0001| HOUSE BILL 658
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0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003| INTRODUCED BY
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0004| MURRAY RYAN
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0005|
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0006|
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0007|
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0008|
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0009|
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0010| AN ACT
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0011| RELATING TO SECURITIES; AMENDING CERTAIN PROVISIONS OF THE NEW
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0012| MEXICO SECURITIES ACT OF 1986.
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0013|
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0014| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0015| Section 1. Section 58-13B-2 NMSA 1978 (being Laws 1986,
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0016| Chapter 7, Section 2, as amended) is amended to read:
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0017| "58-13B-2. DEFINITIONS.--As used in the New Mexico
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0018| Securities Act of 1986:
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0019| A. "affiliate" means a person who directly or
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0020| indirectly through one or more intermediaries, controls, is
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0021| controlled by or is under common control with another person;
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0022| B. "broker-dealer" means [any] a person engaged
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0023| in the business of effecting transactions in securities for the
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0024| account of others or for the person's own account. Broker-
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0025| dealer does not include:
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0001| (1) a sales representative;
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0002| (2) an issuer, except when effecting
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0003| transactions other than with respect to its own securities;
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0004| (3) a depository institution when acting on
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0005| its own account or when exercising trust or fiduciary powers
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0006| permitted for [such] a depository [institutions under]
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0007| institution pursuant to applicable state or federal laws and
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0008| regulations providing for the organization, operation,
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0009| supervision and examination of [such] the depository
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0010| institution; or
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0011| (4) any other person as the director by rule
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0012| or order designates;
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0013| C. "control person" means an officer, director,
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0014| managing partner or trustee, manager of a limited liability
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0015| company or person of similar status or function or any security
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0016| holder who owns beneficially or of record ten percent or more
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0017| of any class of securities of an issuer;
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0018| D. "depository institution":
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0019| (1) means:
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0020| [(1)] (a) a person [which] that
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0021| is organized, chartered or holding an authorization certificate
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0022| under the laws of a state or of the United States [which]
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0023| that authorizes the person to receive deposits, including a
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0024| savings, share, certificate or deposit account, [and which]
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0025| is regulated, supervised and examined for the protection of
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0001| depositors by an official or agency of a state or the United
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0002| States and is insured by the federal depository insurance
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0003| corporation, the federal savings and loan insurance corporation
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0004| or the national credit union share insurance fund; and
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0005| [(2)] (b) a trust company or other
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0006| institution that is authorized by federal or state law to
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0007| exercise fiduciary powers of the type a national bank is
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0008| permitted to exercise under the authority of the comptroller of
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0009| the currency and is regulated, supervised and examined by an
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0010| official or agency of a state or the United States; and
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0011| (2) ["Depository institution"] does not
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0012| include an insurance company or other organization primarily
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0013| engaged in the insurance business or a Morris plan bank,
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0014| industrial loan company or a similar bank or company;
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0015| E. "director" means the director of the securities
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0016| division of the regulation and licensing department;
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0017| F. "division" means the securities division of the
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0018| regulation and licensing department;
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0019| G. "federal covered security" means any security
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0020| described as a "covered security" in the federal Securities Act
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0021| of 1933, except that, prior to October 11, 1999, a security
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0022| that would otherwise qualify as a federal covered security for
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0023| which the correct fee has not been paid as required by the New
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0024| Mexico Securities Act of 1986 shall not be a federal covered
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0025| security, if such deficiency is not remedied within twenty days
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0001| of the date of notice of the deficiency;
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0002| [G.] H. "filed" means the receipt of a document
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0003| or application by the director or by the authorized
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0004| representative of the director at the principal office of the
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0005| director;
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0006| [H.] I. "financial or institutional investor"
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0007| means any of the following, whether acting for itself or others
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0008| in a fiduciary capacity, other than as an agent:
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0009| (1) a depository institution;
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0010| (2) an insurance company;
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0011| (3) a separate account of an insurance
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0012| company;
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0013| (4) an investment company as defined in the
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0014| Investment Company Act of 1940;
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0015| (5) an employee pension, profit-sharing or
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0016| benefit plan, if:
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0017| (a) [if] the plan has total assets in
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0018| excess of five million dollars ($5,000,000); or
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0019| (b) [if] investment decisions are made
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0020| by a plan fiduciary, as defined in the Employee Retirement
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0021| Income Security Act of 1974, which is either a broker-dealer
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0022| registered under the Securities Exchange Act of 1934, an
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0023| investment adviser registered or exempt from registration under
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0024| the Investment Advisers Act of 1940, a depository institution
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0025| or an insurance company;
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0001| (6) a business development company as defined
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0002| by the Investment Company Act of 1940;
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0003| (7) a small business investment company
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0004| licensed by the United States small business administration
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0005| under Section 301(c) or (d) of the Small Business Investment
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0006| Act of 1958; or
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0007| (8) any other financial or institutional
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0008| investor as the director by rule or order designates;
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0009| [I.] J. "fraud", "deceit" and "defraud" are not
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0010| limited to common-law fraud or deceit;
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0011| [J.] K. "guaranteed" means guaranteed as to
