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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
SENATE BILL 1425 By: Montgomery
AS INTRODUCED
An Act relating to the Oklahoma Uniform Securities
Act of 2004; amending 71 O.S. 2 021, Section 1-102,
which relates to defin itions; modifying definition;
and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. 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 att empting to effect
purchases or sales of securities or represents an issuer in
effecting or attempting to effect purchases or sales of the issue r’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
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within the term. The term does not include an indivi dual excluded
by rule adopted or order issued under this act ;
3. “Bank” means:
a. a banking institution organize d under the laws of the
United States,
b. a member bank of the Federal Reserve System ,
c. any other banking institution, whether incorporated o r
not, doing business under the laws of a state or of
the United States, a substantial portion of the
business of which consists of receiving deposits or
exercising fiduciary powers similar to those permitted
to be exercised by national banks under the aut hority
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 purpose of evad ing this act, and
d. a receiver, conservator, or other liquidat ing agent of
any institution or firm included in s ubparagraph a, b
or c of this paragraph;
4. “Broker-dealer” means a person engaged in the business of
effecting transactions in securities for the account of others or
for the person’s own account. The te rm does not include:
a. an agent,
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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) through (vi), ( viii) through
(x), and (xi) if limited to unsolicited transacti ons;
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 S ecurities Exchange Act
of 1934 (15 U.S.C. Section 78c(a)(4)),
d. an international banking institution , or
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 Department of Securities;
7. “Depository institution” means:
a. a bank, or
b. a savings institutio n, trust company, credit union, or
similar institution that is organized or chartered
under the laws of a state or of the United States,
authorized to receive deposits, and supervised and
examined by an official or agency of a state or the
United States if its deposits or share accounts are
insured to the maximum amount authorized by statute by
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the Federal Deposit Insurance Corporation, the
National Credit Union 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 co mpany;
8. “Federal covered investment adviser ” means a person
registered under the Investment Advisers Act of 19 40;
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 provi sion;
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 capa city:
a. a depository institution or international banking
institution,
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b. an insurance company,
c. a separate account of an insurance company ,
d. an investment company as defined in the Investment
Company Act of 1940,
e. a broker-dealer registered under t he Securities
Exchange Act of 1934 ,
f. an employee pension, pro fit-sharing, or benefit plan
if the plan has total assets in excess 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 investment 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 stat e, 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 decis ions are made
by a duly designated public official or by a named
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fiduciary, as defined in the Employee Retirement
Income Security Act of 1974, that is a broker-dealer
registered under the Securities Exchang e Act of 1934,
an investment 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 ,
h. a trust, if it has total assets in 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 th at 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 simil ar business
trust, limited liability company, or p artnership, not
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 t he
Small Business Administration under Section 301 (c) of
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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
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 advise r acting for its
own account,
m. a “qualified institutional buy er” 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 individual, 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 specifi ed 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
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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;
16. “International banking institution ” means an international
financial institution of which the United St ates is a member and
whose securities are exempt f rom registration 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 wri tings, as to the value of securities or
the advisability of investing in, purchasing, or selling securities
or that, for compensation and as a part of a regular business,
issues or promulgates analyses or reports concerning securities.
The term includes a financial planner or other person that, as an
integral component of other financially related services, provides
investment advice to others for compensation as part of a business
or that holds itself out as providing investment advice to others
for compensation. The term does not include:
a. an investment adviser representative ,
b. a lawyer, accountant, engineer, or teacher whose
performance of investment advice is solely incidental
to the practice of the person ’s profession,
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c. a broker-dealer or its agents whose performance of
investment advice is sol ely incidental to the conduct
of business as a broker -dealer and that does not
receive special compensation for the investment
advice,
d. a publisher of a bona fide newspaper, news magazine,
or business or financial publication of general and
regular circulation,
e. a depository institution, or
f. any other person excluded by rule adopted or order
issued under this act;
18. “Investment adviser r epresentative” means an individual
employed by or associated wi th an investment adviser or federal
covered investment adviser and who makes any recommendations or
otherwise gives investment advice regarding securities, manages
accounts or portfolios of cli ents, determines which recommendation
or advice regarding secur ities should be given, provides investment
advice or holds herself or himself out as providing investment
advice, receives compensation to solicit, offer, or negotiate for
the sale of or for se lling investment advice, or supervises
employees who perform an y of the foregoing. The term does not
include an individual who:
a. performs only clerical or ministerial acts ,
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b. is an agent whose performance of investment advice is
solely incidental to th e individual acting as an agent
and who does not receive specia l 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 or proposes to issue a
security, subject to the following:
a. the issuer of a voting trust certifica te, collateral
trust certificate, certificate of d eposit for a
security, or share in an investment company without a
board of directors or individuals performing similar
