TITLE 660. DEPARTMENT OF SECURITIES
Chapter |
Section |
1. Organization and Procedures of Securities
Commission……………………………. |
660:1-1-1 |
2. Organization and Procedures of Department of
Securities………………………….. |
660:2-1-1 |
3. Procedures for the Oklahoma Take-over Disclosure
Act of 1985…………………... |
[RESERVED] |
4. Procedures for the Oklahoma Subdivided Land Sales
Code………………………... |
660:4-1-1 |
5. Procedures for the Oklahoma Business Opportunity
Sales Act……………………. |
[RESERVED] |
6. Forms……………………………………………………………………………………… |
660:6-1-1 |
10. Oklahoma Securities
Act.............................................................................. |
[REVOKED] |
11. Oklahoma Uniform Securities Act of
2004…………………………………………… |
660:11-1-1 |
15. Oklahoma Take-over Disclosure Act of
1985……………………………………….. |
660:15-1-1 |
20. Oklahoma Subdivided Land Sales
Code…………………………………………….. |
660:20-1-1 |
25. Oklahoma Business Opportunity Sales
Act………………………………………… |
660:25-1-1 |
CHAPTER 1.
ORGANIZATION AND PROCEDURES OF SECURITIES COMMISSION
Subchapter |
Section |
1. General Provision………………………………………………………………………… |
660:1-1-1 |
3. Organization………………………………………………………………………………. |
660:1-3-1 |
5. Appeals |
660:1-5-1 |
SUBCHAPTER 1.
GENERAL PROVISIONS
Section 660:1-1-1. Purpose 660:1-1-2. Statutory
Citations 660:1-1-3. Definitions
660:1-1-1. Purpose
The provisions of this
Chapter set forth the organization and procedural rules governing the
Oklahoma Securities Commission.
660:1-1-2. Statutory
citations
Citations to statutes in this
Chapter refer to the most recent codification of Title 71 of the Oklahoma
Statutes.
660:1-1-3. Definitions
Unless the context clearly indicates otherwise, or unless
defined in this Section, terms used in this Chapter, if defined in the
Oklahoma Uniform Securities Act of 2004, the Oklahoma Subdivided Land Sales
Code, the Oklahoma Business Opportunity Sales Act or the Oklahoma Take-over
Disclosure Act of 1985 shall have the meanings set forth in such acts. The
following words and terms, when used in this Chapter, shall have the
following meaning, unless the context clearly indicates otherwise:
"Administrator" means the Administrator of the
Department of Securities.
"Business Opportunity Act" means the most
recent codification of the Oklahoma Business Opportunity Sales Act in
Title 71 of the Oklahoma Statutes.
"Commission" means the Oklahoma Securities
Commission.
"Department" means the Oklahoma Department of
Securities.
"Land Sales Act" means the most recent
codification of the Oklahoma Subdivided Land Sales Code in Title 71 of
the Oklahoma Statutes.
"NASD" means the National Association of
Securities Dealers, Inc.
"SEC" means the United States Securities and
Exchange Commission.
"Securities Act" means the most recent
codification of the Oklahoma Uniform Securities Act of 2004 in Title 71
of the Oklahoma Statutes.
"Take-over Act" means the most recent
codification of the Oklahoma Take-over Disclosure Act of 1985 in Title
71 of the Oklahoma Statutes.
SUBCHAPTER 3.
ORGANIZATION
Section 660:1-3-1. Purpose and organization
660:1-3-2 Commission actions
660:1-3-1. Purpose and organization
The Oklahoma Securities Commission shall be the policy
making and governing authority of the Department. The organization of the
Commission shall be in accordance with the provisions of Section 1-601 of
the Securities Act.
660:1-3-2. Commission actions
(a) All official acts of
the Commission shall be evidenced by a written record, and all final
orders, decisions, opinions, rules and other written statements of
policy or interpretations formulated, adopted or used in the discharge
of the function of the Commission shall be available for public
inspection.
(b) Official action of
the Commission shall not be bound or be prejudiced by any informal
statement made or opinion given by the Commission or employees of the
Department.
SUBCHAPTER 5. APPEALS
Section
660:1-5-1. Procedures for appeals to the Commission
660:1-5-1. Procedures for
appeals to the Commission
(a) Scope. The
provisions of this Section govern the procedures for appeals by a person
aggrieved by a final order of the Administrator filed before the
Commission. These procedures shall not be construed to extend or limit
the jurisdiction of the Commission or the Administrator as established
by law.
(b) Appeal-how and
when taken. In matters in which an appeal is permitted by law, the
person appealing the order shall file with the Administrator a petition
within fifteen (15) days after entry of the order. The Administrator
shall submit the petition to the Commission at the next scheduled
Commission meeting. The Petition shall specify the party or parties
requesting the appeal; shall designate the order or part thereof
appealed from; shall request a record on appeal be compiled; shall set
forth appellant’s agreement to pay for the preparation of the record on
appeal; and shall be signed by the party or parties or counsel for the
party or parties. For purposes of this subsection, the term "entry of
the order" means the day the final order is mailed or personally
delivered to the persons entitled to receive the order.
(c) Record on appeal.
Upon receipt of the petition of appeal, the Administrator shall direct
the Department to compile the record on appeal. The record on appeal
shall consist of the record upon which the final order was issued as
described in 660:2-9-7. Upon completion of the record on appeal, the
Administrator shall notify the appellant that the record has been
completed. Upon payment of the costs of preparation of the record on
appeal, copies of the record will be served upon the Commission and all
parties to the appeal with a notice of the date that the record was
served and the briefing schedule.
(d) Briefing schedule
and briefs. The appellant shall file six copies of his opening brief
on appeal with the Administrator and serve one copy on all other parties
to the appeal within fifteen (15) days of service of the record on
appeal. The appellee shall file six copies of his opening brief on
appeal with the Administrator and serve one copy on all other parties to
the appeal within fifteen (15) days of receipt of the brief of
appellant. The Chairperson of the Commission, or his designee, may, upon
good cause shown, enlarge these periods as he deems appropriate.
(1) Brief of
appellant. The brief of the appellant shall contain under
appropriate headings and in the order here indicated:
(A) A table
of contents, with page references, and a table of cases
(alphabetically arranged), statutes and other authorities
cited, with references to the pages of the brief where they
are cited.
(B) A
statement setting forth any objection to the jurisdiction of
the Department and the grounds for such objection or a
statement that no objection to jurisdiction is being made.
(C) A
statement of the issues presented for review.
(D) A
statement of the case. The statement shall first indicate
briefly the nature of the case, the course of the
proceedings, and its disposition with the Administrator.
There shall follow a statement of the facts relevant to the
issues presented for review, with appropriate references to
the record. No factual statements may be made in the brief
unless asserted at the hearing before the Administrator and
a citation to the record is included.
(E) An
argument. The argument may be preceded by a summary. The
argument shall contain the contentions of the appellant with
respect to the issues presented and the reasons therefor,
with citations to the authorities, statutes and parts of the
record upon which the party is relying.
(F) A short
conclusion stating the precise relief sought.
(2) Brief of
appellee. The brief of the appellee shall conform to the
requirements of (1)(A)-(F) of this paragraph, except that a
statement of jurisdiction, of the issues or of
660:1-5-1. p2
the case need not be
made unless the appellee is dissatisfied with the statement of the
appellant.
(3) Oral argument.
All parties submitting briefs shall include, either on the cover of
the brief or by separate document filed with the brief, a statement
as to whether oral argument before the Commission is desired.
(4) Length of
briefs. Except by permission of the Chairperson of the
Commission, or his designee, the briefs of the parties shall not
exceed thirty (30) pages, exclusive of the table of contents, table
of citations and appendix.
(5) Appendix to
brief. A party to an appeal may submit, contemporaneously with
the filing and service of his brief, an appendix containing copies
of material cited in the brief, such as cases, statutes, treatises,
and other authorities or copies of portions of the record on appeal.
Copies of authorities must reflect the official citation to the
authority. Portions of the record must be accompanied by a citation
to the exact location of the material in the official record on
appeal. The appendix shall not contain any argument or material
which should have been more appropriately included in the brief.
(6) Appeal based
on newly discovered evidence. Any appeal of a final order of the
Administrator based in whole or in part on the grounds that newly
discovered evidence has been obtained shall include in the brief a
detailed description of the newly discovered evidence, a statement
setting forth specifically how the new evidence is relevant, and a
detailed explanation of why the evidence could not have been
discovered in a timely fashion prior to the issuance of the final
order by the Administrator. If the Commission determines the newly
discovered evidence should be considered, it shall remand the matter
to the Administrator with instruction to rehear the matter and
consider the newly discovered evidence.
(e) Stay pending
review. The filing of an appeal with the Commission does not stay
the order of the Administrator pending the appeal.
(1) A party aggrieved
by a final order of the Administrator may, upon filing a petition
for appeal with the Commission, apply to the Administrator for a
stay pending the appeal. The Administrator may stay the effect of
his order pending the appeal upon such grounds or upon condition of
such undertakings as he deems, in his discretion, to be appropriate.
(2) If the
Administrator denies the application for a stay, the party may file
with the Administrator six copies of an application for stay to the
Commission. The application for stay shall not be longer than five
(5) pages and shall set forth any grounds upon which the stay is
sought. The Administrator may file a statement in opposition to the
application for stay. The Administrator shall forward copies of the
application for stay and any statement in opposition to the
Commission within five (5) days of receipt.
(3) The filing of an
application for a stay with the Administrator or the Commission
shall not have the effect of staying the order of the Administrator.
The order of the Administrator shall only be stayed upon order of
the Administrator, the Commission or a court of appropriate
jurisdiction.
(f) Motions. All
applications or motions made to the Commission in connection with an
appeal properly filed before the Commission shall be filed with the
Administrator and promptly submitted to the Chairperson of the
Commission, or his designee, and be promptly ruled upon by the
Chairperson of the Commission, or his designee.
(g) Executive session.
Deliberations by the Commission may be held in executive session.
(h) Order on appeal.
The Order of the Commission on any appeal shall contain a concise
statement of the facts as found by the Commission and a concise
statement of the conclusions therefrom and the effective date of the
Order.
CHAPTER 2.
ORGANIZATION AND PROCEDURES OF
DEPARTMENT OF SECURITIES
Subchapter |
Section |
1. General provisions………………………………………………………………………. |
660:2-1-1 |
3. Organization……………………………………………………………………………… |
660:2-3-1 |
5. Authority and actions of
administrator………………………………………………… |
660:2-5-1 |
7. Investigations…………………………………………………………………………….. |
660:2-7-1 |
9. Individual proceeding practices and
procedures…………………….……………….. |
660:2-9-1 |
11. Procedures for inspecting and/or copying public
records…………………………. |
660:2-11-1 |
13. Declaratory rulings and interpretive
opinions……………………………………….. |
660:2-13-1 |
SUBCHAPTER 1.
GENERAL PROVISIONS
Section 660:2-1-1. Purpose
660:2-1-2. Statutory citations 660:2-1-3.
Definitions
660:2-1-1. Purpose
(a) The provisions of
this Chapter set forth the organization and procedural rules governing
the Department of Securities and have been adopted for the purpose of
complying with 75 O.S., Section 302.
(b) The provisions of
this Chapter relating to investigations and hearings shall apply to all
investigations and hearings conducted by the Department in the
enforcement of the Business Opportunity Act, the Land Sales Act, the
Securities Act, and the Take-over Act.
660:2-1-2. Statutory
citations
Citations to statutes in this
Chapter refer to the most recent codification of Title 71 of the Oklahoma
Statutes.
660:2-1-3. Definitions
Unless the context clearly indicates otherwise, or unless
defined in this Section, terms used in this Chapter, if defined in the
Oklahoma Uniform Securities Act of 2004, the Oklahoma Land Sales Code, the
Oklahoma Business Opportunity Sales Act or the Oklahoma Take-over Disclosure
Act of 1985 shall have the meanings set forth in such acts. The following
words and terms, when used in this Chapter, shall have the following
meaning, unless the context clearly indicates otherwise:
"Administrator" means the Administrator of the
Department of Securities.
"Business Opportunity Act" means the most
recent codification of the Oklahoma Business Opportunity Sales Act in
Title 71 of the Oklahoma Statutes.
"Commission" means the Oklahoma Securities
Commission.
"Department" means the Oklahoma Department of
Securities.
"Hearing Officer" means a person who has been
duly appointed by the Administrator to hold hearings and, as required,
render proposed orders.
"Land Sales Act" means the most recent
codification of the Oklahoma Subdivided Land Sales Code in Title 71 of
the Oklahoma Statutes.
"Securities Act" means the most recent
codification of the Oklahoma Uniform Securities Act of 2004 in Title 71
of the Oklahoma Statutes.
"Take-over Act" means the most recent
codification of the Oklahoma Take-over Disclosure Act of 1985 in Title
71 of the Oklahoma Statutes.
SUBCHAPTER 3.
ORGANIZATION
Section 660:2-3-1. Organization
660:2-3-1. Organization
(a) The Department shall be organized in accordance
with Section 1-601 of the Securities Act. It shall be the purpose of the
Department to implement the policies of the Commission and to enforce
the Securities Act in an efficient and effective manner.
(b) The Department shall be organized in the
following divisions:
(1) registration of broker-dealers, agents and
investment advisers.
(2) registration of securities.
(3) investigation and enforcement; and
(4) investor education.
(c) The Department shall have as its chief officer an
Administrator who shall be charged with the duty of administering and
enforcing the acts under the supervision of the Commission and in
accordance with its policies.
SUBCHAPTER 5.
AUTHORITY AND ACTIONS OF ADMINISTRATOR
Section
660:2-5-1. Official actions
660:2-5-2. Register of actions [REVOKED]
660:2-5-3. Settlements
660:2-5-4. Summary orders
660:2-5-1. Official actions
(a) All officials acts of
the Administrator shall be evidenced by a written record, and all final
orders, decisions, opinions, rules and other written statements of
policy or interpretations formulated, adopted or used in the discharge
of the function of the Administrator shall be available for public
inspection.
(b) Official action of
the Administrator shall not be bound or be prejudiced by any informal
statement made or opinion given by the Administrator, Commission or
employees of the Department of Securities.
660:2-5-2. Register of
actions [REVOKED]
660:2-5-3. Settlements
In order to avoid the expense
and time involved in formal legal proceedings, it is the policy of the
Administrator to afford persons who have engaged in unlawful acts and
practices an opportunity to enter into settlement agreements, when it
appears to the Administrator that such procedure fully safeguards the public
interest. The Administrator reserves the right in all cases to withhold the
privilege of disposition by settlement agreement.
660:2-5-4. Summary orders
The Administrator may issue summary orders pursuant
to the provisions set forth in:
(1) Sections 1-306.D, 1-411.F or 1-604 of the
Securities Act;
(2) Section 814(D) of the Business Opportunity
Act;
(3) Sections 628(D), 634(C), or 660 of the Land
Sales Act; or
(4) Subsection (D) of Section 453 of the
Take-over Act.
SUBCHAPTER 7.
INVESTIGATIONS
Section 660:2-7-1. Initiation 660:2-7-2. Authority [REVOKED]
660:2-7-3. Investigative processes 660:2-7-4. Subpoenas [REVOKED]
660:2-7-5. Testimony [REVOKED] 660:2-7-6. Reports [REVOKED] 660:2-7-7.
Enforcement of process [REVOKED] 660:2-7-8. Right to counsel [REVOKED]
660:2-7-9. Termination of investigation
660:2-7-1. Initiation
Investigations may be initiated upon inquiry, request or
complaint by members of the public or by the Administrator or the Commission
upon their own motion. The request or complaint by a member of the public
should be in writing on the form identified in Chapter 6 of this Title, be
signed by the complainant and contain a statement setting forth the acts,
activities or matters and the name and address of the party or parties
against whom they are complaining. No formal procedures are required in
making such requests or complaints. The complainant is not regarded as a
party, since the Administrator acts only in the public interest. The
Administrator shall not take action when the acts, activities or matters
complained of are merely matters of private controversy and do not tend to
adversely affect the public.
660:2-7-2. Authority [REVOKED]
660:2-7-3. Investigative processes
(a) Authority. Investigations under the
statutes administered by the Administrator shall be conducted by
representatives designated and duly authorized for this purpose. Such
representatives are authorized to exercise and perform the duties of
their office in accordance with the statutes of the state of Oklahoma
and the regulations of the Administrator, including administration of
oaths and affirmations, in any matter under investigation by the
Administrator. Nothing in this section shall prohibit the Administrator
or his designee from expanding or restricting the scope of any
investigation at any time during an investigation.
(b) Investigative hearings. Investigative
hearings, as distinguished from hearings in individual proceedings, may
be conducted in the course of any investigation undertaken by the
Administrator, including inquiries initiated for the purpose of
determining whether or not a respondent is complying with an order of
the Administrator. Investigative hearings may be held before the
Administrator, or his designee, for the purpose of hearing the testimony
of witnesses and receiving documents and other data relating to any
subject under investigation. Such hearings shall be non-public.
(c) Subpoena to testify or produce records.
While the Administrator encourages voluntary cooperation in
investigations, the Administrator, or his designee, at any stage of any
investigation, may issue a subpoena ordering the person named therein to
appear before a designated representative at a designated time and
place, including the offices of the Department, to provide testimony by
deposition, sworn statement or affidavit and/or to produce documentary
evidence relating to any matter under investigation. Such testimony
shall only be reduced to writing or otherwise recorded in any manner by
the person taking the testimony, or under his direction.
(d) Subpoena to grant access. The
Administrator may issue a subpoena to grant access to, to examine, and
to copy documents, books or other records of any person being
investigated.
(e) Service. Subpoenas shall be served in
the manner provided by law.
(f) Written examination. The Administrator,
or his designee, may issue an order requiring persons to file a report
or statement, or answers in writing and under oath to specific
questions, relating to any matter under investigation.
(g) Rights of witness. Any person under
investigation, compelled to furnish information or documentary evidence,
shall be advised of the purpose and scope of the investigation, subject
to the confidentiality requirements provided by law. Any person required
to testify shall be entitled to review a copy of the transcript of his
own testimony, if transcribed, at the offices of the Department of
Securities. Any person required to submit documentary evidence shall be
entitled to retain or, on payment of lawfully prescribed cost, to
procure a copy of any document produced by such person. Any party
compelled to testify or to produce documentary evidence may be
accompanied and advised by counsel, provided that such counsel is duly
licensed to practice law by the Supreme Court of Oklahoma. Such counsel
may question such person briefly at the conclusion of the examination to
clarify any of the answers such person has given.
(h) Confidentiality. Information or
documents obtained by the Administrator and subpoenas issued in
connection with an investigation shall be kept confidential and shall
not be made available to the public, unless expressly ordered by the
Administrator, disclosed pursuant to the provisions of Subchapter 9 of
this Chapter or as otherwise provided by law.
660:2-7-4. Subpoenas [REVOKED]
660:2-7-5. Testimony [REVOKED]
660:2-7-6. Reports [REVOKED]
660:2-7-7. Enforcement of process [REVOKED]
660:2-7-8. Right to counsel [REVOKED]
660:2-7-9. Termination of investigation
Upon completion of investigation, where the facts
indicate that no corrective action by the Administrator is warranted, the
investigative files shall be closed, without prejudice to reopening. Where
remedial action is appropriate, the files may be referred for the initiation
of administrative or civil proceedings, or other disposition as may be
permitted under law. At any time during or after completion of an
investigation, a matter may be referred to a law enforcement agency or
another governmental or regulatory entity.
SUBCHAPTER 9.
INDIVIDUAL PROCEEDING PRACTICES AND PROCEDURES
Section 660:2-9-1. Hearings in general 660:2-9-2. Initiation of
individual proceedings 660:2-9-3. Prehearing proceedings and processes
660:2-9-4. Authority to subpoena witnesses 660:2-9-5. Representation
660:2-9-6. Conduct of hearings 660:2-9-7. Record of hearing
660:2-9-8. Final orders 660:2-9-9. Rehearings
660:2-9-10. Appeals [REVOKED]
660:2-9-1.
Hearings in general
(a)
Authority. Prior to issuance of a final order in an individual
proceeding, all parties shall be afforded an opportunity for hearing after
reasonable notice. If the person to whom notice is addressed does not
request a hearing within
twenty (20) days after the service
of notice is effective, a final order may be issued.
(b)
Public hearing.
All hearings shall be open to the public
but may not be recorded by the public or any respondent by any electronic
means.
(c)
Hearings on summary orders.
The provisions of this Subchapter shall not
apply to proceedings for summary orders. The procedures for hearings
on summary orders shall be those set forth in:
(1)
Sections 1-306.D, 1-411.F, or 1-604.B of the Securities Act;
(2)
Section 814(D) of the Business Opportunity Act;
(3)
Sections 628(D), 634(C), or 660 of the Land Sales Act; and
(4)
Subsections (D) and (E) of Section 453 of the Take-over Act.
660:2-9-2.
Initiation of individual proceedings
(a)
Request for hearing and answer. The request for hearing shall be
in writing and shall specifically admit or deny each allegation of the
Department or state that the party does not have, and is unable to obtain,
sufficient information to admit or deny each allegation. When a person
intends in good faith to deny only a part of an allegation, the party shall
specify so much of it as is true and shall deny only the remainder. A
statement of a lack of information shall have the effect of a denial. Any
allegation not denied shall be deemed admitted. Failure to file a
request for hearing in substantial compliance with this subsection shall
constitute grounds for denial of the request.
(b)
Setting or denial of hearing. Upon receipt of a written request
for a hearing, the Administrator shall either schedule a hearing to commence
within ninety (90) days from the receipt of the request or shall issue a
written order denying hearing.
(c)
Time of notice.
Notice
of all hearings shall be served by regular mail or personal delivery within
a time reasonable in light of the circumstances, in advance of the hearing,
but not less than forty-five (45) days in advance thereof, to all
parties. For good cause shown, any
hearing may be rescheduled, provided all persons entitled to notice of such
hearing are promptly advised thereof.
(d)
Contents of notice. The notice of hearing shall contain the
following information:
(1)
the time, place and nature of the hearing;
(2)
a statement of the legal authority and jurisdiction under which the hearing
is to be held;
(3)
a short plain statement of the matters asserted; and
(4)
a reference to the particular sections of the statutes and rules involved.
(e)
Appointment of hearing officer.
The Administrator may delegate authority to a Hearing Officer to conduct an
individual proceeding whenever deemed appropriate under the circumstances.
The Administrator shall enter into a written contract with each Hearing
Officer appointed, which shall govern the terms of appointment.
(f)
Authority of presiding officer. The Administrator, or the Hearing
Officer, shall have the authority to do all things necessary and appropriate
to discharge his duties. The duties of the Administrator, or the Hearing
Officer, include, but are not limited to,
the following:
(1)
Administering oaths and affirmations;
(2)
Issuing subpoenas authorized by law and revoking, quashing, or modifying any
such subpoena;
(3)
Receiving relevant evidence and ruling upon the admission of evidence and
offers of proof;
(4)
Regulating the course of a proceeding and the conduct of the parties and
their counsel;
(5)
Holding prehearing and other conferences and requiring the attendance at any
such conference of any party;
(6)
Recusing himself or herself upon motion made by a party or upon his or her
own motion;
(7)
Considering and ruling upon all procedural and other motions, subject to any
limitations otherwise specified;
(8)
Requiring the filing of briefs, if so desired;
(9)
Requiring the filing of proposed findings of fact and conclusions of law in
preparation for the proposed final order if so desired; and
(10) Preparing
a proposed final order for submission to the Administrator.
(g)
Submission of case on documentary record. The
Administrator, or the Hearing Officer, may elect not to hold a hearing if
all parties agree to submit the case on the documentary record and waive
their right to appear.
660:2-9-3.
Prehearing proceedings and processes
(a)
Scheduling.
As soon as is practicable after the request for hearing is received, the
Administrator, or Hearing Officer, shall enter a scheduling order that is
intended to expedite the disposition of the action and insure the fair,
orderly and efficient conduct of the proceedings. The parties shall
confer in person or by telephone and attempt to prepare a single agreed
scheduling order to submit to the Hearing Officer. If the proposed
scheduling order is acceptable to the Hearing Officer no scheduling
conference need be held. If the parties are unable to agree, the Hearing
Officer shall issue an appropriate scheduling order or hold a scheduling
conference in person or by telephone. The scheduling order should
establish at least the following:
(1)
a statement of the issues as they then appear;
(2)
a schedule of discovery;
(3)
any limitations to be placed on discovery;
(4)
a preliminary list identifying all witnesses, documents and exhibits
intended to be utilized at the hearing;
(5)
a schedule for filing and exchanging prehearing briefs, if any;
(6)
identification of any expert witness intended to be called;
(7)
the date or dates and time for the prehearing conference;
(8)
the date and time of the hearing; and
(9)
such other matters as may aid in the disposition of the matter.
(b)
Prehearing conference.
(1)
A prehearing conference shall be held as close to the time of hearing as is
reasonable under the circumstances, but not less than twenty (20) days in
advance thereof. No less than ten (10) days before the
prehearing conference each party shall submit to the Hearing Officer and
serve on all other parties, by personal delivery or facsimile, their final
witness list, final exhibit list and specific factual contentions and legal
contentions. No less than five (5) days before the prehearing
conference any objections to any witnesses or exhibits listed shall be
submitted to the Administrator, or the Hearing Officer, in writing stating
the specified grounds for each objection,
and served on all other parties, by personal delivery or facsimile. At
the conclusion of the prehearing conference a ruling or order shall be
entered reciting the action taken. The order shall control the
subsequent course of the action unless modified by a subsequent order.
The order shall be modified only to prevent manifest injustice. The
order shall include the results of the prehearing conference and shall
present:
(A)
all factual and legal issues to be determined in the case;
(B)
the final list of witnesses and exhibits to be utilized at the hearing;
(C)
any admissions of fact and any stipulations regarding admission and
authenticity of
documents; and
(D)
if there is objection to the admission of any exhibit or witness, a list of
the specific grounds for each objection. Absent proper objection, a
listed exhibit or the testimony of a listed witness is admitted when offered
at the hearing.
(2)
Each party and the Administrator, or the Hearing Officer, shall approve the
prehearing order and the order shall supersede the previous scheduling order
and shall govern the hearing unless modified only to prevent manifest
injustice.
(3)
The Administrator, or the Hearing Officer, may conduct the prehearing
conference by telephone. Upon notice to the participants, all or part
of the prehearing conference may be recorded.
(c)
Failure to participate. Failure to participate and cooperate in
the preparation of a scheduling order or prehearing conference order,
failure to appear at any conference, failure to appear at a conference
substantially prepared, or failure to participate in good faith in any
prehearing proceedings may result in any of the following sanctions:
(1)
striking of any pleading;
(2)
a preclusion order;
(3)
staying the proceeding;
(4)
default judgment; or
(5)
such other order as the Administrator, or the Hearing Officer, may deem just
and appropriate.
(d)
Post
prehearing conference.
If additional exhibits
are discovered after the prehearing conference order is issued, the party
intending to use them shall immediately notify all other parties and furnish
copies of the additional exhibits to such parties. If additional
witnesses are discovered, all other parties shall be notified immediately
and furnished the nature of the testimony along with the names and addresses
of the witnesses. These additional exhibits or the testimony of the
additional witnesses shall be deemed admitted unless written objection is
filed prior to or at the commencement of the hearing by the party objecting.
If a written objection is filed, no exhibit or witness may be added to the
prehearing conference order without a showing to the Administrator, or the
Hearing Officer, that manifest injustice would be created if the addition of
such exhibit or witness were not permitted.
(e)
Filing of papers. All papers required
to be served by a party shall be filed with the Administrator within the
applicable time for service. When a Hearing Officer is appointed, a
person making a filing with the Administrator shall promptly provide to the
Hearing Officer a copy of such filing. Papers filed with the
Administrator shall be accompanied by a certificate stating the name of the
person or persons served, the date of service, the method or service and the
mailing address or facsimile telephone number to which service was made, if
not made in person.
(f)
Signature requirement. Every filing of
a party represented by counsel shall be signed by at least one counsel of
record in his name and shall state that counsel’s business address and
telephone number. A party who acts as his own counsel shall sign his
individual name and state his address and
telephone number on every filing. The signature of a counsel or party shall
constitute a certification that:
(1)
the person
signing the filing has read the filing;
(2) to
the best of his knowledge, information, and belief, formed after reasonable
inquiry, the filing is well grounded in fact and is warranted by existing
law or a good faith argument for the extension, modification, or reversal of
existing law; and the filing is not made for any improper purpose, such as
to harass or to cause unnecessary delay or needless increase in the cost of
adjudication.
(3)
If a
filing is not signed, the Administrator, or the Hearing Officer, shall
strike the filing, unless it is signed promptly after the omission is called
to the attention of the party making the filing.
660:2-9-4. Authority to subpoena witnesses
(a) Subpoenas.
The Administrator,
or the Hearing Officer, shall have the power to subpoena witnesses and
administer oaths or to subpoena documentary evidence in any cause before
him. Any party to a hearing shall have the right to have subpoenas
issued to require the attendance and testimony of witnesses at a
designated time and place, or to require the production of documentary
evidence at a designated time and place. Where it appears to the
Administrator, or the Hearing Officer, that the subpoena sought may be
unreasonable, oppressive, excessive in scope, unduly burdensome, or not
relevant, he may, in his discretion, as a condition precedent to the
issuance of the subpoena, require the party seeking the subpoena to show
the general relevance and reasonable scope of the testimony or other
evidence sought. If after consideration of all the circumstances,
the Administrator, or the Hearing Officer, determines that the subpoena
or any of its terms is unreasonable, oppressive, excessive in scope,
unduly burdensome or not relevant, he may refuse to issue the subpoena,
or issue the subpoena only upon such conditions as fairness requires.