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0012| payment of principal, interest and dividends;
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0013| [K.] L. "insured" means insured as to payment
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0014| of principal, interest and dividends;
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0015| [L.] M. "investment adviser":
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0016| (1) means [any] a person who, for
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0017| compensation, engages in the business of advising others as to
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0018| the value of securities or as to the advisability of investing
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0019| in, purchasing or selling securities, or who, for compensation
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0020| and as a part of a regular business, issues or promulgates
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0021| analyses or reports concerning securities; [Investment
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adviser] and
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0023| (2) does not include:
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0024| [(1)] (a) an investment adviser
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0025| representative;
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0001| [(2)] (b) a depository institution
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0002| when acting on its own account or when exercising trust or
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0003| fiduciary powers permitted for such depository institutions
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0004| under applicable state or federal laws and regulations
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0005| providing for the organization, operation, supervision and
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0006| examination of such depository institution;
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0007| [(3)] (c) a lawyer, accountant,
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0008| engineer or teacher whose performance of these services is
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0009| solely incidental to the practice of the person's profession;
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0010| [(4)] (d) a broker-dealer whose
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0011| performance of the investment advisory services is solely
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0012| incidental to the conduct of business as a broker-dealer and
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0013| who receives no special compensation for the investment
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0014| advisory services;
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0015| [(5)] (e) a publisher, employee or
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0016| columnist of a newspaper, news magazine or business or
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0017| financial publication, or an owner, operator, producer or
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0018| employee of a cable, radio or television network, station or
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0019| production facility if, in either case, the financial or
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0020| business news published or disseminated is made available to
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0021| the general public and the content does not consist of
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0022| rendering advice on the basis of the specific investment
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0023| situation of each client; or
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0024| [(6)] (f) any other person as the
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0025| director by rule or order designates;
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0001| [M.] N. "investment adviser representative"
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0002| means a natural person other than an investment adviser who,
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0003| whether as an employee or in the form of a professional
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0004| corporation is under the direct supervision of an investment
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0005| adviser and engages in the business of advising others as to
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0006| the value of securities or [as to] about the advisability
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0007| of investing in, purchasing or selling securities, or who, for
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0008| compensation and as part of a regular business, issues or
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0009| promulgates analyses or reports concerning securities;
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0010| [N.] O. "issuer" means a person that issues or
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0011| proposes to issue a security, except that:
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0012| (1) in respect to the issuer of a collateral
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0013| trust certificate, voting trust certificate, certificate of
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0014| deposit for a security or share in an investment company
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0015| without a board of directors or persons performing similar
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0016| functions, "issuer" means the person or persons performing
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0017| the acts and assuming the duties of depositor or manager
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0018| pursuant to the provisions of the trust or other agreement or
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0019| instrument under which the security is issued;
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0020| (2) in respect to the issuer of an equipment
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0021| trust certificate, including a conditional sales contract, or
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0022| similar security serving the same purpose, "issuer" means the
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0023| person to whom the equipment or property is or is to be leased
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0024| or conditionally sold; and
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0025| (3) in respect to the issuer of an interest
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0001| in oil, gas or other mineral rights "issuer" means the owner
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0002| of an interest in such a right, whether whole or fractional,
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0003| who creates interests for the purposes of sale;
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0004| [O.] P. "non-issuer transaction" means a
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0005| transaction not directly or indirectly for the benefit of the
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0006| issuer;
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0007| [P.] Q. "person" means a [natural person,
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corporation, business trust, estate, trust, partnership,
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limited liability company, association, joint venture,
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government in its private or public capacity, governmental
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subdivision or agency or any other] legal [or commercial]
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0012| entity;
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0013| [Q.] R. "price amendment" means the amendment
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0014| to a registration statement filed under the Securities Act of
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0015| 1933 or, if no amendment is filed, the prospectus or prospectus
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0016| supplement filed under the Securities Act of 1933, [which]
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0017| that includes a statement of the offering price, underwriting
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0018| and selling discounts or commissions, amount of proceeds,
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0019| conversion rates, call prices and other matters dependent upon
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0020| the offering price;
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0021| [R.] S. "promoter" includes:
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0022| (1) a person who, acting alone or in concert
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0023| with one or more other persons, takes the entrepreneurial
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0024| initiative in founding or organizing the business or enterprise
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0025| of an issuer;
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0001| (2) an officer or director or person of
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0002| similar status or function owning any securities of an issuer
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0003| or any security holder who owns, beneficially or of record, ten
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0004| percent or more of any class of securities of the issuer if the
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0005| officer, director, person of similar status or security holder
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0006| acquires any of those securities in a transaction which does
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0007| not possess the indicia of arm's-length bargaining or which is
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0008| otherwise unfair to the issuer; or
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0009| (3) a member of the immediate family of a
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0010| person [within] described in Paragraph (1) or (2) of this
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0011| subsection if the family member received the securities in a
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0012| transaction [which] that does not possess the indicia of
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0013| arm's-length bargaining or which is otherwise unfair to the
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0014| issuer;
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0015| [S.] T. the following words and phrases have the
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0016| indicated meanings:
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0017| (1) "sale" or "sell" includes every contract
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0018| of sale, contract to sell or other disposition of a security or
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0019| interest in a security for value;
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0020| (2) "offer to sell" includes every attempt or
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0021| offer to dispose of, or solicitation of an offer to purchase, a
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0022| security or interest in a security for value;
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0023| (3) "offer to purchase" includes every attempt
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0024| or offer to obtain, or solicitation of an offer to sell, a
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0025| security or interest in a security for value;
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0001| (4) a security given or delivered with, or as
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0002| a bonus on account of, a purchase of securities or other item
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0003| is considered to constitute part of the subject of the purchase
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0004| and to have been offered and sold for value;
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0005| (5) a gift of assessable stock is deemed to
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0006| involve an offer and sale; and
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0007| (6) a sale or offer of a warrant or right to
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0008| purchase or subscribe to another security of the same or
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0009| another issuer, or a sale or offer of a security that gives the
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0010| holder a present or future right or privilege to convert into
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0011| another security of the same or another issuer, is deemed to
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0012| include an offer of the other security; [and]
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0013| U. [(7)] the terms defined in [this]
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0014| Subsection T of this section do not include the creation of
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0015| security interest or a loan of a security; a stock dividend,
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0016| whether the corporation distributing the dividend is the issuer
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0017| of the stock or not, if nothing of value is given by
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0018| stockholders for the dividend other than the surrender of a
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0019| right to a cash or property dividend and each stockholder may
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0020| elect to take the dividend in cash, property or stock; or an
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0021| act incident to a judicially approved reorganization in which a
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0022| security is issued in exchange for one or more outstanding
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0023| securities, claims or property interests, or partly in exchange
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0024| and partly for cash, [Provided, however, that] but the
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0025| terms contained in this [paragraph] subsection are within
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0001| the meaning of [this] Subsection T of this section for the
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0002| purpose of Section 58-13B-30 NMSA 1978;
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0003| [T.] V. "sales representative" means an
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0004| individual other than a broker-dealer, whether as an employee
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0005| or in the form of a professional corporation, authorized to act
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0006| and acting for a broker-dealer or issuer in effecting or
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0007| attempting to effect purchases or sales of securities. A
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0008| partner, officer or director of a broker-dealer or issuer, or a
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0009| person occupying a similar status or performing similar
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0010| functions, is a sales representative only if that person
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0011| otherwise comes within the definition;
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0012| [U.] W. "Securities Act of 1933", "Securities
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0013| Exchange Act of 1934", "Public Utility Holding Company Act of
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0014| 1935", "Investment Company Act of 1940", "Investment Advisers
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0015| Act of 1940", "Employee Retirement Income Security Act of
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0016| 1974", "National Housing Act" and "Commodity Exchange Act" mean
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0017| the federal statutes of those names as amended before or after
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0018| the effective date of the New Mexico Securities Act of 1986;
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0019| [V.] X. unless the context requires otherwise,
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0020| "security" means a note; stock; treasury stock; bond;
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0021| debenture; evidence of indebtedness; certificate of interest or
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0022| participation in any profit-sharing agreement; any limited
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0023| partnership interest; any interest in a limited liability
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0024| company; collateral-trust certificate; preorganization
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0025| certificate or subscription; transferable share; investment
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0001| contract; voting-trust certificate; certificate of deposit for
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0002| a security; any interest in oil, gas or other mineral rights;
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0003| any put, call, straddle or option entered into on a national
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0004| securities exchange relating to foreign currency; any put,
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0005| call, straddle or option on any security, certificate of
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0006| deposit or group or index of securities, including any interest
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0007| therein or based on the value thereof; or, in general, any
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0008| interest or instrument commonly known as a security or any
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0009| certificate of interest or participation in, temporary or
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0010| interim certificate for, receipt for, guarantee of or warrant
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0011| or right to subscribe to or purchase any of the foregoing.
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0012| "Security" does not include landowner royalties in the
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0013| production of oil, gas or other minerals created through the
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0014| execution of a lease of the lessor's mineral interest;
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0015| [W.] Y. "self-regulatory organization" means a
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0016| national securities exchange registered under Section 6 of the
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0017| Securities Exchange Act of 1934, a national securities
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0018| association of brokers and dealers registered under Section 15A
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0019| of the Securities Exchange Act of 1934, a clearing agency
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0020| registered under Section 17A of [the Securities Exchange]
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0021| that act [of 1934] and the municipal securities rulemaking
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0022| board established under Section 15B(b)(1) of [the Securities
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Exchange] that act [of 1934];
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0024| [X.] Z. "state" means a state, commonwealth,
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0025| territory or possession of the United States, the District of
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0001| Columbia and the commonwealth of Puerto Rico; and
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0002| [Y.] AA. "underwriter" means any person who has
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0003| purchased from an issuer with the intent to offer or sell a
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0004| security or to distribute any security, or participates or has
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0005| a direct or indirect participation in any [such] the
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0006| undertaking, or participates or has a participation in the
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0007| direct or indirect underwriting of any [such] the
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0008| undertaking; but the term does not include a person whose
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0009| interest is limited to a commission from an underwriter or
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0010| dealer not in excess of the usual and customary distributors'
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0011| or sellers' commission. As used in this subsection, the term
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0012| "issuer" [shall include] includes, in addition to an
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0013| issuer, any person directly or indirectly controlling or
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0014| controlled by the issuer, or any person under direct or
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0015| indirect common control with the issuer."
