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Alaska Statutes.

Title 45. Trade and Commerce

Chapter 55. Alaska Securities Act

Section 990. Definitions.

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AS 45.55.990. Definitions.

In this chapter unless the context otherwise requires,

(1) "administrator" means the commissioner of commerce, community, and economic development or a designee of the commissioner;

(2) "advisory client" means a person to whom services are provided under an investment advisory contract;

(3) "advisory fee" means the fee for providing services under an investment advisory contract;

(4) "advisory services" means advising a person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise;

(5) "agent" means an individual other than a broker-dealer who represents a broker-dealer or an issuer in effecting or attempting to effect purchase or sale of securities; a partner, an officer, or a director of a broker-dealer or issuer, or a person occupying a similar status or performing similar functions, is an agent only if the person otherwise comes within this definition; "agent" does not include an individual who represents

(A) an issuer in effecting transactions

(i) in a security exempted by AS 45.55.900 (a);

(ii) exempted by AS 45.55.900 (b);

(iii) in a covered security as described in 15 U.S.C. 77r(b)(3) and (4)(D) (Securities Act of 1933); or

(iv) with existing employees, partners, or directors of the issuer if a commission or other remuneration is not paid or given directly or indirectly for soliciting any person in this state; or

(B) a broker-dealer in effecting transactions in this state described in 15 U.S.C. 78o(h)(2) and (3) (Securities Exchange Act of 1934);

(6) "Bank Holding Company Act of 1956" means 12 U.S.C. 1841 - 1850, as that act exists on or after October 1, 1999;

(7) "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; "broker-dealer" does not include

(A) an agent;

(B) an issuer;

(C) a bank, savings institution, or trust company;

(D) a person who has no place of business in this state if the 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 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940), pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustees; or

(E) a person who has no place of business in this state if, during a period of 12 consecutive months, the person does not effect more than 15 transactions at the initiation and direction of the customer and on behalf of residents of this state regardless of whether the residents are then present in this state and does not direct any offers initiated by the person to sell or buy into this state in any manner to persons other than those specified in (D) of this paragraph, regardless of whether the offeror or any offeree is then present in this state;

(8) "clients who are natural persons" means natural persons who are clients of a state investment adviser or federal covered adviser, except that natural persons with at least $750,000 under management with the state investment adviser or federal covered adviser or with a net worth of at least $1,500,000 at the time they initially contract for services described in (15)(A)(i) of this section, and other natural persons who may be designated by regulation or order of the administrator, are not considered natural persons for the purpose of determining under (15)(A)(ii) of this section if a supervised person provides the services described under (15)(A)(i) of this section to natural persons;

(9) "federal covered adviser" means a person who is registered with the United States Securities and Exchange Commission under 15 U.S.C. 80b-3 (Investment Advisers Act of 1940); "federal covered adviser" does not include a person that is excluded from the definition of "state investment adviser" under (34)(B)(i)-(v), (vii), or (viii) of this section;

(10) "federal covered security" means a security that is a covered security under 15 U.S.C. 77r(b) (Securities Act of 1933), or regulations adopted under that act;

(11) "Federal Deposit Insurance Act" means 12 U.S.C. 1811 - 1835a, as that act exists on or after October 1, 1999;

(12) "fraud," "deceit," and "defraud" are not limited to common-law deceit;

(13) "guaranteed" means guaranteed as to payment of principal, interest, or dividends;

(14) "Home Owners' Loan Act" means 12 U.S.C. 1461 - 1470, as that act exists on or after October 1, 1999;

(15) "investment adviser representative"

(A) means a natural person who

(i) makes a recommendation or otherwise renders advice regarding securities; manages accounts or portfolios of clients; determines which recommendation or advice regarding securities should be given; solicits, offers, or negotiates for the sale of or sells advisory services; or supervises employees who perform an activity described in this sub-subparagraph; and

(ii) is a supervised person of a state investment adviser that is registered or required to be registered under this chapter if a substantial portion of the business of the supervised person is providing to clients who are natural persons the services described in (i) of this subparagraph, or who is a supervised person of a federal covered adviser, has a place of business located in this state, and has six or more clients who are natural persons, if a substantial portion of the business of the supervised person is providing to clients who are natural persons the services described in (i) of this subparagraph;

(B) means other persons who are not otherwise covered by this paragraph but who are designated by regulation or order of the administrator;

(C) except persons covered by (36)(A)(ii) of this section, does not include a person that would not be defined as an investment adviser representative under 17 C.F.R. 275.203A-3 adopted under 15 U.S.C. 80b-3a (Investment Advisers Act of 1940), as that regulation exists on or after October 1, 1999;

(16) "Investment Advisers Act of 1940" means 15 U.S.C. 80b-1 - 80b-21, as that act exists on or after October 1, 1999;

(17) "investment advisory business" means a business in which a person receives compensation primarily for providing advisory services;

(18) "investment advisory contract" means a contract in which one person receives consideration from another person primarily for providing advisory services;

(19) "Investment Company Act of 1940" means 15 U.S.C. 80a-1 - 80a-64, as that act exists on or after October 1, 1999;

(20) "issuer" means a person who issues or proposes to issue any security, except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors, or persons performing similar functions or of the fixed, restricted management, or unit type, the term "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager under the provisions of the trust or other agreement or instrument under which the security is issued;

(21) "NASDAQ" means National Association of Securities Dealers Automatic Quotation System;

(22) "National Securities Markets Improvement Act of 1996" means P.L. 104-290, 101 Stat. 3416 - 3440, as that act exists on or after October 1, 1999;

(23) "nonissuer" means not directly or indirectly for the benefit of the issuer;

