id="pl.18.34"></a><var>18.34</var>to read:<br />
         		<a id="pl.19.1"></a><var>19.1</var>&nbsp;&nbsp;&nbsp;&nbsp;Subd. 3. <b>Withdrawal due to inactivity.</b> If no activity occurs with respect to the <br />
         		<a id="pl.19.2"></a><var>19.2</var>public offering statement for a period of 120 days the commissioner may declare by <br />
         		<a id="pl.19.3"></a><var>19.3</var>order the application withdrawn.<br />
         		
      </div>