1999 Minnesota Statutes

     80A.14 Definitions. 

    Subdivision 1.    Terms.  When used in sections 80A.01 
 to 80A.31, the terms defined in this section have the meanings 
 given them unless the context otherwise requires.  

    Subd. 2.    Affiliate.  "Affiliate" of another person 
 means any person directly or indirectly controlling, controlled 
 by, or under common control with the other person. 

    Subd. 3.    Agent.  "Agent" means any individual other 
 than a broker-dealer who represents a broker-dealer or issuer in 
 effecting or attempting to effect purchases or sales of 
 securities.  "Agent" does not include: 

    (a) an individual who represents an issuer in: 

    (1) effecting transactions in a security exempted by 
 section 80A.15, subdivision 1; 

    (2) effecting transactions exempted by section 80A.15, 
 subdivision 2; 

    (3) effecting transactions with existing employees, 
 partners or directors of the issuer if no commission or other 
 remuneration is paid or given directly or indirectly for 
 soliciting any person in this state; 

    (4) effecting other transactions, if the individual is an 
 officer or director of the issuer, no commission or other 
 remuneration is paid or given directly or indirectly for 
 soliciting any person in this state, and, upon application, the 
 individual is specifically authorized by name in an order issued 
 by the commissioner; 

    (5) effecting transactions in securities registered by 
 notification under section 80A.09 if no commission or other 
 remuneration is paid or given directly or indirectly for 
 soliciting any person in this state; or 

    (6) effecting transactions in a federal covered security as 
 described in sections 18(b)(3) and 18(b)(4) of the Securities 
 Act of 1933; or 

    (b) an individual who represents a broker-dealer in 
 effecting transactions in the state limited to those 
 transactions described in section 15(h)(2) of the Securities 
 Exchange Act of 1934. 

    A partner, officer or director of a broker-dealer or 
 issuer, or a person occupying a similar status or performing 
 similar functions, is an agent only if that person otherwise 
 comes within this definition. 

    Subd. 4.    Broker-dealer.  "Broker-dealer" means any 
 person engaged in the business of effecting transactions in 
 securities for the account of others or for that person's own 
 account. "Broker-dealer" does not include: 

    (1) an agent; 

    (2) an issuer; 

    (3) a trust company; or 

    (4) a bank, savings institution, savings association, 
 credit union: 

    (i) acting for the account of others, provided that such 
 activities are conducted in compliance with such rules as may be 
 adopted by the commissioner; 

    (ii) acting for its own account; or 

    (iii) acting in a fiduciary capacity pursuant to the powers 
 and privileges described by sections 48.36 to 48.49 or United 
 States Code, title 12, section 92(a); 

    (5) a person who has no place of business in this state if 
 that person effects transactions in this state exclusively with 
 or through (i) the issuers of the securities involved in the 
 transactions, (ii) other broker-dealers, or (iii) banks, savings 
 institutions, trust companies, insurance companies, investment 
 companies as defined in the Investment Company Act of 1940, or 
 other financial institutions or institutional buyers, or to 
 broker-dealers, whether the purchaser is acting for itself or in 
 some fiduciary capacity; or 

    (6) other persons not within the intent of this subsection 
 whom the commissioner by rule or order designates. 

    Subd. 5.    Commissioner.  "Commissioner" means the 
 commissioner of commerce. 

    Subd. 5a.    Federal covered adviser.  "Federal covered 
 adviser" means a person who is:  (1) registered under section 
 203 of the Investment Act of 1940; or (2) is excluded from the 
 definition of "investment adviser" under section 202(a)(11). 

    Subd. 5b.    Federal covered security.  "Federal covered 
 security" means a security that is a covered security under 
 section 18(b) of the Securities Act of 1933 or regulations 
 adopted under that act. 

    Subd. 6.    Fraud, deceit, defraud.  "Fraud," "deceit" 
 and "defraud" are not limited to common law deceit. 

    Subd. 7.    Guaranteed.  "Guaranteed" means guaranteed 
 as to payment of principal and interest or principal and 
 dividends. 

    Subd. 8. Repealed, 1996 c 439 art 2 s 18 

    Subd. 8a.    Institutional buyer.  For the purposes of 
 sections 80A.04, subdivision 3; 80A.14, subdivision 4, clause 
 (5); and 80A.15, subdivision 2, paragraph (g), "institutional 
 buyer" includes, but is not limited to, a corporation with a 
 class of equity securities registered under section 12(b) or 
 12(g) of the Securities Exchange Act of 1934, as amended, a 
 "qualified institutional buyer" within the meaning of rule 144A, 
 and an "accredited investor" within the meaning of rule 501(a) 
 of regulation D. 