(b) Service.
Service of the
subpoena shall be in the manner provided by law and shall be the
responsibility of the party requesting the subpoena. Appropriate
service shall be made at least three (3) calendar days before the person
is required to appear. Proof of service shall be filed with the
Administrator. (c) Fees.
Witnesses subpoenaed
pursuant to this section shall be paid the same fees and mileage as are
paid witnesses in the courts of the state of Oklahoma. Such fees
shall be paid by the party requesting that the subpoena be issued.
660:2-9-5. Representation
(a) Right to counsel. Any party shall have
the right to appear in person and by counsel, provided, however, that
such counsel representing the party must be duly licensed to practice
law by the Supreme Court of Oklahoma. Such counsel may be present during
the giving of evidence, may have a reasonable opportunity to examine and
inspect all documentary evidence, may examine witnesses and may present
evidence in his client's behalf.
(b) Notice of appearance. An attorney
representing a party shall promptly file a notice of appearance with the
Administrator. The notice of appearance shall contain all of the
following:
(1) the attorney’s name, address, telephone
number, and bar number;
(2) the firm name, address, and telephone number
if the attorney is a member of a firm; and
(3) the name, address, and telephone number of
the person represented.
(c) Service on attorney. After a notice of
appearance has been filed, service of all papers may be made upon the
attorney or firm of record and shall be effective as service upon the
person represented.
660:2-9-6. Conduct of hearings
(a) Rules of evidence. The rules of evidence
need not be strictly followed or observed by the Administrator, or the
Hearing Officer, during the hearing. However, the Administrator, or the
Hearing Officer, may look to Section 310 of the Administrative
Procedures Act for guidance on any matter not specifically provided for
in this Subchapter.
(b) Photocopies. Documentary evidence may be
received in the form of copies if the original is not readily available
and no party or interested person has objected to the authenticity of
the document or asserted it has been altered. Upon such objection or
assertion, the Administrator, or the Hearing Officer, may require the
original to be produced.
(c) Official notice. Notice may be taken by
the Administrator, or the Hearing Officer, of judicially cognizable
facts. In addition, notice may be taken of generally recognized
practices, procedures and facts relating to the securities industry.
Parties shall be notified either before or during the hearing of the
material noticed and they shall be afforded an opportunity to contest
the material so noticed. The Administrator, or the Hearing Officer,
shall utilize his experience, technical competence and specialized
knowledge in evaluating the evidence presented.
(d) Sequestration of witnesses. Upon request
by any party, the Administrator, or the Hearing Officer, may exclude
witnesses other than parties from the hearing room when those witnesses
are not testifying. A party that is not a natural person may designate
an individual as its representative to remain in the hearing room, even
though the individual may also be a witness. An expert witness who is to
render an opinion based on the testimony given at the hearing may remain
in the hearing room during the testimony. The Administrator, or the
Hearing Officer, may order the witnesses, parties, their counsel, and
any person under their direction not to disclose to any sequestered
witness the substance of the testimony, exhibits, or other evidence
introduced during the absence of the witness.
(e) In person testimony. No witness shall
testify by telephone or other electronic means unless by agreement of
the parties.
660:2-9-7. Record of hearing
(a) Requirement. Oral proceedings shall be
electronically recorded at the expense of the Department. Costs of
transcription shall be borne by the party requesting transcription and
shall be paid directly to the person transcribing the proceeding.
(b) Contents of record. The record in any
hearing shall include the following:
(1) all pleadings, motions and intermediate
rulings;
(2) all evidence received or considered,
including a statement of matters officially noted;
(3) questions or offers of proof, objections and
rulings thereon;
(4) proposed findings and exceptions;
(5) the decision, opinion, or report of the
Administrator, or the Hearing Officer;
(6) all other evidence or data submitted to the
Administrator, or the Hearing Officer, in connection with their
consideration of the case provided all parties have had access to
such evidence; and
(7) the final order of the Administrator.
660:2-9-8. Final orders
A
final order adverse to a party in any individual proceeding shall be in
writing or stated in the record. A final order shall include findings
of fact and conclusions of law, separately stated. Findings of fact,
if set forth in statutory language, shall be accompanied by a concise and
explicit statement of the underlying facts supporting the findings.
If, upon request, a party submits proposed findings of fact, the order shall
include a ruling upon each proposed finding. Parties shall be notified
either personally or by certified mail, return receipt requested, of any
final order. A copy of the order shall be delivered or mailed promptly
to each party and to his attorney of record, if any.
660:2-9-9. Rehearings
(a) Written request. Any party aggrieved by
a final order may request rehearing, reopening or reconsideration if a
written request is made therefor within ten days (10) after entry of the
final order.
(b) Grounds. In the request for rehearing,
reopening or reconsideration, the party shall set forth one or more of
the following grounds:
(1) newly discovered or newly available evidence
relevant to the issues;
(2) need for additional evidence to adequately
develop the facts essential to proper decision;
(3) probable error committed by the
Administrator, or the Hearing Officer, in the proceeding or in his
decision such as would be ground for reversal on judicial review of
the order;
(4) need for further consideration of the issues
and the evidence in the public interest; or
(5) a showing that issues not previously
considered ought to be examined in order to properly dispose of the
matter.
(c) Additional grounds for rehearing.
Nothing in these rules shall prevent the Administrator from ordering any
matter reheard, reopened or reconsidered in accordance with other
applicable statutory provisions or rules or, at any time, on the ground
of fraud practiced by the prevailing party or of procurement of the
order by perjured testimony or fictitious evidence.
(d) Order granting rehearing. The order
granting reconsideration, reopening or rehearing shall set forth the
grounds that justify such action.
(e) Scope. The reconsideration, reopening or
rehearing shall be confined to those grounds upon which the
reconsideration, reopening or rehearing was granted.
660:2-9-10.
Appeals [REVOKED]
SUBCHAPTER 11.
PROCEDURES FOR INSPECTING AND/OR COPYING PUBLIC RECORDS
Section 660:2-11-1. Purpose
660:2-11-2. Definitions
660:2-11-3. Record Custodians
660:2-11-4. Hours of inspection
660:2-11-5. Procedures for inspection of records
660:2-11-6. Procedures for copying records
660:2-11-7. Fees
660:2-11-1. Purpose
The provisions of this
Subchapter set forth the procedures of the Department for public inspection
and/or copying of the public records of the Department. Such procedures are
established for purposes of complying with the provisions of the Open
Records Act as defined in 660:2-11-2 and Section 302 of the Oklahoma
Administrative Procedures Act (75 O.S., § 302). Nothing herein is intended
to derogate from or be in conflict with the provisions of the Open Records
Act. To the extent any provision of this Subchapter is found to be in
conflict with any provision of the Open Records Act, the provisions of the
Open Records Act shall govern.
660:2-11-2. Definitions
The following words and
terms, when used in this Subchapter shall have the following meanings,
unless the context clearly indicates otherwise:
"Open Records Act"
means the Oklahoma Open Records
Act, 51 O.S., Sections 24A1 through 24A19.
660:2-11-3. Record Custodians
(a) Authority of
record custodians. The persons designated below shall serve as
Record Custodians for purposes of the Open Records Act and are hereby
charged with responsibility for compliance with that Act pursuant to the
procedures set forth in this Section and elsewhere in this Subchapter.
(b) Appointment of
Record Custodians. The following officials of the Department are
hereby appointed as Record Custodians for the designated records and as
such shall have all the powers and duties set forth in this Subchapter
and in the Open Records Act:
(1) Administrator -
all records of the Department
(2) Deputy
Administrator - all records of the Department
(3) Director of
Enforcement - all enforcement records of the Department
(4) Director of
Registrations and Exemptions - all registration and exemption
records of the Department
(5) Director of
Licensing - all licensing records of the Department
(c) Substitute Record
Custodians. Each of the Record Custodians appointed in subsection
(b) of this Section is hereby authorized to designate any other employee
of the Department to serve as Record Custodian in the place of the
designated Record Custodian. Such substitute Record Custodian shall have
the same duties and powers as the Record Custodian set forth above and
wherever the term "Record Custodian" is used herein, it shall include
any such substitute Record Custodian. Whenever a Record Custodian shall
appoint another person as a substitute Record Custodian he or she shall
notify the Administrator of such designation and the Administrator shall
maintain a register of all such designations.
(d) Duties. All
Record Custodians shall protect the public records of the Department
from damage and disorganization; prevent excessive disruption of the
essential functions of the Department; provide assistance and
information upon request; insure efficient and timely action and
response to all applications for inspection and/or copying of public
records; and shall carry out the procedures adopted by this Department
for inspecting and/or copying public records.
(e) Direction of
requests to custodians. All members of the public, in seeking access
to, or copies of, a public record in accordance with the provisions of
the Open Records Act shall address their requests to the Record
Custodian charged with responsibility for the maintenance of the record
sought to be inspected or copied. Whenever a Record Custodian is
presented with a request for inspection or copy of, a public record
which record the Record Custodian does not have in his or her possession
and which he or she has not been given responsibility to keep and
maintain, the Record Custodian shall so advise the person requesting the
record. Further, the person making the request shall be informed as to
which custodian the request should be addressed, if such is known by the
Record Custodian receiving the request.
660:2-11-4. Hours of
inspection
All public records of the
Department shall be available for inspection during the regular business
hours of the Department. Such hours shall be 8:00 a.m. to 5:00 p.m., Monday
through Friday, except legal holidays.
660:2-11-5. Procedures for
inspection of records
(a) Requests for
inspection. To inspect a public record in the possession of the
Department, the person requesting the record shall execute a Form OAD 25
- REQUEST FOR RECORD INSPECTION and deliver it to the Record Custodian
responsible for the requested record designated in 660:2-11-3. Such
request shall be accompanied by the fees set forth in 660:2-11-7. All
record inspection forms must be completed by the person requesting the
record and signed by the individual making the request. The Record
Custodian may demand reasonable identification of any person requesting
a record.
(b) Place of
inspection. All inspections of public records shall be performed in
the offices of the Department under the supervision of the Record
Custodian.
(c) Identification of
records. A written request for inspection of a record shall
reasonably describe the record sought. In instances where the person
requesting the record cannot provide sufficient information to identify
a record, the Record Custodian shall assist in making such
identification.
(d) Delay or denial of
requests for inspection. If the record requested is not available
for inspection at the time requested, within three (3) business days
following the day the request for inspection is received by the Record
Custodian, the Record Custodian shall notify the person requesting the
record:
(1) that the record
will be available for inspection at a later time by returning Form
OAD 26 - RECORD INSPECTION DELAY NOTICE; or
(2) that the record
will not be available for inspection, by returning to the person
requesting the record a copy of Form OAD 27 - RECORD INSPECTION
DENIAL.
660:2-11-6. Procedures for
copying records
(a) Requests for
copies. To obtain a copy of a public record in the possession of the
Department, the person requesting the copy shall execute a Form OAD 28 -
REQUEST FOR RECORD COPY and deliver it to the Record Custodian
responsible for the requested record designated in 660:2-11-3; except
that no form shall be required for requests made for records which have
been reproduced for free public distribution. Such request shall be
accompanied by the fees set forth in 660:2-11-7. All record copy forms
must be completed by the person requesting the record and signed by the
individual making the request. The Record Custodian may demand
reasonable identification of any person requesting a record.
(b) Responsibility for
making copies. All copies of public records shall be performed by
the Record Custodian in the offices of the Department except where the
Record Custodian determines that the size or the volume of records to be
copied warrants sending the record outside the Department for copying,
in which event the copies shall be made at a place selected by the
Record Custodian and under the supervision of the Record Custodian.
(c) Identification of
records. A written request for copies of a record shall reasonably
describe the record sought. In instances where the person requesting the
copies cannot provide sufficient information to identify a record, the
Record Custodian shall assist in making such identification.
(d) Delay or denial of
requests for copies. If the record requested is not available for
copying at the time requested, within three (3) business days following
the day the request for copies is received by the Record Custodian, the
Record Custodian shall notify the person requesting the copies:
(1) that the record
will be available for copying at a later time by returning Form
OAD 29 - RECORD COPY DELAY NOTICE; or
(2) that the record
will not be available for copying, by returning to the person
requesting the record a copy of Form OAD 30 - RECORD COPY DENIAL.
660:2-11-7. Fees
(a) Amounts payable. The following are the
fees that shall be charged by the Department for copying and/or
mechanical reproduction of public records and for the search for public
records requested by the public pursuant to the Open Records Act and
Section 1-612 of the Securities Act; provided, however, no record search
and/or copying charge shall be assessed against officers or employees of
the Department who make requests which are reasonably necessary to the
performance of their official duties:
(1) Inspection fees. No fee shall be
charged for inspection of a public record in the offices of the
Department.
(2) Copying fees. The following fees
shall be charged for copies of public records:
(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
(3) Fee for mechanical reproduction. For
copying any public record which cannot be reproduced by
photocopying, such as a computer printout or a blueprint, or where
the size of the record to be copied warrants sending the record
outside for copying, the person requesting the record shall be
charged the actual cost to the Department of such copying, including
the cost of labor, materials and equipment.
(4) Search fee. If the person requesting
a record is using the record solely for a commercial purpose, a
search fee shall be charged equal to $20.00 per hour for the time
spent by employees in retrieving the record.
(b) Prepayment of fees. The Record Custodian
may require prepayment of estimated fees for requests for public records
and shall require prepayment of a fee whenever the estimated amount
exceeds $200.00. The prepayment amount shall be an estimate of the costs
of copying, mechanical reproduction and/or searching for the record. Any
overage or underage in the prepayment amount shall be settled prior to
producing the requested record or delivering the copy or mechanical
reproduction of the record to the person requesting the record.
SUBCHAPTER 13.
DECLARATORY RULINGS AND INTERPRETIVE OPINIONS
Section 660:2-13-1. Opinions
660:2-13-1. Opinions
The Administrator and/or Commission may honor
requests from interested persons for interpretive opinions and as to the
applicability of any rule or order, if it be shown that an actual case,
controversy or issue is in contemplation and that unreasonable hardship,
loss or delay would result if the matter were not determined in advance.
The Administrator in his discretion may honor requests from interested
persons for formal interpretive opinions relating to a specific factual
circumstance and no-action positions, including consideration of
waivers, where appropriate and in the public interest, on the basis of
facts stated and submitted in writing, with respect to the provisions of
the Securities Act or any rule or statement of policy adopted
thereunder, provided such requests satisfy and conform to the following
requirements:
(1) Such requests shall be in writing and shall
include or be accompanied by all information and material required
by any statute, rule or statement of policy under which an exception
or exemption may be claimed, including but not limited to, copies of
prospectuses or offering circulars if applicable or appropriate.
(2) An original and one copy of the request
letter itself shall be submitted and the name of the entity for whom
the request is being made along with the specific subsection of the
particular statute or the particular rule or statement of policy to
which the letter pertains shall be indicated in the upper right-hand
corner of the letter.
(3) The letter should contain a brief narrative
of the fact situation and should set out all of the facts necessary
to reach a conclusion in the matter; however, such narratives should
be concise and to the point.
(4) The names of the company or companies,
organization or organizations and all other persons involved should
be stated and should relate and be limited to a particular factual
circumstance. Letters relating to unnamed companies, organizations
or persons or to hypothetical situations will not warrant a formal
response.
(5) Every such request shall include or be
accompanied by a manually signed opinion of legal counsel which
briefly and concisely states counsel's understanding, counsel's
opinion in the matter, which may be expressed tentatively or
conditioned upon concurrence by the Administrator, and the basis for
such opinion.
(6) Each request for a no-action position and/or
interpretive opinion letter shall be accompanied by payment of a fee
in the amount specified in Section 1-612 of the Securities Act.
CHAPTER 3. PROCEDURES FOR THE OKLAHOMA TAKE-OVER
DISCLOSURE ACT OF 1985 [RESERVED]
CHAPTER 4.
PROCEDURES FOR THE
OKLAHOMA SUBDIVIDED LAND SALES CODE
Subchapter |
Section |
1. General Provisions……………………………………………………………………… |
660:4-1-1 |
3. Hearings…………………………………………………………………………………. |
660:4-3-1 |
[Authority: 71 O.S., Section 662; 75 O.S., Section 302]
[Source: Codified 12/31/91]
SUBCHAPTER 1.
GENERAL PROVISIONS
Section 660:4-1-1. Purpose 660:4-1-2. Statutory citations
660:4-1-1. Purpose
The provisions of this Chapter have been adopted for the
purpose of carrying out the provisions of the Oklahoma Subdivided Land Sales
Code, 71 O.S., Sections 601 through 667, including the establishment of
administrative procedures.
660:4-1-2. Statutory citations
Citations to statutes in this Chapter refer to the most
recent codification of the Oklahoma Subdivided Land Sales Code, 71 O.S.,
Sections 601 through 667.
SUBCHAPTER 3.
HEARINGS
Section 660:4-3-1. Reconsideration of Department action
660:4-3-1. Reconsideration of Department action
(a) Review of final order. Any person
aggrieved by a final order of the Administrator under the Land Sales Act
may obtain a review by the Oklahoma Securities Commission by filing with
the Administrator within fifteen (15) days after the entry of its order,
a written petition praying that the order be modified or set aside in
whole or in part and stating the grounds therefor.
b) Hearing de novo. The application and
petition shall within sixty (60) days be heard de novo by the Commission
en banc.
(c) Request for oral argument. If petitioner
desires to present oral argument on his petition, it shall be
affirmatively requested in writing at the time the petition is submitted
to the Administrator.
CHAPTER 5. PROCEDURES FOR THE OKLAHOMA BUSINESS
OPPORTUNITY SALES ACT [RESERVED]
CHAPTER 6. FORMS
Subchapter |
Section |
1. General
Provisions........................................................................................ |
660:6-1-1 |
3. Forms for General
Purposes........................................................................... |
660:6-3-1 |
5. Forms used under the
Securities Act..................................……………………… |
660:6-5-1 |
7. Forms used under the
Take-over
Act............................................................... |
[RESERVED]
|
9. Forms used under the
Land Sales
Act............................................................ |
660:6-9-1
|
11. Forms used under the
Business Opportunity Act............................................ |
[RESERVED]
|
SUBCHAPTER 1. GENERAL PROVISIONS
Section
660:6-1-1. Purpose
660:6-1-1. Purpose
The provisions of this
Chapter have been adopted for the purpose of describing the various forms
accepted by the Department for compliance with the various provisions of the
acts subject to the jurisdiction of the Administrator.
SUBCHAPTER 3. FORMS FOR GENERAL PURPOSES
Section
660:6-3-1. Forms to inspect or copy records
660:6-3-2. Forms to file a complaint
660:6-3-1. Forms to inspect
or copy records
The following forms are
required to obtain records of the Department under the Open Records Act:
(1) OAD-25 -- Request
for Record Inspection
(2) OAD-26 -- Record
Inspection Delay Notice
(3) OAD-27 -- Record
Inspection Denial
(4) OAD-28 -- Request
for Record Copy
(5) OAD-29 -- Record
Copy Delay Notice
(6) OAD 30 -- Record
Copy Denial
660:6-3-2. Forms to file a
complaint
(a) Form. The
following form is used to file a complaint with the Department: OEN-002
-- Complaint Form
(b) Obtaining form.
The form listed in Subsection (a) of this Section may be obtained from
the Department.
SUBCHAPTER 5.
FORMS USED UNDER THE SECURITIES ACT Section
660:6-5-1. Forms for registration or exemption of securities [AMENDED]
660:6-5-2. Licensing forms [AMENDED]
660:6-5-1. Forms for registration or exemption of
securities
(a) The following is a list of forms accepted by the
Department in connection with the registration or exemption of
securities under the Securities Act:
(1) U-1 -- Uniform Application to Register
Securities
(2) U-2 -- Uniform Consent to Service of Process
(3) U-2A -- Uniform Form of Corporate Resolution
(4) U-7 -- Small Corporate Offerings Registration
Form
(5) NF -- Uniform Investment Company Notice
Filing
(6) USR-1 -- Uniform Sales Report for Issuers
(7) Form D -- Notice of Sale of Securities
Pursuant to Regulation D
(8) Oklahoma Accredited Investor Exemption
Supplemental Information Form
(b) Obtaining forms.
(1) Copies of forms listed in (a)(1) through (6)
of this Section, can be obtained from The North American Securities
Administrators Association, Inc. at 10 G Street Northeast, Suite
710, Washington, D.C. 20002 or on the NASAA web site at
http://www.nasaa.org.
(2) Copies of Form D may be obtained from The
Public Reference Branch of the main office of the SEC, 450 5th
Street, N.W., Washington, D.C. 20549, from any of the regional or
branch offices of the SEC, or on the SEC web site at
http://www.sec.gov.
(3) Copies of the form listed in (a)(8) of this
Section can be obtained from the Department.
(4) The referenced forms are also available from
the Department's website at
www.securities.ok.gov.
660:6-5-2. Licensing forms
(a) The following is a list of forms used by the
Department in connection with licensing persons as broker-dealers,
agents, principals, issuer agents, investment advisers or investment
adviser representatives, under the Securities Act:
(1) BD -- Uniform Application for Broker-Dealers,
Investment Advisers and Agents
(2) ADV -- Uniform Application for Investment
Adviser Registration
(3) U-2 -- Uniform Consent to Service of Process
(4) U-2A -- Uniform Form of Corporate Resolution
(5) U-4 -- Uniform Application for Securities
Industry Registration or Transfer
(6) U-5 -- Uniform Application for Termination of
Registration
(7) U-10 -- Uniform Examination Request for
Non-NASD Candidates
(8) OBD-001 -- Applicant/Management Certification
for Non-NASD Principals
(9) OBD-008 -- Application for Renewal of
Non-NASD Broker-Dealer Registration
(10) OBD-015 -- Application for Renewal of Issuer
Agent Registration
(11) OBD-016 -- Application for Renewal of
Non-NASD Broker-Dealer Principal Registration
(12) OBD-018 -- Applicant/Management
Certification for Issuer Agents
(13) OBD-019 -- Application for Renewal of
Non-NASD Broker-Dealer Agent Registration
(14) OBD-020 -- NonBranch Sales Office Form
(b) Obtaining forms.
(1) Copies of the forms listed in (a)(1) and (2)
of this Section, can be obtained from the SEC, 450 5th Street, N.W.,
Washington, D.C. 20549 or from any of the regional or branch offices
of the SEC.
(2) Copies of the forms listed in (a)(1), (5) and
(6) of this Section, can be obtained by contacting the NASD, 9509
Key West Avenue, Rockville, Maryland 20850, 301-590-6500.
(3) Copies of forms listed in (a)(3) through (7)
of this Section, can be obtained from The North American Securities
Administrators Association, Inc. at 10 G Street, Northeast, Suite
710, Washington, D.C. 20002.
4) Copies of forms listed in (a)(8) through (14)
of this Section, can be obtained from the Department.
(5) Many of the referenced forms are available
from the Department's website at
www.securities.ok.gov.
SUBCHAPTER 7. FORMS USED UNDER
THE TAKE-OVER ACT
[RESERVED]
SUBCHAPTER 9. FORMS USED UNDER THE LAND SALES ACT
Section
660:6-9-1. Forms for registration of subdivided land
660:6-9-2. Forms for licensing of agents
660:6-9-1. Forms for
registration of subdivided land
(a) Forms. The
following is a list of forms required by the Department in connection
with the registration of subdivided land under the Land Sales Act:
(1) LRF-625 --
Application for Registration of Subdivided Lands
(2) LRF-626A --
Public Offering Statement-Instruction Guide
(3) LRF-626B --
Summary Disclosure Statement Guide
(4) LRF-627 --
Registrants Semi-Annual Report
(b) Obtaining forms.
The forms listed above may be obtained from the Department.
660:6-9-2. Forms for
licensing of agents
(a) Forms. The
following is a list of forms required by the Department in connection
with the licensing of agents under the Land Sales Act: LRF-632 --
Application for License for Subdivided Land Sales Agent
(b) Obtaining form.
The form listed in Subsection (a) may be obtained from the Department.
SUBCHAPTER 11. FORMS USED
UNDER THE BUSINESS OPPORTUNITY ACT
[RESERVED]
CHAPTER 10. OKLAHOMA SECURITIES ACT
[REVOKED]
CHAPTER 11.
OKLAHOMA UNIFORM SECURITIES ACT OF 2004
Subchapter |
Section |
1. General provisions……..………………………………………………………………... |
660:11-1-1 |
3. Investment Certificate
Issuers……….…………………………………………………. |
660:11-3-1 |
5. Broker-dealers and agents
..................……………………………………………… |
660:11-5-1 |
7. Investment advisers and investment adviser
representatives…………………...….. |
660:11-7-1 |
9. Registration of securities
..................………………………………………………... |
660:11-9-1 |
11. Exemptions from securities registration
.................………………………………. |
660:11-11-1 |
13. Sales literature
....................…………………………………………………………. |
660:11-13-1 |
15. Miscellaneous provisions
..................……………………………………………….. |
660:11-15-1 |
SUBCHAPTER 1.
GENERAL PROVISIONS
Section 660:11-1-1. Purpose 660:11-1-2. Statutory citations
660:11-1-3. Definitions 660:11-1-4. [RESERVED] 660:11-1-5. [RESERVED]
660:11-1-6. Amendments
660:11-1-1. Purpose
The provisions of this chapter have been adopted for the
purpose of carrying out the provisions of the Oklahoma Uniform Securities
Act of 2004 including, but not limited to, provisions governing the offer,
sale and issuance of securities.
660:11-1-2. Statutory citations
Citations to statutes in this chapter refer to the most
recent codification of the Oklahoma Uniform Securities Act of 2004 in Title
71 of the Oklahoma Statutes.
660:11-1-3. Definitions
Unless the context otherwise requires, or unless defined
in this section or in 660:11-5-2, terms used in this chapter, if defined in
the Securities Act, shall have the meaning as defined in the Securities Act.
The following words and terms, when used in this chapter, shall have the
following meaning, unless the context clearly indicates otherwise:
"Authorized to do business in Oklahoma" means
authorized to do business in Oklahoma pursuant to the Oklahoma Uniform
Securities Act of 2004.
"Audited financial statements" means
"Certified financial statements."
"Certified financial statements" means
financial statements prepared in accordance with generally accepted
accounting principles and examined by Independent accountants in
accordance with generally accepted auditing standards, accompanied by an
opinion as described in 660:11-15-1.
"CFR" means the Code of Federal Regulations.
"CRD" means the NASAA/NASD Central
Registration Depository System.
"Date of filing" means the date on which a
proper registration statement is filed for purposes of determining the
dates of the statements of financial condition to be filed with a
registration statement. If amendments to a registration statement are
necessary to comply fully with the registration requirements, "date of
filing" means the date on which the last amendment is filed.
"FDIC" means the Federal Deposit Insurance
Corporation.
"Financial statements" means, but is not
limited to, the statement of financial condition, statement of income,
and statement of changes in stockholders’ or owners’ equity, as well as
all related footnotes and supporting schedules applicable thereto,
prepared in accordance with generally accepted accounting principles.
"Independent accountants" means independent
certified public accountants. The concept of independence shall be that
promulgated by the American Institute of Certified Public Accountants.
"NASAA" means the North American Securities
Administrators Association.
"NASD" means the National Association of
Securities Dealers, Inc.
"NASDR" means the National Association of
Securities Dealers Regulation, Inc.
"1933 Act" means the Securities Act of 1933,
as amended.
"1934 Act" means the Securities Exchange Act
of 1934, as amended.
"1940 Act" means the Investment Company Act of
1940, as amended.
"Predecessor of an issuer" means:
(A) a person the major portion of whose assets
have been acquired directly or indirectly by the issuer, or
(B) a person from which the issuer acquired directly or indirectly
the major portion of its assets.
"Promotional or developmental stage company"
means an issuer for which any of the following conditions exist:
(A) the company and any predecessors were formed
within the twelve-month period ending on the date of the filing of
the application for registration; (B) the company
has no significant revenues from the line of business being
undertaken with the offering proceeds; (C) the
principal operations to be conducted with offering proceeds have not
commenced or have been commenced within the twelve-month period
ending on the date of the filing of the application for
registration; or (D) the principal operations to
be conducted with offering proceeds have commenced, but the issuer
has not demonstrated profitable operations for two of the three
fiscal years prior to registration, evidenced by net income
determined in accordance with generally accepted accounting
principles after taxes, and excluding extraordinary items.
"Prospectus" means a prospectus in a form and
containing such information as may be required by the Administrator,
including a prospectus filed under the 1933 Act or an offering circular
used in connection with an exempt security or transaction regardless of
the designation of the document (i.e., prospectus, offering circular,
memorandum, etc.). "Registration statement"
means an application for registration of securities under Sections 1-303
and 1-304 of the Securities Act and all documents and exhibits related
thereto, including a Prospectus. "SEC" means
the United States Securities and Exchange Commission.
"Securities Act" means the most recent
codification of the Oklahoma Uniform Securities Act of 2004 in Title 71
of the Oklahoma Statutes. "SIPC" means the
Securities Investor Protection Corporation.
660:11-1-4. [RESERVED]
660:11-1-5. [RESERVED] 660:11-1-6. Amendments
The Administrator may by order amend the provisions of this chapter to
conform references to the Securities Act or to rules promulgated thereunder
to numerical redesignations occasioned by legislative or rulemaking
activities.
SUBCHAPTER 3.
INVESTMENT CERTIFICATE ISSUERS
PART 1. GENERAL PROVISIONS
Section 660:11-3-1. Definitions
PART 3. REPORTING AND ACCOUNTING REQUIREMENTS
660:11-3-21. Loans 660:11-3-22. Valuation of other assets
660:11-3-23. Reserve against bad debts 660:11-3-24. Books and records
660:11-3-25. Reports
PART 5. MISCELLANEOUS PROVISIONS
660:11-3-31. Qualifications of conservator or liquidator 660:11-3-32.
