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ENGROSSED SENATE
BILL NO. 1361 By: Hall of the Senate
and
Moore of the House
An Act relating to securities; amending 17 O.S. 2021,
Section 188, which relates to appl icability of
Securities title; upda ting statutory reference;
amending 18 O.S. 2021, Section 437.27, which relates
to Securities act exemption; updating stat utory
reference; amending 36 O.S. 2021, Sections 6034,
6035, and 6061, which relate to sale and trans fer of
securities and separate account s; updating statutory
references; amending 71 O.S. 2021, Sections 1-102 and
1-103, which relate to general provisions of the
Oklahoma Uniform Securities Act of 2004; modifying
definitions; updating and adding statutory
references; amending 71 O.S. 2021, Se ctions 1-201, 1-
202, 1-203, and 1-204, which relate to exemptions
from registration of securities; modifying
requirements for certain exemptions; updating
statutory references; amending 71 O.S. 2021, Sections
1-301, 1-302, 1-303, 1-304, 1-305, 1-306, 1-307, and
1-308, which relate to re gistration of securities and
notice of filing of federal covered securities;
requiring certain notice filing; specifying
requirements for certain no tice filing; updating
statutory references; amending 71 O.S. 2021, Section
1-402, 1-403, 1-404, 1-405, 1-406, 1-407, 1-408, 1-
409, 1-410, and 1-411, which relate to broker-
dealers, agents, investment advisers, investment
adviser representatives, and federa l covered
investment advisers; modifying exception to certain
exemption; modifying time period for person to
request certain hearing; updating statutory
references; amending 71 O.S. 2021, S ections 1-504, 1-
508, 1-509, and 1-510, which relate to fraud and
liabilities; updating statutory references; amending
71 O.S. 2021, Sections 1-601, 1-604, 1-605, 1-606, 1-
607, 1-608, 1-610, and 1-612, which relate to
administration and judicial review; adding exception
to certain disclosure requirement; removing ex emption
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from certain service; establishing procedures for
certain hearing requ est; providing for
confidentiality of certain records; adding fee for
certain late notice filing; updating statutory
references; amending 71 O.S. 2021, Section s 803, 807,
809, 811, 814, 824, 825, 826, and 828, which relate
to the Oklahoma Business Opportunity Sales Act;
modifying requirements for certain offers or sales;
modifying filing requirements for certain
registration; authorizing court to issue certain
orders in actions for certain violations; updating
statutory references; amending 85 O.S. 2021, Sectio n
398, which relates to group sel f-insurers; updating
statutory reference; amending 85A O.S. 2021, Section
102, which relates to workers’ compensation self-
insurance; updating statutory reference; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLA HOMA:
SECTION 1. AMENDATORY 17 O.S. 2021, Section 188, is
amended to read as follows:
Section 188. Securities issued by public utilities, as defined
in this act, shall not be subject to any of the provisions of Title
71, O.S.1941, of the Oklahoma Statutes relating to the Oklahoma
Securities Commission.
SECTION 2. AMENDATORY 18 O.S. 2021, Section 437.27, is
amended to read as follo ws:
Section 437.27. The provisions of the Securities Act, Article
23 of Chapter 24, Oklahoma Statutes 1931, Oklahoma Uniform
Securities Act of 2004, as amended, shall not apply to any note,
bond or other evidence of indebtedness issued by any cooperative or
foreign corporation transacting business in this state pursuant to
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this act, to the United States of America or any agency or
instrumentality thereof, or to any mortgage or deed of trust
executed to secure the same. The provisions of said Securities Act
shall not apply to the issuance of member ship certificates by any
cooperative or any such foreign corporation.
SECTION 3. AMENDATORY 36 O.S. 2021, Section 6034, is
amended to read as follows:
Section 6034. After the effective date of this act, no equity
securities issued by any domestic life insurance company, under any
incentive, bonus, “stock option” or similar plan, and no rights to
acquire any such equity securities shall, within a period of two
years after the date of o riginal allotment by the issuer thereof be
sold, or be transferred for value, or be exchanged, for a
consideration exceeding one hundred fi fteen per cent (115%) of the
net proceeds received by the issuer thereof for such securities or
rights at the time of allotment, provided, however, that the
limitations in this Section set forth sh all not be applicable to any
such securities or rights orig inally issued or allotted at a price
or value equal to the market price of such securities or rights on
the date of issue or allotment, or to any such securities or rights
allotted or issued by the issurer issuer thereof for eighty-five per
cent (85%) or more of the price or value at which such securities or
rights were offered by such issuer to the public on the date of
allotment or issue thereof, whichever is the g reater, or to any such
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securities or rights which were deposited and held in escrow for at
least two years from date of issue or allotment in compliance with a
rule promulgated or an order issued by the Administrator , Oklahoma
Securities Commission, under the Oklahoma Securities Act, Titl e 71,
O.S.1961 Oklahoma Uniform Securi ties Act of 2004. It shall be
unlawful for any person to sell, tran sfer or exchange any such
equity securities in contravention of this section.
SECTION 4. AMENDATORY 36 O.S. 2021, Section 60 35, is
amended to read as follows:
Section 6035. This act shall be administered a nd enforced by
the Insurance Commissioner. The term “insurer” when used in this
act means any domestic life insura nce company during the fir st two
years of its existence and the provisions hereof are applicable to
any such insurer and to any person, firm or corporation that holds,
sells or deals in equity securities or options therefor of any
domestic life insurance c ompany during the first tw o years of
existence or prior the reto. Provided, however, the provisions of
this act shall not apply after a perio d of two years subsequent to
the latest registration for public offering under the Oklahoma
Securities Act Oklahoma Uniform Securities Act of 2004. The term
“equity securities” when used herein includes options therefo r.
This act applies to domestic life insurance companies during the
first two years of existence and to every person, firm or
corporation that holds, se lls, or deals in equity s ecurities, or
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options therefor, of any domestic life insurance company during the
first two years of the existence o f a domestic life insurance
company or prior thereto or which engages in the formation,
organization or promotion o f a domestic life insuran ce company.
SECTION 5. AMENDATORY 36 O.S. 2021, Section 6061, is
amended to read as follows:
Section 6061. A. Any domestic life insurance company may
establish one or more separate accounts, and m ay allocate to such
separate account or accounts any amounts incl uding without
limitation proceeds applied under optional modes of settlement or
under dividend options to provide for life insurance or annuities
and benefits incidental thereto, payable in f ixed or in variable
dollar amounts, or in both, subject to the fo llowing:
1. Except as hereinafter provided, the amounts allocated to
each such account and accumulations thereon may be invested and
reinvested without r egard to any requirements or limitati ons
prescribed by the laws of th is state governing the investment s of
life insurance companies; provided, that to the extent that the
company’s reserve liability with regard to a. benefits guaranteed
as to amounts and duration, and b. funds guaranteed as to principal
amount or stated rate of interest is maintained in any separate
account, a portion of the assets of such separate account at least
equal to such reserve liability shall be, except as the Commissioner
may otherwise approve, invested in accorda nce with the laws of this
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state governing the investments of life insurance companies. The
investments in such separate account or accounts shall not be taken
into account in applying the investment limitations applica ble to
other investments of the compa ny.
2. With respect to seventy -five percent (75%) of the market
value of the total assets in a separate account no company shall
purchase or otherwise acquire the securities of any issuer, other
than securities issued or guaranteed as to principal or inte rest by
the United States, if im mediately after such purchase or acquisition
the market value of such investment, together with prior investments
of such separate account in such security taken at market value,
would exceed ten percent (10%) of the market value of the assets of
said separate account; provided, however, that the Commissioner may
waive such limitations if, in his opinion, such waiver will not
render the operation of such separate account hazardous to the
public or the policyholders in this st ate.
3. No separate account sha ll invest in the voting securitie s of
a single issuer if such investment would result in the company
owning an amount in excess of ten percent (10%) of the total issued
and outstanding voting securities of such issuer; provi ded, that the
foregoing shall not apply with respect to securitie s held in
separate accounts, the voting rights in which are exercisable only
in accordance with instructions from persons having interest in such
accounts.
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4. The limitations provided in sub sections 2. and 3. above
shall not apply to the investment with r espect to a separate account
in the securities of an investment company registered under the
Investment Company Act of 1940, provided that the investments of
such investment company comply in substance with subsections 2. a nd
3. hereof.
5. The income, if any, and gains and losses, realized or
unrealized, from assets allocated to each account shall be credited
to or charged against the account in accordance with the applicable
contract without regard to other income, gains o r losses of the
company.
6. Assets allocated to a separate account shall be valued at
their market value on the date of valuation, or if there is no
readily available market, then in acc ordance with the applicable
contract or the rules or other written ag reement applicable to such
separate account; provided, the portion of the assets of such
separate account at least equal to the company ’s reserve liability
with regard to the guaranteed b enefits and funds referred to in
subsection 1. hereof, if any, shall be valued in accordance with the
rules otherwise applicable to the company ’s assets. The reserve
liability for variable contracts shall be determined in accordance
with actuarial procedu res that recognize the variable natur e of the
benefits provided and a ny mortality guarantees.
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7. If, and to the extent, so provided under the applicable
contracts, that portion of the assets of any such separate account
equal to the reserves, and other co ntract liabilities with respect
to such account, shall not be chargea ble with liabilities arising
out of any other business the company may conduct.
8. The life insurance company shall have the power and the
company’s charter shall be deemed amended to au thorize such company
to do all things necessary under any applicable state or federal law
in order that variable contracts may be lawfully sold or offered for
sale including, without limitation, a. with respect to any separate
account registered with the Securities and Exchange Commission as a
unit investment trust exercis e voting rights in connection wit h any
securities of a regulated investment company registered under the
Investment Company Act of 1940 and held in such separate accounts in
accordance with instructions from persons having i nterests in such
accounts ratably as determined by the company, o r b. with respect
to any separate account registered with the Securities and Exchange
Commission as a management investment company, establish for such
account a committee, board, or other b ody, the members of which may
or may not be otherwise affiliated with such company and may be
elected to such membership by the vote of persons having interests
in such account ratably as determined by the company. Suc h
committee, board or other body may have the power, exercisable alon e
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or in conjunction with others, to manage such separate account and
the investment of its assets.
B. Any contract providing benefits payable in variable amounts
delivered or issued for delivery in this state shall contain a
statement of the essential fea tures of the procedure to be foll owed
by the company in determining the dollar amount of such variable
benefits. Any such contract under which the benefits vary to
reflect investment exp erience, including a group contract a nd any
certificate issued thereu nder shall state that such dollar amount
may decrease or increase and shall contain on its first page a
statement that the benefits thereunder are on a variable basis.
C. No domestic life insurance company, and no other lif e
insurance company admitted to transact business in this state, shall
be authorized to deliver within this state any variable contract
providing benefits in variable amounts until said company has
satisfied the Insuran ce Commissioner that its condition or methods
of operation in connect ion with the issuance of such con tracts will
not render its operation hazardous to the public or its
policyholders in this state. In determining the qualification of a
company requesting authority to deliver such contracts within this
state, the Insurance Commissioner shall consider, amo ng other
things:
1. The history and financial condition of the company;
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2. The character, responsibility and general fitness of the
officers and directo rs of the company; and
3. In the case of a company other than a dome stic company,
whether the statutes and regulations of the jurisdiction of its
incorporation, or state of entry in the case of an alien company,
provide a degree of protection to policyhol ders and the public which
is substantially equal to that provided by this section and the
rules and regulations issued thereunder.
An authorized life insurance company, whether domestic, foreign
or alien, which issues variable contracts and which is a subs idiary
of (or affiliated through comm on management or ownership with)
another life insurance company a uthorized to do business in this
state may be deemed to have met the provisions of this subsection if
either it or the parent or affiliated company meets the requirements
hereof.
D. The Insurance Commissioner shall have th e sole and exclusive
authority to regulate the issuance and sale of such contracts and to
issue such reasonable rules and regulations as may be necessary to
carry out the purposes and pro visions of this section; and such
contracts, the companies which issu e them and the agents or other
persons who sell them shall not be subject to the Oklahoma
Securities Act Oklahoma Uniform Securities A ct of 2004 nor to the
jurisdiction of the Oklahoma Securities Commission thereunder.
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SECTION 6. AMENDATORY 71 O.S. 2021, Section 1-102, is
amended to read as follows:
Section 1-102. In this act, unless the context otherwise
requires:
1. “Administrator” means the securities Administrator appointed
by the Oklahoma Securities Commission;
2. “Agent” means an individual, other than a broker-dealer, who
represents a broker-dealer in effecting or attempting to effect
purchases or sales of securities or represents an issuer in
effecting or attempting to effect purchases or sales of the issuer’s
securities. A partner, officer, or director of a broker-dealer or
issuer, or an individual having a similar status or performing
similar functions is an agent only if the individual otherwise comes
within the term. The term does not include an individual excluded
by rule adopted or order issued un der this act;
3. “Bank” means:
a. a banking institution organized under the laws of the
United States,
b. a member bank of the Federal Reserve System ,
c. any other banking institution, whether inco rporated or
not, doing business under the laws of a state or of
the United States, a substantial portion of the
business of which consists of receiving deposits or
exercising fiduciary powers similar to those permitted
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to be exercised by national banks und er the authority
of the Comptroller of the Currency pursuant to Section
1 of Public Law 87-722 (12 U.S.C. Section 92a), and
which is supervised and examined by a state or federal
agency having supervision over banks, and which is not
operated for the purpo se of evading this act , and
d. a receiver, conservator, or other liquidating agent of
any institution or firm included in subparagraph a, b
or c of this paragraph;
4. “Broker-dealer” means a person engaged in the business of
effecting transactions in secu rities for the account of others or
for the person’s own account. The term does not include:
a. an agent,
b. an issuer,
c. a bank or savings institution if its activities as a
broker-dealer are limited to those specified in
subsections 3(a)(4)(B)(i) throu gh (vi), (viii) through
(x), and (xi) if limited to unsoli cited transactions;
3(a)(5)(B); and 3(a)(5)(C) of the Securities Exchange
Act of 1934 (15 U.S.C . Sections 78c(a)(4) and (5)) or
a bank that satisfies the conditions described in
subsection 3(a)(4)(E ) of the Securities Excha nge Act
of 1934 (15 U.S.C. Section 78c(a)(4)),
d. an international banking institution , or
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e. a person excluded by rule adopted or order issued
under this act;
5. “Commission” means the Oklahoma Securities Commission;
6. “Department” means the Oklahoma D epartment of Securities;
7. “Depository institution” means:
a. a bank, or
b. a savings institution, trust company, credit union, or
similar institution that is organized or chartered
under the laws of a state or of the United Stat es,
authorized to receive deposits, and supervised and
examined by an official or agency of a state or the
United States if its deposits or share accounts are
insured to the maximum amount authorized by statute by
the Federal Deposit Insurance Corporation, the
National Credit Unio n Share Insurance Fund, or a
successor authorized by federal law. The term does
not include:
(1) an insurance company or other organization
primarily engaged in the business of insurance ,
(2) a Morris Plan bank, or
(3) an industrial loan company that is not an insured
depository institution as defined in Section
3(c)(2) of the Federal Deposit Insurance Act (12
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U.S.C. Section 1813(c)(2)) or any successor
federal statute;
8. “Federal covered investment adviser ” means a person
registered under the Investment Advisers Act of 1940 ;
9. “Federal covered security” means a security that is, or upon
completion of a transaction will be, a covered security under
Section 18(b) of the Securities Act of 1933 (15 U.S.C . Section
77r(b)) or rules or regulations adopted pursuant to that provision ;
10. “Filing” means the receipt under this act of a record by
the Administrator or a designee of the Administrator ;
11. “Fraud,” “deceit,” and “defraud” are not limited to common
law deceit;
12. “Guaranteed” means guaranteed as to payment of all
principal and all interest;
13. “Institutional investor ” means any of the following,
whether acting for itself or for others in a fiduciary capacity:
a. a depository institution or international banking
institution,
b. an insurance company,
c. a separate account of an in surance company,
d. an investment company as defined in the Investment
Company Act of 1940,
e. a broker-dealer registered under the Securities
Exchange Act of 1934 ,
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f. an employee pension, pr ofit-sharing, or benefit plan
if the plan has total assets in exc ess of Ten Million
Dollars ($10,000,000.00) or its investment decisions
are made by a named fiduciary, as defined in the
Employee Retirement Income Security Act of 1974, that
is a broker-dealer registered under the Securities
Exchange Act of 1934, an inves tment adviser registered
or exempt from registration under the Investment
Advisers Act of 1940, an investment adviser registered
under this act, a depository institution, or an
insurance company,
g. a plan established and maintained by a state, a
political subdivision of a state, or an agency or
instrumentality of a state or a political subdivision
of a state for the benefit of its employees, if the
plan has total assets in excess of Ten Million Dollars
($10,000,000.00) or its investment decisions are made
by a duly designated public official or by a named
fiduciary, as defined in the Employee Retirement
Income Security Act of 1974, that is a broker -dealer
registered under the Securities Exchan ge Act of 1934,
an investment adviser registered or exempt from
registration under the Investment Advisers Act of
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1940, an investment adviser registered under this act,
a depository institution, or an insurance company ,
h. a trust, if it has total assets i n excess of Ten
Million Dollars ($10,000,000.00), its trustee is a
depository institution, and its participants are
exclusively plans of the types identified in
subparagraph f or g of this paragraph, regardless of
the size of their assets, except a trust t hat includes
as participants self-directed individual retirement
accounts or similar self-directed plans,
i. an organization described in Section 501(c)(3) of the
Internal Revenue Code (26 U.S.C . Section 501(c)(3)),
corporation, Massachusetts trust or simi lar business
trust, limited liability company, or partnership, no t
formed for the specific purpose of acquiring the
securities offered, with total assets in excess of Ten
Million Dollars ($10,000,000.00),
j. a small business investment company licensed by the
Small Business Administration under Section 301(c) of
the Small Business Investment Act of 1958 (15 U.S.C .
Section 681(c)) with total assets in excess of Ten
Million Dollars ($10,000,000.00),
k. a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of
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1940 (15 U.S.C. Section 80b-2(a)(22)) with total
assets in excess of Ten Million Dollars
($10,000,000.00),
l. a federal covered investment adviser acting for its
own account,
m. a “qualified institutional bu yer” as defined in Rule
144A(a)(1), other than Rule 144A(a)(1) (i)(H), adopted
under the Securities Act of 1933 (17 C.F.R . 230.144A),
n. a “major U.S. institutional investor ” as defined in
Rule 15a-6(b)(4)(i) adopted under the Securities
Exchange Act of 1934 (17 C.F.R. 240.15a-6),
o. any other person, other than an indiv idual, of
institutional character with total assets in excess of
Ten Million Dollars ( $10,000,000.00) not organized for
the specific purpose of evading this act, or
p. any other person specif ied by rule adopted or order
issued under this act;
14. “Insurance company” means a company organized as an insurer
whose primary business is writing insurance or reinsuring risks
underwritten by insurance companies and that are subject to
supervision by the insurance commissioner or a similar official or
agency of a state;
15. “Insured” means insured as to payment of all principal and
all interest;
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16. “International banking institution ” means an international
financial institution of which the United S tates is a member and
whose securities are exempt from registrati on under the Securities
Act of 1933;
17. “Investment adviser” means a person that, for compensation,
engages in the business of advising others, either directly or
through publications or wr itings, as to the value of securities or
the advisability of inve sting in, purchasing, or selling securities
or that, for compensation and as a part of a regular business,
issues or promulgates analyses or reports concerning securities.
The term includes a financial planner or other person that, as an
integral component of other financially related services, provides
investment advice to others for compensation as part of a business
or that holds itself out as providing investment advice to others
for compensation. The term does not include:
a. an investment adviser re presentative,
b. a lawyer, accountant, engineer, or teacher whose
performance of investment advice is solely incidental
to the practice of the person ’s profession,
c. a broker-dealer or its agents whose performance of
investment advice is solely incidental to the conduct
of business as a broker -dealer and that does not
receive special compensation for the investment
advice,
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d. a publisher of a bona fide newspaper, news magazine,
or business or financial publication of general and
regular circulation,
e. a depository bank or savings institution, or
f. any other person excluded by the Inv estment Advisers
Act of 1940 from the definition of investment adviser;
or
g. any other person excluded by rule adopt ed or order
issued under this act;
18. “Investment adviser representative” means an individual
employed by or associated w ith an investment adviser or federal
covered investment adviser and who makes any recommendations or
otherwise gives investment advic e regarding securities, m anages
accounts or portfolios of clients, determines which recommendation
or advice regarding secu rities should be given, provides investment
advice or holds herself or himself out as providing investment
advice, receives compensat ion to solicit, offer, or negotiate for
the sale of or for selling investment advice, or supervises
employees who perform a ny of the foregoing. The term does not
include an individual who:
a. performs only clerical or ministerial acts ,
b. is an agent whose performance of investme nt advice is
solely incidental to the individual acting as an agent
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and who does not receive speci al compensation for
investment advisory services , or
c. is excluded by rule adopted or order issued under this
act;
19. “Issuer” means a person that issues o r proposes to issue a
security, subject to the following:
a. the issuer of a voting trust certific ate, collateral
trust certificate, certificate of deposit for a
security, or share in an investment company without a
board of directors or individuals perfor ming similar
functions is the per son performing the acts and
assuming the duties of depositor or m anager pursuant
to the trust or other agreement or instrument under
which the security is issued ,
b. the issuer of an equipment trust certificate or
similar security serving the same purpose is the
person by which the property or equipment is or will
be used or to which the property or equipment is or
will be leased or conditionally sold or that is
otherwise contractually responsible fo r assuring
payment of the certificate,
c. the issuer of a fractional undivided interest in an
oil, gas, or other mineral le ase or in payments out of
production under a lease, right, or royalty is the
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owner of an interest in the lease or in payments out
of production under a lease, right, or royalty,
whether whole or fractional, that creates fractional
interests for the purpose of sale;
20. “Nonissuer transaction ” or “nonissuer distribution ” means a
transaction or distribution not directly or indirectly for the
benefit of the issue r;
21. “Offer to purchase” includes an attempt or offer to obtain,
or solicitation of an offer to sell, a security or interest in a
security for value. The term does not include a tender offer that
is subject to Section 14(d) of the Securities Exchange A ct of 1934
(15 U.S.C. 78n(d));
22. “Person” means an individual; corporation; business trust;
estate; trust; partnership; limited liability company; association;
joint venture; government, governmental subdivision, agency, or
instrumentality; public corpo ration; or any other legal or
commercial entity;
23. “Place of business” of a broker-dealer, an investment
adviser, or a federal covered investment adviser means:
a. an office at which the broker -dealer, investment
adviser, or federal covered investment a dviser
regularly provides brokera ge or investment advice or
solicits, meets with, or otherwise com municates with
customers or clients , or
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b. any other location that is held out to the general
public as a location at which the broke r-dealer,
investment adviser, or federal covered investmen t
adviser provides brokerage or investment advice or
solicits, meets with, or otherwise communicates with
customers or clients ;
24. “Predecessor act” means the act repealed by Section 53 of
this act;
25. “Price amendment” means the amendment to a registr ation
statement filed under the Securities Act of 1933 or, if an amendment
is not filed, the prospectus or prospectus supplement filed under
the Securities Act of 1933 that includes a statement of t he offering
price, underwriting and selling discounts or c ommissions, amount of
proceeds, conversion rates, call prices, an d other matters dependent
upon the offering price ;
26. “Principal place of business ” of a broker-dealer or an
investment adviser mea ns the executive office o f the broker-dealer
or investment adviser from which the officers, partners, or managers
of the broker-dealer or investment adviser direct, control, and
coordinate the activities of the broker -dealer or investment
adviser;
27. “Promoter” includes:
a. a person who, acting alone or in conc ert with one or
more persons, takes the entrepreneurial initiativ e in
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founding or organizing the business or enterprise of
an issuer,
b. an officer or director owning securities of an issuer
or a person who owns, beneficial ly or of record, ten
percent (10%) or more of a class of securities of the
issuer if the officer, director, or person acquires
any of those securities in a transaction within three
(3) years before the filing by the issuer of a
registration statement under this act and the
transaction is not an arms-length transaction, or
c. a member of the immediate f amily of a person within
subparagraph a or b of this paragraph if the family
member receives securities of the issuer from that
person in a transaction within three (3) years before
the filing by the issuer of a registration statement
under this act and th e transaction is not an arms-
length transaction.
