Statutes | RSA 421-B:1-102 | 2018
In this chapter, unless the context otherwise requires:
(1) &ldquoAdvertisement&rdquo means any notice, circular, letter, or other written communication that is given to more than one person or any other announcement in any publication, by radio, television, or other electronic media, that offers:
(A) Any analysis, report, or publication concerning securities or which is to be used in making any determination as when to buy or sell securities or
(B) Any graph, chart, formula, or other device to be used in making any determination concerning when to buy or sell any security, or which security to buy or sell.
(2) &ldquoAffiliate&rdquo means any person directly or indirectly controlling, controlled by, or under common control with another person.
(3) &ldquoAgent&rdquo 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&rsquos securities. But 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 order issued under this chapter.
(4) &ldquoBank&rdquo means any of the following:
(A) a banking institution organized under the laws of the United States
(B) a member bank of the Federal Reserve System
(C) a bank organized under the laws of the state of New Hampshire
(D) a trust company
(E) any other banking institution, whether incorporated 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 to be exercised by 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, 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 evading this chapter and
(F) a receiver, conservator, or other liquidating agent of any institution or firm included in subsection (1)(A), (1)(B), (1)(C), (1)(D), or (1)(E).
(5)
(A) &ldquoBranch office&rdquo means:
(i) With regard to an investment adviser, any location other than the main office, identified by any means to broker-dealers, other investment advisers, the public, customers, or clients as a location at which an investment adviser conducts an investment advisory business.
(ii) With regard to a broker-dealer, any location where one or more agents regularly conducts the business of effecting any transactions in, or inducing or attempting to induce the purchase or sale of, any security, or is held out as such, excluding:
(a) Any location that is established solely for one or both of customer service and back-office-type functions where no sales activities are conducted and that is not held out to the public as a branch office
(b) Any location that is the agent&rsquos primary residence provided that:
(1) Only one agent, or multiple agents who reside at that location and are members of the same immediate family, conduct business at the location
(2) The location is not held out to the public as an office and the agent does not meet with customers at the location
(3) Neither customer funds nor securities are handled at that location
(4) The agent is assigned to a designated branch office, and such designated branch office is reflected on all business cards, stationery, advertisements, and other communications to the public by such agent
(5) The agent&rsquos correspondence and communications with the public are subject to the broker-dealer&rsquos supervision
(6) Electronic communications, such as e-mail are made through the electronic system of the broker dealer
(7) All orders for securities are entered through the designated branch office or an electronic system established by the broker-dealer that is reviewable at the branch office
(8) Written supervisory procedures pertaining to supervision of activities conducted at the residence are maintained by the broker-dealer and
(9) A list of the residence locations are maintained by the broker-dealer
(c) Any location, other than a primary residence, that is used for securities business for less than 30 business days in any one calendar year, provided the broker-dealer complies with the provisions of subsections (5)(A)(ii)(b)(2) through (8)
(d) Any office of convenience, where associated persons occasionally and exclusively by appointment meet with customers, which is not held out to the public as an office
(e) Any location that is used primarily to engage in non-securities activities and from which the agent effects no more than 25 securities transactions in any one calendar year provided that any advertisement or sales literature identifying such location also sets forth the address and telephone number of the location from which the agent conducting business at the non-branch locations is directly supervised
(f) The floor of a registered national securities exchange where a broker-dealer conducts a direct access business with public customers
(g) A temporary location established in response to the implementation of a business continuity plan or
(h) Any other location not within the intent of subsection (5) as the secretary of state may determine.
(B) Notwithstanding the exclusions provided in subsection (5)(A)(ii), any location that is responsible for supervising the activities of agents of the broker dealer at one or more non-branch locations of the broker-dealer shall be a branch office.
(C) &ldquoBusiness day&rdquo as used in subsection (5) shall not include any partial day provided that the agent or investment adviser representative spends at least 4 hours of such day at his or her designated branch office during the hours that such office is normally open for business.
