1.1 	A bill for an act
1.2 	relating to securities; enacting and modifying the
1.3 	2002 Uniform Securities Act of the National Conference
1.4 	of Commissioners on Uniform State Laws; prescribing
1.5 	criminal penalties; amending Minnesota Statutes 2004,
1.6 	sections 60A.077, subdivision 9; 82.23; 82.43,
1.7 	subdivision 7; 144A.01, subdivision 4; 245A.02,
1.8 	subdivision 5a; 302A.011, subdivision 26; 302A.251,
1.9 	subdivision 4; 308A.505; 308B.465, subdivision 2;
1.10 	322B.03, subdivision 43; 322B.663, subdivision 4;
1.11 	356A.06, subdivision 6; proposing coding for new law
1.12 	in Minnesota Statutes, chapter 80A; repealing
1.13 	Minnesota Statutes 2004, sections 80A.01; 80A.02;
1.14 	80A.03; 80A.04; 80A.041; 80A.05; 80A.06; 80A.07;
1.15 	80A.08; 80A.09; 80A.10; 80A.11; 80A.115; 80A.12;
1.16 	80A.122; 80A.125; 80A.13; 80A.14; 80A.15; 80A.16;
1.17 	80A.17; 80A.18; 80A.19; 80A.22; 80A.23; 80A.24;
1.18 	80A.25; 80A.26; 80A.27; 80A.28; 80A.29; 80A.30; 80A.31.
1.19 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.20 	ARTICLE 1
1.21 	UNIFORM SECURITIES ACT
1.22 	GENERAL PROVISIONS

1.23 	Section 1. [80A.40] SECTION 101; SHORT TITLE.
1.24 	This chapter may be cited as the Uniform Securities Act
1.25 	(2002).

1.26 	Sec. 2. [80A.41] SECTION 102; DEFINITIONS.
1.27 	In this chapter, unless the context otherwise requires:
1.28 	(1) "Administrator" means the commissioner of commerce.
1.29 	(2) "Agent" means an individual, other than a
1.30 	broker-dealer, who represents a broker-dealer in effecting or
1.31 	attempting to effect purchases or sales of securities or
1.32 	represents an issuer in effecting or attempting to effect
2.1 	purchases or sales of the issuer's securities.  But a partner,
2.2 	officer, or director of a broker-dealer or issuer, or an
2.3 	individual having a similar status or performing similar
2.4 	functions is an agent only if the individual otherwise comes
2.5 	within the term.  The term does not include an individual
2.6 	excluded by rule adopted or order issued under this chapter.
2.7 	(3) "Bank" means:
2.8 	(A) a banking institution organized under the laws of the
2.9 	United States;
2.10 	(B) a member bank of the Federal Reserve System;
2.11 	(C) any other banking institution, whether incorporated or
2.12 	not, doing business under the laws of a state or of the United
2.13 	States, a substantial portion of the business of which consists
2.14 	of receiving deposits or exercising fiduciary powers similar to
2.15 	those permitted to be exercised by national banks under the
2.16 	authority of the Comptroller of the Currency pursuant to Section
2.17 	1 of Public Law 87-722 (12 U.S.C. Section 92a), and which is
2.18 	supervised and examined by a state or federal agency having
2.19 	supervision over banks, and which is not operated for the
2.20 	purpose of evading this chapter; and 
2.21 	(D) a receiver, conservator, or other liquidating agent of
2.22 	any institution or firm included in subparagraph (A), (B), or
2.23 	(C).
2.24 	(4) "Broker-dealer" means a person engaged in the business
2.25 	of effecting transactions in securities for the account of
2.26 	others or for the person's own account.  The term does not
2.27 	include:
2.28 	(A) an agent;
2.29 	(B) an issuer;
2.30 	(C) a bank or savings institution if its activities as a
2.31 	broker-dealer are limited to those specified in subsections
2.32 	3(a)(4)(B)(i) through (vi), (viii) through (x), and (xi) if
2.33 	limited to unsolicited transactions; 3(a)(5)(B); and 3(a)(5)(C)
2.34 	of the Securities Exchange Act of 1934 (15 U.S.C. Sections
2.35 	78c(a)(4) and (5)) or a bank that satisfies the conditions
2.36 	described in subsection 3(a)(4)(E) of the Securities Exchange
3.1 	Act of 1934 (15 U.S.C. Section 78c(a)(4));
3.2 	(D) credit union; provided such activities are conducted in
3.3 	accordance with such rules as may be adopted by the
3.4 	commissioner;
3.5 	(E) an international banking institution; or 
3.6 	(F) a person excluded by rule adopted or order issued under
3.7 	this chapter.
3.8 	(5) "Depository institution" means:
3.9 	(A) a bank; or 
3.10 	(B) a savings institution, trust company, credit union, or
3.11 	similar institution that is organized or chartered under the
3.12 	laws of a state or of the United States, authorized to receive
3.13 	deposits, and supervised and examined by an official or agency
3.14 	of a state or the United States if its deposits or share
3.15 	accounts are insured to the maximum amount authorized by statute
3.16 	by the Federal Deposit Insurance Corporation, the National
3.17 	Credit Union Share Insurance Fund, or a successor authorized by
3.18 	federal law.  The term does not include:
3.19 	(i) an insurance company or other organization primarily
3.20 	engaged in the business of insurance;
3.21 	(ii) a Morris Plan bank; or 
3.22 	(iii) an industrial loan company that is not an "insured
3.23 	depository institution" as defined in section 3(c)(2) of the
3.24 	Federal Deposit Insurance Act, United States Code, title 12,
3.25 	section 1813(c)(2), or any successor federal statute.
3.26 	(6) "Federal covered investment adviser" means a person
3.27 	registered under the Investment Advisers Act of 1940.
3.28 	(7) "Federal covered security" means a security that is, or
3.29 	upon completion of a transaction will be, a covered security
3.30 	under Section 18(b) of the Securities Act of 1933 (15 U.S.C.
3.31 	Section 77r(b)) or rules or regulations adopted pursuant to that
3.32 	provision.
3.33 	(8) "Filing" means the receipt under this chapter of a
3.34 	record by the administrator or a designee of the administrator.
3.35 	(9) "Fraud," "deceit," and "defraud" are not limited to
3.36 	common law deceit.
4.1 	(10) "Guaranteed" means guaranteed as to payment of all
4.2 	principal and all interest.
4.3 	(11) "Institutional investor" means any of the following,
4.4 	whether acting for itself or for others in a fiduciary capacity:
4.5 	(A) a depository institution or international banking
4.6 	institution;
4.7 	(B) an insurance company;
4.8 	(C) a separate account of an insurance company;
4.9 	(D) an investment company as defined in the Investment
4.10 	Company Act of 1940;
4.11 	(E) a broker-dealer registered under the Securities
4.12 	Exchange Act of 1934;
4.13 	(F) an employee pension, profit-sharing, or benefit plan if
4.14 	the plan has total assets in excess of $10,000,000 or its
4.15 	investment decisions are made by a named fiduciary, as defined
4.16 	in the Employee Retirement Income Security Act of 1974, that is
4.17 	a broker-dealer registered under the Securities Exchange Act of
4.18 	1934, an investment adviser registered or exempt from
4.19 	registration under the Investment Advisers Act of 1940, an
4.20 	investment adviser registered under this chapter, a depository
4.21 	institution, or an insurance company;
4.22 	(G) a plan established and maintained by a state, a
4.23 	political subdivision of a state, or an agency or
4.24 	instrumentality of a state or a political subdivision of a state
4.25 	for the benefit of its employees, if the plan has total assets
4.26 	in excess of $10,000,000 or its investment decisions are made by
4.27 	a duly designated public official or by a named fiduciary, as
4.28 	defined in the Employee Retirement Income Security Act of 1974,
4.29 	that is a broker-dealer registered under the Securities Exchange
4.30 	Act of 1934, an investment adviser registered or exempt from
4.31 	registration under the Investment Advisers Act of 1940, an
4.32 	investment adviser registered under this chapter, a depository
4.33 	institution, or an insurance company;
4.34 	(H) a trust, if it has total assets in excess of
4.35 	$10,000,000, its trustee is a depository institution, and its
4.36 	participants are exclusively plans of the types identified in
5.1 	subparagraph (F) or (G), regardless of the size of their assets,
5.2 	except a trust that includes as participants self-directed
5.3 	individual retirement accounts or similar self-directed plans;
5.4 	(I) an organization described in Section 501(c)(3) of the
5.5 	Internal Revenue Code (26 U.S.C. Section 501(c)(3)),
5.6 	corporation, Massachusetts trust or similar business trust,
5.7 	limited liability company, or partnership, not formed for the
5.8 	specific purpose of acquiring the securities offered, with total
5.9 	assets in excess of $10,000,000;
5.10 	(J) a small business investment company licensed by the
5.11 	Small Business Administration under Section 301(c) of the Small
5.12 	Business Investment Act of 1958 (15 U.S.C. Section 681(c)) with
5.13 	total assets in excess of $10,000,000;
5.14 	(K) a private business development company as defined in
5.15 	Section 202(a)(22) of the Investment Advisers Act of 1940 (15
5.16 	U.S.C. Section 80b-2(a)(22)) with total assets in excess of
5.17 	$10,000,000;
5.18 	(L) a federal covered investment adviser acting for its own
5.19 	account;
5.20 	(M) a "qualified institutional buyer" as defined in Rule
5.21 	144A(a)(1), other than Rule 144A(a)(1)(i)(H), adopted under the
5.22 	Securities Act of 1933 (17 C.F.R. 230.144A);
5.23 	(N) a "major U.S. institutional investor" as defined in
5.24 	Rule 15a-6(b)(4)(i) adopted under the Securities Exchange Act of
5.25 	1934 (17 C.F.R. 240.15a-6);
5.26 	(O) any other person, other than an individual, of
5.27 	institutional character with total assets in excess of
5.28 	$10,000,000 not organized for the specific purpose of evading
5.29 	this chapter; or 
5.30 	(P) any other person specified by rule adopted or order
5.31 	issued under this chapter;
5.32 	(12) "Insurance company" means a company organized as an
5.33 	insurance company whose primary business is writing insurance or
5.34 	reinsuring risks underwritten by insurance companies and which
5.35 	is subject to supervision by the insurance commissioner or a
5.36 	similar official or agency of a state.
6.1 	(13) "Insured" means insured as to payment of all principal
6.2 	and all interest.
6.3 	(14) "International banking institution" means an
6.4 	international financial institution of which the United States
6.5 	is a member and whose securities are exempt from registration
6.6 	under the Securities Act of 1933.
6.7 	(15) "Investment adviser" means a person that, for
6.8 	compensation, engages in the business of advising others, either
6.9 	directly or through publications or writings, as to the value of
6.10 	securities or the advisability of investing in, purchasing, or
6.11 	selling securities or that, for compensation and as a part of a
6.12 	regular business, issues or promulgates analyses or reports
6.13 	concerning securities.  The term includes a financial planner or
6.14 	other person that, as an integral component of other financially
6.15 	related services, provides investment advice to others for
6.16 	compensation as part of a business or that holds itself out as
6.17 	providing investment advice to others for compensation.  The
6.18 	term does not include:
6.19 	(A) an investment adviser representative;
6.20 	(B) a lawyer, accountant, engineer, or teacher whose
6.21 	performance of investment advice is solely incidental to the
6.22 	practice of the person's profession;
6.23 	(C) a broker-dealer or its agents whose performance of
6.24 	investment advice is solely incidental to the conduct of
6.25 	business as a broker-dealer and that does not receive special
6.26 	compensation for the investment advice;
6.27 	(D) a publisher of a bona fide newspaper, news magazine, or
6.28 	business or financial publication of general and regular
6.29 	circulation;
6.30 	(E) a federal covered investment adviser;
6.31 	(F) a bank or savings institution;
6.32 	(G) any other person that is excluded by the Investment
6.33 	Advisers Act of 1940 from the definition of investment adviser;
6.34 	or 
6.35 	(H) any other person excluded by rule adopted or order
6.36 	issued under this chapter.
7.1 	(16) "Investment adviser representative" means an
7.2 	individual employed by or associated with an investment adviser
7.3 	or federal covered investment adviser and who makes any
7.4 	recommendations or otherwise gives investment advice regarding
7.5 	securities, manages accounts or portfolios of clients,
7.6 	determines which recommendation or advice regarding securities
7.7 	should be given, provides investment advice or holds herself or
7.8 	himself out as providing investment advice, receives
7.9 	compensation to solicit, offer, or negotiate for the sale of or
7.10 	for selling investment advice, or supervises employees who
7.11 	perform any of the foregoing.  The term does not include an
7.12 	individual who:
7.13 	(A) performs only clerical or ministerial acts;
7.14 	(B) is an agent whose performance of investment advice is
7.15 	solely incidental to the individual acting as an agent and who
7.16 	does not receive special compensation for investment advisory
7.17 	services;
7.18 	(C) is employed by or associated with a federal covered
7.19 	investment adviser, unless the individual has a "place of
7.20 	business" in this state as that term is defined by rule adopted
7.21 	under Section 203A of the Investment Advisers Act of 1940 (15
7.22 	U.S.C. Section 80b-3a) and is 
7.23 	(i) an "investment adviser representative" as that term is
7.24 	defined by rule adopted under Section 203A of the Investment
7.25 	Advisers Act of 1940 (15 U.S.C. Section 80b-3a); or 
7.26 	(ii) not a "supervised person" as that term is defined in
7.27 	Section 202(a)(25) of the Investment Advisers Act of 1940 (15
7.28 	U.S.C. Section 80b-2(a)(25)); or 
7.29 	(D) is excluded by rule adopted or order issued under this
7.30 	chapter.
7.31 	(17) "Issuer" means a person that issues or proposes to
7.32 	issue a security, subject to the following:
7.33 	(A) The issuer of a voting trust certificate, collateral
7.34 	trust certificate, certificate of deposit for a security, or
7.35 	share in an investment company without a board of directors or
7.36 	individuals performing similar functions is the person
8.1 	performing the acts and assuming the duties of depositor or
8.2 	manager pursuant to the trust or other agreement or instrument
8.3 	under which the security is issued.
8.4 	(B) The issuer of an equipment trust certificate or similar
8.5 	security serving the same purpose is the person by which the
8.6 	property is or will be used or to which the property or
8.7 	equipment is or will be leased or conditionally sold or that is
8.8 	otherwise contractually responsible for assuring payment of the
8.9 	certificate.
8.10 	(C) The issuer of a fractional undivided interest in an
8.11 	oil, gas, or other mineral lease or in payments out of
8.12 	production under a lease, right, or royalty is the owner of an
8.13 	interest in the lease or in payments out of production under a
8.14 	lease, right, or royalty, whether whole or fractional, that
8.15 	creates fractional interests for the purpose of sale.
8.16 	(18) "Nonissuer transaction" or "nonissuer distribution"
8.17 	means a transaction or distribution not directly or indirectly
8.18 	for the benefit of the issuer.
8.19 	(19) "Offer to purchase" includes an attempt or offer to
8.20 	obtain, or solicitation of an offer to sell, a security or
8.21 	interest in a security for value.  The term does not include a
8.22 	tender offer that is subject to Section 14(d) of the Securities
8.23 	Exchange Act of 1934 (15 U.S.C. Section 78n(d)).
8.24 	(20) "Person" means an individual; corporation; business
8.25 	trust; estate; trust; partnership; limited liability company;
8.26 	association; joint venture; government; governmental
8.27 	subdivision, agency, or instrumentality; public corporation; or
8.28 	any other legal or commercial entity.
8.29 	(21) "Place of business" of a broker-dealer, an investment
8.30 	adviser, or a federal covered investment adviser means:
8.31 	(A) an office at which the broker-dealer, investment
8.32 	adviser, or federal covered investment adviser regularly
8.33 	provides brokerage or investment advice or solicits, meets with,
8.34 	or otherwise communicates with customers or clients; or 
8.35 	(B) any other location that is held out to the general
8.36 	public as a location at which the broker-dealer, investment
9.1 	adviser, or federal covered investment adviser provides
9.2 	brokerage or investment advice or solicits, meets with, or
9.3 	otherwise communicates with customers or clients.
9.4 	(22) "Predecessor Act" means Minnesota Statutes 2002,
9.5 	sections 80A.01 to 80A.31.
9.6 	(23) "Price amendment" means the amendment to a
9.7 	registration statement filed under the Securities Act of 1933
9.8 	or, if an amendment is not filed, the prospectus or prospectus
9.9 	supplement filed under the Securities Act of 1933 that includes
9.10 	a statement of the offering price, underwriting and selling
9.11 	discounts or commissions, amount of proceeds, conversion rates,
9.12 	call prices, and other matters dependent upon the offering price.
9.13 	(24) "Principal place of business" of a broker-dealer or an
9.14 	investment adviser means the executive office of the
9.15 	broker-dealer or investment adviser from which the officers,
9.16 	partners, or managers of the broker-dealer or investment adviser
9.17 	direct, control, and coordinate the activities of the
9.18 	broker-dealer or investment adviser.
9.19 	(24a) "Purchaser" does not include:
9.20 	(A) any relative, spouse, or relative of the spouse of a
9.21 	purchaser who has the same principal residence as the purchaser;
9.22 	(B) any trust or estate in which a purchaser and any of the
9.23 	persons related to him as specified in Regulation D, Rule
9.24 	501(e)(1)(i) or (e)(1)(ii) collectively have more than 50
9.25 	percent of the beneficial interest (excluding contingent
9.26 	interests);
9.27 	(C) any corporation or other organization of which a
9.28 	purchaser and any of the persons related to the purchaser as
9.29 	specified in Regulation D, Rule 501(e)(1)(i) or (e)(1)(ii)
9.30 	collectively are beneficial owners of more than 50 percent of
9.31 	the equity securities (excluding directors' qualifying shares)
9.32 	or equity interests; and 
9.33 	(D) any accredited investor as defined by Regulation D,
9.34 	Rule 501(3).
9.35 	A corporation, partnership, or other entity must be counted
9.36 	as one purchaser.  If, however, that entity is organized for the
10.1 	specific purpose of acquiring the securities offered and is not
10.2 	an accredited investor, then each beneficial owner of equity
10.3 	securities or equity interests in the entity shall count as a
10.4 	separate purchaser for all provisions of Regulation D, except to
10.5 	the extent provided in Regulation D, Rule 501(e)(1).
10.6 	A noncontributory employee benefit plan within the meaning
10.7 	of Title I of the Employee Retirement Income Security Act of
10.8 	1974 shall be counted as one purchaser where the trustee makes
10.9 	all investment decisions for the plan.
10.10 	(25) "Record," except in the phrases "of record," "official
10.11 	record," and "public record," means information that is
10.12 	inscribed on a tangible medium or that is stored in an
10.13 	electronic or other medium and is retrievable in perceivable
10.14 	form.
10.15 	(26) "Sale" includes every contract of sale, contract to
10.16 	sell, or disposition of, a security or interest in a security
10.17 	for value, and "offer to sell" includes every attempt or offer
10.18 	to dispose of, or solicitation of an offer to purchase, a
10.19 	security or interest in a security for value.
10.20 	(A) A security given or delivered with, or as a bonus on
10.21 	account of, any purchase of securities or any other thing is
10.22 	considered to constitute part of the subject of the purchase and
10.23 	to have been offered and sold for value.
10.24 	(B) A gift of assessable stock is considered to involve an
10.25 	offer and sale.
10.26 	(C) A sale or offer of a warrant or right to purchase or
10.27 	subscribe to another security of the same or another issuer and
10.28 	a sale or offer of a security that gives the holder a present or
10.29 	future right or privilege to convert the security into another
10.30 	security of the same or another issuer, are each considered to
10.31 	include an offer of the other security.
10.32 	(27) "Securities and Exchange Commission" means the United
10.33 	States Securities and Exchange Commission.
10.34 	(28) "Security" means a note; stock; treasury stock;
10.35 	security future; bond; debenture; evidence of indebtedness;
10.36 	certificate of interest or participation in a profit-sharing
11.1 	agreement; collateral trust certificate; preorganization
11.2 	certificate or subscription; transferable share; investment
11.3 	contract; voting trust certificate; certificate of deposit for a
11.4 	security; fractional undivided interest in oil, gas, or other
11.5 	mineral rights; put, call, straddle, option, or privilege on a
11.6 	security, certificate of deposit, or group or index of
11.7 	securities, including an interest therein or based on the value
11.8 	thereof; put, call, straddle, option, or privilege entered into
11.9 	on a national securities exchange relating to foreign currency;
11.10 	or, in general, an interest or instrument commonly known as a
11.11 	"security"; or a certificate of interest or participation in,
11.12 	temporary or interim certificate for, receipt for, guarantee of,
11.13 	or warrant or right to subscribe to or purchase, any of the
11.14 	foregoing.  The term:
11.15 	(A) includes both a certificated and an uncertificated
11.16 	security;
11.17 	(B) does not include an insurance or endowment policy or
11.18 	annuity contract under which an insurance company promises to
11.19 	pay a fixed or variable sum of money either in a lump sum or
11.20 	periodically for life or other specified period;
11.21 	(C) does not include an interest in a contributory or
11.22 	noncontributory pension or welfare plan subject to the Employee
11.23 	Retirement Income Security Act of 1974;
11.24 	(D) includes as an "investment contract" an investment in a
11.25 	common enterprise with the expectation of profits to be derived
11.26 	primarily from the efforts of a person other than the investor
11.27 	and a "common enterprise" means an enterprise in which the
11.28 	fortunes of the investor are interwoven with those of either the
11.29 	person offering the investment, a third party, or other
11.30 	investors;
11.31 	(E) includes as an "investment contract," among other
11.32 	contracts, an interest in a limited partnership and a limited
11.33 	liability company and an investment in a viatical settlement or
11.34 	similar agreement; and 
11.35 	(F) does not include any equity interest of a closely held
11.36 	corporation or other entity with not more than 35 holders of the
12.1 	equity interest of such entity offered or sold pursuant to a
12.2 	transaction in which 100 percent of the equity interest of such
12.3 	entity is sold as a means to effect the sale of the business of
12.4 	the entity if the transaction has been negotiated on behalf of
12.5 	all purchasers and if all purchasers have access to inside
12.6 	information regarding the entity before consummating the
12.7 	transaction.
12.8 	(29) "Self-regulatory organization" means a national
12.9 	securities exchange registered under the Securities Exchange Act
12.10 	of 1934, a national securities association of broker-dealers
12.11 	registered under the Securities Exchange Act of 1934, a clearing
12.12 	agency registered under the Securities Exchange Act of 1934, or
12.13 	the Municipal Securities Rulemaking Board established under the
12.14 	Securities Exchange Act of 1934.
12.15 	(30) "Sign" means, with present intent to authenticate or
12.16 	adopt a record:
12.17 	(A) to execute or adopt a tangible symbol; or 
12.18 	(B) to attach or logically associate with the record an
12.19 	electronic symbol, sound, or process.
12.20 	(31) "State" means a state of the United States, the
12.21 	District of Columbia, Puerto Rico, the United States Virgin
12.22 	Islands, or any territory or insular possession subject to the
12.23 	jurisdiction of the United States.
12.24 	(32) "Associated with" with respect to a person means any
12.25 	partner, officer, director, or manager of such person (or any
12.26 	person occupying a similar status or performing similar
12.27 	functions or any person directly or indirectly controlling,
12.28 	controlled by, or in common control with such person, but shall
12.29 	not include a person whose primary duties are ministerial or
12.30 	clerical.

12.31 	Sec. 3. [80A.42] SECTION 103; REFERENCES TO FEDERAL
12.32 	STATUTES.
12.33 	"Securities Act of 1933" (15 U.S.C. Section 77a et seq.),
12.34 	"Securities Exchange Act of 1934" (15 U.S.C. Section 78a et
12.35 	seq.), "Public Utility Holding Company Act of 1935" (15 U.S.C.
12.36 	Section 79 et seq.), "Investment Company Act of 1940" (15 U.S.C.
13.1 	Section 80a-1 et seq.), "Investment Advisers Act of 1940" (15
13.2 	U.S.C. Section 80b-1 et seq.), "Employee Retirement Income
13.3 	Security Act of 1974" (29 U.S.C. Section 1001 et seq.),
13.4 	"National Housing Act" (12 U.S.C. Section 1701 et seq.),
13.5 	"Commodity Exchange Act" (7 U.S.C. Section 1 et seq.), "Internal
13.6 	Revenue Code" (26 U.S.C. Section 1 et seq.), "Securities
13.7 	Investor Protection Act of 1970" (15 U.S.C. Section 78aaa et
13.8 	seq.), "Securities Litigation Uniform Standards Act of 1998"
13.9 	(112 Stat. 3227), "Small Business Investment Act of 1958" (15
13.10 	U.S.C. Section 661 et seq.), and "Electronic Signatures in
13.11 	Global and National Commerce Act" (15 U.S.C. Section 7001 et
13.12 	seq.) mean those statutes and the rules and regulations adopted
13.13 	under those statutes, as in effect on the date of enactment of
13.14 	this chapter, or as later amended.

13.15 	Sec. 4. [80A.43] SECTION 104; REFERENCES TO FEDERAL
13.16 	AGENCIES.
13.17 	A reference in this chapter to an agency or department of
13.18 	the United States is also a reference to a successor agency or
13.19 	department.