    Subd. 9.    Investment adviser.  "Investment adviser" 
 means any person who, for compensation, engages in the business 
 of advising others, either directly or through publications, 
 writings or electronic means, as to the value of securities or 
 as to the advisability of investing in, purchasing, or selling 
 securities, or who, for compensation and as a part of a regular 
 business, issues or promulgates analyses or reports concerning 
 securities.  "Investment adviser" does not include: 

    (1) a bank, savings institution, credit union, or trust 
 company; 

    (2) a lawyer, accountant, engineer, or teacher whose 
 performance of these services is solely incidental to the 
 practice of that person's profession; 

    (3) a broker-dealer whose performance of these services is 
 solely incidental to the conduct of the business as a 
 broker-dealer and who receives no special compensation for them; 

    (4) a publisher of any newspaper, news column, newsletter, 
 news magazine, or business or financial publication or service, 
 whether communicated in hard copy form, or by electronic means, 
 or otherwise, that does not consist of the rendering of advice 
 on the basis of the specific investment situation of each 
 client; or 

    (5) other persons not within the intent of this subdivision 
 as the commissioner may by rule or order designate. 

    Subd. 9a.    Investment adviser representative.  
 "Investment adviser representative" means any partner, officer, 
 or director of an investment adviser, or any person performing 
 similar functions, or any person, directly or indirectly, 
 controlling or controlled by an investment adviser, including 
 any employee of an investment adviser who provides investment 
 advice to clients. 

    Subd. 10.    Investment metal.  "Investment metal" means 
 any object which contains gold, silver, platinum, indium, 
 chromium, or germanium, or any other metal which the 
 commissioner may specify by rule upon a showing that such other 
 metal is being purchased and sold by the public as an investment.

    Subd. 11.    Investment gem.  "Investment gem" means any 
 gem which the commissioner may specify by rule upon a showing 
 that the gem is being purchased and sold by the public as an 
 investment. 

    Subd. 12.    Investment metal contract.  "Investment 
 metal contract" or "investment gem contract" means: 

    (i) a sale of an investment metal or investment gem in 
 which the seller or an affiliate of the seller retains 
 possession of the investment metal or investment gem; or 

    (ii) a contract of purchase or sale which provides for the 
 future delivery of an investment metal or investment gem, or any 
 option to purchase or option to sell such a contract; or 

    (iii) a sale of an investment metal or investment gem 
 pursuant to a contract known to the trade as a margin account, 
 margin contract, leverage account, or leverage contract. 

    "Investment metal contract" or "investment gem contract" 
 shall not include: 

    (i) the sale of an investment metal or investment gem where 
 the seller has reasonable grounds to believe that the investment 
 metal or investment gem is being acquired for manufacturing, 
 commercial or industrial purposes; or 

    (ii) the sale, or contract for the future purchase or sale, 
 of jewelry, art objects or other manufactured or crafted goods 
 other than bullion or bulk sales of coins; or 

    (iii) the sale of an investment metal or investment gem 
 where full payment is made to the seller, and delivery of the 
 investment metal or investment gem is made to the purchaser, or 
 to a bank, savings institution, trust company, broker-dealer, or 
 safe deposit company designated by the purchaser, within 20 days 
 of the date of purchase, if the bank, savings institution, trust 
 company, broker-dealer, or safe deposit company is located 
 within this state, and is, where required, licensed under the 
 laws of this state, provided that a safe deposit company 
 accepting such delivery may not be an affiliate of the seller; 
 or 

    (iv) any futures contracts traded on a commodities exchange 
 registered under the Federal Commodity Futures Trading 
 Commission Act of 1974. 

    Subd. 13.    Issuer.  "Issuer" means any person who 
 issues or proposes to issue any security and any promoter who 
 acts for an issuer to be formed, except: 

    (1) with respect to certificates of deposit or trust 
 certificates, issuer means the person performing the act and 
 assuming the duties of depositor, manager or trustee pursuant to 
 the provisions of the trust or other instrument under which the 
 security is issued; 

    (2) with respect to certificates of interest or 
 participation in oil, gas or mining rights, titles or leases, 
 issuer means the owner of any such right, title or lease, who 
 creates fractional interest therein for the purposes of sale. 

    Subd. 14.    Nonissuer.  "Nonissuer" means not directly 
 or indirectly for the benefit of the issuer or an affiliate of 
 the issuer. 

    Subd. 15.    Person.  "Person" means an individual, 
 corporation, a partnership, an association, a joint stock 
 company, a trust where the interests of the beneficiaries are 
 evidenced by a security, an unincorporated organization, a 
 government, a political subdivision of a government or any other 
 entity. 

    Subd. 16.    Purchasing for investment.  "Purchasing for 
 investment" means a purchase made for investment and not for the 
 purpose of resale.  In determining whether securities have been 
 purchased for investment, the length of the period for which the 
 securities are held will be one of the factors considered.  
 Securities held for two years after their purchase shall be 
 conclusively deemed to have been purchased for investment. 