Acknowledgment 660:11-3-33. Examination standards
PART 1. GENERAL PROVISIONS
660:11-3-1. Definitions
The following words and terms, when used in this
subchapter, shall have the following meaning, unless the context clearly
indicates otherwise:
"Allowance" means an allowance for loan losses
or a reserve against bad debts. "Net loans
outstanding" means total gross loans outstanding less unearned
discount. "Nonperforming loan" means a loan
over 90 days past due with respect to principal and/or interest.
"Uncollectible" means the potential for collection is virtually
nonexistent. "Worthless" means lacking value.
PART 3. REPORTING AND ACCOUNTING REQUIREMENTS
660:11-3-21. Loans
(a) Classifications. Each investment
certificate issuer shall observe the following prescribed classification
standards of loans:
(1) Loss - all, or a portion, of the loan
considered uncollectible or worthless. (2)
Doubtful - all, or a portion, of the loan the ultimate collection of
which is doubtful and in which a substantial loss is probable, but
not as yet definitely ascertainable in amount. (3)
Substandard - all, or a portion, of the loan not classified as
doubtful or loss and which involves more than normal risk due to the
financial condition or unfavorable record of the borrower,
insufficiency of security, or other factors. (4)
Special mention - loans not warranting classification as
substandard, doubtful, or loss but which are of an unusual nature
carrying more than the usual risk, and should have the careful
attention of management.
(b) Appraisals. Each investment certificate
issuer shall perform an in-house appraisal or obtain an appraisal by a
licensed independent appraiser of collateral at the time of the
origination of each loan. Said appraisal shall be updated by a licensed
independent appraiser upon the Administrator's written request upon a
change in the economic or market conditions or if the loan becomes
nonperforming. (c)
Aging schedules.
(1) The provisions of this subsection shall apply
to determining the age of loans. Loans shall be aged on the basis of
contract terms in effect at the close of business each month.
Account balances not in current status shall be classified in the
following categories (assuming monthly payments):
(A) One installment or a portion in excess of
5% of an installment due and unpaid 0 to 30 days past due.
(B) Two installments or one and a portion in excess of 5% of an
installment due and unpaid 31 to 60 days past due.
(C) Three installments or two and a portion in excess of 5% of
an installment due and unpaid 61 to 90 days past due.
(D) Four installments or three and a portion in excess of 5% of
an installment due and unpaid over 90 days past due.
(2) Amortizing real estate loans are to be
reported as past due when the borrower is in arrears two or more
monthly payments. Such obligations with payments scheduled other
than monthly are to be reported as past due when one scheduled
payment is due and unpaid for 30 days or more. (3)
Single payment and demand notes providing for the payment of
interest at stated intervals are to be reported as past due after
one interest payment is due and unpaid for 30 days or more.
(4) Single payment notes providing for the payment of interest at
maturity are to be reported as past due after maturity if interest
or principal remains unpaid for 30 days or more.
(d) Interest. Loans are to be reported as
being in nonaccrual status if:
(1) said loans are maintained on a cash basis
because of deterioration in the financial position of the borrower;
(2) payment in full of interest or principal is not expected; or
(3) principal or interest has been in default for a period of 90
days or more unless the obligation is both well secured and in the
process of collection. A debt is "well secured" if it is secured (1)
by collateral in the form of liens on or pledges of real or personal
property, including securities, that have a realizable value
sufficient to discharge the debt in full, or (2) by the guaranty of
a financially responsible party. A debt is "in the process of
collection" if collection of the debt is proceeding in due course
either through legal action, including judgment enforcement
procedures, or, in appropriate circumstances, through collection
efforts not involving legal action which are reasonably expected to
result in repayment of the debt or in its restoration to a current
status.
(e) Charge-offs. Each investment certificate
issuer shall charge-off the whole or any part of a loan at such times
that said loan is classified by the Administrator as "loss" as defined
in (a) above.
660:11-3-22. Valuation of other assets
(a) Real property. Real property shall be
recorded on the balance sheet in accordance with generally accepted
accounting principles. Each investment certificate issuer shall maintain
an appraisal of all real property recorded on the balance sheet. Said
appraisal shall be updated by a licensed, independent appraiser upon the
Administrator's request if a change in the economic or market conditions
occur. If said appraisal indicates that the value of the asset is
materially overstated on the balance sheet such that the financial
statements are materially misstated, said asset shall be written down to
market value upon the written request of the Administrator.
(b)
Other assets. All other assets of the investment certificate
issuer shall be recorded on the balance sheet in accordance with
generally accepted accounting principles. (c)
Charge-offs. Each investment certificate issuer shall charge-off
the whole of any other asset, including real property, at such time that
said asset is deemed to be lacking in value by the Administrator.
660:11-3-23. Reserve against bad debts
(a) Requirement to maintain reserve. Each
investment certificate issuer shall at all times maintain a reserve
against bad debts, that is, an Allowance for Loan Losses, in an amount
equal to two percent (2%) of the total loans outstanding.
(b)
Determination of amount of reserve. As of the end of each
quarter, the management of each investment certificate issuer shall
evaluate the collectibility of the loan portfolio to bring the
Allowance, by means of a charge or credit, to a level adequate to absorb
anticipated loan losses. Any recoveries during the reporting period
should be credited to the Allowance, and any charge-offs should be
charged to the Allowance. With respect to those loans classified as
"doubtful" in accordance with 660:11-3-21, the Allowance shall be
increased by an amount equal to fifty percent (50%) of the amounts
classified as "doubtful." With respect to those loans classified as
"substandard" in accordance with 660:11-3-21, the Allowance shall be
increased by ten percent (10%) of the amounts of the outstanding loans
classified as "substandard."
660:11-3-24. Books and records
(a) Maintenance of books and records. Each
investment certificate issuer shall maintain its books and records in
such a manner that said books and records will facilitate preparation of
financial statements in accordance with generally accepted accounting
principles. Said books and records shall be maintained in sufficient
detail to afford an analysis of all transactions. (b)
Financial statements. Each investment certificate issuer shall
prepare a balance sheet and statement of income at the close of business
on the last day of each month. Said financial statements shall be
prepared not later than fifteen (15) business days after the end of the
accounting period.
660:11-3-25. Reports
(a) Reports required. Each investment
certificate issuer shall prepare and file with the Administrator
quarterly reports for the quarters other than the quarter ending the
fiscal year. Each report shall include the following:
(1) balance sheet and statement of income at the
close of business on the last day of the quarter covered by said
report; (2) a schedule of the loans classified as
loss, doubtful, substandard or special mention pursuant to
660:11-3-21, to include the loan balance amount of accrued interest
and value of collateral for each loan appearing thereon; and
(3) aging schedules as prepared in accordance with 660:11-3-21.
(b) When to file. Each report shall be
submitted to the Administrator within thirty (30) days of the end of the
quarter for which the report applies.
PART 5. MISCELLANEOUS PROVISIONS
660:11-3-31. Qualifications of conservator or
liquidator
A conservator or liquidator, who may be the Administrator
of the Department, a member of his staff, or an independent party, appointed
under Section 1-308.I.2. of the Securities Act shall be of legal age, of
good moral character, a resident of the state of Oklahoma and competent to
perform the duties of conservator or liquidator.
660:11-3-32. Acknowledgment
The purpose of Section 1-308.C of the Securities Act is
to aid investment certificate issuers in applying for insurance by the FDIC.
The prior issuance and continued effectiveness of a registration order shall
constitute the written acknowledgment addressed by Section 1-308.C of the
Securities Act. A formal acknowledgment for purposes of seeking insurance by
the FDIC will be issued by the Administrator upon receipt of a written
request therefor. Said request shall be accompanied by a copy of the
application filed or to be filed with the FDIC. Upon obtaining membership in
the FDIC, an investment certificate issuer shall not be subject to the
prospectus preparation and delivery requirements set forth in Section
1-304.E of the Securities Act.
660:11-3-33. Examination standards
Examinations made by the Administrator or designated
members of his staff may be performed in reliance upon the American
Institute of Certified Public Accountants industry audit guides for
financial institutions and federal regulatory guidelines for financial
institutions.
SUBCHAPTER 5.
BROKER-DEALERS AND AGENTS
PART 1. GENERAL PROVISIONS
Section 660:11-5-1. Purpose 660:11-5-2. Definitions
PART 3. LICENSING PROCEDURES
660:11-5-11. Initial registration 660:11-5-12. Renewal 660:11-5-13.
Agent transfer 660:11-5-14. Agent termination 660:11-5-15. Categories
of registration 660:11-5-16. Qualification examination requirements
660:11-5-17. Net capital for broker-dealers 660:11-5-18. [RESERVED]
660:11-5-19. Piecemeal filings 660:11-5-20. Cross-border licensing
exemption
PART 5. REPORTING REQUIREMENTS
660:11-5-31. Post-registration reporting requirements
PART 7. RECORD KEEPING AND ETHICAL STANDARDS
660:11-5-41. Books and records requirements for broker-dealers
660:11-5-42. Standards of ethical practices for broker-dealers and their
agents 660:11-5-42.1. Standards of ethical practices--issuer agents
660:11-5-43. Examination of broker-dealers 660:11-5-44. [RESERVED]
660:11-5-45. Financial statements for broker-dealers
PART 1. GENERAL PROVISIONS
660:11-5-1. Purpose
The rules in this subchapter have been adopted to provide
procedures for complying with the provisions of Sections 1-401 through 1-402
of the Securities Act relating to the licensing of broker-dealers and agents
under the Securities Act.
660:11-5-2. Definitions
In addition to the terms defined in 660:11-1-3, the
following words and terms when used in this subchapter shall have the
following meaning, unless the context clearly indicates otherwise:
"Branch office" means any business location of
a broker-dealer identified to the public or customers by any means as a
location at which a securities business is conducted on behalf of the
broker-dealer, excluding any location identified solely in a telephone
directory line listing or on a business card or letterhead, which
listing, card, or letterhead also sets forth the address and telephone
number of the office of the broker-dealer responsible for supervising
the activities of the identified location. "Complaint"
means and includes any written statement of a customer or any person
acting on behalf of a customer alleging a grievance involving the
activities of those persons under the control of the broker-dealer in
connection with the solicitation or execution of any transaction or the
disposition of securities or funds of that customer. "Completion
of the transaction" means:
(A) In the case of a customer who purchases a
security through or from a broker-dealer, except as provided in (B),
the time when such customer pays the broker-dealer any part of the
purchase price, or, if payment is effected by bookkeeping entry, the
time when such bookkeeping entry is made by the broker-dealer for
any part of the purchase price; (B) In the case of
a customer who purchases a security through or from a broker-dealer
and who makes payments therefor prior to the time when payment is
requested or notification is given that payment is due, the time
when such broker-dealer delivers the security to or into the account
of such customer; (C) In the case of a customer
who sells a security through or to a broker-dealer, except as
provided in (D), if any security is not in the custody of the
broker-dealer at the time of sale, the time when the security is
delivered to the broker-dealer, and if the security is in the
custody of the broker-dealer at the time of sale, the time when the
broker-dealer transfers the security from the account of such
customer; (D) In the case of a customer who sells
a security through or to a broker-dealer and who delivers such
security to such broker-dealer prior to the time when delivery is
requested or notification is given that delivery is due, the time
when such broker-dealer makes payment to or into the account of such
customer.
"Customer" means any person who, in the
regular course of a broker-dealer's business, has cash or securities in
the possession of such broker-dealer. "Customer" shall not include a
broker-dealer. "Direct participation programs"
mean programs which provide for flow-through tax consequences regardless
of the structure of the legal entity or vehicle for distribution
including, but not limited to, oil and gas programs, real estate
programs, agricultural programs, cattle programs, condominium
securities, Subchapter S corporate offerings and all other programs of a
similar nature, regardless of the industry represented by the program,
or any combination thereof; excluded from this definition are real
estate investment trusts, tax qualified pension and profit sharing plans
pursuant to Sections 401 and 403(a) of the Internal Revenue Code and
individual retirement plans Section 408 of that code, tax sheltered
annuities pursuant to the provisions of Section 403(b) of the Internal
Revenue Code and any company including separate accounts registered
pursuant to the 1940 Act. "Investment company and
variable contracts products" means:
(A) redeemable securities of companies registered
pursuant to the 1940 Act; (B) securities of
closed-end companies registered pursuant to the 1940 Act during the
period of original distribution only; and (C)
variable contracts and insurance premium funding programs and other
contracts issued by an insurance company except contracts which are
exempt securities pursuant to Section 3(a)(8) of the 1933 Act.
"Municipal securities" mean securities which
are direct obligations of, or obligations guaranteed as to principal or
interest by, a state or any political subdivision thereof, or any agency
or instrumentality of a state or any political subdivision thereof, or
any municipal corporate instrumentality of one of more states, or any
security which is an industrial development bond as defined in Section
3(a)(29) of the 1934 Act.
"Nonbranch sales office" means any business
location of the broker-dealer identified to the public or customers by
any means as a location at which a securities business is conducted on
behalf of the broker-dealer which location is identified solely in a
telephone directory line listing or on a business card or letterhead,
which listing, card, or letterhead also sets forth the address and
telephone number of the office of the broker-dealer responsible for
supervising the activities of the identified location.
"Office" means any location where a broker-dealer and/or one or
more of its agents regularly conduct the business of handling funds or
securities or effecting any transactions in, or inducing or attempting
to induce the purchase or sale, of any security. "Option"
means any put, call, straddle or other option or privilege, which is a
"security" as defined in Section 2(1) of the 1933 Act, as amended, but
shall not include any tender offer, registered warrant, right,
convertible security or any other option in respect to which the writer
is the issuer of the security which may be purchased or sold upon the
exercise of the option. "OSJ" or "Office of
supervisory jurisdiction" means any office designated as directly
responsible for the review of the activities of registered agents or
associated persons in such office and/or in other offices of the
broker-dealer. An office of supervisory jurisdiction would be any
business location of a broker-dealer at which one or more of the
following functions take place:
(A) order execution and/or market making;
(B) structuring of public offerings or private placements;
(C) maintaining custody of customers' funds and/or securities;
(D) final acceptance (approval) of new accounts on behalf of the
broker-dealer; (E) review and endorsement of
customer orders pursuant to 660:11-5-42; (F) final
approval of advertising or sales literature for use by agents of the
broker-dealer; (G) responsibility for supervising
the activities of persons associated with the broker-dealer at one
or more other offices of the broker-dealer.
"Principal" means:
(A) any individual registered with a registered
national securities association as a principal or branch manager of
a member, broker or dealer, or any other person who has been
delegated supervisory responsibility for the firm or its associated
persons; or (B) any person associated with a
non-NASD applicant for registration as a broker-dealer who is or
will be actively engaged in the management of the applicant's
securities business, including supervision, solicitation, conduct of
business or training of persons associated with an applicant for any
of these functions, and is designated as a principal by the
broker-dealer applicant.
"Public offering price" shall mean the price
at which the security involved was offered to the public as set forth in
the prospectus of the issuing company. "Selling
group" means any group formed in connection with a public offering,
to distribute all or part of an issue of securities by sales made
directly to the public by or through members of such selling group,
under an agreement which imposes no financial commitment on the members
of such group to purchase any such securities except as they may
individually or collectively elect to do so. "Selling
syndicate" means any syndicate formed in connection with a public
offering, to distribute all or part of an issue of securities by others
or sales made directly to the public by or through participants in such
syndicate under an agreement which imposes a financial commitment upon
the participants in such syndicate to purchase any of such securities.
"Undertaking for Participation in the NASAA/CRD Temporary Agent
Transfer Program" means the document entitled "Broker-Dealer
Undertaking for Participation in the NASAA/CRD Temporary Agent Transfer
Program" which the employing broker-dealer has executed and filed with
the CRD.
PART 3.
LICENSING PROCEDURES
660:11-5-11. Initial registration
(a) Broker-dealer. Each broker-dealer
applying for initial registration pursuant to Section 1-406 of the
Securities Act:
(1) who is contemporaneously applying for NASD
membership or who is an NASD member:
(A) shall file with the CRD:
(i) a completed Form BD, including
Schedules A-E; and (ii) the filing fee
specified in Section 1-612 of the Securities Act.
(B) shall file with the Department, within 60
days of becoming registered, a list of the addresses, telephone
numbers and resident agents of all nonbranch sales offices
located within the state of Oklahoma.
(2) who is not a current NASD member shall file
with the Department:
(A) a completed Form BD, including Schedules
A-E; (B) the filing fee specified in Section
1-612 of the Securities Act; (C) audited
financial statements as required by 660:11-5-45;
(D) documentation of compliance with the minimum capital
requirement set forth in Section 1-406.E of the Securities Act
and 660:11-5-17; (E) designation,
qualification and registration of a principal as defined in
660:11-5-2 pursuant to (c) of this section;
(F) a list of the addresses, telephone numbers and resident
agents of all nonbranch sales offices located within the state
of Oklahoma; (G) a copy of the written
supervisory procedures of the broker-dealer; and
(H) any additional documentation, supplemental forms and
information as the Administrator may deem necessary.
(b) Broker-dealer agent.
(1) Required documents. Each
broker-dealer agent applying for initial registration pursuant to
Section 1-406 of the Securities Act shall file:
(A) a completed Form U-4;
(B) the filing fee specified in Section 1-612 of the Securities
Act; (C) proof of successful completion of the
applicable examinations specified in 660:11-5-16; and
(D) any additional documentation, supplemental forms and
information as the Administrator may deem necessary.
(2) Where to file. An agent applying for
registration with an NASD member shall file the documentation
required by (1)(A) through (C) of this subsection with the CRD and
shall file any additional documentation with the Department. Agents
applying for registration with a non-NASD broker-dealer shall file
the required documentation with the Department.
(c) Broker-dealer principal.
(1) Required documents. Each person
applying for initial registration under the Securities Act as a
principal of a broker-dealer who is not a member of the NASD shall
file with the Department:
(A) a completed Form U-4;
(B) a $50.00 filing fee; (C) proof of
successful completion of the applicable examinations specified
in 660:11-5-16; (D) an executed
Applicant/Management Certification for Non-NASD Principals Form;
and (E) any additional documentation,
supplemental forms and information as the Administrator may deem
necessary.
(2) Effect of registration. Registration
under the Securities Act as a principal of a broker-dealer shall
constitute registration as an agent.
(d) Issuer agent. Agents of issuers applying
for initial registration in the state of Oklahoma pursuant to Section
1-406 of the Securities Act shall file the following with the
Department:
(1) a completed Form U-4; (2)
the fee specified in Section 1-612 of the Securities Act;
(3) proof of successful completion of the
applicable examinations specified in 660:11-5-16;
(4) an executed Applicant/Management Certification Form; and
(5) any additional documentation, supplemental forms and information
as the Administrator may deem necessary.
(e) Requirement for continued registration.
660:11-5-42, adopted pursuant to Section 1-411.D.13 of the Securities
Act, sets forth the standards of ethical practices for broker-dealers
and their agents. Paragraph (22) of said rule requires that each
broker-dealer establish, maintain and enforce written procedures that
will enable it to supervise properly the activities of each registered
agent to assure compliance with applicable securities laws, rules,
regulations and statements of policy. Therefore, the initial and
continued registration of a broker-dealer that is not an NASD member is
conditioned upon the designation, qualification and registration of a
principal who shall be responsible for the supervision of all agents of
the broker-dealer who are registered under the Securities Act. A
broker-dealer applicant or registrant may apply for registration of more
than one person as a principal of said broker-dealer.
660:11-5-12. Renewal
(a) Broker-dealer. An NASD member shall
renew its registration by submitting the renewal fee specified in
Section 1-612 of the Securities Act to the CRD. A non-NASD member shall
renew its registration by submitting to the Department an Application
for Renewal of Non-NASD Broker-Dealer Registration and the renewal fee
specified in Section 1-612 of the Securities Act. (b)
Broker-dealer agent. Agents of NASD members shall renew their
registrations by submitting the renewal fee specified in Section 1-612
of the Securities Act to the CRD. Agents of non-NASD members shall renew
their registrations by submitting an Application for Renewal of Non-NASD
Broker-Dealer Agent Registration and the renewal fee specified in
Section 1-612 of the Securities Act to the Department.
(c)
Broker-dealer principal. Principals of non-NASD members shall
renew their registrations by submitting an Application for Renewal of
Non-NASD Broker-Dealer Principal Registration and the renewal fee
specified in Section 1-612 of the Securities Act to the Department.
(d)
Issuer agent. Issuer agents shall renew their registrations by
submitting an Application for Renewal of Issuer Agent Registration and
the renewal fee specified in Section 1-612 of the Securities Act to the
Department.
660:11-5-13. Agent transfer
An agent who wishes to terminate his employment with
one registered broker-dealer and thereafter commence employment with
another broker-dealer may do so without causing a suspension in the
agent's registration if all of the following conditions are met:
(1) Both the terminating and employing
broker-dealers are members of the National Association of Securities
Dealers, Inc. (2) The transfer is effected in
accordance with the terms and conditions of the NASAA/NASD Central
Registration Depository Temporary Agent Transfer Program.
(3) The employing broker-dealer has executed and filed an
"Undertaking for Participation in the NASAA/NASD Central
Registration Depository TAT Program." (4) The
employing broker-dealer currently is not subject to an order of the
Administrator which would otherwise make this section unavailable.
660:11-5-14. Agent termination
(a) Filing requirement. Termination notice
pursuant to the requirements of Section 1-408.A of the Securities Act
shall be given by filing within thirty calendar (30) days of
termination, a completed Uniform Termination Notice For Securities
Industry Registration, Form U-5. The Form U-5 for an agent terminating
registration with a NASD member shall be filed with the CRD. The Form
U-5 for agents terminating registration with a non-NASD broker-dealer
shall be filed with the Department. (b)
Responsibility for filing. A completed Form U-5 signed by the
employer will be accepted as fulfilling the statutory requirements of
both parties. Upon verification that the Form U-5 has not been filed by
the broker-dealer, the agent shall notify the Department in writing of
said termination. (c)
Effect of failure to file. In the event of termination, the
filing of a future application for registration shall not be considered
complete until compliance with the termination notice requirements of
Section 1-408.A and this section.
660:11-5-15. Categories of registration
(a) Broker-dealers. The Administrator shall
register broker-dealers in accordance with the following categories:
(1) General securities - an applicant whose
activities in the securities business are not limited.
(2) Investment company and variable contracts products - an
applicant whose activities in the securities business are limited to
the solicitation, purchase and/or sale of investment company and
variable contracts products. (3) Direct
participation programs - an applicant whose activities in the
securities business are limited solely to marketing, on behalf of
the issuer, direct participation programs. (4)
Options - an applicant whose activities in the securities business
include transactions in put or call options with the public.
(5) Municipal securities - an applicant whose activities in the
securities business are limited solely to effecting transactions in
municipal securities. (6) Multiple categories - an
applicant may be registered in more than one category if qualified
to be so registered.
(b) Principals and agents. The Administrator
shall register principals of broker-dealers and agents in accordance
with the following categories of registration as applicable:
(1) General securities principal or agent - an
applicant representing a broker-dealer whose activities in the
securities business are not limited. (2)
Investment company and variable contracts products principal or
agent - an applicant representing a broker-dealer whose activities
in the securities business are limited to the solicitation, purchase
and/or sale of investment company and variable contracts products.
(3) Direct participation programs principal or agent - an applicant
representing a broker-dealer whose activities in the securities
business are limited to marketing, on behalf of the issuer, direct
participation programs. (4) Options principal or
agent - an applicant representing a broker-dealer whose activities
in the securities business are limited to transactions in put or
call options with the public. (5) Municipal
securities principal or agent - an applicant representing a
broker-dealer whose activities in the securities business are
limited to effecting transactions in municipal securities.
(6) Limited agent - corporate securities - an applicant representing
a general securities broker-dealer in the solicitation, purchase,
and/or sale of a security, as that term is defined in Section
1-102.32 of the Securities Act, however, such person's activities do
not include activities with respect to the following securities
unless such person is separately qualified and registered in the
category or categories of registration related to these securities:
(A) Municipal securities;
(B) Option securities; (C) Redeemable
securities of companies registered pursuant to the 1940 Act,
except for money market funds; and/or (D)
Direct participation programs.
(7) Issuer agent - an applicant whose activities
in the securities business are limited solely to effecting
transactions for the benefit of an issuer as that term is defined in
Section 1-102.19 of the Securities Act. (8)
Multiple categories - an applicant may be registered in more than
one category provided he is qualified to be so registered. An
applicant qualified solely within one category of registration shall
not be qualified to transact business as an agent in any area not
prescribed by said category.
660:11-5-16. Qualification examination requirements
(a) Examination requirement. Proof of
compliance with the examination requirements of this rule is
prerequisite to a complete filing for registration under the Securities
Act. (b)
Examination. Each applicant for registration as a broker-dealer
agent, broker-dealer principal or issuer agent must pass the applicable
examinations for the desired category of registration. The examinations
shall consist of a qualification examination(s) applicable to the
category of registration applied for and a uniform state law
examination. The Administrator adopts the examinations administered by
the NASDR as applicable to each individual registrant by category of
registration as the required examinations. (c)
Limitations on licenses. Without regard to the category of
registration of one's broker-dealer, if any, the activities of each
person registered as a principal or agent are limited to the
corresponding category for which they are qualified by examination,
unless waived, and for which they are registered under the Securities
Act. (d)
Examination categories. Examination categories are as follows:
(1) General securities or government securities -
NASD members:
(A) Principals--Series 7, 24 or such other
examination(s) determined by the Administrator to be acceptable
in lieu thereof and Series 63 or 66. (B)
Agents--Series 7 and 63 or 66
(2) General securities - Non-NASD
Members/Issuers:
(A) Principals--Series 7, 24 or such other
examination(s) determined by the Administrator to be acceptable
in lieu thereof and Series 63 or 66 (B)
Agents--Series 7 and 63 or 66
(3) Investment company and variable contract
products:
(A) Principals--Series 6, 26 and 63 or 66
(B) Agents--Series 6 and 63 or 66
(4) Direct participation programs:
(A) Principals--Series 22, 39 and 63 or 66
(B) Agents--Series 22 and 63 or 66
(5) Options:
(A) Principals--Series 4, 7 and 63 or Series
4, 62 and 63 or 66 (B) Agents--Series 7 or 42
and 63 or 66
(6) Municipal securities:
(A) Principals--Series 52, 53 and 63 or 66
(B) Agents--Series 52 and 63 or 66
(7) Limited agent - corporate securities--Series
62 and 63 or 66 (8) Assistant agent - order
processing--Series 11 and 63 or 66
(e) Change in series number. Should NASDR
examination series numbers change, the most current examination series
applicable to the category of registration shall apply.
(f)
Validity of prior examination scores. The Department will not
recognize for purposes of qualification for registration under the
Securities Act any NASDR examination score which predates an initial
application for registration by more than two (2) years in the absence
of continuous NASD registration since examination. The Department will
not recognize for purposes of qualification for registration in this
state the examination score(s) of any person whose most recent
registration as an agent or principal has been terminated with the NASD
for a period of two (2) or more years immediately preceding the date of
receipt by the Department of a new application for registration under
the Securities Act. (g)
Waiver of examination requirement. The Administrator may waive
the examination requirements on a case-by-case basis when such action is
determined to be consistent with the purposes fairly intended by the
policy and provisions of the Securities Act. Requests for waivers shall
be in writing setting forth the reasons therefor.
660:11-5-17. Net capital for broker-dealers
(a) General requirement. All broker-dealers
registered under the Securities Act shall at all times have and maintain
net capital of no less than the highest minimum requirement applicable
to each broker-dealer as established by the SEC in 17 CFR 240.15c3-1.
(b)
Calculation of "net capital." As used in this subchapter, net
capital shall mean the net worth of a broker-dealer calculated according
to the formula established by the SEC.
660:11-5-18. [RESERVED]
660:11-5-19. Piecemeal filings
An application for initial registration or renewal of
registration as a broker-dealer, broker-dealer agent, broker-dealer
principal or issuer agent shall not be deemed to have been filed until all
of the documentation required by 660:11-5-11 or 660:11-5-12 is submitted, or
is otherwise made available, to the Department and payment of the proper
fees is made. Such documentation shall be in completed form.
660:11-5-20. Cross-border licensing exemption.
By authority delegated to the Administrator in
Section 1-401.B.1.h of the Securities Act, a Canadian broker-dealer
meeting all of the following conditions is determined to be exempt from
the registration requirement in Section 1-401.A of the Securities Act:
(1) The broker-dealer is domiciled in Canada,
does not have an office or other physical presence in the United
States, and is not an office or branch of a broker-dealer domiciled
in the United States. (2) The broker-dealer is
registered with or a member of a Canadian self-regulatory
organization, stock exchange, or the Bureau des Services Financiers
and maintains that registration or membership in good standing.
(3)
The broker-dealer and its agents effect
transactions in securities with or for, or induce or attempt to
induce the purchase or sale of any security by:
(A) an individual from Canada that
temporarily resides or is temporarily present in this state and
with whom the broker-dealer had a bona fide
broker-dealer-customer relationship before the individual
entered the United States; or (B) an
individual present in this state whose transactions relate to a
self-directed, tax advantaged Canadian retirement plan of which
the individual is the holder or contributor.