For purposes of this subsection, “immediate family” means a
spouse of a person withi n subparagraph a or b of this paragraph, an
emancipated child residing in such person’s household, or an
individual claimed as a dependent by such person for tax purposes ;
28. “Record” except in the phrases “of record,” “official
record,” and “public record,” means information th at is inscribed on
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a tangible medium or that is stored in an electronic or other medium
and is retrievable in perceivable form;
29. “Registration statement ” means the documentation provided
to the Securities and Exchange Commissio n or the Department in
connection with the registration of securities under the Securities
Act of 1933 or this title and in cludes any amendment thereto and any
report, document, exhibit or memorandum filed as part of such
statement or incorporated therein by reference;
30. “Sale” includes every contract of sale, contract to sell,
or disposition of, a security or interest in a security for value,
and “offer to sell” includes every attempt or offer to dispose of,
or solicitation of an offer to purchase, a se curity or interest in a
security for value. Both terms in clude:
a. a security given or delivered with, or as a bonus on
account of, a purchase of securities or any other
thing constituting part of the subject of the purchase
and having been offered and so ld for value,
b. a gift of assessable stock involving an o ffer and
sale, and
c. a sale or offer of a warrant or right to pu rchase or
subscribe to another security of the same or another
issuer and a sale or offer of a security that gives
the holder a present or future right or pri vilege to
convert the security in to another security of the same
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or another issuer, including an o ffer of the other
security;
31. “Securities and Exchange Commission ” means the United
States Securities and Exchange Commission ;
32. “Security” means a note; stock; treasury stock; security
future; bond; debenture; evidence of indebtedness; certificate o f
interest or participation in a profit -sharing agreement; collateral
trust certificate; preorganization certificate or subscription;
transferable share; inve stment contract; voting trust cer tificate;
certificate of deposit for a security; fractional undiv ided interest
in oil, gas, or other mineral rights; put, call, straddle, option,
or privilege on a security, certificate of deposit, or group or
index of securities, including an interest the rein or based on the
value thereof; put, call, straddle, option, or privilege entered
into on a national securities exchange relating to foreign currency;
or, in general, an interest or instrument c ommonly known as a
“security”; or a certificate of interes t or participation in,
temporary or interim certificate for, rece ipt for, guarantee of, or
warrant or right to subscribe to or purchase, any of the foregoing.
The term:
a. includes both a certifica ted and an uncertificated
security,
b. does not include an insurance or endowment policy or
annuity contract under which an insurance company
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promises to pay a sum of money either in a lump sum or
periodically for life or other specified period ,
c. does not include an interest in a contributory or
noncontributory pension or welfare plan subject to the
Employee Retirement Incom e Security Act of 1974,
d. includes as an “investment contract” an investment in
a common enterprise with the expectation of profits to
be derived primarily f rom the efforts of a person
other than the investor and a “common enterprise”
means an enterprise in which the fortunes of the
investor are interwoven with those of either the
person offering the investment, a third party, or
other investors,
e. includes as an “investment contract, ” among other
contracts, an interest in a limited partnership and a
third party managed limited liability company and an
investment in a viatical or life settlement or similar
contract or agreement ,
f. includes an investment of mo ney or money’s worth
including goods furnished or services performed in the
risk capital of a vent ure with the expectation of some
benefit to the investor where the investor has no
direct control over the investment or policy decis ion
of the venture, and
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g. does not include an interest in an oil, gas or mineral
lease as part of a transaction between pa rties, each
of whom is engaged in the business of exploring for or
producing oil and gas or other valuable minerals as an
ongoing business or the execution of oil and gas
leases by land, mine ral and royalty owners in favor of
a party or parties engaged in the business of
exploring for or producing oil and gas or other
valuable minerals;
33. “Self-regulatory organization ” means a national securities
exchange registered under the Securities Exc hange Act of 1934, a
national securities association of broker -dealers registered under
the Securities Exchange Act of 1934, a clearing agency registered
under the Securities Exchange Act of 1934, o r the Municipal
Securities Rulemaking Board established un der the Securities
Exchange Act of 1934 ;
34. “Sign” means, with present intent to authenticate or adopt
a record:
a. to execute or adopt a tangible symbol , or
b. to attach or logically associate wi th the record an
electronic symbol, sound, or process ;
35. “State” means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
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territory or insular possession subject to the jurisdiction of the
United States; and
36. “Underwriter” means any person who has purchased from an
issuer or from any other person with a view to, or offers or sells
for an issuer or for any other person in connection with, the
distribution of any security, or participates or ha s a direct or
indirect participation in any such undertaki ng, or participates or
has a participation in the direct or indir ect underwriting of any
such undertaking. “Underwriter” does not include a person whose
interest is limited to a commission from an underwriter or broker -
dealer not in excess of the usual an d customary distributor’s or
seller’s commission.
SECTION 7. AMENDATORY 71 O.S. 2021, Section 1 -103, is
amended to read as follows:
Section 1-103. “Securities Act of 1933 ” (15 U.S.C. Section 77a
et seq.), “Securities Exchange Act of 1934” (15 U.S.C. Section 78a
et seq.), “Public Utility Holding Company Act of 1935 ”(15 U.S.C.
Section 79 et seq.) “Public Utility Holding Company Act of 2005 ” (42
U.S.C. Section 16451 et seq.) , “Investment Company Act of 1940” (15
U.S.C. Section 80a-1 et seq.), “Investment Advisers Act of 1940 ” (15
U.S.C. Section 80b-1 et seq.), “Employee Retirement Income Security
Act of 1974” (29 U.S.C. Section 1001 et seq.), “National Housing
Act” (12 U.S.C. Section 1701 et seq.), “Commodity Exchange Act” (7
U.S.C. Section 1 et seq.), “Internal Revenue Code ” (26 U.S.C.
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Section 1 et seq.), “Securities Investor Protection Act of 1970 ” (15
U.S.C. Section 78aaa et seq.), “Securities Litigation Uniform
Standards Act of 1998” (112 Stat. 3227), “Small Business Investment
Act of 1958” (15 U.S.C. Section 661 et seq.), “Family Educational
Rights and Privacy Act ” (20 U.S.C. Section 1232g), and “Electronic
Signatures in Global and National C ommerce Act” (15 U.S.C. Section
7001 et seq.) mean those s tatutes and the rules and regulat ions
adopted under those statutes, as in effect on the date of enactment
of this act, or as later amended.
SECTION 8. AMENDATORY 71 O.S. 2021, Section 1 -201, is
amended to read as follows:
Section 1-201. The following securities are exempt from the
requirements of Sections 10 1-301 and 32 1-504 of this act title:
1. A security, including a revenue obligation or a separate
security as defined in Rule 131 (17 C.F.R . 230.131) adopted under
the Securities Act of 1933, issued, insured , or guaranteed by the
United States; by a state; by a political subdivision of a state; by
a public authority, agency, or instrumentality of one or more
states; by a political subdivision of one or more states; or by a
person controlled or supervised by a nd acting as an instrumentality
of the United States under authority granted by the Congress; or a
certificate of deposit for any of the foregoing; however,
notwithstanding the provisions of Section 106(c) of the Secondary
Mortgage Market Enhancement Act o f 1984, Public Law 98-440, any
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security that is offered and sold pursuant to Section 4(5) of the
Securities Act of 1933 or that is a mortgage related security as
that term is defined in Section 3(a) (41) of the Securities Exchange
Act of 1934 shall not be exempt from Sections 10 1-301 and 32 1-504
of this act title by virtue of such Secondary Mortgage Market
Enhancement Act but may be exempt based upon the availability of the
exemptions from registrat ion provided for in this section;
2. A security issued, insured, or guaranteed by a foreign
government with which the United States maintains diplomatic
relations, or any of its political subdivisions, if the security is
recognized as a valid obligation b y the issuer, insurer, or
guarantor;
3. A security issued by and representing or that will represent
an interest in or a direct obligation of, or be guaranteed by:
a. an international banking institution ,
b. a banking institution organized under the laws of the
United States; a member bank of the Federal Reserve
System; or a depository institution a substantial
portion of the business of which consists or will
consist of receiving deposits or share accounts that
are insured to the maximum amount authorized by
statute by the Federa l Deposit Insurance Corporation,
the National Credit Union Share Insurance Fund, or a
successor authorized by federal law or exercising
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fiduciary powers that are similar to those permitted
for national banks under the authority of the
Comptroller of the Currency pursuant to Section 1 of
Public Law 87-722 (12 U.S.C. Section 92a),
c. a trust company or other institution that is
authorized by federal or state law to exercise
fiduciary powers of the type a national bank is
permitted to exercise under the author ity of the
Comptroller of the Currency and is supervised and
examined by an official or agency of a state or the
United States, or
d. any other depository institution , unless by rule or
order issued by the Administrator pursuant to Section
1-204 of this title;
4. A security issued by and representing an interest in, or a
debt of, or insured or guaranteed by, an insurance company
authorized to transact insurance business in this state by the
Insurance Commissioner;
5. A security issued or guaranteed by a r ailroad, other common
carrier, public utility, or public utility holding company that is:
a. regulated in respect to its rates and charges by the
United States or a state ,
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b. regulated in respect to the issuance or guarantee of
the security by the United S tates, a state, Canada, or
a Canadian province or territory, or
c. a public utility holding company registere d under the
Public Utility Holding Company Act of 1935 2005 or a
subsidiary of such a registered holding company within
the meaning of that act;
6. A federal covered security spec ified in Section 18(b)(1) of
the Securities Act of 1933 (15 U.S.C . Section 77r(b)(1)) or by rule
adopted under that provision or a security listed or approved for
listing on another securities marke t specified by rule under this
act; a put or a call option contract, a warrant, or a subscription
right on or with respect to such sec urities; or an option or similar
derivative security on a security or an index of secu rities or
foreign currencies issued by a clearing agency regi stered under the
Securities Exchange Act of 1934 and listed or designated for trading
on a national securitie s exchange, a facility of a national
securities exchange, or a facility of a national securities
association registered un der the Securities Exchange Act of 1934 or
the underlying security in connection with the offer, sale, or
exercise of an option or oth er derivative security that was exempt
when the option or other derivative security wa s written or issued;
or an option or other derivative security designated by the
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Securities and Exchange Commission under Section 9(b) of the
Securities Exchange Act of 1 934 (15 U.S.C. Section 78i(b));
7. A security issued by a person organized and operat ed
exclusively for religious, educat ional, benevolent, frater nal,
charitable, social, athletic , or reformatory purposes, or as a
chamber of commerce, and not for pecuniar y profit, no part of the
net earnings of which inures to the benefit of a private stoc kholder
or other person, or a securi ty of a company that is e xcluded from
the definition of an investment company under Section 3(c)(10)(B) of
the Investment Company Act of 1940 (15 U.S.C. Section 80a-
3(c)(10)(B)); except that with respect to the offer or sale of a
note, bond, debenture, or other evidence of indebte dness issued by
such a person, a rule may be adopted under this act limiting the
availability of this exempti on by classifying securities, persons,
and transactions, imposing different requiremen ts for different
classes, specifying with respect to subparag raph b of this paragraph
the scope of the exemption, the requirement of an offering
statement, the filing of sales and advertising literature, the
filing of consent to service of process complyin g with Section 49 of
this act, and the grounds for denial or suspension, and requiring an
issuer:
a. to file a notice specifying the material terms of the
proposed offer or sale and copies of any proposed
sales and advertising literature to be used and
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providing that the exemption becomes ef fective if the
Administrator does not disallow the exempti on within
the period established by the rule ,
b. to file a request for exemp tion authorization for
which a rule under this title may specify the scope of
the exemption, the requirement of an offering
statement, the filing o f sales and advertising
literature, the filing of consent to service of
process in compliance with Section 1 -611 of this
title, and grounds for denial or suspe nsion of the
exemption, or
c. to register under Section 13 1-304 of this act title;
8. A member’s or owner’s interest in, or a retention
certificate or like security given in lieu of a cash patronage
dividend issued by, a cooperative organized and operated as a not
for profit membership co operative under the cooperative laws of a
state, but not a mem ber’s or owner’s interest, retention
certificate, or like security sold to persons other than bona fide
members of the cooperative; and
9. An equipment trust certificate with respect to equipme nt
leased or conditionally sold to a person, if any security i ssued by
the person would be exempt under this section or would be a federal
covered security under Section 1 8(b)(1) of the Securities Act of
1933 (15 U.S.C. Section 77r(b)(1)).
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SECTION 9. AMENDATORY 71 O.S. 2021, Section 1-202, is
amended to read as follows:
Section 1-202. The following transactions are exempt from the
requirements of Sections 1 -301 and 1-504 of the Oklahoma Uniform
Securities Act of 2004 this title:
1. An isolated nonissuer transaction, whether or not effected
by or through a broker-dealer;
2. A nonissuer transaction by or through a broker -dealer
registered, or exempt from registration under the Oklahoma Uniform
Securities Act of 2004, and a resale tr ansaction by a sponsor of a
unit investment trust registered under the Investment Company Act of
1940, in a security of a class that has been outstanding in the
hands of the public for at least ninety (90) days, if, at the date
of the transaction:
a. the issuer of the security is engaged in business, the
issuer is not in the organizational stage or in
bankruptcy or receivership, and the issuer is not a
blank check, blind pool, or shell company that has no
specific business plan or purpose or has indicated
that its primary business plan is to engage in a
merger or combination of the business with, or an
acquisition of, an unidentified person,
b. the security is sold at a price reasonably related to
its current market price,
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c. the security does not constitute the whole or part of
an unsold allotment to, or a subscripti on or
participation by, the broker-dealer as an underwriter
of the security or a redistribution, and
d. a nationally recognized securities manual or its
electronic equivalent designated by rule a dopted or
order issued under this ac t or a record filed with the
Securities and Exchange Commission that is publicly
available contains:
(1) a description of the business and operations of
the issuer,
(2) the names of the issuer ’s executive officers and
the names of the issuer ’s directors, if any,
(3) an audited balance sheet of the issuer as of a
date within eighteen (18) months before the date
of the transaction or, in the case of a
reorganization or merger when the parties to the
reorganization or merger each had an audited
balance sheet, a pro forma balance sheet for the
combined organization, and
(4) an audited income statement for each of the
issuer’s two (2) immediately previous fiscal
years or for the period of existence of the
issuer, whichever is s horter, or, in the case of
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a reorganization or merger when ea ch party to the
reorganization or merger had audited income
statements, a pro forma income statement, or
e. the issuer of the security has a class of equity
securities listed on a national securi ties exchange
registered under the S ecurities Exchange Act of 1934
or designated for trading on the National Association
of Securities Dealers Automated Quotation System,
unless the issuer of the security is a unit investment
trust registered under the Inv estment Company Act of
1940; or the issuer of the security, i ncluding its
predecessors, has been engaged in continuous business
for at least three (3) years; or the issuer of the
security has total assets of at least Two Million
Dollars ($2,000,000.00) bas ed on an audited balance
sheet as of a date within eighteen ( 18) months before
the date of the transaction or, in the case of a
reorganization or merger when the parties to the
reorganization or merger each had the audited balance
sheet, a pro forma balanc e sheet for the combined
organization;
3. A nonissuer transa ction by or through a broker-dealer
registered or exempt from registration under this act in a security
of a foreign issuer that is a margin security defined in regulations
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or rules adopted by th e Board of Governors of the Federal Reserve
System;
4. A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under the Oklahoma Uniform
Securities Act of 2004 in an outstanding security if the guarantor
of the security files reports with the Securities and Exchange
Commission under the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));
5. A nonissuer transaction by or through a broker -dealer
registered or exempt from registration under the Ok lahoma Uniform
Securities Act of 2004 in a security that:
a. is rated at the time of the transaction by a
nationally recognized statistical rating organization
in one of its four highest rating categories, or
b. has a fixed maturity or a fixed interest or dividend,
if:
(1) a default has not occurred during the current
fiscal year or within the three (3) previous
fiscal years or during the existence of the
issuer and any predecessor if less than three (3)
fiscal years, in the payment of principal,
interest, or dividends on the secur ity, and
(2) the issuer is engaged in business, is not in the
organizational stage or in bankruptcy or
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receivership, and is not and has not been within
the previous twelve (12) months a blank che ck,
blind pool, or shell company tha t has no specific
business plan or purpose or has indicated that
its primary business plan is to engage in a
merger or combination of the business with, or an
acquisition of, an unidentified person;
6. A nonissuer trans action by or through a broker -dealer
registered or exempt fro m registration under the Oklahoma Uniform
Securities Act of 2004 effecting an unsolicited order or offer to
purchase;
7. A nonissuer transaction executed by a bona fide pledgee
without the purpose of evading the Oklahoma Uniform S ecurities Act
of 2004;
8. A nonissuer transaction by a federal covered investment
adviser with investments under management in excess of One Hundred
Million Dollars ($100,000,000.00) acting in the exercise of
discretionary authority in a signed record for the account of
others;
9. A transaction in a security, whether or not the security or
transaction is otherwise exempt, in exchange for one or more bona
fide outstanding securities, claims, or property interests, or
partly in such exchange and partly for cash, if the terms and
conditions of the issuance and exchange or the delivery and exchange
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and the fairness of the terms and conditions have been approved by
the Administrator after a hearing;
10. A transaction between the issuer or other person on whose
behalf the offering is m ade and an underwriter, or among
underwriters;
11. A transaction in a note, bond, debenture, or other evidence
of indebtedness secured by a mortgage or other security agreement
if:
a. the note, bond, debenture, or other evidence o f
indebtedness is offered and sold with the mortgage or
other security agreement as a unit,
b. a general solicitation or general advertisement of the
transaction is not made, and
c. a commission or other remuneration is not paid or
given, directly or indir ectly, to a person not
registered under the Oklahoma Uniform Securities Act
of 2004 as a broker-dealer or as an agent;
12. A transaction by an executor, administrator of an estate,
sheriff, marshal, receiver, trustee in bankruptcy, guardian, or
conservator;
13. A sale or offer t o sell to:
a. an institutional investor,
b. a federal covered investment adviser, or
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c. any other person exempted by rule adopted or order
issued under the Oklahoma Uniform Securities Act of
2004;
14. A sale or an offer to sell se curities by an issuer, if the
transaction is part of a single issue in which:
a. not more than twenty -five purchasers during any twelve
(12) consecutive months, other than those designated
in paragraph 13 of this section ,
b. a general solicitation or gener al advertising is not
made in connection with the offer to sell or sale of
the securities,
c. a commission or other remuneration is not paid or
given, directly or indirectly, to a person other than
a broker-dealer registered under the Oklahoma Uniform
Securities Act of 2004 or an agent registered under
the Oklahoma Uniform Securities Act of 2004 for
soliciting a prospective purchaser in this state, and
d. the issuer reasonably believes that all the purchasers
in this state, other than those designated in
paragraph 13 of this sectio n, are purchasing for
investment;
15. A transaction under an offer to existing security holders
of the issuer, including persons that at the date of the transaction
are holders of convertible se curities, options, or warrants, if:
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a. no commission or other remuneration, other than a
standby commission, is paid or given, directly or
indirectly, for soliciting a security holder in this
state, or
b. the issuer first files a notice specifying the term s
of the offer and the Administrator , by order, does not
disallow the exemption within the next ten (10) full
business days;
16. A sale from or in this state to not more than thirty -two
persons of a unit consisting of interests in oil, gas or mining
titles or leases or any certificate of in terest or participation, or
conveyance in any form of an interest therein, or in payments out of
production pursuant to such titles or leases, whether or not offered
in conjunction with, or as an incident to, an operatin g agreement or
other contract to dri ll oil or gas wells or ot herwise exploit the
minerals on the particular leases, whether or not the seller or any
buyers are then present in this state, if:
a. the seller reasonably believes that all buyers are
purchasing for investment,
b. no commission is paid or given directly o r indirectly
for the solicitation of any such sale excluding any
commission paid or given by and between parties each
of whom is engaged in the business of exploring for or
producing oil and gas or other valuable minerals,
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c. no public advertising or publi c solicitation is used
in any such solicitation or sale, and
d. sales are effected only to persons the seller has
reasonable cause to believe are capable of evaluating
the risk of the prospective investment and able to
bear the economic risk of the investm ent; but the
Administrator, by rule or order, as to any specific
transaction, may withdraw or further condition this
exemption or decrease the number of sales permitted or
waive the conditions in subparagraphs a, b and c of
this paragraph, with or without substitution of a
limitation on remuneration.
For purposes of this subsection, no units of the issuer shall be
integrated; however, this exemption cannot be combined or used in
conjunction with any other transactional exemption.