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0016| Section 2. Section 58-13B-5 NMSA 1978 (being Laws 1986,
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0017| Chapter 7, Section 5) is amended to read:
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0018| "58-13B-5. INVESTMENT ADVISER AND INVESTMENT ADVISER
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0019| REPRESENTATIVE LICENSING.--
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0020| A. It is unlawful for any person to transact
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0021| business in this state as an investment adviser or investment
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0022| adviser representative unless:
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0023| (1) the person is licensed or exempt from
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0024| licensing under the New Mexico Securities Act of 1986;
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0025| (2) the person is registered as an investment
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0001| adviser under Section 203 of the Investment Advisers Act of
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0002| 1940 and the person has filed the documents and paid the fees
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0003| described in Subsection (C) of that section;
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0004| (3) the person is an investment adviser
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0005| representative employed by, supervised by or associated with an
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0006| investment adviser described in Paragraph (2) of this
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0007| subsection and the person has no place of business in this
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0008| state;
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0009| (4) the person is excepted from the definition
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0010| of investment adviser under Section 202(a)(11) of the
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0011| Investment Advisers Act of 1940; or
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0012| (5) the person is an investment adviser
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0013| representative employed by, supervised by or associated with a
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0014| person described in Paragraph (4) of this subsection.
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0015| B. It is unlawful for an investment adviser to
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0016| employ or contract with, in connection with any of the
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0017| investment adviser's investment adviser activities in this
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0018| state, any person who is suspended or barred from association
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0019| with a broker-dealer or investment adviser by the director.
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0020| Upon request from an investment adviser and for good cause
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0021| shown, the director by order may waive the prohibition of this
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0022| subsection with respect to a person who has been suspended or
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0023| barred.
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0024| C. Except with respect to investment advisers
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0025| whose only clients are those described in Subsection A of
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0001| Section 58-13B-6 NMSA 1978, it is unlawful for any person who
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0002| is registered or required to be registered under Section 203 of
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0003| the Investment Advisers Act of 1940 as an investment adviser to
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0004| conduct advisory business in this state unless such person
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0005| files such documents filed with the United States securities
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0006| and exchange commission with the director as the director may
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0007| by rule or by order require, and a fee and consent to service
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0008| of process, as the director, by rule or by order, may require.
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0009| Until October 11, 1999 the director may require any person who
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0010| is required to pay a fee pursuant to this subsection and who
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0011| fails or refuses to pay such fee to be licensed as an
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0012| investment adviser."
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0013| Section 3. Section 58-13B-6 NMSA 1978 (being Laws 1986,
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0014| Chapter 7, Section 6) is amended to read:
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0015| "58-13B-6. EXEMPT INVESTMENT ADVISERS AND INVESTMENT
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0016| ADVISER REPRESENTATIVES.--The following investment advisers and
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0017| investment adviser representatives are exempt from the
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0018| licensing requirements of Section [5 of the New Mexico
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Securities Act of 1986] 58-13B-5 NMSA 1978:
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0020| A. an investment adviser who is registered as an
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0021| investment adviser under the Investment Advisers Act of 1940
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0022| or an investment adviser who is registered under the laws of
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0023| the state where its principal place of business is located if:
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0024| (1) its only clients in this state are other
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0025| investment advisers, broker-dealers or financial or
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0001| institutional investors; or
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0002| (2) the investment adviser has no place of
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0003| business in this state and the investment adviser during any
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0004| twelve consecutive months [does not direct business
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communications in this state to more than five present or
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prospective] has fewer than six clients other than those
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0007| specified in Paragraph (1) of this subsection, [whether or not
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the person or client to whom the communication is directed is
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present in this state] who are residents of New Mexico;
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0010| B. investment adviser representatives if the
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0011| investment adviser by whom they are employed is exempt under
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0012| Subsection A of this section; and
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0013| C. other investment advisers and investment adviser
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0014| representatives the director by rule or order exempts."
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0015| Section 4. Section 58-13B-7 NMSA 1978 (being Laws 1986,
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0016| Chapter 7, Section 7) is amended to read:
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0017| "58-13B-7. PROOF OF EXEMPTION.--
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0018| A. If, at any time, the director has reason to
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0019| believe that any person claiming to be exempt from, or
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0020| otherwise not subject to, licensing as a broker-dealer, sales
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0021| representative, investment adviser or investment adviser
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0022| representative under Section [4 or 6 of the New Mexico
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Securities Act of 1986] 58-13B-4 or 58-13B-6 NMSA 1978 is
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0024| not entitled to that exemption or is otherwise required to be
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0025| licensed, the director may, by written notice, require that
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0001| person to:
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0002| (1) file a consent to service of process in
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0003| accordance with Section [50 of that act] 58-13B-50 NMSA
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0004| 1978; and
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0005| (2) furnish evidence satisfactory to the
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0006| director confirming that the person is exempt under Section [4
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or 6 of that act] 58-13B-4 or 58-13B-6 NMSA 1978 or is
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0008| otherwise not subject to licensure or, if satisfactory
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0009| evidence is not or cannot be furnished, the director may
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0010| require that person to be licensed as a broker-dealer, sales
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0011| representative, investment adviser or investment adviser
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0012| representative.