(4) The broker-dealer prominently discloses in
writing to its clients in this state that the broker-dealer and its
agents are not subject to the full regulatory requirement of the
Securities Act. (5) Neither the broker-dealer nor
its agents disclaim the applicability of Canadian law or
jurisdiction to any transaction conducted pursuant to this
exemption. (6) The broker-dealer and its agents
comply with the antifraud provisions of the Securities Act and of
federal securities laws. (7) Prior to or
contemporaneously with the first transaction in Oklahoma, the
broker-dealer must file a consent to service of process on Form U-2
in a manner that effectively appoints the Administrator as agent for
service of process. (8) Any Canadian broker-dealer
or agent relying on this exemption shall, upon written request,
furnish the Department any information relative to a transaction
covered by this Section that the Administrator deems relevant.
PART 5.
REPORTING REQUIREMENTS
660:11-5-31. Post-registration reporting requirements
(a) Filing requirement. Pursuant to Section
1-410.B of the Securities Act, all broker-dealers registered under
Section 1-406 of the Securities Act who are not NASD members must make
post-registration filings with the Department. The Department will not
accept incomplete or piecemeal filings. Failure to file a complete
report when due may result in the suspension or revocation of
registration. (b)
Report content. Such registered broker-dealers shall make one (1)
post-registration filing each fiscal year. Said filing shall contain
audited financial statements as of the broker-dealer's fiscal year end
and the report filing fee specified in Section 1-612 of the Securities
Act. (c)
Report filing dates. Post-registration filings become due on the
last day of the fiscal period to which they apply; however, a grace
period is provided before a filing becomes delinquent. The filing must
be made by the last day of the fourth month following the close of the
registrant's fiscal year.
PART 7. RECORD KEEPING AND ETHICAL STANDARDS
660:11-5-41. Books and records requirements for
broker-dealers
17 CFR § 240.17a-3 and 17 CFR § 240.17a-4 (2003), books
and records rules established by the SEC under the 1934 Act, are hereby
incorporated by reference as if fully set forth into this Chapter.
660:11-5-42. Standards of ethical practices for
broker-dealers and their agents
(a) Purpose. This rule is intended to set
forth the standards of ethical practices for broker-dealers and their
agents. Any noncompliance with the standards of ethical practices
specified in this section will constitute unethical practices in the
securities business; however, the following is not intended to be a
comprehensive listing of all specific events or conditions that may
constitute such unethical practices. The standards shall be interpreted
in such manner as will aid in effectuating the policy and provisions of
the Securities Act, and so as to require that all practices of
broker-dealers, and their agents, in connection with their activities in
this state shall be just, reasonable and not unfairly discriminatory.
(b)
Standards.
(1) A broker-dealer and his agents, in the
conduct of his business, shall observe high standards of commercial
honor and just and equitable principles of trade. A broker-dealer
and his agents shall not violate any federal securities statute or
rule or any rule of a national securities exchange or national
securities association of which it is a member with respect to any
customer, transaction or business effected in this state.
(2) In recommending to a customer the purchase, sale or exchange of
any security, the broker-dealer and his agents shall have reasonable
grounds for believing that the recommendation is suitable for such
customer upon the basis of the facts, if any, disclosed by such
customer as to his other security holdings and as to his financial
situation and needs. Prior to making a recommendation to a customer
a broker-dealer shall also make reasonable efforts to obtain
information concerning the customer's financial background, tax
status, and investment objectives, and such other information used
or considered to be reasonable and necessary by such broker-dealer
or registered agent in making such recommendation.
(3) Charges, if any, for services performed, including miscellaneous
services such as collection of monies due for principal, dividends,
or interest, exchange or transfer of securities, appraisals,
safekeeping or custody of securities, and other services, shall be
reasonable and not unfairly discriminatory between customers.
(4) In "over-the-counter" transactions, whether in "listed" or
"unlisted" securities, if a broker-dealer or agent of a
broker-dealer buys for his own account from his customer, or sells
for his own account to his customer, he shall buy or sell at a price
which is fair, taking into consideration all relevant circumstances,
including market conditions with respect to such security at the
time of the transaction, the expense involved, and the fact that he
is entitled to a profit; and if he acts as agent for his customer in
any such transaction, he shall not charge his customer more than a
fair commission or service charge, taking into consideration all
relevant circumstances including market conditions with respect to
such security at the time of the transaction, the expense of
executing the order and the value of any service he may have
rendered by reason of his experience in and knowledge of such
security and the market therefor. (5) No
broker-dealer or agent of a broker-dealer shall publish or
circulate, or cause to be published or circulated, any notice,
circular, advertisement, newspaper article, investment service, or
communication of any kind which purports to report any transaction
as a purchase or sale of any security unless such broker-dealer
believes that such transaction was a bona fide purchase or sale of
such security; or which purports to quote the bid price or asked
price for any security, unless such broker-dealer believes that such
quotation represents a bona fide bid for, or offer of, such
security. If nominal quotations are used or given, they shall be
clearly stated or indicated to be only nominal quotations.
(6) No broker-dealer or agent of a broker-dealer shall make an offer
to buy from or sell to any person any security at a stated price
unless such broker-dealer or agent is prepared to purchase or sell,
as the case may be, at such price and under such conditions as are
stated at the time of such offer to buy or sell.
(7) A broker-dealer, when a member of a selling syndicate or a
selling group, shall purchase securities taken in trade at a fair
market price at the time of purchase, or shall act as agent in the
sale of such securities. (8) A broker-dealer who
in the capacity of paying agent, transfer agent, trustee, or any
other similar capacity, has received information as to the ownership
of securities, shall under no circumstances make use of such
information for the purpose of soliciting purchases, sales or
exchanges except at the request and on behalf of the issuer.
(9) No broker-dealer or agent of a broker-dealer
shall, directly or indirectly, give, permit to be given, or offer to
give, anything of value to any person for the purpose of influencing
or rewarding the action of such person in connection with the
publication or circulation in any newspaper, investment service, or
similar publication, of any matter which has, or is intended to
have, an effect upon the market price of any security, provided that
this rule shall not be construed to apply to matter which is clearly
distinguishable as paid advertising. (10) A
broker-dealer at or before the completion of each transaction with a
customer shall give or send to each customer written notification
disclosing:
(A) whether such broker-dealer is acting as a
broker for such customer and some other person; and
(B) in any case in which such broker-dealer is acting as a
broker for such customer or for both such customer and some
other person, either the name of the person from whom the
security was purchased or to whom it was sold for such customer
and the date and the time when such transaction took place or
the fact that such information will be furnished upon the
request of such customer, and the source and amount of any
commission or other remuneration received or to be received by
such broker-dealer in connection with the transaction.
(11) A broker-dealer or agent of a broker-dealer
controlled by, controlling, or under common control with, the issuer
of any security, shall, before entering into any contract with or
for a customer for the purchase or sale of such security, disclose
to such customer the existence of such control, and if such
disclosure is not made in writing, it shall be supplemented by the
giving or sending of written disclosure at or before the completion
of the transaction. (12) A broker-dealer or agent
of a broker-dealer who is acting as a broker for a customer or for
both such customer and some other person, or a broker-dealer who is
acting as a dealer and who receives or has promise of receiving a
fee from a customer for advising such customer with respect to
securities, shall, at or before the completion of any transaction
for or with such customer in any security in the primary or
secondary distribution of which such broker-dealer is participating
or is otherwise financially interested, give such customer written
notification of the existence of such participation or interest.
(13) The following standards shall apply to discretionary accounts:
(A) No broker-dealer or agent of a
broker-dealer shall effect with or for any customer's account in
respect to which such broker-dealer or agent or employee is
vested with any discretionary power any transactions of purchase
or sale which are excessive in size or frequency in view of the
financial resources of such customer and character of such
account. (B) No broker-dealer or agent of a
broker-dealer shall exercise any discretionary power in a
customer's account unless such customer has given prior written
authorization to a stated individual or individuals and the
account has been accepted by the broker-dealer, as evidenced in
writing by the broker-dealer or the partner, officer, or manager
duly designated by the broker-dealer, in accordance with (22) of
this subsection. (C) The broker-dealer or the
person duly designated shall approve promptly, in writing, each
discretionary order entered and shall review all discretionary
accounts at frequent intervals in order to detect and prevent
transactions which are excessive in size or frequency in view of
the financial resources of the customer and the character of the
account. (D) This section shall not apply to
discretion as to the price at which or the time when an order
given by a customer for the purchase or sale of a definite
amount of a specified security shall be executed.
(14) A broker-dealer or agent of a broker-dealer
who is participating or who is otherwise financially interested in
the primary or secondary distribution of any security which is not
admitted to trading on a national securities exchange, shall make no
representation that such security is being offered to a customer "at
the market" or at a price related to the market price unless such
broker-dealer or agent knows or has reasonable grounds to believe
that a market for such security exists other than that made,
created, or controlled by such broker-dealer or agent, or by any
person for whom he is acting or with whom he is associated in such
distribution, or any person controlled by, controlling or under
common control with such broker-dealer or agent.
(15) No broker-dealer or agent of a broker-dealer shall effect any
transaction in, or induce the purchase or sale of, any security by
means of any manipulative, deceptive or other fraudulent device,
practice, plan, program, design, or contrivance.
(16) The following standards shall apply to the use of customer
funds:
(A) No broker-dealer or person associated
with a broker-dealer shall make improper use of a customer's
securities or funds. (B) No broker-dealer or
agent of a broker-dealer shall lend, either to himself or to
others, securities carried for the account of any customer,
unless such broker-dealer or agent shall first have obtained
from the customer a separate written authorization permitting
the lending of securities thus carried by such broker-dealer or
agent; and, regardless of any agreement between the
broker-dealer or agent and a customer authorizing the former to
lend or pledge such securities, no broker-dealer or agent shall
lend or pledge more of such securities than is fair and
reasonable in view of the indebtedness of the customer, except
such lending as may be specifically authorized under (C) of this
paragraph. (C) No broker-dealer or agent of a
broker-dealer shall lend securities carried for the account of
any customer which have been fully paid for or which are in
excess of the amount which may be loaned in view of the
indebtedness of the customer, unless such broker-dealer or agent
shall first have obtained from such customer a separate written
authorization designating the particular securities to be
loaned. (D) No broker-dealer or agent of a
broker-dealer shall hold securities carried for the account of
any customer which have been fully paid for or which are in
excess of the amount which may be pledged in view of the
indebtedness of the customer, unless such securities are
segregated and identified by a method which clearly indicates
the interest of such customer in those securities.
(E) No broker-dealer or agent of a broker-dealer shall guarantee
a customer against loss in any securities account of such
customer carried by the broker-dealer or in any securities
transaction effected by the broker-dealer or agent with or for
such customer. (F) No broker-dealer or agent
of a broker-dealer shall share directly or indirectly in the
profits or losses in any account of a customer carried by the
broker-dealer or agent or any other broker-dealer or agent,
unless such broker-dealer or agent obtains written authorization
from the broker-dealer carrying the account; and, a
broker-dealer or agent shall share in the profits or losses in
any account of such customer only in direct proportion to the
financial contributions made to such account by the
broker-dealer or agent. Exempt from the direct proportionate
share limitation are accounts of the immediate family of such
broker-dealer or agent. For purposes of this section, the term
"immediate family" shall include parents, mother-in-law or
father-in-law, husband or wife, children or any relative to
whose support the broker-dealer or agent otherwise contributes
directly or indirectly.
(17) The following standards shall apply to
customer credit:
(A) No broker-dealer or agent of a
broker-dealer shall take or carry any account or make a
transaction for any customer under any arrangement which
contemplates or provides for the purchase of any security for
the account of the customer or for the sale of any security to
the customer where payment for the security is to be made to the
broker-dealer by the customer over a period of time in
installments or by a series of partial payments, unless:
(i) in the event such broker-dealer acts
as an agent or broker in such transaction, he shall
immediately, in the regular course of his business, make an
actual purchase of the security for the account of the
customer, and shall immediately, in the regular course of
his business, take possession or control of such security
and shall maintain possession or control thereof so long as
he remains under obligation to delivery of the security to
the customer; (ii) in the event such
broker-dealer acts as a principal in any such transaction,
he shall, at the time of such transaction own such security
and shall maintain possession or control thereof so long as
he remains under obligation to deliver the security to the
customer; and (iii) the provisions of
Regulation T of the Federal Reserve Board, if applicable to
such broker-dealer, are satisfied.
(B) No broker-dealer, whether acting as a
principal or agent, shall, in connection with any transaction
referred to in this Standard, make any agreement with his
customer under which such broker-dealer shall be allowed to
pledge or hypothecate any security involved in such transaction
for any amount in excess of the indebtedness of the customer to
such broker-dealer.
(18) The following standards shall apply to books
and records:
(A) Each broker-dealer shall keep and
preserve books, accounts, records, memoranda, and correspondence
in conformity with all applicable laws, rules, regulations, and
statements of policy promulgated by the Administrator and/or the
Commission under the Securities Act. (B) Each
broker-dealer shall keep and preserve in each office of
supervisory jurisdiction, as defined in 660:11-5-2, either a
separate file of all written complaints of customers and action
taken by the broker-dealer, if any, or a separate record of such
complaints and clear reference to the files containing the
correspondence connected with such complaints as maintained in
such office.
(19) A broker-dealer shall make available to
inspection by any bona fide regular customer, upon request, the
information relative to such broker-dealer's financial condition as
disclosed in its most recent balance sheet prepared either in
accordance with such broker-dealer's usual practice or as required
by the state or federal securities laws, or any rule or regulation
promulgated thereunder. (20) No broker-dealer or
agent of a broker-dealer shall offer any security or confirm any
purchase or sale of any security, from or to any person not actually
engaged in the investment banking or securities business at any
price which shows a concession, discount, or other allowance, but
shall offer such security and confirm such purchase or sale at a net
dollar or basis price. (21) Selling concessions,
discounts, or other allowances, as such, shall be allowed only as
consideration for services rendered in distribution and in no event
shall be allowed to anyone other than a broker-dealer registered
under the Securities Act actually engaged in the investment banking
or securities business; provided however, that nothing in this
standard shall prevent any broker-dealer from selling any security
owned by him to any person at any net price which may be fixed by
him unless prevented therefrom by agreement.
(22) The following standards shall apply to
supervisory procedures:
(A) Each broker-dealer shall establish,
maintain and enforce written procedures which will enable it to
supervise properly the activities of each registered agent and
associated person to assure compliance with applicable
securities laws, rules, regulations and statements of policy
promulgated by the Administrator and/or the Commission under the
Securities Act. (B) Final responsibility for
proper supervision shall rest with the broker-dealer, the
principal(s) of the broker-dealer registered in accordance with
660:11-5-11, and the principal(s) of the broker-dealer in each
OSJ, including the main office, and the registered
representatives in each non-OSJ branch office designated by the
broker-dealer to carry out the supervisory responsibilities
assigned to that office by the broker-dealer pursuant to the
rules and regulations of the NASD. A copy of the written
supervisory procedures shall be kept in each office of
supervisory jurisdiction and each non-OSJ branch office.
(C) Each broker-dealer shall be responsible for keeping and
preserving appropriate records for carrying out such
broker-dealer's supervisory procedures. Each broker-dealer shall
review and endorse in writing, on an internal record, all
transactions and all correspondence of its registered agents
pertaining to the solicitation or execution of any securities
transaction. (D) Each broker-dealer shall
review the activities of each office, which shall include the
periodic examination of customer accounts to detect and prevent
irregularities or abuses and conduct at least an annual
inspection of each office of supervisory jurisdiction.
(E) Each broker-dealer shall have the responsibility and duty to
ascertain by investigation the good character, business repute,
qualifications and experience of any person prior to making such
a certification in the application of such person for
registration under the Securities Act.
(23) The following standards shall apply to
financial information:
(A) Each broker-dealer offering or selling
securities not listed on a registered national securities
exchange recognized by the Administrator shall have and furnish
to customers, on request, a balance sheet of the issuer as of a
date within eighteen months, and a profit and loss statement for
either the fiscal year preceding that date or the most recent
year of operations, prepared in accordance with generally
accepted accounting principles, the names of the issuer's
proprietors, partners or officers, the nature of the enterprise
of the issuer and any other available information reasonably
necessary for evaluating the desirability or the lack of
desirability of investing in the securities of the issuer.
(B) Each broker-dealer who, in computation of net capital
includes securities not listed on a registered national
securities exchange recognized by the Administrator shall also
have the information provided for in (A) of this paragraph
available and shall, upon request, furnish same to the
Department. (C) All transactions in such
securities described in (A) and (B) of this paragraph shall
comply with the provisions of Section 1-301 of the Securities
Act. (D) The provisions of (A) of this
paragraph shall not be required in unsolicited transactions,
except when numerous unsolicited transactions in a particular
security are occurring, it shall be the duty and responsibility
of the broker-dealer to make reasonable effort to secure and
provide to customers upon their written request the information
required by the provisions of (A) of this paragraph. Nothing
contained in this Section shall be construed to limit the powers
of the Administrator under Section 1-204 of the Securities Act.
660:11-5-42.1. Standards of ethical practices--issuer
agents
(a) Purpose. This rule is intended to set
forth the standards of ethical practices for issuer agents. Any
noncompliance with the standards of ethical practices specified in this
section will constitute unethical practices in the securities business;
however, the following is not intended to be a comprehensive listing of
all specific events or conditions that may constitute such unethical
practices. The standards shall be interpreted in such manner as will aid
in effectuating the policy and provisions of the Securities Act, and so
as to require that all practices of issuer agents, in connection with
their activities in this state shall be just, reasonable and not
unfairly discriminatory. (b)
Standards.
(1) An issuer agent, in the conduct of his
business, shall observe high standards of commercial honor and just
and equitable principles of trade. Issuer agents shall not violate
any federal securities statute or rule or any rule of a national
securities exchange or national securities association of which he
is a member with respect to any customer, transaction or business
effected in this state. (2) In recommending to a
customer the purchase, sale or exchange of any security, an issuer
agent shall have reasonable grounds for believing that the
recommendation is suitable for such customer upon the basis of the
facts, if any, disclosed by such customer as to his other security
holdings and as to his financial situation and needs. Prior to
making a recommendation to a customer an issuer agent shall also
make reasonable efforts to obtain information concerning the
customer's financial background, tax status, and investment
objectives, and such other information used or considered to be
reasonable and necessary by such registered agent in making such
recommendation. (3) No issuer agent shall
guarantee a customer against loss in any securities transaction
effected by the issuer agent with such customer.
660:11-5-43. Examination of broker-dealers
(a) Periodic examinations. The business and
records of each broker-dealer registered under the Securities Act may be
periodically examined by the Administrator and/or person(s) designated
by him at such times and in such scope as the Administrator determines
prudent and necessary for the protection of the public. A report of each
such examination shall be prepared. (b)
Department access. Each broker-dealer scheduled for examination
shall provide the personnel of the Department access to business books,
documents, and other records. Each broker-dealer shall provide personnel
with office space and facilities to conduct on-site examinations, and
assistance in the physical inspection of assets and confirmation of
liabilities. Failure of any applicant or registrant to provide such
access shall constitute a violation of this section and shall be a basis
for denial, suspension or revocation of the registration or application
for registration.
660:11-5-44. [RESERVED]
660:11-5-45. Financial statements for broker-dealers
(a) Audited statements. Applications for
registration for broker-dealers shall contain audited financial
statements for the applicant as of the end of its last fiscal year.
Applicants that have been in operation for less than twelve (12) months
shall submit an audited statement of financial condition as of a date
within ninety (90) days of the date of the filing of the application and
an audited statement of income for the period beginning from the date of
inception through the date as of which the statement of financial
condition is prepared. (b)
Unaudited interim financial statements. If the audited financial
statements required by (a) of this section are not current to within
ninety (90) days of the date of filing of the application, additional
unaudited financial statements shall be submitted covering the period
from the beginning of the current fiscal year through a month ending
within the 90-day time frame. (c)
Net capital computation. Financial Statements submitted by or on
behalf of a broker-dealer shall include a statement of the amount of net
capital required by the SEC for the broker-dealer and a schedule
presenting a computation of net capital as of each statement of
financial condition date. The computation of net capital shall be
calculated according to the formula established by the SEC.
(d)
Waiver. The Administrator in his discretion may waive any of the
requirements of this section on a case-by-case basis when such action is
determined to be consistent with the purposes fairly intended by the
policy and provisions of the Securities Act. Requests for waivers shall
be in writing setting forth the reasons therefor.
SUBCHAPTER 7.
INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES
PART 1. GENERAL PROVISIONS
Section 660:11-7-1. Purpose 660:11-7-2. Definitions
PART 3. LICENSING PROCEDURES
660:11-7-11. Initial registration 660:11-7-12. Renewal
660:11-7-13. Qualification examination requirements 660:11-7-14.
[RESERVED] 660:11-7-15. Piecemeal filings 660:11-7-16. Solicitor
exemption
PART 5. REPORTING REQUIREMENTS
660:11-7-31. Post-registration reporting requirements
PART 7. RECORD KEEPING AND ETHICAL STANDARDS
660:11-7-41. Record keeping requirements 660:11-7-42. Standards of
ethical practices 660:11-7-43. Disclosure requirements 660:11-7-44.
Financial statements for investment advisers 660:11-7-45. Examination of
investment advisers 660:11-7-46. [RESERVED] 660:11-7-47. Payments for
client solicitations
PART 9. SEC COVERED INVESTMENT ADVISERS
660:11-7-51. SEC covered investment adviser notice filing
PART 1. GENERAL PROVISIONS
660:11-7-1. Purpose
The rules in this subchapter are adopted to provide
procedures for complying with the provisions of Sections 1-403 and 1-404 of
the Securities Act relating to the licensing of investment advisers and
investment adviser representatives under the Securities Act.
660:11-7-2. Definitions
In addition to the terms defined in 660:11-1-3, the
following words and terms when used in this subchapter shall have the
following meaning, unless the context clearly indicates otherwise:
"Impersonal advisory services" means
investment advisory services provided solely:
(A) by means of written material or oral
statements which do not purport to meet the objectives or needs of
specific individuals or accounts; (B) through the
issuance of statistical information containing no expression of
opinion as to the investment merits of a particular security; or
(C) any combination of the foregoing services.
"Investment company contract" means a contract
with an investment company registered under the 1940 Act that meets the
requirements of Section 15(c) of that Act. "Solicitor"
means any person who, directly or indirectly, solicits any client for,
or refers any client to, an investment adviser.
PART 3. LICENSING PROCEDURES
660:11-7-11. Initial registration
(a) Investment adviser. Investment advisers
applying for initial registration pursuant to Section 1-406 of the
Securities Act:
(1) shall file with the IARD:
(A) a completed Form ADV, including Schedules
A-I; and (B) the filing fee specified in
Section 1-612 of the Securities Act;
(2) shall file with the Department within 30 days
from the effective date of registration:
(A) Part 2 of the Form ADV;
(B) audited financial statements as required by 660:11-7-44
unless exempt therefrom; (C) a copy of the
investment advisory contract to be executed by Oklahoma clients;
and (D) any additional documentation,
supplemental forms and information as the Administrator may deem
necessary; and
(3) if a natural person, must have passed the
applicable examinations specified in 660:11-7-13.
(b) Investment adviser representative.
Investment adviser representatives applying for initial registration
under the Securities Act:
(1) shall file with the CRD:
(A) a completed Form U-4 if the information
on the Form U-4 is not maintained in current form on the CRD;
(B) the filing fee specified in Section 1-612 of the Securities
Act; and (C) any additional documentation,
supplemental forms and information as the Administrator may deem
necessary; and
(2) must have passed the applicable examinations
specified in 660:11-7-13.
660:11-7-12. Renewal
(a) Investment adviser. An investment
adviser registered under the Act shall renew its registration by
submitting to the IARD the renewal fee specified in Section 1-612 of the
Securities Act. (b)
Investment adviser representative. Investment adviser
representatives registered under the Act shall renew their registrations
by submitting to the CRD the renewal fee specified in Section 1-612 of
the Securities Act.
660:11-7-13. Qualification examination requirements
(a) Examination requirement. Proof of
compliance with the written examination requirements of this rule is
prerequisite to a complete filing for registration under the Securities
Act. (b)
Examinations. Any natural person seeking registration as an
investment adviser or investment adviser representative must pass the
Series 65, or both the Series 66 and Series 7, or such other
examination(s) or certifications determined by the Administrator to be
acceptable in lieu thereof. The Administrator adopts the examinations as
administered by the NASDR as the required examinations.
(c)
Change in series number. Should NASDR examination series numbers
change, the most current examination series applicable to the category
of registration shall apply. (d)
Validity of prior examination scores. For purposes of
qualification for registration under the Securities Act, the Department
will not recognize any NASDR examination score that predates an
application for registration by more than two (2) years in the absence
of:
(1) continuous registration as an investment
adviser representative in another jurisdiction since examination; or
(2) continuous registration as an agent with the NASD since
examination.
(e) Waiver of examination requirement. The
Administrator may waive the examination requirement on a case-by-case
basis when such action is determined to be consistent with the purposes
fairly intended by the policy and provisions of the Securities Act.
Requests for waivers shall be in writing setting forth the reasons
therefor.
660:11-7-14. [RESERVED]
660:11-7-15. Piecemeal filings
An application for initial registration or renewal of
registration as an investment adviser or investment adviser representative
shall not be deemed to have been filed until all of the documentation
required by 660:11-7-11 or 660:11-7-12 is submitted, or is otherwise made
available, to the Department and payment of the proper fees is made. Such
documentation shall be in completed form.
660:11-7-16. Solicitor exemption
By authority delegated to the Administrator in Section
1-404.B.2 of the Securities Act, an individual whose only activity on behalf
of an investment adviser is to solicit clients for same is exempt from the
requirement to register as an investment adviser representative of such
investment adviser if the individual is separately registered as an
investment adviser representative of another investment adviser or is
individually registered as an investment adviser.
PART 5. REPORTING REQUIREMENTS
660:11-7-31. Post-registration reporting requirements
(a) Filing requirement. Pursuant to Section
1-410.B of the Securities Act, all investment advisers registered under
Section 1-406 of the Securities Act must make post-registration filings
with the Department. The Department will not accept incomplete or
piecemeal filings. The post-registration filing shall contain the
financial or operating report fee set forth in Section 1-612 of the
Securities Act. Failure to file a complete report when due may result in
the suspension or revocation of registration. The Administrator will
consider requests that no enforcement action be taken regarding a
delinquent filing pursuant to the provisions of 660:2-13-1.
(b)
Report content. Registered investment advisers who have custody
or possession of clients' funds or securities or require prepayment of
advisory fees six (6) months or more in advance and in excess of $500.00
per client shall make one (1) post-registration report each fiscal year.
Said filing shall contain the report filing fee specified in Section
1-612 of the Securities Act and an audited statement of financial
condition as of the investment adviser's fiscal year end.
(c)
Report filing dates. Post-registration filings become due on the
last day of the fiscal year to which they apply; however a grace period
is provided before a filing becomes delinquent. The filing must be made
by the last day of the fourth month following the close of the
registrant's fiscal year.
PART 7. RECORD KEEPING AND ETHICAL STANDARDS
660:11-7-41. Record keeping requirements
(a) Every investment adviser registered or required
to be registered under the Securities Act shall make and keep true,
accurate and current the following books and records relating to his
investment advisory business:
(1) A journal or journals, including cash
receipts and disbursements, records, and any other records of
original entry forming the basis of entries in any ledger.
(2) General and auxiliary ledgers (or other comparable records)
reflecting asset, liability, reserve, capital, income and expense
accounts. In no event shall the general ledger be posted less than
once a month. (3) A record of each order given by
the investment adviser for the purchase or sale of any security, of
any instruction received by the investment adviser from the client
concerning the purchase, sale, receipt or delivery of a particular
security, and of any modification or cancellation of any such order
or instruction. The record shall show the terms and conditions of
the order, instruction, modification or cancellation; shall identify
the person connected with the investment adviser who recommended the
transaction to the client and the person who placed the order; and
shall show the account for which entered, the date of entry, and the
bank or broker-dealer by or through whom executed where appropriate.
Orders entered pursuant to the exercise of discretionary power shall
be so designated. (4) All check books, bank
statements, canceled checks and cash reconciliations of the
investment adviser. (5) All bills or statements
(or copies thereof), paid or unpaid, relating to the business of the
investment adviser as such. (6) All trial
balances, financial statements prepared in accordance with generally
accepted accounting principles, and internal audit working papers
relating to the business of such investment adviser. The trial
balance shall be prepared no later than fifteen (15) business days
after the end of the accounting period. (7)
Originals of all written communications received and copies of all
written communications sent by the investment adviser relating to
the business of the investment adviser, including, but not limited
to:
(A) any recommendation made or proposed to be
made and any advice given or proposed to be given,
(B) any receipt, disbursement or delivery of funds or
securities, or (C) the placing or execution of
any order to purchase or sell any security; provided, however:
(i) that the investment adviser shall not
be required to keep any unsolicited market letters and other
similar communications of general public distribution not
prepared by or for the investment adviser, and
(ii) that if the investment adviser sends any notice,
circular or other advertisement offering any report,
analysis, publication or other investment advisory service
to 2 or more persons, the investment adviser shall not be
required to keep a record of the names and addresses of the
persons to whom it was sent; except that if the notice,
circular or advertisement is distributed to persons named on
any list, the investment adviser shall retain with the copy
of the notice, circular or advertisement a memorandum
describing the list and the source thereof.
(8) A list or other record identifying all
accounts in which the investment adviser is vested with any
discretionary power with respect to the funds, securities or
transactions of any client. (9) A copy of all
powers of attorney and other evidences of the granting of any
discretionary authority by any client to the investment adviser.
(10) A copy of all agreements entered into by the investment adviser
with any client and all other agreements relating to the business of
the investment adviser as such, including agreements which set forth
the fees to be charged, the manner of computation and method of
payment.