17. An offer to sell, but not a sale, of a security not exempt
from registration under the Securities Act of 1933 if:
a. a registration or offering statement or similar record
as required under the Securities Act of 1933 has been
filed, but is not effective , or the offer is made in
compliance with Rule 165 adopted under the Securities
Act of 1933 (17 C.F.R. 230.165), and
b. no stop order of which the offeror is aware has been
issued against the offeror by the Administrator or the
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Securities and Exchange Comm ission, and an audit,
inspection, or proceeding that is public and that may
culminate in a stop order is not known by the offeror
to be pending;
18. An offer to sell, but not a sale, of a security exempt from
registration under the Securities Act of 1933 if:
a. a registration statement has been filed under this
act, but is not effective,
b. a solicitation of interest is provided in a record to
offerees in compliance with a rule adopted by the
Administrator under the Okla homa Uniform Securities
Act of 2004, and
c. a stop order of which the offeror is aware has not
been issued by the Administrator under the Oklahoma
Uniform Securities Act of 2004 and an audit,
inspection, or proceeding that may culminate in a stop
order is not known by the offeror to be pendi ng;
19. A transaction in volving the distribution of the securities
of an issuer to the security holders of another person in connection
with a merger, consolidation, exchange of securities, sale of
assets, or other reor ganization to which the issuer, or i ts parent
or subsidiary and the other person, or its parent or subsidiary, are
parties if:
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a. the securities to be distributed are registered under
the Securities Act of 1933 before the vote by security
holders on the transaction, or
b. the securities to be distributed are not req uired to
be registered under the Securities Act of 1933,
written notice of the transaction and a copy of the
materials, if any, by which approval of the
transaction will be solicited from such se curity
holders is given to the Admin istrator at least ten
(10) full business days before the vote by security
holders on the transaction and the Administrator does
not commence a proceeding to deny the exemption within
the next ten (10) full business days; however, such
notice shall not be r equired if the sole purpo se of
the transaction is to change an issuer’s domicile
solely within the United States;
20. A rescission offer, sale, or purchase under Section 38 1-
510 of the Oklahoma Uniform Securities Act of 2004 this title;
21. An offer or sale of a security throug h a broker-dealer
registered under the Oklahoma Uniform Securities Act of 2004 to a
person not a resident of this state and not present in this state if
the offer or sale does not constitute a violation of the la ws of the
state or foreign jurisdiction in w hich the offeree or purchaser is
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present and is not part of an unlawful plan or scheme to evade the
Oklahoma Uniform Securities Act of 2004;
22. Employees’ stock purchase, savings, option, profit -sharing,
pension, or similar employees’ benefit plan, including any
securities, plan interests, and guarantees issued under a
compensatory benefit plan or compensation contract, contained in a
record, established by the issuer, its parents, its majority -owned
subsidiaries, or the majority-owned subsidiaries of the issuer’s
parent for the participation of their employees including offers or
sales of such securities to:
a. directors; general partners; trustees, if the issuer
is a business trust; and officers; consultants; and
advisors,
b. family members who acquire such securities from those
persons through gifts or domestic relations orders,
c. former employees, directors, general partners,
trustees, and officers if those individuals were
employed by or providing services to the issuer when
the securities were offered, and
d. insurance agents who are exclusive insurance agents of
the issuer, or the issuer ’s subsidiaries or parents,
or who derive more than fifty percent (50%) of their
annual income from those organizations;
23. A transaction i nvolving:
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a. a stock dividend or equivalent equity distribution,
whether the corporation or other business organization
distributing the dividend or equivalent equity
distribution is the issuer or not, if nothing of value
is given by stockholders or other equity holders for
the dividend or equivalent equity distribution other
than the surrender of a right to a cash or property
dividend if each stockholder or other equity holder
may elect to take the dividend or equivalent equity
distribution in cash, proper ty, or stock,
b. an act incident to a judicially approved
reorganization in which a security is issued in
exchange for one or more outstanding securities,
claims, or property interests, or partly in such
exchange and partly for cash, or
c. the solicitation of tenders of securities by an
offeror in a tender offer in compliance with Rule 162
adopted under the Securities Act of 1933 (17 C.F.R.
230.162);
24. A nonissuer transaction in an outstanding security by or
through a broker-dealer registered or exempt f rom registration under
this act, if the issuer is a reporting issuer in a foreign
jurisdiction designated by this paragraph or by rule adopted or
order issued under the Oklahoma Uniform Securities Act of 2004; has
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been subject to continuous reporting requi rements in the foreign
jurisdiction for not less than one hundred eighty (180) days before
the transaction; and the security is listed on the foreign
jurisdiction’s securities exchange that has been designated by this
paragraph or by rule adopted or order issued under the Oklahoma
Uniform Securities Act of 2004, or is a security of the same issuer
that is of senior or substantially equal rank to the listed security
or is a warrant or right to purchase or subscribe to any of the
foregoing. For purposes of t his paragraph, Canada, together with
its provinces and territories, is a designated foreign jurisdiction
and The Toronto Stock Exchange, Inc., is a designated securities
exchange. After an administrative hearing in compliance with the
Administrative Proce dures Act, the Administrator, by rule adopted or
order issued under the Oklahoma Uniform Securities Act of 2004, may
revoke the designation of a securities exchange under this
paragraph, if the Administrator finds that revocation is necessary
or appropriate in the public interest and for the protection of
investors; or
25. A sale or offer to sell a security by an issuer if:
a. the issuer is a corporation or other business entity
residing in and doing business in this state and the
transaction meets the req uirements of the federal
exemption for intrastate offerings in Section 3(a)(11)
of the Securities Act of 1933, 15 U.S.C. 77c(a)(11)
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and Rule 147A adopted under the Securities Act of 1933
(17 C.F.R. 230.147A) and as such the securities shall
be sold only to persons who are residents of this
state at the time of purchase,
b. the sum of all cash and other consideration to be
received for the sale of securities in reliance on
this exemption shall be limited to Five Million
Dollars ($5,000,000.00),
c. the aggregate value of securities sold under this
exemption by an issuer to any one person does not
exceed Five Thousand Dollars ($5,000.00) unless the
purchaser is an accredited investor as that term is
defined by Rule 501 of Regulation D of the Securities
Act of 1933 (17 C.F.R. 230.501),
d. a commission or other renumeration is not paid or
given, directly or indirectly, to a person not
registered under the Oklahoma Uniform Securities Act
of 2004 as a broker-dealer or as an agent,
e. the issuer reasonably believes t hat all purchasers are
purchasing for investment and not for sale in
connection with a distribution of the security,
f. the issuer distributes to prospective purchasers a
disclosure document containing the information set
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forth by rule adopted under the Ok lahoma Uniform
Securities Act of 2004,
g. the issuer, at least ten (10) business days prior to a
sale, files a notice of exemption with the Department
accompanied by the disclosure document required by
paragraph f of this subsection, and the filing fee set
forth in the Oklahoma Uniform Securities Act of 2004,
pursuant to Section 1-612 of Title 71 of the Oklahoma
Statutes,
h. the issuer files with the Department, for as long as
the offering is continuing, quarterly and fiscal year -
end reports containing any changes to information that
has become inaccurate or incomplete in any material
respect including, but not limited to, the most recent
financial statements, and
i. the issuer holds funds received from sales made in
reliance on this exemption in an escrow a ccount
established in a bank or depository institution
authorized to do business in this state and subject to
regulation under the laws of the United States or
under the laws of this state until the aggregate funds
raised from all purchases is equal to or greater than
the minimum target offering amount specified in the
disclosure document. All funds shall be used in
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accordance with the representations made by the issuer
in the disclosure document required by subparagraph f
of this paragraph.
Notwithstanding the foregoing provisions of this subsection, an
issuer shall be prohibited from offering securities under this
subsection if the issuer or any of its principals or control
persons:
(1) within the last five (5) years has filed a
registration statement tha t is the subject of a
currently effective registration stop order
entered by any state securities administrator or
the Securities and Exchange Commission,
(2) within the last five (5) years has been convicted
of any criminal offense in connection with the
offer, purchase, or sale of any security or
involving fraud or deceit,
(3) is currently subject to any state or federal
administrative enforcement order or judgment
entered within the last five (5) years finding
fraud or deceit in connection with the purch ase
or sale of any security, or
(4) is currently subject to any order, judgment or
decree of any court of competent jurisdiction
entered within the last five (5) years
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temporarily, preliminarily or permanently
restraining or enjoining such party from engag ing
in or continuing to engage in any conduct or
practice involving fraud or deceit in connection
with the purchase or sale of any security.
Nothing in this subsection prohibits the use of general
solicitation or general advertising in connection with the exemption
under this subsection.
As to a particular offering, the Administrator may by rule or
order withdraw or further condition the exemption under this
subsection.
SECTION 10. AMENDATORY 71 O.S. 2021, Section 1 -203, is
amended to read as follows:
Section 1-203. A rule adopted or orde r issued under this act
may exempt a security, transaction, or offer; a r ule under this act
may exempt a class of securities, transactions, or offers from any
or all of the requirements of Sections 10 and 32 1-301 through 1-305
and 1-504 of this act title; and an order under this act may waive,
in whole or in part, any or all o f the conditions for an exem ption
or offer under Sections 6 1-201 and 7 1-202 of this act title.
SECTION 11. AMENDATORY 71 O. S. 2021, Section 1-204, is
amended to read as follows:
Section 1-204. A. Except with respect to a federal covered
security or a transaction involving a federal covered security, an
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order under this act m ay deny, suspend application of, condition,
limit, or revoke an exemption created un der subparagraph c or d of
paragraph 3 of Section 6 1-201 of this act title, or paragraph 7 or
8 of Section 6 1-201 of this act title or Section 7 1-202 of this
act title or an exemption or waiver c reated under Section 8 1-203 of
this act title with respect to a specific security, transaction, or
offer. An order under this section may be issued only pursuant to
the procedures in subsection D of Section 15 1-306 or Section 42 1-
604 of this act title and only prospectively.
B. A person does not violate Section 10, 32 1-301, 1-504 or 38
1-510 of this act title by an offer to sell, offer to purchase,
sale, or purchase effected after the entry of an order issued under
this section if the person did not k now, and in the exercise of
reasonable care could not have known, of the order.
SECTION 12. AMENDATORY 71 O.S. 2021, Section 1 -301, is
amended to read as follows:
Section 1-301. It is unlawful for a person t o offer or sell a
security in this state unless:
1. The security is a federal co vered security;
2. The security, transaction, or offer is exempt ed from
registration under Sect ions 6 1-201 through 8 1-203 of this act
title; or
3. The security is registered under this act title.
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SECTION 13. AMENDATORY 71 O.S. 2021, Section 1-302, is
amended to read as follows:
Section 1-302. A. With respect to a federal covered security,
as defined in Section 18(b)(2) of the Securities Act of 1933, (15
U.S.C. Section 77r(b)(2)), that is not otherwise exempt under
Sections 1-201 through 1-203 of this title, the issuer shall file a
notice with the Administrator pr ior to an offer in this state. A
separate notice shall be filed for each class of an issuer ’s
securities offered in this state. Each notice shall be for an
indefinite amount of securities. A notice, or renewal thereof,
shall be accompanied by the filing fee set forth in Section 1 -612 of
this title. The Administrator may, by rule or order, prescribe
notice filing and renewal requirements, and the requirements for
filing of reports of the dollar amount of securities sold or offered
to be sold to persons l ocated in this state.
B. A notice filing under subsection A of this section is
effective for one (1) year com mencing on the later of the notice
filing or the effective ness of the offering filed with the
Securities and Exchange Commission. On or before ex piration, the
issuer may renew a notice filing by filing a copy of those records
filed by the issuer with the Securities and Exchange Commission that
are required by rule or order under this act to be filed and by
paying a renewal fee as provided in Sectio n 1-612 of this title. A
previously filed consent to service of process complying with
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Section 1-611 of this title may be incorporated by reference in a
renewal. A renewed notice filing becomes effective upon the
expiration of the filing being renewed.
C. 1. With respect to a security that is a federal covered
security under Section 18(b)(4)(E) 18(b)(4)(F) of the Securities Act
of 1933, (15 U.S.C. Section 77r(b)(4)(E) 77r(b)(4)(F)), a rule under
this act may require a notice filing by or on behalf of an issuer as
allowed by applicable federal law is required and shal l be
accompanied by the payment of the fee se t forth in Section 1-612 of
this title. The Administrator shall designate the content and
timing of the notice filing by rule .
2. With respect to a security that is a federal covered
security under Section 18(b)(3) or Section 18(b)(4)(D)(ii) of the
Securities Act of 1933, (15 U.S.C. Sections 77r(b)(3) and Section
77r(b)(4)(D)(ii)), a rule under this act may require a notice filing
by or on behalf of an issuer as allowed by applicable federal law is
required and shall be accompanied by the payment of the fee set
forth in Section 1-612 of this title. The Administ rator shall
designate the content and timing of the notice filing by rule .
D. Except with respect to a federal covered security under
Section 18(b)(1) of the Securities Act of 193 3, (15 U.S.C. Section
77r(b)(1)), if the Administrator finds that there is a failure to
comply with a notice or fee requirement of this section, the
Administrator may issue a stop order suspending the offer and sale
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of a federal covered security in this stat e. If the deficiency is
corrected, the stop order is void as of the time of its issuance and
no penalty may be imposed by the Administrator.
SECTION 14. AMENDATORY 71 O.S. 2021, Section 1 -303, is
amended to read as follows:
Section 1-303. A. A security for which a registration
statement has been filed under the Securities Act of 1933 in
connection with the same offering may be registered by coordination
under this section.
B. A registration statement under this section must contain or
be accompanied by the following records in addition to the
information specified in Section 14 1-305 of this act title and a
consent to service of p rocess complying wit h Section 49 1-611 of
this act title:
1. A copy of the latest form of prospectus filed under th e
Securities Act of 1933;
2. A copy of the articles of inc orporation and bylaws or their
substantial equivalents currently in effect; a copy of any agreement
with or among underwriters; a copy of any indenture or other
instrument governing the issuance of the security to be registered;
and a specimen, copy, or de scription of the security that is
required by rule ado pted or order issued under this act;
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3. Copies of any other information or any other records filed
by the issuer under the Securities Act of 1 933 requested by the
Administrator; and
4. An undertaking to forward each amendment to the federal
prospectus, other than an amendment that delays the effective date
of the registration statement, promptly after it is fi led with the
Securities and Exchang e Commission and in any event not later than
the first business day after the day the amendment is forwarded to
or filed with the Securities and Exchange Commission, whiche ver
first occurs.
C. A registration statement un der this section becomes
effective simultaneously with or subsequent to the federal
registration statement when all the following conditions are
satisfied:
1. A stop order under subsection D of this section or Section
15 1-306 of this act title or issued by the Secur ities and Exchange
Commission is not in effect and a proceeding is not pending aga inst
the issuer under Section 15 1-306 of this act title; and
2. The registration statement has been on file for at least
twenty (20) days or a shorter period provided by rule adopted o r
order issued under this act.
D. The registrant shall promptly notif y the Administrator in a
record of the date when the f ederal registration statement becomes
effective and the content of any price amendm ent and shall promptly
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file a record containing t he price amendment. If the notice is not
timely received, the Adminis trator may issue a stop order, without
prior notice or hearing, retroactively denying effectiveness to the
registration statement or susp ending its effectiveness until
compliance with this section. The Administrator shall promptly
notify the registrant of the order by telegram, telephone, or
electronic means and promptly confirm this notice by a record. If
the registrant subsequently comp lies with the notice requirements of
this section, the stop order is void as of the date of its issuance.
E. If the federal registration statement becomes effective
before each of the conditions in this section is satisfied or is
waived by the Administrat or, the registration statement is
automatically effective under this act when all the conditions are
satisfied or waived. If the registrant notifies the Administrator
of the date when the federal registration statement is expected to
become effective, the Administrator shall promptly notify the
registrant by telegram, telephone, or electronic means and promptly
confirm this notice by a record, indicating whether all the
conditions are satisfied or waived and whether the Administrator
intends the institutio n of a proceeding under Section 15 1-306 of
this act title. The notice by the Administrator does not preclude
the institution of such a proceeding.
SECTION 15. AMENDATORY 71 O.S. 2021 , Section 1-304, is
amended to read as follows:
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Section 1-304. A. A security may be registered by
qualification under this section.
B. A registration statement und er this section must contain the
information or records specified in Section 14 1-305 of this act
title, a consent to service of process complying with Section 49 1-
611 of this act title, and the following information or records:
1. With respect to the is suer and any significant subsidiary,
its name, address, and form of organization; the state or foreign
jurisdiction and dat e of its organization; the general character and
location of its business; a description of its physical properties
and equipment; and a statement of the general competitive conditions
in the industry or business in which it is or will be engaged;
2. With respect to each director and officer of the issuer, and
other person having a similar status or performing similar
functions, the person’s name, address, and principal occupation for
the previous five (5) years; the amount of securities of the issuer
held by the person as of the 30th day before the filing of the
registration statement; the amount of the securities covered by the
registration statement to which the person has indicated an
intention to subscribe; and a description of any material interest
of the person in any material transaction with the issuer or a
significant subsidiary effected within the previous three (3) years
or proposed to be effected;
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3. With respect to persons covered by paragraph 2 of this
subsection, the aggregate sum of the rem uneration paid to those
persons during the previous twelve (12) months and estimated to be
paid during the next twelve (12) months, directly or indirectly, by
the issuer, and all predecessors, parents, subsidiaries, and
affiliates of the issuer;
4. With respect to a person owning of record or owning
beneficially, if known, ten percent (10%) or more of the outstanding
shares of any class of equity security of the issuer, the
information or recor ds specified in paragraph 2 of this subsection
other than the person’s occupation;
5. With respect to a promoter, if the issuer was orga nized
within the previous three (3) years, the information or records
specified in paragraph 2 of this subsection, any amount paid to the
promoter within that period or intended to b e paid to the promoter,
and the consideration for the payment;
6. With respect to a person on whose behalf any part of the
offering is to be made in a nonissuer distribution, the person ’s
name and address; the amount of securities of the issuer held by th e
person as of the date of the filing of the registration statement; a
description of any material interest of the person in any mate rial
transaction with the issuer or any significant subsidia ry effected
within the previous three (3) years or proposed to be effected; and
a statement of the reasons for making the offering;
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7. The capitalization and long term debt, on both a current and
pro forma basis, of the issuer and any significant subsidia ry,
including a description of each security outstanding or bei ng
registered or otherwise offered, and a statement of the amount and
kind of consideration, whether in the form of cash, physical as sets,
services, patents, goodwill, or anything else of value , for which
the issuer or any subsidiary has issued its securit ies within the
previous two (2) years or is obligated to issue its securit ies;
8. The kind and amount of securities to be offered; t he
proposed offering price or the method by which it is to b e computed;
any variation at which a proportion of the offering is to be made to
a person or class of persons other than the underwriters , with a
specification of the person or class; the basis on which the
offering is to be made if otherwise than for cash ; the estimated
aggregate underwriting and selling discounts or commissions and
finders’ fees, including separately cash, securities, con tracts, or
anything else of value to accrue to the underwri ters or finders in
connection with the offering or, if the s elling discounts or
commissions are variable, the basis of dete rmining them and their
maximum and minimum amounts; the estimated amounts of other selling
expenses, including legal, engineering, an d accounting charges; the
name and address of each underwrit er and each recipient of a
finder’s fee; a copy of any underwri ting or selling group agreement
under which the distribution is to be made or the proposed form of
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any such agreement whose terms hav e not yet been determined; and a
description of the plan of distribution of any securities that are
to be offered otherwise than through an underwriter;
9. The estimated monetary proceeds to be re ceived by the issuer
from the offering; the purposes for wh ich the proceeds are to be
used by the issuer; the estimated amount to be used for each
purpose; the order or priority in w hich the proceeds will be used
for the purposes stated; the amounts of any funds to be raised from
other sources to achieve the purpo ses stated; the sources of the
funds; and, if a part of the proceeds is to be used to acquire
property, including goodwill, otherwise than in the ordinary course
of business, the names and addresse s of the vendors, the purchase
price, the names of any pers ons that have received commissions in
connection with the ac quisition, and the amounts of the commissions
and other expenses in connection with the acquisition, including the
cost of borrowing mone y to finance the acquisition;
10. A description of any sto ck options or other security
options outstanding, or to be c reated in connection with the
offering, and the amount of those options held or to be held by each
person required to be named in paragra ph 2, 4, 5, 6 or 8 of this
subsection and by any person tha t holds or will hold ten percent
(10%) or more in the aggreg ate of those options;
11. The dates of, parties to, and genera l effect concisely
stated of each managerial or other material contract ma de or to be
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made otherwise than in the ordinary course of b usiness to be
performed in whole or in part at or after the filing of the
registration statement or that was made within th e previous two (2)
years, and a copy of the contract;
12. A description of any pending litigation, action, or
proceeding to which th e issuer is a party and that materially
affects its business or assets, and any litigation, action, or
proceeding known to be contemplated by governmental authorities;
13. A copy of any prospectus , pamphlet, circular, form letter,
advertisement, or other sales literature intended as of the
effective date to be use d in connection with the offering and any
solicitation of inter est used in compliance with subparagraph b of
paragraph 18 of Section 7 1-202 of this act title;
14. A specimen or copy of the secur ity being registered, unless
the security is uncertificated; a copy of t he issuer’s articles of
incorporation and bylaws or their subst antial equivalents, in
effect; and a copy of any indenture or other instrument covering the
security to be registered;
15. A signed or conformed copy of an opinion of counsel
concerning the legality of the security being registered, with an
English translation if it is in a language other than English, which
states whether the security when sold will be validly issued, full y
paid, and nonassessable and, if a debt security, a binding
obligation of the issuer;
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16. A signed or conformed copy of a consent of any accountant,
engineer, appraiser, or other person whose pro fession gives
authority for a statement made by the person, if the person is named
as having prepared or certified a report or valu ation, other than an
official record, that is public, which is used in connection with
the registration statement;
17. A balance sheet of the issuer as of a date within four (4)
months before the filing of the registration statement; a statement
of income and changes in financial position for each of the three
(3) fiscal years preceding the date of the balance sheet and for any
period between the close of the immediately previous fisca l year and
the date of the balance sheet, or for the period of the issue r’s and
any predecessor’s existence if less than three (3) years; and, if
any part of the proceeds of the offering is to be a pplied to the
purchase of a business, the financial stateme nts that would be
required if that business were the registrant; and
18. Any additional information or records required by rule
adopted or order issued under this act.
C. A registration statement under this section becomes
effective thirty (30) days, or any shorter period provided by rule
adopted or order issued under this a ct, after the date the
registration statement or the last amend ment other than a price
amendment is filed, if:
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1. A stop order is not in effect and a proceeding is not
pending under Section 15 1-306 of this act title;
2. The Administrator has not issued an order und er Section 15
1-306 of this act title postponing effectiveness; and
3. The applicant or registrant has not reque sted that
effectiveness be delayed.
D. The Administrator may delay effectiveness once for not more
than ninety (90) days if the Administrator determines t he
registration statement is not complete in all material respe cts and
promptly notifies the applican t or registrant of that determination.
The Administrator may also delay effectiveness for a further period
of not more than thirty (30) days if the Admini strator determines
that the delay is necessary or appropriate.