13.20 	Sec. 5. [80A.44] SECTION 105; ELECTRONIC RECORDS AND
13.21 	SIGNATURES.
13.22 	This chapter modifies, limits, and supersedes the federal
13.23 	Electronic Signatures in Global and National Commerce Act, but
13.24 	does not modify, limit, or supersede Section 101(c) of that act
13.25 	(15 U.S.C. Section 7001(c)) or authorize electronic delivery of
13.26 	any of the notices described in Section 103(b) of that act (15
13.27 	U.S.C. Section 7003(b)).  This chapter authorizes the filing of
13.28 	records and signatures, when specified by provisions of this
13.29 	chapter or by a rule adopted or order issued under this chapter,
13.30 	in a manner consistent with Section 104(a) of that act (15
13.31 	U.S.C. Section 7004(a)).
13.32 	EXEMPTIONS FROM REGISTRATION OF SECURITIES

13.33 	Sec. 6. [80A.45] SECTION 201; EXEMPT SECURITIES.
13.34 	The following securities are exempt from the requirements
13.35 	of sections 80A.49 through 80A.54 and 80A.71:
13.36 	(1) a security, including a revenue obligation or a
14.1 	separate security as defined in Rule 131 (17 C.F.R. 230.131)
14.2 	adopted under the Securities Act of 1933, issued, insured, or
14.3 	guaranteed by the United States; by a state; by a political
14.4 	subdivision of a state; by a public authority, agency, or
14.5 	instrumentality of one or more states; by a political
14.6 	subdivision of one or more states or by a person controlled or
14.7 	supervised by and acting as an instrumentality of the United
14.8 	States under authority granted by Congress; or a certificate of
14.9 	deposit for any of the foregoing;
14.10 	(2) a security issued, insured, or guaranteed by a foreign
14.11 	government with which the United States maintains diplomatic
14.12 	relations, or any of its political subdivisions, if the security
14.13 	is recognized as a valid obligation by the issuer, insurer, or
14.14 	guarantor;
14.15 	(3) a security issued by and representing or that will
14.16 	represent an interest in or a direct obligation of, or be
14.17 	guaranteed by:
14.18 	(A) an international banking institution;
14.19 	(B) a banking institution organized under the laws of the
14.20 	United States; a member bank of the Federal Reserve System; or a
14.21 	depository institution a substantial portion of the business of
14.22 	which consists or will consist of receiving deposits or share
14.23 	accounts that are insured to the maximum amount authorized by
14.24 	statute by the Federal Deposit Insurance Corporation, the
14.25 	National Credit Union Share Insurance Fund, or a successor
14.26 	authorized by federal law or exercising fiduciary powers that
14.27 	are similar to those permitted for national banks under the
14.28 	authority of the Comptroller of Currency pursuant to Section 1
14.29 	of Public Law 87-722 (12 U.S.C. Section 92a); or 
14.30 	(C) any other depository institution, unless by rule or
14.31 	order the administrator proceeds under section 80A.48;
14.32 	(4) a security issued by and representing an interest in,
14.33 	or a debt of, or insured or guaranteed by, an insurance company
14.34 	authorized to do business in this state;
14.35 	(5) a security issued or guaranteed by a railroad, other
14.36 	common carrier, public utility, or public utility holding
15.1 	company that is:
15.2 	(A) regulated in respect to its rates and charges by the
15.3 	United States or a state;
15.4 	(B) regulated in respect to the issuance or guarantee of
15.5 	the security by the United states, a state, Canada, or a
15.6 	Canadian province or territory; or 
15.7 	(C) a public utility holding company registered under the
15.8 	Public Utility Holding Company Act of 1935 or a subsidiary of
15.9 	such a registered holding company within the meaning of that
15.10 	act;
15.11 	(6) a federal covered security specified in Section
15.12 	18(b)(1) of the Securities Act of 1933 (15 U.S.C. Section
15.13 	77r(b)(1)) or by rule adopted under that provision or a security
15.14 	listed or approved for listing on another securities market
15.15 	specified by rule under this chapter; a put or a call option
15.16 	contract; a warrant; a subscription right on or with respect to
15.17 	such securities; or an option or similar derivative security on
15.18 	a security or an index of securities or foreign currencies
15.19 	issued by a clearing agency registered under the Securities
15.20 	Exchange Act of 1934 and listed or designated for trading on a
15.21 	national securities exchange, a facility of a national
15.22 	securities exchange, or a facility of a national securities
15.23 	association registered under the Securities Exchange Act of 1934
15.24 	or an offer or sale, of the underlying security in connection
15.25 	with the offer, sale, or exercise of an option or other security
15.26 	that was exempt when the option or other security was written or
15.27 	issued; or an option or a derivative security designated by the
15.28 	Securities and Exchange Commission under Section 9(b) of the
15.29 	Securities Exchange Act of 1934 (15 U.S.C. Section 78i(b));
15.30 	(7) a security issued by a person organized and operated
15.31 	exclusively for religious, educational, benevolent, fraternal,
15.32 	charitable, social, athletic, or reformatory purposes, or as a
15.33 	chamber of commerce, and not for pecuniary profit, no part of
15.34 	the net earnings of which inures to the benefit of a private
15.35 	stockholder or other person, or a security of a company that is
15.36 	excluded from the definition of an investment company under
16.1 	Section 3(c)(10)(B) of the Investment Company Act of 1940 (15
16.2 	U.S.C. Section 80a-3(c)(10)(B)); except that with respect to the
16.3 	offer or sale of a note, bond, debenture, or other evidence of
16.4 	indebtedness issued by such a person, a rule may be adopted
16.5 	under this chapter limiting the availability of this exemption
16.6 	by classifying securities, persons, and transactions, imposing
16.7 	different requirements for different classes, specifying with
16.8 	respect to paragraph (B) the scope of the exemption and the
16.9 	grounds for denial or suspension, and requiring an issuer:
16.10 	(A) to file a notice specifying the material terms of the
16.11 	proposed offer or sale and copies of any proposed sales and
16.12 	advertising literature to be used and provide that the exemption
16.13 	becomes effective if the administrator does not disallow the
16.14 	exemption within the period established by the rule;
16.15 	(B) to file a request for exemption authorization for which
16.16 	a rule under this chapter may specify the scope of the
16.17 	exemption, the requirement of an offering statement, the filing
16.18 	of sales and advertising literature, the filing of consent to
16.19 	service of process complying with section 80A.88, and grounds
16.20 	for denial or suspension of the exemption; or 
16.21 	(C) to register under section 80A.52;
16.22 	(8) a member's or owner's interest in, or a retention
16.23 	certificate or like security given in lieu of a cash patronage
16.24 	dividend issued by, a cooperative organized and operated as a
16.25 	nonprofit membership cooperative under the cooperative laws of a
16.26 	state, but not a member's or owner's interest, retention
16.27 	certificate, or like security sold to persons other than bona
16.28 	fide members of the cooperative; and 
16.29 	(9) an equipment trust certificate with respect to
16.30 	equipment leased or conditionally sold to a person, if any
16.31 	security issued by the person would be exempt under this section
16.32 	or would be a federal covered security under Section 18(b)(1) of
16.33 	the Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)).

16.34 	Sec. 7. [80A.46] SECTION 202; EXEMPT TRANSACTIONS.
16.35 	The following transactions are exempt from the requirements
16.36 	of sections 80A.49 through 80A.54 and 80A.71:
17.1 	(1) isolated nonissuer transactions, consisting of sale to
17.2 	not more than ten purchasers in Minnesota during any period of
17.3 	12 consecutive months, whether effected by or through a
17.4 	broker-dealer or not;
17.5 	(2) a nonissuer transaction by or through a broker-dealer
17.6 	registered, or exempt from registration under this chapter, and
17.7 	a resale transaction by a sponsor of a unit investment trust
17.8 	registered under the Investment Company Act of 1940, in a
17.9 	security of a class that has been outstanding in the hands of
17.10 	the public for at least 90 days, if, at the date of the
17.11 	transaction:
17.12 	(A) the issuer of the security is engaged in business, the
17.13 	issuer is not in the organizational stage or in bankruptcy or
17.14 	receivership, and the issuer is not a blank check, blind pool,
17.15 	or shell company that has no specific business plan or purpose
17.16 	or has indicated that its primary business plan is to engage in
17.17 	a merger or combination of the business with, or an acquisition
17.18 	of, an unidentified person;
17.19 	(B) the security is sold at a price reasonably related to
17.20 	its current market price;
17.21 	(C) the security does not constitute the whole or part of
17.22 	an unsold allotment to, or a subscription or participation by,
17.23 	the broker-dealer as an underwriter of the security or a
17.24 	redistribution;
17.25 	(D) a nationally recognized securities manual or its
17.26 	electronic equivalent designated by rule adopted or order issued
17.27 	under this chapter or a record filed with the Securities and
17.28 	Exchange Commission that is publicly available contains:
17.29 	(i) a description of the business and operations of the
17.30 	issuer;
17.31 	(ii) the names of the issuer's executive officers and the
17.32 	names of the issuer's directors, if any;
17.33 	(iii) an audited balance sheet of the issuer as of a date
17.34 	within 18 months before the date of the transaction or, in the
17.35 	case of a reorganization or merger when the parties to the
17.36 	reorganization or merger each had an audited balance sheet, a
18.1 	pro forma balance sheet for the combined organization; and 
18.2 	(iv) an audited income statement for each of the issuer's
18.3 	two immediately previous fiscal years or for the period of
18.4 	existence of the issuer, whichever is shorter, or, in the case
18.5 	of a reorganization or merger when each party to the
18.6 	reorganization or merger had audited income statements, a pro
18.7 	forma income statement; and 
18.8 	(E) any one of the following requirements is met:
18.9 	(i) the issuer of the security has a class of equity
18.10 	securities listed on a national securities exchange registered
18.11 	under Section 6 of the Securities Exchange Act of 1934 or
18.12 	designated for trading on the National Association of Securities
18.13 	Dealers Automated Quotation System;
18.14 	(ii) the issuer of the security is a unit investment trust
18.15 	registered under the Investment Company Act of 1940;
18.16 	(iii) the issuer of the security, including its
18.17 	predecessors, has been engaged in continuous business for at
18.18 	least three years; or 
18.19 	(iv) the issuer of the security has total assets of at
18.20 	least $2,000,000 based on an audited balance sheet as of a date
18.21 	within 18 months before the date of the transaction or, in the
18.22 	case of a reorganization or merger when the parties to the
18.23 	reorganization or merger each had such an audited balance sheet,
18.24 	a pro forma balance sheet for the combined organization;
18.25 	(3) a nonissuer transaction by or through a broker-dealer
18.26 	registered or exempt from registration under this chapter in a
18.27 	security of a foreign issuer that is a margin security defined
18.28 	in regulations or rules adopted by the Board of Governors of the
18.29 	Federal Reserve System;
18.30 	(4) a nonissuer transaction by or through a broker-dealer
18.31 	registered or exempt from registration under this chapter in an
18.32 	outstanding security if the guarantor of the security files
18.33 	reports with the Securities and Exchange Commission under the
18.34 	reporting requirements of Section 13 or 15(d) of the Securities
18.35 	Exchange Act of 1934 (15 U.S.C. Sections 78m or 78o(d));
18.36 	(5) a nonissuer transaction by or through a broker-dealer
19.1 	registered or exempt from registration under this chapter in a
19.2 	security that:
19.3 	(A) is rated at the time of the transaction by a nationally
19.4 	recognized statistical rating organization in one of its four
19.5 	highest rating categories; or 
19.6 	(B) has a fixed maturity or a fixed interest or dividend,
19.7 	if:
19.8 	(i) a default has not occurred during the current fiscal
19.9 	year or within the three previous fiscal years or during the
19.10 	existence of the issuer and any predecessor if less than three
19.11 	fiscal years, in the payment of principal, interest, or
19.12 	dividends on the security; and 
19.13 	(ii) the issuer is engaged in business, is not in the
19.14 	organizational stage or in bankruptcy or receivership, and is
19.15 	not and has not been within the previous 12 months a blank
19.16 	check, blind pool, or shell company that has no specific
19.17 	business plan or purpose or has indicated that its primary
19.18 	business plan is to engage in a merger or combination of the
19.19 	business with, or an acquisition of, an unidentified person;
19.20 	(6) a nonissuer transaction by or through a broker-dealer
19.21 	registered or exempt from registration under this chapter
19.22 	effecting an unsolicited order or offer to purchase;
19.23 	(7) a nonissuer transaction executed by a bona fide pledgee
19.24 	without the purpose of evading this chapter;
19.25 	(8) a nonissuer transaction by a federal covered investment
19.26 	adviser with investments under management in excess of
19.27 	$100,000,000 acting in the exercise of discretionary authority
19.28 	in a signed record for the account of others;
19.29 	(9) a transaction in a security, whether or not the
19.30 	security or transaction is otherwise exempt, in exchange for one
19.31 	or more bona fide outstanding securities, claims, or property
19.32 	interests, or partly in such exchange and partly for cash, if
19.33 	the terms and conditions of the issuance and exchange or the
19.34 	delivery and exchange and the fairness of the terms and
19.35 	conditions have been approved by the administrator after a
19.36 	hearing;
20.1 	(10) a transaction between the issuer or other person on
20.2 	whose behalf the offering is made and an underwriter, or among
20.3 	underwriters;
20.4 	(11) a transaction in a note, bond, debenture, or other
20.5 	evidence of indebtedness secured by a mortgage or other security
20.6 	agreement if:
20.7 	(A) the note, bond, debenture, or other evidence of
20.8 	indebtedness is offered and sold with the mortgage or other
20.9 	security agreement as a unit;
20.10 	(B) a general solicitation or general advertisement of the
20.11 	transaction is not made; and 
20.12 	(C) a commission or other remuneration is not paid or
20.13 	given, directly or indirectly, to a person not registered under
20.14 	this chapter as a broker-dealer or as an agent;
20.15 	(12) a transaction by an executor, administrator of an
20.16 	estate, sheriff, marshal, receiver, trustee in bankruptcy,
20.17 	guardian, or conservator;
20.18 	(13) a sale or offer to sell to:
20.19 	(A) an institutional investor;
20.20 	(B) an accredited investor as that term is defined in
20.21 	Regulation D, Rule 501(a);
20.22 	(C) a federal covered investment adviser; or 
20.23 	(D) any other person exempted by rule adopted or order
20.24 	issued under this chapter;
20.25 	(14) a sale or an offer to sell securities by an issuer, if
20.26 	the transaction is part of a single issue in which:
20.27 	(A) not more than 35 purchasers are present in this state
20.28 	during any 12 consecutive months, other than those designated in
20.29 	paragraph (13);
20.30 	(B) a general solicitation or general advertising is not
20.31 	made in connection with the offer to sell or sale of the
20.32 	securities;
20.33 	(C) a commission or other remuneration is not paid or
20.34 	given, directly or indirectly, to a person other than a
20.35 	broker-dealer registered under this chapter or an agent
20.36 	registered under this chapter for soliciting a prospective
21.1 	purchaser in this state; and 
21.2 	(D) the issuer reasonably believes that all the purchasers
21.3 	in this state, other than those designated in paragraph (13),
21.4 	are purchasing for investment;
21.5 	(15) a transaction under an offer to existing security
21.6 	holders of the issuer, including persons that at the date of the
21.7 	transaction are holders of convertible securities, options, or
21.8 	warrants, if a commission or other remuneration, other than a
21.9 	standby commission, is not paid or given, directly or
21.10 	indirectly, for soliciting a security holder in this state;
21.11 	(16) an offer to sell, but not a sale, of a security not
21.12 	exempt from registration under the Securities Act of 1933 if:
21.13 	(A) a registration or offering statement or similar record
21.14 	as required under the Securities Act of 1933 has been filed, but
21.15 	is not effective, or the offer is made in compliance with Rule
21.16 	165 adopted under the Securities Act of 1933 (17 C.F.R.
21.17 	230.165); and 
21.18 	(B) a stop order of which the offeror is aware has not been
21.19 	issued against the offeror by the administrator or the
21.20 	Securities and Exchange Commission, and an audit, inspection, or
21.21 	proceeding that is public and that may culminate in a stop order
21.22 	is not known by the offeror to be pending;
21.23 	(17) an offer to sell, but not a sale, of a security exempt
21.24 	from registration under the Securities Act of 1933 if:
21.25 	(A) a registration statement has been filed under this
21.26 	chapter, but is not effective;
21.27 	(B) a solicitation of interest is provided in a record to
21.28 	offerees in compliance with a rule adopted by the administrator
21.29 	under this chapter; and 
21.30 	(c) a stop order of which the offeror is aware has not been
21.31 	issued by the administrator under this chapter and an audit,
21.32 	inspection, or proceeding that may culminate in a stop order is
21.33 	not known by the offeror to be pending;
21.34 	(18) a transaction involving the distribution of the
21.35 	securities of an issuer to the security holders of another
21.36 	person in connection with a merger, consolidation, exchange of
22.1 	securities, sale of assets, or other reorganization to which the
22.2 	issuer, or its parent or subsidiary and the other person, or its
22.3 	parent or subsidiary, are parties;
22.4 	(19) a rescission offer, sale, or purchase under section
22.5 	80A.77;
22.6 	(20) an offer or sale of a security to a person not a
22.7 	resident of this state and not present in this state if the
22.8 	offer or sale does not constitute a violation of the laws of the
22.9 	state or foreign jurisdiction in which the offeree or purchaser
22.10 	is present and is not part of an unlawful plan or scheme to
22.11 	evade this chapter;
22.12 	(21) employees' stock purchase, savings, option,
22.13 	profit-sharing, pension, or similar employees' benefit plan,
22.14 	including any securities, plan interests, and guarantees issued
22.15 	under a compensatory benefit plan or compensation contract,
22.16 	contained in a record, established by the issuer, its parents,
22.17 	its majority-owned subsidiaries, or the majority-owned
22.18 	subsidiaries of the issuer's parent for the participation of
22.19 	their employees including offers or sales of such securities to:
22.20 	(A) directors; general partners; trustees, if the issuer is
22.21 	a business trust; officers; consultants; and advisors;
22.22 	(B) family members who acquire such securities from those
22.23 	persons through gifts or domestic relations orders;
22.24 	(C) former employees, directors, general partners,
22.25 	trustees, officers, consultants, and advisors if those
22.26 	individuals were employed by or providing services to the issuer
22.27 	when the securities were offered; and 
22.28 	(D) insurance agents who are exclusive insurance agents of
22.29 	the issuer, or the issuer's subsidiaries or parents, or who
22.30 	derive more than 50 percent of their annual income from those
22.31 	organizations;
22.32 	(22) a transaction involving:
22.33 	(A) a stock dividend or equivalent equity distribution,
22.34 	whether the corporation or other business organization
22.35 	distributing the dividend or equivalent equity distribution is
22.36 	the issuer or not, if nothing of value is given by stockholders
23.1 	or other equity holders for the dividend or equivalent equity
23.2 	distribution other than the surrender of a right to a cash or
23.3 	property dividend if each stockholder or other equity holder may
23.4 	elect to take the dividend or equivalent equity distribution in
23.5 	cash, property, or stock;
23.6 	(B) an act incident to a judicially approved reorganization
23.7 	in which a security is issued in exchange for one or more
23.8 	outstanding securities, claims, or property interests, or partly
23.9 	in such exchange and partly for cash; or 
23.10 	(C) the solicitation of tenders of securities by an offeror
23.11 	in a tender offer in compliance with Rule 162 adopted under the
23.12 	Securities Act of 1933 (17 C.F.R. 230.162);
23.13 	(23) a nonissuer transaction in an outstanding security by
23.14 	or through a broker-dealer registered or exempt from
23.15 	registration under this chapter, if the issuer is a reporting
23.16 	issuer in a foreign jurisdiction designated by this paragraph or
23.17 	by rule adopted or order issued under this chapter; has been
23.18 	subject to continuous reporting requirements in the foreign
23.19 	jurisdiction for not less than 180 days before the transaction;
23.20 	and the security is listed on the foreign jurisdiction's
23.21 	securities exchange that has been designated by this paragraph
23.22 	or by rule adopted or order issued under this chapter, or is a
23.23 	security of the same issuer that is of senior or substantially
23.24 	equal rank to the listed security or is a warrant or right to
23.25 	purchase or subscribe to any of the foregoing.  For purposes of
23.26 	this paragraph, Canada, together with its provinces and
23.27 	territories, is a designated foreign jurisdiction and The
23.28 	Toronto Stock Exchange, Inc., is a designated securities
23.29 	exchange.  After an administrative hearing in compliance with
23.30 	chapter 14, the administrator, by rule adopted or order issued
23.31 	under this chapter, may revoke the designation of a securities
23.32 	exchange under this paragraph, if the administrator finds that
23.33 	revocation is necessary or appropriate in the public interest
23.34 	and for the protection of investors;
23.35 	(24) any transaction effected by or through a Canadian
23.36 	broker-dealer exempted from broker-dealer registration pursuant
24.1 	to section 80A.56(b)(3); or 
24.2 	(25)(A) the offer and sale by a cooperative organized under
24.3 	chapter 308A or under the laws of another state, of it
24.4 	securities when the securities are offered and sold only to its
24.5 	members, or when the purchase of the securities is necessary or
24.6 	incidental to establishing membership in the cooperative, or
24.7 	when such securities are issued as patronage dividends.  This
24.8 	paragraph applies to a cooperative organized under the laws of
24.9 	another state only if the cooperative has filed with the
24.10 	commissioner a consent to service of process under section
24.11 	80A.88 and has, not less than ten days prior to the issuance or
24.12 	delivery, furnished the administrator with a written general
24.13 	description of the transaction and any other information that
24.14 	the administrator requires by rule or otherwise;
24.15 	(B) the offer and sale by a cooperative organized under
24.16 	chapter 308B of its securities when the securities are offered
24.17 	and sold to its existing members or when the purchase of the
24.18 	securities is necessary or incidental to establishing patron
24.19 	membership in the cooperative, or when such securities are
24.20 	issued as patronage dividends.  This paragraph applies to
24.21 	securities, other than securities issued as patronage dividends,
24.22 	only when:
24.23 	(i) the issuer, prior to the completion of the sale of such
24.24 	securities, provides each offeree or purchaser disclosure
24.25 	materials that, to the extent material to an understanding of
24.26 	the issuer, its business, and the securities being offered,
24.27 	substantially meet the disclosure conditions and limitations
24.28 	found in rule 502(b) of Regulation D promulgated by the
24.29 	Securities and Exchange Commission, Code of Federal Regulations,
24.30 	title 17, section 230.502; and 
24.31 	(ii) within 15 days after the completion of the first sale
24.32 	in each offering completed in reliance upon this exemption, the
24.33 	cooperative has filed with the administrator a consent to
24.34 	service of process under section 80A.88 or has previously filed
24.35 	such a consent, and has furnished the administrator with a
24.36 	written general description of the transaction and any other
25.1 	information that the administrator requires by rule or
25.2 	otherwise; and 
25.3 	(C) a cooperative may, at or about the same time as offers
25.4 	or sales are being completed in reliance upon the exemptions
25.5 	from registration found in this paragraph and as part of a
25.6 	common plan of financing, offer or sell its securities in
25.7 	reliance upon any other exemption from registration available
25.8 	under this chapter.  The offer or sale of securities in reliance
25.9 	upon the exemptions found in this paragraph shall not be
25.10 	considered or deemed a part of or be integrated with any offer
25.11 	or sale of securities conducted by the cooperative in reliance
25.12 	upon any other exemption from registration available under this
25.13 	chapter, nor shall offers or sales of securities by the
25.14 	cooperative in reliance upon any other exemption from
25.15 	registration available under this chapter be considered or
25.16 	deemed a part of or be integrated with any offer or sale
25.17 	conducted by the cooperative in reliance upon this paragraph.

25.18 	Sec. 8. [80A.47] SECTION 203; ADDITIONAL EXEMPTIONS AND
25.19 	WAIVERS.
25.20 	A rule adopted or order issued under this chapter may
25.21 	exempt a security, transaction, or offer; a rule under this
25.22 	chapter may exempt a class of securities, transactions, or
25.23 	offers from any or all of the requirements of sections 80A.49
25.24 	through 80A.54 and 80A.71; and an order under this chapter may
25.25 	waive, in whole or in part, any or all of the conditions for an
25.26 	exemption or offer under sections 80A.45 and 80A.46.

25.27 	Sec. 9. [80A.48] SECTION 204; DENIAL, SUSPENSION,
25.28 	REVOCATION, CONDITION, OR LIMITATION OF EXEMPTIONS.
25.29 	(a) [ENFORCEMENT RELATED POWERS.] Except with respect to a
25.30 	federal covered security or a transaction involving a federal
25.31 	covered security, an order under this chapter may deny, suspend
25.32 	application of, condition, limit, or revoke an exemption created
25.33 	under section 80A.45(3)(C), (7) or (8) or 80A.46 or an exemption
25.34 	or waiver created under section 80A.47 with respect to a
25.35 	specific security, transaction, or offer.  An order under this
25.36 	section may be issued only pursuant to the procedures in section
26.1 	80A.54(d) or 80A.81 and only prospectively.
26.2 	(b) [KNOWLEDGE OF ORDER REQUIRED.] A person does not
26.3 	violate sections 80A.49, 80A.51 through 80A.54, 80A.71, or
26.4 	80A.77 by an offer to sell, offer to purchase, sale, or purchase
26.5 	effected after the entry of an order issued under this section
26.6 	if the person did not know, and in the exercise of reasonable
26.7 	care could not have known, of the order.
26.8 	REGISTRATION OF SECURITIES AND
26.9 	NOTICE FILING OF FEDERAL COVERED SECURITIES

26.10 	Sec. 10. [80A.49] SECTION 301; SECURITIES REGISTRATION
26.11 	REQUIREMENT.
26.12 	It is unlawful for a person to offer or sell a security in
26.13 	this state unless:
26.14 	(1) the security is a federal covered security;
26.15 	(2) the security, transaction, or offer is exempted from
26.16 	registration under sections 80A.45 through 80A.47; or 
26.17 	(3) the security is registered under this chapter.