(6) &ldquoBroker-dealer&rdquo means a person engaged in the business of effecting transactions in securities for the account of others or for the person&rsquos own account. The term does not include:
(A) an agent
(B) an issuer
(C) a bank
(D) an international banking institution or
(E) a person excluded by order issued under this chapter.
(7) &ldquoCommon enterprise&rdquo 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 one or more investors. This definition is met if (a) the investor joins with the promoter or some third party to accomplish a common goal, such as earning a profit for the investor, whether the promoter or third party shares in the profits or is merely paid a commission or fee for his or her services, or (b) 2 or more investors join together in a common goal of making a profit.
(8) &ldquoComplaint&rdquo means a written statement submitted after an incident complained of by the secretary of state or any other person that sets forth specific allegations of wrongdoing and requests administrative action by the secretary of state.
(9) &ldquoCRD&rdquo means the Central Registration Depository maintained by FINRA.
(10) &ldquoDepartment&rdquo means the department of state.
(11) &ldquoDepository institution&rdquo means:
(A) a bank or
(B) a savings institution, trust company, credit union or similar institution, whether incorporated 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 share accounts insured to the maximum amount authorized by statute by the Federal Deposit Insurance Corporation, National Credit Union Share Insurance Fund or a successor authorized by federal law and which is supervised and examined by a state or federal agency having supervision over such institutions, and which is not operated for the purpose of evading this chapter. The term does not include:
(i) an insurance company or other organization primarily engaged in the business of insurance
(ii) a Morris Plan bank or
(iii) an industrial loan company that is not an &ldquoinsured depository institution&rdquo as defined in the Federal Deposit Insurance Act, 12 U.S.C. section 1813(c)(2), or any successor federal statute.
(C) The inclusion of an institution in this definition shall not be construed as a grant of power or authority for such institution to engage in activities under this chapter that are not permitted under the laws governing such institution.
(12) &ldquoEx parte communication&rdquo means the transmittal of information or argument concerning the merits of the subject matter of any adjudicatory proceeding to or from a decision maker in that proceeding without proper notice to and opportunity to participate in by all parties.
(13) &ldquoFederal covered investment adviser&rdquo means a person registered with the United States Securities and Exchange Commission under the Investment Advisers Act of 1940.
(14) &ldquoFederal covered security&rdquo 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).
(15) &ldquoFiling&rdquo means the receipt under this chapter of a record by the secretary of state.
(16) &ldquoFINRA&rdquo means the Financial Industry Regulatory Authority.
(17) &ldquoFraud,&rdquo &ldquodeceit,&rdquo and &ldquodefraud&rdquo are not limited to common law deceit.
(18) &ldquoGuaranteed&rdquo means guaranteed as to payment of all principal and all interest.
(19) &ldquoHearing&rdquo means the receipt and consideration by the department of evidence or argument, or both, in accordance with this chapter and other applicable law, and includes:
(A) Conducting trial-type evidentiary hearings
(B) Directing the filing of exhibits, affidavits, memoranda or briefs
(C) Directing the delivery of oral argument or
(D) Any combination of these or similar methods.
(20) "IARD" means the Investment Adviser Registration Depository maintained by FINRA.
(21) "Industrial bond," "industrial revenue bond," or "industrial development bond" means any obligation issued by a governmental unit (including the United States, any state, any political subdivision of a state, or any agency, or corporate or other instrumentality, of one or more of them) other than a general obligation of a governmental unit having power to tax property or of an agency of the state of New Hampshire:
(A) Which is issued as part of an issue, all or a major portion of the proceeds of which are to be used directly or indirectly in any trade or business, and
(B) The payment of the principal or interest on which (under the terms of such obligation or any underlying arrangement) is, in whole or in major part:
(i) Secured by any interest in property used or to be used in a trade or business or in payment in respect of such property, or
(ii) To be derived from payments in respect of property or borrowed money, used or to be used in a trade or business.