E. A rule adopted or order issued und er this act may require as
a condition of registration unde r this section that a prospectus
containing a specified part of the information or record specif ied
in subsection B of this section be sent or given to each pe rson to
which an offer is made, before or concurrently, with the earliest
of:
1. The first offer made in a record to the person otherwise
than by means of a public advertisement, by or for the account of
the issuer or another person on whose behalf the of fering is being
made or by an underwri ter or broker-dealer that is offering part of
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an unsold allotment or subscription taken by the person as a
participant in the distribution;
2. The confirmation of a sale made by or for the account of the
person;
3. Payment pursuant to such a sale; or
4. Delivery of the security pursuant to such a sale.
SECTION 16. AMENDATORY 71 O.S. 2021, Section 1 -305, is
amended to read as follows:
Section 1-305. A. A registration statement may be filed by the
issuer, a person on whose behalf the offering is to be made, or a
broker-dealer registered under this act.
B. A person filing a registration statement shall pay the
filing fee set forth in Secti on 50 1-612 of this act title. If a
registration statement is withdrawn before the effective date or a
preeffective stop order is issued under Section 15 1-306 of this act
title, the Administrator shall retain the fee.
C. A registration statement filed u nder Section 12 or 13 1-303
and 1-304 of this act title must specify:
1. The amount of securities to be offered in this state;
2. The states in which a registration statement or similar
record in connection with the offering has been or is to be filed;
and
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3. Any adverse order, judgment, or decree issued in connection
with the offering by a sta te securities regulator, the Securities
and Exchange Commission, or a court.
D. A record filed under this a ct or the predecessor act within
five (5) years preceding the filing of a regi stration statement may
be incorporated by reference in the registratio n statement to the
extent that the record is currently accu rate.
E. In the case of a nonissuer distribution , information or a
record may not be required under sub section I of this section or
Section 13 1-304 of this act title, unless it is known to the p erson
filing the registration statement or to the person on whose behalf
the distribution is to be made or unless it can be furnished by
those persons without unre asonable effort or expense.
F. A rule adopted or order issued under this act may require as
a condition of registration that a security issued within th e
previous five (5) years or to be issued to a promoter for a
consideration substantially less than the public offering price or
to a person for a consideration other than cash be deposited in
escrow; and that the proceeds from the sale of the registered
security in this state be impounded until the issuer receives a
specified amount from the sale of the se curity either in this state
or elsewhere. The conditions of any escrow or impoundment requir ed
under this subsection may be established by rule adopted or order
issued under this act, but the Administrator may no t reject a
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depository institution solely be cause of its location in another
state.
G. A rule adopted or order issued under this act may require as
a condition of registration that a security regi stered under this
act be sold only on a specified form of su bscription or sale
contract and that a sign ed or conformed copy of each contra ct be
filed under this act or preserved for a period speci fied by the rule
or order, which may not be longer than five (5) years.
H. Except while a stop order is in effect under Section 15 1-
306 of this act title, a registration statement is effective for one
year after its effective date, or for any longer peri od designated
in an order under this act during which the se curity is being
offered or distributed in a nonexempted transaction by o r for the
account of the issuer or other person on whose behalf the offering
is being made or by an underwriter or broker -dealer that is still
offering part of an unsold allotment or s ubscription taken as a
participant in the distribution. For the purpose s of a nonissuer
transaction, all outstanding securities of the same class ide ntified
in the registration statement as a sec urity registered under this
act are considered to be registe red while the registration statement
is effective. If any securities of the same class are outstanding ,
a registration statement may not be withdrawn until one year after
its effective date. A r egistration statement may be withdrawn only
with the approval of the Administrator.
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I. While a registration statement is effective, the person that
filed the registration statement shall file reports, not more often
than quarterly, to keep the information or other record in the
registration statement reasonably cu rrent and to disclose the
progress of the offering.
J. A registration statement may be amended after i ts effective
date. The posteffective amendment becomes effective when the
Administrator so orders. If a posteffective amendment is made to
increase the number of securities specified to be offered or sold,
the person filing the amendment shall pay a regi stration fee as
provided in Section 50 1-612 of this act title. A posteffective
amendment relates back to the date of the offering of the additional
securities being registered if, within one year after the date of
the sale, the amendme nt is filed and the additional registration fee
is paid.
K. The records of an issuer registered or required to be
registered under this act are subject to such reasonable periodic,
special, or other audits or inspections by a representative of the
Administrator, within or without this state, as the Administrator
considers necessary or appropriate in the public inte rest and for
the protection of investors. An audit or inspe ction may be made at
any time and without prior notice. The Administrator may copy, and
remove for audit or inspection copies of, all records the
Administrator reasonably considers necessary or a ppropriate to
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conduct the audit or inspection. The Administ rator may assess a
reasonable charge for conducting an audit or inspection under thi s
subsection.
SECTION 17. AMENDATORY 71 O.S. 2021, Section 1 -306, is
amended to read as follows:
Section 1-306. A. The Administrator may issue a stop order
denying effectiveness to, or suspending or revoking the
effectiveness of, a registration statement if the Administrator
finds that the order is in the public interest and that:
1. The registration statement as of its effective date or
before the effective date in the case of an order denying
effectiveness, an amendment under subsection J of Section 14 1-305
of this act title as of its effective date, or a report under
subsection I of Section 14 1-305 of this act title, is incomplete in
a material respect or contains a statement that, in the light of the
circumstances under which it was made, was false or misleading with
respect to a material fact;
2. This act or a rule adopted or order issued under this act or
a condition imposed under this act has been willfully violated, in
connection with the offering, by the person filing the registration
statement; by the issuer, a partner, officer, or direct or of the
issuer or a person having a sim ilar status or performing a similar
function, a promoter of the issuer, or a person directly or
indirectly controlling or controlled by the issuer, but only if the
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person filing the registration statement is directl y or indirectly
controlled by or acting f or the issuer; or by an underwriter;
3. The security registered or sought to be registered is the
subject of a permanent or temporary injunction of a court of
competent jurisdiction or an administrative stop order or similar
order issued under any federal , foreign, or state law other than
this act applicable to th e offering, but the Administrator may not
institute a proceeding against an effective registration statement
under this paragraph more than one year after the date of the order
or injunction on which it is based, and the Administrator may not
issue an order under this paragraph on the basis of an order or
injunction issued under the securities act of another state unless
the order or injunction was based on conduct that would constitute,
as of the date of the order, a ground for a stop order under this
section;
4. The issuer’s enterprise or method of business includes or
would include activities that are unlawful where performed;
5. With respect to a securi ty sought to be registered under
Section 12 1-303 of this act title, there has been a failure to
comply with the undertaking required by paragraph 4 of subsection B
of Section 12 1-303 of this act title;
6. The applicant or registrant has not paid the filing fee, but
the Administrator shall void the order if the deficiency is
corrected; or
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7. The offering:
a. will work or tend to work a fraud upon purchasers or
would so operate, or
b. has been or would be made or is being made with
unreasonable amounts of underwriters ’ and sellers’
discounts, commissions, or other compensation;
promoters’ profits or participation; or unreasonable
amounts or kinds of options, profits, compensation, or
remuneration paid directly or indirectly to any
officer, director, employee, contractor or agent.
B. To the extent practicable, the Administrator by rule adopted
or order issued under this act shall publish standards that provide
notice of conduct that violates paragraph 7 of subsection A of this
section.
C. The Administrator may not institute a sto p order proceeding
against an effective registration statement on the basis of conduct
or a transaction known to the Administrator when the registration
statement became effective unless the proceeding is instituted
within thirty (30) days after the regist ration statement became
effective.
D. The Administrator may summarily revoke, deny, postpone, or
suspend the effectiveness of a registration statement pending final
determination of an administrative proceeding. Upon the issuance of
the order, the Admini strator shall promptly notify each person
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specified in subsection E of this section that the order has been
issued, the reasons for the revocation, denial, postponement, or
suspension, and that within fifteen (15) days after the receipt of a
request in a record from the person the matter will be scheduled for
a hearing and such hearing shall be commenced within fifteen (15)
days of the matter being set for hearing. If a hearing is not
requested and none is ordered by the Administrator, within thirty
(30) days after the date of service of the order, the order becomes
final. If a hearing is requested or ordered, the Administrator,
after notice of and opportunity for hearing for each person subject
to the order, may modify or vacate the order or extend the or der
until final determination.
E. Unless the right to notice and hearing is waived, a stop
order may not be issued under this section without:
1. Appropriate notice to the applicant or registrant, the
issuer, and the person on whose behalf the securities are to be or
have been offered;
2. An opportunity for hearing; and
3. Findings of fact and conclusions of law in a record in
accordance with the Administrative Procedures Act.
F. The Administrator may modify or vacate a stop order issued
under this section if the Administrator finds that the conditions
that caused its issuance have changed or that it is necessary or
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appropriate in the public interest or for the protection of
investors.
SECTION 18. AMENDATORY 71 O.S. 2021, Section 1-307, is
amended to read as follows:
Section 1-307. The Administrator may waive or modify, in whole
or in part, any or all of the requirements of Sections 11, 12, 1-
302, 1-303, and subsection B of Section 13 1-304 of this act title
or the requirement of any information or record in a registration
statement or in a periodic repo rt filed pursuant to subsection I of
Section 14 1-305 of this act title.
SECTION 19. AMENDATORY 71 O.S. 2021, Section 1 -308, is
amended to read as follows:
Section 1-308. A. In addition to all other applicable
registration provisions specified in this act, investment
certificate issuers are subject to the provisions of this section.
As used in this section:
1. “Investment certificate ” means thrift certificates,
certificates of deposit, savings obligations and similar
certificates or obligations issued and sold by an investment
certificate issuer as defined in paragraph 2 of this subsection; and
2. “Investment certificate issuer ” means any financial
institution or person , other than a federally or state chartered
bank, bank holding company, trust company or savings and loan
association, or any credit union, which accepts investor funds or
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deposits in exchange for the issuance of investment certificates;
provided, however, the term “investment certificate issuer” shall
not include a financial institution or person which, as of Nove mber
1, 1985, issued only the following securities:
a. investment certificates exempt under the provisions of
Sections 6 1-201 through 8 1-203 of this act title,
b. investment certificates registered by coordination
under Section 12 1-303 of this act title, or
c. any other security as to which the Administrator, by
rule or order, finds that registration is not
necessary or appropriate for the prote ction of
investors.
Nothing contained in this act shall be construed as precluding
an investment certificate issuer from qualifying for and r elying
upon any of the exemptions from the provisions of Sections 10 1-301
and 32 1-504 of this act title as contained in Sections 6 1-201
through 8 1-203 of this act title.
B. In addition to other powers conferred by this act, the
Administrator shall have power to require an investment cer tificate
issuer to:
1. Cause its books and records to be made available at its
offices and to provide to the Department a trial balance within five
(5) days of the commencement of any examination. The books and
records shall be audited at least once each year by an independent
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certified public accountant in accordance with ge nerally accepted
auditing standards, and the report thereof, including financial
statements prepared in accordance with generally accepted accounting
principles, furnished to the Admi nistrator in such form as he or she
may require;
2. Observe methods and standards, including classification
standards of loans, which the Administrator may prescribe by rule
adopted and promulgated pursuant to the Administrative Procedures
Act for determining the value of various types of assets;
3. Maintain its accounting sy stems and procedures in accordance
with such regulations as adopted and promulgated by the
Administrator pursuant to the Administrative Procedures Act;
provided, the accounting system required shall have due regard to
the size of the investment certificate issuer;
4. Charge off the whole or any part of an asset, the value of
which, at the time of the Administrator ’s action, has deteriorated
for reasons set forth by the Administrator b y rule adopted and
promulgated pursuant to the Administrative Procedures Act; and
5. Write down an asset to market value as prescribed by the
Administrator by rule adopted and promulgated pursuant to the
Administrative Procedures Act.
C. Every investment certificate issuer shall obtain from the
Administrator a written acknowl edgment, issued in accordance with
procedures adopted and promulgated pursuant to the Administrative
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Procedures Act, that the investment certificate issuer engages in
the business of accepting investor funds or deposits in exchange for
the issuance of inve stment certificates. Any investment certificate
issuer who obtains such an acknowledgment shall be subject to this
section and shall possess all the rights, powers and privileges and
shall be subject to all of the duties, restrictions and limitations
contained herein. No company or person who fails to obtain such
acknowledgment within ninety (90) days of the effective date of the
adoption by the Administrator of procedures governing the issuance
of a written acknowledgment shall possess or exercise, unles s
expressly given and possessed or exercised under other laws, any of
the benefits, rights, powers or privileges which are herein
conferred on investment certificate issuers. Any com pany or person
who fails to obtain a written acknowledgment as described herein may
not engage in the business of issuing investment certificates.
D. Any officer, director or employee of an investment
certificate issuer found by the Administrator to be dishonest,
reckless, unfit to participate in the conduct of the affairs o f the
institution, or practicing a continuing disregard or violation of
laws, rules, regulations or orders which are likely to cause
substantial loss to the company or likely to serio usly weaken the
condition of the company shall be removed immediately fro m office by
the board of directors of the investment certificate issuer of which
he or she is an officer, director or employee, on the written order
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of the Administrator; provided, th at the investment certificate
issuer or officer, employee, or director ma y within ten (10) days
file a notice of protest for the removal with the Commission, and as
soon as possible thereafter, the Commission will review the order of
the Administrator and make findings as it deems proper, and that,
pending said time, the office r, employee or director shall not
perform any of the duties of his office.
E. An investment certificate issuer shall not, without the
consent of the Administrator:
1. Make a loan to any of its stockholders owning twenty -five
percent (25%) or more of the stock of the investment certificate
issuer, or its officers or directors;
2. Make a loan to any employee in excess of Ten Thousand
Dollars ($10,000.00); or
3. Make a loan to or othe r investment in or purchase any asset
from any company in which any of it s officers, directors or
stockholders may have any direct or indirect interest, unless made
in an arm’s length transaction.
F. An investment certificate issuer shall not, without th e
consent of the Administrator:
1. Lend money in excess of ten percent ( 10%) of its
shareholders’ equity to any person, association, partnership or
corporation liable for such obligations; provided, however, that
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this limitation does not apply to the purc hase of investment
securities; or
2. Engage in, or acquire any interest in, any business
prohibited to a bank chartered under the laws of this state.
G. The shareholders’ equity of an investment certificate issuer
shall not be less than ten percent (10%) of the investment
certificates outstanding. Provided, an investment cer tificate
issuer lawfully incorporated and operating in this state on or
before November 1, 1985, with less than the above specified
shareholders’ equity shall, at the beginning of eac h fiscal year
thereafter, increase its shareholders ’ equity by a minimum of one-
fourth (1/4) the difference between its shareholders’ equity on
November 1, 1985, and the above specified amount until such time as
its shareholders’ equity equals or exceeds t he amount specified
above. For purposes of computing the shareholders ’ equity, the
reserve against bad debts shall be included.
H. Every investment certificate issuer shall maintain a reserve
against bad debts in an amount required by the Administrator by rule
adopted and promulgated pursuant to the Administrative Procedure s
Act, but in no event shall the reserve against bad debts be less
than two percent (2%) of total loans outstanding.
I. If the Administrator finds the capital of an investment
certificate issuer to be impaired according to the standard set
forth in subsection G of this section, the Administrator may:
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1. Give notice of the i mpairment to the directors and
shareholders of the investment certificate issuer and levy an
assessment in a designated amount upon the holders of record of the
investment certificate i ssuer’s stock to remedy an impairment of
capital. Upon receipt of an o rder to levy an assessment, the
directors shall cause to be sent to all holders of stock, at their
addresses as listed on the books of the investment certificate
issuer, a notice of the amount of the assessment and a copy of this
subsection. If an assessm ent is not paid within ninety (90) days
after the order is mailed, the Administrator, at his or her
discretion, may offer the shares of the defaulting stockholders for
sale at public auction at a price which shall not be less than the
amount of the assessm ent and the cost of the sale; or
2. Apply to the district court of any county where the assets
of the investment certificate issuer are located for an order
appointing a conservator of , and directing him to rehabilitate, the
investment certificate issuer. If all reasonable efforts to
rehabilitate the investment certificate issuer fail, the
Administrator may apply to the court for an order directing the
appointment of a liquidator to di ssolve any such issuer and
liquidate its assets. All rights and intere sts of the stockholders
in the stock, property and assets of such investment certificate
issuer are thereby term inated except the rights of stockholders to
the proceeds of liquidation, if any, after all other valid claims,
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including interest, against the a ssets of the investment certificate
issuer and the proceeds of liquidation have been satisfied. The
conservator or liquidator appointed under this subsection shall meet
qualifications established by the Administrator by rule adopted and
promulgated pursuant to the Administrative Procedures Act.
J. Whenever the capital or reserve of any investment
certificate issuer shall be impaired according to the standards set
forth in subsections G and H of this section, the investment
certificate issuer shall make no new loans, renew any investment
certificates or sell new investment certificates without the consent
of the Administrator.
K. 1. It shall be unlawful for any investment certificate
issuer to issue investment certificates when insolvent.
2. Every officer, director, principal stockholder, or every
other person who materially participates or aids in the issuance o f
an investment certificate in violation of this subsection, or who
directly or indirectly controls any such person, shall be jointly
and severally liable, unless the officer, director, principal
stockholder, or any other person who so participates, aids o r
controls, sustains the burden of proof that the person did not know,
and could not have known, of the existence of the facts by reason of
which liability is alleged to exist. There shall be contribution as
in cases of contract among the persons so liabl e.
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3. The rights and remedies provided for in this subsection are
in addition to any other rights or remedies provided for in Title 71
of the Oklahoma Statutes, or that may exist at law or in equity.
L. The Administrator may as often as he or she deems i t prudent
and necessary for the protection of the public, make or cause t o be
made examinations of the books, records, papers, assets and
liabilities of every kind and character owned by, or relating to,
every investment certificate issuer.
M. Every investment certificate issuer shall make and file with
the Administrator repor ts at such times and in such form as the
Administrator may prescribe by rule or order. The reports shall be
verified by the oath of either the president, the vice -president, or
the secretary and attested by the signature of two or more of the
directors. Each report shall exhibit in detail, as may be required
by the Administrator, the resources and liabilities of the
investment certificate issuer at the close of business on the day to
be specified by the Administrator.
N. Every investment certificate issu er whose investor funds or
deposits are not insured by an agency of the government shall
disclose on the face of each investment certificate in ten -point
type the following:
“This certificate is not insured by the Federal Deposit
Insurance Corporation or a ny other agency of the government.”
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SECTION 20. AMENDATORY 71 O.S. 2021, Section 1-402, is
amended to read as follows:
Section 1-402. A. It is unlawful for an ind ividual to transact
business in this state as an agent unless the individual is
registered under this act as an agent or is exempt f rom registration
as an agent under subsection B of this section.
B. The following individuals are exempt from the registrat ion
requirement of subsection A of this section:
1. An individual who represen ts a broker-dealer in effecting
transactions in this state limited to those described in Section
15(h)(2) 15(i)(3) of the Securities Exchange Act of 1934 (15 U.S.C .
Section 78o(h)(2) 78o(i)(3));
2. An individual who represents a broker -dealer that is exempt
under subsection B or D of Section 18 1-401 of this act title;
3. An individual who represents an issuer with respe ct to an
offer or sale of the issuer ’s own securities or those of the
issuer’s parent or any of the issuer ’s subsidiaries to existing
employees, partners, members or directors of the issuer or the
issuer’s parent or any of the issuer’s subsidiaries, and wh o is not
compensated in connection with the individual ’s participation by the
payment of commissions or other remuneration based, directl y or
indirectly, on transactions in those securities;
4. An individual who represents an issuer and who effects
transactions in the issuer ’s securities exempted by Section 7 1-202
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of this act title, other than paragraphs 11 and 14 of Section 7 1-
202 of this act title;
5. An individual who represents an issuer who effects
transactions solely in federal covered securities of the issuer, but
an individual who effects transaction s in a federal covered security
under Section 18(b)(3) or 18(b)(4)(D) 18(b)(4)(F) of the Securities
Act of 1933 (15 U.S.C. Section 77r(b)(3) or 77r(b)(4)(D)
77r(b)(4)(F)) is not exempt if the individual is compens ated in
connection with the agent ’s participation by the payment of
commissions or other remuneration based, directly or in directly, on
transactions in those securities;
6. An individual who represents a broker-dealer registered in
this state under subsection A of Section 18 1-401 of this act title
or exempt under subsection B of Section 18 1-401 of this act title
in the offer and sale of securities for an account of a
nonaffiliated federal covered investment adviser with investments
under management in excess of One Hundred Million Dollars
($100,000,000.00) acting for the account of others pursuant to
discretionary authority in a signed record;
7. An individual who represents an issue r in connection with
the purchase of the issuer ’s own securities;
8. An individual who represe nts an issuer and who restricts
participation to performing ministerial or clerical work; or
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9. Any other individual exempted by rule adopted or order
issued under this act.
C. The registration of an agent is effective only while the
agent is employed by or associated with a broker-dealer registered
under this act or an issuer that is offering, selling or purchasing
its securities in this state.
D. It is unlawful for a broker-dealer, or an issuer engaged in
offering, selling, or purchasing securities in this state, to employ
or associate with an agent who transacts business in this state on
behalf of broker-dealers or issuers unless the agent is registered
under subsection A of this section or exempt from registration under
subsection B of this section.
E. Unless prohibited by rule adopted or order issued under this
act, an individual may act as an age nt for more than one broker-
dealer or more than one issuer at a time.
F. It is unlawful for an individual acting as an agent,
directly or indirectly, to co nduct business in this state on behalf
of a broker-dealer or issuer if the registration of the indiv idual
as an agent is suspended or revoked under this act; or the
individual is barred from employment or association with a broker -
dealer by an order under this act, the Securities and Exchange
Commission, or a self -regulatory organization; or the individu al is
subject to an order of a court of competent jurisdictio n
temporarily, preliminarily or permanently enjoining such individual
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from conducting business in this state on behalf of a broker-dealer
or issuer.
SECTION 21. AMENDATORY 71 O.S. 2021, Section 1-403, is
amended to read as follows:
Section 1-403. A. It is unlawful for a person to transact
business in this state as an investment adviser unless the person is
registered under this act as an investment adviser or is exempt f rom
registration as an investment adviser under subsection B of this
section.