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0013| B. It is unlawful for any person notified pursuant
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0014| to Subsection A of this section to initiate any further
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0015| business transactions in this state as a broker-dealer, sales
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0016| representative, investment adviser or investment adviser
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0017| representative until evidence satisfactory to the director is
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0018| furnished or the person becomes licensed as a broker-dealer,
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0019| sales representative, investment adviser or investment adviser
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0020| representative. The provisions of Section [53 of the New
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Mexico Securities Act of 1986] 58-13B-53 NMSA 1978 shall
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0022| govern all subsequent proceedings pursuant to this subsection.
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0023| C. The director may examine the records or require
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0024| copies to be provided to him of any broker-dealer, sales
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0025| representative, investment adviser or investment adviser
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0001| representative to whom the director proposes to issue or has
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0002| issued a notice pursuant to Subsection A of this section."
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0003| Section 5. Section 58-13B-13 NMSA 1978 (being Laws 1986,
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0004| Chapter 7, Section 13) is amended to read:
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0005| "58-13B-13. POST-LICENSING REQUIREMENTS.--
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0006| A. The director shall by rule require:
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0007| (1) a licensed broker-dealer to maintain:
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0008| (a) minimum net capital not to exceed
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0009| the limitations of Section 15 of the Securities Exchange Act of
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0010| 1934; and
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0011| (b) a prescribed ratio between net
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0012| capital and aggregate indebtedness. The minimum net capital
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0013| and net capital to aggregate indebtedness ratio may vary with
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0014| type or class of broker-dealer; and
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0015| (2) a licensed investment adviser to maintain
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0016| a minimum net worth not to exceed the limitations of Section
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0017| 222 of the Investment Advisers Act of 1940.
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0018| B. If a licensed broker-dealer or investment
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0019| adviser knows or has reasonable cause to know that any
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0020| requirement imposed on it under Subsection A of this section is
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0021| not being met, it shall promptly notify the director of its
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0022| current financial condition.
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0023| C. The director may by rule require the furnishing
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0024| of a fidelity bond from a broker-dealer, sales representative,
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0025| investment adviser or investment adviser representative.
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0001| D. A licensed broker-dealer or investment adviser
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0002| shall file financial and other reports as the director
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0003| determines by rule or order are necessary.
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0004| E. Unless the director adopts by rule a special
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0005| reporting requirement, compliance with the financial reporting
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0006| requirements of the Securities Exchange Act of 1934, in the
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0007| case of a broker-dealer, or the Investment Advisers Act of
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0008| 1940, in the case of an investment adviser, shall satisfy the
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0009| requirements with regard to the filing of financial reports
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0010| pursuant to Subsection D of this section.
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0011| F. A licensed broker-dealer, sales representative,
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0012| investment adviser or investment adviser representative shall
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0013| make and maintain records as the director determines by rule
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0014| are necessary or appropriate.
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0015| G. [Unless the director adopts by rule a special
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record-keeping requirement,] Compliance with the record-
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0017| keeping requirements of the Securities Exchange Act of 1934, in
|
0018| the case of a broker-dealer, or the Investment Advisers Act of
|
0019| 1940, in the case of an investment adviser, shall satisfy the
|
0020| requirements of Subsection F of this section. Compliance by an
|
0021| investment adviser, if registered or licensed pursuant to the
|
0022| laws of the state where it maintains its principal place of
|
0023| business, with the record-keeping requirements of that state
|
0024| also satisfies the requirements of Subsection F of this
|
0025| section.
|
0001| H. Required records may be maintained in computer
|
0002| or microfilm format or any other form of data storage, provided
|
0003| that the records are readily accessible to the director.
|
0004| I. Required records shall be preserved for five
|
0005| years unless the director by rule specifies either a longer or
|
0006| shorter period for a particular type or class of records.
|
0007| J. If the information contained in a document filed
|
0008| with the director as part of the application for licensing or
|
0009| under this section, except information the director by rule or
|
0010| order excludes, is or becomes inaccurate or incomplete in a
|
0011| material respect, the licensed person shall promptly file
|
0012| correcting information, unless notification of termination has
|
0013| been given under Subsection E or G of Section [11 of the New
|
Mexico Securities Act of 1986] 58-13B-11 NMSA 1978."
|
0015| Section 6. Section 58-13B-20 NMSA 1978 (being Laws 1986,
|
0016| Chapter 7, Section 20) is amended to read:
|
0017| "58-13B-20. REGISTRATION REQUIREMENT.--It is unlawful for
|
0018| a person to offer to sell or sell any security in [this
|
state] New Mexico unless:
|
0020| A. the security is registered under the New
|
0021| Mexico Securities Act of 1986; [or]
|
0022| B. the security or transaction is exempt under
|
0023| that act; or
|
0024| C. the security is a federal covered security."
|
0025| Section 7. Section 58-13B-24 NMSA 1978 (being Laws 1986,
|
0001| Chapter 7, Section 24, as amended) is amended to read:
|
0002| "58-13B-24. PROVISIONS APPLICABLE TO REGISTRATION
|
0003| GENERALLY.--
|
0004| A. A registration statement may be filed by the
|
0005| issuer, any other person on whose behalf the offering is to be
|
0006| made or a registered broker-dealer.