(22) "Institutional investor" means any of the following, whether acting for itself or for others in a fiduciary capacity:
(A) a depository institution, trust company, or international banking institution
(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 the Securities Exchange Act of 1934
(F) an employee pension, profit-sharing, or benefit plan if the plan has total assets in excess of $10,000,000 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 chapter, a depository institution, a trust company, 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 $10,000,000 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 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 chapter, a depository institution, a trust company, or an insurance company
(H) a trust, if it has total assets in excess of $10,000,000, its trustee is a depository institution or trust company, and its participants are exclusively plans of the types identified in subsection (22)(F) or (22)(G), regardless of the size of their assets, except a trust that includes as participants self-directed individual retirement accounts or similar self-directed plans
(I) an organization described in 26 U.S.C. section 501(c)(3), corporation, Massachusetts trust or similar business trust, limited liability company, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $10,000,000
(J) a small business investment company licensed by the Small Business Administration under the Small Business Investment Act of 1958, 15 U.S.C. section 681(c) with total assets in excess of $10,000,000
(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 $10,000,000
(L) a federal covered investment adviser acting for its own account
(M) a "qualified institutional buyer" 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 $25,000,000 not organized for the specific purpose of evading this chapter or
(P) any other person specified by order issued under this chapter.
(23) "Insurance company" means a company organized as an insurance company whose primary business is writing insurance or reinsuring risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a state.
(24) "Insured" means insured as to payment of all principal and all interest.
(25) "International banking institution" means an international financial institution of which the United States is a member and whose securities are exempt from registration under the Securities Act of 1933.
(26) "Investment adviser" means a person that, for compensation, engages in the business of advising others, either directly or through publications or writings, 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
(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
(D) a publisher of a bona fide newspaper, news magazine, or business or financial publication of general and regular circulation
(E) a federal covered investment adviser
(F) a bank
(G) any other person that is excluded by the Investment Advisers Act of 1940 from the definition of investment adviser
(H) a person whose advice, analyses or reports relate only to securities exempted under RSA 421-B:2-201(1)
(I) a person who has no place of business in this state if the person's only clients in this state are other investment advisers, federal covered advisers, broker-dealers, banks, trust companies, insurance companies, investment companies as defined under the Investment Company Act of 1940, pension or profit-sharing trusts, small business investment companies as defined under the Small Business Investment Act of 1958, or other financial institution or institutional buyer, whether acting for itself or in a fiduciary capacity
(J) a person who transacts business in the field of insurance, provided such business is solely and exclusively in the field of insurance
(K) a real estate broker, with regards to his or her real estate investment advice, who does not promote or sell any interest in any limited partnership
(L) a person who has no place of business in this state and who, during the preceding 12-month period, has not had more than 5 clients, other than those listed in subsection (26)(I), who are residents of this state and
(M) any other person excluded by order issued under this chapter.
(27) "Investment adviser representative" means an individual employed by or associated with 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 clients, determines which recommendation or advice regarding securities 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 selling investment advice, or supervises employees who perform any 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 investment advice is solely incidental to the individual acting as an agent and who does not receive special compensation for investment advisory services
(C) is employed by or associated with a federal covered investment adviser, unless the individual has a "place of business" in this state as that term is defined by rule adopted under section 203A of the Investment Advisers Act of 1940, 15 U.S.C. section 80b-3a, and is
(i) an "investment adviser representative" as defined by rule adopted under the Investment Advisers Act of 1940, 15 U.S.C. section 80b-3a or
(ii) not a "supervised person" as defined in the Investment Advisers Act of 1940, 15 U.S.C. section 80b-2(a)(25) or
(D) is excluded by order issued under this chapter.
(28) "Investment advisory contract" means any contract or agreement whereby a person agrees to act as an investment adviser or to manage any investment or trading account for a person other than an investment adviser as defined in subsection (26).
(29)
(A) "Investment contract" means either:
(i) An investment in a common enterprise with the expectation of profits to be derived primarily from the efforts of the promoter or some third party or
(ii) an investment by which an offeree furnishes initial value to an offeror, and a portion of this value is subject to the risks of the enterprise, and the furnishing of the initial value is induced by the offeror's promises or representations which give rise to a reasonable understanding that a material valuable benefit of some kind over and above the initial value will accrue to the offeree as a result of the operation of the enterprise, and the offeree does not receive the right to exercise practical and actual control over the management of the enterprise.