26.18 	Sec. 11. [80A.50] SECTION 302; FEDERAL COVERED
26.19 	SECURITIES; SMALL CORPORATE OFFERING REGISTRATION.
26.20 	(a) [FEDERAL COVERED SECURITIES.]
26.21 	(1) [REQUIRED FILING OF RECORDS.] With respect to a federal
26.22 	covered security, as defined in Section 18(b)(2) of the
26.23 	Securities Act of 1933 (15 U.S.C. Section 77r(b)(2)), that is
26.24 	not otherwise exempt under sections 80A.45 through 80A.47, a
26.25 	rule adopted or order issued under this chapter may require the
26.26 	filing of any or all of the following records:
26.27 	(A) before the initial offer of a federal covered security
26.28 	in this state, all records that are part of a federal
26.29 	registration statement filed with the Securities and Exchange
26.30 	Commission under the Securities Act of 1933 and a consent to
26.31 	service of process complying with section 80A.88 signed by the
26.32 	issuer;
26.33 	(B) after the initial offer of the federal covered security
26.34 	in this state, all records that are part of an amendment to a
26.35 	federal registration statement filed with the Securities and
26.36 	Exchange Commission under the Securities Act of 1933; and 
27.1 	(C) to the extent necessary or appropriate to compute fees,
27.2 	a report of the value of the federal covered securities sold or
27.3 	offered to persons present in this state, if the sales data are
27.4 	not included in records filed with the Securities and Exchange
27.5 	Commission.
27.6 	(2) [NOTICE FILING EFFECTIVENESS AND RENEWAL.] A notice
27.7 	filing under subsection (a) is effective for one year commencing
27.8 	on the later of the notice filing or the effectiveness of the
27.9 	offering filed with the Securities and Exchange Commission.  On
27.10 	or before expiration, the issuer may renew a notice filing by
27.11 	filing a copy of those records filed by the issuer with the
27.12 	Securities and Exchange Commission that are required by rule or
27.13 	order under this chapter to be filed.  A previously filed
27.14 	consent to service of process complying with section 80A.88 may
27.15 	be incorporated by reference in a renewal.  A renewed notice
27.16 	filing becomes effective upon the expiration of the filing being
27.17 	renewed.
27.18 	(3) [NOTICE FILINGS FOR FEDERAL COVERED SECURITIES UNDER
27.19 	SECTION 18(b)(4)(D).] With respect to a security that is a
27.20 	federal covered security under Section 18(b)(4)(D) of the
27.21 	Securities Act of 1933 (15 U.S.C. Section 77r(b)(4)(D)), a rule
27.22 	under this chapter may require a notice filing by or on behalf
27.23 	of an issuer to include a copy of Form D, including the
27.24 	Appendix, as promulgated by the Securities and Exchange
27.25 	Commission, and a consent to service of process complying with
27.26 	section 80A.88 signed by the issuer not later than 15 days after
27.27 	the first sale of the federal covered security in this state.
27.28 	(4) [STOP ORDERS.] Except with respect to a federal
27.29 	security under Section 18(b)(1) of the Securities Act of 1933
27.30 	(15 U.S.C. Section 77r(b)(1)), if the administrator finds that
27.31 	there is a failure to comply with a notice or fee requirement of
27.32 	this section, the administrator may issue a stop order
27.33 	suspending the offer and sale of a federal covered security in
27.34 	this state.  If the deficiency is corrected, the stop order is
27.35 	void as of the time of its issuance and no penalty may be
27.36 	imposed by the administrator.
28.1 	(b) [SMALL CORPORATION OFFERING REGISTRATION.]
28.2 	(1) [REGISTRATION REQUIRED.] A security meeting the
28.3 	conditions set forth in this section may be registered as set
28.4 	forth in this section.
28.5 	(2) [AVAILABILITY.] Registration under this section is
28.6 	available only to the issuer of securities and not to an
28.7 	affiliate of the issuer or to any other person for resale of the
28.8 	issuer's securities.  The issuer must be organized under the
28.9 	laws of one of the states or possessions of the United States.
28.10 	The securities offered must be exempt from registration under
28.11 	the Securities Act of 1933 pursuant to Rule 504 of Regulation D
28.12 	(15 U.S.C. section 77c).
28.13 	(3) [DISQUALIFICATION.] Registration under this section is
28.14 	not available to any of the following issuers:
28.15 	(A) an issuer subject to the reporting requirements of
28.16 	section 13 or 15(d) of the Securities Exchange Act of 1934;
28.17 	(B) an investment company;
28.18 	(C) a development stage company that either has no specific
28.19 	business plan or purpose or has indicated that its business plan
28.20 	is to engage in a merger or acquisition with an unidentified
28.21 	company or companies or other entity or person;
28.22 	(D) an issuer if the issuer or any of its predecessors,
28.23 	officers, directors, governors, partners, ten percent stock or
28.24 	equity holders, promoters, or any selling agents of the
28.25 	securities to be offered, or any officer, director, governor, or
28.26 	partner of the selling agent:
28.27 	(i) has filed a registration statement that is the subject
28.28 	of a currently effective registration stop order entered under a
28.29 	federal or state securities law within five years before the
28.30 	filing of the small corporate offering registration application;
28.31 	(ii) has been convicted within five years before the filing
28.32 	of the small corporate offering registration application of a
28.33 	felony or misdemeanor in connection with the offer, purchase, or
28.34 	sale of a security or a felony involving fraud or deceit,
28.35 	including, but not limited to, forgery, embezzlement, obtaining
28.36 	money under false pretenses, larceny, or conspiracy to defraud;
29.1 	(iii) is currently subject to a state administrative
29.2 	enforcement order or judgment entered by a state securities
29.3 	administrator or the Securities and Exchange Commission within
29.4 	five years before the filing of the small corporate offering
29.5 	registration application, or is subject to a federal or state
29.6 	administrative enforcement order or judgment in which fraud or
29.7 	deceit, including, but not limited to, making untrue statements
29.8 	of material facts or omitting to state material facts, was found
29.9 	and the order or judgment was entered within five years before
29.10 	the filing of the small corporate offering registration
29.11 	application;
29.12 	(iv) is currently subject to an order, judgment, or decree
29.13 	of a court of competent jurisdiction temporarily restraining or
29.14 	enjoining, or is subject to an order, judgment, or decree of a
29.15 	court of competent jurisdiction permanently restraining or
29.16 	enjoining the party from engaging in or continuing any conduct
29.17 	or practice in connection with the purchase or sale of any
29.18 	security or involving the making of a false filing with a state
29.19 	or with the Securities and Exchange Commission entered within
29.20 	five years before the filing of the small corporate offering
29.21 	registration application; or 
29.22 	(v) is subject to a state's administrative enforcement
29.23 	order, or judgment that prohibits, denies, or revokes the use of
29.24 	an exemption for registration in connection with the offer,
29.25 	purchase, or sale of securities,
29.26 	(I) except that clauses (i) to (iv) do not apply if the
29.27 	person subject to the disqualification is duly licensed or
29.28 	registered to conduct securities-related business in the state
29.29 	in which the administrative order or judgment was entered
29.30 	against the person or if the dealer employing the party is
29.31 	licensed or registered in this state and the form BD filed in
29.32 	this state discloses the order, conviction, judgment, or decree
29.33 	relating to the person, and 
29.34 	(II) except that the disqualification under this
29.35 	subdivision is automatically waived if the state securities
29.36 	administrator or federal agency that created the basis for
30.1 	disqualification determines upon a showing of good cause that it
30.2 	is not necessary under the circumstances to deny the
30.3 	registration.
30.4 	(4) [FILING AND EFFECTIVENESS OF REGISTRATION STATEMENT.] A
30.5 	small corporate offering registration statement must be filed
30.6 	with the administrator.  If no stop order is in effect and no
30.7 	proceeding is pending under section 80A.54, such registration
30.8 	statement shall become effective automatically at the close of
30.9 	business on the 20th day after filing of the registration
30.10 	statement or the last amendment of the registration statement or
30.11 	at such earlier time as the administrator may designate by rule
30.12 	or order.
30.13 	(5) [CONTENTS OF REGISTRATION STATEMENT.] A small corporate
30.14 	offering registration statement under this section shall be on
30.15 	Form U-7, including exhibits required by the instructions
30.16 	thereto, as adopted by the North American Securities
30.17 	Administrators Association, or such alternative form as may be
30.18 	designated by the administrator by rule or order and must
30.19 	include:
30.20 	(A) a consent to service of process complying with section
30.21 	80A.88;
30.22 	(B) a statement of the type and amount of securities to be
30.23 	offered and the amount of securities to be offered in this
30.24 	state;
30.25 	(C) a specimen or copy of the security being registered,
30.26 	unless the security is uncertificated, a copy of the issuer's
30.27 	articles of incorporation and bylaws or their substantial
30.28 	equivalents in effect, and a copy of any indenture or other
30.29 	instrument covering the security to be registered;
30.30 	(D) a signed or conformed copy of an opinion of counsel
30.31 	concerning the legality of the securities being registered which
30.32 	states whether the securities, when sold, will be validly
30.33 	issued, fully paid, and nonassessable and, if debt securities,
30.34 	binding obligations of the issuer;
30.35 	(E) the states (i) in which the securities are proposed to
30.36 	be offered; (ii) in which a registration statement or similar
31.1 	filing has been made in connection with the offering including
31.2 	information as to effectiveness of each such filing; and (iii)
31.3 	in which a stop order or similar proceeding has been entered or
31.4 	in which proceedings or actions seeking such an order are
31.5 	pending;
31.6 	(F) a copy of the offering document proposed to be
31.7 	delivered to offerees; and 
31.8 	(G) a copy of any other pamphlet, circular, form letter,
31.9 	advertisement, or other sales literature intended as of the
31.10 	effective date to be used in connection with the offering and
31.11 	any solicitation of interest used in compliance with section
31.12 	80A.46(17)(B).
31.13 	(6) [COPY TO PURCHASER.] A copy of the offering document as
31.14 	filed with the administrator must be delivered to each person
31.15 	purchasing the securities prior to sale of the securities to
31.16 	such person.

31.17 	Sec. 12. [80A.51] SECTION 303; SECURITIES REGISTRATION BY
31.18 	COORDINATION.
31.19 	(a) [REGISTRATION PERMITTED.] A security for which a
31.20 	registration statement has been filed under the Securities Act
31.21 	of 1933 in connection with the same offering may be registered
31.22 	by coordination under this section.
31.23 	(b) [REQUIRED RECORDS.] A registration statement and
31.24 	accompanying records under this section must contain or be
31.25 	accompanied by the following records in addition to the
31.26 	information specified in section 80A.53 and a consent to service
31.27 	of process complying with section 80A.88:
31.28 	(1) a copy of the latest form of prospectus filed under the
31.29 	Securities Act of 1933;
31.30 	(2) a copy of the articles of incorporation and bylaws or
31.31 	their substantial equivalents currently in effect; a copy of any
31.32 	agreement with or among underwriters; a copy of any indenture or
31.33 	other instrument governing the issuance of the security to be
31.34 	registered; and a specimen, copy, or description of the security
31.35 	that is required by rule adopted or order issued under this
31.36 	chapter;
32.1 	(3) copies of any other information or any other records
32.2 	filed by the issuer under the Securities Act of 1933 requested
32.3 	by the administrator; and 
32.4 	(4) an undertaking to forward each amendment to the federal
32.5 	prospectus, other than an amendment that delays the effective
32.6 	date of the registration statement, promptly after it is filed
32.7 	with the Securities and Exchange Commission.
32.8 	(c) [CONDITIONS FOR EFFECTIVENESS OF REGISTRATION
32.9 	STATEMENT.] A registration statement under this section becomes
32.10 	effective simultaneously with or subsequent to the federal
32.11 	registration statement when all of the following conditions are
32.12 	satisfied:
32.13 	(1) a stop order under subsection (d) or section 80A.54 or
32.14 	issued by the Securities and Exchange Commission is not in
32.15 	effect and a proceeding is not pending against the issuer under
32.16 	section 80A.54; and 
32.17 	(2) the registration statement has been on file for at
32.18 	least 20 days or a shorter period provided by rule adopted or
32.19 	order issued under this chapter.
32.20 	(d) [NOTICE OF FEDERAL REGISTRATION STATEMENT
32.21 	EFFECTIVENESS.] The registrant shall promptly notify the
32.22 	administrator in a record of the date when the federal
32.23 	registration statement becomes effective and the content of any
32.24 	price amendment and shall promptly file a record containing the
32.25 	price amendment.  If the notice is not timely received, the
32.26 	administrator may issue a stop order, without prior notice or
32.27 	hearing, retroactively denying effectiveness to the registration
32.28 	statement or suspending its effectiveness until compliance with
32.29 	this section.  The administrator shall promptly notify the
32.30 	registrant of an order by telegram, telephone, or electronic
32.31 	means and promptly confirm this notice by a record.  If the
32.32 	registrant subsequently complies with the notice requirement of
32.33 	this section, the stop order is void as of the date of its
32.34 	issuance.
32.35 	(e) [EFFECTIVENESS OF REGISTRATION STATEMENT.] If the
32.36 	federal registration statement becomes effective before each of
33.1 	the conditions in this section is satisfied or is waived by the
33.2 	administrator, the registration statement is automatically
33.3 	effective under this chapter when all the conditions are
33.4 	satisfied or waived.  If the registrant notifies the
33.5 	administrator of the date when the federal registration
33.6 	statement is expected to become effective, the administrator
33.7 	shall promptly notify the registrant by telegram, telephone, or
33.8 	electronic means and promptly confirm this notice by a record,
33.9 	indicating whether all the conditions are satisfied or waived
33.10 	and whether the administrator intends the institution of a
33.11 	proceeding under section 80A.54.  The notice by the
33.12 	administrator does not preclude the institution of such a
33.13 	proceeding.

33.14 	Sec. 13. [80A.52] SECTION 304; SECURITIES REGISTRATION BY
33.15 	QUALIFICATION.
33.16 	(a) [REGISTRATION PERMITTED.] A security may be registered
33.17 	by qualification under this section.
33.18 	(b) [REQUIRED RECORDS.] A registration statement under this
33.19 	section must contain the information or records specified in
33.20 	section 80A.53, a consent to service of process complying with
33.21 	section 80A.88, and, if required by rule adopted under this
33.22 	chapter, the following information or records:
33.23 	(1) with respect to the issuer and any significant
33.24 	subsidiary, its name, address, and form of organization; the
33.25 	state or foreign jurisdiction and date of its organization; the
33.26 	general character and location of its business; a description of
33.27 	its physical properties and equipment; and a statement of the
33.28 	general competitive conditions in the industry or business in
33.29 	which it is or will be engaged;
33.30 	(2) with respect to each director and officer of the
33.31 	issuer, and other person having a similar status or performing
33.32 	similar functions, the person's name, address, and principal
33.33 	occupation for the previous five years; the amount of securities
33.34 	of the issuer held by the person as of the 30th day before the
33.35 	filing of the registration statement; the amount of the
33.36 	securities covered by the registration statement to which the
34.1 	person has indicated an intention to subscribe; and a
34.2 	description of any material interest of the person in any
34.3 	material transaction with the issuer or a significant subsidiary
34.4 	effected within the previous three years or proposed to be
34.5 	effected;
34.6 	(3) with respect to persons covered by paragraph (2), the
34.7 	aggregate sum of the remuneration paid to those persons during
34.8 	the previous 12 months and estimated to be paid during the next
34.9 	12 months, directly or indirectly, by the issuer, and all
34.10 	predecessors, parents, subsidiaries, and affiliates of the
34.11 	issuer;
34.12 	(4) with respect to a person owning of record or owning
34.13 	beneficially, if known, ten percent or more of the outstanding
34.14 	shares of any class of equity security of the issuer, the
34.15 	information specified in paragraph (2) other than the person's
34.16 	occupation;
34.17 	(5) with respect to a promoter, if the issuer was organized
34.18 	within the previous three years, the information or records
34.19 	specified in paragraph (2), any amount paid to the promoter
34.20 	within that period or intended to be paid to the promoter, and
34.21 	the consideration for the payment;
34.22 	(6) with respect to a person on whose behalf any part of
34.23 	the offering is to be made in a nonissuer distribution, the
34.24 	person's name and address; the amount of securities of the
34.25 	issuer held by the person as of the date of the filing of the
34.26 	registration statement; a description of any material interest
34.27 	of the person in any material transaction with the issuer or any
34.28 	significant subsidiary effected within the previous three years
34.29 	or proposed to be effected, and a statement of the reasons for
34.30 	making the offering;
34.31 	(7) the capitalization and long-term debt, on both a
34.32 	current and pro forma basis, of the issuer and any significant
34.33 	subsidiary, including a description of each security outstanding
34.34 	or being registered or otherwise offered, and a statement of the
34.35 	amount and kind of consideration, whether in the form of cash,
34.36 	physical assets, services, patents, goodwill, or anything else
35.1 	of value, for which the issuer or any subsidiary has issued its
35.2 	securities within the previous two years or is obligated to
35.3 	issue its securities;
35.4 	(8) the kind and amount of securities to be offered; the
35.5 	proposed offering price or the method by which it is to be
35.6 	computed; any variation at which a proportion of the offering is
35.7 	to be made to a person or class of persons other than the
35.8 	underwriters, with a specification of the person or class; the
35.9 	basis on which the offering is to be made if otherwise than for
35.10 	cash; the estimated aggregate underwriting and selling discounts
35.11 	or commissions and finders' fees, including separately cash,
35.12 	securities, contracts, or anything else of value to accrue to
35.13 	the underwriters or finders in connection with the offering or,
35.14 	if the selling discounts or commissions are variable, the basis
35.15 	of determining them and their maximum and minimum amounts; the
35.16 	estimated amounts of other selling expenses, including legal,
35.17 	engineering, and accounting charges; the name and address of
35.18 	each underwriter and each recipient of a finder's fee; a copy of
35.19 	any underwriting or selling group agreement under which the
35.20 	distribution is to be made or the proposed form of any such
35.21 	agreement whose terms have not yet been determined; and a
35.22 	description of the plan of distribution of any securities that
35.23 	are to be offered otherwise than through an underwriter;
35.24 	(9) the estimated monetary proceeds to be received by the
35.25 	issuer from the offering; the purposes for which the proceeds
35.26 	are to be used by the issuer; the estimated amount to be used
35.27 	for each purpose; the order or priority in which the proceeds
35.28 	will be used for the purposes stated; the amounts of any funds
35.29 	to be raised from other sources to achieve the purposes stated;
35.30 	the sources of the funds; and, if a part of the proceeds is to
35.31 	be used to acquire property, including goodwill, otherwise than
35.32 	in the ordinary course of business, the names and addresses of
35.33 	the vendors, the purchase price, the names of any persons that
35.34 	have received commissions in connection with the acquisition,
35.35 	and the amounts of the commissions and other expenses in
35.36 	connection with the acquisition, including the cost of borrowing
36.1 	money to finance the acquisition;
36.2 	(10) a description of any stock options or other security
36.3 	options outstanding, or to be created in connection with the
36.4 	offering, and the amount of those options held or to be held by
36.5 	each person required to be named in paragraph (2), (4), (5),
36.6 	(6), or (8) and by any person that holds or will hold ten
36.7 	percent or more in the aggregate of those options;
36.8 	(11) the dates of, parties to, and general effect concisely
36.9 	stated of each managerial or other material contract made or to
36.10 	be made otherwise than in the ordinary course of business to be
36.11 	performed in whole or in part at or after the filing of the
36.12 	registration statement or that was made within the previous two
36.13 	years, and a copy of the contract;
36.14 	(12) a description of any pending litigation, action, or
36.15 	proceeding to which the issuer is a party and that materially
36.16 	affects its business or assets, and any litigation, action, or
36.17 	proceeding known to be contemplated by governmental authorities;
36.18 	(13) a copy of any prospectus, pamphlet, circular, form
36.19 	letter, advertisement, or other sales literature intended as of
36.20 	the effective date to be used in connection with the offering
36.21 	and any solicitation of interest used in compliance with section
36.22 	80A.46(17)(B);
36.23 	(14) a specimen or copy of the security being registered,
36.24 	unless the security is uncertificated; a copy of the issuer's
36.25 	articles of incorporation and bylaws or their substantial
36.26 	equivalents, in effect; and a copy of any indenture or other
36.27 	instrument covering the security to be registered;
36.28 	(15) a signed or conformed copy of an opinion of counsel
36.29 	concerning the legality of the security being registered, with
36.30 	an English translation if it is in a language other than
36.31 	English, which states whether the security when sold will be
36.32 	validly issued, fully paid, and nonassessable and, if a debt
36.33 	security, a binding obligation of the issuer;
36.34 	(16) a signed or conformed copy of a consent of any
36.35 	accountant, engineer, appraiser, or other person whose
36.36 	profession gives authority for a statement made by the person,
37.1 	if the person is named as having prepared or certified a report
37.2 	or valuation, other than an official record, that is public,
37.3 	which is used in connection with the registration statement;
37.4 	(17) a balance sheet of the issuer as of a date within four
37.5 	months before the filing of the registration statement; a
37.6 	statement of income and a statement of case flows for each of
37.7 	the three fiscal years preceding the date of the balance sheet
37.8 	and for any period between the close of the immediately previous
37.9 	fiscal year and the date of the balance sheet, or for the period
37.10 	of the issuer's and any predecessor's existence if less than
37.11 	three years; and, if any part of the proceeds of the offering is
37.12 	to be applied to the purchase of a business, the financial
37.13 	statements that would be required if that business were the
37.14 	registrant; and 
37.15 	(18) any additional information or records required by rule
37.16 	adopted or order issued under this chapter.
37.17 	(c) [CONDITIONS FOR EFFECTIVENESS OF REGISTRATION
37.18 	STATEMENT.] A registration statement under this section becomes
37.19 	effective 30 days, or any shorter period provided by rule
37.20 	adopted or order issued under this chapter, after the date the
37.21 	registration statement or the last amendment other than a price
37.22 	amendment is filed, if:
37.23 	(1) a stop order is not in effect and a proceeding is not
37.24 	pending under section 80A.54;
37.25 	(2) the administrator has not issued an order under section
37.26 	80A.54 delaying effectiveness; and 
37.27 	(3) the applicant or registrant has not requested that
37.28 	effectiveness be delayed.
37.29 	(d) [DELAY OF EFFECTIVENESS OF REGISTRATION STATEMENT.] The
37.30 	administrator may delay effectiveness once for not more than 90
37.31 	days if the administrator determines the registration statement
37.32 	is not complete in all material respects and promptly notifies
37.33 	the applicant or registrant of that determination.  The
37.34 	administrator may also delay effectiveness for a further period
37.35 	of not more than 30 days if the administrator determines that
37.36 	the delay is necessary or appropriate.
38.1 	(e) [PROSPECTUS DISTRIBUTION MAY BE REQUIRED.] A rule
38.2 	adopted or order issued under this chapter may require as a
38.3 	condition of registration under this section that a prospectus
38.4 	containing a specified part of the information or record
38.5 	specified in subsection (b) be sent or given to each person to
38.6 	which an offer is made, before or concurrently, with the
38.7 	earliest of:
38.8 	(1) the first offer made in a record to the person
38.9 	otherwise than by means of a public advertisement, by or for the
38.10 	account of the issuer or another person on whose behalf the
38.11 	offering is being made or by an underwriter or broker-dealer
38.12 	that is offering part of an unsold allotment or subscription
38.13 	taken by the person as a participant in the distribution;
38.14 	(2) the confirmation of a sale made by or for the account
38.15 	of the person;
38.16 	(3) payment pursuant to such a sale; or 
38.17 	(4) delivery of the security pursuant to such a sale.

38.18 	Sec. 14. [80A.53] SECTION 305; SECURITIES REGISTRATION
38.19 	FILINGS.
38.20 	(a) [WHO MAY FILE.] A registration statement may be filed
38.21 	by the issuer, a person on whose behalf the offering is to be
38.22 	made, or a broker-dealer registered under this chapter.
38.23 	(b) [STATUS OF OFFERING.] A registration statement filed
38.24 	under section 80A.51 or 80A.52 must specify:
38.25 	(1) the amount of securities to be offered in this state;
38.26 	(2) the states in which a registration statement or similar
38.27 	record in connection with the offering has been or is to be
38.28 	filed; and 
38.29 	(3) any adverse order, judgment, or decree issued in
38.30 	connection with the offering by a state securities regulator,
38.31 	the Securities and Exchange Commission, or a court.
38.32 	(c) [INCORPORATION BY REFERENCE.] A record filed under this
38.33 	chapter or the predecessor act within five years preceding the
38.34 	filing of a registration statement may be incorporated by
38.35 	reference in the registration statement to the extent that the
38.36 	record is currently accurate.
39.1 	(d) [NONISSUER DISTRIBUTION.] In the case of a nonissuer
39.2 	distribution, information or a record may not be required under
39.3 	subsection (i) or section 80A.52, unless it is known to the
39.4 	person filing the registration statement or to the person on
39.5 	whose behalf the distribution is to be made or unless it can be
39.6 	furnished by those persons without unreasonable effort or
39.7 	expense.
39.8 	(e) [ESCROW AND IMPOUNDMENT.] A rule adopted or order
39.9 	issued under this chapter may require as a condition of
39.10 	registration that a security issued within the previous five
39.11 	years or to be issued to a promoter for a consideration
39.12 	substantially less than the public offering price or to a person
39.13 	for a consideration other than cash be deposited in escrow; and
39.14 	that the proceeds from the sale of the registered security in
39.15 	this state be impounded until the issuer receives a specified
39.16 	amount from the sale of the security either in this state or
39.17 	elsewhere.  The conditions of any escrow or impoundment required
39.18 	under this subsection may be established by rule adopted or
39.19 	order issued under this chapter, but the administrator may not
39.20 	reject a depository institution solely because of its location
39.21 	in another state.
39.22 	(f) [FORM OF SUBSCRIPTION.] A rule adopted or order issued
39.23 	under this chapter may require as a condition of registration
39.24 	that a security registered under this chapter be sold only on a
39.25 	specified form of subscription or sale contract and that a
39.26 	signed or conformed copy of each contract be filed under this
39.27 	chapter or preserved for a period specified by the rule or
39.28 	order, which may not be longer than five years.
39.29 	(g) [EFFECTIVE PERIOD.] Except while a stop order is in
39.30 	effect under section 80A.54, a registration statement is
39.31 	effective for one year after its effective date, or for any
39.32 	longer period designated in an order under this chapter during
39.33 	which the security is being offered or distributed in a
39.34 	nonexempted transaction by or for the account of the issuer or
39.35 	other person on whose behalf the offering is being made or by an
39.36 	underwriter or broker-dealer that is still offering part of an
40.1 	unsold allotment or subscription taken as a participant in the
40.2 	distribution.  For the purposes of a nonissuer transaction, all
40.3 	outstanding securities of the same class identified in the
40.4 	registration statement as a security registered under this
40.5 	chapter are considered to be registered while the registration
40.6 	statement is effective.  If any securities of the same class are
40.7 	outstanding, a registration statement may not be withdrawn until
40.8 	one year after its effective date.  A registration statement may
40.9 	be withdrawn only with the approval of the administrator.
40.10 	(h) [PERIODIC REPORTS.] While a registration statement is
40.11 	effective, a rule adopted or order issued under this chapter may
40.12 	require the person that filed the registration statement to file
40.13 	reports, not more often than quarterly, to keep the information
40.14 	or other record in the registration statement reasonably current
40.15 	and to disclose the progress of the offering.
40.16 	(i) [POSTEFFECTIVE AMENDMENTS.] A registration statement
40.17 	may be amended after its effective date.  The posteffective
40.18 	amendment becomes effective when the administrator so orders.
40.19 	If a posteffective amendment is made to increase the number of
40.20 	securities specified to be offered or sold, the person filing
40.21 	the amendment shall pay a registration fee.  A posteffective
40.22 	amendment relates back to the date of the offering of the
40.23 	additional securities being registered if, within one year after
40.24 	the date of the sale, the amendment is filed and the additional
40.25 	registration fee is paid.

