2006 Minnesota Statutes

80A.41 SECTION 102; DEFINITIONS.
    In this chapter, unless the context otherwise requires:
    (1) "Administrator" means the commissioner of commerce.
    (2) "Agent" means an individual, other than a broker-dealer, who represents a broker-dealer
in effecting or attempting to effect purchases or sales of securities or represents an issuer in
effecting or attempting to effect purchases or sales of the issuer's securities. But a partner, officer,
or director of a broker-dealer or issuer, or an individual having a similar status or performing
similar functions is an agent only if the individual otherwise comes within the term. The term
does not include an individual excluded by rule adopted or order issued under this chapter.
    (3) "Bank" means:
    (A) a banking institution organized under the laws of the United States;
    (B) a member bank of the Federal Reserve System;
    (C) any other banking institution, whether incorporated or not, doing business under the
laws of a state or of the United States, a substantial portion of the business of which consists of
receiving deposits or exercising fiduciary powers similar to those permitted to be exercised by
national banks under the authority of the Comptroller of the Currency pursuant to Section 1 of
Public Law 87-722 (12 U.S.C. Section 92a), and which is supervised and examined by a state
or federal agency having supervision over banks, and which is not operated for the purpose of
evading this chapter; and
    (D) a receiver, conservator, or other liquidating agent of any institution or firm included in
subparagraph (A), (B), or (C).
    (4) "Broker-dealer" means a person engaged in the business of effecting transactions in
securities for the account of others or for the person's own account. The term does not include:
    (A) an agent;
    (B) an issuer;
    (C) a depository institution; provided such activities are conducted in accordance with such
rules as may be adopted by the administrator;
    (D) an international banking institution; or
    (E) a person excluded by rule adopted or order issued under this chapter.
    (5) "Depository institution" means:
    (A) a bank; or
    (B) a savings institution, trust company, credit union, or similar institution that is organized
or chartered under the laws of a state or of the United States, authorized to receive deposits, and
supervised and examined by an official or agency of a state or the United States if its deposits
or share accounts are insured to the maximum amount authorized by statute by the Federal
Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, or a successor
authorized by federal law. The term does not include:
    (i) an insurance company or other organization primarily engaged in the business of
insurance;
    (ii) a Morris Plan bank; or
    (iii) an industrial loan company that is not an "insured depository institution" as defined
in section 3(c)(2) of the Federal Deposit Insurance Act, United States Code, title 12, section
1813(c)(2), or any successor federal statute.
    (6) "Federal covered investment adviser" means a person registered under the Investment
Advisers Act of 1940.
    (7) "Federal covered security" means a security that is, or upon completion of a transaction
will be, a covered security under Section 18(b) of the Securities Act of 1933 (15 U.S.C. Section
77r(b)) or rules or regulations adopted pursuant to that provision.
    (8) "Filing" means the receipt under this chapter of a record by the administrator or a
designee of the administrator.
    (9) "Fraud," "deceit," and "defraud" are not limited to common law deceit.
    (10) "Guaranteed" means guaranteed as to payment of all principal and all interest.
    (11) "Institutional investor" means any of the following, whether acting for itself or for
others in a fiduciary capacity:
    (A) a depository institution or international banking institution;
    (B) an insurance company;
    (C) a separate account of an insurance company;
    (D) an investment company as defined in the Investment Company Act of 1940;
    (E) a broker-dealer registered under the Securities Exchange Act of 1934;
    (F) an employee pension, profit-sharing, or benefit plan if the plan has total assets in excess
of $10,000,000 or its investment decisions are made by a named fiduciary, as defined in the
Employee Retirement Income Security Act of 1974, that is a broker-dealer registered under the
Securities Exchange Act of 1934, an investment adviser registered or exempt from registration
under the Investment Advisers Act of 1940, an investment adviser registered under this chapter, a
depository institution, or an insurance company;
    (G) a plan established and maintained by a state, a political subdivision of a state, or an
agency or instrumentality of a state or a political subdivision of a state for the benefit of its
employees, if the plan has total assets in excess of $10,000,000 or its investment decisions are
made by a duly designated public official or by a named fiduciary, as defined in the Employee
Retirement Income Security Act of 1974, that is a broker-dealer registered under the Securities
Exchange Act of 1934, an investment adviser registered or exempt from registration under
the Investment Advisers Act of 1940, an investment adviser registered under this chapter, a
depository institution, or an insurance company;
    (H) a trust, if it has total assets in excess of $10,000,000, its trustee is a depository institution,
and its participants are exclusively plans of the types identified in subparagraph (F) or (G),
regardless of the size of their assets, except a trust that includes as participants self-directed
individual retirement accounts or similar self-directed plans;
    (I) an organization described in Section 501(c)(3) of the Internal Revenue Code (26 U.S.C.