(11) A file containing a copy of each notice,
circular, advertisement, newspaper article, investment letter,
bulletin, or other communication, including any communication by
electronic media, that the investment adviser circulates or
distributes, directly or indirectly, to 2 or more persons (other
than persons connected with the investment adviser), and if the
notice, circular, advertisement, newspaper article, investment
letter, bulletin, or other communication, including any
communication by electronic media, recommends the purchase or sale
of a specific security and does not state the reasons for the
recommendation, a memorandum of the investment adviser indicating
the reasons for the recommendation. (12) A record
of every transaction in a security in which the investment adviser
or any investment adviser representative of the investment adviser
has, or by reason of any transaction acquires, any direct or
indirect beneficial ownership, except transactions effected in any
account over which neither the investment adviser nor the investment
adviser representative has any direct or indirect influence or
control, and transactions in securities which are direct obligations
of the United States. The record shall state the title and amount of
the security involved; the date and nature of the transaction (i.e.,
purchase, sale or other acquisition or disposition); the price at
which it was effected; and the name of the broker-dealer or bank
with or through whom the transaction was effected. The record may
also contain a statement declaring that the reporting or recording
of any transaction shall not be construed as an admission that the
investment adviser or investment adviser representative has any
direct or indirect beneficial ownership in the security. A
transaction shall be recorded no later than ten (10) days after the
end of the calendar quarter in which the transaction was effected.
(13) A record of each customer account containing the name, address,
date of birth, net worth and investment objectives of the beneficial
owner of such account. (14) Ledgers or other
records itemized separately as to each account of every investment
adviser representative of such investment adviser reflecting all
purchases, sales, receipts and deliveries of securities and
commodities for such account and all other debits and credits to
such accounts. Said records shall reflect transactions as of the
date they occur and should be prepared no later than the day
following the transaction. (15) A copy of the
written supervisory procedures of the investment adviser.
(b) Every investment adviser registered or required
to be registered under the Securities Act that has its principal place
of business in a state other than Oklahoma shall be exempt from the
requirements of this section, provided the investment adviser is
licensed in the state in which it maintains its principal place of
business and is in compliance with that state’s books and records
requirements. For purposes of this subsection, the term "principal place
of business" means "the executive office of the investment adviser from
which the officers, partners, or managers of the investment adviser
direct, control, and coordinate the activities of the investment
adviser." (c) All books and records required to be
maintained under the provisions of (a) of this section shall be
maintained and preserved in an easily accessible place for a period of
not less than five (5) years, the first two (2) years in the principal
office of the investment adviser.
660:11-7-42. Standards of ethical practices
(a) Purpose. This rule is intended to set
forth the standards of ethical practices for investment advisers and
investment adviser representatives. Any noncompliance with the standards
set forth in this section will constitute unethical practices in the
securities business as the same is set forth in Section 1-411.D.13 of
the Securities Act; however, the following is not intended to be a
comprehensive listing of all specific events or conditions that may
constitute such unethical practices. The standards shall be interpreted
in such manner as will aid in effectuating the policy and provisions of
the Securities Act, and so as to require that all practices of
investment advisers and investment adviser representatives in connection
with their activities in this state shall be just, reasonable and not
unfairly discriminatory. The standards set forth in this section and the
disclosure delivery requirement set forth in 660:11-7-43 shall apply to
all investment advisers and investment adviser representatives.
(b)
Standards. An investment adviser or investment adviser
representative shall not engage in dishonest or unethical practices
including, although not limited to, the following:
(1) Recommending to a client to whom investment
supervisory, management or consulting services are provided the
purchase, sale or exchange of any security without reasonable
grounds to believe that the recommendation is suitable for the
client on the basis of information furnished by the client after
reasonable inquiry concerning the client's investment objectives,
financial situation and needs, and any other information known by
the investment adviser or investment adviser representative.
(2) Exercising any discretionary power in placing an order for the
purchase or sale of securities for a client without obtaining
written discretionary authority from the client within ten (10)
business days after the date of the first transaction placed
pursuant to oral discretionary authority, unless the discretionary
power relates solely to the price at which, or the time when, an
order involving a definite amount of a specified security shall be
executed, or both. (3) Inducing trading in a
client's account that is excessive in size or frequency in view of
the financial resources, investment objectives and character of the
account. (4) Placing an order to purchase or sell
a security for the account of a client without authority to do so.
(5) Placing an order to purchase or sell a security for the account
of a client upon instruction of a third party without first having
obtained a written third-party trading authorization from the
client. (6) Borrowing money or securities from a
client unless the client is a broker-dealer, an affiliate of the
investment adviser or investment adviser representative, or a
financial institution engaged in the business of loaning funds.
(7) Loaning money to a client unless the investment adviser is a
financial institution engaged in the business of loaning funds or
the client is an affiliate of the investment adviser or investment
adviser representative. (8) Misrepresenting to any
advisory client, or prospective advisory client, the qualifications
of the investment adviser or an investment adviser representative or
misrepresenting the nature of the advisory services being offered or
fees to be charged for such service, or omitting to state a material
fact necessary to make the statements made regarding qualifications,
services or fees, in light of the circumstances under which they are
made, not misleading. (9) Charging a client an
unreasonable advisory fee. (10) Failing to
disclose to clients in writing before any advice is rendered any
material conflict of interest relating to the investment adviser or
any of its employees which could reasonably be expected to impair
the rendering of unbiased and objective advice including:
(A) Compensation arrangements connected with
advisory services to clients which are in addition to
compensation from such clients for such services; and
(B) Charging a client an advisory fee for rendering advice when
a commission for executing securities transactions pursuant to
such advice will be received by the investment adviser or its
employees. (11) Guaranteeing a client that a
specific result will be achieved (gain or no loss) with advice
which will be rendered. (12) Publishing,
circulating and distributing any advertisement which does not
comply with Reg. § 275.206(4)-1, under the Investment Advisers
Act of 1940.
(13) Disclosing the identity, affairs, or
investments of any client unless required by law to do so, or unless
consented to by the client. (14) Taking any
action, directly or indirectly, with respect to those securities or
funds in which any client has any beneficial interest, where the
investment adviser has custody or possession of such securities or
funds when the investment adviser's action is subject to and does
not comply with the requirements of Reg.
§ 275.206(4)-2 under the Investment
Advisers Act of 1940. (15) Entering into,
extending or renewing any investment advisory contract unless such
contract is in writing and discloses, in substance, the services to
be provided, the term of the contract, the advisory fee, the formula
for computing the fee, the amount of prepaid fee to be returned in
the event of contract termination or nonperformance, whether the
contract grants discretionary power to the investment adviser or
investment adviser representative and that no assignment of such
contract shall be made by the investment adviser without the consent
of the other party to the contract. (16) Entering
into, extending or renewing any investment advisory contract, if
such contract contains any provision that limits or purports to
limit any of the following:
(A) the liability of the investment adviser
for conduct or omission arising from the advisory relationship
that does not conform to the Securities Act, applicable federal
statutes, or common law fiduciary standard of care;
(B) remedies available to the client at law or equity or the
jurisdiction where any action shall be filed or heard; or
(C) applicability of the laws of Oklahoma with respect to the
construction or interpretation of the provisions of the
investment advisory contract.
660:11-7-43. Disclosure requirements
(a) Disclosure delivery requirement. In
furtherance of compliance with the standards of ethical practices
specified in 660:11-7-42, every investment adviser, registered or
required to be registered under the Securities Act shall, in accordance
with the provisions of this section, furnish each advisory client and
prospective advisory client with a written disclosure statement which
may be a copy of Part II of its Form ADV including Schedule F, if
applicable, or written documents containing at least the information
then so required by Part II of the Form ADV including Schedule F, if
applicable; provided however, delivery of the required statement need
not be made in connection with entering into an investment company
contract or a contract for impersonal advisory services.
(b)
Time of delivery. An investment adviser shall deliver the
statement required by (a) of this section to an advisory client or
prospective advisory client.
(1) not less than 48 hours prior to entering into
any written or oral investment advisory contract with such client or
prospective client, or (2) at the time of entering
into any such contract, if the advisory client has a right to
terminate the contract without penalty within five business days
after entering into the contract.
(c) For purposes of this section, "entering into"
does not include an extension or renewal without material change of any
investment advisory contract which is in effect immediately prior to
such extension or renewal. (d)
Annual delivery requirement. Unless exempted as provided in (a)
of this section, an investment adviser annually shall, without charge,
deliver or offer in writing to deliver upon written request to each of
its advisory clients the statement required by this section. Any
statement requested in writing by an advisory client pursuant to an
offer required by this subsection must be mailed or delivered within
seven (7) days of the receipt of the request.
660:11-7-44. Financial statements for investment
advisers
(a) Audited statements. Applications for
registration as investment advisers shall contain audited financial
statements for the applicant as of the end of its last fiscal year.
(b)
Unaudited interim financial statements. If the audited financial
statements required in the preceding (a) are not current to within
ninety (90) days of the date of filing, additional unaudited financial
statements shall be submitted covering the period from the beginning of
the current fiscal year through a month ending within the 90-day time
frame. (c)
Sole proprietors. Investment advisers who are individuals or
sole proprietorships, in lieu of audited financial statements, may
provide financial statements that have been prepared in accordance with
generally accepted accounting principles and which have been reviewed
and reported upon by independent accountants in accordance with the
standards for the review of financial statements promulgated by the
American Institute of Certified Public Accountants.
(d)
Exemption. The financial statement requirements specified in
this section shall not apply to an investment adviser unless the
investment adviser has custody or possession of clients' funds or
securities or requires prepayment of advisory fees six (6) months or
more in advance and in excess of $500.00 per client.
(e)
Waiver. The Administrator in his discretion may waive any of the
requirements of this section on a case-by-case basis when such action is
determined to be consistent with the purposes fairly intended by the
policy and provisions of the Securities Act. Requests for waivers shall
be in writing setting forth the reasons therefor.
660:11-7-45. Examination of investment advisers
(a) Periodic examinations. The business and
records of each investment adviser registered under the Securities Act
may be periodically examined by the Administrator and/or person(s)
designated by him at such times and in such scope as the Administrator
determines prudent and necessary for the protection of the public. A
report of each such examination shall be prepared. (b)
Department access. Each investment adviser scheduled for
examination shall provide the personnel of the Department access to
business books, documents, and other records. Each investment adviser
shall provide personnel with office space and facilities to conduct
on-site examinations, and assistance in the physical inspection of
assets and confirmation of liabilities. Failure of any applicant or
registrant to provide such access shall constitute a violation of this
section and shall be a basis for denial, suspension or revocation of the
registration or application for registration.
660:11-7-46. [RESERVED]
660:11-7-47. Payments for client solicitations
(a) Prohibition. An investment adviser
required to be registered pursuant to Section 1-403 of the Securities
Act shall not pay a cash fee, directly or indirectly, to a solicitor
with respect to solicitation activities unless:
(1) the investment adviser is registered under
the Securities Act; (2) the solicitor is
registered as an investment adviser representative of this or
another investment adviser registered under the Securities Act or
separately registered as an investment adviser or under the
Securities Act; and (3) such cash fee is paid
pursuant to a written agreement to which the investment adviser is a
party.
(b) Written agreement. If soliciting clients
is the only service rendered on behalf of an investment adviser, the
written agreement required by (a)(3) of this section shall:
(1) describe the solicitation activities to be
engaged in by the solicitor on behalf of the investment adviser and
the compensation to be received therefor; (2)
contain an undertaking by the solicitor to perform his duties under
the agreement in a manner consistent with the instructions of the
investment adviser and the provisions of the Securities Act and the
rules thereunder; and (3) require that the
solicitor, at the time of any solicitation activities for which
compensation is paid or to be paid by the investment adviser,
provide the customer with a current copy of the investment adviser's
written disclosure statement required by 660:11-7-43 and a separate
written disclosure document described in (d) of this section.
(c) Investment adviser responsibilities. The
investment adviser shall receive from the client, prior to, or at the
time of, entering into any written or oral investment advisory contract
with such client, a signed and dated acknowledgment of receipt of the
investment adviser's written disclosure statement and the solicitor's
written disclosure document. In addition, the investment adviser shall
ascertain whether the solicitor has complied with the agreement, and has
a reasonable basis for believing that the solicitor has so complied.
(d)
Disclosure by solicitor. The separate written disclosure
document required to be furnished by the solicitor to the customer
pursuant to (b) of this section shall contain the following information:
(1) the name of the solicitor;
(2) the name of the investment adviser; (3) the
nature of the relationship, including any affiliation, between the
solicitor and the investment adviser; (4) a
statement that the solicitor will be compensated for his
solicitation services by the investment adviser;
(5) the terms of such compensation arrangement, including a
description of the compensation paid or to be paid to the solicitor;
and (6) the amount, if any, for the cost of
obtaining his account the customer will be charged in addition to
the advisory fee, and the differential, if any, among customers with
respect to the amount or level of advisory fees charged by the
investment adviser if such differential is attributable to the
existence of any arrangement pursuant to which the investment
adviser has agreed to compensate the solicitor for soliciting
customers for, or referring customers to, the investment adviser.
PART 9. SEC COVERED INVESTMENT ADVISERS
660:11-7-51. SEC covered investment adviser notice
filing
(a) Initial filing. A federal covered
investment adviser making its initial notice filing in the state of
Oklahoma pursuant to Section 1-405 of the Securities Act:
(1) shall file with the IARD:
(A) a new or amended Form ADV, including
Schedules A-I, designating Oklahoma on Item 2.B of Part 1A; and
(B) the investment adviser notice filing fee set forth in
Section 1-612 of the Securities Act; and
(2) shall comply with existing federal
requirements with regard to the Part 2 of the Form ADV.
(b) Renewal. Federal covered investment
advisers who have made a notice filing pursuant to Section 1-405 of the
Securities Act may renew their notice by submitting to the IARD the
investment adviser notice filing fee set forth in Section 1-612 of the
Securities Act.
SUBCHAPTER 9.
REGISTRATION OF SECURITIES
PART 1. GENERAL PROVISIONS
Section 660:11-9-1. [RESERVED] 660:11-9-2. Amendments
PART 3. REGISTRATION PROCEDURES
660:11-9-11. Filing by coordination 660:11-9-12. Content of
registration statement 660:11-9-13. Amendments to registration statements
660:11-9-14. Financial statements 660:11-9-15. Change of accountant
preceding or during effectiveness 660:11-9-16. Abandoned filings
PART 5. GUIDELINES AND POLICIES APPLICABLE TO OFFERINGS
OF REGISTERED SECURITIES
660:11-9-31. Prospectus delivery requirement 660:11-9-32. Impound
agreements 660:11-9-33. Special requirements for promotional or
developmental stage companies 660:11-9-34. NASAA guidelines
660:11-9-35. Limitations on offering expenses and remuneration
660:11-9-36. Promoters' and organizers' equity contributions
PART 7. REPORTING REQUIREMENTS
660:11-9-51. Registration renewal and sales reporting requirements
660:11-9-52. [RESERVED] 660:11-9-53. Special examinations of
registrations
PART 1. GENERAL PROVISIONS
660:11-9-1. [RESERVED]
660:11-9-2. Amendments
The Administrator may by order amend the provisions of
this subchapter to conform references to the Securities Act or to rules
promulgated thereunder to numerical redesignations occasioned by legislative
or rulemaking activities.
PART 3. REGISTRATION PROCEDURES
660:11-9-11. Filing by coordination
An offering of securities for which an application for
registration is not filed with and received by the Department prior to SEC
effectiveness shall not be deemed to be in connection with the same offering
of securities and therefore shall not be eligible for registration in the
state of Oklahoma pursuant to Section 1-303 of the Securities Act.
660:11-9-12. Content of registration statement
In addition to the other requirements set forth in the
Securities Act and the rules and regulations promulgated thereunder, a
registration statement filed under the provisions of Sections 1-303 and
1-304 of the Securities Act shall contain the information that would be
required in a registration statement filed with the SEC under Section 5 of
the 1933 Act, as amended. Except for offerings attempting to register by use
of the Form U-7, the registration statement shall be on the form that the
issuer would be entitled to use if filing under the 1933 Act and in
accordance with the specified instructions of said form.
660:11-9-13. Amendments to registration statements
(a) Requirement to amend. A correcting
amendment to an effective Registration Statement shall be prepared and
submitted to the Department any time that the information contained
therein becomes inaccurate or incomplete in any material respect. The
responsibility for identifying and reporting a material change lies with
the registrant. Any of the following changes are likely to be the basis
for filing a correcting amendment; however, the following is not
intended to be a comprehensive listing of specific events or conditions
which might give rise to such a filing:
(1) changes in officers, directors and other
management personnel identified in the Registration Statement,
including those persons who would have been identified in the
Registration Statement had the change occurred prior to making the
initial filing; (2) a change of 10% or more in the
equity ownership of the issuer by persons identified in the
Registration Statement as principal security holders or by persons
who would have been so described had the change occurred prior to
making the initial filing; (3) changes in the
issuer's aims, objectives, business enterprise, operations or
activities; (4) a change in any designated Use of
Proceeds item; (5) impairment of the issuer's
assets, the issuer's insolvency or the filing of a petition for
bankruptcy by or for the issuer; (6) management's
intention to dispose of a significant portion of an issuer's assets,
or the actual occurrence of such disposal; (7)
changes in the compensation arrangements described in the
Registration Statement for promoters, general partners or sponsors
of the issuer, including controlling persons of such promoters,
general partners or sponsors, who are identified in the Registration
Statement, or who would have been so identified had a change
occurred prior to making the initial filing; (8)
changes in underwriting terms; (9) any agreement
in principle to enter into a business combination;
(10) changes in the industry, the economy, or in laws or regulations
governing the industry, if disclosures in the Registration Statement
are affected by the changes or if the condition resulting from such
changes would have resulted in a disclosure requirement had the
changes occurred prior to making the initial filing.
(b) Time of filing and undertaking.
(1) Every Registration Statement shall contain an
undertaking by the applicant to file correcting amendments to the
Registration Statement whenever the information in the Registration
Statement becomes inaccurate or incomplete in any material respect
by the earlier of:
(A) two business days after filing such
amendment with the SEC, or (B) fifteen
business days following the event giving rise to the amendment.
(2) If not registered with the SEC, registrants
shall file an amended Registration Statement if required within
fifteen (15) business days following the event giving rise to the
amendment, and in no event, not less often than annually as a part
of the Annual Report required by 660:11-9-51.
(c) Contents of filing. Each filing of a
correcting amendment to a Registration Statement shall contain a copy of
each item of the Registration Statement which has been changed, with all
changes clearly marked. To be complete, a filing of a correcting
amendment to the Registration Statement shall contain a report of
material changes setting forth a summary of each material change and
indicating the location of such change in the documents filed. Neither
the Administrator nor any member of his staff shall be held to have
taken notice of any item of material change not summarized in such a
report. (d)
Effect of failure to amend. Solicitation of prospective
investors through utilization of a Prospectus containing information
which is inaccurate or incomplete in any material respect is a violation
of Section 1-501 of the Securities Act and constitutes a basis for
suspending or revoking the effectiveness of a Registration Statement
under Section 1-306.A.7.a of the Securities Act. Failure to report to
the Department and disclose to prospective investors a material change
that occurs after the effective date of a Registration Statement and
prior to the sale of a security is a violation of Section 1-501 of the
Securities Act and a basis for the suspension or revocation of the
registration under Section 1-306.A.7.a of the Securities Act. Nothing in
this section shall be construed to require any open-end investment
company registered under the 1940 Act and the Securities Act to disclose
fluctuations in its investment portfolio.
660:11-9-14. Financial statements
(a) Section 1-304 filings. Except for
applications made on the Form U-7, registration statements filed
pursuant to Section 1-304 of the Securities Act shall contain Audited
Financial Statements of the issuer for its last two (2) fiscal years.
Registration statements filed with applications made on the Form U-7
shall contain the financial statements specified in the instructions to
the Form U-7. (b)
Unaudited interim financial statements. If the Audited Financial
Statements or unaudited Financial Statements required in (a) of this
section are not current to within four (4) months of the Date of Filing
of the registration statement, additional unaudited Financial Statements
as of the issuer's last fiscal quarter or any later date designated by
the Administrator shall be included. (c)
Multiple financial statements. If more than one balance sheet or
more than one statement of income is required to be filed pursuant to
(a) of this section, the statement shall be in comparative columnar
form, the date or periods applicable to each column shall be clearly
shown, and columns relating to unaudited Financial Statements shall be
clearly designated "Unaudited." (d)
Acquisitions. If any part of the proceeds of the offering is to
be applied to the purchase of any business, the same Financial
Statements required in (a) of this section shall be filed for the
business to be acquired. When appropriate for full and fair disclosure,
the Administrator may require pro forma combined Financial Statements.
(e)
Application of Regulation S-X. As to definitions, qualifications
of accountants, content of accountant's certificates, requirements for
consolidated or combined statements, and actual form and content of
Financial Statements, the Administrator shall apply Regulation S-X of
the SEC (17 C.F.R. Part 210) in its most currently amended form as of
the date of the filing of the application to all Financial Statements
filed with the Department in connection with the registration of
securities. (f)
Financial statements incorporated by reference. Where Financial
Statements in a prospectus are incorporated by reference from another
document, the Administrator may require that such other document be
filed with the Department and be delivered to investors with the
prospectus. (g)
Application of antifraud provisions. Any Financial Statement
distributed in connection with the offer or sale of securities under the
Act shall be subject to the provisions of Section 1-501 of the Act. Any
Financial Statement filed with the Department shall be subject to the
provisions of Section 1-505 of the Act.
660:11-9-15. Change of accountant preceding or during
effectiveness
(a) Materiality of event. One of the
foundations of the administration of the disclosure requirements of
securities law is reliance upon the reports of independent accountants
regarding the financial statements of registrants. These reports provide
the assurance of an outside expert's examination and opinion, thereby
substantially enhancing the reliability of financial statements.
Consequently, the resignation or dismissal of the principal auditing
firm during a period immediately preceding or contemporaneous with an
application for registration of securities in this state is considered
to be of material importance. (b)
Procedure. If during the 18 months preceding registration and/or
during the period of effective registration, the principal accountant or
firm auditing the registrant's financial statements resigns or is
dismissed, the following shall be required:
(1) Issuers which are SEC reporting companies
shall file a copy of all Form 8-K's filed with the SEC during the 18
months preceding their filing with the Department as well as any
that may be filed during the period of registration with the
Department. (2) All other issuers as a condition
for initial and continuing registration, shall provide the following
information to the Department:
(A) the date of such resignation or
dismissal; (B) disclosure of any disagreements
with the former accountant on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure to which the accountant would have
made reference in his report in connection with the audits of
the two most recent fiscal years and any subsequent interim
period preceding the dismissal or resignation. Each disagreement
should be disclosed whether it was resolved to the accountant's
satisfaction or not; (C) any principal
accountant's report on the financial statements for any of the
past two years containing a disclaimer of opinion or an adverse
or qualified opinion; and (D) a statement that
the decision to change accountants was recommended or approved
by either:
(i) the Audit Committee of the Board of
Directors, if the issuer has such a committee; or,
(ii) the Board of Directors, if the issuer has no such
committee.
(3) The registrant shall request the former
accountant to furnish a letter addressed to the Administrator
stating whether or not he agrees with the statements made by the
registrant and, if not, stating the respects in which he does not
agree. The former accountant's letter shall be attached as an
exhibit to the information required in (b)(2) of this Section.
660:11-9-16. Abandoned filings
An application for registration of securities pursuant to
Sections 1-303 or 1-304 of the Securities Act shall be deemed abandoned if
such registration is not effective in the state of Oklahoma within one year
from the date of receipt by the Department of the initial filing of the
application for registration. Once deemed abandoned, the original
application shall not be reinstated. A new application including the
registration statement, appropriate exhibits and filing fees shall be
required.
PART 5. GUIDELINES AND POLICIES APPLICABLE TO OFFERINGS
OF REGISTERED SECURITIES
660:11-9-31. Prospectus delivery requirement
No offer or sale of any security registered under the
Securities Act may be made unless concurrent with the initial solicitation
or immediately thereafter there is furnished to the prospective purchaser, a
prospectus, in such form and containing such information as may be required
pursuant to the Securities Act or the rules and regulations promulgated
thereunder or by order of the Administrator, which prospectus has been
previously filed with and approved by the Administrator for use; provided,
no prospectus shall be required in connection with offers or sales of
securities or transactions exempted by Sections 1-201 through 1-203 of the
Securities Act, except as may be specifically required by such Act or the
rules and regulations promulgated thereunder or by order of the
Administrator. In addition, after the effective date of the registration
statement in the state of Oklahoma, all broker-dealers and agents effecting
transactions in the securities registered under the Securities Act shall be
required to deliver a prospectus prior to or concurrently with any
transaction in said securities for the same time periods specified in
Section 4(3) of the 1933 Act and Rule 174 adopted by the SEC (17 C.F.R.
230.174) in its most currently amended form as of the date of the filing of
the application. Nothing in this rule obviates the need for registrants to
comply with the provisions of Section 1-501 of the Securities Act.
660:11-9-32. Impound agreements
(a) General requirements. In any instance
where impoundment of the proceeds of sale of securities is determined to
be in the public interest and necessary for the protection of investors,
as a condition of registration the Administrator may require that the
registrant deposit a specific percentage or amount of the proceeds from
the sale of the registrant's securities in an acceptable depository
pursuant to a written agreement between the registrant issuer and the
depository. The proceeds shall be retained therein until a specific sum
has been accumulated and the terms and conditions of the agreement have
been performed. (b)
Filing requirement. Each impound agreement shall be negotiated
between the depositor and the depository and an executed copy filed with
the Administrator. (c)
Required provisions. Each such impound agreement shall
substantially comply with the following guidelines and shall contain the
following terms or information:
(1) the date of the agreement;
(2) the names and addresses of the depositor and the depository;
(3) the specified percentage or amount of gross proceeds from the
sale of the securities involved to be deposited;
(4) the aggregate sum to be accumulated; (5) the
date on or before which such accumulation shall be completed;
(6) the conditions under which the impounded funds are to be
released to the depositor, or are to be refunded to the persons
entitled thereto, and by whom and in what manner such refunding is
to be effected; (7) a provision that interest and
other earnings, if any, from the impounded funds shall be
distributed to the public investors if the impounded offering
proceeds are refunded; (8) a statement that
neither release nor refunding of the impounded funds is to be
effected unless and until the depositor has given the Administrator
and/or Commission ten (10) days written notice of the action to be
taken. To be complete, such notice shall contain a sworn affidavit
from the applicant that all the terms of the escrow agreement have
been properly fulfilled.
(d) Prohibited provisions. An impound
agreement will not be acceptable, except upon unusual circumstances with
prior approval of the Department, if the agreement:
(1) provides for the depositor to make any levy
or assessment or to apply any lien on or against the impounded
funds. It is the intent and purpose hereof that all charges, fees,
and costs incurred in respect to the impound agreement and its
performance be charged to and be borne by the depositor;
(2) provides for or permits credit towards or inclusion in the
specific sum to be accumulated of any monies deposited in the
account, including interest or other earnings directly attributable
to the impounded funds, if such monies constitute proceeds of any
transaction or were derived from sources other than sales of the
depositor's securities; (3) provides for any
rights of the depositor to require release of, or obligation on the
part of the depository to release all or any part of the impounded
funds, except after accumulation in the fund of a specific sum on or
before the date fixed by the impound agreement for the accumulation
to be completed.
660:11-9-33. Special requirements for promotional or
developmental stage companies
(a) Definition. For purposes of this section
a "promotional or developmental stage company" means any entity that
meets the definition in 660:11-1-3. (b)
Requirements. Registration statements filed under Section 1-305
of the Securities Act or any exhibits filed therewith relating to
securities of a promotional or developmental stage company must
demonstrate in addition to meeting any other requirements that may
apply, the issuer's ability to meet the following requirements:
(1) Taking into consideration the minimum net
proceeds of the offering, past earnings, and accounts receivable, of
the issuer, the prospectus must demonstrate the issuer's ability to
operate for a period of at least six months without additional
capital; or based on a business plan filed supplementally, the
issuer must demonstrate its ability to operate for a period of at
least 12 months. Any registrant may request that such business plan
not be deemed filed with the registration statement and may request
that it be held in confidence. A prospectus relating to an offering
of debt securities must demonstrate the issuer's ability to service
the debt. This can be demonstrated by submission of a compilation.
(2) No more than 25% of the proceeds of the offering net of offering
costs shall be paid as remuneration to promoters, executive
officers, directors or shareholders owning 10% or more of any class
of outstanding stock of the issuer. (3) The
prospectus must demonstrate compliance with 660:11-9-35 regarding
limitations on offering expenses and remuneration and with the NASAA
statement of policy regarding promotional shares.
(4) Issuers shall not have granted, and shall agree not to grant in
the future, options to acquire securities of the same class as those
being offered, at an exercise price that is less than 85% of the
fair market value of the securities at the time of the grant of the
option. The prospectus shall disclose the dilution that would result
from the exercise of all outstanding warrants or options to acquire
securities of the same class as those being offered.
(5) The use of offering proceeds must be disclosed with specificity
in the prospectus.
(c) Waiver provisions. The Administrator in
his or her discretion may waive any of the above requirements upon
written request of the registrant, if the Administrator finds that the
requirement is not necessary to protect the public interest under the
circumstances. Any such request shall be filed with the registration
statement and shall indicate the reasons why the requirement is not
necessary under the circumstances described in the registration
statement.