40.26 	Sec. 15. [80A.54] SECTION 306; DENIAL, SUSPENSION, AND
40.27 	REVOCATION OF SECURITIES REGISTRATION.
40.28 	(a) [STOP ORDERS.] The administrator may issue a stop order
40.29 	denying effectiveness to, or suspending or revoking the
40.30 	effectiveness of, a registration statement if the administrator
40.31 	finds that the order is in the public interest and that:
40.32 	(1) the registration statement as of its effective date or
40.33 	before the effective date in the case of an order denying
40.34 	effectiveness, an amendment under section 80A.53(j) as of its
40.35 	effective date, or a report under section 80A.53(i), is
40.36 	incomplete in a material respect or contains a statement that,
41.1 	in the light of the circumstances under which it was made, was
41.2 	false or misleading with respect to a material fact;
41.3 	(2) this chapter or a rule adopted or order issued under
41.4 	this chapter or a condition imposed under this chapter has been
41.5 	willfully violated, in connection with the offering, by:
41.6 	(A) the person filing the registration statement, if the
41.7 	person is directly or indirectly controlled by or acting for the
41.8 	issuer;
41.9 	(B) the issuer;
41.10 	(C) a partner, officer, or director of the issuer or a
41.11 	person having a similar status or performing similar functions;
41.12 	(D) a promoter of the issuer;
41.13 	(E) a person directly or indirectly controlling or
41.14 	controlled by the issuer; or 
41.15 	(F) an underwriter;
41.16 	(3) the security registered or sought to be registered is
41.17 	the subject of a permanent or temporary injunction of a court of
41.18 	competent jurisdiction or an administrative stop order or
41.19 	similar order issued under any federal, foreign, or state law
41.20 	other than this chapter applicable to the offering, but the
41.21 	administrator may not institute a proceeding against an
41.22 	effective registration statement under this paragraph more than
41.23 	one year after the date of the order or injunction on which it
41.24 	is based, and the administrator may not issue an order under
41.25 	this paragraph on the basis of an order or injunction issued
41.26 	under the securities act of another state unless the order or
41.27 	injunction was based on conduct that would constitute, as of the
41.28 	date of the order, a ground for a stop order under this section;
41.29 	(4) the issuer's enterprise or method of business includes
41.30 	or would include activities that are unlawful where performed;
41.31 	(5) with respect to a security sought to be registered
41.32 	under section 80A.51, there has been a failure to comply with
41.33 	the undertaking required by section 80A.51(b)(4); or 
41.34 	(6) the applicant or registrant has not paid the filing
41.35 	fee, but the administrator shall void the order if the
41.36 	deficiency is corrected.
42.1 	(b) [INSTITUTION OF STOP ORDER.] The administrator may not
42.2 	institute a stop order proceeding against an effective
42.3 	registration statement on the basis of conduct or a transaction
42.4 	known to the administrator when the registration statement
42.5 	became effective unless the proceeding is instituted within 30
42.6 	days after the registration statement became effective.
42.7 	(c) [SUMMARY PROCESS.] The administrator may summarily
42.8 	revoke, deny, postpone, or suspend the effectiveness of a
42.9 	registration statement pending final determination of an
42.10 	administrative proceeding.  Upon the issuance of the order, the
42.11 	administrator shall promptly notify each person specified in
42.12 	subsection (d) that the order has been issued; the reasons for
42.13 	the revocation, denial, postponement, or suspension; and that
42.14 	within 15 days after the receipt of a request in a record from
42.15 	the person the matter will be scheduled for a hearing.  If a
42.16 	hearing is not requested and none is ordered by the
42.17 	administrator, within 30 days after the date of service of the
42.18 	order, the order becomes final.  If a hearing is requested or
42.19 	ordered, the administrator, after notice of and opportunity for
42.20 	hearing for each person subject to the order, may modify or
42.21 	vacate the order or extend the order until final determination.
42.22 	(d) [PROCEDURAL REQUIREMENTS FOR STOP ORDER.] A stop order
42.23 	may not be issued under this section without:
42.24 	(1) appropriate notice to the applicant or registrant, the
42.25 	issuer, and the person on whose behalf the securities are to be
42.26 	or have been offered;
42.27 	(2) an opportunity for hearing; and 
42.28 	(3) findings of fact and conclusions of law in a record in
42.29 	accordance with chapter 14.
42.30 	(e) [MODIFICATION OR VACATION OF STOP ORDER.] The
42.31 	administrator may modify or vacate a stop order issued under
42.32 	this section if the administrator finds that the conditions that
42.33 	caused its issuance have changed or that it is necessary or
42.34 	appropriate in the public interest or for the protection of
42.35 	investors.

42.36 	Sec. 16. [80A.55] SECTION 307; WAIVER AND MODIFICATION.
43.1 	The administrator may waive or modify, in whole or in part,
43.2 	any or all of the requirements of sections 80A.50, 80A.51, and
43.3 	80A.52(b) or the requirement of any information or record in a
43.4 	registration statement or in a periodic report filed pursuant to
43.5 	section 80A.53(i).
43.6 	BROKER-DEALERS, AGENTS, INVESTMENT ADVISERS,
43.7 	INVESTMENT ADVISER REPRESENTATIVES, AND FEDERAL
43.8 	COVERED INVESTMENT ADVISERS

43.9 	Sec. 17. [80A.56] SECTION 401; BROKER-DEALER REGISTRATION
43.10 	REQUIREMENT AND EXEMPTIONS.
43.11 	(a) [REGISTRATION REQUIREMENT.] It is unlawful for a person
43.12 	to transact business in this state as a broker-dealer unless the
43.13 	person is registered under this chapter as a broker-dealer or is
43.14 	exempt from registration as a broker-dealer under subsection (b)
43.15 	or (d).
43.16 	(b) [EXEMPTIONS FROM REGISTRATION.] The following persons
43.17 	are exempt from the registration requirement of subsection (a):
43.18 	(1) a broker-dealer without a place of business in this
43.19 	state if its only transactions effected in the state are with:
43.20 	(A) the issuer of the securities involved in the
43.21 	transactions;
43.22 	(B) a broker-dealer registered under this chapter or not
43.23 	required to be registered as a broker-dealer under this chapter;
43.24 	(C) an institutional investor;
43.25 	(D) a nonaffiliated federal covered investment adviser with
43.26 	investments under management in excess of $100,000,000 acting
43.27 	for the account of others pursuant to discretionary authority in
43.28 	a signed record;
43.29 	(E) a bona fide preexisting customer whose principal place
43.30 	of residence is not in this state and the person is registered
43.31 	as a broker-dealer under the Securities Exchange Act of 1934 or
43.32 	not required to be registered under the Securities Exchange Act
43.33 	of 1934 and is registered under the securities act of the state
43.34 	in which the customer maintains a principal place of residence;
43.35 	(F) a bona fide preexisting customer whose principal place
43.36 	of residence is in this state but was not present in this state
44.1 	when the customer relationship was established, if:
44.2 	(i) the broker-dealer is registered under the Securities
44.3 	Exchange Act of 1934 or not required to be registered under the
44.4 	Securities Exchange Act of 1934 and is registered under the
44.5 	securities laws of the state in which the customer relationship
44.6 	was established and where the customer had maintained a
44.7 	principal place of residence; and 
44.8 	(ii) within 45 days after the customer's first transaction
44.9 	in this state, the person files an application for registration
44.10 	as a broker-dealer in this state and a further transaction is
44.11 	not effected more than 75 days after the date on which the
44.12 	application is filed, or, if earlier, the date on which the
44.13 	administrator notifies the person that the administrator has
44.14 	denied the application for registration or has stayed the
44.15 	pendency of the application for good cause;
44.16 	(G) not more than three customers in this state during the
44.17 	previous 12 months, in addition to those customers specified in
44.18 	subparagraphs (A) through (F) and under subparagraph (H), if the
44.19 	broker-dealer is registered under the Securities Exchange Act of
44.20 	1934 or not required to be registered under the Securities
44.21 	Exchange Act of 1934 and is registered under the securities act
44.22 	of the state in which the broker-dealer has its principal place
44.23 	of business; and 
44.24 	(H) any other person exempted by rule adopted or order
44.25 	issued under this chapter; and 
44.26 	(2) a person that deals solely in United States government
44.27 	securities and is supervised as a dealer in government
44.28 	securities by the Board of Governors of the Federal Reserve
44.29 	System, the Comptroller of the Currency, the Federal Deposit
44.30 	Insurance Corporation, or the Office of Thrift Supervision; and 
44.31 	(3) a broker-dealer that is registered in Canada and who
44.32 	has no office or other physical presence in this state if the
44.33 	broker-dealer complies with the following conditions:
44.34 	(A) the broker-dealer is registered with or is a member of
44.35 	a self-regulatory organization in Canada, a stock exchange in
44.36 	Canada, or the Bureau des services financiers;
45.1 	(B) the broker-dealer maintains in good standing its
45.2 	provincial or territorial registration and its registration with
45.3 	or membership in a self-regulatory organization in Canada, a
45.4 	stock exchange in Canada, or the Bureau des services financiers;
45.5 	and 
45.6 	(C) the broker-dealer effects or attempts to effect
45.7 	transactions in securities:
45.8 	(i) with or for a person from Canada who is temporarily
45.9 	present in this state, with whom the broker-dealer had a bona
45.10 	fide broker-dealer-client relationship before the person entered
45.11 	the United States; or 
45.12 	(ii) with or for a person from Canada who is present in
45.13 	this state, whose transactions are in a Canadian self-directed
45.14 	tax advantaged retirement account of which the person is the
45.15 	holder or contributor.
45.16 	(c) [LIMITS ON EMPLOYMENT OR ASSOCIATION.] It is unlawful
45.17 	for a broker-dealer, or for an issuer engaged in offering,
45.18 	offering to purchase, purchasing, or selling securities in this
45.19 	state, directly or indirectly, to employ or associate with an
45.20 	individual to engage in an activity related to securities
45.21 	transactions in this state if the registration of the individual
45.22 	is suspended or revoked or the individual is barred from
45.23 	employment or association with a broker-dealer, an issuer, an
45.24 	investment adviser, or a federal covered investment adviser by
45.25 	an order of the administrator under this chapter, the Securities
45.26 	and Exchange Commission, or a self-regulatory organization.  A
45.27 	broker-dealer or issuer does not violate this subsection if the
45.28 	broker-dealer or issuer did not know and in the exercise of
45.29 	reasonable care could not have known, of the suspension,
45.30 	revocation, or bar.  Upon request from a broker-dealer or issuer
45.31 	and for good cause, an order under this chapter may modify or
45.32 	waive, in whole or in part, the application of the prohibitions
45.33 	of this subsection to the broker-dealer.
45.34 	(d) [FOREIGN TRANSACTIONS.] A rule adopted or order issued
45.35 	under this chapter may permit:
45.36 	(1) a broker-dealer that is registered in Canada or other
46.1 	foreign jurisdiction and that does not have a place of business
46.2 	in this state to effect transactions in securities with or for,
46.3 	or attempt to effect the purchase or sale of any securities by:
46.4 	(A) an individual from Canada or other foreign jurisdiction
46.5 	who is temporarily present in this state and with whom the
46.6 	broker-dealer had a bona fide customer relationship before the
46.7 	individual entered the United States;
46.8 	(B) an individual from Canada or other foreign jurisdiction
46.9 	who is present in the state and whose transactions are in a
46.10 	self-directed tax advantaged retirement plan of which the
46.11 	individual is the holder or contributor in that foreign
46.12 	jurisdiction; or 
46.13 	(C) an individual who is present in this state, with whom
46.14 	the broker-dealer customer relationship arose while the
46.15 	individual was temporarily or permanently resident in Canada or
46.16 	the other foreign jurisdiction; and 
46.17 	(2) an agent who represents a broker-dealer that is exempt
46.18 	under this subsection to effect transactions in securities or
46.19 	attempt to effect the purchase or sale of securities in this
46.20 	state as permitted for a broker-dealer described in paragraph
46.21 	(1).

46.22 	Sec. 18. [80A.57] SECTION 402; AGENT REGISTRATION
46.23 	REQUIREMENT AND EXEMPTIONS.
46.24 	(a) [REGISTRATION REQUIREMENT.] It is unlawful for an
46.25 	individual to transact business in the state as an agent unless
46.26 	the individual is registered under this chapter as an agent or
46.27 	is exempt from registration as an agent under subsection (b).
46.28 	(b) [EXEMPTIONS FROM REGISTRATION.] The following
46.29 	individuals are exempt from the registration requirement of
46.30 	subsection (a):
46.31 	(1) an individual who represents a broker-dealer in
46.32 	effecting transactions in this state limited to those described
46.33 	in Section 15(h)(2) of the Securities Exchange Act of 1934 (15
46.34 	U.S.C. Section 78(o)(2));
46.35 	(2) an individual who represents a broker-dealer that is
46.36 	exempt under section 80A.56(b) or (d);
47.1 	(3) an individual who represents an issuer with respect to
47.2 	an offer or sale of the issuer's own securities or those of the
47.3 	issuer's parent or any of the issuer's subsidiaries, and who is
47.4 	not compensated in connection with the individual's
47.5 	participation by the payment of commissions or other
47.6 	remuneration based, directly or indirectly, on transactions in
47.7 	those securities;
47.8 	(4) an individual who represents an issuer and who effects
47.9 	transactions in the issuer's securities exempted by section
47.10 	80A.46, other than section 80A.46(11) and (14);
47.11 	(5) an individual who represents an issuer that effects
47.12 	transactions solely in federal covered securities of the issuer,
47.13 	but an individual who effects transactions in a federal covered
47.14 	security under Section 18(b)(3) or 18(b)(4)(D) of the Securities
47.15 	Act of 1933 (15 U.S.C. Section 77r(b)(3) or 77r(b)(4)(D)) is not
47.16 	exempt if the individual is compensated in connection with the
47.17 	agent's participation by the payment of commissions or other
47.18 	remuneration based, directly or indirectly, on transactions in
47.19 	those securities;
47.20 	(6) an individual who represents a broker-dealer registered
47.21 	in this state under section 80A.56(a) or exempt from
47.22 	registration under section 80A.56(b) in the offer and sale of
47.23 	securities for an account of a nonaffiliated federal covered
47.24 	investment adviser with investments under management in excess
47.25 	of $100,000,000 acting for the account of others pursuant to
47.26 	discretionary authority in a signed record;
47.27 	(7) an individual who represents an issuer in connection
47.28 	with the purchase of the issuer's own securities;
47.29 	(8) an individual who represents an issuer and who
47.30 	restricts participation to performing clerical or ministerial
47.31 	acts; or 
47.32 	(9) any other individual exempted by rule adopted or order
47.33 	issued under this chapter.
47.34 	(c) [REGISTRATION EFFECTIVE ONLY WHILE EMPLOYED OR
47.35 	ASSOCIATED.] The registration of an agent is effective only
47.36 	while the agent is employed by or associated with a
48.1 	broker-dealer registered under this chapter or an issuer that is
48.2 	offering, selling, or purchasing its securities in this state.
48.3 	(d) [LIMIT ON EMPLOYMENT OR ASSOCIATION.] It is unlawful
48.4 	for a broker-dealer, or an issuer engaged in offering, selling,
48.5 	or purchasing securities in this state, to employ or associate
48.6 	with an agent who transacts business in the state on behalf of
48.7 	broker-dealers or issuers unless the agent is registered under
48.8 	subsection (a) or exempt from registration under subsection (b).
48.9 	(e) [LIMIT ON AFFILIATIONS.] An individual may not act as
48.10 	an agent for more than one broker-dealer or one issuer at a
48.11 	time, unless the broker-dealer or the issuer for which the agent
48.12 	acts are affiliated by direct or indirect common control or are
48.13 	authorized by rule or order under this chapter.

48.14 	Sec. 19. [80A.58] SECTION 403; INVESTMENT ADVISER
48.15 	REGISTRATION REQUIREMENT AND EXEMPTIONS.
48.16 	(a) [REGISTRATION REQUIREMENT.] It is unlawful for a person
48.17 	to transact business in this state as an investment adviser
48.18 	unless the person is registered under this chapter as an
48.19 	investment adviser or is exempt from registration as an
48.20 	investment adviser under subsection (b).
48.21 	(b) [EXEMPTIONS FROM REGISTRATION.] The following persons
48.22 	are exempt from the registration requirement of subsection (a):
48.23 	(1) a person without a place of business in the state that
48.24 	is registered under the securities act of the state in which the
48.25 	person has its principal place of business if its only clients
48.26 	in this state are:
48.27 	(A) federal covered investment advisers, investment
48.28 	advisers registered under this chapter, or broker-dealers
48.29 	registered under this chapter;
48.30 	(B) institutional investors;
48.31 	(C) bona fide preexisting clients whose principal places of
48.32 	residence are not in this state if the investment adviser is
48.33 	registered under the securities act of the state in which the
48.34 	clients maintain principal places of residence; or 
48.35 	(D) any other client exempted by rule adopted or order
48.36 	issued under this chapter;
49.1 	(2) a person without a place of business in this state if
49.2 	the person has had, during the preceding 12 months, not more
49.3 	than five clients that are resident in this state in addition to
49.4 	those specified under paragraph (1); or 
49.5 	(3) any other person exempted by rule adopted or order
49.6 	issued under this chapter.
49.7 	(c) [LIMITS ON EMPLOYMENT OR ASSOCIATION.] It is unlawful
49.8 	for an investment adviser, directly or indirectly, to employ or
49.9 	associate with an individual to engage in an activity related to
49.10 	investment advice in this state if the registration of the
49.11 	individual is suspended or revoked or the individual is barred
49.12 	from employment or association with an investment adviser,
49.13 	federal covered investment adviser, or broker-dealer by an order
49.14 	under this chapter, the Securities and Exchange Commission, or a
49.15 	self-regulatory organization, unless the investment adviser did
49.16 	not know, and in the exercise of reasonable care could not have
49.17 	known, of the suspension, revocation, or bar.  Upon request from
49.18 	the investment adviser and for good cause, the administrator, by
49.19 	order, may waive, in whole or in part, the application of the
49.20 	prohibitions of this subsection to the investment adviser.

49.21 	Sec. 20. [80A.60] SECTION 405; FEDERAL COVERED INVESTMENT
49.22 	ADVISER NOTICE FILING REQUIREMENT.
49.23 	(a) [NOTICE FILING REQUIREMENT.] Except with respect to a
49.24 	federal covered investment adviser described in subsection (b),
49.25 	it is unlawful for a federal covered investment adviser to
49.26 	transact business in this state as a federal covered investment
49.27 	adviser unless the federal covered investment adviser complies
49.28 	with subsection (c).
49.29 	(b) [NOTICE FILING REQUIREMENT NOT REQUIRED.] The following
49.30 	federal covered investment advisers are not required to comply
49.31 	with subsection (c):
49.32 	(1) a federal covered investment adviser without a place of
49.33 	business in this state if its only clients in this state are:
49.34 	(A) federal covered investment advisers, investment
49.35 	advisers registered under this chapter, and broker-dealers
49.36 	registered under this chapter;
50.1 	(B) institutional investors;
50.2 	(C) bona fide preexisting clients whose principal places of
50.3 	residence are not in this state; or 
50.4 	(D) other clients specified by rule adopted or order issued
50.5 	under this chapter;
50.6 	(2) a federal covered investment adviser without a place of
50.7 	business in this state if the person has had, during the
50.8 	preceding 12 months, not more than five clients that are
50.9 	resident in this state in addition to those specified under
50.10 	paragraph (1); and 
50.11 	(3) any other person excluded by rule adopted or order
50.12 	issued under this chapter.
50.13 	(c) [NOTICE FILING PROCEDURE.] A person acting as a federal
50.14 	covered investment adviser, not excluded under subsection (b),
50.15 	shall file a notice, a consent to service of process complying
50.16 	with section 80A.88, and such records as have been filed with
50.17 	the Securities and Exchange Commission under the Investment
50.18 	Advisers Act of 1940 required by rule adopted or order issued
50.19 	under this chapter and pay the fees specified in section
50.20 	80A.65(e).
50.21 	(d) [EFFECTIVENESS OF FILING.] The notice under subsection
50.22 	(c) becomes effective upon its filing.

50.23 	Sec. 21. [80A.61] SECTION 406; REGISTRATION BY
50.24 	BROKER-DEALER, AGENT, AND INVESTMENT ADVISER.
50.25 	(a) [APPLICATION FOR INITIAL REGISTRATION.] A person shall
50.26 	register as a broker-dealer, agent, or investment adviser by
50.27 	filing an application and a consent to service of process
50.28 	complying with section 80A.88, and paying the fee specified in
50.29 	section 80A.65 and any reasonable fees charged by the designee
50.30 	of the administrator for processing the filing.  The application
50.31 	must contain:
50.32 	(1) the information or record required for the filing of a
50.33 	uniform application; and 
50.34 	(2) upon request by the administrator, any other financial
50.35 	or other information or record that the administrator determines
50.36 	is appropriate.
51.1 	(b) [AMENDMENT.] If the information or record contained in
51.2 	an application filed under subsection (a) is or becomes
51.3 	inaccurate or incomplete in a material respect, the registrant
51.4 	shall promptly file a correcting amendment.
51.5 	(c) [EFFECTIVENESS OF REGISTRATION.] If an order is not in
51.6 	effect and a proceeding is not pending under section 80A.67,
51.7 	registration becomes effective at noon on the 45th day after a
51.8 	completed application is filed, unless the registration is
51.9 	denied.  A rule adopted or order issued under this chapter may
51.10 	set an earlier effective date or may defer the effective date
51.11 	until noon on the 45th day after the filing of any amendment
51.12 	completing the application.
51.13 	(d) [REGISTRATION RENEWAL.] A registration is effective
51.14 	until midnight on December 31 of the year for which the
51.15 	application for registration is filed.  Unless an order is in
51.16 	effect under section 80A.67, a registration may be automatically
51.17 	renewed each year by filing such records as are required by rule
51.18 	adopted or order issued under this chapter, by paying the fee
51.19 	specified in section 80A.65, and by paying costs charged by the
51.20 	designee of the administrator for processing the filings.
51.21 	(e) [ADDITIONAL CONDITIONS OR WAIVERS.] A rule adopted or
51.22 	order issued under this chapter may impose such other
51.23 	conditions, not inconsistent with the National Securities
51.24 	Markets Improvement Act of 1996.  An order issued under this
51.25 	chapter may waive, in whole or in part, specific requirements in
51.26 	connection with registration as are in the public interest and
51.27 	for the protection of investors.

51.28 	Sec. 22. [80A.62] SECTION 407; SUCCESSION AND CHANGE IN
51.29 	REGISTRATION OF BROKER-DEALER OR INVESTMENT ADVISER.
51.30 	(a) [SUCCESSION.] A broker-dealer or investment adviser may
51.31 	succeed to the current registration of another broker-dealer or
51.32 	investment adviser or a notice filing of a federal covered
51.33 	investment adviser, and a federal covered investment adviser may
51.34 	succeed to the current registration of an investment adviser or
51.35 	notice filing of another federal covered investment adviser, by
51.36 	filing as a successor an application for registration pursuant
52.1 	to section 80A.56 or 80A.58 or a notice pursuant to section
52.2 	80A.60 for the unexpired portion of the current registration or
52.3 	notice filing.
52.4 	(b) [ORGANIZATIONAL CHANGE.] A broker-dealer or investment
52.5 	adviser that changes its form of organization or state of
52.6 	incorporation or organization may continue its registration by
52.7 	filing an amendment to its registration if the change does not
52.8 	involve a material change in its financial condition or
52.9 	management.  The amendment becomes effective when filed or on a
52.10 	date designated by the registrant in its filing.  The new
52.11 	organization is a successor to the original registrant for the
52.12 	purposes of this chapter.  If there is a material change in
52.13 	financial condition or management, the broker-dealer or
52.14 	investment adviser shall file a new application for
52.15 	registration.  A predecessor registered under this chapter shall
52.16 	stop conducting its securities business other than winding down
52.17 	transactions and shall file for withdrawal of broker-dealer or
52.18 	investment adviser registration within 45 days after filing its
52.19 	amendment to effect succession.
52.20 	(c) [NAME CHANGE.] A broker-dealer or investment adviser
52.21 	that changes its name may continue its registration by filing an
52.22 	amendment to its registration.  The amendment becomes effective
52.23 	when filed or on a date designated by the registrant.
52.24 	(d) [CHANGE OF CONTROL.] A change of control of a
52.25 	broker-dealer or investment adviser may be made in accordance
52.26 	with a rule adopted or order issued under this chapter.