Section 501(c)(3)), corporation, Massachusetts trust or similar business trust, limited liability
company, or partnership, not formed for the specific purpose of acquiring the securities offered,
with total assets in excess of $10,000,000;
    (J) a small business investment company licensed by the Small Business Administration
under Section 301(c) of the Small Business Investment Act of 1958 (15 U.S.C. Section 681(c))
with total assets in excess of $10,000,000;
    (K) a private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(22)) with total assets in excess
of $10,000,000;
    (L) a federal covered investment adviser acting for its own account;
    (M) a "qualified institutional buyer" as defined in Rule 144A(a)(1), other than Rule
144A(a)(1)(i)(H), adopted under the Securities Act of 1933 (17 C.F.R. 230.144A);
    (N) a "major U.S. institutional investor" as defined in Rule 15a-6(b)(4)(i) adopted under the
Securities Exchange Act of 1934 (17 C.F.R. 240.15a-6);
    (O) any other person, other than an individual, of institutional character with total assets in
excess of $10,000,000 not organized for the specific purpose of evading this chapter; or
    (P) any other person specified by rule adopted or order issued under this chapter;
    (12) "Insurance company" means a company organized as an insurance company whose
primary business is writing insurance or reinsuring risks underwritten by insurance companies
and which is subject to supervision by the insurance commissioner or a similar official or agency
of a state.
    (13) "Insured" means insured as to payment of all principal and all interest.
    (14) "International banking institution" means an international financial institution of
which the United States is a member and whose securities are exempt from registration under
the Securities Act of 1933.
    (15) "Investment adviser" means a person that, for compensation, engages in the business of
advising others, either directly or through publications or writings, as to the value of securities or
the advisability of investing in, purchasing, or selling securities or that, for compensation and
as a part of a regular business, issues or promulgates analyses or reports concerning securities.
The term includes a financial planner or other person that, as an integral component of other
financially related services, provides investment advice to others for compensation as part of a
business or that holds itself out as providing investment advice to others for compensation.
The term does not include:
    (A) an investment adviser representative;
    (B) a lawyer, accountant, engineer, or teacher whose performance of investment advice is
solely incidental to the practice of the person's profession;
    (C) a broker-dealer or its agents whose performance of investment advice is solely incidental
to the conduct of business as a broker-dealer and that does not receive special compensation
for the investment advice;
    (D) a publisher of a bona fide newspaper, news magazine, or business or financial publication
of general and regular circulation;
    (E) a federal covered investment adviser;
    (F) a bank or savings institution;
    (G) any other person that is excluded by the Investment Advisers Act of 1940 from the
definition of investment adviser; or
    (H) any other person excluded by rule adopted or order issued under this chapter.
    (16) "Investment adviser representative" means an individual employed by or associated
with an investment adviser or federal covered investment adviser and who makes any
recommendations or otherwise gives investment advice regarding securities, manages accounts or
portfolios of clients, determines which recommendation or advice regarding securities should
be given, provides investment advice or holds herself or himself out as providing investment
advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment
advice, or supervises employees who perform any of the foregoing. The term does not include an
individual who:
    (A) performs only clerical or ministerial acts;
    (B) is an agent whose performance of investment advice is solely incidental to the individual
acting as an agent and who does not receive special compensation for investment advisory
services;
    (C) is employed by or associated with a federal covered investment adviser, unless the
individual has a "place of business" in this state as that term is defined by rule adopted under
Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a) and is
    (i) an "investment adviser representative" as that term is defined by rule adopted under
Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a); or
    (ii) not a "supervised person" as that term is defined in Section 202(a)(25) of the Investment
Advisers Act of 1940 (15 U.S.C. Section 80b-2(a)(25)); or
    (D) is excluded by rule adopted or order issued under this chapter.