B. The following persons are exempt from the registration
requirement of subsection A of this section:
1. A federal covered investment adviser;
2. A person without a place of business in this state that is
registered under the securities act of the state in which that
person has its principal place of business if its only clients in
this state are:
a. federal covered investment advisers, investment
advisers registered under thi s act, or broker-dealers
registered under this act,
b. institutional investors,
c. bona fide preexisting clients whose principal places
of residence are not in this state if the investment
adviser is registered under the securities act of the
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state in which the clients maintain principal places
of residence, or
d. any other client exempted by rule adopted or order
issued under this act;
3. A person without a place of business in this state if the
person has had, during the preceding twelve (12) months, not more
than five clients that are residents of this state in addition to
those specified under paragraph 2 of this subsection; or
4. Any other person exempted by rule adopted or order issued
under this act.
C. It is unlawful for an investment adviser, dir ectly or
indirectly, to employ or associate with an individual to engage in
an activity related to investment advice in this state if the
registration of the individual is suspended or revoked under this
act, or the individual is barred from employment or association with
an investment adviser, federal covered investment adviser, or
broker-dealer by an order under this act, the Securities and
Exchange Commission, or a self -regulatory organization, unless the
investment adviser did not know, and in the exerc ise of reasonable
care could not have known, of the suspension, revocation, or bar.
Upon request from the investment adviser and for good cause, the
Administrator, by order, may waive, in whole or in part, the
application of the prohibitions of this subse ction to the investment
adviser.
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D. It is unlawful for an investment adviser to employ or
associate with an individual required to be registered under this
act as an investment adviser representative who transacts business
in this state on behalf of the i nvestment adviser unless the
individual is registered under subsection A of Section 21 1-404 of
this act title or is exempt from registration un der subsection B of
Section 21 1-404 of this act title.
E. The exemption from registration provided by subparagraph b
of paragraph 2 of subsection B of this section shall not be
available to any person who acts as an investment adviser to the
state, any county, municipality or school district of this state, or
any other political subdivision of this state; any agen cy or
corporate or other instrumentality of any such entity; or any
pension fund for the benefit of employees of any such entity , unless
registered with the Securities and Exchange Commission and the
Municipal Securities Rulemaking B oard.
SECTION 22. AMENDATORY 71 O.S. 2021, Section 1 -404, is
amended to read as follows:
Section 1-404. A. It is unlawful for an individual to transa ct
business in this state as an investment adviser representative
unless the individual is registered u nder this act as an investment
adviser representative or is e xempt from registration as an
investment adviser representative under subsection B of this
section.
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B. The following individuals are exempt from the registration
requirement of subsection A of this section:
1. An individual who is employed by or associat ed with an
investment adviser that is exempt from registration un der subsection
B of Section 20 1-403 of this act title unless the individual has a
place of business in this state or is not a “supervised person” as
that term is defined in Section 202(a)(25 ) of the Investment
Advisers Act of 1940 (15 U.S.C . Section 80b-2(a)(25)); and
2. Any other individual exempted by rule adopted or order
issued under this act.
C. The registration of an investm ent adviser representative is
not effective while the investm ent adviser representative is not
employed by or associated with an investment adviser regis tered
under this act or a federal covered investment adviser that has made
or is required to make a notice filing under Section 22 1-405 of
this act title.
D. An individual may transact business as an investment adviser
representative for more than one in vestment adviser or federal
covered investment adviser at a time unless a rule adopted or order
issued under this act prohibits or limits an individual from acting
as an investment adviser representative for more than one investment
adviser or federal cove red investment adviser.
E. It is unlawful for an individual acting as an investment
adviser representative, directly or indirectly, to conduct business
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in this state on behalf of an investment adviser or a federal
covered investment adviser if the registr ation of the individual as
an investment adviser representative is suspended or revoked; or the
individual is barred from employment or association with an
investment adviser or a federal covered investment adviser by an
order under this act, the Securities and Exchange Commission, or a
self-regulatory organization; or the individual is subject to an
order of a court of competent jurisdiction temporarily,
preliminarily or permanently enjoining such individual from
conducting business in this state on behalf of an investment adviser
or a federal covered investment adviser . Upon request from a
federal covered investment adviser and for good cause, the
Administrator, by order issued, may waive, in whole or in part, the
application of the requirements of this s ubsection to the federal
covered investment adviser.
F. An investment adviser registered under this ac t, a federal
covered investment adviser that has filed a notice under Section 22
1-405 of this act title, or a broker-dealer registered under this
act is not required to employ or associate with an individual as an
investment adviser representative for the referral of investment
advisory clients so long as any compensation paid by such persons
for such referral is paid to an investment adviser registered u nder
this act, a federal covered investment adviser who has filed a
notice under Section 22 1-405 of this act title, or a broker-dealer
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registered under this act with which the individual is employed or
associated as an investment adviser representative.
SECTION 23. AMENDATORY 71 O.S. 2021, Section 1 -405, is
amended to read as follo ws:
Section 1-405. A. Except with respect to a federal cove red
investment adviser described in subsection B of this section, it is
unlawful for a federal covered inve stment adviser to transact
business in this state as a federal covered investment advise r
unless the federal covered investment adviser complies with
subsection C of this section.
B. The following federal covered investment advisers are not
required to comply with subsection C of this section:
1. A federal covered investment adviser without a place of
business in this state if its only clients in thi s state are:
a. federal covered investment advisers, investment
advisers registered under this act, and bro ker-dealers
registered under this act,
b. institutional investors ,
c. bona fide preexisting clients whose principal places
of residence are not in th is state, or
d. other clients specified by rule adopted or order
issued under this act;
2. A federal covered investment adviser without a place of
business in this state if the person has had, d uring the preceding
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twelve (12) months, not more than five cl ients that are residents in
this state in addition to those specified under paragraph 1 of this
subsection; and
3. Any other person excluded by rule adopted or order issued
under this act.
C. A person acting as a federal covered investment adviser, not
excluded under subsection B of this section, shall file a notice
containing a consent to service of p rocess complying with Section 49
1-611 of this act title, such records as have been filed with the
Securities and Exchange Commission under the Investment A dvisers Act
of 1940 required by rule or order under this act, and the fee
specified in Section 50 1-612 of this act title.
D. The notice under subsection C of this section becomes
effective upon its filing and expires at midnight on December 31
each year.
SECTION 24. AMENDATORY 71 O.S. 2021, Section 1 -406, is
amended to read as follows:
Section 1-406. A. A person shall register as a broker -dealer,
agent, investment advi ser, or investment adviser representative by
filing an application that contains:
1. The information required for the filing of a uniform
application, a consent to service of p rocess complying with Section
49 1-611 of this act title, the fee specified in Section 50 1-612 of
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this act title and any reasonable fees ch arged by the designee of
the Administrator for processing the filing; and
2. Upon request by the Administrator, any other financial or
other information that the Administrator determines is appr opriate.
B. If the information contained in an application t hat is filed
under subsection A of this section is or becomes inaccurate or
incomplete in any material respect, the registrant shall promptly
file a correcting amendment.
C. If an order is not i n effect and a proceeding is not pending
under Section 28 1-411 of this act title, registration become s
effective at noon on the 45th da y after a completed application is
filed unless the registration is denied. A rule adopted or order
issued under this act may set an earlier effective date or may defer
the effective date until noon on the 45th day after the filing of
any amendment comple ting the application.
D. A registration is effective until midnight on December 31 of
the year for which the applicatio n for registration is filed.
Unless an order is in e ffect under Section 28 1-411 of this act
title, a registration may be automatically renewed each year by
filing such records as are required by rule adopted or order issued
under this act, by paying the fee specified in Section 50 1-612 of
this act title, and by paying costs charged by the designee of the
Administrator for proc essing the filings.
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E. A rule adopted or order issued under this act may impose
such other conditions not inconsistent with the N ational Securities
Markets Improvement Act of 1996. An order issued under this act may
waive, in whole or in part, specific r equirements in connection with
registration as are i n the public interest and for the protection of
investors.
SECTION 25. AMENDATORY 71 O.S. 2021, Section 1 -407, is
amended to read as follows:
Section 1-407. A. A broker-dealer or investment adviser may
succeed to the current registration of another broker -dealer or
investment adviser or a notice filing of a federal covered
investment adviser, and a federal covered i nvestment adviser may
succeed to the current registration of an investment adviser or
notice filing of another federal covered investment adviser, by
filing as a successor an application for registration pursuant to
Section 18 1-401 or 20 1-403 of this act title, or a notice pursuant
to Section 22 1-405 of this act title, for the unexpired portion of
the current registration or notice filing.
B. A broker-dealer or investment adviser that changes its form
of organization or state of incorporation or organization may
continue its registration by filing an amendment to its registration
if the change does not involve a material change in its financial
condition or management. The amendme nt becomes effective when filed
or upon a date designated by the registrant in its filing. The new
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organization is a successor to the original registrant for the
purposes of this act. If there is a material change in financial
condition or management, th e broker-dealer or investment adviser
shall file a new application for registration. Any predecessor
registered under this act shall stop conducting its securities
business other than winding down transactions and shall file for
withdrawal of broker -dealer or investment adviser registration
within forty-five (45) days after filing its amendment to effect
succession.
C. A broker-dealer or investment adviser that changes its name
may continue its registration by filing an amendment to its
registration. The amendment becomes effective when filed or upon a
date designated by the registrant.
D. A change of control of a broker -dealer or investment adviser
may be made in accordance with a rule adopted or order issued under
this act.
SECTION 26. AMENDATORY 71 O.S. 2021, Section 1-408, is
amended to read as fol lows:
Section 1-408. A. If an agent registered under this act
terminates employment by or association with a broker -dealer or
issuer, or if an investment adviser representative registered under
this act terminates employment by or association with an investment
adviser or federal covered investment adviser, or if either
registrant terminates activities that require registration as an
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agent or investment adviser representative, the broker -dealer,
issuer, investment adviser, or federal covered investment adviser
shall promptly file a notice of termination. If the registrant
learns that the broker -dealer, issuer, investment adviser, or
federal covered investment adviser has not filed the notice, th e
registrant may do so.
B. If an agent registered under this act terminates employment
by or association with a broker -dealer registered under this act and
begins employment by or association with another broker-dealer
registered under this act; or if an investment adviser
representative registered under this act terminates employment by or
association with an investment adviser registered under this act ; or
a federal covered investment adviser tha t has filed a notice under
Section 22 1-405 of this act title, and begins employment by or
association with another investment adviser registered under this
act or a federal covered investment adviser that has filed a notice
under Section 22 1-405 of this act title; then upon the filing by or
on behalf of the regi strant, within thirty (30) days after the
termination, of an application for registration that complies with
the requirement of subsection A of Section 23 1-406 of this act
title, and payment of the filing fee required under Section 50 1-612
of this act title, the registration of the agent or investment
adviser representative, is:
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1. Immediately effective as of th e date of the completed filing
if the agent’s Central Registration Depository record or successor
record or the investment adviser re presentative’s Investment Adviser
Registration Depository record or successor record does not contain
a new or amended disc iplinary disclosure within the previous twelve
(12) months; or
2. Temporarily effective as of the date of the completed
filing, if the agent’s Central Registration Depository record or
successor record or the investment adviser representative’s
Investment Adviser Registration Depository record or successor
record contains a new or amended disciplinary disclosure within the
preceding twelve (12) months.
C. The Administrator may withdraw the temporary registration if
there are or were grounds for discipline under Section 28 1-411 of
this act title and the Administrator does so within thirty (30) days
after the filing of the application. If the Admi nistrator does not
withdraw the temporary registration within the 30 day period,
registration becomes automatically effecti ve on the 31st day after
filing.
D. The Administrator may prevent the effectiveness of a
transfer of an agent or investment adviser representative under
paragraph 1 or 2 of subsection B of this section based on the public
interest and the protection of in vestors.
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E. If the Administrator determines that a registrant or
applicant for registration is no longer in existence or has ceased
to act as a broker-dealer, agent, investment adviser, or investment
adviser representative, or is the subject of an adjudic ation of
incapacity or is subject to the control of a committee, conservator,
or guardian, or cannot reasonably be located, a rule ad opted or
order issued under this act may require the registration be canceled
or terminated or the application denied. The Administrator may
reinstate a canceled or terminated registration, with or without
hearing, and may make the registration retroactiv e.
SECTION 27. AMENDATORY 71 O.S. 2021, Section 1-409, is
amended to read as follows:
Section 1-409. Withdrawal of registration by a broker -dealer,
agent, investment advis er, or investment adviser representative
becomes effective sixty (60) days after the filing of the
application to withdr aw or within any shorter period as provided by
rule adopted or order issued under this act unless a revocation or
suspension proceeding is pending when the application is filed . If
a proceeding is pending, withdrawal becomes effective when and upon
such conditions as required by rule adopted or order issued under
this act. The Administrator may institute a revocation or
suspension proceeding under Section 28 1-411 of this act title
within one year after the withdrawal became effective automatically
and issue a revocation or suspension order as of the last date on
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which registration was effective if a proceeding is not pending when
the application is filed.
SECTION 28. AMENDATORY 71 O.S. 2021, Section 1-410, is
amended to read as follows:
Section 1-410. A. Subject to Section 15(h) 15(i) of the
Securities Exchange Act of 1934 (15 U.S.C . Section 78o(h) 78o(i)) or
Section 222 of the Investment Advisers Act of 1940 (15 U.S.C .
Section 80b-18a), a rule adopted or order issued und er this act may
establish minimum financial requirements for broker -dealers
registered or required to be registered under this act and
investment advisers registered or required to be registered under
this act.
B. Subject to Section 15(h) 15(i) of the Securities Exchange
Act of 1934 (15 U.S.C. Section 78o(h) 78o(i)) or Section 222 of the
Investment Advisers Act of 1940 (15 U.S.C. Section 80b-18a), a
broker-dealer registered or required to be registered under this act
and an investment adviser registered or require d to be registered
under this act shall file such financial reports as are required by
a rule adopted or order issued under this act. If the information
contained in a record filed under this s ubsection is or becomes
inaccurate or incomplete in a material respect, the registrant shall
promptly file a correcting amendment.
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C. Subject to Section 15(h) 15(i) of the Securities Exchange
Act of 1934 (15 U.S.C . Section 78o(h) 78o(i)) or Section 222 of the
Investment Advisers Act of 1940 (15 U.S.C. Section 80b-18a):
1. A broker-dealer registered or required to be registered
under this act and a n investment adviser registered or required to
be registered under this act shall make and maintain the accoun ts,
correspondence, memoranda, papers, books, and other record s as
required by rule adopted or order issued under this act;
2. Broker-dealer records required to be maintained under
paragraph 1 of this subsection may be maintained in any form of data
storage acceptable under Section 17(a) of the Securities Exchange
Act of 1934 (15 U.S.C. Section 78q(a)) if they are readily
accessible to the Administ rator; and
3. Investment adviser records required to be maintained under
paragraph 1 of this subsection may b e maintained in any form of data
storage required by rule adop ted or order issued under this act.
D. The records of a broker -dealer registered or required to be
registered under this act and an investment adviser registered or
required to be registered un der this act are subject to such
reasonable periodic, special, or other audits or inspections by a
representative of the Administrator, within or without this state,
as the Administrator considers necessary or appropriate in the
public interest and for the protection of investors. An audit or
inspection may be made at any time and without prior notice. The
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Administrator may copy, and remove for au dit or inspection copies
of, all records the Administrator reasonably considers necessary or
appropriate to conduct the audit or inspection. The Administrator
may assess a reasonable charge for conducting an audit or inspection
under this subsection.
E. Subject to Section 15(h) 15(i) of the Securities Exchange
Act of 1934 (15 U.S.C . Section 78o(h) 78o(i)) or Section 222 of the
Investment Advisers Act of 1940 (15 U.S.C . Section 80b-18a), an
agent may not have custody of funds or securities of a customer
except under the supervision of a broker -dealer and an investment
adviser representative may not have custody o f funds or securities
of a client except under the supervision of an investment adviser or
federal covered investment adviser. A rule adopted or order issued
under this act may prohibit, limit, or impose conditions on a
broker-dealer regarding custody of f unds or securities of a customer
and on an investment adviser regarding custody of securities or
funds of a client.
F. With respect to an investment adviser r egistered or required
to be registered under this act, a rule adopted or order issued
under this act may require that information be furnished or
disseminated to clients or prospective clients in this state as
necessary or appropriate in the public interes t and for the
protection of investors and advisory clients.
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G. A rule adopted or order issued un der this act may require
any individual registered under Secti on 19 1-402 or 21 1-404 of this
act title to participate in a continuing education program which is
approved by the Securities and Exchange Commission and administered
by a self-regulatory organization or, in the absence of such a
program, a rule adopted o r order issued under this act may require
continuing education for an indivi dual registered under Section 21
1-404 of this act title.
SECTION 29. AMENDATORY 71 O.S. 2 021, Section 1-411, is
amended to read as follows:
Section 1-411. A. If the Administrator finds that t he order is
in the public interest and subsection D of this section authorizes
the action, an order issued under this act may deny an application,
or may condition or limit registration:
1. Of an applicant to be a br oker-dealer, agent, investment
adviser, or investment adviser representative; and
2. If the applicant is a broker -dealer or investment adviser,
any partner, officer, or director, any person hav ing a similar
status or performing similar functions, or any p erson directly or
indirectly controllin g the broker-dealer or investment adviser.
B. If the Administrator finds that the order issued is in the
public interest and subsection D of this section authorizes the
action an order issued under this act may revok e, suspend,
condition, or limit the reg istration of a registrant and if the
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registrant is a broker -dealer or investment adviser, any partner,
officer, or director, any person having a similar st atus or
performing similar functions, or any person directly o r indirectly
controlling the broker-dealer or investment adviser. However, the
Administrator:
1. May not institute a revocation or suspension pr oceeding
under this subsection based on an order issued by another state that
is reported to the Administrator or designee later than one year
after the date of the order on which it is based; and
2. Under subparagraphs a and b of paragraph 5 of subsection D
of this section may not issue an order on th e basis of an order
under the state securities act of another state unless the other
order was based on conduct for which subsection D of this section
would authorize the action had the conduct occurred in th is state.
C. If the Administrator finds that th e order is in the public
interest and paragraphs 1 through 6, 8, 9, 10, 12 or 13 of
subsection D of this section authorizes the action, an order under
this act may censure, impose a bar, impose a civil penalt y in an
amount not to exceed a maximum of Five Thousand Dollars ($5,000.00)
for a single violation or Two Hund red Fifty Thousand Dollars
($250,000.00) for multiple violations on a registrant, and/or
recover the costs of the investigation from a registrant and if the
registrant is a broker -dealer or investment adviser, from any
partner, officer, or director, any pe rson having a similar function
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or any person directly or indirectly controlling the broker -dealer
or investment adviser.
D. A person may be disci plined under subsections A through C of
this section if the person:
1. Has filed an application for registrat ion in this state
under this act or the predecessor act within the previous ten (10)
years, which, as of the effective date of registration or as of any
date after filing in the case of an order denying effectiveness, was
incomplete in any material respect or contained a statement that, in
light of the circumstances under which it was made, was false or
misleading with respect to a material fact;
2. Has willfully violated or willfully failed to comply with
this act or the predecessor act or a rule adopted or order issued
under this act or the predecessor act within the previous ten (10)
years;
3. Has been convicted of any felony or within the prev ious ten
(10) years has been convicted of a misd emeanor involving a security,
a commodity futures or option con tract, or an aspect of a business
involving securities, commodities, investments, franchises,
insurance, banking, or finance;
4. Is enjoined or restrained by a court of competent
jurisdiction in an action instituted by the Administrator under this
act or a predecessor act, a state, the Securi ties and Exchange
Commission, or the United States from engaging in or continuing an
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act, practice, or cour se of business involving an aspect of a
business involving securities, commodities, investments, franchises,
insurance, banking, or finance;
5. Is the subject of an order, issued after notice and
opportunity for hearing by:
a. the securities, depository i nstitution, insurance or
other financial service s regulator of a state, or by
the Securities and Exchange Commi ssion or other
federal agency denying, revoking, barring, or
suspending registration as a broker -dealer, agent,
investment adviser, federal cover ed investment
adviser, or investment adviser rep resentative,
b. the securities regulator of a state or by the
Securities and Exchange Commission agai nst a broker-
dealer, agent, investment adviser, investment adviser
representative, or federal covered inves tment adviser,
c. the Securities and Exchange Co mmission or by a self-
regulatory organization suspending, barri ng, canceling
or expelling the registr ant from membership in a self -
regulatory organization ,
d. a court adjudicating a United States Postal Servi ce
fraud,
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e. the insurance regulator of a state denying,
suspending, or revoking the registration of an
insurance agent, or
f. a depository instituti on regulator suspending or
barring a person from the banking or depository
institution business;
6. Is the subject of an adjudication or determination, af ter
notice and opportunity for hearing, by the Securities and E xchange
Commission, the Commodity Futu res Trading Commission, the Federal
Trade Commission, a federal depository institution regulator, or a
depository institution, insurance, or other financia l services
regulator of a state that the person willfully viola ted the
Securities Act of 1933, the S ecurities Exchange Act of 1934, the
Investment Advisers Act of 1940, the Investment Company Act of 1940,
or the Commodity Exchange Act, the securities or c ommodities law of
a state, or a federal or state law under which a business involving
investments, franchises, insurance, banking, or finance is
regulated;
7. Is insolvent, either because the person ’s liabilities exceed
the person’s assets or because the person cannot meet the person’s
obligations as they mature, but the Administrator may not enter an
order against an applicant or registrant under this paragraph
without a finding of insolvency as to the appli cant or registrant;
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8. Refuses to allow or othe rwise impedes the Administrator from
conducting an audit or insp ection under subsection D of Section 27
1-410 of this act title or refuses access to any registrant ’s office
to conduct an audit or inspection un der subsection D of Section 27
1-410 of this act title;
9. Has failed to reasonably supervise an agent, invest ment
adviser representative, or other individual, if the agent,
investment adviser representative, or other individual was subject
to the person’s supervision and commi tted a violation of this act or
the predecessor act or a rule adopted or order issued un der this act
or the predecessor act within the previous ten (10) years;
10. Has not paid the proper filing fee within thirty (30) days
after having been notified by th e Administrator of a def iciency, but
the Administrator shall vacate an order under this paragraph when
the deficiency is corr ected;
11. After notice and opportunity for a hearing, has been found
within the previous ten (10) years:
a. by a court of compete nt jurisdiction to have willfully
violated the laws of a foreign jurisdiction under
which the business of securities, commodities,
investment, franchises, insurance, banking or finance
is regulated,
b. to have been the subject of an order of a securities
regulator of a foreign ju risdiction denying, revoking,
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or suspending the right to engage in the business of
securities as a broker-dealer, agent, investment
adviser, investment adviser representative or similar
person, or
c. to have been suspended or expell ed from membership by
or participation in a securities exchange or
securities associatio n operating under the securities
laws of a foreign jurisdiction;
12. Is the subject of a cease and desist order issued by the
Securities and Exchange Commission or iss ued under the securities ,
commodities, investment, franchise, banking, finance or insura nce
laws of a state;
13. Has engaged in dishonest or unethical practices in the
securities, commodities, investment, franchise, banking, finance or
insurance business within the previous ten (10) years; or
14. Is not qualified on the basis of factors suc h as training,
experience, and knowle dge of the securities business. However, in
the case of an application by an agent for a broker -dealer that is a
member of a self-regulatory organization or by an individual for
registration as an investment adviser re presentative, a denial order
may not be based on this paragraph if the individual has
successfully completed all examinations required by subsection E of
this section. The Administrator may r equire an applicant for
registration under Section 19 1-402 or 21 1-404 of this act title
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who has not been registered in a state within the two (2) years
preceding the filing of an application in this state to successfully
complete an examination.
