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The Vermont Statutes Online



Title

09

:
Commerce and Trade






Chapter

150

:
SECURITIES ACT






Subchapter

001
:
GENERAL PROVISIONS










 

§

5102. Definitions

In this chapter,

unless the context otherwise requires:

(1)

"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.

(2)

"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 12 U.S.C. § 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

subdivision (2)(A), (B), or (C) of this section.

(3)

"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 bank or

savings institution if its activities as a broker-dealer are limited to those

specified in subdivisions 15 U.S.C. § 78c(a)(4)(B)(i) through (vi), (viii)

through (x), and (xi) if limited to unsolicited transactions; and 15 U.S.C. §

78c(a)(5)(B) and (C) or a bank that satisfies the conditions described in 15

U.S.C. § 78c(a)(4)(E);

(D) an

international banking institution; or

(E) a person

excluded by rule adopted or order issued under this chapter.

(4)

"Commissioner" means the Commissioner of Financial Regulation.

(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, 12 U.S.C. § 1813(c)(2), or any successor federal statute.

(6)

"Federal covered investment adviser" means a person registered under

15 U.S.C. § 80b-1 et seq.

(7)

"Federal covered security" means a security that is, or upon completion

of a transaction will be, a covered security under 15 U.S.C. § 77r(b) or rules

or regulations adopted pursuant to that provision.

(8)

"Filing" means the receipt under this chapter of a record by the

Commissioner or a designee of the Commissioner.

(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 15 U.S.C. § 80a-1 et seq.;

(E) a

broker-dealer registered under 15 U.S.C. § 78a et seq.;

(F) an employee

pension, profit-sharing, or benefit plan if the plan has total assets in excess

of $10,000,000.00 or its investment decisions are made by a named fiduciary, as

defined in 29 U.S.C. § 1001 et seq., that is a broker-dealer registered under

15 U.S.C. § 78a et seq., an investment adviser registered or exempt from

registration under 15 U.S.C. § 80a-1 et seq., 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

$10,000,000.00 or its investment decisions are made by a duly designated public

official or by a named fiduciary, as defined in 29 U.S.C. § 1001 et seq., that

is a broker-dealer registered under 15 U.S.C. § 78a et seq., an investment

adviser registered or exempt from registration under 15 U.S.C. § 80a-1 et seq.,

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 $10,000,000.00, its trustee is a depository

institution, and its participants are exclusively plans of the types identified

in subdivision (11)(F) or (G) of this section, 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 26 U.S.C. § 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 $10,000,000.00;

(J) a small

business investment company licensed by the Small Business Administration under

15 U.S.C. § 681(c) with total assets in excess of $10,000,000.00;

(K) a private

business development company as defined in 15 U.S.C. § 80b-2(a)(22) with total

assets in excess of $10,000,000.00;

(L) a federal

covered investment adviser acting for its own account;

(M) a

"qualified institutional buyer" as defined in 17 C.F.R.

230.144A(a)(1), other than subdivision 17 C.F.R. 230.144A(a)(1)(i)(H);

(N) a

"major U.S. institutional investor" as defined in 17 C.F.R.

240.15a-6(b)(4)(i);

(O) any other

person, other than an individual, of institutional character with total assets

in excess of $10,000,000.00 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 15 U.S.C. § 77a et seq.

(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 15 U.S.C. § 80b-1 et seq. 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 himself or herself 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 15 U.S.C. § 80b-3a, and is:

(i) an

"investment adviser representative" as that term is defined by rule

adopted under 15 U.S.C. § 80b-3a; or

(ii) not a

"supervised person" as that term is defined in 15 U.S.C. §

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

as 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 15 U.S.C. § 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 chapter 131 of this title.

(23) "Price

amendment" means the amendment to a registration statement filed under 15

U.S.C. § 77a et seq. or, if an amendment is not filed, the prospectus or

prospectus supplement filed under 15 U.S.C. § 77a et seq. 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.

(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. Both

terms include:

(A) a security

given or delivered with, or as a bonus on account of, a purchase of securities

or any other thing constituting part of the subject of the purchase and having

been offered and sold for value;

(B) a gift of

assessable stock involving an offer and sale; and

(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, including an offer of the other

security.

(27)

"Securities and Exchange Commission" means the U.S. 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 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 29 U.S.C. § 1001 et seq.;

(D) includes 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; and

(E) includes as

an "investment contract" among other contracts an interest in a

limited partnership, a limited liability company, an investment in a viatical

settlement, or similar agreement.

(29) "Self-regulatory

organization" means any national securities exchange, registered

securities association, clearing agency registered under 15 U.S.C. § § 78a et

seq., or, solely for purposes of sections 19(b), 19(c), and 23(b) of 15 U.S.C. §

78a et seq., the Municipal Securities Rulemaking Board established under 15

U.S.C. § 78a et seq.

(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. (Added 2005, No.

11, § 1, eff. July 1, 2006; amended 2005, No. 122 (Adj. Sess.), §§ 9-12; 2011,

No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)