660:11-9-34. NASAA guidelines
(a) Application of guidelines. The
Administrator in his discretion may apply any Statements of Policy or
guidelines adopted by NASAA, or its successors, to a registration of
securities pursuant to the Securities Act. (b)
Cross-reference sheet. Issuers, or interested persons on the
issuer's behalf, shall prepare a cross-reference sheet setting out each
section of the statement of policy or guideline applied by the
Administrator pursuant to this rule, and reflecting the document and
page numbers where compliance with each section of the statement of
policy or guideline is disclosed. Any variance or failure to comply with
particular sections of an applicable statement of policy or guideline
shall be noted by the issuer or his attorney, and the reasons for the
variance shall be fully stated. (c)
Waiver provisions. The Administrator in his discretion may waive
any of the requirements of the statements of policy or guidelines upon
written request of the registrant, if the Administrator finds that the
requirement is not necessary to protect the public interest under the
circumstances. Any such request shall be filed with the registration
statement and shall indicate the reasons why the requirement is not
necessary under the circumstances described in the registration
statement.
660:11-9-35. Limitations on offering expenses and
remuneration
(a) Issuer expenses. Expenses incurred by an
issuer of securities (including the sponsor or general partners of a
limited partnership expended or being reimbursed from partnership funds)
in connection with an offering of securities shall not exceed 20% of the
amount of securities actually sold. Such expenses shall include, but are
not necessarily limited to, the following:
(1) Sales commissions or discounts, including
expense allowances and warrants issued gratis or at nominal prices.
(2) Finders fees, advisory fees and similar fees however designated.
(3) Promotional or carried interests granted, or sold at a price
substantially different from the public offering price, to an
underwriter, broker-dealer or agent. (4)
Organizational expenses of recently formed issuers.
(5) Advertising directly associated with the sale of the public
offering being registered. (6) Accountant's and
attorney's fees for services in connection with the issue and sale
of the securities and their qualification for sale under applicable
laws and regulations. (7) The cost of
prospectuses, circulars and other documents required to comply with
such laws and regulations. (8) Other expenses
directly incurred in connection with such qualifications and
compliance with such laws and regulations (filing fees and
investigation fees prior to registration). (9)
Cost of authorizing and preparing the securities and documents
relating thereto, including issue taxes and stamps.
(10) Charges of transfer agents, registrars, indenture trustees,
escrow holders, depositories, auditors, and of engineers,
appraisers, and other experts. (11) Those expenses
required to be itemized in Part II of a registration statement filed
with the SEC, and with an application for registration by
coordination pursuant to Section 1-303 of the Securities Act.
(b) Underwriters' or broker-dealers'
remuneration. Remuneration received directly or indirectly by any
underwriter, broker-dealer, agent, or any other person performing
similar functions, for effecting or attempting to effect transactions in
securities, shall not exceed 15% of the sales price of the securities
sold in each transaction, regardless of by whom such remuneration is
paid. Further, the aggregate amount of remuneration received directly or
indirectly by all underwriters, broker-dealers, agents, or other persons
performing similar functions for effecting or attempting to effect
transactions in securities, shall not exceed 15% of the aggregate amount
of securities actually sold. For the purpose of this rule (including (a)
of this section and 660:11-9-36) an interstate (or other jurisdiction)
offering of securities shall be viewed in its entirety. Remuneration
shall include, but is not necessarily limited to, the following:
(1) Sales commissions or discounts, including
expense allowances and warrants issued gratis or at nominal prices.
(2) Finders fees, advisory fees and similar fees, however
designated. (3) Promotional or carried interests
granted, or sold at a price substantially different from the public
offering price.
(c) Disclosure of expenses and remuneration.
The aggregate amounts (or good faith estimates of such amounts) of sales
commission and offering expenses paid by an issuer of securities as
discussed in (a) of this section and remuneration to be received by the
seller of securities as discussed in (b) of this section, shall be
clearly disclosed in the prospectus, offering circular, private
placement memorandum or other offering document. (d)
Waiver. Where good cause is shown, the Administrator may waive
or modify the percentage limitations set forth in this section.
Consideration of such requests shall be on a case-by-case basis and only
pursuant to a written request setting forth the reasons therefor.
660:11-9-36. Promoters' and organizers' equity
contributions
(a) Requirement. Where an issuer is a
promotional or developmental stage company as defined in 660:11-1-3, the
ratio of equity investment by promoters or insiders must be determined
as reasonable and equitable in light of the facts and circumstances
presented in each particular case. Cases where the fair value of such
equity investment is less than 10% of the total offering are
discouraged, and in such instances, the proponents of the registration
shall have the burden of establishing that the offering is being made
without unfair or unreasonable amounts of promoters' profits or
participation, as provided in Section 1-306.A.7.b of the Securities Act.
(b)
Presumption. In those instances where only 5% or more has been
contributed by promoters or organizers, but where they have entered into
bona fide and binding subscription contracts exercisable within one year
with the new enterprises for capital stock representing the difference
between the amount contributed and 10%, then the burden of proof will be
deemed to have been satisfied. (c)
Determination of equity investment. The fair value of equity
investment shall be deemed to mean the total of all sums conveyed to the
issuer in the form of paid-in or contributed cash or other assets with
an established or determinable value. In those cases where the issuer
has experienced losses from operations, the fair value of equity
investment shall be the net worth of the issuer as of the date of the
proposed offering determined in accordance with generally accepted
accounting principles. (d)
Burden of proof. The burden of justifying as equitable the
quantity of promotional securities to be issued for assets so conveyed,
and of establishing reasonable or market value of said assets, shall
rest with the applicant.
PART 7. REPORTING REQUIREMENTS
660:11-9-51. Registration renewal and sales reporting
requirements
(a) Registration renewal. Pursuant to
Section 1-305.H of the Securities Act, every registration statement
ordered effective is effective for one (1) year after its effective
date, and certain registration statements may be effective for any
longer period during which the security is being offered. Registration
statements, the effectiveness of which is to continue beyond one (1)
year from their effective date, must have their effectiveness renewed
annually. A renewal of the effectiveness of a registration statement may
be obtained by submitting a registration renewal report to keep the
information contained in the registration statement reasonably current
and by paying appropriate fees.
(1) Time of filing. Each registration
renewal report shall be submitted no more than thirty (30) days
before or thirty (30) days after each anniversary of the
registration effective date. (2)
Content. Each registration renewal report submitted shall
contain:
(A) a written summary of any substantive
changes in the registration statement since the later of the
date of registration or the latest filing of a registration
renewal report; and (B) a copy of the latest
post-effective amendment to the registration statement as filed
with the SEC that has been marked for changes from the prior
version of the registration statement as filed with the SEC; or,
if not registered with the SEC, the proposed amendment to the
registration statement that has been marked for changes from the
prior version of the registration statement as filed with the
Department.
(3) Examination of report. The
Department shall conduct a special examination of each registration
renewal report filed. The purpose for such special examination shall
be to evaluate the reported changes in the registration statement
and to determine whether the registration should continue. The
examination report shall consist of notification to the registrant
of the status of the registration. (4)
Fee. Each registration renewal report filed shall include
the examination fee set forth in Section 1-612.B of the Securities
Act.
(b) Sales reporting. Pursuant to Section
1-305.I of the Securities Act, and so long as a registration statement
is effective, the Administrator may require the applicant, the issuer,
or the broker-dealer to file reports not more often than quarterly to
disclose the progress of the offering. Unless the Administrator requires
more frequent sales reporting by request as to a specific registered
security, a person who has filed a registration statement that has been
ordered effective shall file one (1) registration sales report to
disclose the progress of the offering for the initial one (1) year
period of effectiveness and for each one (1) year renewal period of
effectiveness thereafter.
(1) Time of filing. Each registration
sales report shall be submitted no later than thirty (30) days after
each anniversary of the effective date of the registration, or no
later than thirty (30) days after the termination of the offering,
whichever is earlier. (2)
Content. Each registration sales report submitted shall
contain:
(A) the file number of the registration of
securities to which the registration sales report relates;
(B) a statement as to whether the offering has been completed;
and (C) the dollar amount of each class of
securities sold in the state for the entire one (1) year period
of the registration, or from the beginning of the one (1) year
period of registration through the completion of the offering,
as applicable, in substantially the following form:
Balance unsold at beginning of period $
ADD: Additional authorizations LESS: Amount sold during
period Balance unsold at end of period $
(3) Fee. Each registration sales report
filed shall include the issuer sales report fee as required in
Section 1-612 of the Securities Act.
(c) Piecemeal filings. Any report required
under this section is not considered filed if it is incomplete.
Piecemeal filings shall not be accepted.
660:11-9-52. [RESERVED]
660:11-9-53. Special examinations of registrations
(a) Examination of application. The
Department shall conduct a special examination of each application for
registration under Sections 1-303 and 1-304 of the Securities Act to
determine the adequacy of disclosure and to fulfill the Department's
obligations under Section 1-306 of the Securities Act. This examination
shall be based upon material contained in the Registration Statement and
any other documentation which the applicant may be required to submit.
Each application for registration shall be accompanied by the
examination fee set forth in Section 1-612.B of the Securities Act. The
examination report shall consist of the Department's written comments
regarding the filing. (b)
On-site examinations of issuers. The business and records of
issuers registered pursuant to Sections 1-303 and 1-304 of the
Securities Act may be subject to periodic on-site examinations by the
Administrator, and/or his designee, at such times as he determines
necessary for the protection of the public. The Division of
Registrations shall prepare a special report of every such examination.
(c)
Department access. Each issuer scheduled for examination shall
provide the personnel of the Department access to business books,
documents, and other records. Each issuer shall provide personnel with
office space and facilities to conduct on-site examinations, and
assistance in the physical inspection of assets and confirmation of
liabilities. Failure of any applicant or registrant to comply with any
provision hereof shall constitute a violation of this section and shall
be a basis for denial, suspension or revocation of the registration or
application for registration.
SUBCHAPTER 11.
EXEMPTIONS FROM SECURITIES REGISTRATION
PART 1. GENERAL PROVISIONS
Section 660:11-11-1. Definitions 660:11-11-2. Commissions
660:11-11-3. Number of purchasers 660:11-11-4. Integration of offerings
PART 3. EXEMPT SECURITIES
660:11-11-21. Not for profit debt securities notice filing
PART 5. EXEMPT TRANSACTIONS
660:11-11-40. Manual exemption 660:11-11-41. [RESERVED]
660:11-11-42. Interpretation of 'existing security holders' 660:11-11-43.
Coordinated limited offering exemption 660:11-11-44. [RESERVED]
660:11-11-45. [RESERVED] 660:11-11-46. [RESERVED] 660:11-11-47.
[RESERVED] 660:11-11-48. [RESERVED] 660:11-11-49. Nonissuer
transaction exemption for certain exchange-listed securities
660:11-11-50. [RESERVED] 660:11-11-51. Cross-border transactions
exemption 660:11-11-52. Oklahoma Accredited Investor Exemption
660:11-11-53. Exemption for offers but not sales
PART 7. FEDERAL COVERED SECURITIES
660:11-11-60. Investment company notices 660:11-11-61. Regulation D
Rule 506 notice filing
PART 1. GENERAL PROVISIONS
660:11-11-1. Definitions
The following words and terms, when used in this
subchapter, shall have the following meaning, unless the context clearly
indicates otherwise:
"Class" means the lowest level of subdivision
of the securities offered by an issuer. "Enterprise"
means a corporation, general partnership, limited partnership, joint
venture and any other formal or informal entity, association or
arrangement (other than a sponsor) in which the investors' rights,
interests or participation constitute "securities" as defined by Section
1-102 of the Securities Act. "Sponsor" means
any natural person, corporation, general partnership, limited
partnership, joint venture or other entity which is directly or
indirectly instrumental in organizing an enterprise or which will manage
or participate in the management of an enterprise.
660:11-11-2. Commissions
(a) Definition. As used in Sections 1-202
and 1-402 of the Securities Act, the term "commission" shall mean any
economic benefit paid or given, directly or indirectly, for the
offering, selling or purchasing of a security whether in the form of
money or its equivalent, or any real or personal property or interest
therein, or otherwise. Such economic benefit shall be presumed to be
paid or given for the offer, sale or purchase of a security if the
amount of such benefit is based on the amount of securities offered,
sold or purchased or is an inducement for an offer, sale or purchase.
(b)
Exceptions. Notwithstanding (a) of this section, the following
do not constitute a commission:
(1) Benefit for property purchased or services
performed.
(A) A benefit paid or given, whether or not
such benefit is paid from the proceeds of the sale of a security
of an enterprise or is related to the sale of a security of an
enterprise, if such benefit is paid or given for property
purchased or services performed so long as:
(i) the property or services are
reasonably related to the present or proposed business of
the enterprise, and (ii) the amount or
value of the benefit paid or given is competitive with the
amounts charged or paid in the same or comparable areas by
persons not affiliated with the enterprise who are engaged
in the business of rendering comparable services or
providing comparable property.
(B) Payment to independent third party
professional engineers, geologists, accountants, attorneys, or
such other persons for professional services rendered or to be
rendered for the enterprise does not constitute a commission.
(2) Promotional or other interest of sponsor.
(A) Any promotional or other interest of a
sponsor of an enterprise in the revenues, assets or equity of
the enterprise which is proportionately greater than the capital
invested by such sponsor in the enterprise or the total costs
and expenses of the enterprise borne by or charged to such
sponsor, if:
(I) the interest received is reasonable
or customary in the industry in which the enterprise
operates or proposes to operate; and (ii)
the sponsor or entity receiving such interest has or will
have substantial duties unrelated to the sale of a security
in connection with the enterprise.
(B) For the purpose of this paragraph, the
type and amount of interests allowed under any applicable
guidelines adopted by NASAA or any other guidelines adopted by
the Department for public offerings registered with the
Department shall be presumed reasonable and customary.
(3) Compensation to officer, director, partner or
employee. The payment of compensation to an officer, director,
partner or employee of an enterprise or its sponsor if:
(A) such payment is not directly or
indirectly related to the offer or sale of a security;
(B) the officer, director, partner or employee is a bona fide
officer, director, partner or employee who has substantial
duties that are unrelated to the sale of a security; and
(C) the officer, director, partner or employee's activity
involving the offer or sale of a security is strictly incidental
to such person's bona fide primary work duties.
(c) Presumptions. No presumption shall arise
that a benefit constitutes a commission if the relevant conditions
described in (b) of this section are not satisfied. The burden of
proving that the conditions of this rule have been met remains with the
person claiming an exemption addressed by this rule.
660:11-11-3. Number of purchasers
(a) Exclusions. For purposes of computing
the number of persons to whom sales of the issuer's securities are made
pursuant to Sections 1-202.14 and 1-202.16 of the Securities Act, sales
to the following purchasers shall be excluded:
(1) any relative, spouse or relative of the
spouse of a purchaser who has the same principal residence as such
purchaser; (2) any trust or estate in which a
purchaser and any of the persons related to him as specified in (1)
of this subsection or (3) of this subsection collectively have more
than 50% of the beneficial interest (excluding contingent
interests); (3) any corporation or other
organization of which a purchaser and any of the persons related to
him as specified in (1) or (2) of this subsection collectively are
beneficial owners of more than 50 percent of the equity securities
(excluding directors' qualifying shares) or equity interests.
(b) Entities as purchasers. A corporation,
partnership, or other entity shall be counted as one purchaser. If,
however, that entity is organized for the specific purpose of acquiring
the securities offered and is not an accredited investor as defined in
Section 501 of Regulation D, then, each beneficial owner of equity
interests or equity securities in such entity shall count as a separate
purchaser. (c)
Sales to certain clients or customers. Sales to clients of an
investment adviser, customers of a broker or dealer, a trust
administered solely by a bank trust department or persons with similar
relationships, shall be considered as separate sales for purposes of
this section regardless of the amount of discretion given to the
investment adviser, broker or dealer, bank trust department, or other
persons to act on behalf of the client, customer or trust.
(d)
Joint or common ownership. A sale to persons who acquire the
securities as joint tenants, or as tenants in common, shall be counted
as sales to each tenant unless otherwise covered by the rules of
attribution provided by this section.
660:11-11-4. Integration of offerings
(a) General. An offering made by an issuer
attempting to rely on the exemptions from registration provided by
Sections 1-202.14 of the Securities Act and/or 660:11-11-43 must be
separate and distinct from any other offering. Offers and sales of an
offering will be deemed integrated with offers and sales of another
offering when a review of the integration factors provided by (b) of
this section indicates that the offers and sales are part of a larger
offering. Integration may occur between two (2) claimed exempt offerings
as well as between a claimed exempt offering and a registered offering.
(b)
Factors. The following five (5) factors are deemed relevant to a
determination as to whether or not two (2) different offerings are in
fact integrated and thus part of a larger offering:
(1) the different offerings are part of single
plan of financing; (2) the offerings involve the
issuance of the same class of security; (3) the
offerings are made at or about the same time; (4)
the same type of consideration is to be received;
(5) the offerings are made for the same general purpose.
(c) Case by case determination.
Determination as to whether or not integration has occurred between two
offerings shall be made on a case by case basis. The presence of all the
integration factors shall not be required to establish the integration
of two (2) offerings.
PART 3. EXEMPT SECURITIES
660:11-11-21. Not for profit debt securities notice
filing
(a) Securities exempt. With respect to the
offer or sale of a note, bond, debenture, or other evidence of
indebtedness, such issuers relying upon the exemption from registration
provided in Section 1-201.7 of the Securities Act shall file a notice
with the Administrator at least ten (10) full business days prior to the
first offering of sale pursuant to such claim. Such exemption shall
become effective ten (10) full business days after the filing of a
complete notice if the Administrator has not disallowed the exemption.
(b)
Notice information. The notice required in (a) shall specify, in
writing, the material terms of the proposed offer or sale to include,
although not limited to, the following:
(1) the identity of the issuer;
(2) the amount and type of securities to be sold pursuant to the
exemption; (3) a description of the use of
proceeds of the securities; and (4) the person or
persons by whom offers and sales will be made.
(c) Notice requirements. The following items
must be included as a part of the notice in (a):
(1) the offering statement, if any;
(2) a consent to service of process on Form U-2 and (if applicable)
Form U-2A; and (3) the fee required by Section
1-612 of the Securities Act.
(d) Sales and advertising literature. All
proposed sales and advertising literature to be used in connection with
the proposed offer or sale of the securities shall be filed with the
Administrator only upon request. (e)
NASAA Statements of Policy or guidelines. The Statements of
Policy or guidelines adopted by NASAA may be applied, as applicable, to
the proposed offer or sale of a security for which a notice must be
filed pursuant to this rule. Failure to comply with the provisions of an
applicable Statement of Policy or guideline promulgated by NASAA may
serve as the grounds for disallowance of the exemption from registration
provided by Section 1-201.7 of the Securities Act. (f)
Waiver. The Administrator may waive any term or condition set
forth in this rule.
PART 5. EXEMPT TRANSACTIONS
660:11-11-40. Manual exemption
(a) Recognized securities manuals. The
publications which shall be recognized by the Administrator for purposes
of the exemption from registration set forth in Section 1-202.2.d of the
Securities Act shall be as follows:
(1) Best's Insurance Reports, Life-Health
(2) Mergent's Industrial Manual (3) Mergent's
International Manual (4) Standard & Poor's
Corporation Records
(b) Additional requirements. To be eligible
for the exemption from registration provided by Section 1-202.2.d of the
Securities Act, the following additional conditions must be met:
(1) All information specified as required to be
contained in the recognized securities manuals pursuant to Section
1-202.2.d of the Securities Act must be given to the purchaser with
the confirmation by providing the purchaser with a copy of either:
(A) the information contained in the manual
listing; or (B) the information maintained by
the broker-dealer effecting the transaction that is required to
be kept by such broker-dealer pursuant to the requirements of
SEC Rule 15c2-11 promulgated under the provisions of the 1934
Act.
(2) The information required under (1) of this
subsection must be reasonably current in all material respects. The
time for determining whether the information is current is at the
date of the particular sale not the date the manual listing is
published. For purposes of this paragraph, the term "reasonably
current" shall have the meaning set forth in SEC Rule 15c2-11.
(3) The financial statements of the issuer required pursuant to
Section 1-202.2.d of the Securities Act must be audited by an
independent public accountant in accordance with generally accepted
auditing standards, presenting fairly, in all material respects, the
financial condition of the issuer; provided, if the issuer is an
entity formed and operating under the laws of a foreign
jurisdiction, the financial statements shall be audited in
accordance with the auditing standards applicable in its
jurisdiction of formation and operation. (4) The
issuer of the security, including any predecessors, has either:
(A) been in continuous business or operations
for at least two (2) years, unless the issuer is an insurance
company in which event it shall have been in business for at
least five (5) years; or (B) had a class of
equity securities registered under Section 1-301 of the
Securities Act within the past five (5) years.
(C) As used in this paragraph, "business or operations" means
actual activities related to its current business or operations
and shall not include merely holding funds or assets for future
use.
(5) Sales must be made by a broker-dealer, either
as principal or agent, who is registered under the provisions of
Section 1-401 of the Securities Act. (6) The
securities must be offered or sold at a price reasonably related to
the current market price of such securities. (7)
The securities must be issued and outstanding. The exemption is not
available for issuer transactions. For purposes of this paragraph,
"issuer" shall include all officers, directors and controlling (5%
or more) shareholders of the issuer. (8) The
security does not constitute the whole or any part of an unsold
allotment to, or subscription or participation by, the broker-dealer
as an underwriter of the security.
(c) Restriction for promotional or developmental
stage companies. This exemption may not be used to evade the
registration requirements of Section 1-301 of the Securities Act.
Accordingly, transactions in reliance on this exemption for the
securities of an issuer which is a promotional or developmental stage
company as defined in 660:11-1-3, involving securities that have not
been registered for offer or sale in the state of Oklahoma and which
securities would not have met the requirements for registration set
forth in Sections 1-303 or 1-304 of the Securities Act and the rules
promulgated thereunder, had the securities been filed for registration
pursuant to such sections of the Securities Act, may be deemed to have
violated this requirement unless proven otherwise.
(d) Exemption. The requirements of (b)(1) of
this section, shall not apply to the sale of the securities of an issuer
who has net tangible assets in excess of $10,000,000.00 (U.S.) as
determined by its most recent audited financial statements. For foreign
issuers, the net tangible asset value may be determined by applying the
exchange rate in effect as of the date of the financial statement relied
upon unless there has been a material change in such exchange rate after
the date of the financial statement that would reduce by greater than
20% the value in U.S. dollars. In that event, the exchange rate applied
should be the rate effective as of the last day of the preceding month.
Nothing in this Section shall release the broker-dealer effecting the
transaction from its obligation to maintain the information required by
SEC Rule 15c2-11 and to deliver any such information to any person
involved in a transaction effected in the security, upon request by such
person.
660:11-11-41. [RESERVED]
660:11-11-42. Interpretation of 'existing security
holders'
For purposes of the exemption from registration set forth
in Section 1-202.15 of the Securities Act, the term "existing security
holder" shall not include a person who is a security holder of an issuer
only by the receipt of securities as a gift by said issuer; consequently,
the exemption from registration set forth in Section 1-202.15 of the
Securities Act would not be available in connection with transactions to
such security holders. For purposes of this rule, a distribution of
securities shall be deemed to be a gift if the security holder does not give
consideration in exchange for the securities.
660:11-11-43. Coordinated limited offering exemption
(a) Preliminary notes.
(1) Nothing in this exemption is intended to or
should be construed as in any way relieving issuers or persons
acting on behalf of issuers from providing disclosure to prospective
investors adequate to satisfy the antifraud provisions of this
state's securities laws. (2) In view of the
objective of this section and the purposes and policies underlying
the Securities Act, the exemption is not available to any issuer
with respect to any transaction which, although in technical
compliance with this section, is part of a plan or scheme to evade
registration or the conditions or limitations explicitly stated in
this Section. (3) Nothing in this section is
intended to relieve registered broker-dealers or agents from the due
diligence, suitability, or know your customer standards or any other
requirements of law otherwise applicable to such registered persons.
(b) Terms of the exemption. By authority
delegated to the Administrator in Section 1-203 of the Securities Act,
the following transactions are determined to be classes of transactions
for which registration is not necessary or appropriate for the
protection of investors and are exempt from Sections 1-301 and 1-504 of
the Securities Act: any offer or sale of securities exempted from
Section 5 of the 1933 Act pursuant to Section 4(6) thereof; or any offer
or sale of securities offered or sold in compliance with the 1933 Act,
Regulation D, Rules 230.504 and/or 230.505, including any offer or sale
made exempt by application of Rule 508(a); provided the following
further conditions and limitations are satisfied:
(1) offering expenses do not exceed those allowed
for securities registered pursuant to the provisions of this title;
(2) no general advertising or general solicitation is used; and
(3) the issuer files with the Administrator no later than fifteen
(15) days after the first sale of securities subject to the
Securities Act one (1) signed copy of the notice of sales on Form D
as most recently filed with the SEC, including the Appendix thereto.
Such filing shall also include the following:
(A) an undertaking by the issuer to furnish
to the Administrator, upon written request, the information
furnished by the issuer to offerees; (B)
unless otherwise available, a consent to service of process on
Form U-2 and (if applicable) Form U-2A; and
(C) the notice of exemption fee required by Section 1-612.A.12
of the Securities Act.
(c) Substantial compliance. A failure to
comply with a term, condition or requirement of (b)(3) of this section
will not result in the loss of the exemption from the requirements of
Section 1-301 of the Securities Act for any offer or sale to a
particular individual or entity if the person relying on the exemption
shows:
(1) the failure to comply did not pertain to a
term, condition or requirement directly intended to protect that
particular individual or entity; and (2) the
failure to comply was insignificant with respect to the offering as
a whole; and (3) a good faith and reasonable
attempt was made to comply with all applicable terms, conditions and
requirements of (3)(b) of this section.
(d) Action by Administrator. Where an
exemption is established only through reliance upon (c) of this section,
the failure to comply shall nonetheless be actionable by the
Administrator under the Securities Act. (e)
Reliance on other exemptions. Transactions that are exempt under
this section may not be combined with offers and sales exempt under any
other rule or any section of the Securities Act; however, nothing in
this limitation shall act as an election. Should for any reason the
offer and sale fail to comply with all of the conditions of this
exemption, the issuer may claim the availability of any other applicable
exemption. (f)
Waiver of terms. The Administrator may, by rule or order,
increase the number of purchasers or waive any other conditions of this
exemption. (g)
Title. The exemption authorized by this section shall be known
and may be cited as the "Oklahoma Coordinated Limited Offering
Exemption."
660:11-11-44. [RESERVED]
660:11-11-45. [RESERVED]
660:11-11-46. [RESERVED]
660:11-11-47. [RESERVED]
660:11-11-48. [RESERVED]
660:11-11-49. Nonissuer transaction exemption for
certain exchange-listed securities
By authority delegated to the Administrator in Section
1-203 of the Securities Act, the following transactions are determined to be
classes of transactions for which registration is not necessary or
appropriate for the protection of investors and are exempt from Sections
1-301 and 1-504 of the Securities Act: any nonissuer transaction involving a
security issued and outstanding and listed or approved for listing upon
notice of issuance on Tier 1 of the Chicago Stock Exchange or involving any
security of the same issuer that is of senior or substantially equal rank,
or that differs only in terms of voting rights, from the security so listed,
or any warrant, option or right to purchase or subscribe to any such
security so long as the standards for such listing remain substantially the
same.
660:11-11-50. [RESERVED]
660:11-11-51. Cross-border transactions exemption
By authority delegated to the Administrator in Section
1-203 of the Securities Act, transactions effected by a Canadian
broker-dealer and its agents that meet the requirements for exemption from
registration pursuant to 660:11-5-20 are determined to be classes of
transactions for which registration is not necessary or appropriate for the
protection of investors and are exempt from Sections 1-301 and 1-504 of the
Securities Act.
660:11-11-52. Oklahoma Accredited Investor Exemption
(a) Preliminary statement. On April 27,
1997, the NASAA adopted the Model Accredited Investor Exemption
("MAIE"). MAIE provides exemption from securities registration only for
offers and sales to accredited investors. The MAIE rests on the premise
that accredited investors are capable of fending for themselves in
information gathering and conducting "due diligence" on potential
investments in companies before making an investment. Under authority of
Section 401(b)(22) of the Oklahoma Securities Act, 71 O.S. §§ 1-17,
101-103, 201-204, 301-307, 401-413, 501, 701-703 (Supp. 1998), repealed
effective July 1, 2004, the Administrator issued an order granting such
an exemption, effective March 8, 1999, that is known as the Oklahoma
Accredited Investor Exemption. (b)
Definitions. The following terms, when used in this section,
shall have the meanings as such terms are defined in the NASAA Statement
Of Policy Regarding Corporate Securities Definitions, adopted April 27,
1997.
(1) "Issuer in the Development Stage"; and
(2) "Promoters"
(c) Exemption. Under the authority of
Section 2-103 of the Securities Act, transactions meeting the following
conditions are exempt from Sections 1-301 and 1-504 of the Securities
Act:
(1) Sales only to accredited investors. Sales of
securities shall be made only to persons who are or the issuer
reasonably believes are accredited investors. For purposes of this
order, an "accredited investor" is a person who meets the definition
set forth in 17 CFR § 230.501(a). (2) Investment
intent. The issuer reasonably believes that all purchasers are
purchasing for investment and not with the view to or for sale in
connection with a distribution of the security. Any resale of a
security sold in reliance on this exemption within 12 months of sale
shall be presumed to be with a view to distribution and not for
investment, except a resale pursuant to a registration statement
effective under Sections 1-303 or 1-304 of the Securities Act or to
an exemption from securities registration under the Securities Act.
(3) When exemption is unavailable.
(A) The exemption is not available to an
Issuer that is in the Development Stage that either has no
specific business plan or purpose or has indicated that its
business plan is to engage in a merger or acquisition with an
unidentified company or companies, or other entity or person.