E. A rule adopted or order issued under this act may require
that an examination, including an examination d eveloped or approved
by an organization of securities regulators, be successfully
completed by a class of individuals or all individuals. An order
issued under this act may waive, in whole or in part, an examination
as to an individual and a rule adopted under this act may waive, in
whole or in part, an examination as to a class of individuals if the
Administrator determines that the examination is no t necessary or
appropriate in the public interest and for the prote ction of
investors.
F. The Administrator may summarily postpone an application or
summarily suspend a registration before final determination of an
administrative proceeding. Upon the iss uance of the order, the
Administrator shall promptly notify each pe rson subject to the order
that the order has been issued, the reasons for the action, and that
within fifteen (15) days after the receipt of a request in a record
from the person the matter will be scheduled for a hearing and such
hearing shall be commence d within fifteen (15) days of the matter
being set for hearing. If a hearing is not requested and none is
ordered by the Administrator , within thirty (30) days after the date
of service of the order, the order becomes final by operation of
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law. If a hearing is requested or ordered, the Adminis trator, after
notice of and opportunity for hearing to each person subject to the
order, may modify or vacate the order or extend the order until
final determination.
G. An order may not be issued under this section , except under
subsection F of this section, without:
1. Appropriate notice to the applicant or registrant;
2. Opportunity for hearing; and
3. Findings of fact and conclusions of law in a record in
accordance with the Administrative Procedures Act. If the person to
whom the notice is address ed does not request a hearing within
fifteen (15) thirty (30) days after the date of service of the
notice is effective, a final order as provided in subsection A, B or
C of this section may be issued.
H. A person who controls, directly or indirectly, a person not
in compliance with this section may be disciplined by order of the
Administrator under subsections A through C of this section to the
same extent as the noncomplying person, unless the controlling
person did not know, and in the exercise of reasonable car e could
not have known, of the existence of conduct that is the basis for
discipline under this section.
I. The Administrator may not institute a proc eeding under
subsection A, B or C of this section based sol ely on material facts
actually known by the Ad ministrator unless an investigation or the
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proceeding is instituted within one year after the Administrator
actually knew the material facts.
SECTION 30. AMENDATORY 71 O.S. 2021, Section 1-504, is
amended to read as follows:
Section 1-504. A. Except as otherwise provided in subsection B
of this section, it is unlawful for a person to distribut e a
prospectus, pamphlet, circular, form letter, advertisement, sales
literature, or other ad vertising communication relating to a
security or investment advice, addressed or intended for
distribution to prospective investors, including clients or
prospective clients of a person r egistered or required to be
registered as an investment adviser unde r this act, unless the sales
and advertising literature is first filed with the Department with
the fee specified in Section 50 1-612 of this act title and the
Department has responded indicating that the Administrator has no
objection to its distribution o r use.
B. This section does not apply to sales and advertising
literature specified in subsection A of this section relating to a
federal covered security, a federal covered investment adviser, or a
security or transaction exempted by Section 6, 7, 1-201, 1-202, or 8
1-203 of this act title except as may be required pursuant to
paragraph 7 of Section 6 1-201 of this act title.
SECTION 31. AMENDATORY 71 O.S. 2021, Section 1 -508, is
amended to read as follows:
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Section 1-508. A. A person who willfully violates this act, or
a rule adopted or order issued under this a ct, except Section 32 1-
504 of this act title or the notice filing requirements of Section
11 1-302 or 22 1-405 of this act title, or that willfully violates
Section 33 1-505 of this act title knowing the statement made to be
false or misleading in a material respect, upon conviction, shall be
fined not more than One Hundred Thousand Dollars ($1 00,000.00) or
imprisoned not more than ten (10) years, or both such fine and
imprisonment. An individual convicted of violating a rule adopted
or order issued under this act may be fined, but may not be
imprisoned, if the individual did not have knowledge of the rule or
order.
B. This act does not limit the power of this state to pu nish a
person for conduct that constitutes a crime under oth er laws of this
state.
C. On a criminal matter referred by the Adm inistrator, the
prosecuting attorney may designate and appoint one or more lawyers
of the Department as special assistants as ava ilable for the purpose
of assisting in or conducting a crimi nal prosecution arising by
reason of an investigation or proceeding under this section.
SECTION 32. AMENDATORY 7 1 O.S. 2021, Section 1-509, is
amended to read as follows:
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Section 1-509. A. Enforcement of civil liability under this
section is subject to the Securities Litigation Uniform Standards
Act of 1998.
B. A person is liable to a purchaser if the person sell s a
security in violation of Section 10 1-301 of this section title, or
by means of an untrue statement of a m aterial fact or an omission to
state a material fact necessary in order to make the statement made,
in light of the circumstances under which it i s made, not
misleading, the purchaser not knowing the unt ruth or omission, and
the seller not sustaining the b urden of proof that the seller did
not know and, in the exercise of reasonable care, could not have
known of the untruth or omission. An action u nder this subsection
is governed by the following:
1. The purchaser may maintain an action at law or in equit y to
recover the consideration paid for the security, and interest at the
legal rate of interest per year from the date of the purchase, less
the amount of any income received on the security, plus costs , and
reasonable attorneys’ fees determined by the co urt, upon the tender
of the security, or for actual damages as provided in paragraph 3 of
this subsection.
2. The tender referred to in paragraph 1 of this subsection may
be made any time before entry o f judgment. Tender requires only
notice in a record of ownership of the security and willingness to
exchange the security for the amount specified. A purchaser that no
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longer owns the security may recover actual damages as provided in
paragraph 3 of this subsection.
3. Actual damages in an action arising under this subsection
are the amount that would be recoverable upon a tender, less the
value of the security when the purchaser disposed of it, an d
interest at the legal rate of interest per year from th e date of
purchase, costs, and reasonable attorneys ’ fees determined by the
court.
C. A person is liable to the seller if the person buys a
security by means of an untrue statement of a material fac t or
omission to state a material fact necessary in order to make the
statement made, in light of the circumst ances under which it is
made, not misleading, the seller not knowing of the untruth or
omission, and the purchaser not sustaining the burden of pr oof that
the purchaser did not know, and in the exercise of reasonable care,
could not have known of the untru th or omission. An action under
this subsection is governed by the following:
1. The seller may maintain an action at law or in equity to
recover the security, and any income received on the security,
costs, and reasonable attorney’s fees determined by t he court, upon
the tender of the purchase price, or for actual damages as provided
in paragraph 3 of this subsection.
2. The tender referred to i n paragraph 1 of this subsection may
be made any time bef ore entry of judgment. Tender requires only
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notice in a record of the present ability to pay the amount tendered
and willingness to take delivery of the security for the amount
specified. If the pu rchaser no longer owns the security, the seller
may recover actual damages as provided in paragraph 3 of this
subsection.
3. Actual damages in an action arising under this subsection
are the difference between the price at which the security was sold
and the value the security would have had at the time of the sale in
the absence of the purchaser’s conduct causing liability, and
interest at the legal rate of interest per year from the date of the
sale of the security, costs, and reasonable attorneys ’ fees
determined by the court.
D. A person acting as a broker -dealer or agent that sells or
buys a security in viol ation of subsection A of Section 18 1-401,
subsection A of Section 19 1-402, or Section 34 1-506 of this act
title is liable to the customer. The customer, if a purchaser, may
maintain an action at law or in equity for recovery of actual
damages as specified in paragraphs 1 through 3 of subsection B of
this section; or, if a seller, a remedy as specified in paragraphs 1
through 3 of subsection C of this section.
E. A person acting as an investment adviser or investment
adviser representative that provides investment advice for
compensation in violation of subsection A of Section 20 1-403,
subsection A of Section 21 1-404, or Section 34 1-506 of this act
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title is liable to the client. The client may mainta in an action at
law or in equity to recover th e consideration paid for the advice,
interest at the legal rate of interest per year from the date of
payment, costs, and reasonable attorney ’s fees determined by the
court.
F. A person that receives directly or indirectly any
consideration for providing investment advice to another person and
that employs a device, scheme, or artifice to defraud the other
person or engages in an act, practice, or cours e of business that
operates or would operate as a fraud or deceit on the other person,
is liable to the other person. An action under this subsection is
governed by the following:
1. The person defrauded may maintain an action to recover the
consideration paid for the advice and the amount of any actual
damages caused by the fraudulent conduct, interest at the legal rate
of interest per year from the date of the fraudulent conduct, costs,
and reasonable attorney ’s fees determined by the court, less the
amount of any income received as a result of the fraudulent c onduct.
2. This subsection does not apply to a broker-dealer or its
agents, if the investment advi ce is solely incidental to the conduct
of business as a broker -dealer and no special compensation is
received for the investment advice.
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G. The following persons are liable jointly and severally with
and to the same extent as persons liable under subsecti ons B through
F of this section:
1. A person that directly or indirectly controls a person
liable under subsections B through F of this section, unless the
controlling person sustains the burden of proo f that the person did
not know, and in the exercise o f reasonable care could not have
known, of the existence of the conduct by reason of which the
liability is alleged to exist;
2. An individual who is a mana ging partner, executive officer,
or director of a person liable under subsections B through F of this
section, including an individual having a similar status or
performing similar functions, unles s the individual sustains the
burden of proof that the indi vidual did not know and, in the
exercise of reasonable care could not have known, of the existence
of the conduct by reason of which the liability is alleged to exist;
3. An individual who is an e mployee of or associated with a
person liable under subsect ions B through F of this section and who
materially aids the conduct giving rise to the liability, unless the
individual sustains the burden of proof that the individual did not
know and, in the exercise of reasonable care could not have known,
of the existence of the conduct by reason of which the li ability is
alleged to exist;
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4. A person that is a b roker-dealer, agent, investment adviser,
or investment adviser representative that materially aids the
conduct giving rise to the liability under subsections B through F
of this section, unless the perso n sustains the burden of proof that
the person did not know and, in the exercise of reasonable care
could not have known, of the existence of the conduct by reason of
which liability is alleged to exist; and
5. Any other person who materially aids in the conduct giving
rise to the liability under subsection s B through F of this section,
unless the person sustains the burden or proof that the person did
not know and, in the exercise of reasonable care could not have
known, of the existence of the conduct by reason of which liability
is alleged to exist.
H. A person liable under this section has a right of
contribution as in cases of contract against any other person liable
under this section for the same conduct .
I. A cause of action under this section sur vives the death of
an individual who might have been a plaintiff or defendant.
J. A person may not obtain relief:
1. Under subsection B of this section for violation of Section
10 1-301 of this act title, or under subsection D or E of this
section, unless the action is commenced within one year after the
violation occurred; or
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2. Under subsection B of this section, other than for violation
of Section 10 1-301 of this act title, or under subsection C or F of
this section, unless the action is instituted within the earlier of
two (2) years after discovery of the facts constituting the
violation or five (5) years after such violation.
K. A person that has made, or has engaged in the performance
of, a contract in violation of this act or a rule adopted or order
issued under this ac t, or that has acquired a purported right under
the contract with knowledge of conduct by reason of which its making
or performance was in violation of this act, may not base an action
on the contract.
L. A condition, stipulation, or provision binding a p erson
purchasing or selling a security or receiving i nvestment advice to
waive compliance with this act or a rule adopted or or der issued
under this act is void.
M. The rights and remed ies provided by this act are in addition
to any other rights or remedi es that may exist, but this act does
not create a cause of action not specified in this section.
SECTION 33. AMENDATORY 71 O.S. 2021, Section 1-510, is
amended to read as follows:
Section 1-510. A purchaser, seller, or recipient of investment
advice may not maintain an action under Section 37 1-509 of this act
title if:
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1. The purchaser, seller, or recip ient of investment advice
receives in a record, before the action is instituted:
a. an offer stating the respect in which liability under
Section 37 1-509 of this act title may have arisen and
fairly advising the purchaser, seller, or recipient of
investment advice of that person’s rights in
connection with the of fer, and any financial or other
information necessary to correct all material
misstatements or omissions in the information that was
required by this act to be furnished to that person at
the time of the purchase, sale, or investment advice,
b. if the basis for relief under this section may have
been a violation of subsection B of Section 37 1-509
of this act title, an offer to repurchase th e security
for cash, payable on delivery of the security, e qual
to the consideration paid, and interest at the legal
rate of interest per year from the date of purchase,
less the amount of any income received on the
security, or, if the purchaser no longer owns the
security, an offer to pay the purchaser upon
acceptance of the offer damages in an amount that
would be recoverable upon a tender, less the value o f
the security when the purcha ser disposed of it, and
interest at the legal rate of interest per ye ar from
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the date of purchase in cash equal to the damages
computed in the manner provided in this subsection ,
c. if the basis for relief under this section m ay have
been a violation of su bsection C of Section 37 1-509
of this act title, an offer to tender the security, on
payment by the seller of an amount equal t o the
purchase price paid, less income received on the
security by the purchaser, and interest at the legal
rate of interest from the date o f the sale, or if the
purchaser no longer owns the securi ty, an offer to pay
the seller upon acceptance of the offer , in cash,
damages in the amount of the difference between the
price at which the security was purchased and t he
value the security would ha ve had at the time of the
purchase in the absence of the purchaser’s conduct
that may have caused liability and inte rest at the
legal rate of interest per year from the date o f the
sale,
d. if the basis for relief under this s ection may have
been a violation of subsection D of Section 37 1-509
of this act title, and if the customer is a purchaser,
an offer to pay as spe cified in subparagraph b of this
paragraph; or, if the customer is a seller, an offer
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to tender or to pay as specified in subparagraph c of
this paragraph,
e. if the basis for relief under this sec tion may have
been a violation of subsection E of Section 37 1-509
of this act title, an offer to reimburse in cash th e
consideration paid for the advice and interest at the
legal rate of interest per year from the date of
payment, or
f. if the basis for relief under this section may have
been a violation of subse ction F of Section 37 1-509
of this act title, an offer to reimburse in cash the
consideration paid for the advice, the amount of any
actual damages that may have been caused b y the
conduct, and interest at the legal rate of interest
per year from the date of the violation causing the
loss;
2. An offer under paragraph 1 of this subsection states that it
must be accepted by the purchaser, seller, or recipient of
investment advice within thirty (30) days after the date of its
receipt by the purchaser, seller , or recipient of investment advice,
or any shorter period, of not less than three (3) days, that the
Administrator, by order, specifies;
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3. The offeror has the present abilit y to pay the amount
offered or to tender the security under paragraph 1 of this
subsection;
4. The offer under paragraph 1 of this subsect ion is delivered
to the purchaser, seller, or recipient of investment advice, or sent
in a manner that ensures receip t by the purchaser, s eller, or
recipient of investment advice; and
5. The purchaser, seller, or recipient of investment advice
that accepts the offer under paragraph 1 of this subsection, in a
record within the period specifi ed under paragraph 2 of this
subsection is paid in accordance with the terms of the offer.
SECTION 34. AMENDATORY 71 O.S. 2021, Section 1 -601, is
amended to read as follows:
Section 1-601. A. The Administrator shall administer the
Oklahoma Uniform Securities Act of 2004.
B. There are hereby created the Oklahoma Securities Commission
and the Department of Securities. The Commission shall be the
policy making and governing authority of the Depar tment, shall
appoint the Administrator and shall be res ponsible for the
enforcement of the Oklahoma Uniform Securities Act of 2004.
C. 1. The Commission shall consist of four (4) members to be
appointed by the Governor by and with the advice and consent of the
Senate. One member will be a member of the Oklahoma Bar Association
appointed from a list of five nominees submitted by the Oklahoma Bar
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Association; one member shall be an active officer of a bank or
trust company operating in the State of Oklahom a appointed from a
list of five nominees submitted by the Oklahoma Bankers Association;
and one member shall be a certified public accountant appo inted from
a list of five nominees submitted by the Oklahom a Society of
Certified Public Accountants; and one member shall be engaged in the
securities industry and shall be appointed for a six -year initial
term from a list of five nominees submitted by th e Oklahoma
Securities Industry Association; provided, that the State Banking
Commissioner shall be and is here by made an ex officio voting member
of the Commission.
2. Except for appointment of the member engaged in the
securities industry as provided for in subsection C of this section,
no person may be appointe d to or by the Commission while such person
is registered as a broker-dealer, agent, investment adviser, or
investment adviser representative under the Oklahoma Uniform
Securities Act of 2004, or w hile he or she is an officer, director,
or partner of any person so registered, or while he or she is an
officer, director, or partner of an issuer which has a registration
statement effective under the Oklahoma Uniform Securities Act of
2004, or while he or she is occupying a similar status or performing
similar functions.
3. It is unlawful for any member of the Commission, the
Administrator, or any other officer or employee of the Department to
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use for personal benefit any information which is filed with or
obtained by the Administrator and which is not made pub lic. No
provision of the Oklahoma Uniform Securiti es Act of 2004 authorizes
any member of the Commission, the Administrator or any other officer
or employee of the Department to disclose any such information
except among themselves or when necessary or ap propriate in a
proceeding or investigation under th e Oklahoma Uniform Securities
Act of 2004 or in connection with a proceeding or investigation
conducted by any state, federal or foreign law enfor cement agency,
securities agency or self-regulatory organization. No provision of
the Oklahoma Uniform Securi ties Act of 2004 either creates or
derogates from any privilege which exists at common law or otherwise
when documentary or other evidence is soug ht under a subpoena
directed to any member of the Commissio n, the Administrator or any
other officer or employ ee of the Department.
4. Except on proof of corruption, no Commissioner shall for his
or her acts or failure to act be civilly liable to any inve stor,
applicant for registration, or any other person.
D. The Governor shall biennially appoint Commission me mbers to
serve for a staggered term of six (6) years. Upon the expiration of
initial terms, the term of each member shall be six (6) years from
the date of his or her appointment and qualification, and un til his
or her successor shall qualify. Vacancies shall be filled by the
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Governor for the unexpired term. Members shall be eligible for
reappointment.
E. The Commission shall select a chair and is hereby authorized
to adopt rules for conducting its proc eedings. Any three members
shall constitute a quor um for transacting Commission business. The
Commission shall meet bimonthly on such date as it may designate and
may meet at such other times as it may deem necessary, or when
called by the chair or by an y two members. Complete minutes of each
meeting shall be kept and filed in the Department and shall be
available for public inspection during reasonable office hours. The
Commission shall report annually to the Governor, to the Speaker of
the House of Representatives and to the President Pro Tempore of t he
Senate. The report shall contain the minutes of each meeting held
during the year, legislative recommendations, a summary of
violations of the Oklahoma Uniform Securities Act of 2004 and action
taken thereon, a list of securities registered under the O klahoma
Uniform Securities Act of 2004 and such other data and information
as may be deemed necessary or appropriate. The Commission is hereby
authorized to publish such report, and the Administrator may sell
copies of such report at such price as is reas onably sufficient to
defray the expenses of the Department in preparing, publishing, and
disseminating the same. Each member of the Commission sh all have
unrestricted access to all offices and records und er the
jurisdiction of the Department. The Commiss ion, or a majority
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thereof, may exercise any power or perform any act authorized for
the Administrator under the provisions of the Oklahoma Unifor m
Securities Act of 2004.
F. The Commission shall appoint a full-time Administrator, who
shall serve at the p leasure of the Commission. The Administrator
shall administer the Oklahoma Uniform Securities Act of 2004 under
the supervision of the Commission and in accordance with its
policies.
G. The Administrator shall be a person of good moral character,
at least thirty (30) years of age, a resident taxpayer of Oklahoma,
and thoroughly familiar with corporate organization, investment
banking, investment t rusts, the sale of securities, and the
statistical details of the manufacturing industries and commerce of
this state. In addition, the Administrator shall:
1. Be a graduate of an accredited law school and a member of
the Oklahoma Bar Association, or sha ll have had ten (10) years’
experience as a certified publi c accountant; and
2. Have at least three (3) years ’ work experience involving
some aspect of the securities industry. The Commission may also
require additional qualifications. The salary of the Administrator
shall be fixed by the Commission.
H. The Administrator, with the approval of the Commission, m ay
designate a Deputy Securities Administrator, who shall possess the
same qualifications, including bond, required for the Administrator
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and who shall perform all the duties required to be performed by th e
Administrator when the Administrator is absent or unable to act for
any reason.
I. Before assuming office, the Administrator shall give a bond
in the sum of Fifty Thousand Dollars ($50,000.00) p ayable to the
State of Oklahoma, to be approved by the Atto rney General of the
State of Oklahoma, conditioned that he or she will faithfully
execute the duties of the office. The Administrator may by rule or
order require any employee of the Department to be bonded on the
same condition and in the same or such le sser amount as he or she
determines. The expense o f all such bonds shall be paid from funds
available to the Department.
J. 1. The internal administrative organization of the
Department shall be determined by the Commission in such manner as
to promote the efficient and effective enforcement of the Okla homa
Uniform Securities Act of 2004. The Department shall include, but
not be limited to, divisions relating to:
a. registration of broker -dealers, agents, investment
advisers, and investment adviser repr esentatives,
b. registration of securities,
c. investigation and enforcement, and
d. investor education.
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2. Within the division of investor education, the Department
may provide the following serv ices at the discretion of the
Administrator:
a. informing investors of all rights and remedies
available under this act,
b. informing investors of the availability of private
dispute resolution, including arbitration and
mediation, as an alternative to oth er courses of
action,
c. acting as a liaison between invest ors and the other
divisions of the Department, and
d. acting as a liaison between investors and issuers of
securities, broker-dealers or investment advisers
subject to the jurisdiction of the Depar tment under
this act.
Nothing in this subsection shall auth orize any employee of the
Department to represent t he interests of, or to serve as counsel
for, investors in any proceeding or action to include an
administrative or civil proceeding brought by the Department or the
Securities and Exchange Commission, a pr oceeding brought by the
National Association of Sec urities Dealers, Inc., or an arbitration
or mediation proceeding. Further, no employee of the Department may
advise any person about the value of securities or as to the
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advisability of investing in, purc hasing or selling securities, or
as to the value or merits of pursuing a particular course of action.
3. Employees Records of the division of investor education
shall not be exempt from the provis ions of the Open Records Act and
Section 1-607 of this title except as provided for in subparagraph 8
of paragraph B of Section 1-607 of this title.