    Subd. 17.    Sale, sell.  (1) "Sale" or "sell" includes 
 every contract of sale of, contract to sell, or disposition of, 
 a security or interest in a security for value. 

    (2) "Offer" or "offer to sell" includes every attempt or 
 offer to dispose of, or solicitation of an offer to buy, a 
 security or interest in a security for value. 

    (3) Any 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. 

    (4) A purported gift of assessable stock is considered to 
 involve an offer and sale. 

    (5) Every sale or offer of a warrant or right to purchase 
 or subscribe to another security of the same or another issuer, 
 as well as every sale or offer of a security which gives the 
 holder a present or future right or privilege to convert into 
 another security of the same or another issuer, is considered to 
 include an offer of the other security. 

    (6) The terms defined in this subdivision do not include 
 (i) any bona fide pledge or loans; (ii) any stock dividend, 
 whether the corporation distributing the dividend is the issuer 
 of the stock or not. 

    Subd. 18.    Security.  (a) "Security" means any note; 
 stock; treasury stock; bond; debenture; evidence of 
 indebtedness; certificate of interest or participation in any 
 profit sharing agreement; collateral trust certificate; 
 preorganization certificate or subscription; transferable 
 shares; investment contract; investment metal contract or 
 investment gem contract; voting trust certificate; certificate 
 of deposit for a security; certificate of interest or 
 participation in an oil, gas or mining right, title or lease or 
 in payments out of production under the right, title or lease; 
 or, in general, any interest or instrument commonly known as a 
 security, or any 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.  "Security" does not include:  

    (1) any insurance or endowment policy or annuity contract 
 under which an insurance company promises to pay money either in 
 a lump sum or periodically for life or for some other specified 
 period; or 

    (2) stock of a closely held corporation offered or sold 
 pursuant to a transaction in which 100 percent of the stock of 
 that corporation is sold as a means to effect the sale of the 
 business of the corporation if the transaction has been 
 negotiated on behalf of all purchasers, and if all purchasers 
 have access to inside information regarding the corporation 
 before consummating the transaction. 

    (b) A security that is offered and sold pursuant to section 
 4(5) of the Securities Act of 1933 or that is a "mortgage 
 related security" (as defined in section 3(a)(41) of the 
 Securities Exchange Act of 1934) is not a security exempt from 
 registration under section 80A.15, subdivision 1, paragraph (a), 
 in the same manner as obligations issued or guaranteed as to 
 principal and interest by the United States or its agencies or 
 instrumentalities.  This provision specifically overrides the 
 preemption of state law contained in section 106(c) of the 
 Secondary Mortgage Market Enhancement Act of 1984, Public Law 
 Number 98-440. 

    Subd. 19.    State.  "State" means any state, territory 
 or possession of the United States, the District of Columbia and 
 Puerto Rico.  

    Subd. 20.    Qualified charity.  "Qualified charity" 
 means an organization that is described in section 501(c)(3) of 
 the Internal Revenue Code and that is not a private foundation 
 as described in section 509 of the Internal Revenue Code.  

    Subd. 21.    Internal Revenue Code.  "Internal Revenue 
 Code" means the Internal Revenue Code of 1986, as amended, 
 United States Code, title 26, section 1 et seq.  

    Subd. 22.    Pooled income fund.  "Pooled income fund" 
 means a trust that meets the requirements of a pooled income 
 fund as defined in section 642(C)(5) of the Internal Revenue 
 Code, provided that the remainder beneficiary is a qualified 
 charity. 

    Subd. 23.    Charitable remainder trust.  "Charitable 
 remainder trust" means a trust that meets the requirements of 
 either a charitable remainder annuity trust or a charitable 
 remainder unitrust as defined in section 664 of the Internal 
 Revenue Code, provided that the remainder beneficiary is a 
 qualified charity. 

    Subd. 24.    Charitable lead trust.  "Charitable lead 
 trust" means a trust that meets the requirements of a charitable 
 lead trust as described in section 170(F)(2) of the Internal 
 Revenue Code, provided that the lead beneficiary is a qualified 
 charity. 

    Subd. 25.    Charitable gift annuity.  "Charitable gift 
 annuity" means an annuity that meets the requirements of a 
 charitable gift annuity as defined in section 501(m)(5) of the 
 Internal Revenue Code. 

    HIST: 1973 c 451 s 14; 1975 c 371 s 1; 1980 c 516 s 2; 1981 c 
 140 s 5; 1983 c 284 s 8-10; 1983 c 289 s 114 subd 1; 1984 c 552 
 s 4; 1984 c 655 art 1 s 92; 1985 c 248 s 70; 1986 c 358 s 4; 
 1986 c 444; 1987 c 336 s 13; 1989 c 209 art 1 s 8; 1993 c 257 s 
 39,40; 1995 c 11 s 2; 1995 c 202 art 1 s 25; 1996 c 439 art 2 s 
 7-12; 1997 c 222 s 22-26