|
0007| B. If a registration statement is withdrawn before
|
0008| the effective date or a pre-effective stop order is entered
|
0009| pursuant to Section 58-13B-25 NMSA 1978, the director shall
|
0010| retain the fee set forth in this subsection. Except as
|
0011| provided in Subsection C of this section, a person filing a
|
0012| registration statement shall pay a filing fee of:
|
0013| (1) one-tenth of one percent
|
0014| of the maximum aggregate offering price at which the registered
|
0015| securities are to be offered in [this state] New Mexico,
|
0016| but not less than three hundred fifty dollars ($350) or more
|
0017| than two thousand five hundred dollars ($2,500); or
|
0018| (2) three hundred fifty dollars ($350) if the
|
0019| person is a corporate issuer or a person acting on behalf of a
|
0020| corporate issuer and is claiming an exemption from the
|
0021| registration requirements of federal law regarding small
|
0022| corporate offerings pursuant to Rule 504 of Regulation D (17
|
0023| CFR 230.504).
|
0024| C. An open-end management company or a face amount
|
0025| certificate company as defined in the federal Investment
|
0001| Company Act of 1940 may register an indefinite amount of
|
0002| securities under a registration statement. The registrant
|
0003| shall pay:
|
0004| (1) a fee of five hundred dollars ($500) at
|
0005| the time of filing; and
|
0006| (2) within sixty days after the registrant's
|
0007| fiscal year during which its registration statement is
|
0008| effective, a fee of two thousand dollars ($2,000) or file a
|
0009| report on a form the director by rule adopts, specifying its
|
0010| sale of securities to persons in this state during the fiscal
|
0011| year and pay a fee of one-tenth of one percent of the aggregate
|
0012| sale price of the securities sold to persons in the state, but
|
0013| the latter fee shall not be less than three hundred fifty
|
0014| dollars ($350) or more than two thousand five hundred dollars
|
0015| ($2,500).
|
0016| D. Except as permitted otherwise by Subsection C of
|
0017| this section, a registration statement must specify the amount
|
0018| of securities to be offered in [this state] New Mexico and:
|
0019| (1) the states in which a registration
|
0020| statement or similar document in connection with the offering
|
0021| has been or is to be filed; and
|
0022| (2) any adverse order, judgment or decree
|
0023| entered by the securities agency or administrator in any state
|
0024| or by a court or the securities and exchange commission in
|
0025| connection with the offering.
|
0001| E. A document filed under the New Mexico Securities
|
0002| Act of 1986 or a predecessor act, within five years before the
|
0003| filing of a registration statement, may be incorporated by
|
0004| reference in the registration statement if the document is
|
0005| currently accurate.
|
0006| F. The director by rule or order may permit the
|
0007| omission of an item of information or document from a
|
0008| registration statement.
|
0009| G. In the case of a non-issuer offering, the
|
0010| director may not require information under Section 58-13B-23
|
0011| NMSA 1978 or Subsection M of this section unless it is known to
|
0012| the person filing the registration statement or to the persons
|
0013| on whose behalf the offering is to be made, or can be furnished
|
0014| by them without unreasonable effort or expense.
|
0015| H. In the case of a registration under Section
|
0016| 58-13B-22 or 58-13B-23 NMSA 1978 by an issuer who has no public
|
0017| market for its shares and no significant earnings from
|
0018| continuing operations during the last five years or any shorter
|
0019| period of its existence, the director by rule or order may
|
0020| require as a condition of registration that the following
|
0021| securities be deposited in escrow for not more than three
|
0022| years:
|
0023| (1) a security issued to a promoter, control
|
0024| person or affiliate within the three years immediately before
|
0025| the offering or to be issued to such persons for a
|
0001| consideration substantially less than the offering price; and
|
0002| (2) a security issued to a promoter, control
|
0003| person or affiliate for a consideration other than cash, unless
|
0004| the registrant demonstrates that the value of the noncash
|
0005| consideration received in exchange for the security is
|
0006| substantially equal to the offering price for the security.
|
0007| The director by rule or order may determine the conditions
|
0008| of an escrow required under this subsection, but the director
|
0009| may not reject a depository solely because of location in
|
0010| another state.
|
0011| I. The director by rule or order may require as a
|
0012| condition of registration under Section 58-13B-22 or 58-13B-23
|
0013| NMSA 1978 that the proceeds from the sale of the registered
|
0014| security in [this state] New Mexico be impounded until the
|
0015| issuer receives a specified amount from the sale of the
|
0016| security. The director by rule or order may determine the
|
0017| conditions of an impoundment arrangement required under this
|
0018| subsection, but the director may not reject a depository solely
|
0019| because of its location in another state.
|
0020| J. If a security is registered pursuant to Section
|
0021| 58-13B-21 or 58-13B-22 NMSA 1978, the prospectus filed under
|
0022| the Securities Act of 1933 shall be delivered to each purchaser
|
0023| in accordance with the prospectus delivery requirements of the
|
0024| Securities Act of 1933. With respect to a security registered
|
0025| under Section 58-13B-21 or 58-13B-22 NMSA 1978, the director by
|
0001| rule or order may require the delivery of other material
|
0002| documents or information to each purchaser concurrent with or
|
0003| prior to the delivery of the prospectus.