K. The Administrator shall prepare in writing a manual of
necessary employee positions for the Department, including job
classifications, personnel qualifications, d uties, maximum and
minimum salary schedules, and ot her personnel information, which
shall be approved by the Com mission. The Administrator may select,
appoint, and employ such attorneys, accountants, auditors,
examiners, clerks, stenographers, and other p ersonnel as he or she
deems necessary for the prope r administration of the Oklahoma
Uniform Securities Act of 2004, and may fix their compensation and
the salary of the Deputy Administrator. The D eputy Administrator
and other employees of the Department s hall serve at the pleasure of
the Administrator.
L. The Commission and the Securities Department shall be
assigned offices in Oklahoma City, Oklahoma, by the Office of
Management and Enterprise Se rvices, and all records of the
Commission and Department sh all be kept in those offices, unless and
until transferred to the Records Management Division of the Oklahoma
Department of Libraries.
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M. The Department of Securities ’ attorney, paralegal, legal
secretary, accountant, investigator, examiner, chief financi al
officer, network administrator, business manager , and investor
education coordinator positions shall be in the unclassif ied service
and are in no way subject to any of the provisions of the Meri t
System of Personnel Administration or of the rules promul gated by
the Office of Management and Enterprise Se rvices except those
relating to leave regulations.
N. 1. Neither the Administrator nor any employee of the
Department, during their respective t erms of employment, shall serve
as a director, officer, sha reholder, member, partner, agent or
employee of any person who, during the period of such
Administrator’s or employee’s employment with the Department:
a. was licensed or applied for registration a s a broker-
dealer, agent, investment adviser or investment
adviser representative under this act, or
b. applied for or secured the registration of securities
under the Oklahoma Unifo rm Securities Act of 2004.
2. Nothing in paragraph 1 of this subsection s hall prohibit the
holding, purchasing or selling of any sec urities by the
Administrator or any employee of the Department in accordance with
regulations adopted by the Commission for the purpose of protecting
the public interest and avoiding conflicts of i nterest.
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3. Nothing contained in paragraph 1 of this subse ction shall
prohibit the holding, purchasing or sel ling of any securities of any
issuer described in subparagraph b of para graph 1 of this subsection
of this section by the Administrator if either:
a. the Administrator together with his or her spouse, or
minor children, owns less than one percent (1%) of a ny
class of outstanding securities of any such issuer so
long as such securities are not purchased in an
initial public offering, or
b. such securities are held or purchased through a
management account or trust administered by a bank or
trust company authorized to do business in this state
that has sole investment discretion regarding the
holding, purchasing or selling of such securities and
the Administrator or employee did not, directly or
indirectly, advise, counsel or command the holding,
purchasing or selling of any securities or furnish any
information relating to any su ch securities to such
bank or trust company and further, such account or
trust does not at any time have more than ten percent
(10%) of its total assets invested in the securities
of any one issuer or hold more than five percent (5%)
of the outstanding sec urities of any class of
securities of any one issuer.
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O. N. The Oklahoma Uniform Securities Act of 2004 does not
create or diminish a privilege or exemption that exists at common
law, by statute or rule, or otherwise.
P. O. The Administrator may develop and im plement investor
education initiatives to inform the public about in vesting in
securities, with particular emphasis on the prev ention and detection
of securities fraud. In devel oping and implementing these
initiatives, the Administrator may collaborate wi th public and
nonprofit organizations with an interest in investor e ducation. The
Administrator may accept a grant or donation from a person that is
not affiliated with the secu rities industry or from a nonprofit
organization, regardless of whether the or ganization is affiliated
with the securities industry, to develop an d implement investor
education initiatives. This subsectio n does not authorize the
Administrator to require p articipation or monetary contributions of
a registrant in an investor educatio n program.
SECTION 35. AMENDATORY 71 O.S. 2021, Section 1-604, is
amended to read as follows:
Section 1-604. A. If the Administrator determines that a
person has engaged, is engaging, or is about to engage in an act,
practice, or course of business constituting a violation of this act
or a rule adopted or order issued under this act or constituting a
dishonest or unethical practice or that a person has materially
aided, is materially aiding, or is about to materially aid an act,
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practice, or course of business constituting a violation of this act
or a rule adopted or order issued under this act or constituting a
dishonest or unethical practice, the Administrator may:
1. Issue an order directing the person to cease and desis t from
engaging in the act, practice, or course of business or to take
other action necessary or appropriate to comply with this act;
2. Issue an order denying, suspending, revoking, or
conditioning the exemptions for a broker -dealer under subparagraph d
or f of paragraph 1 of subsection B of Section 18 1-401 of this act
title or an investment adviser under subparagraph c of paragraph 2
of subsection B of Section 20 1-403 of this act title; or
3. Issue an order under Section 9 1-204 of this act title.
B. An order under subsection A of this section is effective on
the date of issuance. Upon issuance of the order, the Administrat or
shall promptly serve each person subject to the order with a copy of
the order and a notice that the order has been entered. The order
must include a statement whether the Administrator will seek a ci vil
penalty or costs of the investigation, a stateme nt of the reasons
for the order, and notice that, within fifteen (15) days after
receipt of a request in a record from the person , the matter will be
scheduled for a hearing and the hearing shall be comme nced within
fifteen (15) days of the matter being se t for hearing. Any request
for a hearing shall be made in writing and the person making the
request shall specifically admi t or deny the allegations contained
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in the order. If a person subject to the or der does not request a
hearing and none is ordered by the A dministrator, within thirty (30)
days after the date of service of the order, the order , that may
include a civil penalty or costs of the investigation if a civil
penalty or costs were sought in th e statement accompanying the
order, becomes final as to tha t person by operation of law. If a
hearing is requested or ordered, the Administrator, after notice of
and opportunity for hearing to each person subje ct to the order, may
modify or vacate the ord er or extend it until final determination.
C. If a hearing is requested or ordered pursuant to subsection
B of this section, a hearing must be held pursuant to the
Administrative Procedures Act. A final order may not be issued
unless the Administrator ma kes findings of fact and conclusions of
law in a record in accordance with the Administrative Procedure s
Act. The final order may make final, vacate, or modify the order
issued under subsection A of this section.
D. In a final order under subsection C of this section, the
Administrator may impose a civil penalty up to a maximum of Five
Thousand Dollars ($5,000.00) for a single violation or up to Two
Hundred Fifty Thousand Dollars ( $250,000.00) for multiple violations
in a single proceeding or a series of related proceedings.
E. In a final order, the Administrato r may charge the actual
cost of an investigation or proceeding for a violation of this act
or a rule adopted or order issu ed under this act.
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F. If a petition for judicial review of a final order i s not
filed in accordance with Section 47 1-609 of this act title, the
Administrator may file a certified copy of the final order with the
clerk of a court of competent jurisdiction . The order so filed has
the same effect as a judgment of the court and ma y be recorded,
enforced, or satisfied in the same manner as a judgment of the
court.
G. If a person does not comply with an order under this
section, the Administrator may petition a court of competent
jurisdiction to enfo rce the order. The court may not require the
Administrator to post a bond in an action or p roceeding under this
section. If the court finds, after service and opportunity for
hearing, that the person was not in c ompliance with the order, the
court may adjudge the person in civil contemp t of the order. The
court may impose a further civil penal ty against the person for
contempt in an amount not to exceed One Thousand Dollars ($1,000.00)
for each violation and may grant any other relief the court
determines is just and proper in the circu mstances.
SECTION 36. AMENDATORY 7 1 O.S. 2021, Section 1-605, is
amended to read as follows:
Section 1-605. A. The Administrator may:
1. Issue forms and orders and, after notice and comment, may
adopt and amend rules necessary o r appropriate to carry out this act
and may repeal rules, including rules and forms governing
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registration statements, applications, notice filings, reports, and
other records;
2. By rule, define terms, whether or not used in this act, but
those definitions may not be inconsistent with this act; and
3. By rule, classify securities, persons, and transactions and
adopt different requirements for different classes.
B. Under this act, a rule or form may not be adopted or
amended, or an order issued or amende d, unless the Administrator
finds that the rule, form, order, or amendment is necessary or
appropriate in the public interest or for the protection of
investors and is consistent with the purposes intended by this act.
In adopting, amending, and repealing rules and forms, Section 46 1-
608 of this act title applies in order to achieve uniformity among
the states and coordination with federal laws in the form and
content of registration statements, applications, reports, and other
records, including the adop tion of uniform rules, forms, and
procedures.
C. Subject to Section 15(h) 15(i) of the Securities Exchange
Act (15 U.S.C. Section 78o(i)) and Section 222 of the Investment
Advisers Act of 1940 (15 U.S.C. Section 80b -18a), the Administrator
may require that a financial statement filed under this act be
prepared in accordance with generally accepted accounting principles
in the United States and comply with other requ irements specified by
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rule adopted or order issued under this act. A rule adopted or
order issued under this act may establish:
1. Subject to Section 15(h) 15(i) of the Securities Exchange
Act (15 U.S.C. Section 78o(i)) and Section 222 of the Investment
Advisors Act of 1940 (15 U.S.C. Section 80b -18a), the form and
content of financial statemen ts required under this act;
2. Whether unconsolidated financial statements must be filed;
and
3. Whether required financial statements must be audited by an
independent certified public accoun tant.
D. The Administrator may provide interpretative opinion s or
issue determinations that the Administrator will not institute a
proceeding or an action under this act against a specified person
for engaging in a specified act, practice, or course of bu siness if
the determination is consistent with this act. The charge for
interpretative opinions or determinati ons that the Administrator
will not institute an action or a proceeding under this act shall be
specified in Section 50 1-612 of this act title.
E. A penalty under this act may not be imp osed for, and
liability does not arise from, conduct that is engaged in or omitted
in good faith believing it conforms to a rule, form, or order of the
Administrator under this act.
F. A hearing in an administrative proceedi ng under this act
shall be conducted in public.
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SECTION 37. AMENDATORY 71 O.S. 2 021, Section 1-606, is
amended to read as follows:
Section 1-606. A. The Administrator shall maintain, or
designate a person to maintain, a re gister of applications for
registration of securities; re gistration statements; notice filings;
applications for reg istration of broker-dealers, agents, investment
advisers, and investment adviser representatives; notice filings by
federal covered investme nt advisers that are or have been effective
under this act or the predecessor act; notices of claims of
exemption from registration or notice filing requirements contained
in a record; orders issued under this act or the predecessor act;
and interpretative opinions or no action determinations issued under
this act.
B. The Administrator shall make all rules, forms,
interpretative opinions, and orders available to the public.
C. The Administrator shall furnish a copy of a record that is a
public record or a certification that the public record does not
exist to a person who so requests. The charge for furnishing the
record or certification shall be specified in Section 50 1-612 of
this act title. A copy of the record certified or a certificate by
the Administrator of a record ’s nonexistence is prima facie eviden ce
of a record or its nonexistence.
SECTION 38. AMENDATORY 71 O.S. 2021, Section 1 -607, is
amended to read as follo ws:
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Section 1-607. A. Except as otherwise provided in subsection B
of this section, records obtained by the Admini strator or filed
under this act, including a record contain ed in or filed with a
registration statement, application, notice filing, or report, are
public records and are available for public examination.
B. The following records are not public records an d are not
available for public examination under subsection A of this section:
1. A record obtained by the Administrator or created by a
representative of the Administrator in connection with an audit or
inspection under subsection K of Section 14 1-305 or subsection D of
Section 27 1-410 of this act title or an investigation under Section
40 1-602 of this act title;
2. A part of a record filed in connection with a registration
statement under Sections 10 1-301 and 12 1-303 through 14 1-305 of
this act title or a record obtained under subsection K of Section 14
1-305 or subsection D of Section 27 1-410 of this act title that
contains trade secrets or confidential information if the pers on
filing the registration statement or providing the record has
asserted a claim of confidentiality or privilege that is authoriz ed
by law;
3. A record that is not required to be provided to the
Administrator or filed under this act and is provided to th e
Administrator only on the condition that the record will not be
subject to public examination or disclosure;
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4. A record in a litigation file;
5. A nonpublic record received from a person specified in
subsection A of Section 46 1-608 of this act title;
6. A record obtained by the Administrator through a designee of
the Administrator that a rule or order under this act determines has
been:
a. expunged from the Administrator’s records by the
designee, or
b. determined to be nonpublic or nondisclosable by that
designee if the Administrator finds the determination
to be in the public interest and necessary for the
protection of investors; and
7. Any social security number, residential address unless used
as a business address , and residential telephone number containe d in
a record that is filed ; and
8. Any records concerning a participant in the Department’s
investor education program that would be individual student records
or communications subject to the protections of Section 24A.16 of
Title 51 of the Oklahoma Statutes or the Family Educational Rights
and Privacy Act unle ss authorized for release by the parent or
guardian of the participant or by the participant if he or she is
eighteen (18) years of age or older .
C. If disclosure is for the purpose of a civil or
administrative investigation, action, or proceeding brought by the
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Administrator or a criminal referral made by the Administrator or to
a person specified in subsection A of Section 46 1-608 of this act
title, the Administrator may disclose a record obtained in
connection with an audit or inspection under subsection K of Section
14 1-305 of this act title or subsection D of Section 27 1-410 of
this act title or a record obtained or created in connection with an
investigation under Section 40 1-602 of this act title so long as
the receiving person specified in subse ction A of Section 46 1-608
of this act title provides assurances to undertake such safeguards
as are necessary and appropriate to protect the confidentiality of
files to which access is granted and information derived therefrom.
SECTION 39. AMENDATORY 71 O.S. 2021, Section 1-608, is
amended to read as follows:
Section 1-608. A. The Administrator shall, in its discretion,
cooperate, coordinate, consult, and, subject to Section 45 1-607 of
this act title, share records and inf ormation with the securities
regulator of another stat e, Canada, a Canadian province or
territory, a foreign jurisdiction, the Securities and Exchange
Commission, the United States Department of Justice, the Commodity
Futures Trading Commission, the Federa l Trade Commission, the
Securities Investor Protection Corporation, a self-regulatory
organization, a national or international organization of securities
regulators, a federal or state banking and insurance regulator, and
a governmental law enforcement ag ency to effectuate greater
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uniformity in securities ma tters among the federal government, self-
regulatory organizations, states, and foreign governments.
B. In cooperating, coordinating, consulting, and sharing
records and information under this section a nd in acting by rule,
order, or waiver under this act, the Administrator shall, in its
discretion, take into consideration in carrying out the public
interest the following general policies:
1. Maximizing effectiveness of regulation f or the protection of
investors;
2. Maximizing uniformity in federal and st ate regulatory
standards; and
3. Minimizing burdens on the business of capital formation,
without adversely affecting essentials of investor protection.
C. The cooperation, coordi nation, consultation, and sharing of
records and information authorized by this section includes:
1. Establishing or employing one or more designees as a central
depository for registration and notice filings under this act and
for records required or all owed to be maintained under this act;
2. Developing and maintaining unifor m forms;
3. Conducting a joint examination or investigation;
4. Holding a joint administrative hearing;
5. Instituting and prosecuting a joint civil or administrative
proceeding;
6. Sharing and exchanging personnel;
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7. Coordinating registrations under Sections 10 1-301 and 18 1-
401 through 21 1-404 of this act title and exemptions under Section
8 1-203 of this act title;
8. Sharing and exchanging records, subject to Section 45 1-607
of this act title;
9. Formulating rules, statements of policy, guidelines, forms,
and interpretative opinions and re leases;
10. Formulating common systems and procedures;
11. Notifying the public of proposed rules, forms, statements
of policy, and guidelines;
12. Attending conferences and other meetings among securities
regulators, which may include representatives o f governmental and
private sector organizations involved in capital formation, deemed
necessary or appropriate to promote or achieve uniformity; and
13. Developing and maintaining a uniform exemption from
registration for small issuers, and taking other s teps to reduce the
burden of raising investment capital by small businesses.
SECTION 40. AMENDATORY 71 O.S. 2021, Sect ion 1-610, is
amended to read as follows:
Section 1-610. A. Sections 10 1-301 and 11 1-302, subsection A
of Section 18 1-401, subsection A of Section 19 1-402, subsection A
of Section 20 1-403, subsection A of Section 21 1-404, and Sections
29, 34, 37 1-501, 1-506, 1-509 and 38 1-510 of this act title do not
apply to a person that sells or offers to sell a security unless the
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offer to sell or the sale is made in this state or the offer to
purchase or the purchase is made and accepted in this state.
B. Subsection A of Se ction 18 1-401, subsection A of Section 19
1-402, subsection A of Section 20 1-403, subsection A of Section 21
1-404, and Sections 29, 34, 37 1-501, 1-506, 1-509 and 38 1-510 of
this act title do not apply to a person that purchases or offers to
purchase a security unless the offer to purchase or the purchase is
made in this state or the offer to sell or the sale is made and
accepted in this state.
C. For the purpose of this section, an offer to sell or to
purchase a security is made in this state, whether or not either
party is then present in this state, if the offer:
1. Originates from within this state; or
2. Is directed by the offeror to a place in this state and
received at the place to which it is directed.
D. For the purpose of this section, an o ffer to purchase or to
sell is accepted in this state, whet her or not either party is then
present in this state, if the acceptance:
1. Is communicated to the offeror in this state and the offeree
reasonably believes the offeror to be present in this stat e and the
acceptance is received at the place in this state to which it is
directed; and
2. Has not previously been communicated to the of feror, orally
or in a record, outside this state.
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E. An offer to sell or to purchase is not made in this state
when a publisher circulates or there is circulated on the
publisher’s behalf in this state a bona fide newspaper or other
publication of general , regular, and paid circulation that is not
published in this state, or that is published in this state but has
had more than two thirds of its circulation outside this state
during the previous twelve (12) months or when a radio or television
program or other electronic communication originating outside this
state is received in this state. A radio or television progra m, or
other electronic communication is considered as havin g originated in
this state if either the broadcast studio or the originating sou rce
of transmission is located in this state, unless:
1. The program or communication is syndicated and distributed
from outside this state for redistribution to the general p ublic in
this state;
2. The program or communication is supplied by a radio,
television, or other electronic network with the electronic signal
originating from outside this state for redistributi on to the
general public in this state;
3. The program or communication is an electronic communication
that originates outside this state and is captured for
redistribution to the general public in this state by a community
antenna or cable, radio, cable television, or other electronic
system; or
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4. The program or communication consists of an electronic
communication that originates in this state, but which is not
intended for distribution to the general public in this state.
F. Subsection A of Section 20 1-403, subsection A of Section 21
1-404, subsection A of Section 22 1-405, and Sections 30, 33 1-502,
1-505, and 34 1-506 of this act title apply to a person if the
person engages in an act, practice, or course of business
instrumental in effecting prohi bited or actionable conduct in this
state, whether or not either party is then present in this state.
SECTION 41. AMENDATORY 71 O.S. 2021, Section 1 -612, is
amended to read as follows:
Section 1-612. A. Unless otherwise provided for by law, the
following shall be the fees charg ed pursuant to the provisions of
this act:
1. Broker-dealer registration fee or
renewal fee............................... $300.00
2. Broker-dealer or issuer agent or
broker-dealer principal
registration fee or renewal fee ............$50.00
3. Broker-dealer agent on an inactive
basis, renewal fee......................... $10.00
4. Investment adviser registration fee
or renewal fee............................ $300.00
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5. Investment adviser annual notice
filing fee................................ $300.00
6. Investment adviser repres entative
registration fee or renewal fee ............$50.00
7. Mass transfer fee........................... $10.00 per
transferee
8. Mailing list fee............................ $30.00 per year
9. Review of sales literature package ..........$50.00
10. Broker-dealer or investment adviser
financial or operating reports .............$50.00
11. Issuer sales reports ........................ $50.00
12. Notice of exemption filing or
request for order of exemption ............$250.00
13. Interpretive opinion or no-action
request................................ ...$250.00
14. Affidavit request ........................... $10.00
15. Service of process upon the
Administrator.............................. $10.00
16. Amendments to registration
statements or notice filings
pursuant to Section 1-302 of this
title involving changes to the
issuer’s application or notice
filing form:
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a. examination fee....................... $50.00, and
b. a filing fee computed in the same
manner as the filing fee requ ired
pursuant to of subsection B of
this section for any additional
securities being registered.
17. Copying fee.
a. 8 1/2” by 14” or smaller................$.25 per page
b. Larger than 8 1/2” by 14”..............$1.00 per page
c. Certified copy 8 1/2 ” by 14”
or smaller............................. $1.00 per page
d. Certified copy larger than 8
1/2” by 14”............................ $2.00 per page
18. Document search fee for commerc ial
purpose................................ ....$20.00 per hour
19. Notice filing fee for a federal
covered security under Section 18
(b)(4) 18(b)(4)(D)(ii) and
(b)(4)(F) of the Securities Act of
1933 (15 U.S.C. Section
77r(b)(4)(D)(ii) and (b)(4)(F)............$250.00
20. Late fee for late notice filin g for
a federal covered security under
Section 18(b)(4)(F) of the
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Securities Act of 1933 (15 U.S.C.
Section 77r(b)(4)(F) …………………$250.00
B. For the purpose of registering securities under this act,
any person filing a registration statement shall pay an examination
fee of Two Hundred Dollars ($200.00) and a filing fee computed upon
the aggregate offering price of the securities sought to be
registered in Oklahoma as follows:
a fee equal to one-tenth of one percent (1/10 of 1%)
of said price; provided, in no event shall the filing
fee be less than Two Hundred Dollars ($200.00) or more
than Two Thousand Five Hundred Dollars ($2,500.00).
C. Any person making a notice filing pursuant to subsection A
of Section 1-302 of this title, or renewing such a filing, shall pay
a filing fee of Five Hundred Dollars ($500.00) with each such notice
or renewal filed.
D. A person required to pay a filing or notice fee unde r this
section may transmit the fee through or to a per son designated by
rule adopted or order issued under this act. All fees and other
charges collected by the Administrator shall be deposited in the
General Revenue Fund with the State Treasurer, except for the fees
deposited in the Oklahoma Department of S ecurities Revolving Fund
and the amounts deposited in the Oklahoma Department of Securities
Investor Education Revolving Fund.
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E. There is hereby created in the State Treasury a revolving
fund for the Oklahoma Department of Securities to be designated the
“Oklahoma Department of Securities Revolving Fund”. The fund shall
be a continuing fund, not subject to fiscal year limitations, and
shall consist of fees and other charges collected by the
Administrator as follows:
1. The fees collected pursuant to par agraphs 1, 4, 5, 8, 14,
15, 17 and 18 of subsection A of this section;
2. The fees collected pursuant to the provisions of Section 1 -
504 of this title as provided in paragraph 9 of subsection A of thi s
section;
3. The examination fees designated in parag raph 16 of
subsection A and in subsection B of this section;
4. The amounts collected pursuant to subsection D of Section 1 -
605 of this title set forth in paragraph 13 of subsection A of this
section; and
5. One Hundred Fifty Dollars ($150.00) of each fi ling fee
collected pursuant to subsection C of this section.