52.27 	Sec. 23. [80A.63] SECTION 408; TERMINATION OF EMPLOYMENT
52.28 	OR ASSOCIATION OF AGENT AND TRANSFER OF EMPLOYMENT OR
52.29 	ASSOCIATION.
52.30 	(a) [NOTICE OF TERMINATION.] If an agent registered under
52.31 	this chapter terminates employment by or association with a
52.32 	broker-dealer or issuer, or terminates activities that require
52.33 	registration as an agent, the broker-dealer, or issuer shall
52.34 	promptly file a notice of termination.  If the registrant learns
52.35 	that the broker-dealer or issuer has not filed the notice, the
52.36 	registrant may do so.
53.1 	(b) [TRANSFER OF EMPLOYMENT OR ASSOCIATION.] If an agent
53.2 	registered under this chapter terminates employment by or
53.3 	association with a broker-dealer registered under this chapter
53.4 	and begins employment by or association with another
53.5 	broker-dealer registered under this chapter, then upon the
53.6 	filing by or on behalf of the registrant, within 30 days after
53.7 	the termination, of an application for registration that
53.8 	complies with the requirement of section 80A.61(a) and payment
53.9 	of the filing fee required under section 80A.65, the
53.10 	registration of the agent is:
53.11 	(1) immediately effective as of the date of the completed
53.12 	filing, if the agent's Central Registration Depository record or
53.13 	successor record does not contain a new or amended disciplinary
53.14 	disclosure within the previous 12 months; or 
53.15 	(2) temporarily effective as of the date of the completed
53.16 	filing, if the agent's Central Registration Depository record or
53.17 	successor record contains a new or amended disciplinary
53.18 	disclosure within the preceding 12 months.
53.19 	(c) [WITHDRAWAL OF TEMPORARY REGISTRATION.] The
53.20 	administrator may withdraw a temporary registration if there are
53.21 	or were grounds for discipline as specified in section 80A.67
53.22 	and the administrator does so within 30 days after the filing of
53.23 	the application.  If the administrator does not withdraw the
53.24 	temporary registration within the 30 day period, registration
53.25 	becomes automatically effective on the 31st day after filing.
53.26 	(d) [POWER TO PREVENT REGISTRATION.] The administrator may
53.27 	prevent the effectiveness of a transfer of an agent under
53.28 	subsection (b)(1) or (2) based on the public interest and the
53.29 	protection of investors.
53.30 	(e) [TERMINATION OF REGISTRATION OR APPLICATION FOR
53.31 	REGISTRATION.] If the administrator determines that a registrant
53.32 	or applicant for registration is no longer in existence or has
53.33 	ceased to act as a broker-dealer, agent, or investment adviser,
53.34 	or is the subject of an adjudication of incapacity or is subject
53.35 	to the control of a committee, conservator, or guardian, or
53.36 	cannot reasonably be located, a rule adopted or order issued
54.1 	under this chapter may require the registration be canceled or
54.2 	terminated or the application denied.  The administrator may
54.3 	reinstate a canceled or terminated registration, with or without
54.4 	hearing, and may make the registration retroactive.

54.5 	Sec. 24. [80A.64] SECTION 409; WITHDRAWAL OF REGISTRATION
54.6 	OF BROKER-DEALER, AGENT, AND INVESTMENT ADVISER.
54.7 	Withdrawal of registration by a broker-dealer, agent, or
54.8 	investment adviser becomes effective 60 days after the filing of
54.9 	the application to withdraw or within any shorter period as
54.10 	provided by rule adopted or order issued under this chapter
54.11 	unless a revocation or suspension proceeding is pending when the
54.12 	application is filed.  If a proceeding is pending, withdrawal
54.13 	becomes effective when and upon such conditions as required by
54.14 	rule adopted or order issued under this chapter.  The
54.15 	administrator may institute a revocation or suspension
54.16 	proceeding under section 80A.67 within one year after the
54.17 	withdrawal became effective automatically and issue a revocation
54.18 	or suspension order as of the last date on which registration
54.19 	was effective if a proceeding is not pending.

54.20 	Sec. 25. [80A.65] SECTION 410; FEES AND EXPENSES.
54.21 		Subdivision 1.Registration or notice filing fee. (a)
54.22 	There shall be a filing fee of $100 for every application for
54.23 	registration or notice filing.  There shall be an additional fee
54.24 	of one-tenth of one percent of the maximum aggregate offering
54.25 	price at which the securities are to be offered in this state,
54.26 	and the maximum combined fees shall not exceed $300.
54.27 	(b) When an application for registration is withdrawn
54.28 	before the effective date or a preeffective stop order is
54.29 	entered under section 80A.54, all but the $100 filing fee shall
54.30 	be returned.  If an application to register securities is
54.31 	denied, the total of all fees received shall be retained.
54.32 	(c) Where a filing is made in connection with a federal
54.33 	covered security under section 18(b)(2) of the Securities Act of
54.34 	1933, there is a fee of $100 for every initial filing.  If the
54.35 	filing is made in connection with redeemable securities issued
54.36 	by an open end management company or unit investment trust, as
55.1 	defined in the Investment Company Act of 1940, there is an
55.2 	additional annual fee of 1/20 of one percent of the maximum
55.3 	aggregate offering price at which the securities are to be
55.4 	offered in this state during the notice filing period.  The fee
55.5 	must be paid at the time of the initial filing and thereafter in
55.6 	connection with each renewal no later than July 1 of each year
55.7 	and must be sufficient to cover the shares the issuer expects to
55.8 	sell in this state over the next 12 months.  If during a current
55.9 	notice filing the issuer determines it is likely to sell shares
55.10 	in excess of the shares for which fees have been paid to the
55.11 	commissioner, the issuer shall submit an amended notice filing
55.12 	to the commissioner under section 80A.50, together with a fee of
55.13 	1/20 of one percent of the maximum aggregate offering price of
55.14 	the additional shares.  Shares for which a fee has been paid,
55.15 	but which have not been sold at the time of expiration of the
55.16 	notice filing, may not be sold unless an additional fee to cover
55.17 	the shares has been paid to the commissioner as provided in this
55.18 	section and section 80A.50.  If the filing is made in connection
55.19 	with redeemable securities issued by such a company or trust,
55.20 	there is no maximum fee for securities filings made according to
55.21 	this paragraph.  If the filing is made in connection with any
55.22 	other federal covered security under Section 18(b)(2) of the
55.23 	Securities Act of 1933, there is an additional fee of one-tenth
55.24 	of one percent of the maximum aggregate offering price at which
55.25 	the securities are to be offered in this state, and the combined
55.26 	fees shall not exceed $300.  Beginning with fiscal year 2001 and
55.27 	continuing each fiscal year thereafter, as of the last day of
55.28 	each fiscal year, the commissioner shall determine the total
55.29 	amount of all fees that were collected under this paragraph in
55.30 	connection with any filings made for that fiscal year for
55.31 	securities of an open-end investment company on behalf of a
55.32 	security that is a federal covered security pursuant to section
55.33 	18(b)(2) of the Securities Act of 1933.  To the extent the total
55.34 	fees collected by the commissioner in connection with these
55.35 	filings exceed $25,000,000 in a fiscal year, the commissioner
55.36 	shall refund, on a pro rata basis, to all persons who paid any
56.1 	fees for that fiscal year, the amount of fees collected by the
56.2 	commissioner in excess of $25,000,000.  No individual refund is
56.3 	required of amounts of $100 or less for a fiscal year.
56.4 		Subd. 2.Registration application and renewal filing
56.5 	fee. Every applicant for an initial or renewal registration
56.6 	shall pay a filing fee of $200 in the case of a broker-dealer,
56.7 	$50 in the case of an agent, and $100 in the case of an
56.8 	investment adviser.  When an application is denied or withdrawn,
56.9 	the filing fee shall be retained.  A registered agent who has
56.10 	terminated employment with one broker-dealer shall, before
56.11 	beginning employment with another broker-dealer, pay a transfer
56.12 	fee of $25.  The fee for a filing made according to section
56.13 	80A.56 is $100.
56.14 		Subd. 3.Amendment fee. Any amendment to an existing
56.15 	registration requiring an order of the commissioner shall
56.16 	require payment of an amendment fee of $25.  If the amendment
56.17 	increases the aggregate amount of securities to be registered,
56.18 	there shall be an additional fee calculated in accordance with
56.19 	subdivision 1, provided the maximum additional fees, if
56.20 	applicable, have not previously been paid.  The commissioner
56.21 	shall by rule designate those amendments which require an order
56.22 	of the commissioner.
56.23 		Subd. 4.Periodic report fee. Every periodic report
56.24 	required by section 80A.53 shall be accompanied by a fee of $100.
56.25 		Subd. 5.Exemption filing fee. The filing of any
56.26 	exemption for which notice is required to be given the
56.27 	commissioner under section 80A.45 shall be accompanied by a fee
56.28 	of $50.
56.29 		Subd. 6.Rescission offer filing fee. The filing of a
56.30 	rescission offer under section 80A.77 shall be accompanied by
56.31 	the fees as calculated in subdivision 1.
56.32 		Subd. 7.Written opinion request fee. Every request for
56.33 	a written opinion from the commissioner shall be accompanied by
56.34 	a fee of $50.
56.35 		Subd. 7a.Excess securities registration filing fee. If
56.36 	securities of an issuer are sold in this state in excess of the
57.1 	quantity registered, the excess securities may be registered by
57.2 	paying a filing fee of $100, and an additional fee in the amount
57.3 	of three times that which is prescribed under subdivision 1, for
57.4 	the excess securities to be registered.  There shall be no
57.5 	maximum combined fees under this subdivision, notwithstanding
57.6 	the limitation set forth in subdivision 1, clause (a).
57.7 	Registration of the excess securities shall be effective
57.8 	retroactively to the date of sale.
57.9 		Subd. 8.Expense deposits. When the commissioner deems
57.10 	it necessary to incur any expense in connection with any
57.11 	application or registration, the commissioner shall have the
57.12 	power to require the interested person to make an advance
57.13 	deposit with the commissioner in an amount estimated as
57.14 	sufficient to cover such expense.  All such deposits shall be
57.15 	covered into the state treasury and credited to the state
57.16 	commissioner of commerce's investigation fund, from which fund
57.17 	the commissioner shall have power to make disbursements to pay
57.18 	for expenses necessarily incurred in the investigation.  Any
57.19 	unexpended portion shall be refunded.  On field examinations
57.20 	made by the commissioner or an employee away from the office of
57.21 	the commissioner, a per diem of $10 for each such person may be
57.22 	charged in addition to actual expenses.  Where additional
57.23 	technical, expert, or special services are used, the actual cost
57.24 	of such services may be charged in addition to actual expenses.
57.25 		Subd. 9.Generally. No filing for which a fee is
57.26 	required shall be deemed to be filed or given any effect until
57.27 	the proper fee is paid.  All fees and charges collected by the
57.28 	commissioner shall be covered into the state treasury.  When any
57.29 	person is entitled to a refund under this section, the
57.30 	commissioner shall certify to the commissioner of finance the
57.31 	amount of the fee to be refunded to the applicant, and the
57.32 	commissioner of finance shall issue a warrant in payment thereof
57.33 	out of the fund to which such fee was credited in the manner
57.34 	provided by law.  There is hereby appropriated to the person
57.35 	entitled to such refunds from the fund in the state treasury to
57.36 	which such fees were credited an amount to make such refunds and
58.1 	payments.

58.2 	Sec. 26. [80A.66] SECTION 411; POSTREGISTRATION
58.3 	REQUIREMENTS.
58.4 	(a) [FINANCIAL REQUIREMENTS.] Subject to Section 15(h) of
58.5 	the Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h))
58.6 	or Section 222 of the Investment Advisers Act of 1940 (15 U.S.C.
58.7 	Section 80b-22), a rule adopted or order issued under this
58.8 	chapter may establish minimum financial requirements for
58.9 	broker-dealers registered or required to be registered under
58.10 	this chapter and investment advisers registered or required to
58.11 	be registered under this chapter.
58.12 	(b) [FINANCIAL REPORTS.] Subject to Section 15(h) of the
58.13 	Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or
58.14 	Section 222(b) of the Investment Advisers Act of 1940 (15 U.S.C.
58.15 	Section 80b-22), a broker-dealer registered or required to be
58.16 	registered under this chapter and an investment adviser
58.17 	registered or required to be registered under this chapter shall
58.18 	file such financial reports as are required by a rule adopted or
58.19 	order issued under this chapter.  If the information contained
58.20 	in a record filed under this subsection is or becomes inaccurate
58.21 	or incomplete in a material respect, the registrant shall
58.22 	promptly file a correcting amendment.
58.23 	(c) [RECORD KEEPING.] Subject to Section 15(h) of the
58.24 	Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or
58.25 	Section 222 of the Investment Advisers Act of 1940 (15 U.S.C.
58.26 	Section 80b-22):
58.27 	(1) a broker-dealer registered or required to be registered
58.28 	under this chapter and an investment adviser registered or
58.29 	required to be registered under this chapter shall make and
58.30 	maintain the accounts, correspondence, memoranda, papers, books,
58.31 	and other records required by rule adopted or order issued under
58.32 	this chapter;
58.33 	(2) broker-dealer records required to be maintained under
58.34 	paragraph (1) may be maintained in any form of data storage
58.35 	acceptable under Section 17(a) of the Securities Exchange Act of
58.36 	1934 (15 U.S.C. Section 78q(a)) if they are readily accessible
59.1 	to the administrator; and 
59.2 	(3) investment adviser records required to be maintained
59.3 	under paragraph (1) may be maintained in any form of data
59.4 	storage required by rule adopted or order issued under this
59.5 	chapter.
59.6 	(d) [AUDITS OR INSPECTIONS.] The records of a broker-dealer
59.7 	registered or required to be registered under this chapter and
59.8 	of an investment adviser registered or required to be registered
59.9 	under this chapter are subject to such reasonable periodic,
59.10 	special, or other audits or inspections by a representative of
59.11 	the administrator, within or without this state, as the
59.12 	administrator considers necessary or appropriate in the public
59.13 	interest and for the protection of investors.  An audit or
59.14 	inspection may be made at any time and without prior notice.
59.15 	The administrator may copy, and remove for audit or inspection
59.16 	copies of, all records the administrator reasonably considers
59.17 	necessary or appropriate to conduct the audit or inspection.
59.18 	The administrator may assess a reasonable charge for conducting
59.19 	an audit or inspection under this subsection.
59.20 	(e) [CUSTODY AND DISCRETIONARY AUTHORITY BOND OR
59.21 	INSURANCE.] Subject to Section 15(h) of the Securities Exchange
59.22 	Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the
59.23 	Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22), a
59.24 	rule adopted or order issued under this chapter may require a
59.25 	broker-dealer or investment adviser that has custody of or
59.26 	discretionary authority over funds or securities of a customer
59.27 	or client to obtain insurance or post a bond or other
59.28 	satisfactory form of security in an amount not to exceed
59.29 	$........  The administrator may determine the requirements of
59.30 	the insurance, bond, or other satisfactory form of security.
59.31 	Insurance or a bond or other satisfactory form of security may
59.32 	not be required of a broker-dealer registered under this chapter
59.33 	whose net capital exceeds, or of an investment adviser
59.34 	registered under this chapter whose minimum financial
59.35 	requirements exceed, the amounts required by rule or order under
59.36 	this chapter.  The insurance, bond, or other satisfactory form
60.1 	of security must permit an action by a person to enforce any
60.2 	liability on the insurance, bond, or other satisfactory form of
60.3 	security if instituted within the time limitations in section
60.4 	80A.76(j)(2).
60.5 	(f) [REQUIREMENTS FOR CUSTODY.] Subject to Section 15(h) of
60.6 	the Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h))
60.7 	or Section 222 of the Investment Advisers Act of 1940 (15 U.S.C.
60.8 	Section 80b-22), an agent may not have custody of funds or
60.9 	securities of a customer except under the supervision of a
60.10 	broker-dealer and an investment adviser representative may not
60.11 	have custody of funds or securities of a client except under the
60.12 	supervision of an investment adviser or a federal covered
60.13 	investment adviser.  A rule adopted or order issued under this
60.14 	chapter may prohibit, limit, or impose conditions on a
60.15 	broker-dealer regarding custody of funds or securities of a
60.16 	customer and on an investment adviser regarding custody of
60.17 	securities or funds of a client.
60.18 	(g) [INVESTMENT ADVISER BROCHURE RULE.] With respect to an
60.19 	investment adviser registered or required to be registered under
60.20 	this chapter, a rule adopted or order issued under this chapter
60.21 	may require that information or other record be furnished or
60.22 	disseminated to clients or prospective clients in this state as
60.23 	necessary or appropriate in the public interest and for the
60.24 	protection of investors and advisory clients.
60.25 	(h) [CONTINUING EDUCATION.] A rule adopted or order issued
60.26 	under this chapter may require an individual registered under
60.27 	section 80A.57 or 80A.59 to participate in a continuing
60.28 	education program approved by the Securities and Exchange
60.29 	Commission and administered by a self-regulatory organization
60.30 	or, in the absence of such a program, a rule adopted or order
60.31 	issued under this chapter may require continuing education for
60.32 	an individual registered under section 80A.59.

60.33 	Sec. 27. [80A.67] SECTION 412; DENIAL, REVOCATION,
60.34 	SUSPENSION, WITHDRAWAL, RESTRICTION, CONDITION, OR LIMITATION OF
60.35 	REGISTRATION.
60.36 	(a) [DISCIPLINARY CONDITIONS-APPLICANTS.] If the
61.1 	administrator finds that the order is in the public interest and
61.2 	subsection (d) authorizes the action, an order issued under this
61.3 	chapter may deny an application, or may condition or limit
61.4 	registration of an applicant to be a broker-dealer, agent, or
61.5 	investment adviser, and, if the applicant is a broker-dealer or
61.6 	investment adviser, of a partner, officer, director, or person
61.7 	having a similar status or performing similar functions, or a
61.8 	person directly or indirectly in control of the broker-dealer or
61.9 	investment adviser.
61.10 	(b) [DISCIPLINARY CONDITIONS-REGISTRANTS.] If the
61.11 	administrator finds that the order is in the public interest and
61.12 	subsection (d) authorizes the action an order issued under this
61.13 	chapter may revoke, suspend, condition, or limit the
61.14 	registration of a registrant and, if the registrant is a
61.15 	broker-dealer or investment adviser, of a partner, officer,
61.16 	director, or person having a similar status or performing
61.17 	similar functions, or a person directly or indirectly in control
61.18 	of the broker-dealer or investment adviser.  However, the
61.19 	administrator may not:
61.20 	(1) institute a revocation or suspension proceeding under
61.21 	this subsection based on an order issued under a law of another
61.22 	state that is reported to the administrator or a designee of the
61.23 	administrator more than one year after the date of the order on
61.24 	which it is based; or 
61.25 	(2) under subsection (d)(5)(A) or (B), issue an order on
61.26 	the basis of an order issued under the securities act of another
61.27 	state unless the other order was based on conduct for which
61.28 	subsection (d) would authorize the action had the conduct
61.29 	occurred in this state.
61.30 	(c) [DISCIPLINARY PENALTIES-REGISTRANTS.] If the
61.31 	administrator finds that the order is in the public interest and
61.32 	subsection (d)(1) through (6), (8), (9), (10), or (12) and (13)
61.33 	authorizes the action, an order under this chapter may censure,
61.34 	impose a bar, or impose a civil penalty in an amount not to
61.35 	exceed a maximum of $....... for a single violation or $.......
61.36 	for more than one violation, on a registrant, and, if the
62.1 	registrant is a broker-dealer or investment adviser, a partner,
62.2 	officer, director, person having a similar status or performing
62.3 	similar functions, or a person directly or indirectly in
62.4 	control, of the broker-dealer or investment adviser.
62.5 	(d) [GROUNDS FOR DISCIPLINE.] A person may be disciplined
62.6 	under subsections (a) through (c) if the person:
62.7 	(1) has filed an application for registration in this state
62.8 	under this chapter or the predecessor act within the previous
62.9 	ten years, which, as of the effective date of registration or as
62.10 	of any date after filing in the case of an order denying
62.11 	effectiveness, was incomplete in any material respect or
62.12 	contained a statement that, in light of the circumstances under
62.13 	which it was made, was false or misleading with respect to a
62.14 	material fact;
62.15 	(2) willfully violated or willfully failed to comply with
62.16 	this chapter or the predecessor act or a rule adopted or order
62.17 	issued under this chapter or the predecessor act within the
62.18 	previous ten years;
62.19 	(3) has been convicted of a felony or within the previous
62.20 	ten years has been convicted of a misdemeanor involving a
62.21 	security, a commodity future or option contract, or an aspect of
62.22 	a business involving securities, commodities, investments,
62.23 	franchises, insurance, banking, or finance;
62.24 	(4) is enjoined or restrained by a court of competent
62.25 	jurisdiction in an action instituted by the administrator under
62.26 	this chapter or the predecessor act, a state, the Securities and
62.27 	Exchange Commission, or the United States from engaging in or
62.28 	continuing an act, practice, or course of business involving an
62.29 	aspect of a business involving securities, commodities,
62.30 	investments, franchises, insurance, banking, or finance.
62.31 	(5) is the subject of an order, issued after notice and
62.32 	opportunity for hearing by:
62.33 	(A) the securities, depository institution, insurance, or
62.34 	other financial services regulator of a state or by the
62.35 	Securities and Exchange Commission or other federal agency
62.36 	denying, revoking, barring, or suspending registration as a
63.1 	broker-dealer, agent, investment adviser, federal covered
63.2 	investment adviser, or investment adviser representative;
63.3 	(B) the securities regulator of a state or the Securities
63.4 	and Exchange Commission against a broker-dealer, agent,
63.5 	investment adviser, investment adviser representative, or
63.6 	federal covered investment adviser;
63.7 	(C) the Securities and Exchange Commission or a
63.8 	self-regulatory organization suspending or expelling the
63.9 	registrant from membership in the self-regulatory organization;
63.10 	(D) a court adjudicating a United States Postal Service
63.11 	fraud order;
63.12 	(E) the insurance regulator of a state denying, suspending,
63.13 	or revoking registration as an insurance agent; or 
63.14 	(F) a depository institution regulator suspending or
63.15 	barring the person from the depository institution business;
63.16 	(6) is the subject of an adjudication or determination,
63.17 	after notice and opportunity for hearing, by the Securities and
63.18 	Exchange Commission, the Commodity Futures Trading Commission;
63.19 	the Federal Trade Commission; a federal depository institution
63.20 	regulator, or a depository institution, insurance, or other
63.21 	financial services regulator of a state that the person
63.22 	willfully violated the Securities Act of 1933, the Securities
63.23 	Exchange Act of 1934, the Investment Advisers Act of 1940, the
63.24 	Investment Company Act of 1940, or the Commodity Exchange Act,
63.25 	the securities or commodities law of a state, or a federal or
63.26 	state law under which a business involving investments,
63.27 	franchises, insurance, banking, or finance is regulated;
63.28 	(7) is insolvent, either because the person's liabilities
63.29 	exceed the person's assets or because the person cannot meet the
63.30 	person's obligations as they mature, but the administrator may
63.31 	not enter an order against an applicant or registrant under this
63.32 	paragraph without a finding of insolvency as to the applicant or
63.33 	registrant;
63.34 	(8) refuses to allow or otherwise impedes the administrator
63.35 	from conducting an audit or inspection under section 80A.66(d)
63.36 	or refuses access to a registrant's office to conduct an audit
64.1 	or inspection under section 80A.66(d);
64.2 	(9) has failed to reasonably supervise an agent, investment
64.3 	adviser representative, or other individual, if the agent,
64.4 	investment adviser representative, or other individual was
64.5 	subject to the person's supervision and committed a violation of
64.6 	this chapter or the predecessor act or a rule adopted or order
64.7 	issued under this chapter or the predecessor act within the
64.8 	previous ten years;
64.9 	(10) has not paid the proper filing fee within 30 days
64.10 	after having been notified by the administrator of a deficiency,
64.11 	but the administrator shall vacate an order under this paragraph
64.12 	when the deficiency is corrected;
64.13 	(11) after notice and opportunity for a hearing, has been
64.14 	found within the previous ten years:
64.15 	(A) by a court of competent jurisdiction to have willfully
64.16 	violated the laws of a foreign jurisdiction under which the
64.17 	business of securities, commodities, investment, franchises,
64.18 	insurance, banking, or finance is regulated;
64.19 	(B) to have been the subject of an order of a securities
64.20 	regulator of a foreign jurisdiction denying, revoking, or
64.21 	suspending the right to engage in the business of securities as
64.22 	a broker-dealer, agent, investment adviser, investment adviser
64.23 	representative, or similar person; or 
64.24 	(C) to have been suspended or expelled from membership by
64.25 	or participation in a securities exchange or securities
64.26 	association operating under the securities laws of a foreign
64.27 	jurisdiction;
64.28 	(12) is the subject of a cease and desist order issued by
64.29 	the Securities and Exchange Commission or issued under the
64.30 	securities, commodities, investment, franchise, banking,
64.31 	finance, or insurance laws of a state;
64.32 	(13) has engaged in dishonest or unethical practices in the
64.33 	securities, commodities, investment, franchise, banking,
64.34 	finance, or insurance business within the previous ten years; or 
64.35 	(14) is not qualified on the basis of factors such as
64.36 	training, experience, and knowledge of the securities business.
65.1 	However, in the case of an application by an agent for a
65.2 	broker-dealer that is a member of a self-regulatory organization
65.3 	or by an individual for registration as an investment adviser
65.4 	representative, a denial order may not be based on this
65.5 	paragraph if the individual has successfully completed all
65.6 	examinations required by subsection (e).  The administrator may
65.7 	require an applicant for registration under section 80A.57 or
65.8 	80A.59 who has not been registered in a state within the two
65.9 	years preceding the filing of an application in this state to
65.10 	successfully complete an examination.
65.11 	(e) [EXAMINATIONS.] A rule adopted or order issued under
65.12 	this chapter may require that an examination, including an
65.13 	examination developed or approved by an organization of
65.14 	securities regulators, be successfully completed by a class of
65.15 	individuals or all individuals.  An order issued under this
65.16 	chapter may waive, in whole or in part, an examination as to an
65.17 	individual and a rule adopted under this chapter may waive, in
65.18 	whole or in part, an examination as to a class of individuals if
65.19 	the administrator determines that the examination is not
65.20 	necessary or appropriate in the public interest and for the
65.21 	protection of investors.
65.22 	(f) [SUMMARY PROCESS.] The administrator may suspend or
65.23 	deny an application summarily; restrict, condition, limit, or
65.24 	suspend a registration; or censure, bar, or impose a civil
65.25 	penalty on a registrant before final determination of an
65.26 	administrative proceeding.  Upon the issuance of an order, the
65.27 	administrator shall promptly notify each person subject to the
65.28 	order that the order has been issued, the reasons for the
65.29 	action, and that within 15 days after the receipt of a request
65.30 	in a record from the person the matter will be scheduled for a
65.31 	hearing.  If a hearing is not requested and none is ordered by
65.32 	the administrator within 30 days after the date of service of
65.33 	the order, the order becomes final by operation of law.  If a
65.34 	hearing is requested or ordered, the administrator, after notice
65.35 	of and opportunity for hearing to each person subject to the
65.36 	order, may modify or vacate the order or extend the order until
66.1 	final determination.
66.2 	(g) [PROCEDURAL REQUIREMENTS.] An order issued may not be
66.3 	issued under this section, except under subsection (f), without:
66.4 	(1) appropriate notice to the applicant or registrant;
66.5 	(2) opportunity for hearing; and 
66.6 	(3) findings of fact and conclusions of law in a record in
66.7 	accordance with chapter 14.
66.8 	(h) [CONTROL PERSON LIABILITY.] A person that controls,
66.9 	directly or indirectly, a person not in compliance with this
66.10 	section may be disciplined by order of the administrator under
66.11 	subsections (a) through (c) to the same extent as the
66.12 	noncomplying person, unless the controlling person did not know,
66.13 	or knowingly or recklessly disregarded evidence, of the
66.14 	existence of conduct that is a ground for discipline under this
66.15 	section.
66.16 	(i) [LIMIT ON INVESTIGATION OR PROCEEDING.] The
66.17 	administrator may not institute a proceeding under subsection
66.18 	(a), (b), or (c) based solely on material facts actually known
66.19 	by the administrator unless an investigation or the proceeding
66.20 	is instituted within one year after the administrator actually
66.21 	acquires knowledge of the material facts.
66.22 	FRAUD AND LIABILITIES