|
0004| K. If a security is registered pursuant to Section
|
0005| 58-13B-23 NMSA 1978, an offering document containing
|
0006| information the director by rule or order designates shall be
|
0007| delivered to each purchaser with or before the earliest of:
|
0008| (1) the first written offer made to the
|
0009| purchaser by or for the account of the issuer or another person
|
0010| on whose behalf the offering is being made or by an underwriter
|
0011| or broker-dealer who is offering part of an unsold allotment or
|
0012| subscription taken by it as a participant in the distribution;
|
0013| (2) confirmation of a sale made by or for the
|
0014| account of a person named in Paragraph (1) of this subsection;
|
0015| (3) payment pursuant to a sale; or
|
0016| (4) delivery pursuant to a sale.
|
0017| L. A registration statement remains effective for
|
0018| one year after its effective date unless the director by rule
|
0019| or order extends the period of effectiveness. All outstanding
|
0020| securities of the same class as a registered security are
|
0021| considered to be registered for the purpose of a non-issuer
|
0022| transaction while the registration statement is effective,
|
0023| unless the director by rule or order provides otherwise. A
|
0024| registration statement may not be withdrawn after its effective
|
0025| date if any of the securities registered have been sold in
|
0001| [this state] New Mexico, unless the director by rule or
|
0002| order provides otherwise. No registration statement is
|
0003| effective while a stop order is in effect under Subsection A of
|
0004| Section 58-13B-25 NMSA 1978.
|
0005| M. During the period that an offering is being made
|
0006| pursuant to an effective registration statement, the director
|
0007| by rule or order may require the person who filed the
|
0008| registration statement to file reports, not more often than
|
0009| quarterly, to keep reasonably current the information contained
|
0010| in the registration statement and to disclose the progress of
|
0011| the offering.
|
0012| N. A registration statement filed under Section
|
0013| 58-13B-21 or 58-13B-22 NMSA 1978 may be amended after its
|
0014| effective date to increase the securities specified to be
|
0015| offered and sold. The amendment becomes effective upon filing
|
0016| of the amendment and payment of an additional filing fee which
|
0017| shall be three times the fee otherwise payable, calculated in
|
0018| the manner specified in Subsection B of this section, with
|
0019| respect to the additional securities to be offered and sold.
|
0020| The effectiveness of the amendment relates back to the date or
|
0021| dates of sale of the additional securities being registered.
|
0022| O. A registration statement filed under Section
|
0023| 58-13B-23 NMSA 1978 may be amended after its effective date to
|
0024| increase the securities specified to be offered and sold,
|
0025| provided that the public offering price and underwriters'
|
0001| discounts and commissions are not changed from the respective
|
0002| amounts of which the director was informed. The amendment
|
0003| becomes effective when the director so orders and relates back
|
0004| to the date of sale of the additional securities being
|
0005| registered. A person filing an amendment shall pay an
|
0006| additional filing fee which shall be three times the fee
|
0007| otherwise payable, calculated in the manner specified in
|
0008| Subsection B of this section, with respect to the additional
|
0009| securities to be offered and sold.
|
0010| P. Pursuant to Section 106(c) of the federal
|
0011| Secondary Mortgage Market Enhancement Act of 1984, any
|
0012| securities which are offered and sold pursuant to Section 4 (5)
|
0013| of the Securities Act of 1933 or that are mortgage-related
|
0014| securities, as that term is defined in Section 3 (a) (41) of
|
0015| the Securities Exchange Act of 1934, being 15 U.S.C. 78c (a)
|
0016| (41), are required to comply with all applicable registration
|
0017| and qualification requirements of the New Mexico Securities Act
|
0018| of 1986 and the rules under that act and shall not be treated
|
0019| as obligations issued by the United States for purposes of that
|
0020| act.
|
0021| Q. The director, by rule or by order, may require
|
0022| the filing of any or all of the following items with respect to
|
0023| a federal covered security under Section 18(b)(2) of the
|
0024| Securities Act of 1933:
|
0025| (1) prior to the initial offer of such federal
|
0001| covered security in New Mexico, all documents that are part of
|
0002| a current federal registration statement filed with the United
|
0003| States securities and exchange commission under the Securities
|
0004| Act of 1933, together with a consent to service of process
|
0005| signed by the issuer and with a notification fee in an amount
|
0006| equal to that which the person would have paid to register or
|
0007| claim an appropriate exemption if the security were not a
|
0008| federal covered security;
|
0009| (2) after the initial offer of such federal
|
0010| covered security in New Mexico, all documents that are part of
|
0011| an amendment to a current federal registration statement filed
|
0012| with the United States securities and exchange commission under
|
0013| the Securities Act of 1933; or
|
0014| (3) if the person is paying a notification fee
|
0015| calculated according to the terms of Subsection C of this
|
0016| section, an annual or periodic report of the value of such
|
0017| federal covered securities offered or sold in New Mexico.