(B) The exemption is not available to an issuer if the issuer,
any of the issuer's predecessors, any affiliated issuer, any of
the issuer's directors, officers, general partners, beneficial
owners of 10% or more of any class of its equity securities, any
of the issuer's Promoters presently connected with the issuer in
any capacity, any underwriter of the securities to be offered,
or any partner, director or officer of such underwriter:
(i) within the last five years, has filed
a registration statement that is the subject of a currently
effective registration stop order entered by any state
securities administrator or the SEC; (ii)
within the last five years, has been convicted of any
criminal offense in connection with the offer, purchase or
sale of any security, or involving fraud or deceit;
(iii) is currently subject to any state or federal
administrative enforcement order or judgment, entered within
the last five years, finding fraud or deceit in connection
with the purchase or sale of any security; or
(iv) is currently subject to any order, judgment or decree
of any court of competent jurisdiction, entered within the
last five years, temporarily, preliminarily or permanently
restraining or enjoining such party from engaging in or
continuing to engage in any conduct or practice involving
fraud or deceit in connection with the purchase or sale of
any security.
(C) Subparagraph (3)(B) shall not apply if:
(i) the party subject to the
disqualification is licensed or registered to conduct
securities related business in the state in which the order,
judgment or decree creating the disqualification was entered
against such party; (ii) before the first
offer under this exemption, the state securities
administrator, or the court or regulatory authority that
entered the order, judgment, or decree, waives the
disqualification; or
(iii) the issuer establishes that it did
not know and in the exercise of reasonable care, based on a
factual inquiry, could not have known that a
disqualification existed under this paragraph.
(4) General announcement.
(A) A general announcement of the proposed
offering may be made by any means. (B) The
general announcement shall include only the following
information, unless additional information is specifically
permitted by the Administrator:
(i) The name, address and telephone
number of the issuer of the securities;
(ii) The name, a brief description and price (if known) of
any security to be issued; (iii) A brief
description of the business of the issuer in 25 words or
less; (iv) The type, number and aggregate
amount of securities being offered; (v)
The name, address and telephone number of the person to
contact for additional information; and
(vi) A statement that:
(I) sales will only be made to
accredited investors; (II) no money or
other consideration is being solicited or will be
accepted by way of this general announcement; and
(III) the securities have not been registered with or
approved by any state securities agency or the SEC and
are being offered and sold pursuant to an exemption from
registration.
(5) Additional information. The issuer,
in connection with an offer, may provide information in addition to
the general announcement under (5), if such information:
(A) is delivered through an electronic
database that is restricted to persons who have been
prequalified as accredited investors; or (B)
is delivered after the issuer reasonably believes that the
prospective purchaser is an accredited investor.
(6) Telephone solicitation.
(A) No telephone solicitation shall be
permitted unless prior to placing the call, the issuer
reasonably believes that the prospective purchaser to be
solicited is an accredited investor. (B)
Dissemination of the general announcement of the proposed
offering to persons who are not accredited investors shall not
disqualify the issuer from claiming the exemption under this
order.
(7) Notice filing. The issuer shall file
a notice of the transaction with the Department within 15 days after
the first sale of securities subject to the Act. The notice must
include the following: an executed copy of the NASAA Model
Accredited Investor Exemption Uniform Notice of Transaction; the
Oklahoma Accredited Investor Exemption Supplemental Information
Form; a consent to service of process on Form U-2 and (if
applicable) Form U-2A; a copy of the general announcement; and a fee
as set forth in Section 1-612 of the Securities Act.
(8)
Disqualifying provision. Failure to comply with (7) of this
section shall not result in the loss of availability of the subject
exemption unless the issuer, any of its predecessors or affiliates
have been subject to a cease and desist order of the Administrator
or any order, judgment, or decree by another state securities
agency, the SEC or any court of competent jurisdiction temporarily,
preliminarily or permanently enjoining such person for failure to
comply with a notice filing requirement for a comparable exemption.
This provision shall not apply if the Administrator determines, upon
a showing of good cause, that it is not necessary under the
circumstances that the exemption be denied. Requests for waivers of
the disqualifying provision of this subsection shall be in writing
setting forth the reasons therefor.
660:11-11-53. Exemption for offers but not sales
Terms of the exemption. By authority delegated to
the Administrator in Sections 1-202 and 1-203 of the Securities Act, the
following transactions are determined to be classes of transactions for
which registration is not necessary or appropriate for the protection of
investors and are exempt from Sections 1-301 and 1-504 of the Securities
Act: an offer to sell, but not a sale, of a security exempt from
registration under the 1933 Act if:
(1) a registration statement has been filed under
this act, but is not effective, (2) the offeror is
not aware of a stop order that has been issued by the Administrator
under this act and does not know of an audit, inspection, or
proceeding by the Department that may culminate in a stop order is
by the offeror to be pending; and (3) the offer
consists only of: (A) publication or distribution
of a solicitation of interest document that complies with the
requirements of 17 CRF § 230.254 and any subsequent oral
communications with prospective investors and other broadcasts, also
permitted by said section; (B) a preliminary
offering circular that complies with the requirements of 17 CRF §
230.255; or (C) an offering document that contains
the information required to be furnished in 17 CRF § 230.502(b)(2).
PART 7. FEDERAL COVERED SECURITIES
660:11-11-60.
Investment company notices
(a) Notice requirement. Pursuant to Section
1-302.A of the Securities Act, prior to the offer in this state of a
Class of security of an investment company that is registered, or that
has filed a registration statement, under the Investment Company Act of
1940, that is not otherwise exempt under Sections 1-201 through 1-203 of
the Securities Act, the issuer must file a notice with the Administrator
relating to such Class of security. (b)
Content of notice. Each required notice shall include the
following:
(1) a properly completed Form NF;
(2) a consent to service of process on Form U-2 and (if applicable)
Form U-2A; and (3) the filing fee set forth in
Section 1-612.C of the Securities Act.
(c) Other documents. Documents other than
those required in (b) of this section, unless specifically requested by
the Department, should not be filed with the Department. Documents that
should be filed with the Department only if specifically requested
include, but are not limited to, registration statements, prospectuses,
amendments, statements of additional information, quarterly reports,
annual reports, and sales literature. (d)
Renewal of notice. The effectiveness of a notice required
pursuant to (a) of this section may be renewed each year for an
additional one (1) year period of effectiveness by filing on or before
the expiration of the effectiveness of such notice:
(1) a properly completed Form NF clearly
indicating the state file number of the Notice to be renewed; and
(2) the filing fee required by Section 1-612.C of the Securities
Act.
660:11-11-61. Regulation D Rule 506 notice filing
(a) Notice requirement. Issuers offering a
security in this state in reliance upon Section 1-301.1 of the
Securities Act by reason of compliance with Regulation D, Rule 506,
adopted by the United States Securities and Exchange Commission, shall
be required to file a notice with the Administrator pursuant to the
authority of Section 1-302.C of the Securities
Act if a sale of a security in this state occurs as a result of such
offering. (b)
Terms of notice filing. The issuer shall file with the
Administrator no later than fifteen (15) days after the first sale of a
security in this state for which a notice is required under (a) of this
section:
(1) one copy of the notice of sales on Form D as
most recently filed with the SEC, and the Appendix thereto;
(2) a consent to service of process on Form U-2 and (if applicable)
Form U-2A; and (3) the notice filing fee required
by Section 1-612.A.19 of the Securities Act.
SUBCHAPTER 13.
SALES LITERATURE
Section 660:11-13-1. Purpose 660:11-13-2. Definitions
660:11-13-3. Filing requirements
660:11-13-4. Content
660:11-13-1. Purpose
The rules of this subchapter are adopted to provide
procedures for complying with the provisions of Section 1-504 of the
Securities Act relating to sales literature.
660:11-13-2. Definitions
The following words and terms, when used in this
subchapter, shall have the following meaning, unless the context clearly
indicates otherwise:
"Sales literature" means material published,
or designed for use, in a newspaper, magazine or other periodical,
radio, television, telephone solicitation or tape recording, videotaped
display, signs, billboards, motion pictures, telephone directories
(other than routine listings), other public media and any other written
communication distributed or made generally available to customers or
the public including, but not limited to, prospectuses, pamphlets,
circulars, form letters, seminar texts, research reports, surveys,
performance reports or summaries and reprints or excerpts of other sales
literature or advertising to include publications in electronic format.
"Sales literature package" means all submissions of Sales
Literature to the Department under one posting or delivery relating to a
specific issue of securities.
660:11-13-3. Filing requirements
(a) Requirement of filing. Section 1-504 of
the Securities Act requires a filing of all Sales Literature for review
and response by the Administrator before use or distribution in
Oklahoma. A complete filing shall consist of the Sales Literature
Package, the fee specified in Section 1-612 of the Securities Act and a
representation by the applicant, issuer or broker-dealer, that reads
substantially as follows: "I ------hereby attest and affirm that the
enclosed sales literature or advertising package contains no false or
misleading statements or misrepresentations of material facts, and that
all information set forth therein is in conformity with the Company's
most recently amended registration statement as filed with the Oklahoma
Department of Securities on or about-----." (b)
Exemption from filing. The following types of Sales Literature
are excluded from the filing requirements set forth in this Section:
(1) Sales Literature which does nothing more than
identify a broker-dealer and/or offer a specific security at a
stated price; (2) Internal communications that are
not distributed to the public; (3) Prospectuses,
preliminary prospectuses, prospectus supplements and offering
circulars which have been filed with the Department as part of a
registration statement, including a final printed copy if clearly
identified as such; (4) Sales Literature solely
related to changes in a name, personnel, location, ownership,
offices, business structure, officers or partners, telephone or
teletype numbers; and (5) Sales Literature filed
with and approved by the NASD.
(c) Piecemeal filings. The Department will
not approve any Sales Literature Package until a complete filing is
received. Piecemeal filings will not be accepted and will result in the
disapproval of any materials submitted therewith.
660:11-13-4. Content
(a) Application of antifraud provisions.
Sales Literature used in any manner in connection with the offer and
sale of securities is subject to the provisions of Section 1-501 of the
Securities Act, whether or not such Sales Literature is required to be
filed pursuant to Section 1-504 of the Securities Act or 660:11-13-3.
Further, Sales Literature filed with the Department is subject to the
provisions of Sections 1-501 and 1-505 of the Securities Act. Sales
Literature should be prepared accordingly and should not contain any
ambiguity, exaggeration or other misstatement or omission of material
fact, which might confuse or mislead an investor. (b)
Prohibited disclosures. Unless stating that the Commission,
Administrator or Department has not approved the merits of the
securities offering or the Sales Literature, no Sales Literature shall
contain a reference to the Commission or the Department unless such
reference is specifically required in a Departmental Prospectus Guide or
requested by the Administrator.
SUBCHAPTER 15.
MISCELLANEOUS PROVISIONS
Section 660:11-15-1. General rules for presentation of financial
statements
660:11-15-1. General rules for presentation of
financial statements
(a) Asset values. The following rules shall
apply in presenting asset values in all Financial Statements filed with
the Department:
(1) A unilateral "write-up" of assets above
historical cost is not considered in accordance with generally
accepted accounting principles. Financial Statements containing a
"write-up" of assets to appraisal values (irrespective of the
soundness of the appraisal) shall not be accepted.
(2) A registrant acquiring assets in an "arms-length" transaction,
solely or partly for its own capital stock, should record the
transaction in its Financial Statements at either:
(A) the fair market value of the shares of
stock given in consideration; (B) the fair
market value of the asset so acquired; or (C)
The amount selected should be one that has the preponderance of
evidence substantiating its selection.
(3) Where a parent company (one owning more than
50% of other companies) or a subsidiary company or an affiliated
company is the registrant, consolidated or combined Financial
Statements shall be submitted. The consolidated statements must
conform to generally accepted accounting principles and result in
the elimination of "write-ups" or appraisal amounts not represented
by "arms-length" transactions. (4) Where the
"promoters" of a registrant have transferred assets to the
registrant solely or partly for capital stock, the tests referred to
in (1), (2) and (3) of this subsection must be applied so as to
result in either no "write-up" or one not greater than would have
resulted from a transaction carried out at "arms-length." The
registrant shall make full disclosure of all pertinent facts and
substantiate the values used in its Financial Statements if not
representing "historical cost" of acquisition from third parties.
(b) Opinion of independent accountants.
Audited Financial Statements shall be accompanied by an opinion of the
Independent Accountant. The opinion letter shall be dated, shall be
manually signed, shall identify without detailed enumeration the
Financial Statements covered by the opinion, shall state that the
examination was conducted in accordance with generally accepted auditing
standards and shall express the Independent Accountant's opinion as to
the fairness or unfairness of the Financial Statements in accordance
with generally accepted accounting principles or his inability to
express such an opinion.
CHAPTER 15.
OKLAHOMA TAKE-OVER DISCLOSURE ACT OF 1985
Subchapter |
Section |
1. General Provisions………………………………………………………………………. |
660:15-1-1 |
3. Registration………………………………………………………………………………. |
660:15-3-1 |
[Authority: 71 O.S., Section 457]
[Source: Codified 12-31-91]
SUBCHAPTER 1.
GENERAL PROVISIONS
Section 660:15-1-1. Purpose 660:15-1-2. Statutory citations
660:15-1-3. Definitions
660:15-1-1. Purpose
The provisions of this Chapter have been adopted for the
purpose of carrying out the provisions of the Oklahoma Take-over Disclosure
Act of 1985 in compliance with Section 457 of that Act, including provisions
governing take-over offers.
660:15-1-2. Statutory citations
Citations to statutes in this Chapter refer to the most
recent codification of the Oklahoma Take-over Disclosure Act of 1985, 71
O.S., Sections 451 through 462.
660:15-1-3. Definitions
The following words and terms, when used in this Chapter,
shall have the following meaning, unless the context clearly indicates
otherwise:
"Take-over Act" means the most recent
codification of the Oklahoma Take-over Disclosure Act of 1985, 71 O.S.,
Sections 451 through 462.
SUBCHAPTER 3.
REGISTRATION
Section 660:15-3-1. Review of take-over offer materials 660:15-3-2.
Financial statements 660:15-3-3. Summary suspension of take-over offer
660:15-3-4. Time limits
660:15-3-1. Review of take-over offer materials
The Administrator may require only those disclosures
which are factual in nature, and may not require disclosures which involve
an evaluation of the underlying fairness of the take-over offer nor shall
the Administrator apply subjective standards as to the fairness of the
take-over offer in his review.
660:15-3-2. Financial statements
If the offeror is other than a natural person, such
offeror shall file audited financial statements for its last two (2) fiscal
years. If the offeror's audited financial statements are not current to
within four (4) months of the date of filing of the registration statement,
the offeror shall submit reviewed financial statements for the interim
period. The financial statements shall be prepared in accordance with
generally accepted accounting principles and examined by independent
accountants in accordance with generally accepted auditing standards and
accompanied by an opinion of the accountants making such examination.
660:15-3-3. Summary suspension of take-over offer
(a) Pursuant to subsection D of Section 453 of the
Take-over Act, the Administrator may summarily suspend the effectiveness
of a take-over offer. Such an action shall be based solely upon a
determination that:
(1) the registration statement required to be
filed under Section 453 of the Take-over Act does not contain all
the information required to be included under subsection F of
Section 453 of the Take-over Act; or (2) the
take-over materials provided to offerees do not provide full
disclosure to offerees of all material information concerning the
take-over offer.
(b) The summary suspension shall be in effect only
until a final determination is made by the Administrator following the
hearing held pursuant to subsection E of Section 453 of the Take-over
Act and in accordance with 660:15-3-4.
660:15-3-4. Time limits
Notwithstanding subsection E of Section 453 of the
Take-over Act which provides that the Administrator may by rule or order
prescribe different time limits than those specified in subsection E in
connection with the suspension of a take-over offer following a hearing, the
determination by the Administrator of whether to suspend a take-over offer
must be made prior to the expiration of twenty (20) business days following
the filing of the registration statement in connection with such take-over
offer.
CHAPTER 20.
OKLAHOMA SUBDIVIDED LAND SALES CODE
Subchapter |
Section |
1. General Provisions………………………………………………………………………. |
660:20-1-1 |
3. Registration of Subdivided
Land……………………………………………………….. |
660:20-3-1 |
5. Registration of Subdivided Land Sales
Agents………………………………………. |
660:20-5-1 |
7. Examinations…………………………………………………………………………….. |
660:20-7-1 |
9. Advertising Guidelines………………………………………………………………….. |
660:20-9-1 |
[Authority: 71 O.S., Section 662]
[Source: Codified 12-31-91]
SUBCHAPTER 1.
GENERAL PROVISIONS
Section 660:20-1-1. Purpose 660:20-1-2. Statutory citations
660:20-1-3. Definitions
660:20-1-1. Purpose
The provisions of this Chapter have been adopted for the
purpose of carrying out the provisions of the Oklahoma Subdivided Land Sales
Code in compliance with Section 662 of that Act, including rules governing
applications and reports and defining terms.
660:20-1-2. Statutory citations
Citations to statutes in this Chapter refer to the most
recent codification of the Oklahoma Subdivided Land Sales Code, 71 O.S.,
Sections 601 through 667.
660:20-1-3. Definitions
The following words and terms, when used in this Chapter,
shall have the following meaning, unless the context clearly indicates
otherwise:
"Department" means the Oklahoma Department of
Securities. "Land Sales Act" means-the most
recent codification of the Oklahoma Subdivided Land Sales Code, 71 O.S.,
Sections 601 through 667. "OILSR" means the
Office of Interstate Land Sales Registration of the United States
Department of Housing and Urban Development. "Vacation
certificates" means any material associated with a plan whereby a
prospective purchaser would be entitled to lodging, food or other
amenities and that is used by subdividers or their agents or
distributors or any other person to induce prospective purchasers to
visit the subdivision or attend or submit to a sales presentation by a
subdivider or its agents or its distributors or any other person.
SUBCHAPTER 3.
REGISTRATION OF SUBDIVIDED LAND
Section 660:20-3-1. Registration procedure 660:20-3-2. Financial
statements 660:20-3-3. Public offering statement 660:20-3-4. Renewal
procedures
660:20-3-1. Registration procedure
(a) Applications filed with OILSR. Application
for registration of subdivided land shall be made by submitting to the
Administrator at the office of the Department two (2) complete copies of
a full registration filed with the OILSR and the OILSR certificate of
registration, provided, however, that only one copy of the exhibits to
the OILSR filing shall be filed with the Administrator.
(b)
Applications on Form LRF-625. In the event subdivided lands are
not to be registered with the OILSR, then a registration shall be
undertaken by filing with the Administrator a completed Form LRF-625,
adopted by the Administrator as the application form for registration of
subdivided lands. (c)
Exhibits and additional information. Any information required by
Section 625 of the Land Sales Act which is not included, or not
sufficiently covered in the form of OILSR registration, or any condensed
version thereof, shall be covered, expanded or explained by attaching
additional sheets to the copies of the OILSR form of registration when
necessary and where appropriate. All instruments, documents and other
exhibits required by Section 625 of the Land Sales Act shall be included
in the registration and those not otherwise attached or included in the
form of registration required by OILSR must be added and attached as
exhibits to the copies of the registration submitted to the
Administrator for filing with the Department. Only one of each required
exhibit shall be filed and such exhibits shall include. when applicable,
but shall not be limited to the following.
(1) When the subdeveloper is a corporation or
limited partnership, or if applicable a joint stock company, or
business trust, which must be domesticated in Oklahoma to do
business in Oklahoma, a copy of a certificate of domestication
issued by the Secretary of State of Oklahoma, or if applicable other
evidence of authority to do business in Oklahoma.
(2) If the subdivider is an unincorporated association, joint stock
company, business trust or a general partnership using a fictitious
name or any other form of business organization which may not file
with the Secretary of state of Oklahoma, but which may be required
to file copies of a trust instrument or certificates of fictitious
name or a similar document with the clerk of the Oklahoma District
Court in districts where company offices are located, real estate is
owned or business is principally conducted, then a certified copy of
each such filed document shall be attached as an exhibit.
(3) If the subdivider is a trustee, a certified copy of all
instruments by which the trust was created or declared, and in which
it is accepted and acknowledged. (4) If the
subdivider is a partnership or unincorporated association, or joint
stock company or similar form of business organization, a certified
copy of its articles of partnership or association and all other
papers pertaining to formation and governance of the organization.
(5) An executed "Consent to Service of Process" irrevocably
appointing the Administrator of the Department or his successor in
office. as attorney to receive service of any lawful process in any
noncriminal suit, action or proceeding against the applicant or his
successor, executor or administrator which arises under the Land
Sales Act or any rule or order issued thereunder after the Consent
has been filed, with the same validity as if served personally on
the person filing the Consent, all as provided in Subsection A of
Section 664 of the Land Sales Act, and such "Consent to Service of
Process" should be generally in the form of the Uniform Form U-2
promulgated and recommended by the North American Securities
Administrators Association. (6) A uniform form of
"Corporate Resolution," or in the case of another form of business
organization, a substantially similar and appropriate resolution, as
applicable generally in the form of the Uniform Form U-2A as
promulgated by the North American Securities Administrators
Association. (7) A list of all persons who are
intended or expected to represent or assist the subdivider in
selling or disposing the subdivided land to Oklahoma residents.
(8) A copy of agency franchise agreements, sales agreements and a
copy of any agreements between the subdivider and salesmen and
brokers. (9) A detailed statement of the plan
under which the subdivider proposes to develop the subdivision,
offer and sell lots and generally transact business, sworn to or
affirmed by an officer of the subdivider or a person occupying a
similar position. (10) A copy of all advertising
material intended to be used for distribution, publication, or
otherwise in connection with the subdivided land.
(11) An exact description of the real estate to be sold.
(12) A map or plat prepared by an independent,
registered professional land surveyor showing the boundaries,
dimensions, setback lines, roads, utility easements, public
easements and all other similar information regarding the subdivided
land including all common areas and lots of the subdivision.
(13) Copies of all zoning restrictions and deed restrictions
affecting any of the subdivided land included in the filing.
(14) Copies of conveyances, bearing public record book and page
number, by which the subdivider or owner acquired title. If the
subdivider does not own the property, also attach copies of all
instruments which give the subdivider authority to sell.
(15) Copies of all instruments presently creating liens, mortgages,
encumbrances, reservations or defects upon or otherwise affecting
the use or title of land included in the filing. The documents shall
reflect the book and page number of the public records where they
are recorded. (16) A list of units by lot number
and section number, as applicable, which relates each lot to all
improvements which are dependent upon future performance according
to any promise made by the subdivider. (17) An
up-to-date, current copy of either a master title insurance policy
providing coverage for the purchasers of lots or a specimen copy of
individual title insurance policies which will provide coverage for
the purchasers of lots and an independent, as described in Section
625 of the Land Sales Act, attorney's title opinion regarding title
to the subdivided land included in the filing and a consent to use
the opinion in connection with the registration.
(18) A copy of the sales contract, including contract for a deed if
applicable, to be used. (19) A copy of any note,
including mortgage note, to be used. (20) A copy
of the deed or other instrument to be used by the subdivider in
conveying title to the purchasers. (21) A copy of
any mortgage trust escrow agreement. (22) A copy
of any improvement escrow agreement. (23) A copy
of an independent licensed engineer's report regarding the soil and
topography of the subdivided land, and a consent to use the report
in connection with the registration. (24) A copy
of any and all contracts for franchises with public utility
companies or copies of all documents and instruments providing
arrangement for services and facilities in lieu of those provided by
any public utility companies. (25) A copy of any
and all completion bonds, performance bonds and agreements with
public authorities which guarantee completion of improvements.
(26) A copy of all contracts or agreements to be used between any
salesmen and the ultimate purchaser. (27) An
opinion of counsel regarding the legality of the proposed offering
of subdivided land and a consent to use such opinion in connection
with the registration. (28) Audited financial
statements including a schedule of real estate assets, and a consent
to use the opinion of the independent accountant in connection with
the registration. (29) Three (3) copies of the
Public Offering Statement, for which the federal Property Report
with supplements may be used.
(d) Filing fee. Each Application for
Registration shall be accompanied by payment to the Department of the
statutory filing fee of Two Hundred Fifty Dollars ($250.00) plus One
Dollar ($1.00) for each lot included in the offering.
(e)
Examination fees. After filing the Application for Registration
and prior to the registration becoming effective, the subdivider shall
deposit with the Department, upon request by the Administrator, such
amounts as may be reasonably expected to be incurred as expenses by the
Administrator and/or his designated representative(s) in the
investigation of the subdivision as provided in any or all parts of
Subsection E of Section 627 of the Land Sales Act.
660:20-3-2. Financial statements
Whenever required by the Land Sales Act or any provision
of this Chapter, financial statements shall mean a statement of financial
position, a statement of income, a statement of retained earnings, a
statement of changes in financial position and, when required elsewhere or
otherwise required by the Administrator, a separately certified schedule of
real estate assets. The separately certified schedule of real estate assets
shall disclose real estate held in sufficient detail to identify the
subdivided land being offered in Oklahoma and separate parcels thereof
acquired at different times or at different costs per acre; the schedule
shall disclose the number of acres in each such parcel; the date each such
parcel was acquired; the original cost for each such parcel; the amounts of
any improvements capitalized and added to the cost basis of each such
parcel; and the total amount of the historical cost basis of each such
parcel; the amounts of any improvements capitalized and added to the cost
basis of each such parcel; and the total amount of historical cost basis of
each such parcel, with improvements, adjusted for a depreciation of
improvements. All financial statements shall be prepared in accordance with
generally accepted accounting principles and practices, unless otherwise
provided by the Administrator, and shall be audited and certified by
independent accountants, unless otherwise provided elsewhere or by the
Administrator.
660:20-3-3. Public offering statement
(a) Receipt for public offering statement.
The subdivider shall use a Public Offering Statement as provided and
required in Section 626.A of the Land Sales Act and prepared in the
manner instructed by Form LRF-625.A, adopted by the Administrator as the
"Public Offering Statement-Instruction Guide." The subdivider shall
obtain and retain a receipt as provided and required therein. The
receipt may be in such form as the subdivider chooses, but it shall not
contain or constitute a release of any kind and shall cover and pertain
only to the receipt of a copy of the Public Offering Statement by the
purchaser. Also, the receipt shall state and disclose that the Oklahoma
Public Offering Statement includes and consists of a Summary Disclosure
Statement, a Property Report as defined hereinafter, and, if applicable,
Oklahoma Supplement to the Property Report; and the receipt shall
acknowledge that the purchaser received a copy of each of the documents
and instruments comprising the Oklahoma Public Offering Statement. The
receipt should also state the name of the person from whom the Oklahoma
Public Offering Statement was received by the purchaser, the address
where it was received and the date when it was received. There also
should be a place for the purchaser to sign and a place separately
provided for the purchaser to write in the date he signed the receipt.
The failure to obtain and retain such a fully completed receipt in
compliance with the requirements of Section 626.A of the Land Sales Act
shall give rise to a presumption on the part of the Administrator that a
Public Offering Statement was not delivered and provided to a purchaser
according to law. (b)
Federal Property Report. In cases where a full registration of
the subdivided land is filed with the OILSR for use in Oklahoma, the
federal Property Report used in connection with the OILSR filing shall
be submitted accompanied by a Summary Disclosure Statement and,
together, the two documents shall be used as the Oklahoma Public
Offering Statement. (c)
Summary Disclosure Statement. The Summary Disclosure Statement
required by Section 626.6 of the Land Sales Act should be prepared in a
manner consistent with this Section and as instructed by FORM LRF-626.B,
adopted by the Administrator as the "Summary Disclosure Statement
Guide." The Summary Disclosure Statement should be on 8 1/2" x 11"
letter size, white paper and the smallest lettering thereon should be no
smaller than uppercase, "capital," standard, elite typewriter size type.
The Summary Disclosure Statement may be typewritten, printed,
mimeographed or otherwise produced, but it should be legible and should
conform to the minimum standards set out herein. The Summary Disclosure
Statement should be no more than four (4) pages long. It may be made by
using both the front and back of two (2) sheets, which shall be counted
as four (4) pages. The Summary Disclosure Statement should contain and
set out in brief, succinct, and concise language, using plain English
and emphasizing the most negative aspects and greatest risk factors to
the purchaser, a summary of the information required in Section 626.B of
the Land Sales Act, except that no financial statements of the
subdivider shall be required in the Summary Disclosure Statement. In
addition to the other information required to be contained in the
Summary Disclosure Statement, it shall contain the following additional
two (2) items:
(1) a statement of the kind of title the
purchaser will have upon completion of payment for any of the
subdivided land and a description of what happens if the purchaser
defaults on any payments and all forfeitures which may occur; and
(2) a schedule, in tabular, columnar form, showing the date on which
the subdivided land was acquired by the subdivider, or the date on
which each parcel of the subdivided lands was acquired if not all
acquired at the same time and the number of acres in each parcel; a
column showing the amounts paid for each parcel of the subdivided
land; a column showing the cost of all improvements made by the
subdivider on each parcel of the subdivided land; a column showing
the total historical cost basis, adjusted for any depreciation of
improvements, of each parcel of the subdivided land; and a column
showing the proposed total sales price of all lots in each parcel of
the subdivided lands. Every item in the Summary Disclosure Statement
should be referenced to the part, section and page number, when
applicable, of the Property Report, or main body of the Public
Offering Statement, wherein elaboration, explanation and additional
information regarding that item can be found. The questions which
should be set out and answered in the Summary Disclosure Statement
are as follows:
(A) If I have any questions or there is
trouble where do I find the seller and his representatives? Here
include the name, principal address and telephone number of the
subdivider, his offices and agents in this state.