66.23 	Sec. 28. [80A.68] SECTION 501; GENERAL FRAUD.
66.24 	It is unlawful for a person, in connection with the offer,
66.25 	sale, or purchase of a security, directly or indirectly:
66.26 	(1) to employ a device, scheme, or artifice to defraud;
66.27 	(2) to make an untrue statement of a material fact or to
66.28 	omit to state a material fact necessary in order to make a
66.29 	statement made, in the light of the circumstances under which it
66.30 	is made, not misleading; or 
66.31 	(3) to engage in an act, practice, or course of business
66.32 	that operates or would operate as a fraud or deceit upon another
66.33 	person.

66.34 	Sec. 29. [80A.69] SECTION 502; PROHIBITED CONDUCT IN
66.35 	PROVIDING INVESTMENT ADVICE.
66.36 	(a) [FRAUD IN PROVIDING INVESTMENT ADVICE.] It is unlawful
67.1 	for a person that advises others for compensation, either
67.2 	directly or indirectly or through publications or writings, as
67.3 	to the value of securities or the advisability of investing in,
67.4 	purchasing, or selling securities or that, for compensation and
67.5 	as part of a regular business, issues or promulgates analyses or
67.6 	reports relating to securities:
67.7 	(1) to employ a device, scheme, or artifice to defraud
67.8 	another person; or 
67.9 	(2) to engage in an act, practice, or course of business
67.10 	that operates or would operate as a fraud or deceit upon another
67.11 	person.
67.12 	(b) [RULES DEFINING FRAUD.] A rule adopted under this
67.13 	chapter may define an act, practice, or course of business of an
67.14 	investment adviser or an investment adviser representative,
67.15 	other than a supervised person of a federal covered investment
67.16 	adviser, as fraudulent, deceptive, or manipulative, and
67.17 	prescribe means reasonably designed to prevent investment
67.18 	advisers and investment adviser representatives, other than
67.19 	supervised persons of a federal covered investment adviser, from
67.20 	engaging in acts, practices, and courses of business defined as
67.21 	fraudulent, deceptive, or manipulative.
67.22 	(c) [RULES SPECIFYING CONTENTS OF ADVISORY CONTRACT.] A
67.23 	rule adopted under this chapter may specify the contents of an
67.24 	investment advisory contract entered into, extended, or renewed
67.25 	by an investment adviser.

67.26 	Sec. 30. [80A.70] SECTION 503; EVIDENTIARY BURDEN.
67.27 	(a) [CIVIL.] In a civil action or administrative proceeding
67.28 	under this chapter, a person claiming an exemption, exception,
67.29 	preemption, or exclusion has the burden to prove the
67.30 	applicability of the claim.
67.31 	(b) [CRIMINAL.] In a criminal proceeding under this
67.32 	chapter, a person claiming an exemption, exception, preemption,
67.33 	or exclusion has the burden of going forward with evidence of
67.34 	the the claim.

67.35 	Sec. 31. [80A.71] SECTION 504; FILING OF SALES AND
67.36 	ADVERTISING LITERATURE.
68.1 	(a) [FILING REQUIREMENT.] Except as otherwise provided in
68.2 	subsection (b), a rule adopted or order issued under this
68.3 	chapter may require the filing of a prospectus, pamphlet,
68.4 	circular, form letter, advertisement, sales literature, or other
68.5 	advertising record relating to a security or investment advice,
68.6 	addressed or intended for distribution to prospective investors,
68.7 	including clients or prospective clients of a person registered
68.8 	or required to be registered as an investment adviser under this
68.9 	chapter.
68.10 	(b) [EXCLUDED COMMUNICATIONS.] This section does not apply
68.11 	to sales and advertising literature specified in subsection (a)
68.12 	which relates to a federal covered security, a federal covered
68.13 	investment adviser, or a security or transaction exempted by
68.14 	section 80A.45, 80A.46, or 80A.47 except as required pursuant to
68.15 	section 80A.45(7).

68.16 	Sec. 32. [80A.72] SECTION 505; MISLEADING FILINGS.
68.17 	It is unlawful for a person to make or cause to be made, in
68.18 	a record that is used in an action or proceeding or filed under
68.19 	this chapter other than a contested case hearing, a statement
68.20 	that, at the time and in the light of the circumstances under
68.21 	which it is made, is false or misleading in a material respect,
68.22 	or, in connection with the statement, to omit to state a
68.23 	material fact necessary to make the statement made, in the light
68.24 	of the circumstances under which it was made, not false or
68.25 	misleading.

68.26 	Sec. 33. [80A.73] SECTION 506; MISREPRESENTATIONS
68.27 	CONCERNING REGISTRATION OR EXEMPTION.
68.28 	The filing of an application for registration, a
68.29 	registration statement, a notice filing under this chapter, the
68.30 	registration of a person, the notice filing by a person, or the
68.31 	registration of a security under this chapter does not
68.32 	constitute a finding by the administrator that a record filed
68.33 	under this chapter is true, complete, and not misleading.  The
68.34 	filing or registration or the availability of an exemption,
68.35 	exception, preemption, or exclusion for a security or a
68.36 	transaction does not mean that the administrator has passed upon
69.1 	the merits or qualifications of, or recommended or given
69.2 	approval to, a person, security, or transaction.  It is unlawful
69.3 	to make, or cause to be made, to a purchaser, customer, client,
69.4 	or prospective customer or client a representation inconsistent
69.5 	with this section.

69.6 	Sec. 34. [80A.74] SECTION 507; QUALIFIED IMMUNITY.
69.7 	A broker-dealer, agent, investment adviser, federal covered
69.8 	investment adviser, or investment adviser representative is not
69.9 	liable to another broker-dealer, agent, investment adviser,
69.10 	federal covered investment adviser, or investment adviser
69.11 	representative for defamation relating to a statement that is
69.12 	contained in a record required by the administrator, or designee
69.13 	of the administrator, the Securities and Exchange Commission, or
69.14 	a self-regulatory organization, unless the person knew, or
69.15 	should have known at the time that the statement was made, that
69.16 	is was false in a material respect or the person acted in
69.17 	reckless disregard of the statement's truth or falsity.

69.18 	Sec. 35. [80A.75] SECTION 508; CRIMINAL PENALTIES.
69.19 	(a) [CRIMINAL PENALTIES.] A person that willfully violates
69.20 	this chapter, or a rule adopted or order issued under this
69.21 	chapter, except section 80A.71 or the notice filing requirements
69.22 	of section 80A.50 or 80A.60, or that willfully violates section
69.23 	80A.72 knowing the statement made to be false or misleading in a
69.24 	material respect, upon conviction, shall be fined not more that
69.25 	$....... or imprisoned not more than ...... years, or both.  An
69.26 	individual convicted of violating a rule or order under this
69.27 	chapter may be fined, but may not be imprisoned, if the
69.28 	individual did not have knowledge of the rule or order.
69.29 	(b) [CRIMINAL REFERENCE NOT REQUIRED.] The attorney general
69.30 	with or without a reference from the administrator, may
69.31 	institute criminal proceedings under this chapter.
69.32 	(c) [NO LIMITATION ON OTHER CRIMINAL ENFORCEMENT.] This
69.33 	chapter does not limit the power of this state to punish a
69.34 	person for conduct that constitutes a crime under other laws of
69.35 	this state.

69.36 	Sec. 36. [80A.76] SECTION 509; CIVIL LIABILITY.
70.1 	(a) [SECURITIES LITIGATION UNIFORM STANDARDS
70.2 	ACT.] Enforcement of civil liability under this section is
70.3 	subject to the Securities Litigation Uniform Standards Act of
70.4 	1998.
70.5 	(b) [LIABILITY OF SELLER TO PURCHASER.] A person is liable
70.6 	to the purchaser if the person sells a security in violation of
70.7 	section 80A.49 or, by means of an untrue statement of a material
70.8 	fact or an omission to state a material fact necessary in order
70.9 	to make the statement made, in light of the circumstances under
70.10 	which it is made, not misleading, the purchaser not knowing the
70.11 	untruth or omission and the seller not sustaining the burden of
70.12 	proof that the seller did not know and, in the exercise of
70.13 	reasonable care, could not have known of the untruth or
70.14 	omission.  An action under this subsection is governed by the
70.15 	following:
70.16 	(1) The purchaser may maintain an action to recover the
70.17 	consideration paid for the security, less the amount of any
70.18 	income received on the security, and interest from the date of
70.19 	the purchase, costs, and reasonable attorneys' fees determined
70.20 	by the court, upon the tender of the security, or for actual
70.21 	damages as provided in paragraph (3).
70.22 	(2) The tender referred to in paragraph (1) may be made any
70.23 	time before entry of judgment.  Tender requires only notice in a
70.24 	record of ownership of the security and willingness to exchange
70.25 	the security for the amount specified.  A purchaser that no
70.26 	longer owns the security may recover actual damages as provided
70.27 	in paragraph (3).
70.28 	(3) Actual damages in an action arising under this
70.29 	subsection are the amount that would be recoverable upon a
70.30 	tender less the value of the security when the purchaser
70.31 	disposed of it, and interest from the date of the purchase,
70.32 	costs, and reasonable attorneys' fees determined by the court.
70.33 	(c) [LIABILITY OF PURCHASER TO SELLER.] A person is liable
70.34 	to the seller if the person buys a security by means of an
70.35 	untrue statement of a material fact or omission to state a
70.36 	material fact necessary in order to make the statement made, in
71.1 	light of the circumstances under which it is made, not
71.2 	misleading, the seller not knowing of the untruth or omission,
71.3 	and the purchaser not sustaining the burden of proof that the
71.4 	purchaser did not know, and in the exercise of reasonable care,
71.5 	could not have known of the untruth or omission.  An action
71.6 	under this subsection is governed by the following:
71.7 	(1) The seller may maintain an action to recover the
71.8 	security, and any income received on the security, costs, and
71.9 	reasonable attorneys' fees determined by the court, upon the
71.10 	tender of the purchase price, or for actual damages as provided
71.11 	in paragraph (3).
71.12 	(2) The tender referred to in paragraph (1) may be made any
71.13 	time before entry of judgment.  Tender requires only notice in a
71.14 	record of the present ability to pay the amount tendered and
71.15 	willingness to take delivery of the security for the amount
71.16 	specified.  If the purchaser no longer owns the security, the
71.17 	seller may recover actual damages as provided in paragraph (3).
71.18 	(3) Actual damages in an action arising under this
71.19 	subsection are the difference between the price at which the
71.20 	security was sold and the value the security would have had at
71.21 	the time of the sale in the absence of the purchaser's conduct
71.22 	causing liability, and interest from the date of the sale of the
71.23 	security, costs, and reasonable attorneys' fees determined by
71.24 	the court.
71.25 	(d) [LIABILITY OF UNREGISTERED BROKER-DEALER AND AGENT.] A
71.26 	person acting as a broker-dealer or agent that sells or buys a
71.27 	security in violation of section 80A.56(a), 80A.57(a), or 80A.73
71.28 	is liable to the customer.  The customer, if a purchaser, may
71.29 	maintain an action for recovery of actual damages as specified
71.30 	in subsections (b)(1) through (3), or, if a seller, for a remedy
71.31 	as specified in subsections (c)(1) through (3).
71.32 	(e) [LIABILITY OF UNREGISTERED INVESTMENT ADVISER AND
71.33 	INVESTMENT ADVISER REPRESENTATIVE.] A person acting as an
71.34 	investment adviser or investment adviser representative that
71.35 	provides investment advice for compensation in violation of
71.36 	section 80A.58(a), 80A.59(a), or 80A.73 is liable to the
72.1 	client.  The client may maintain an action to recover the
72.2 	consideration paid for the advice, interest from the date of
72.3 	payment, costs, and reasonable attorneys' fees determined by the
72.4 	court.
72.5 	(f) [LIABILITY FOR INVESTMENT ADVICE.] A person that
72.6 	receives directly or indirectly any consideration for providing
72.7 	investment advice to another person and that employs a device,
72.8 	scheme, or artifice to defraud the other person or engages in an
72.9 	act, practice, or course of business that operates or would
72.10 	operate as a fraud or deceit on the other person, is liable to
72.11 	the other person.  An action under this subsection is governed
72.12 	by the following:
72.13 	(1) The person defrauded may maintain an action to recover
72.14 	the consideration paid for the advice and the amount of any
72.15 	actual damages caused by the fraudulent conduct, interest from
72.16 	the date of the fraudulent conduct, costs, and reasonable
72.17 	attorneys' fees determined by the court, less the amount of any
72.18 	income received as a result of the fraudulent conduct.
72.19 	(2) This subsection does not apply to a broker-dealer or
72.20 	its agents if the investment advice provided is solely
72.21 	incidental to transacting business as a broker-dealer and no
72.22 	special compensation is received for the investment advice.
72.23 	(g) [JOINT AND SEVERAL LIABILITY.] The following persons
72.24 	are liable jointly and severally with and to the same extent as
72.25 	persons liable under subsections (b) through (f):
72.26 	(1) a person that directly or indirectly controls a person
72.27 	liable under subsections (b) through (f), unless the controlling
72.28 	person sustains the burden of proof that the person did not
72.29 	know, and in the exercise of reasonable care could not have
72.30 	known, of the existence of conduct by reason of which the
72.31 	liability is alleged to exist;
72.32 	(2) an individual who is a managing partner, executive
72.33 	officer, or director of a person liable under subsections (b)
72.34 	through (f), including an individual having a similar status or
72.35 	performing similar functions, unless the individual sustains the
72.36 	burden of proof that the individual did not know and, in the
73.1 	exercise of reasonable care could have have known, of the
73.2 	existence of conduct by reason of which the liability is alleged
73.3 	to exist;
73.4 	(3) an individual who is an employee of or associated with
73.5 	a person liable under subsections (b) through (f) and who
73.6 	materially aids the conduct giving rise to the liability, unless
73.7 	the individual sustains the burden of proof that the individual
73.8 	did not know and, in the exercise of reasonable care could not
73.9 	have known, of the existence of conduct by reason of which the
73.10 	liability is alleged to exist; and 
73.11 	(4) a person that is a broker-dealer, agent, investment
73.12 	adviser, or investment adviser representative that materially
73.13 	aids the conduct giving rise to the liability under subsections
73.14 	(b) through (f), unless the person sustains the burden of proof
73.15 	that the person did not know and, in the exercise of reasonable
73.16 	care could not have known, of the existence of conduct by reason
73.17 	of which liability is alleged to exist.
73.18 	(h) [RIGHT OF CONTRIBUTION.] A person liable under this
73.19 	section has a right of contribution as in cases of tort against
73.20 	any other person liable under this section for the same conduct.
73.21 	(i) [SURVIVAL OF CAUSE OF ACTION.] A cause of action under
73.22 	this section survives the death of an individual who might have
73.23 	been a plaintiff or defendant.
73.24 	(j) [STATUTE OF LIMITATIONS.] A person may not obtain
73.25 	relief:
73.26 	(1) under subsection (b) for violation of section 80A.49,
73.27 	or under subsection (d) or (e), unless the action is instituted
73.28 	within one year after the violation occurred; or 
73.29 	(2) under subsection (b), other than for violation of
73.30 	section 80A.49, or under subsection (c) or (f), unless the
73.31 	action is instituted within the earlier of two years after
73.32 	discovery of the facts constituting the violation or five years
73.33 	after the violation.
73.34 	(k) [NO ENFORCEMENT OF VIOLATIVE CONTRACT.] A person that
73.35 	has made, or has engaged in the performance of, a contract in
73.36 	violation of this chapter or a rule adopted or order issued
74.1 	under this chapter, or that has acquired a purported right under
74.2 	the contract with knowledge of conduct by reason of which its
74.3 	making or performance was in violation of this chapter, may not
74.4 	base an action on the contract.
74.5 	(l) NO CONTRACTUAL WAIVER.] A condition, stipulation, or
74.6 	provision binding a person purchasing or selling a security or
74.7 	receiving investment advice to waive compliance with this
74.8 	chapter or a rule adopted or order issued under this chapter is
74.9 	void.
74.10 	(m) [SURVIVAL OF OTHER RIGHT OR REMEDIES.] The rights and
74.11 	remedies provided by this chapter are in addition to any other
74.12 	rights or remedies that may exist, but this chapter does not
74.13 	create a cause of action not specified in this section or
74.14 	section 80A.66(e).

74.15 	Sec. 37. [80A.77] SECTION 510; RESCISSION OFFERS.
74.16 	A purchaser, seller, or recipient of investment advice may
74.17 	not maintain an action under section 80A.76 if:
74.18 	(1) the purchaser, seller, or recipient of investment
74.19 	advice receives in a record, before the action is instituted:
74.20 	(A) an offer stating the respect in which liability under
74.21 	section 80A.76 may have arisen and fairly advising the
74.22 	purchaser, seller, or recipient of investment advice of that
74.23 	person's rights in connection with the offer, and any financial
74.24 	or other information necessary to correct all material
74.25 	misrepresentations or omissions in the information that was
74.26 	required by this chapter to be furnished to that person at the
74.27 	time of this purchase, sale, or investment advice;
74.28 	(B) if the basis for relief under this section may have
74.29 	been a violation of section 80A.76(b), an offer to repurchase
74.30 	the security for cash, payable on delivery of the security,
74.31 	equal to the consideration paid, and interest from the date of
74.32 	the purchase, less the amount of any income received on the
74.33 	security, or, if the purchaser no longer owns the security, an
74.34 	offer to pay the purchaser upon acceptance of the offer damages
74.35 	in an amount that would be recoverable upon a tender, less the
74.36 	value of the security when the purchaser disposed of it, and
75.1 	interest from the date of the purchase in cash equal to the
75.2 	damages computed in the manner provided in this subsection.
75.3 	(C) if the basis for relief under this section may have
75.4 	been a violation of section 80A.76(c), an offer to tender the
75.5 	security, on payment by the seller of an amount equal to the
75.6 	purchase price paid, less income received on the security by the
75.7 	purchaser and interest from the date of the sale; or if the
75.8 	purchaser no longer owns the security, an offer to pay the
75.9 	seller upon acceptance of the offer, in cash, damages in the
75.10 	amount of the difference between the price at which the security
75.11 	was purchased and the value the security would have had at the
75.12 	time of the purchase in the absence of the purchaser's conduct
75.13 	that may have caused liability and interest from the date of the
75.14 	sale.
75.15 	(D) if the basis for relief under this section may have
75.16 	been a violation of section 80A.76(d); and if the customer is a
75.17 	purchaser, an offer to pay as specified in subparagraph (B); or,
75.18 	if the customer is a seller, an offer to tender or to pay as
75.19 	specified in subparagraph (C);
75.20 	(E) if the basis for relief under this section may have
75.21 	been a violation of section 80A.76(e), an offer to reimburse in
75.22 	cash the consideration paid for the advice and interest from the
75.23 	date of payment; or 
75.24 	(F) if the basis for relief under this section may have
75.25 	been a violation of section 80A.76(f), an offer to reimburse in
75.26 	cash the consideration paid for the advice, the amount of any
75.27 	actual damages that may have been caused by the conduct, and
75.28 	interest from the date of the violation causing the loss;
75.29 	(2) the offer under paragraph (1) states that it must be
75.30 	accepted by the purchaser, seller, or recipient of investment
75.31 	advice within 30 days after the date of its receipt by the
75.32 	purchaser, seller, or recipient of investment advice or any
75.33 	shorter period, of not less than three days, that the
75.34 	administrator, by order, specifies;
75.35 	(3) the offeror has the present ability to pay the amount
75.36 	offered or to tender the security under paragraph (1);
76.1 	(4) the offer under paragraph (1) is delivered to the
76.2 	purchaser, seller, or recipient of investment advice, or sent in
76.3 	a manner that ensures receipt by the purchaser, seller, or
76.4 	recipient of investment advice; and 
76.5 	(5) the purchaser, seller, or recipient of investment
76.6 	advice that accepts the offer under paragraph (1) in a record
76.7 	within the period specified under paragraph (2) is paid in
76.8 	accordance with the terms of the offer.
76.9 	ADMINISTRATION AND JUDICIAL REVIEW

76.10 	Sec. 38. [80A.78] SECTION 601; ADMINISTRATION.
76.11 	(a) [ADMINISTRATION.] The administrator shall administer
76.12 	this chapter.
76.13 	(b) [UNLAWFUL USE OF RECORDS OR INFORMATION.] It is
76.14 	unlawful for the administrator or an officer, employee, or
76.15 	designee of the administrator to use for personal benefit or the
76.16 	benefit of others records or other information obtained by or
76.17 	filed with the administrator that are not public under section
76.18 	80A.84(b).  This chapter does not authorize the administrator or
76.19 	an officer, employee, or designee of the administrator to
76.20 	disclose the record or information, except in accordance with
76.21 	section 80A.79, 80A.84(c), or 80A.85.
76.22 	(c) [NO PRIVILEGE OR EXEMPTION CREATED OR DIMINISHED.] This
76.23 	chapter does not create or diminish a privilege or exemption
76.24 	that exists at common law, by statute or rule, or otherwise.
76.25 	(d) [INVESTOR EDUCATION.] The administrator may develop and
76.26 	implement investor education initiatives to inform the public
76.27 	about investing in securities, with particular emphasis on the
76.28 	prevention and detection of securities fraud.  In developing and
76.29 	implementing these initiatives, the administrator may
76.30 	collaborate with public and nonprofit organizations with an
76.31 	interest in investor education.  The administrator may accept a
76.32 	grant or donation from a person that is not affiliated with the
76.33 	securities industry or from a nonprofit organization, regardless
76.34 	of whether the organization is affiliated with the securities
76.35 	industry, to develop and implement investor education
76.36 	initiatives.  This subsection does not authorize the
77.1 	administrator to require participation or monetary contributions
77.2 	of a registrant in an investor education program.
77.3 	(e) [THE SECURITIES INVESTOR EDUCATION AND TRAINING
77.4 	FUND.] The Securities Investor Education and Training Fund is
77.5 	created to provide funds for the purposes specified in
77.6 	subsection (d).  All money received by the state by reason of
77.7 	civil penalties pursuant to this chapter must be deposited in
77.8 	the Securities Investor Education and Training Fund and are
77.9 	appropriated to the administrator.