|
0018| R. With respect to any security that is a federal
|
0019| covered security under Section 18(b)(4)(D) of the federal
|
0020| Securities Act of 1933, the director, by rule or by order, may
|
0021| require the issuer to file, no later than fifteen days after
|
0022| the first sale of the federal covered security in New Mexico, a
|
0023| notice containing the information required by SEC Form D and a
|
0024| consent to service of process signed by the issuer, together
|
0025| with a notification fee in the amount of three hundred fifty
|
0001| dollars ($350).
|
0002| S. The director, by rule or by order, may require
|
0003| the filing of any document filed with the United States
|
0004| securities and exchange commission under the federal Securities
|
0005| Act of 1933 with respect to a federal covered security under
|
0006| Section 18(b)(3) or (4) of the federal Securities Act of 1933,
|
0007| together with a fee to be determined by the director.
|
0008| T. The director may issue a stop order suspending
|
0009| the offer and sale of a federal covered security, except a
|
0010| federal covered security under Section 18(b)(1) of the
|
0011| Securities Act of 1933, if he finds that:
|
0012| (1) the order is in the public interest; and
|
0013| (2) there is a failure to comply with any
|
0014| condition established under this section.
|
0015| U. The director, by rule or otherwise, may waive
|
0016| any or all of the provisions of this section."
|
0017| Section 8. Section 58-13B-28 NMSA 1978 (being Laws 1986,
|
0018| Chapter 7, Section 28, as amended) is amended to read:
|
0019| "58-13B-28. PROVISIONS APPLICABLE TO EXEMPTIONS
|
0020| GENERALLY.--
|
0021| A. The director by order may deny or revoke an
|
0022| exemption specified in Section 58-13B-26 or 58-13B-27 NMSA 1978
|
0023| with respect to a specific security or transaction if the
|
0024| director reasonably believes, after inquiry, that there is
|
0025| about to be or has been a violation of the New Mexico
|
0001| Securities Act of 1986 and that the action is necessary or
|
0002| appropriate for the protection of investors. Following entry
|
0003| of any such order, the procedures set forth in Section 58-13B-
|
0004| 53 NMSA 1978 shall be followed. No order under this subsection
|
0005| may operate retroactively.
|
0006| B. In any civil, criminal or administrative
|
0007| proceeding under that act, the burden of proving an exemption
|
0008| or an exception from a definition or status as a federal
|
0009| covered security is upon the person claiming it.
|
0010| C. The director may by rule require notice of
|
0011| filing for any exemption contained in Section 58-13B-26 or 58-
|
0012| 13B-27 NMSA 1978, and may require payment of a fee not to
|
0013| exceed three hundred fifty dollars ($350) for any such notice
|
0014| of filing, except that no fee shall be required for filing a
|
0015| notice of exemption pursuant to Subsection K of Section 58-13B-
|
0016| 27 NMSA 1978 of that act.
|
0017| D. The director is authorized to promulgate by rule
|
0018| a limited offering transactional exemption which shall further
|
0019| the objectives of compatibility with the exemptions from
|
0020| securities registration authorized by Section 19(c)(3)(C) of
|
0021| the Securities Act of 1933 and uniformity among the states.
|
0022| Such exemption shall be subject to such restrictions as to
|
0023| number of purchasers, investor suitability, disclosure of
|
0024| investment information and other restrictions as the director
|
0025| may determine are necessary for the protection of investors.
|
0001| The director may impose conditions with respect to persons or
|
0002| issuers who by reason of prior misconduct will not be eligible
|
0003| to utilize this exemption. Any person claiming this exemption
|
0004| shall file notice with the director of such claim and shall pay
|
0005| a fee of three hundred fifty dollars ($350).
|
0006| E. The director by rule may exempt any other class
|
0007| of securities or transactions from Sections 58-13B-20 and
|
0008| 58-13B-29 NMSA 1978. Exemptions shall be subject to
|
0009| restrictions and conditions imposed by rule as the director may
|
0010| determine are necessary for the protection of investors."
|
0011| Section 9. EFFECTIVE DATE.--The effective date of the
|
0012| provisions of this act is July 1, 1997.
|
0013| State of New Mexico
|
0014| House of Representatives
|
0015|
|
0016| FORTY-THIRD LEGISLATURE
|
0017| FIRST SESSION, 1997
|
0018|
|
0019|
|
0020| February 19, 1997
|
0021|
|
0022|
|
0023| Mr. Speaker:
|
0024|
|
0025| Your JUDICIARY COMMITTEE, to whom has been referred
|
0001|
|
0002| HOUSE BILL 658
|
0003|
|
0004| has had it under consideration and reports same with
|
0005| recommendation that it DO PASS.
|
0006|
|
0007| Respectfully submitted,
|
0008|
|
0009|
|
0010|
|
0011|
|
0012|
|
0013| Thomas P. Foy, Chairman
|
0014|
|
0015|
|
0016| Adopted Not Adopted
|
0017|
|
0018| (Chief Clerk) (Chief Clerk)
|
0019|
|
0020| Date
|
0021|
|
0022| The roll call vote was 8 For 0 Against
|
0023| Yes: 8
|
0024| Excused: Alwin, King, Luna, Rios, Sanchez
|
0025| Absent: None
|
0001|
|
0002|
|
0003| G:\BILLTEXT\BILLW_97\H0658
|