    (17) "Issuer" means a person that issues or proposes to issue a security, subject to the
following:
    (A) The issuer of a voting trust certificate, collateral trust certificate, certificate of deposit
for a security, or share in an investment company without a board of directors or individuals
performing similar functions is the person performing the acts and assuming the duties of
depositor or manager pursuant to the trust or other agreement or instrument under which the
security is issued.
    (B) The issuer of an equipment trust certificate or similar security serving the same purpose
is the person by which the property is or will be used or to which the property or equipment is or
will be leased or conditionally sold or that is otherwise contractually responsible for assuring
payment of the certificate.
    (C) The issuer of a fractional undivided interest in an oil, gas, or other mineral lease or in
payments out of production under a lease, right, or royalty is the owner of an interest in the lease
or in payments out of production under a lease, right, or royalty, whether whole or fractional, that
creates fractional interests for the purpose of sale.
    (18) "Nonissuer transaction" or "nonissuer distribution" means a transaction or distribution
not directly or indirectly for the benefit of the issuer.
    (19) "Offer to purchase" includes an attempt or offer to obtain, or solicitation of an offer to
sell, a security or interest in a security for value. The term does not include a tender offer that is
subject to Section 14(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78n(d)).
    (20) "Person" means an individual; corporation; business trust; estate; trust; partnership;
limited liability company; association; joint venture; government; governmental subdivision,
agency, or instrumentality; public corporation; or any other legal or commercial entity.
    (21) "Place of business" of a broker-dealer, an investment adviser, or a federal covered
investment adviser means:
    (A) an office at which the broker-dealer, investment adviser, or federal covered investment
adviser regularly provides brokerage or investment advice or solicits, meets with, or otherwise
communicates with customers or clients; or
    (B) any other location that is held out to the general public as a location at which the
broker-dealer, investment adviser, or federal covered investment adviser provides brokerage or
investment advice or solicits, meets with, or otherwise communicates with customers or clients.
    (22) "Predecessor Act" means Minnesota Statutes 2002, sections 80A.01 to 80A.31.
    (23) "Price amendment" means the amendment to a registration statement filed under the
Securities Act of 1933 or, if an amendment is not filed, the prospectus or prospectus supplement
filed under the Securities Act of 1933 that includes a statement of the offering price, underwriting
and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and
other matters dependent upon the offering price.
    (24) "Principal place of business" of a broker-dealer or an investment adviser means the
executive office of the broker-dealer or investment adviser from which the officers, partners, or
managers of the broker-dealer or investment adviser direct, control, and coordinate the activities
of the broker-dealer or investment adviser.
    (24a) "Purchaser" does not include:
    (A) any relative, spouse, or relative of the spouse of a purchaser who has the same principal
residence as the purchaser;
    (B) any trust or estate in which a purchaser and any of the persons related to him as specified
in Regulation D, Rule 501(e)(1)(i) or (e)(1)(ii) collectively have more than 50 percent of the
beneficial interest (excluding contingent interests);
    (C) any corporation or other organization of which a purchaser and any of the persons related
to the purchaser as specified in Regulation D, Rule 501(e)(1)(i) or (e)(1)(ii) collectively are
beneficial owners of more than 50 percent of the equity securities (excluding directors' qualifying
shares) or equity interests; and
    (D) any accredited investor as defined by Regulation D, Rule 501(3).
    A corporation, partnership, or other entity must be counted as one purchaser. If, however,
that entity is organized for the specific purpose of acquiring the securities offered and is not an
accredited investor, then each beneficial owner of equity securities or equity interests in the
entity shall count as a separate purchaser for all provisions of Regulation D, except to the extent
provided in Regulation D, Rule 501(e)(1).