(B) What does this land look like and how
large will the development be? Here include a general
description of the subdivided land including a statement of the
total number of lots to be offered. (C) If a
purchaser decides later to sell his lot, what kind of help can
he get selling it and what kind of local property market can he
expect? Here include the assistance, if any, that the
subdivider, his agents or affiliates will provide to the
purchaser in the resale of the property and the extent to which
the subdivider, his agents or affiliates will be in competition
in the event of resale. (D) What kind of
rights or title to the land do I get immediately and what kind
of title do I have after the lot is paid for? Here include
material terms of any encumbrances, easements, mortgages and
liens. Also include the plans and efforts to remove such liens,
encumbrances or mortgages and the results of the success or
failure thereof. (E) What kind of taxes and
assessments will I have to pay? Here include the material terms
of all existing taxes and existing or proposed special taxes or
assessments, including required membership fees or dues, which
affect the subdivided lands. (F) How can I use
this property? Here include material zoning restrictions,
restrictive covenants and other regulations affecting the use of
the land. Also include the intended use for which the land is
sold and material physical limitations and restrictions of the
land relative to the intended use. (G) What
kind of utilities and other improvements now exist on the land
and what kind are promised for the future? Here include
information about existing or proposed improvements including,
but not limited to, streets, water supply, levees, drainage
control systems, irrigation systems, sewage disposal systems and
customary utilities and the estimated cost. date of completion
and responsibility for construction and maintenance of existing
and proposed improvements which are referred to in connection
with the offering or disposition of any lot in the subdivided
lands. (H) What is the soil and climate like?
Here include topographic and climatic characteristics of the
subdivided lands and adjacent area. (I) What
hospitals, churches, fire stations, police protection and other
community services are available? Here include the existing
provisions for access of the subdivision to community fire
protection, the location of primary and secondary schools, the
proximity to the municipalities and the population thereof, the
improvements installed or to be installed, including off-site
and on-site community and recreational facilities, by whom they
were or are to be installed, maintained or paid for, and an
estimate of completion thereof. (J) What
happens if I fail to make any payments, or if I make my payments
but the seller fails to pay on his mortgage? Can any of my
rights in the land be forfeited? Here include the kind of title
the purchaser will have upon completion of payment for any of
the subdivided land and what happens if the purchaser defaults
on any payments and all forfeitures which may occur. Also
describe any and all "take-out" provisions for all mortgages or
state that there are none and state the possible consequences.
(K) What kind of value did this land have
prior of the present development and how much is being spent to
improve it? Here provide a schedule, in tabular, columnar form,
showing the date on which the subdivided lands were acquired by
the subdivider, or the date on which each parcel of the
subdivided land was acquired if all not acquired at the same
time and the number of acres in each parcel; a column showing
the amounts paid for each parcel of the subdivided land; a
column showing the costs of all improvements made by the
subdivider on each parcel of the subdivided land; a column
showing the total historical cost basis, adjusted for any
depreciation of improvements, of each parcel of the subdivided
land; and a column showing the proposed total sales price of all
lots in each parcel of subdivided land.
(d) Supplement. In the event any item of
information required by Section 626.B of the Land Sales Act is not
contained in the format of the federal Property Report, or is not
included in sufficient detail to constitute adequate disclosure, then a
supplement to the Property Report shall be prepared, in the same format,
in which additional sufficient information is provided and disclosed to
satisfy the requirements of Section 626.B of the Land Sales Act in a
form and manner acceptable to the Administrator- and such supplement
shall be used with the Summary Disclosure Statement and the main body of
the Property Report as part of the Oklahoma Public Offering Statement.
660:20-3-4. Renewal procedures
Upon the expiration of an effective registration the
Administrator may renew the registration for an additional period of one (1)
year provided the registrant is in compliance with the Land Sales Act, has
filed all reports required by the Administrator, including periodic and
supplemental updates and reports, has paid all proper costs of examinations
of the subdivider conducted by the Administrator or his representatives,
pays an annual renewal fee and renewal is requested by a letter signed by
the registrant. The annual renewal fee shall be Two Hundred Fifty Dollars
($250.00) plus Ten Dollars ($10.00) for each 100 lots or fraction thereof
previously registered remaining to be offered in the state of Oklahoma at
renewal.
SUBCHAPTER 5.
REGISTRATION OF SUBDIVIDED LAND SALES AGENTS
Section 660:20-5-1. Application for license 660:20-5-2. Renewal of
license 660:20-5-3. Records and reports
660:20-5-1. Application for license
(a) Application. An application for a
subdivided land sales agent license shall be made by filing with the
Administrator a completed Form LRF-632, adopted by the Administrator as
the "APPLICATION FOR LICENSE FOR SUBDIVIDED LAND SALES AGENT."
(b) Additional requirements. In addition to the completed Form
LRF-632, the following items will be required before a license will be
issued:
(1) an affidavit signed by the supervising broker
for the subdivision within ninety (90) days from the date of
applying for the Oklahoma Subdivided Land Sales Agent license,
affirming the type of real estate license held by the applicant and
that he is a licensee in good standing; and (2)
payment to the Oklahoma Department of Securities of the required
filing fee specified in Section 652 of the Land Sales Act.
660:20-5-2. Renewal of license
Every subdivided land sales license may be renewed by
submitting proof that the applicant holds a valid, current real estate
broker's or real estate sales associate's license, the renewal fee specified
in Section 652 of the Land Sales Act, and a submission of a letter signed by
the applicant requesting such renewal. Proof of a valid, current real estate
broker's or real estate sales associate's license should consist of an
affidavit dated within ninety (90) days of the requested renewal date and
signed by the supervising broker for the subdivision. The affidavit shall
affirm the kind of license held by the applicant and that he is a licensee
in good standing. The proof should also consist of a photostatic copy or
picture of the applicant's current real estate license issued by the
appropriate regulatory authority. Every such renewal shall be for a period
of one (1) year. Applications for renewal will be accepted anytime within
sixty (60) days prior to the expiration date of a license.
660:20-5-3. Records and reports
Every agent shall make and keep, for each subdivider he
represents, a monthly report. A copy of each monthly report shall be
provided by the agent to the subdivider for retention by the subdivider for
at least six (6) years, and for the first three (3) years in a readily
accessible location. Such monthly report shall be provided to the subdivider
within fifteen (15) days following the last day of the month covered by the
report. Each monthly report shall set out the name and address of the agent
and the subdivider and state the period of time covered by the report and
shall be signed by the agent; shall identify and list all lots which have
been sold by the agent for the subdivider during the month covered; shall
state the name and address of the purchaser or purchasers of each lot; shall
state the date and address of each sale; shall state the amount paid for
each lot; and shall state the gross amount of the commission earned by the
agent for each lot sold.
SUBCHAPTER 7.
EXAMINATIONS
Section 660:20-7-1. Expenses of on-site examination of subdivider
660:20-7-2. Expenses of examination of licensed agents
660:20-7-1. Expenses of on-site examination of
subdivider
Charges for an on-site examination of a subdivision
conducted by the Department pursuant to Section 627 of the Land Sales Act
shall be paid by the person being examined as set forth in Section 652 of
the Land Sales Act.
[Source: Amended at 9 Ok Reg 301 1, eff 7-15-92]
660:20-7-2. Expenses of examination of licensed agents
Charges for an examination of the business and
records of a licensed agent shall be paid by the agent whose business is
examined as set forth in Section 652 of the Land Sales Act.
[Source: Amended at 9 Ok Reg 301 1, eff 7-15-92]
SUBCHAPTER 9.
ADVERTISING GUIDELINES
Section 660:20-9-1. Application of Land Sales Act 660-20-9-2.
Filing procedures 660:20-9-3. Approval or rejection of advertising
660-20-9-4. Presumptions concerning advertising 660:20-9-5. Legend
requirement 660:20-9-6. Review of advertising 660-20-9-7. Standards of
review 660-20-9-8. Guidelines for advertising 660:20-9-9. Approval of
promotional plans
660:20-9-1. Application of Land Sales Act
Advertising pertaining to activities of or in a
subdivision for which a Registration Statement has been filed with the
Department, such as advertising material on home construction, home
sales, motels, industrial parks, etc. used or employed by subdivider is
subject to Department approval when it pertains to the entire
subdivision and will be used for the promotion or disposition of land
therein.
660:20-9-2. Filing procedures
(a) Transmittal Letter. Every advertisement
submitted to the Department, either as a part of a Registration
Statement or as a subsequent filing, shall be accompanied by a letter of
transmittal which gives a brief, written description of each
advertisement filed with the Department to assure that all future
correspondence and orders concerning the advertisement will clearly
identify the advertisement in question. The letter of transmittal shall
be signed by the subdivider or his duly authorized representative and
shall verify that the statements made and the representations contained
therein have been reviewed and the advertisement is truthful and correct
to the best of his knowledge and belief with regard to the statements
contained therein. (b)
Fee. Each letter of transmittal shall be accompanied by payment
of a fee in the amount of Ten Dollars ($10.00) payable to the
Department. (c)
Time of filing. All advertising except advertising related to
subdivided land or transactions exempt pursuant to Sections 622 and 623
of the Land Sales Act shall be filed with the Administrator not later
than ten (10) days prior to its use and shall not be used until a copy
thereof has been approved for use by the Administrator except
advertising which the Administrator exempts by rule or order.
(d)
File number. All advertising filed with the Department either
with the original registration statement or by subsequent filing shall
be assigned a number by the Department in order that the Department or
the registrant may refer by the number to any specific piece of
advertising. When advertising relates to more than one subdivision owned
by the same person or entity, or different persons or entities, but
being sold through a common sales agent, an identifying designation
shall be assigned such materials but this designation shall not be
construed to permit filings related to subdivisions or portions of
subdivisions which are not registered with this Department.
660:20-9-3. Approval or rejection of advertising
(a) Presumptive approval. Where an order of
rejection or investigation is not entered within ten (10) days of its
receipt by this Department, the advertising will be deemed approved
unless the applicant has consented in writing to a delay.
(b)
Rejection. The rejection of any advertising material by the
Administrator shall constitute final action and any correction or
amendment to a subsequent filing of advertising material which has been
disapproved must be resubmitted.
660:20-9-4. Presumptions concerning advertising
It will be presumed that:
(1) All advertising filed for approval will be
used within six (6) months of said filing, to offer for sale or to
induce persons to acquire interest in the title to all lands which
are described in or referred to in the material or supporting data
filed with the Department unless express limitation is made.
(2) All advertising published, disseminated or broadcast by or in
behalf of an owner or entity owning more than one subdivision is
being used to offer lands in all subdivisions registered by such
owner or entity unless express limitation is made by such owner or
entity, to the Department or by the Department.
(3) All advertising published, disseminated by, or broadcast on
behalf of a sales agent is being used to offer lands in all
subdivisions for which said person is a sales agent unless an
express limitation is made to or by the Department.
660:20-9-5. Legend requirement
The subdivider shall print on advertising material
approved for use the following legend:
"OKLAHOMA OFFEREES SHOULD OBTAIN AN OKLAHOMA PUBLIC
OFFERING STATEMENT FROM THE DEVELOPER AND READ IT BEFORE SIGNING ANY
DOCUMENTS. THE OKLAHOMA SECURITIES COMMISSION NEITHER RECOMMENDS THE
PURCHASE OF THE PROPERTY NOR APPROVES THE MERITS OF THE OFFERING."
660:20-9-6. Review of advertising
When advertising is accepted for filing, the same,
together with all supporting data and facts discovered upon investigation or
inquiry, shall be examined by the designated personnel of the Department to
determine whether the same is ready for final review by the Administrator.
If additional information is needed before a determination can properly be
entered by the Department, it shall be the Division of Registrations' duty
to see that any matter requiring investigation is referred for
investigation.
660:20-9-7. Standards of review
(a) Authority of Administrator. In reviewing
the advertising submitted by a registrant under the Land Sales Act, the
Administrator shall determine whether the submitted material makes a
full and fair disclosure or is false and misleading within the intent
and meaning of the law, by examining the form, language and content of
the material and supporting data and any other available information as
to ascertain whether the express and implied representations therein are
true and make full and fair disclosure. If it does not appear that the
said representations are true and fair disclosure as to all subdivided
lands to which the filing relates, no order of approval will be entered
and the Administrator will enter such orders or rejection or take such
action as may be necessary. (b)
Implied representations and presumptions. Any inference
reasonably to be drawn from advertising or promotional material will be
considered to be a positive assertion unless the inference is negated
therein in clear and unmistakable terms, or unless adequate safeguards
have been provided by the owner to reasonably guarantee the occurrence
of the thing inferred. Advertising or promotional material will be
judged on the basis of the positive representations contained therein
and the reasonable inferences to be drawn therefrom. Unless the contrary
affirmatively appears in advertising or promotional material the
following inferences will be assumed to have been intended in each case
mentioned; to-wit:
(1) When homesites or building lots are
advertised, the inference is that said lots are immediately usable
for such purpose without any further improvement or development by
the prospective purchaser and that there is an adequate potable
water supply available; that the lands have been approved for
installation of septic tanks or that an adequate sewage disposal
system is installed; that no further major draining, fill-in or
subsurface improvement is necessary to construct dwellings, except
for reasonable preparation for construction; that the individual
homesites or building lots are accessible by automobile without
additional expense to the purchaser over existing right-of-way and
that no other fact or circumstance exists to prohibit the use of the
lots as a homesite or building lot. (2) When title
insurance, abstract or attorney's opinion is advertised, the
inference is that the seller can and will convey fee simple title
free and clear of all liens, encumbrances and defects except those
which are disclosed in writing to the prospective purchaser prior to
purchase. (3) When lands are advertised as usable
for any particular purpose other than homesites or building lots,
the inference is that said lots or parcels are immediately
accessible and usable for such purpose by purchaser without the
necessity for draining, fill-in or other improvement prior to
putting the lands to use for such purpose, except for reasonable
preparation for construction, and that no fact or circumstance
exists to prohibit the immediate use of said lands for such
purposes. (4) When any recreational facility,
improvement, accommodation or privilege is advertised, the inference
is that the same is on the lands at the present time and available
without restriction to the purchasers of lots at no additional
expense. (5) When improvements are advertised, the
inference is that the same are completed.
660:20-9-8. Guidelines for advertising
No precise rules to determine what material is
misleading, or that a plan of sale or development lacks adequate
safeguards and assurances to prospective purchasers, can be made which
will be applicable in all situations. Without any intent to limit its
consideration or determination to the general standards herein set forth
and without any attempt to compel any particular form or method of
advertising, promotion, development or sale of subdivided lands, the
standards set forth in this Section are adopted as a guide to persons
preparing to file advertising material and to be used by Department
personnel in reviewing advertising materials submitted pursuant to
Section 653 of the Land Sales Act.
(1) General guidelines. The following
guidelines apply to all advertising or sales literature:
(A) Claims or representations contained in
the advertising shall be accurate and provable.
(B) Advertising shall not misrepresent the facts or create
misleading impressions. (C) Advertising shall
not use statements, photographs, or sketches portraying the use
to which advertised land can be put unless the land can be put
to such use without unreasonable cost. (D)
Advertising shall not make a derogatory or unfair reference to
competitive developments or properties. (E)
Advertising shall not contain asterisks or any other reference
symbol as a means of contradicting or substantially changing any
previously made statement or as a means of obscuring material
facts. (F) Advertising shall not use names or
trade styles which imply that they are nonprofit research
organizations, public bureaus, groups, etc. when such is not the
case. Advertising of such an organization shall be prohibited
when the true nature of the plan of sale or ownership is
misrepresented or concealed. (G) Maps, plats
or representations shall clearly indicate the estimated date
that the development will be completed. If completion dates are
over a period of years, then a series of shadings, outlines, or
coding may be used to indicate estimated dates of completion.
(2) Distances. The following standards
apply to advertising relating to distances:
(A) When a community is referred to,
advertising must include the location of the subdivision and the
mileage from the approximate geographical center of the
subdivision in road miles to the approximate geographical center
of the community. (B) Where a facility is
referred to, advertising shall disclose with reasonable
specificity, the location of such facility in relation to the
geographic center of the subdivision. (C)
Advertising shall not use such terms as "minutes away,” "short
distance,” “only miles" and "near" and terms of similar import
to indicate distance unless the actual distance in road miles is
used in conjunction with such terms. (D) When
the company offers more than one subdivision in a single
advertising piece, or an offering exceeding five miles in length
or width, advertising shall carry a disclaimer as follows:
"Distances indicated are from the location mentioned to (club
house, center of subdivision, or other pertinent or prominent
points); each purchaser should check the exact location of the
property being offered him in relation to the club house,
subdivision or other prominent locations."
(3) Sketches and pictorial representations.
The following guidelines apply to sketches and pictures used in
advertising:
(A) Advertisements shall not use artists'
sketches to portray proposed improvements or nonexistent scenes
without an indication that such portrayal is an artist's sketch
and that the improvements or scenes must be representative and
state that such rendering is an artist's conception.
(B) Advertising shall not contain before and after pictures for
comparative purposes without an accurate, detailed, comparative
analysis of such pictures.
(4) Improvements and facilities. The
following guidelines apply to advertising about improvements of
facilities connected with subdivided land:
(A) Advertising of improvements on or to the
property which are not completed must state in unmistakable
terms that the improvements are merely proposed or under
construction. Advertising of improvements on or to the property
which are not completed must state precisely the anticipated
price to the consumer to complete and the date of the promised
completion.
(B) Advertising shall not make reference to a
public facility unless money has been budgeted for actual
construction of such facility and is available to the public
authority having the responsibility of construction or an actual
disclosure of the existing facts concerning a public facility is
made. (C) Advertising shall not refer to
public facilities under study unless it is fully disclosed that
the facility is merely proposed and under study and provided
that no reference is made to the location or route of the
facility until such has been decided by the responsible public
authority. (D) Advertising shall not contain a
statement, photograph, or sketch relating to a facility for
recreation, sports or other activities not presently in
existence, unless it is stated that the facility is not
completed or is merely proposed. If such a facility exists and
it is not located within the subdivision the distance by
conventional automobile must be given.
(5) Roads, streets, waterways. The
following guidelines apply to advertising about roads, streets or
waterways connected with subdivided land:
(A) Advertising which refers to "roads" and
"streets" shall make affirmative disclosure as to the nature of
the roads and streets, such as paved, gravel or dirt. To be
described as improved or paved, a road and a street shall be
constructed and surfaced according to county, city, or other
acceptable authority specifications or satisfactory guarantees
made for such construction and surfacing. (B)
Advertising shall not refer to property as waterfront unless the
property being offered actually fronts on a canal or other body
of water. (C) Advertising which uses the term
"canal" shall disclose the approximate width and approximate
depth of water in the canal and whether or not it provides
access to open water.
(6) Special risks. The following risks
shall be included, if applicable, in advertising related to
subdivided land:
(A) Advertising shall disclose if the land or
any part of it is regularly flooded or substantially covered by
standing water for extended periods of time during the year,
unless adequate drainage is assured by bonding or other means
acceptable to the Department. (B) Advertising
shall disclose if the land or any part of it is subject to
mudslides, rockslides or other natural phenomena.
(7) Access and easements. The following
guidelines apply to advertising describing access and easements
relating to subdivided land:
(A) Advertising of land which does not have
available legal access to the purchaser shall disclose that fact
and-its effect. (B) Advertising which refers
to legal access shall be accompanied by phraseology to indicate
whether the access is usable as a passage for conventional
automobiles. (C) Advertising shall not refer
to the existence of a road easement or a road right-of-way
unless the easement or right-of-way has been dedicated to -the
public or to appropriate property owners and recorded in the
public records -of the county where the property is located.
(D) Advertising which indicates the size of the tract offered
shall indicate the size and kind of all easements to which the
property may be subject. If the property is subject to easements
which are unusual in size, this fact shall also be noted. Maps,
plats, representations, or drawings shall indicate the
dimensions of the tract and all easements.
(8) Consideration, prices, values and
additional costs. The following guidelines apply to advertising
relating to consideration, prices, values and additional costs of
subdivided land:
(A) Land shall not be advertised as "free" if
the prospective purchaser is required to give any consideration
therefor. Land shall not be advertised for "closing costs only"
when these costs are substantially more than normal, or when
additional land has to be purchased at a higher price to render
the land usable. (B) Advertising which refers
to a property exchange privilege shall state clearly any
qualification concerning the exchange privilege.
(C) Advertising shall not refer to a predevelopment sale at a
lower price because the land has not yet been developed unless
there is a plan of development, and a subdivision plat has been
recorded, or reasonable assurance is available that the plan
will be completed.
(D) Advertising shall not indicate a discount
on property that appears to effect a price reduction from the
advertised price. A discount may be given for quantity
purchases, cash, larger payments, or for any reasonable basis.
The purpose of this standard is to eliminate the use of
fictitious pricing and illusory discount. (E)
Advertising shall not contain statements concerning future price
increases by the subdeveloper which are not specific as to
amount and as to the date of the announced increase. Any such
date shall be in the reasonable future and the increased price
shall be maintained for a reasonable length of time.
(F) Advertising shall not make predictions of specific or
immediate price or value increases of lots or parcels or units
of advertised lands over which the subdivider does not have
control. (G) Forecasts of future events or
population trends contained in advertising shall be made by
qualified persons based upon objective criteria and shall
pertain to the offering. (H) Advertising shall
be considered misleading if it infers or implies that the
subdivider will resell or repurchase the property being offered
at some future time unless the subdivider has made an
undertaking with the Department to resell or repurchase property
for or on behalf of purchasers and has given reasonable
assurances to the Department to demonstrate his ability to
perform this undertaking. (I) Advertising
shall be deemed misleading if it represents that the property
being offered for sale may be subdivided or resubdivided unless
it includes all necessary and relevant information regarding the
cost and feasibility of future subdividing.
(J) Advertising which contains statements regarding taxes and
the amounts thereof shall employ the latest available figures.
(K) The word "guarantee" or phrase "guaranteed refund" or
phrases of a similar import shall not be approved in advertising
unless the refund is unconditional.
660:20-9-9. Approval of promotional plans
(a) Vacation certificates. Vacation
certification shall be submitted to the Department and shall meet the
advertising standards in this Subsection. Any vacation certificate used
must be submitted with component parts, i.e., registration card, letter
of congratulations, reservation form, confirmation form, signs, etc.
(1) The registration card will disclose
eligibility requirements such as age limitation, affinity group,
residency, marital status, proof of age, transportation, date of
expiration. (2) Letter of congratulations will
contain seasonal charge, refund deposit, date of expiration, and
cost of the certificate. (3) The following must be
prominently disclosed: "While on your vacation you will be invited
to attend a land sales presentation by (name of subdeveloper) for
its property registered by the state of Oklahoma. Attendance is/is
not required to make this certificate valid." Certificates,
advertising or other promotional material shall disclose the terms,
conditions and prerequisites to use and enjoyment of a visitation
program, including the following:
(A) Eligibility requirements such as age
limitations, affinity groups, residency, marital status, proof
of age. (B) Statement indicating state taxes
are not included. (C) Statement indicating
whether transportation, food, lodging or other incidental
expenses are included. (D) Statement from the
vacation certificate holder containing the following:
I have read the terms and conditions and
have understood them fully. Signed
_______________________ (Prospective purchaser)
(b) Promotional meetings. If a land sales
presentation is to be used in connection with the vacation plan, the
standards of this Subsection shall be used as a guide in determining
whether or not the nature and manner of conducting the meeting are such
as to fully disclose all significant facts concerning the subdivision.
(1) If the meeting is to be held within the state
of Oklahoma, the Department shall be notified in writing not less
than fifteen (15) days before said meeting and shall be supplied
with the names of the real estate brokers and/or agents involved. If
the meeting is to be held outside the state of Oklahoma the
subdeveloper is not required to give notice of meetings unless the
Administrator so specifically requests. In all cases a written
script of any and all slide and film presentations shall be
submitted to the Administrator at least ten (10) days prior to their
intended use. (2) Department personnel as
authorized by the Administrator shall have free access to the
meeting and presentations. (3) The advertising in
the meeting is subject to the standards of advertising contained
within this Subchapter. (4) A false or dummy buyer
shall not be used to initiate sales or buying climate or for any
other purpose, nor shall it be indicated that lots, parcels, units
of interest have been sold, when in fact, they have not been sold.
(5) An oral statement to a prospective purchaser at the meeting
shall be consistent with written material approved by the
Department. (6) A prospective buyer who expresses
a desire or intent to leave the meeting at any time during or after
the meeting shall not be impeded from departing, pressured to
remain, or denied any benefit promised in exchange for attending the
meeting, including any transportation.
CHAPTER 25.
OKLAHOMA BUSINESS OPPORTUNITY SALES ACT
Subchapter |
Section |
1. General Provisions………………………………………………………………………. |
660:25-1-1 |
3. Registration
Requirements……………………………………………………………… |
660:25-3-1 |
5. Sales Literature or
Advertising…………………………………………………………. |
660:25-5-1 |
7. Opinions…………………………………………………………………………………... |
660:25-7-1 |
SUBCHAPTER 1.
GENERAL PROVISIONS
Section 660:25-1-1. Purpose 660:25-1-2. Statutory citations
660:25-1-3. Definitions
660:25-1-1. Purpose
The rules of this Chapter have been adopted for the
purpose of carrying out the provisions of the Oklahoma Business Opportunity
Sales Act in compliance with Section 816 of that Act, including rules
governing disclosure documents, applications and reports and defining terms.
660:25-1-2. Statutory citations
Citations to statutes in this Chapter refer to the most
recent codification of the Oklahoma Business Opportunity Sales Act, 71 O.S.,
Sections 801 through 827.
660:25-1-3. Definitions
The following words and terms, when used in this Chapter
or the Business Opportunity Act, shall have the following meaning, unless
the context clearly indicates otherwise:
"Business Opportunity Act" means the most
recent codification of the Oklahoma Business Opportunity Sales Act in
Title 71 of the Oklahoma Statutes. "Sales
literature and advertising" means material published in, or designed
for use in, a newspaper, magazine, or other periodical, radio,
television, telephone solicitation or tape recording, videotape display,
signs, billboards, motion pictures, telephone directories (other than
standard listings), other public media or any other written
communication distributed or made generally available to customers or
the public including but not limited to pamphlets, circulars, form
letters, seminar texts, research reports, surveys, performance reports
or summaries and reprints or excerpts of other sales literature or
advertising to include publications in electronic format.
"Sales literature or advertising package" means all submissions
to the Administrator under one posting or delivery relating to a
specific business opportunity.
SUBCHAPTER 3.
REGISTRATION REQUIREMENTS
Section 660:25-3-1. Registration filing fee 660:25-3-2. Renewal of
registration and sales reports
660:25-3-1. Registration filing fee
Every seller seeking registration of a business
opportunity shall pay the filing fee specified in Section 807.C of the
Business Opportunity Act.
660:25-3-2. Renewal of registration and sales reports
(a) Renewal of registration. In addition to
filing a current disclosure document, all sellers seeking renewal of a
registration shall submit a report indicating the total number of
purchasers in the state of Oklahoma and the total amount of
consideration received therefrom since the effective date of the initial
registration. The renewal fee specified in Section 807.E of the Business
Opportunity Act shall accompany each request for renewal of
registration. (b)
Post-registration sales reports. All registrants shall submit
sales reports to the Administrator. Each report shall be accompanied by
the report filing fee specified in Section 807.E of the Business
Opportunity Act and shall contain a statement of the total number of
purchasers in the state of Oklahoma and the total amount of
consideration received therefrom since the effective date of the initial
registration. Said reports are due no later than six (6) months from the
effective date of registration or the effective date of the renewal of a
registration.
SUBCHAPTER 5.
SALES LITERATURE OR ADVERTISING
Section 660:25-5-1. Filing of sales literature
660:25-5-1. Filing of sales literature
(a) Filing requirement. All sales literature
and advertising must be filed with and responded to by the Administrator
prior to use. A filing shall include the sales literature or advertising
package, the review fee specified in Section 807.F of the Business
Opportunity Act and a representation by the seller that reads
substantially as follows: "I hereby attest and affirm that the enclosed
sales literature or advertising package contains no false or misleading
statements or misrepresentations of material facts, and that all
information contained therein is in conformity with the most recent
disclosure document relating to the particular business opportunity
offered thereby on file with the Administrator." (b)
Exemption. The disclosure document filed with the Administrator
as part of the registration process pursuant to Section 806 of the
Business Opportunity Act is exempted from the filing requirement
specified in subsection (a) of this Section. (c)
Content. Sales literature and advertising used in any manner in
connection with the offer and sale of securities is subject to the
provisions of Section 819 whether or not such sales literature and
advertising is required to be filed pursuant to this rule. Furthermore,
sales literature and advertising filed with the Administrator is subject
to the provisions of Section 820 of the Business Opportunity Act.
(d)
Prohibited disclosure. No sales literature or advertising shall
contain a reference to the Oklahoma Securities Commission, the Oklahoma
Department of Securities or the Administrator unless so requested by the
Administrator.
SUBCHAPTER 7.
OPINIONS
Section 660:25-7-1. Interpretive opinion requests
660:25-7-1. Interpretive opinion requests
The Administrator in his discretion may honor requests
from interested persons for interpretive opinions or no-action positions
relating to a specific factual circumstance with respect to the Business
Opportunity Act or any rule or statement of policy adopted thereunder.
Requests relating to unnamed entities or persons or to hypothetical
situations will not warrant a response. Such requests shall be in writing,
shall set out all the facts necessary to reach a conclusion in the matter
and shall be accompanied by the fee specified in Section 817.D of the
Business Opportunity Act. Each request should also be accompanied by a
signed opinion of legal counsel which states counsel's opinion in the
matter, which may be expressed tentatively or conditioned upon concurrence
by the Administrator, and the basis therefor.
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