77.10 	Sec. 39. [80A.79] SECTION 602; INVESTIGATIONS AND
77.11 	SUBPOENAS.
77.12 	(a) [AUTHORITY TO INVESTIGATE.] The administrator may:
77.13 	(1) conduct public or private investigations within or
77.14 	outside of this state which the administrator considers
77.15 	necessary or appropriate to determine whether a person has
77.16 	violated, is violating, or is about to violate this chapter or a
77.17 	rule adopted or order issued under this chapter, or to aid in
77.18 	the enforcement of this chapter or in the adoption of rules and
77.19 	forms under this chapter;
77.20 	(2) require or permit a person to testify, file a
77.21 	statement, or produce a record, under oath or otherwise as the
77.22 	administrator determines, as to all the facts and circumstances
77.23 	concerning a matter to be investigated or about which an action
77.24 	or proceeding is to be instituted; and 
77.25 	(3) publish a record concerning an action, proceeding, or
77.26 	an investigation under, or a violation of, this chapter or a
77.27 	rule adopted or order issued under this chapter if the
77.28 	administrator determines it is necessary or appropriate in the
77.29 	public interest and for the protection of investors.
77.30 	(b) [ADMINISTRATOR POWERS TO INVESTIGATE.] For the purpose
77.31 	of an investigation under this chapter, the administrator or its
77.32 	designated officer may administer oaths and affirmations,
77.33 	subpoena witnesses, seek compulsion of attendance, take
77.34 	evidence, require the filing of statements, and require the
77.35 	production of any records that the administrator considers
77.36 	relevant or material to the investigation.
78.1 	(c) [PROCEDURE AND REMEDIES FOR NONCOMPLIANCE.] If a person
78.2 	does not appear or refuses to testify, file a statement, produce
78.3 	records, or otherwise does not obey a subpoena as required by
78.4 	the administrator under this chapter, the administrator may
78.5 	refer the matter to the attorney general, who may apply to the
78.6 	district court or a court of another state to enforce
78.7 	compliance.  The court may:
78.8 	(1) hold the person in contempt;
78.9 	(2) order the person to appear before the administrator;
78.10 	(3) order the person to testify about the matter under
78.11 	investigation or in question;
78.12 	(4) order the production of records;
78.13 	(5) grant injunctive relief, including restricting or
78.14 	prohibiting the offer or sale of securities or the providing of
78.15 	investment advice;
78.16 	(6) impose a civil penalty of not less than $....... and
78.17 	not greater than $....... for each violation; and 
78.18 	(7) grant any other necessary or appropriate relief.
78.19 	(d) [APPLICATION FOR RELIEF.] This section does not
78.20 	preclude a person from applying to the district court or a court
78.21 	of another state for relief from a request to appear, testify,
78.22 	file a statement, produce records, or obey a subpoena.
78.23 	(e) [USE IMMUNITY PROCEDURE.] An individual is not excused
78.24 	from attending, testifying, filing a statement, producing a
78.25 	record or other evidence, or obeying a subpoena of the
78.26 	administrator under this chapter or in an action or proceeding
78.27 	instituted by the administrator under this chapter on the ground
78.28 	that the required testimony, statement, record, or other
78.29 	evidence, directly or indirectly, may tend to incriminate the
78.30 	individual or subject the individual to a criminal fine,
78.31 	penalty, or forfeiture.  If the individual refuses to testify,
78.32 	file a statement or produce a record or other evidence on the
78.33 	basis of the individual's privilege against self-incrimination,
78.34 	the administrator may apply to the district court to compel the
78.35 	testimony, the filing of the statement, the production of the
78.36 	record, or the giving of other evidence.  The testimony, record,
79.1 	or other evidence compelled under such an order may not be used,
79.2 	directly or indirectly, against the individual in a criminal
79.3 	case, except in a prosecution for perjury or contempt or
79.4 	otherwise failing to comply with the order.
79.5 	(f) [ASSISTANCE TO SECURITIES REGULATOR OF ANOTHER
79.6 	JURISDICTION.] At the request of the securities regulator of
79.7 	another state or a foreign jurisdiction, the administrator may
79.8 	provide assistance if the requesting regulator states that it is
79.9 	conducting an investigation to determine whether a person has
79.10 	violated, is violating, or is about to violate a law or rule of
79.11 	the other state or foreign jurisdiction relating to securities
79.12 	matters that the requesting regulator administers or enforces.
79.13 	The administrator may provide the assistance by using the
79.14 	authority to investigate and the powers conferred by this
79.15 	section as the administrator determines is necessary or
79.16 	appropriate.  The assistance may be provided without regard to
79.17 	whether the conduct described in the request would also
79.18 	constitute a violation of this chapter or other law of this
79.19 	state if occurring in this state.  In deciding whether to
79.20 	provide the assistance, the administrator may consider whether
79.21 	the requesting regulator is permitted and has agreed to provide
79.22 	assistance reciprocally within its state or foreign jurisdiction
79.23 	to the administrator on securities matters when requested;
79.24 	whether compliance with the request would violate or prejudice
79.25 	the public policy of this state; and the availability of
79.26 	resources and employees of the administrator to carry out the
79.27 	request for assistance.

79.28 	Sec. 40. [80A.80] SECTION 603; CIVIL ENFORCEMENT.
79.29 	(a) [CIVIL ACTION INSTITUTED BY ADMINISTRATOR.] If the
79.30 	administrator believes that a person has engaged, is engaging,
79.31 	or is about to engage in an act, practice, or course of business
79.32 	constituting a violation of this chapter or a rule adopted or
79.33 	order issued under this chapter or that a person has, is, or is
79.34 	about to engage in an act, practice, or course of business that
79.35 	materially aids a violation of this chapter or a rule adopted or
79.36 	order issued under this chapter, the administrator may maintain
80.1 	an action in the district court to enjoin the act, practice, or
80.2 	course of business and to enforce compliance with this chapter
80.3 	or a rule adopted or order issued under this chapter.
80.4 	(b) [RELIEF AVAILABLE.] In an action under this section and
80.5 	on a proper showing, the court may:
80.6 	(1) issue a permanent or temporary injunction, restraining
80.7 	order, or declaratory judgment;
80.8 	(2) order other appropriate or ancillary relief, which may
80.9 	include:
80.10 	(A) an asset freeze, accounting, writ of attachment, writ
80.11 	of general or specific execution, and appointment of a receiver
80.12 	or conservator, that may be the administrator, for the defendant
80.13 	or the defendant's assets;
80.14 	(B) ordering the administrator to take charge and control
80.15 	of a defendant's property, including investment accounts and
80.16 	accounts in a depository institution, rents, and profits; to
80.17 	collect debts; and to acquire and dispose of property;
80.18 	(C) imposing a civil penalty up to $....... for a single
80.19 	violation or up to $....... for more than one violation; an
80.20 	order of rescission, restitution, or disgorgement directed to a
80.21 	person that has engaged in an act, practice, or course of
80.22 	business constituting a violation of this chapter or the
80.23 	predecessor act or a rule adopted or order issued under this
80.24 	chapter or the predecessor act; and 
80.25 	(D) ordering the payment of prejudgment and postjudgment
80.26 	interest; or 
80.27 	(3) order such other relief as the court considers
80.28 	appropriate.
80.29 	(c) [NO BOND REQUIRED.] The administrator may not be
80.30 	required to post a bond in an action or proceeding under this
80.31 	chapter.

80.32 	Sec. 41. [80A.81] SECTION 604; ADMINISTRATIVE
80.33 	ENFORCEMENT.
80.34 	(a) [ISSUANCE OF AN ORDER OR NOTICE.] If the administrator
80.35 	determines that a person has engaged, is engaging, or is about
80.36 	to engage in an act, practice, or course of business
81.1 	constituting a violation of this chapter or a rule adopted or
81.2 	order issued under this chapter or that a person has materially
81.3 	aided, is materially aiding, or is about to materially aid an
81.4 	act, practice, or course of business constituting a violation of
81.5 	this chapter or a rule adopted or order issued under this
81.6 	chapter, the administrator may:
81.7 	(1) issue an order directing the person to cease and desist
81.8 	from engaging in the act, practice, or course of business or to
81.9 	take other action necessary or appropriate to comply with this
81.10 	chapter;
81.11 	(2) issue an order denying, suspending, revoking, or
81.12 	conditioning the exemptions for a broker-dealer under section
81.13 	80A.56(b)(1)(D) or (F) or an investment adviser under section
81.14 	80A.58(b)(1)(C); or 
81.15 	(3) issue an order under section 80A.48.
81.16 	(b) [SUMMARY PROCESS.] An order under subsection (a) is
81.17 	effective on the date of issuance.  Upon issuance of the order,
81.18 	the administrator shall promptly serve each person subject to
81.19 	the order with a copy of the order and a notice that the order
81.20 	has been entered.  The order must include a statement whether
81.21 	the administrator will seek a civil penalty or costs of the
81.22 	investigation, a statement of the reasons for the order, and
81.23 	notice that, within 15 days after receipt of a request in a
81.24 	record from the person, the matter will be scheduled for a
81.25 	hearing.  If a person subject to the order does not request a
81.26 	hearing and none is ordered by the administrator within 30 days
81.27 	after the date of service of the order, the order, which may
81.28 	include a civil penalty or costs of the investigation if a civil
81.29 	penalty or costs were sought in the statement accompanying the
81.30 	order, becomes final as to that person by operation of law.  If
81.31 	a hearing is requested or ordered, the administrator, after
81.32 	notice of an opportunity for hearing to each person subject to
81.33 	the order, may modify or vacate the order or extend it until
81.34 	final determination.
81.35 	(c) [PROCEDURE FOR FINAL ORDER.] If a hearing is requested
81.36 	or ordered pursuant to subsection (b), a hearing must be held
82.1 	under chapter 14.  A final order may not be issued unless the
82.2 	administrator makes findings of fact and conclusions of law in a
82.3 	record according to chapter 14.  The final order may make final,
82.4 	vacate, or modify the order issued under subsection (a).
82.5 	(d) [CIVIL PENALTY.] In a final order under subsection (c),
82.6 	the administrator may impose a civil penalty up to $....... for
82.7 	a single violation or up to $....... for more than one violation.
82.8 	(e) [COSTS.] In a final order, the administrator may charge
82.9 	the actual cost of an investigation or proceeding for a
82.10 	violation of this chapter or a rule adopted or order issued
82.11 	under this chapter.
82.12 	(f) [FILING OF CERTIFIED FINAL ORDER WITH COURT; EFFECT OF
82.13 	FILING.] If a petition for judicial review of a final order is
82.14 	not filed in accordance with section 80A.86, the administrator
82.15 	may file a certified copy of the final order with the clerk of a
82.16 	court of competent jurisdiction.  The order so filed has the
82.17 	same effect as a judgment of the court and may be recorded,
82.18 	enforced, or satisfied in the same manner as a judgment of the
82.19 	court.
82.20 	(g) [ENFORCEMENT BY COURT; FURTHER CIVIL PENALTY.] If a
82.21 	person does not comply with an order under this section, the
82.22 	administrator may petition a court of competent jurisdiction to
82.23 	enforce the order.  The court may not require the administrator
82.24 	to post a bond in an action or proceeding under this section.
82.25 	If the court finds, after service and opportunity for hearing,
82.26 	that the person was not in compliance with the order, the court
82.27 	may adjudge the person in civil contempt of the order.  The
82.28 	court may impose a further civil penalty against the person for
82.29 	contempt in an amount not less than $....... but not greater
82.30 	than $....... for each violation and may grant any other relief
82.31 	the court determines is just and proper in the circumstances.

82.32 	Sec. 42. [80A.82] SECTION 605; RULES, FORMS, ORDERS,
82.33 	INTERPRETATIVE OPINIONS, AND HEARINGS.
82.34 	(a) [ISSUANCE AND ADOPTION OF FORMS, ORDERS, AND
82.35 	RULES.] The administrator may:
82.36 	(1) issue forms and orders and, after notice and comment,
83.1 	may adopt and amend rules necessary or appropriate to carry out
83.2 	this chapter and may repeal rules, including rules and forms
83.3 	governing registration statements, applications, notice filings,
83.4 	reports, and other records;
83.5 	(2) by rule, define terms, whether or not used in this
83.6 	chapter, but those definitions may not be inconsistent with this
83.7 	chapter; and 
83.8 	(3) by rule, classify securities, persons, and transactions
83.9 	and adopt different requirements for different classes.
83.10 	(b) [FINDINGS AND COOPERATION.] Under this chapter, a rule
83.11 	or form may not be adopted or amended, or an order issued or
83.12 	amended, unless the administrator finds that the rule, form,
83.13 	order, or amendment is necessary or appropriate in the public
83.14 	interest or for the protection of investors and is consistent
83.15 	with the purposes intended by this chapter.  In adopting,
83.16 	amending, and repealing rules and forms, section 80A.85 applies
83.17 	in order to achieve uniformity among the states and coordination
83.18 	with federal laws in the form and content of registration
83.19 	statements, applications, reports, and other records, including
83.20 	the adoption of uniform rules, forms, and procedures.
83.21 	(c) [FINANCIAL STATEMENTS.] Subject to Section 15(h) of the
83.22 	Securities Exchange Act and Section 222 of the Investment
83.23 	Advisers Act of 1940, the administrator may require that a
83.24 	financial statement filed under this chapter be prepared in
83.25 	accordance with generally accepted accounting principles in the
83.26 	United States and comply with other requirements specified by
83.27 	rule adopted or order issued under this chapter.  A rule adopted
83.28 	or order issued under this chapter may establish:
83.29 	(1) subject to Section 15(h) of the Securities Exchange Act
83.30 	and Section 222 of the Investment Advisors Act of 1940, the form
83.31 	and content of financial statements required under this chapter;
83.32 	(2) whether unconsolidated financial statements must be
83.33 	filed; and 
83.34 	(3) whether required financial statements must be audited
83.35 	by an independent certified public accountant.
83.36 	(d) [INTERPRETATIVE OPINIONS.] The administrator may
84.1 	provide interpretive opinions or issue determinations that the
84.2 	administrator will not institute a proceeding or an action under
84.3 	this chapter against a specified person for engaging in a
84.4 	specified act, practice, or course of business if the
84.5 	determination is consistent with this chapter.  A rule adopted
84.6 	or order issued under this chapter may establish a reasonable
84.7 	charge for interpretative opinions or determinations that the
84.8 	administrator will not institute an action or a proceeding under
84.9 	this chapter.
84.10 	(e) [EFFECT OF COMPLIANCE.] A penalty under this chapter
84.11 	may not be imposed for, and liability does not arise from
84.12 	conduct that is engaged in or omitted in good faith believing it
84.13 	conforms to a rule, form, or order of the administrator under
84.14 	this chapter.
84.15 	(f) [PRESUMPTION FOR PUBLIC HEARINGS.] A hearing in an
84.16 	administrative proceeding under this chapter must be conducted
84.17 	in public unless the administrator for good cause consistent
84.18 	with this chapter determines that the hearing will not be so
84.19 	conducted.

84.20 	Sec. 43. [80A.83] SECTION 606; ADMINISTRATIVE FILES AND
84.21 	OPINIONS.
84.22 	(a) [PUBLIC REGISTER OF FILINGS.] The administrator shall
84.23 	maintain, or designate a person to maintain, a register of
84.24 	applications for registration of securities; registration
84.25 	statements; notice filings; applications for registration of
84.26 	broker-dealers, agents, investment advisers, and investment
84.27 	adviser representatives; notice filings by federal covered
84.28 	investment advisers that are or have been effective under this
84.29 	chapter or the predecessor act; notices of claims of exemption
84.30 	from registration or notice filing requirements contained in a
84.31 	record; orders issued under this chapter or the predecessor act;
84.32 	and interpretative opinions or no action determinations issued
84.33 	under this chapter.
84.34 	(b) [PUBLIC AVAILABILITY.] The administrator shall make all
84.35 	rules, forms, interpretative opinions, and orders available to
84.36 	the public.
85.1 	(c) [COPIES OF PUBLIC RECORDS.] The administrator shall
85.2 	furnish a copy of a record that is a public record or a
85.3 	certification that the public record does not exist to a person
85.4 	that so requests.  A rule adopted under this chapter may
85.5 	establish a reasonable charge for furnishing the record or
85.6 	certification.  A copy of the record certified or a certificate
85.7 	by the administrator of a record's nonexistence is prima facie
85.8 	evidence of a record or its nonexistence.

85.9 	Sec. 44. [80A.84] SECTION 607; PUBLIC RECORDS;
85.10 	CONFIDENTIALITY.
85.11 	(a) [PRESUMPTION OF PUBLIC RECORDS.] Except as otherwise
85.12 	provided in subsection (b), records obtained by the
85.13 	administrator or filed under this chapter, including a record
85.14 	contained in or filed with a registration statement,
85.15 	application, notice filing, or report, are public records and
85.16 	are available for public examination.
85.17 	(b) [NONPUBLIC RECORDS.] The following records are not
85.18 	public records and are not available for public examination
85.19 	under subsection (a):
85.20 	(1) a record obtained by the administrator in connection
85.21 	with an audit or inspection under section 80A.66(d) or an
85.22 	investigation under section 80A.79;
85.23 	(2) a part of a record filed in connection with a
85.24 	registration statement under sections 80A.49 and 80A.51 through
85.25 	80A.53 or a record under section 80A.66(d) that contains trade
85.26 	secrets or confidential information if the person filing the
85.27 	registration statement or report has asserted a claim of
85.28 	confidentiality or privilege that is authorized by law;
85.29 	(3) a record that is not required to be provided to the
85.30 	administrator or filed under this chapter and is provided to the
85.31 	administrator only on the condition that the record will not be
85.32 	subject to public examination or disclosure;
85.33 	(4) a nonpublic record received from a person specified in
85.34 	section 80A.85(a);
85.35 	(5) any social security number, residential address unless
85.36 	used as a business address, and residential telephone number
86.1 	contained in a record that is filed; and 
86.2 	(6) a record obtained by the administrator through a
86.3 	designee of the administrator that a rule or order under this
86.4 	chapter determines has been:
86.5 	(A) expunged from the administrator's records by the
86.6 	designee; or 
86.7 	(B) determined to be nonpublic or nondisclosable by that
86.8 	designee if the administrator finds the determination to be in
86.9 	the public interest and for the protection of investors.
86.10 	(c) [ADMINISTRATOR DISCRETION TO DISCLOSE.] If disclosure
86.11 	is for the purpose of a civil, administrative, or criminal
86.12 	investigation, action, or proceeding or to a person specified in
86.13 	section 80A.85(a), the administrator may disclose a record
86.14 	obtained in connection with an audit or inspection under section
86.15 	80A.66(d) or a record obtained in connection with an
86.16 	investigation under section 80A.79.

86.17 	Sec. 45. [80A.85] SECTION 608; UNIFORMITY AND COOPERATION
86.18 	WITH OTHER AGENCIES.
86.19 	(a) [OBJECTIVE OF UNIFORMITY.] The administrator shall, in
86.20 	its discretion, cooperate, coordinate, consult, and, subject to
86.21 	section 80A.84, share records and information with the
86.22 	securities regulator of another state, Canada, a Canadian
86.23 	province or territory, a foreign jurisdiction, the Securities
86.24 	and Exchange Commission, the United States Department of
86.25 	Justice, the Commodity Futures Trading Commission, the Federal
86.26 	Trade Commission, the Securities Investor Protection
86.27 	Corporation, a self-regulatory organization, a national or
86.28 	international organization of securities regulators, a federal
86.29 	or state banking and insurance regulator, and a governmental law
86.30 	enforcement agency to effectuate greater uniformity in
86.31 	securities matters among the federal government, self-regulatory
86.32 	organizations, states, and foreign governments.
86.33 	(b) [POLICIES TO CONSIDER.] In cooperating, coordinating,
86.34 	consulting, and sharing records and information under this
86.35 	section and in acting by rule, order, or waiver under this
86.36 	chapter, the administrator shall, in its discretion, take into
87.1 	consideration in carrying out the public interest the following
87.2 	general policies:
87.3 	(1) maximizing effectiveness of regulation for the
87.4 	protection of investors;
87.5 	(2) maximizing uniformity in federal and state regulatory
87.6 	standards; and 
87.7 	(3) minimizing burdens on the business of capital
87.8 	formation, without adversely effecting essentials of investor
87.9 	protection.
87.10 	(c) [SUBJECTS FOR COOPERATION.] The cooperation,
87.11 	coordination, consultation, and sharing of records and
87.12 	information authorized by this section includes:
87.13 	(1) establishing or employing one or more designees as a
87.14 	central depository for registration and notice filings under
87.15 	this chapter and for records required or allowed to be
87.16 	maintained under this chapter;
87.17 	(2) developing and maintaining uniform forms;
87.18 	(3) conducting a joint examination or investigation;
87.19 	(4) holding a joint administrative hearing;
87.20 	(5) instituting and prosecuting a joint civil or
87.21 	administrative proceeding;
87.22 	(6) sharing and exchanging personnel;
87.23 	(7) coordinating registrations under sections 80A.49 and
87.24 	80A.56 through 80A.59 and exemptions under section 80A.47;
87.25 	(8) sharing and exchanging records, subject to section
87.26 	80A.84;
87.27 	(9) formulating rules, statements of policy, guidelines,
87.28 	forms, and interpretative opinions and releases;
87.29 	(10) formulating common systems and procedures;
87.30 	(11) notifying the public of proposed rules, forms,
87.31 	statements of policy, and guidelines;
87.32 	(12) attending conferences and other meetings among
87.33 	securities regulators, which may include representatives of
87.34 	governmental and private sector organizations involved in
87.35 	capital formation, deemed necessary or appropriate to promote or
87.36 	achieve uniformity; and 
88.1 	(13) developing and maintaining a uniform exemption from
88.2 	registration for small issuers, and taking other steps to reduce
88.3 	the burden of raising investment capital by small businesses.

88.4 	Sec. 46. [80A.86] SECTION 609; JUDICIAL REVIEW.
88.5 	(a) [JUDICIAL REVIEW OF ORDERS.] A final order issued by
88.6 	the administrator under this chapter is subject to judicial
88.7 	review in accordance with chapter 14.
88.8 	(b) [JUDICIAL REVIEW OF RULES.] A rule adopted under this
88.9 	chapter is subject to judicial review in accordance with chapter
88.10 	14.

88.11 	Sec. 47. [80A.87] SECTION 610; JURISDICTION.
88.12 	(a) [SALES AND OFFERS TO SELL.] Sections 80A.49, 80A.50,
88.13 	80A.56(a), 80A.57(a), 80A.58(a), 80A.59(a), 80A.68, 80A.73,
88.14 	80A.76, and 80A.77 do not apply to a person that sells or offers
88.15 	to sell a security unless the offer to sell or the sale is made
88.16 	in this state or the offer to purchase or the purchase is made
88.17 	and accepted in this state.
88.18 	(b) [PURCHASES AND OFFERS TO PURCHASE.] Sections 80A.56(a),
88.19 	80A.57(a), 80A.58(a), 80A.59(a), 80A.68, 80A.73, 80A.76, and
88.20 	80A.77 do not apply to a person that purchases or offers to
88.21 	purchase a security unless the offer to purchase or the purchase
88.22 	is made in this state or the offer to sell or the sale is made
88.23 	and accepted in this state.
88.24 	(c) [OFFERS IN THIS STATE.] For the purpose of this
88.25 	section, an offer to sell or to purchase a security is made in
88.26 	this state, whether or not either party is then present in this
88.27 	state, if the offer:
88.28 	(1) originates from within this state; or 
88.29 	(2) is directed by the offeror to a place in this state and
88.30 	received at the place to which it is directed.
88.31 	(d) [ACCEPTANCES IN THIS STATE.] For the purpose of this
88.32 	section, an offer to purchase or to sell is accepted in this
88.33 	state, whether or not either party is then present in this
88.34 	state, if the acceptance:
88.35 	(1) is communicated to the offeror in this state and the
88.36 	offeree reasonably believes the offeror to be present in this
89.1 	state and the acceptance is received at the place in this state
89.2 	to which it is directed; and 
89.3 	(2) has not previously been communicated to the offeror,
89.4 	orally or in a record, outside this state.
89.5 	(e) [PUBLICATIONS, RADIO, TELEVISION, OR ELECTRONIC
89.6 	COMMUNICATIONS.] An offer to sell or to purchase is not made in
89.7 	this state when a publisher circulates or there is circulated on
89.8 	the publisher's behalf in this state a bona fide newspaper or
89.9 	other publication of general, regular, and paid circulation that
89.10 	is not published in this state, or that is published in this
89.11 	state but has had more than two-thirds of its circulation
89.12 	outside this state during the previous 12 months or when a radio
89.13 	or television program or other electronic communication
89.14 	originating outside this state is received in this state.  A
89.15 	radio or television program, or other electronic communication
89.16 	is considered as having originated in this state if either the
89.17 	broadcast studio or the originating source of transmission is
89.18 	located in this state, unless:
89.19 	(1) the program or communication is syndicated and
89.20 	distributed from outside this state for redistribution to the
89.21 	general public in this state;
89.22 	(2) the program or communication is supplied by a radio,
89.23 	television, or other electronic network with the electronic
89.24 	signal originating from outside this state for redistribution to
89.25 	the general public in this state;
89.26 	(3) the program or communication is an electronic
89.27 	communication that originates outside this state and is captured
89.28 	for redistribution to the general public in this state by a
89.29 	community antenna or cable, radio, cable television, or other
89.30 	electronic system; or 
89.31 	(4) the program or communication consists of an electronic
89.32 	communication that originates in this state, but which is not
89.33 	intended for distribution to the general public in this state.
89.34 	(f) [INVESTMENT ADVICE AND MISREPRESENTATIONS.] Sections
89.35 	80A.58(a), 80A.59(a), 80A.60(a), 80A.69, 80A.72, and 80A.73
89.36 	apply to a person if the person engages in an act, practice, or
90.1 	course of business instrumental in effecting prohibited or
90.2 	actionable conduct in this state, whether or not either party is
90.3 	then present in this state.