    A noncontributory employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974 shall be counted as one purchaser where the trustee
makes all investment decisions for the plan.
    (25) "Record," except in the phrases "of record," "official record," and "public record,"
means information that is inscribed on a tangible medium or that is stored in an electronic or other
medium and is retrievable in perceivable form.
    (26) "Sale" includes every contract of sale, contract to sell, or disposition of, a security or
interest in a security for value, and "offer to sell" includes every attempt or offer to dispose of, or
solicitation of an offer to purchase, a security or interest in a security for value.
    (A) A security given or delivered with, or as a bonus on account of, any purchase of
securities or any other thing is considered to constitute part of the subject of the purchase and to
have been offered and sold for value.
    (B) A gift of assessable stock is considered to involve an offer and sale.
    (C) A sale or offer of a warrant or right to purchase or subscribe to another security of the
same or another issuer and a sale or offer of a security that gives the holder a present or future
right or privilege to convert the security into another security of the same or another issuer, are
each considered to include an offer of the other security.
    (27) "Securities and Exchange Commission" means the United States Securities and
Exchange Commission.
    (28) "Security" means a note; stock; treasury stock; security future; bond; debenture; evidence
of indebtedness; certificate of interest or participation in a profit-sharing agreement; collateral trust
certificate; preorganization certificate or subscription; transferable share; investment contract;
voting trust certificate; certificate of deposit for a security; fractional undivided interest in oil, gas,
or other mineral rights; put, call, straddle, option, or privilege on a security, certificate of deposit,
or group or index of securities, including an interest therein or based on the value thereof; put,
call, straddle, option, or privilege entered into on a national securities exchange relating to foreign
currency; or, in general, an interest or instrument commonly known as a "security"; or a certificate
of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or
warrant or right to subscribe to or purchase, any of the foregoing. The term:
    (A) includes both a certificated and an uncertificated security;
    (B) does not include an insurance or endowment policy or annuity contract under which an
insurance company promises to pay a fixed or variable sum of money either in a lump sum or
periodically for life or other specified period;
    (C) does not include an interest in a contributory or noncontributory pension or welfare plan
subject to the Employee Retirement Income Security Act of 1974;
    (D) includes as an "investment contract" an investment in a common enterprise with
the expectation of profits to be derived primarily from the efforts of a person other than the
investor and a "common enterprise" means an enterprise in which the fortunes of the investor are
interwoven with those of either the person offering the investment, a third party, or other investors;
    (E) includes as an "investment contract," among other contracts, an interest in a limited
partnership and a limited liability company and an investment in a viatical settlement or similar
agreement; and
    (F) does not include any equity interest of a closely held corporation or other entity with not
more than 35 holders of the equity interest of such entity offered or sold pursuant to a transaction
in which 100 percent of the equity interest of such entity is sold as a means to effect the sale of
the business of the entity if the transaction has been negotiated on behalf of all purchasers and
if all purchasers have access to inside information regarding the entity before consummating
the transaction.
    (29) "Self-regulatory organization" means a national securities exchange registered under the
Securities Exchange Act of 1934, a national securities association of broker-dealers registered
under the Securities Exchange Act of 1934, a clearing agency registered under the Securities
Exchange Act of 1934, or the Municipal Securities Rulemaking Board established under the
Securities Exchange Act of 1934.
    (30) "Sign" means, with present intent to authenticate or adopt a record:
    (A) to execute or adopt a tangible symbol; or
    (B) to attach or logically associate with the record an electronic symbol, sound, or process.
    (31) "State" means a state of the United States, the District of Columbia, Puerto Rico, the
United States Virgin Islands, or any territory or insular possession subject to the jurisdiction
of the United States.
    (32) "Associated with" with respect to a person means any partner, officer, director, or
manager of such person or any person occupying a similar status or performing similar functions
or any person directly or indirectly controlling, controlled by, or in common control with, such
person, but does not include a person whose primary duties are ministerial or clerical.
History: 2006 c 196 art 1 s 2
NOTE: This section, as added by Laws 2006, chapter 196, article 1, section 2, is effective
August 1, 2007. Laws 2006, chapter 196, article 1, section 52.