The Oklahoma Department of Securities Revolving Fund shall be a
continuing fund, not subject to fiscal year limitations.
Expenditures from the Oklahoma Department of Securities Revolving
Fund shall be made pursuant to the laws of this state and the
statutes relating to the Oklahoma Department of Securities, and
without legislative appropriation. Expenditures from the Oklahoma
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Department of Securities Revolving Fund shall be made upon warrants
issued by the State Treasurer against claims filed as prescribed by
law with the Director of the Office of Management and Enterprise
Services for approval and payment.
F. There is hereby created in the State Treasury a revolving
fund for the Oklahoma Depart ment of Securities to be designated the
“Oklahoma Department of Securities Investor Education Revolving
Fund”. The fund shall be a continuing fund, not subject to fiscal
year limitations, and shall co nsist of all amounts collected
pursuant to court order or judgment in actions brought by the
Administrator, and amounts received in multistate settlements
participated in by the Department, and interest attributable to the
investment of the fund that shall be deposited in the Oklahoma
Department of Securities Investor Education Revolving Fund. The
Fund may be invested in any investment instrument allowed by
Oklahoma Statutes to the State Treasurer for the investment of state
funds. Any amounts received fr om any court settlement in excess of
One Million Dollars ($1,000,000.00) shall be transferred to the
General Fund. The Administrator shall use the moneys in this fund
exclusively for the specific purposes of research for education and
education of Oklahom a residents in matters concerning securities
laws and general investor protection. The Oklahoma Department of
Securities Investor Education Revolving Fund shall be a continuing
fund, not subject to fiscal year limitations. Expenditures from the
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Oklahoma Department of Securities Investor Education Revolving F und
shall be made pursuant to the laws of this state and the statutes
relating to the Oklahoma Department of Securities, and without
legislative appropriation. Expenditures from the Oklahoma
Department of Securities Investor Education Revolving Fund shall be
made upon warrants issued by the State Treasurer against claims
filed as prescribed by law with the Director of the Office of
Management and Enterprise Services for approval and payment.
G. There is hereby created a petty cash fund for the Oklahoma
Department of Securities. The Director of the Office of Management
and Enterprise Services and the Administrator are hereby authorized
and it shall be their duty to fix the maximum amount of the petty
cash fund, not to exceed Five Hundred Dollars ($500.00). The
Director of the Office of Management and Enterprise Services shall
prescribe all forms, systems, and procedures for administering the
petty cash fund. The fund shall be used solely to pay:
1. Examination, investigation and litigation expenses of th e
Department, including, but not limited to, court costs, filing fees,
copying fees, and witness fees; and
2. Incidental operating expenses of the Department not to
exceed One Hundred Dollars ($100.00 ) per transaction.
H. Once paid, fees shall be nonrefu ndable.
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I. Section 211 of Title 62 of the Oklahoma Statutes shall not
apply to the Oklahoma Department of Securities or the Oklahoma
Securities Commission.
SECTION 42. AMENDATORY 71 O.S. 2021, Section 803, is
amended to read as fo llows:
Section 803. The following business opportunities a re exempt
from Sections 806 through 811 of this title:
1. Any offer or sale of a business opportun ity for which the
immediate cash payment made by the purchaser for any business
opportunity is at least Twenty-five Thousand Dollars ($25,000.00) if
the immediate cash payment does not exceed twenty percent (20%) of
the purchaser’s net worth as determined exclusive of principal
residence, furnishings therein, and automobiles. The Administrator
may by rule withdraw or further condition the availability of this
exemption.
2. Any offer or sale of a business opportunity for which the
purchaser is required to make a payment to the se ller or a person
recommended by the seller not to exceed Five Hundred Do llars
($500.00). For purposes of this paragraph, “payment” means the
total amount the purchaser becomes obligated to pay to the seller or
to any third party ei ther prior to or at the time of delivery of the
products, equipment, supplies or services or wit hin one (1) year of
the commencement of operation of the busi ness opportunity by the
purchaser. If payment is over a period of time, “payment” shall
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include the sum of the down paymen t and the total periodic payments.
If the purchaser may enter at differ ent levels, “payment” means the
total sum the purchaser is ob ligated to pay to enter at the level
chosen by the purchaser.
3. Any offer or sale of a business o pportunity where the sel ler
has a net worth of not less than One Million Dollars ($1,000,000.00)
as determined on the basis of the seller’s most recent audited
financial statements, prepared within thirteen (13) months of such
offer or sale in accordance w ith generally accepted a ccounting
principles and audited in accordance with generally accepted
auditing standards. Net worth may be determined on a consolid ated
basis where the seller is at least eighty percent (80%) owned by one
person and that person ex pressly guarantees the o bligations of the
seller with regard to the offer or sale of any busines s opportunity
claimed to be exempt under this paragraph. The Administrator may by
rule withdraw or further condition the availability of this
exemption.
4. Any offer or sale of a bus iness opportunity where the
purchaser has a net worth of not less than T wo Hundred Fifty
Thousand Dollars ($250,000.00). Net worth s hall be determined
exclusive of principal residence, furnishings therein, and
automobiles. The Adm inistrator may by rule w ithdraw or further
condition the availability of this exemption.
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5. Any offer or sale of a business opportunity where the
purchaser is a bank, savings and loan association, trust company,
insurance company, credit union, investment company as defined by
the Investment Company Act of 1940, pension or profit sharing trust
or other financial institution or institutional buyer or a dealer
registered pursuant to the Oklahoma Securities Act, where the
purchaser is acting for itself or in a fiduciary capacity.
6. Any offer or sale of a business opportunity or franchise as
defined in Section 802 of this title provided that the seller
delivers to each purchaser fourteen (14) calendar days prior to the
earlier of the execution by a purchaser of any contract or agree ment
imposing a binding legal obligation on the purchaser or the payment
by a purchaser of any consideration in connection with the o ffer or
sale of the business opportunity or franchise, one of the following
disclosure documents:
a. A Uniform Franchise Of fering Circular a disclosure
document prepared in accordance with the guidel ines
adopted by the North American Securities
Administrators Association, Inc., or
b. A a disclosure document prepared pursuant to the
Federal Trade Commission rule entitled Disclosure
Requirements and Prohibitions Co ncerning Franchising,
16 C.F.R. Section Part 436 or the Business Opportunity
Rule, 16 C.F.R. Part 437 as applicable.
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For the purposes of this paragraph, a personal meet ing shall
mean a face-to-face meeting between the purch aser and the seller or
their representatives, which is held for the purpos e of discussing
the offer or sale of a business opportu nity. The Administrator may
by rule adopt any amendment to the Uniform Franchise Offering
Circular disclosure document that has been adopted by the North
American Securities Administrators Association , Inc. or any
amendment to the disclosure document prepared pursuant to the
Federal Trade Commission rule entitled Disclosure Requirements and
Prohibitions Concerning Franchising, 16 C.F.R. Section Part 436,
that has been adopted by the Federal Trade Commi ssion or the
Business Opportunity Rule, 16 C.F.R. Part 437 as applicable.
7. Any offer or sale of a business opportunity f or which the
required cash payment made by a purchaser to p articipate in any
business opportunity does not exceed Seven Hundred Fifty Dollars
($750.00) and the required payment is made for :
a. the not-for-profit sale of sales demonstration
equipment, material or samples, and/or
b. product inventory sold to the pur chaser at a bona fide
wholesale price.
8. Any offer or sale of a business opportunity which the
Administrator exempts by order o r a class of business opportunities
which the Administrator exempts by rule upon the finding that such
exemption would not be c ontrary to public interest and that
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registration would not be necessary or appropriate for the
protection of purchasers.
9. Any business which is operated under a lease or license on
the premises of the lessor or licenser as long as such business is
incidental to the business conducted by th e lessor or the licenser
on such premises, including, without limitation, leased departments ,
licensed departments and concessions.
SECTION 43. AMENDATORY 71 O.S. 2021, Section 807, is
amended to read as fol lows:
Section 807. A. In order to register a business oppor tunity,
the seller shall file with the Administrator one of the following a
disclosure documents document prepared pursuant to Section 808 of
this title with the appropriate cover sheet as required by Section
808 of this title, a consent to service of process as specified in
subsection B of this section, the a ppropriate fee set forth in
Section 829 of this title, and any other information determined by
the Administrator to be necessary :
1. A Uniform Franchise Offering Circular prepared in accordance
with the guidelines adopted by the North American Securities
Administrators Association, Inc. The Administrator may by rule
adopt any amendment to the Uniform Franch ise Offering Circular that
has been adopted by the North American Securities A dministrators
Association, Inc.;
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2. A disclosure document prepared pursu ant to the Federal Trade
Commission rule entitled Disclosure Requirements and Prohibitions
Concerning Franchising and Business Opportunity Ventures; 16 C.F.R.
Section 436. The Admini strator may by rule adopt any amendment to
the disclosure document prepar ed pursuant to 16 C.F.R. Section 436
that has been adopted by the Federal Trade Commission; or
3. A disclosure document prepared pursuant to Section 808 of
this title.
B. Every seller shall file the consent to service of process
required by Section 818 o f this title.
C. A registration automatically becomes effective upon the
expiration of fifteen (15) full business days after a complete
filing, provided that no order has been issued or that no proceeding
is pending pursuant to Section 810 of this title. The Administrator
may by order waive or reduce the time period prior to effectiveness,
provided that a complete filing has been made. The Administrator
may by order defer the effect ive date until the expiration of
fifteen (15) full business days after th e filing of any amendment.
For purposes of this subsection, a filing shall be deemed complete
upon receipt by the Administrator of the items described in
subsections A and B of this section.
D. The registration is effective for one (1) year commencing on
the day of effectiveness and may be renewed annually upon the filing
of a current disclosure document ac companied by any documents or
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information that the Administrator may by rule o r order require. A
renewal fee as set forth in Section 829 of this title shall
accompany each request for renewal. Failure to renew upon the close
of the one-year period of effectiveness will result in expiration of
the registration. The Administrator m ay by rule or order require
the filing of a sales report and payment of a report filing fee as
set forth in Section 829 of this title.
E. The Administrator may by rule or order require the filing of
all proposed literature or advertising prior to its use and payment
of the review fee as set forth in Section 829 of this title f or each
sales literature or advertising package.
SECTION 44. AMENDATORY 71 O.S. 2021, Section 809, is
amended to read as follows:
Section 809. A. It is unlawful for any perso n to offer or sell
any business opportunity, as defined in Section 2 802 of the
Oklahoma Business Opportunity Sales Act this title, unless the
business opportunity contract or agreement is in writing and a copy
of the contract or agreement is given to the purchaser at the time
the purchaser signs the contract or agreement.
B. Contracts or agreements shall set forth in at least ten -
point type the following:
1. The terms and conditions of any and all payments due to the
seller;
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2. The seller’s principal business address and the name and
address of the seller ’s agent in this state authorized to receive
service of process;
3. The business form of the seller, wh ether corporate,
partnership or otherwise;
4. The delivery date or, when the contract provides for a
periodic delivery of items to the purchaser, the app roximate
delivery date of the product, equipment or supplies the seller is to
deliver to the purchaser to enable the purchaser to start his or her
business; and
5. Whether the product, equipment or su pplies are to be
delivered to the purchaser’s home or business address or are to be
placed or caused to be placed by the seller at locations owned or
managed by persons other than the purchaser.
SECTION 45. AMENDATORY 71 O.S. 2021, Section 811, is
amended to read as follows:
Section 811. In connection with the offer or sale of a business
opportunity, no seller may make or use any of the representations
set forth in divisions (4) and (5) of subparagraph a of paragraph 3
of Section 2 802 of the Oklahoma Business Opportunity Sales Act this
title unless the seller has at all times a minimum net worth of
Fifty Thousand Dollars ($50,000.00) as determined in accordance with
generally accepted accounting principles.
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SECTION 46. AMENDATORY 71 O.S. 2021, Section 814, is
amended to read as follows:
Section 814. A. Whenever it appears to the Administrator that
any person has engaged in or is about to engage in any act or
practice constituting a viola tion of any provision of the Oklahoma
Business Opportunity Sales Act or any rule or order hereunder, the
Administrator may:
1. Issue an order directing each person to cease and desist
from continuing the act or practice and/or issue an order imposing a
civil penalty up to a maximum of Five Thousand Dollars ($5,000.00)
for a single violation or transaction or of Fifty Thousand Dollars
($50,000.00) for multiple violations or transactions in a single
proceeding or a series of rela ted proceedings; or
2. Prior to, concurrently with, or subsequent to an
administrative proceeding pursuant to paragraph 1 of this
subsection, bring an action in the district court of Oklahoma County
or the district court in any other county where service can be
obtained on one or mor e of the defendants to enjoin the acts or
practices and to enforce compliance with the Oklahoma Business
Opportunity Sales Act or any rule or order hereunder. Upon a proper
showing, a permanent or temporary injunction, restrai ning order or
writ of mandamus shall be granted and a receiver or conservator may
be appointed for the defendant or the defendant’s assets or the
court may order rescission, which shall include restitution plus the
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legal interest rate, for any sales of bus iness opportunities
determined to be unlawful pursuant to the Oklahoma Business
Opportunity Sales Act or any rule or order hereunder. The court
shall not require the Administrator to post a bond. No costs shall
be assessed for or against the Administrato r in a proceeding under
the Oklahoma Business Opportunity Sales Act brought by or against
the Administrator in any court except as otherwise provided by law
In an action under this section and upon a proper showing, the court
may:
a. issue a permanent or temporary injunction, restraining
order, or declaratory judgment,
b. order other appropriate or anci llary relief which may
include:
(1) an asset freeze, accounting, writ of attachment,
writ of general or specifi c execution, and
appointment of a receiver or conservator, that
may be the Administrator, for the defendant or
the defendant’s assets,
(2) ordering the Administrator to take charge and
control of a defendan t’s property including
investment accounts and accounts in a depository
institution, rents, and profits; to collect
debts; and to acquire and di spose of property,
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(3) imposing a civil penalty in an amount not to
exceed Five Thousand Dollars ($5,000.00) for a
single violation or in an amount not to ex ceed
Two Hundred Fifty Thousand Dollars ($250, 000.00)
for more than one violat ion; an order of
rescission, restitution, or disgorgement directed
to a person who has engaged in an act, practice,
or course of business constituting a violation of
this act or a rule adopted or order issued under
this act, and
(4) ordering the payment of prejudgment and
postjudgment interest, or
c. order such other relief as the court considers
appropriate.
B. Except as provided in subsection D of this section or unless
the right to notice and hear ing is waived by the person agains t whom
the sanction is impose d, the sanctions provided in paragra ph 1 of
subsection A of this secti on may be imposed only after notice and
opportunity for hearing as required by the Administrative Procedures
Act. If the person to whom notice is addressed does not request a
hearing within fifteen (15) days after the ser vice of the notice, a
final order as provided for in subsection A of this section may be
issued.
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C. For purposes of determining any sanction to be imposed u nder
subsection A of this section, the Administrator shall cons ider,
among other factors, the frequ ency and persistence of the conduc t
constituting a violation of the Oklahoma Business Opportunity Sales
Act or a rule or order of the Administrator under the Oklahoma
Business Opportunity Sal es Act, the number of persons adversely
affected by the conduct, and the resources of the person co mmitting
the violation.
D. 1. If the Administrator makes written findings of fact to
support the conclusion that the publ ic interest will be harmed by
delay in issuing a cease and desi st order pursuant to paragraph 1 of
subsection A of this section, the Administrator may issue a summary
order pending the hearing required by subsection B of this section.
Upon the entry of the summary order, the Administrator shall
promptly notify the per son subject to the summary order:
a. that the summary order has been e ntered and the
reasons therefor,
b. that the person subject to the summary order, if
desiring a hearing, must make written request for a
hearing to the Admin istrator within fifteen (15) days
after service of the notice is effective,
c. that within fifteen (15) days after receipt by the
Administrator of a written request the matter will be
set for hearing to determine whether t he summary order
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should be modified, vacated or extended pendin g final
determination of any proceed ing under paragraph 1 of
subsection A of this section, and
d. that a hearing shall be commenced within fifteen (15)
days of the matter being set for hearing.
2. The summary order shall remai n in effect until the
conclusion of the hearing on the summary or der unless the
Administrator or the Administrator’s designee extends the summary
order pending a final determination of any proceeding under
paragraph 1 of subsection A of this section. If n o hearing is
requested and none is ordered by the Administrator, the summary
order will remain in e ffect until it is modified or vacated by the
Administrator or the Administrator ’s designee. If a request for
hearing on the summary order is timely made and if the hearing is
not commenced by the Administrator within the time limit set forth
above, the summary order shall dissolve and a cease and desist order
shall not be issued pursuant to paragraph 1 of subsection A of this
section except upon reasonable no tice and opportunity for a he aring
as provided in subsection B of this section.
E. When the Administrator has authority to institute an action
or proceeding pursuant to this section, the Administrator may accept
an assurance of discontinuance of an act or practice that is alleged
to be unlawful under Section 819 of thi s title from the person who
is alleged to have engaged or be about to engage in the act or
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practice. The assurance shall not constitute an admission of guil t.
The assurance may include a st ipulation for any or all of t he
following:
1. The voluntary paym ent by the person for the costs of
investigation;
2. An amount to be held in escrow pending the outcome of an
action; or
3. An amount for restitution to an aggrieved person.
An assurance of discontinuance shall be in w riting and filed
with the Administrator. Unless rescinded by the part ies or voided
by a court for good cause, the assurance may be enforced in the
district court of Oklahoma County by the part ies to the assurance.
The assurance may be modified by the par ties or by a court for good
cause.
SECTION 47. AMENDATORY 71 O.S. 2021, Section 824, is
amended to read as follows:
Section 824. A. Any person who violates Section 6 806,
subsection A of Section 8 808, subsection A of Section 9 809 or
Section 11 811 of the Oklahoma Business Opportunity Sales Act this
title, is liable to the purchaser who may sue either at law or in
equity for rescission, for recovery of all money and other valuable
consideration paid f or the business opportunity a nd for actual
damages, together with i nterest at the legal rate from t he date of
sale, reasonable attorney’s fees and court costs.
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B. Any person who violates Section s 19, 21 819, 821, or 22 822
of the Oklahoma Business Opportunity Sales Act this title is liable
to the purchaser who may sue ei ther at law or in equity for
rescission, for recovery of all money or other valuable
consideration paid for the business opportun ity and for actual
damages, together with interest at the legal rate from the date of
sale, reasonable attorney’s fees and court costs.
SECTION 48. AMENDATORY 71 O.S. 2021, Section 825, is
amended to read as follows:
Section 825. Any person who controls or materially aids a
person liable under Sections 22 822 or 23 823 of this act title
shall be liable jointly and severally with and t o the same extent as
the person committing the violation.
SECTION 49. AMENDATORY 71 O.S. 2021, Section 826, is
amended to read as follows:
Section 826. A. No action shall be maintained under subsecti on
A of Section 24 824 of this act title unless commenced before the
expiration of three (3) years after the act or transaction
constituting the sale. No action shall be maintained under
subsection B of Section 24 824 of this act title unless commenced
before the expiration of two (2) y ears after the untruth or omission
was, or in the exercise of reasonable care should have been,
discovered, or such longer term of limitation as may be otherwise
provided by law.
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B. The rights and remedies under the Oklahoma Business
Opportunity Sales Act are in addition to any other rights or
remedies that may exist at law or in equity.
C. Any condition, stipulation or provision binding any
purchaser of a business opportunity to waive c ompliance with or
relieving a person from any duty or liability impos ed by or any
right provided by the Oklahoma Business Opportunity Sales Act or any
rule or order issued pursuant to the act is void.
SECTION 50. AMENDATORY 71 O.S. 2021, Section 828, is
amended to read as follows:
Section 828. All of the administrative procedures applicable to
investigations and proceedings conducted pursuant to the Oklahoma
Securities Act Oklahoma Uniform Securities Act of 2004 which are not
in conflict with the provisions of this act title shall apply to any
offer and/or sale of a business opportunity in this state.
SECTION 51. AMENDATORY 85 O.S. 2021, Section 398, is
amended to read as follows:
Section 398. A. The Workers’ Compensation Court shall adopt
rules permitting two or more emplo yers not otherwise subject to the
provisions of Section 2b o f this title to pool together liabilities
under this act for the purpose of qualif ying as a group self-insurer
and each such employer shall be classified as a self -insurer.
B. The Court shall app rove the distribution of all
undistributed policyholders ’ surplus of a Workers’ Compensation
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Self-Insurance Program if the Program complies wi th the following
criteria:
1. Has been in business for at least five (5) years;
2. Has its financial statements audited by a public accounting
firm which audits at least on e corporate client which has assets in
excess of One Billion Dollars ($1,000,000,0 00.00) and on which the
accounting firm has i ssued an unqualified opinion as to th e fair
presentation of the finan cial position of the Program showing
adequate solvency and r eserves; and
3. Is in compliance with the provisions of this title and all
other regulations as required by the Court.
C. A group self-insurer created pursuant to this section either
prior to or after the effective date of this act shall not be
subject to the provisions of the Oklahoma Securities Act Oklahoma
Uniform Securities Act of 2004.
SECTION 52. AMENDATORY 85A O.S. 2021, Section 102, is
amended to read as follows:
Section 102. A. The Workers’ Compensation Commission shall
adopt rules permitting two or more employers, not otherwise subject
to the provisions of Section 150 of this act, to pool toge ther
liabilities under this act for the purpose of qualifying as a gr oup
self-insurer and each such employer shall be classified as a se lf-
insurer.
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B. The Commission shall approve the distribution of all
undistributed policyholders ’ surplus of a Workers ’ Compensation
Self-Insurance Program if the Program complies with the following
criteria:
1. Has been in business for at least five (5) years;
2. Has its financial statements audited by a public accounting
firm which audits at least one corporate client w hich has assets in
excess of One Billion Dollars ($1,000,000,000.00) and on which the
accounting firm has issued an unqualified opinion as to the fair
presentation of the financial position of the Program showing
adequate solvency and reserves; and
3. Is in compliance with the provisions of this act and all
other regulations as required by the Commission.
C. A group self-insurer created pursuant to this section either
prior to or after the effective date of this act shall not be
subject to the provisions of the Oklahoma Securities Act Oklahoma
Uniform Securities Act of 200 4.
SECTION 53. This act shall become effective November 1, 2022.
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Passed the Senate the 21st day of February, 2022.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2022.
Presiding Officer of the House
of Representatives