(B) Notwithstanding subsection (29)(A), a business that pre-sells its products or services to consumers for future use or consumption is not offering an investment contract. However, a business that pre-sells its products or services to purchasers who are primarily motivated by an investment purpose, rather than future use or consumption, would be offering an investment contract.
(C) For the purposes of subsection (29)(A), the following shall apply:
(i) The investment may take the form of money actually paid to securities or other real or personal property actually delivered to the right to use such securities and other property granted to or services actually performed for, the common enterprise or some other entity designated by the promoter or common enterprise to receive the investment.
(ii) "Profits' shall include the promise to pay money, deliver securities, or deliver in-kind goods
(iii) The third party providing the efforts may or may not be an affiliate or associated with the promoter or the common enterprise. Such efforts are those day-to-day management efforts which affect the success or failure of the enterprise, and do not include physical or mechanical efforts or extraordinary efforts such as the removal of the management of the common enterprise.
(iv) "Benefits" shall mean any bargained-for benefit to the investor or to a person designated by the investor or any bargained-for legal detriment to the common enterprise, the promoter, or some entity identified by the investor.
(C) The following interests are securities if they meet either of the 2 tests for investment contracts, whether or not they are also covered by any other part of the definition of a security:
(i) General partnership interest whether in a general partnership, a joint venture, a limited partnership, a limited liability partnership, or a limited liability limited partnership.
(ii) An investment in a viatical or life settlement or similar agreement.
(30) "Investment metal" means any object that contains:
(A) Gold, silver, or platinum, or
(B) Any other metal that the secretary of state may specify by an order showing that the other metal is being purchased and sold by the public as an investment.
(31) "Investment gem" means any gem that the secretary of state may specify by an order showing that the gem is being purchased and sold by the public as an investment.
(32) "Investment metal contract" or "investment gem contract":
(A) means:
(i) A sale of an investment metal or investment gem in which the seller or an affiliate of the seller retains physical possession of the investment metal or investment gem
(ii) A contract of purchase or sale which provides for the future delivery of an investment metal or investment gem, or any option to purchase or option to sell such a contract or
(iii) A sale of an investment metal or investment gem pursuant to a contract known to the trade as a margin account, margin contract, leverage account, or leverage contract provided, however, that, for the purposes of this subsection (32), the term "leverage contract" includes any contract for the purchase or sale of any investment metal or investment gem, whereby the seller, or an agent, affiliate or representative of the seller, directly or indirectly arranges, or offers to arrange, for the financing of any portion of the total amount of the purchase or sale of the investment metal or investment gem.
(B) But shall not include:
(i) The sale of an investment metal or investment gem where the seller has reasonable grounds to believe that the investment metal or investment gem is being acquired for manufacturing, commercial or industrial purposes
(ii) The sale, or contract for the future purchase or sale, of jewelry, art objects or other manufactured or crafted goods other than bullion or bulk sales of coins or
(iii) The sale of an investment metal or investment gem where full payment is made to the seller and physical delivery is made to the purchaser personally, and not to an agent, within 20 days of the date of purchase provided that a purchaser may designate a bank or licensed broker-dealer, within this state only, and not within any other state, to accept physical delivery on his or her behalf if such bank or licensed broker-dealer maintains such investment metal or investment gem in safekeeping and as the specifically identifiable property of the purchaser
(iv) Any futures contracts traded on a commodities exchange registered under the Federal Commodity Futures Trading Commission Act of 1974.
(33) "Issuer" means a person that issues or proposes to issue a security, subject to the following:
(A) The issuer of a voting trust certificate, collateral trust certificate, certificate of deposit 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 manager 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 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.
(C) The issuer of a fractional undivided interest in an oil, gas, or other mineral lease 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.
(34) "Nonissuer transaction" or "nonissuer distribution" means a transaction or distribution not directly or indirectly for the benefit of the issuer.
(35) "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) the Securities Exchange Act of 1934,