functions is the person performing the acts and
assuming the duties of depositor or ma nager 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 for assuring
payment of the certificate ,
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c. the issuer of a fractional undivided interest in an
oil, gas, or other mineral lea se or in payments out of
production under a lease, right, or royalty is the
owner of an interest in the lease or in payments out
of production under a lease, right, or royalty,
whether whole or fractional, that creates fractional
interests for the purpose of sale;
20. “Nonissuer transaction ” or “nonissuer distribution” means a
transaction or distribution not directly or indirectly for the
benefit of the issuer ;
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 Act 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 corporation; 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 adviser
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regularly provides brokerage or investment advice or
solicits, meets with, or otherwise comm unicates with
customers or clients , or
b. any other location that is held out to the general
public as a location at which the broker -dealer,
investment adviser, or federal covered investment
adviser provides brokerage or investment advice or
solicits, meets with, or otherwise communicates with
customers or clients;
24. “Predecessor act” means the act repealed by Section 53 of
this act;
25. “Price amendment” means the amendment to a registrati on
statement filed under the Securities Act of 1933 or, if an a mendment
is not filed, the prospectus or prospectu s supplement filed under
the Securities Act of 1933 that includes a statement of the offering
price, underwriting and selling discounts or comm issions, amount of
proceeds, conversion rates, call prices, and other matters dependent
upon the offering price ;
26. “Principal place of business ” of a broker-dealer or an
investment adviser means the executive office of the broker -dealer
or investment adviser from which the officers, partners, or managers
of the broker-dealer or investment adviser direct, control, and
coordinate the activities of the broker -dealer or investment
adviser;
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27. “Promoter” includes:
a. a person who, acting alone or in concert with one or
more persons, takes the entrepreneurial initiative in
founding or organizing the business or enterpr ise of
an issuer,
b. an officer or director owning securities of an issuer
or a person who owns, beneficially or of record, ten
percent (10%) or more of a class of securities of the
issuer if the officer, d irector, or person acquires
any of those securitie s 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 fa mily 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 the transaction is not an arms-
length transaction.
For purposes of this subsection, “immediate family” means a
spouse of a person within 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 ;
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28. “Record” except in the phrases “of record,” “official
record,” and “public record,” means information that is inscribed on
a tangible medium or that is stored in an electronic or other medium
and is retrievable in perceivable form;
29. “Registration statement” means the documentation provided
to the Securities and Exchange Commission or the Department in
connection with the registration of se curities under the Securities
Act of 1933 or this title and inc ludes 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, co ntract to sell,
or disposition of, a security or interest in a security for value,
and “offer to sell” includes every attempt or offer to dispose of,
or solicitation of an offer to purchase, a security or interest in a
security for value. Both terms inclu de:
a. a security given or delivered with, or as a bonus on
account of, a purchase of securities or any other
thing constituting part of the subject of the purchase
and having been offered and sold for value ,
b. a gift of assessable stock involving an offe r and
sale, and
c. a sale or offer of a warrant or right to pur chase or
subscribe to another security of the same or another
issuer and a sale or offer of a security that gives
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the holder a present or future right or privilege to
convert the security into another security of the same
or another issuer, including an of fer 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 of
interest or participation in a profit -sharing agreement; collateral
trust certificate; preorganization certificate or subscription;
transferable share; investment contract; voting trust certif icate;
certificate of deposit for a security; fractional undivi ded interest
in oil, gas, or other mineral rights; cryptocurrency; non-fungible
tokens; put, call, straddle, option, or privilege on a security,
certificate of deposit, or group or index of sec urities, including
an interest therein or based on the value th ereof; put, call,
straddle, option, or privilege e ntered into on a national securities
exchange relating to foreign currency; or, in general, an interest
or instrument commonly known as a “security”; or a certificate of
interest or participation in, tempor ary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing. The term:
a. includes both a certificated and an uncertificate d
security,
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b. does not include an insurance or endowment polic y or
annuity contract under which an insurance com pany
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 subj ect to the
Employee Retirement Income 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 from the efforts of a person
other than the investor and a “common enterprise”
means an enterprise in which the f ortunes 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 m oney or money’s worth
including goods furnished or services per formed in the
risk capital of a venture with the e xpectation of some
benefit to the investor where the investor has no
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direct control over the investment or policy decision
of the venture, and
g. does not include an interest in an oil, gas or mineral
lease as part of a transaction between parties, 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 o f oil and gas
leases by land, mineral and royalty owners in fav or of
a party or parties engaged in the business o f
exploring for or producing oil and gas or other
valuable minerals;
33. “Self-regulatory organization ” means a national securities
exchange registered under the Securities Exchange 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, or the Municipal
Securities Rulemaking Board established under 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 with the record an
electronic symbol, sound, or process ;
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35. “State” means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States; 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 has a direct or
indirect participation in any such undertaking, or participates or
has a participation in the direct or indirect underwriti ng 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 and customary distributor ’s or
seller’s commission.
SECTION 2. This act shall become effective November 1, 2022.
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