(24) "notice filing" means a filing made under AS 45.55.040 (h) or 45.55.075 unless the context indicates otherwise;

(25) "person" means an individual, a corporation, a partnership, a limited liability company, a limited partnership, a limited liability partnership, an association, a joint-stock company, a trust in which the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government;

(26) "place of business" of a state investment adviser, investment adviser representative, or federal covered adviser means

(A) an office at which the state investment adviser, federal covered adviser, or investment adviser representative regularly provides advisory services, solicits, meets with, or otherwise communicates with clients; and

(B) another location that is held out to the general public as a location at which the state investment adviser, federal covered adviser, or investment adviser representative provides advisory services, solicits, meets with, or otherwise communicates with clients;

(27) "principal place of business" of a state investment adviser, investment adviser representative, or federal covered adviser means the executive office of the state investment adviser, investment adviser representative, or federal covered adviser from which the officers, partners, or managers of the state investment adviser, investment adviser representative, or federal covered adviser direct, control, and coordinate the activities of the state investment adviser, investment adviser representative, or federal covered adviser;

(28) "sale" or "sell" includes every contract of sale of, contract to sell, or disposition of, a security or interest in a security for value; "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; a security given or delivered with, or as a bonus on account of, a 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; a purported gift of assessable stock is considered to involve an offer and sale; 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;

(29) "Securities Act of 1933" means 15 U.S.C. 77a - 77bbbb, as that act exists on or after October 1, 1999:

(30) "securities business" means a business that provides the services provided by

(A) state investment advisers, federal covered advisers, or investment adviser representatives; or

(B) broker-dealers, issuers, or agents of broker-dealers or issuers;

(31) "Securities Exchange Act of 1934" means 15 U.S.C. 78a - 78lll, as that act exists on or after October 1, 1999;

(32) "security" means a note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; limited liability company interest under AS 10.50, notwithstanding the limitations of AS 45.08.103 (c); collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting-trust certificate; certificate of deposit for a security; viatical settlement interest; certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under the title or lease or in any sale of or indenture or bond or contract for the conveyance of land or any interest in land; an option on a contract for the future delivery of agricultural or mineral commodities or any other commodity offered or sold to the public and not regulated by the Commodity Futures Trading Commission; however, the contract or option is not subject to the provisions of AS 45.55.070 if it is sold or purchased on the floor of a bona fide exchange or board of trade and offered or sold to the public by a broker-dealer or agent registered under this chapter; investment of money or money's worth including goods furnished or services performed in the risk capital of a venture with the expectation of some benefit to the investor where the investor has no direct control over the investment or policy decision of the venture; 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 a participation agreement entered into under AS 14.40.802 or 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 for some other specified period;

(33) "state" means any state, territory, or possession of the United States, the District of Columbia, and Puerto Rico;

(34) "state investment adviser"

(A) means

(i) a person who, for compensation, engages in the business of advising others, either directly or through publications or writings, 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, or who, for compensation, engages in this state in the business of managing an investment or trading account in securities for other persons;

(ii) a financial planner or other person who, as an integral component of other financially related services, provides the services described in (i) of this subparagraph to others for compensation and as part of a business or who holds out to provide the services described in (i) of this subparagraph to others for compensation;

(B) does not include

(i) an investment adviser representative;

(ii) a savings institution, a trust company, a bank holding company as defined in 12 U.S.C. 1841 (Bank Holding Company Act of 1956), or a bank that is not an investment company;

(iii) a lawyer, an accountant, an engineer, or a teacher whose performance of the services described in (A)(i) of this paragraph is incidental to the practice of the person's profession;

(iv) a broker-dealer or its agent whose performance of the services described in (A)(i) of this paragraph is incidental to the conduct of business as a broker-dealer or an agent and who does not receive special compensation for the services;

(v) a publisher of a bona fide newspaper, news column, newsletter, news magazine, or business or financial publication or service, whether communicated in hard copy form, 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;

(vi) a person that is a federal covered adviser;

(vii) a person whose sole clients are the person's spouse, parents, children, or siblings by blood or adoption, and who does not hold out to provide the services described in (A)(i) of this paragraph to the general public;

(viii) other persons not within the intent of this paragraph whom the administrator may designate by regulation or order;

(35) "substantial portion of the business" means that more than 10 percent of the clients of a supervised person during the preceding 12 months are clients who are natural persons to whom the supervised person is providing the services described in (15)(A)(i) of this section;

(36) "supervised person"

(A) means

(i) a partner, an officer, a director, or another person occupying a similar status or performing similar functions, an employee of a state investment adviser or federal covered adviser, or another person who provides services described in (15)(A)(i) of this section to clients on behalf of the state investment adviser or federal covered adviser if the person is subject to the supervision and control of the state investment adviser or federal covered adviser;

(ii) a third-party natural person employed primarily to solicit, offer, or negotiate for the sale of or to sell the services described in (15)(A)(i) of this section for a state investment adviser or federal covered adviser, even if the person is not subject to the supervision or control of the state investment adviser or federal covered adviser;

(B) does not include a person who

(i) does not on a regular basis solicit, meet with, or otherwise communicate with clients of a state investment adviser or federal covered adviser as a normal and ordinary part of the duties of the person; or

(ii) provides the services described in (15)(A)(i) of this section only by means of written material or oral statements that do not claim to meet the objectives or needs of specific individuals or accounts;

(37) "viatical settlement interest"

(A) means the entire interest or any fractional interest in a life insurance policy or in the death benefit under a life insurance policy that is the subject of a viatical settlement contract;

(B) does not include the initial purchase from the viator by a viatical settlement provider;

(38) "viator" means the owner of a life insurance policy insuring the life of an individual who enters or who seeks to enter a viatical settlement contract.