90.4 	Sec. 48. [80A.88] SECTION 611; SERVICE OF PROCESS.
90.5 	(a) [SIGNED CONSENT TO SERVICE OF PROCESS.] A consent to
90.6 	service of process complying with this section required by this
90.7 	chapter must be signed and filed in the form required by a rule
90.8 	or order under this chapter.  A consent appointing the
90.9 	administrator the person's agent for service of process in a
90.10 	noncriminal action or proceeding against the person, or the
90.11 	person's successor or personal representative under this chapter
90.12 	or a rule adopted or order issued under this chapter after the
90.13 	consent is filed, has the same force and validity as if the
90.14 	service were made personally on the person filing the consent.
90.15 	A person that has filed a consent complying with this subsection
90.16 	in connection with a previous application for registration or
90.17 	notice filing need not file an additional consent.
90.18 	(b) [CONDUCT CONSTITUTING APPOINTMENT OF AGENT FOR
90.19 	SERVICE.] If a person, including a nonresident of this state,
90.20 	engages in an act, practice, or course of business prohibited or
90.21 	made actionable by this chapter or a rule adopted or order
90.22 	issued under this chapter and the person has not filed a consent
90.23 	to service of process under subsection (a), the act, practice,
90.24 	or course of business constitutes the appointment of the
90.25 	administrator as the person's agent for service of process in a
90.26 	noncriminal action or proceeding against the person or the
90.27 	person's successor or personal representative.
90.28 	(c) [PROCEDURE FOR SERVICE OF PROCESS.] Service under
90.29 	subsection (a) or (b) may be made by providing a copy of the
90.30 	process to the office of the administrator, but it is not
90.31 	effective unless:
90.32 	(1) the plaintiff, which may be the administrator, promptly
90.33 	sends notice of the service and a copy of the process, return
90.34 	receipt requested, to the defendant or respondent at the address
90.35 	set forth in the consent to service of process or, if a consent
90.36 	to service of process has not been filed, at the last known
91.1 	address, or takes other reasonable steps to give notice; and 
91.2 	(2) the plaintiff files an affidavit of compliance with
91.3 	this subsection in the action or proceeding on or before the
91.4 	return day of the process, if any, or within the time that the
91.5 	court, or the administrator in a proceeding before the
91.6 	administrator, allows.
91.7 	(d) [SERVICE IN ADMINISTRATIVE PROCEEDINGS OR CIVIL ACTIONS
91.8 	BY ADMINISTRATOR.] Service pursuant to subsection (c) may be
91.9 	used in a proceeding before the administrator or by the
91.10 	administrator in a civil action in which the administrator is
91.11 	the moving party.
91.12 	(e) [OPPORTUNITY TO DEFEND.] If process is served under
91.13 	subsection (c), the court, or the administrator in a proceeding
91.14 	before the administrator, shall order continuances as are
91.15 	necessary or appropriate to afford the defendant or respondent
91.16 	reasonable opportunity to defend.

91.17 	Sec. 49. [80A.89] SECTION 612; SEVERABILITY CLAUSE.
91.18 	If any provision of this chapter or its application to any
91.19 	person or circumstances is held invalid, the invalidity does not
91.20 	affect other provisions or applications of this chapter that can
91.21 	be given effect without the invalid provision or application,
91.22 	and to this end the provisions of this chapter are severable.
91.23 	TRANSITION

91.24 	Sec. 50. [80A.90] SECTION 703; APPLICATION OF ACT TO
91.25 	EXISTING PROCEEDING AND EXISTING RIGHTS AND DUTIES.
91.26 	(a) [APPLICABILITY OF PREDECESSOR ACT TO PENDING
91.27 	PROCEEDINGS AND EXISTING RIGHTS.] The predecessor act
91.28 	exclusively governs all actions or proceedings that are pending
91.29 	on the effective date of this chapter or may be instituted on
91.30 	the basis of conduct occurring before the effective date of this
91.31 	chapter, but a civil action may not be maintained to enforce any
91.32 	liability under the predecessor act unless instituted within any
91.33 	period of limitation that applied when the cause of action
91.34 	accrued or within five years after the effective date of this
91.35 	chapter, whichever is earlier.
91.36 	(b) [CONTINUED EFFECTIVENESS UNDER PREDECESSOR ACT.] All
92.1 	effective registrations under the predecessor act, all
92.2 	administrative orders relating to the registrations, rules,
92.3 	statements of policy, interpretative opinions, declaratory
92.4 	rulings, no action determinations, and conditions imposed on the
92.5 	registrations under the predecessor act remain in effect while
92.6 	they would have remained in effect if this chapter had not been
92.7 	enacted.  They are considered to have been filed, issued, or
92.8 	composed under this chapter, but are exclusively governed by the
92.9 	predecessor act.
92.10 	(c) [APPLICABILITY OF PREDECESSOR ACT TO OFFERS OR
92.11 	SALES.] The predecessor act exclusively applies to an offer or
92.12 	sale made within one year after the effective date of this
92.13 	chapter pursuant to an offering made in good faith before the
92.14 	effective date of this chapter on the basis of an exemption
92.15 	available under the predecessor act.

92.16 	Sec. 51. REPEALER.
 92.17 	Minnesota Statutes 2004, sections 80A.01; 80A.02; 80A.03;
92.18 	80A.04; 80A.041; 80A.05; 80A.06; 80A.07; 80A.08; 80A.09; 80A.10;
92.19 	80A.11; 80A.115; 80A.12; 80A.122; 80A.125; 80A.13; 80A.14;
92.20 	80A.15; 80A.16; 80A.17; 80A.18; 80A.19; 80A.22; 80A.23; 80A.24;
92.21 	80A.25; 80A.26; 80A.27; 80A.28; 80A.29; 80A.30; and 80A.31, are
92.22 	repealed.

92.23 	Sec. 52. EFFECTIVE DATE.
 92.24 	This act is effective January 1, 2006.

92.25 	ARTICLE 2
92.26 	CONFORMING CHANGES

92.27 	Section 1. Minnesota Statutes 2004, section 60A.077,
92.28 	subdivision 9, is amended to read:
92.29 		Subd. 9.Membership interests.  A membership interest in
92.30 	a domestic mutual insurance holding company does not constitute
92.31 	a security as defined in section 80A.14, subdivision 18 
92.32 	80A.41(28).  No member of a mutual insurance holding company may
92.33 	transfer or pledge membership in the mutual insurance holding
92.34 	company or any right arising from the membership except as
92.35 	attendant to the valid transfer or assignment of the member's
92.36 	policy in any reorganized company that gave rise to the member's
93.1 	membership interest.  A member of a mutual insurance holding
93.2 	company is not, as a member, personally liable for the acts,
93.3 	debts, liabilities, or obligations of the company.  No
93.4 	assessments of any kind may be imposed upon the members of a
93.5 	mutual insurance holding company by the directors or members, or
93.6 	because of any liability of any company owned or controlled by
93.7 	the mutual insurance holding company or because of any act,
93.8 	debt, or liability of the mutual insurance holding company.  A
93.9 	member's interest in the mutual insurance holding company shall
93.10 	automatically terminate upon cancellation, nonrenewal,
93.11 	expiration, or termination of the member's policy in any
93.12 	insurance company that gave rise to the member's membership
93.13 	interest.

93.14 	Sec. 2. Minnesota Statutes 2004, section 82.23, is amended
93.15 	to read:
93.16 	82.23 EXCEPTIONS.
93.17 	Unless a person is licensed or otherwise required to be
93.18 	licensed under this chapter, the term real estate broker does
93.19 	not include:
93.20 	(a) a licensed practicing attorney if the attorney complies
93.21 	in all respects with the trust account provisions of this
93.22 	chapter;
93.23 	(b) a receiver, trustee, administrator, guardian, executor,
93.24 	or other person appointed by or acting under the judgment or
93.25 	order of any court;
93.26 	(c) any person owning and operating a cemetery and selling
93.27 	lots therein solely for use as burial plots;
93.28 	(d) any custodian, janitor, or employee of the owner or
93.29 	manager of a residential building who leases residential units
93.30 	in the building;
93.31 	(e) any bank, trust company, savings association,
93.32 	industrial loan and thrift company, regulated lender under
93.33 	chapter 56, public utility, or land mortgage or farm loan
93.34 	association organized under the laws of this state or the United
93.35 	States, when engaged in the transaction of business within the
93.36 	scope of its corporate powers as provided by law;
94.1 	(f) public officers while performing their official duties;
94.2 	(g) employees of persons enumerated in clauses (b), (e),
94.3 	and (f), when engaged in the specific performance of their
94.4 	duties;
94.5 	(h) any person who acts as an auctioneer bonded in
94.6 	conformity with section 330.02, when that person is engaged in
94.7 	the specific performance of duties as an auctioneer, and when
94.8 	that person has been employed to auction real estate by a person
94.9 	licensed under this chapter or when the auctioneer has engaged a
94.10 	licensed attorney to supervise the real estate transaction;
94.11 	(i) any person who acquires real estate for the purpose of
94.12 	engaging in and does engage in, or who is engaged in the
94.13 	business of constructing residential, commercial or industrial
94.14 	buildings for the purpose of resale if no more than 25 such
94.15 	transactions occur in any 12-month period and the person
94.16 	complies with section 82.50;
94.17 	(j) any person who is licensed as a securities
94.18 	broker-dealer or is licensed as a securities agent representing
94.19 	a broker-dealer pursuant to chapter 80A and who offers to sell
94.20 	or sells an interest or estate in real estate which is a
94.21 	security as defined in section 80A.14, subdivision 18 
94.22 	80A.41(28), and is registered or exempt from registration or
94.23 	part of a transaction exempt from registration pursuant to
94.24 	chapter 80A, when acting solely as an incident to the sale of
94.25 	these securities;
94.26 	(k) any person who offers to sell or sells a business
94.27 	opportunity which is a franchise registered pursuant to chapter
94.28 	80C, when acting solely to sell the franchise;
94.29 	(l) any person who contracts with or solicits on behalf of
94.30 	a provider a contract with a resident or prospective resident to
94.31 	provide continuing care in a facility, pursuant to the
94.32 	Continuing Care Facility Disclosure and Rehabilitation Act
94.33 	(chapter 80D), when acting solely as incident to the contract;
94.34 	(m) any broker-dealer or agent of a broker-dealer when
94.35 	participating in a transaction in which all or part of a
94.36 	business opportunity or business, including any interest
95.1 	therein, is conveyed or acquired pursuant to an asset purchase,
95.2 	merger, exchange of securities, or other business combination,
95.3 	if the agent or broker-dealer is licensed pursuant to chapter
95.4 	80A;
95.5 	(n) an accountant acting incident to the practice of the
95.6 	accounting profession if the accountant complies in all respects
95.7 	with the trust account provisions of this chapter.

95.8 	Sec. 3. Minnesota Statutes 2004, section 82.43,
95.9 	subdivision 7, is amended to read:
95.10 		Subd. 7.Application for recovery.  When any aggrieved
95.11 	person obtains a final judgment in any court of competent
95.12 	jurisdiction regardless of whether the judgment has been
95.13 	discharged by a bankruptcy court against an individual licensed
95.14 	under this chapter, on grounds of fraudulent, deceptive, or
95.15 	dishonest practices, or conversion of trust funds arising
95.16 	directly out of any transaction when the judgment debtor was
95.17 	licensed and performed acts for which a license is required
95.18 	under this chapter, or performed acts permitted by section
95.19 	327B.04, subdivision 5, the aggrieved person may, upon the
95.20 	judgment becoming final, and upon termination of all
95.21 	proceedings, including reviews and appeals, file a verified
95.22 	application in the court in which the judgment was entered.  The
95.23 	application shall state with specificity the grounds upon which
95.24 	the application seeks to recover from the fund, and request an
95.25 	order directing payment out of the fund of the amount of actual
95.26 	and direct out of pocket loss in the transaction, but excluding
95.27 	any attorney's fees, interest on the loss and on any judgment
95.28 	obtained as a result of the loss, up to the sum of $150,000 of
95.29 	the amount unpaid upon the judgment, provided that nothing in
95.30 	this chapter shall be construed to obligate the fund for more
95.31 	than $150,000 per claimant, per transaction, subject to the
95.32 	limitations set forth in subdivision 14, regardless of the
95.33 	number of persons aggrieved or parcels of real estate involved
95.34 	in the transaction, provided that regardless of the number of
95.35 	claims against a licensee, nothing in this chapter may obligate
95.36 	the fund for more than $250,000 per licensee.  An aggrieved
96.1 	person who has a cause of action under section 80A.23 80A.76 
96.2 	shall first seek recovery as provided in section 80A.05,
96.3 	subdivision 5 80A.66(e), before the commissioner may order
96.4 	payment from the recovery fund.  For purposes of this section,
96.5 	persons who are joint tenants or tenants in common are deemed to
96.6 	be a single claimant.  A copy of the verified application shall
96.7 	be served upon the commissioner and upon the judgment debtor,
96.8 	and a certificate or affidavit of service filed with the court.
96.9 	For the purpose of this section, "aggrieved person" does not
96.10 	include a government agency, financial institution, or other
96.11 	entity that purchases, guarantees, or insures a loan secured by
96.12 	real estate, and does not include a licensee unless (1) the
96.13 	licensee is acting in the capacity of principal in the sale of
96.14 	interests in real property owned by the licensee; or (2) the
96.15 	licensee is acting in the capacity of principal in the purchase
96.16 	of interests in real property to be owned by the licensee.
96.17 	Under no circumstances shall a licensee be entitled to payment
96.18 	under this section for the loss of a commission or similar fee.
96.19 	For the purposes of this section, recovery is limited to
96.20 	transactions where the property involved is intended for the
96.21 	direct personal habitation or commercial use of the buyer.
96.22 	Except for securities permitted to be sold by a licensee
96.23 	pursuant to section 82.41, subdivision 8, for any action
96.24 	commenced after July 1, 1993, recovery under this section is not
96.25 	available where the buyer's participation is for investment
96.26 	purposes only, and is limited to providing capital to fund the
96.27 	transaction.

96.28 	Sec. 4. Minnesota Statutes 2004, section 144A.01,
96.29 	subdivision 4, is amended to read:
96.30 		Subd. 4.Controlling person.  "Controlling person" means
96.31 	any public body, governmental agency, business entity, officer,
96.32 	nursing home administrator, or director whose responsibilities
96.33 	include the direction of the management or policies of a nursing
96.34 	home.  "Controlling person" also means any person who, directly
96.35 	or indirectly, beneficially owns any interest in:
96.36 	(a) Any corporation, partnership or other business
97.1 	association which is a controlling person;
97.2 	(b) The land on which a nursing home is located;
97.3 	(c) The structure in which a nursing home is located;
97.4 	(d) Any mortgage, contract for deed, or other obligation
97.5 	secured in whole or part by the land or structure comprising a
97.6 	nursing home; or
97.7 	(e) Any lease or sublease of the land, structure, or
97.8 	facilities comprising a nursing home.
97.9 	"Controlling person" does not include:
97.10 	(a) A bank, savings bank, trust company, savings
97.11 	association, credit union, industrial loan and thrift company,
97.12 	investment banking firm, or insurance company unless the entity
97.13 	directly or through a subsidiary operates a nursing home;
97.14 	(b) An individual state official or state employee, or a
97.15 	member or employee of the governing body of a political
97.16 	subdivision of the state which operates one or more nursing
97.17 	homes, unless the individual is also an officer or director of a
97.18 	nursing home, receives any remuneration from a nursing home, or
97.19 	owns any of the beneficial interests not excluded in this
97.20 	subdivision;
97.21 	(c) A natural person who is a member of a tax-exempt
97.22 	organization under section 290.05, subdivision 1, clause (i),
97.23 	unless the individual is also an officer or director of a
97.24 	nursing home, or owns any of the beneficial interests not
97.25 	excluded in this subdivision; and
97.26 	(d) A natural person who owns less than five percent of the
97.27 	outstanding common shares of a corporation:
97.28 	(1) whose securities are exempt by virtue of section
97.29 	80A.15, subdivision 1, clause (f) 80A.45(6); or
97.30 	(2) whose transactions are exempt by virtue of section
97.31 	80A.15, subdivision 2, clause (b) 80A.46(7).

97.32 	Sec. 5. Minnesota Statutes 2004, section 245A.02,
97.33 	subdivision 5a, is amended to read:
97.34 		Subd. 5a.Controlling individual.  "Controlling
97.35 	individual" means a public body, governmental agency, business
97.36 	entity, officer, owner, or managerial official whose
98.1 	responsibilities include the direction of the management or
98.2 	policies of a program.  For purposes of this subdivision, owner
98.3 	means an individual who has direct or indirect ownership
98.4 	interest in a corporation, partnership, or other business
98.5 	association issued a license under this chapter.  For purposes
98.6 	of this subdivision, managerial official means those individuals
98.7 	who have the decision-making authority related to the operation
98.8 	of the program, and the responsibility for the ongoing
98.9 	management of or direction of the policies, services, or
98.10 	employees of the program.  Controlling individual does not
98.11 	include:
98.12 	(1) a bank, savings bank, trust company, savings
98.13 	association, credit union, industrial loan and thrift company,
98.14 	investment banking firm, or insurance company unless the entity
98.15 	operates a program directly or through a subsidiary;
98.16 	(2) an individual who is a state or federal official, or
98.17 	state or federal employee, or a member or employee of the
98.18 	governing body of a political subdivision of the state or
98.19 	federal government that operates one or more programs, unless
98.20 	the individual is also an officer, owner, or managerial official
98.21 	of the program, receives remuneration from the program, or owns
98.22 	any of the beneficial interests not excluded in this
98.23 	subdivision;
98.24 	(3) an individual who owns less than five percent of the
98.25 	outstanding common shares of a corporation:
98.26 	(i) whose securities are exempt under section 80A.15,
98.27 	subdivision 1, clause (f) 80A.45(6); or
98.28 	(ii) whose transactions are exempt under section 80A.15,
98.29 	subdivision 2, clause (b) 80A.46(2); or
98.30 	(4) an individual who is a member of an organization exempt
98.31 	from taxation under section 290.05, unless the individual is
98.32 	also an officer, owner, or managerial official of the program or
98.33 	owns any of the beneficial interests not excluded in this
98.34 	subdivision.  This clause does not exclude from the definition
98.35 	of controlling individual an organization that is exempt from
98.36 	taxation.

99.1 	Sec. 6. Minnesota Statutes 2004, section 302A.011,
99.2 	subdivision 26, is amended to read:
99.3 		Subd. 26.Security.  "Security" has the meaning given it
99.4 	in section 80A.14, subdivision 18 80A.41(28).

99.5 	Sec. 7. Minnesota Statutes 2004, section 302A.251,
99.6 	subdivision 4, is amended to read:
99.7 		Subd. 4.Elimination or limitation of liability.  A
99.8 	director's personal liability to the corporation or its
99.9 	shareholders for monetary damages for breach of fiduciary duty
99.10 	as a director may be eliminated or limited in the articles.  The
99.11 	articles shall not eliminate or limit the liability of a
99.12 	director:
99.13 	(a) for any breach of the director's duty of loyalty to the
99.14 	corporation or its shareholders;
99.15 	(b) for acts or omissions not in good faith or that involve
99.16 	intentional misconduct or a knowing violation of law;
99.17 	(c) under section 302A.559 or 80A.23 80A.76;
99.18 	(d) for any transaction from which the director derived an
99.19 	improper personal benefit; or
99.20 	(e) for any act or omission occurring prior to the date
99.21 	when the provision in the articles eliminating or limiting
99.22 	liability becomes effective.

99.23 	Sec. 8. Minnesota Statutes 2004, section 308A.505, is
99.24 	amended to read:
99.25 	308A.505 SUBJECT TO SECURITIES LAW.
99.26 	Cooperatives are subject to the provisions of chapter 80A,
99.27 	except as specifically provided in section 80A.15sections
99.28 	80A.45 and 80A.46.

99.29 	Sec. 9. Minnesota Statutes 2004, section 308B.465,
99.30 	subdivision 2, is amended to read:
99.31 		Subd. 2.Restrictions on liability limitation.  The
99.32 	articles or bylaws may not eliminate or limit the liability of a
99.33 	director:
99.34 	(1) for a breach of the director's duty of loyalty to the
99.35 	cooperative or its members;
99.36 	(2) for acts or omissions that are not in good faith or
100.1 	involve intentional misconduct or a knowing violation of law;
100.2 	(3) for knowing violations of securities laws under section
100.3 	80A.23 or for illegal distributions;
100.4 	(4) for a transaction from which the director derived an
100.5 	improper personal benefit; or
100.6 	(5) for an act or omission occurring before the date when
100.7 	the provision in the articles or bylaws eliminating or limiting
100.8 	liability becomes effective.

100.9 	Sec. 10. Minnesota Statutes 2004, section 322B.03,
100.10 	subdivision 43, is amended to read:
100.11 		Subd. 43.Security.  "Security" has the meaning given it
100.12 	in section 80A.14, subdivision 18 80A.41(28).

100.13 	Sec. 11. Minnesota Statutes 2004, section 322B.663,
100.14 	subdivision 4, is amended to read:
100.15 		Subd. 4.Elimination or limitation of liability.  A
100.16 	governor's personal liability to the limited liability company
100.17 	or its members for monetary damages for breach of fiduciary duty
100.18 	as a governor may be eliminated or limited in the articles of
100.19 	organization or a member control agreement.  Neither the
100.20 	articles nor a member control agreement may eliminate or limit
100.21 	the liability of a governor:
100.22 	(1) for any breach of the governor's duty of loyalty to the
100.23 	limited liability company or its members;
100.24 	(2) for acts or omissions not in good faith or that involve
100.25 	intentional misconduct or a knowing violation of law;
100.26 	(3) under section 80A.23 80A.76 or 322B.56;
100.27 	(4) for any transaction from which the governor derived an
100.28 	improper personal benefit; or
100.29 	(5) for any act or omission occurring before the date when
100.30 	the provision in the articles of organization or a member
100.31 	control agreement eliminating or limiting liability becomes
100.32 	effective.

100.33 	Sec. 12. Minnesota Statutes 2004, section 356A.06,
100.34 	subdivision 6, is amended to read:
100.35 		Subd. 6.Limited list of authorized investment
100.36 	securities.  (a) Except to the extent otherwise authorized by
101.1 	law, a covered pension plan may invest its assets only in
101.2 	investment securities authorized by this subdivision if the plan
101.3 	does not:
101.4 	(1) have assets with a book value in excess of $1,000,000;
101.5 	(2) use the services of an investment advisor registered
101.6 	with the Securities and Exchange Commission in accordance with
101.7 	the Investment Advisers Act of 1940, or licensed registered as
101.8 	an investment advisor in accordance with sections 80A.04,
101.9 	subdivision 4 80A.58, and 80A.14, subdivision 9 80A.59, for the
101.10 	investment of at least 60 percent of its assets, calculated on
101.11 	book value;
101.12 	(3) use the services of the State Board of Investment for
101.13 	the investment of at least 60 percent of its assets, calculated
101.14 	on book value; or
101.15 	(4) use a combination of the services of an investment
101.16 	advisor meeting the requirements of clause (2) and the services
101.17 	of the State Board of Investment for the investment of at least
101.18 	75 percent of its assets, calculated on book value.
101.19 	(b) Investment securities authorized for a pension plan
101.20 	covered by this subdivision are:
101.21 	(1) certificates of deposit issued, to the extent of
101.22 	available insurance or collateralization, by a financial
101.23 	institution that is a member of the Federal Deposit Insurance
101.24 	Corporation or the Federal Savings and Loan Insurance
101.25 	Corporation, is insured by the National Credit Union
101.26 	Administration, or is authorized to do business in this state
101.27 	and has deposited with the chief administrative officer of the
101.28 	plan a sufficient amount of marketable securities as collateral
101.29 	in accordance with section 118A.03;
101.30 	(2) savings accounts, to the extent of available insurance,
101.31 	with a financial institution that is a member of the Federal
101.32 	Deposit Insurance Corporation or the Federal Savings and Loan
101.33 	Insurance Corporation;
101.34 	(3) governmental obligations, including bonds, notes,
101.35 	bills, or other fixed obligations, issued by the United States,
101.36 	an agency or instrumentality of the United States, an
102.1 	organization established and regulated by an act of Congress or
102.2 	by a state, state agency or instrumentality, municipality, or
102.3 	other governmental or political subdivision that:
102.4 	(i) for the obligation in question, issues an obligation
102.5 	that equals or exceeds the stated investment yield of debt
102.6 	securities not exempt from federal income taxation and of
102.7 	comparable quality;
102.8 	(ii) for an obligation that is a revenue bond, has been
102.9 	completely self-supporting for the last five years; and
102.10 	(iii) for an obligation other than a revenue bond, has
102.11 	issued an obligation backed by the full faith and credit of the
102.12 	applicable taxing jurisdiction and has not been in default on
102.13 	the payment of principal or interest on the obligation in
102.14 	question or any other nonrevenue bond obligation during the
102.15 	preceding ten years;
102.16 	(4) corporate obligations, including bonds, notes,
102.17 	debentures, or other regularly issued and readily marketable
102.18 	evidences of indebtedness issued by a corporation organized
102.19 	under the laws of any state that during the preceding five years
102.20 	has had on average annual net pretax earnings at least 50
102.21 	percent greater than the annual interest charges and principal
102.22 	payments on the total issued debt of the corporation during that
102.23 	period and that, for the obligation in question, has issued an
102.24 	obligation rated in one of the top three quality categories by
102.25 	Moody's Investors Service, Incorporated, or Standard and Poor's
102.26 	Corporation; and
102.27 	(5) shares in an open-end investment company registered
102.28 	under the federal Investment Company Act of 1940, if the
102.29 	portfolio investments of the company are limited to investments
102.30 	that meet the requirements of clauses (1) to (4).