950 CMR, § 14.401
When used in M.G.L. c. 110A and 950 CMR 10.00 through 14.413, unless the context otherwise requires:
Act means M.G.L. c. 110A.
Agent includes every individual who represents or acts for a broker-dealer in effecting or attempting to effect transactions in securities, including any person who solicits transactions or new accounts, renders advice concerning the purchase or sale of securities to particular customers, executes trades for particular customers, or supervises any of the foregoing individuals. Representation may be in the form of employment or independent contract and compensation may be in any form including hourly, salaried, transaction-based or based on assets under management.
Agent excludes:
(1) an investment company employee who performs merely administrative duties in connection with the sale of that company's securities.
(2) a lawyer, accountant, engineer or other professional adviser who engages in any activity set forth in M.G.L. c. 110A, § 401(b) incidental to the performance of professional services for his client and who receives no referral fee, finder's fee, commission or any part thereof, or similar transaction-based compensation either directly or indirectly.
(3) An officer, director, partner, or limited liability company manager of an issuer who represents the issuer in effecting or attempting to effect purchases or sales of the issuer's securities, provided such person complies with the following conditions:
(a) such person receives no commission or other compensation for or contingent upon the offering or sale of a security by such person;
(b) such person is not subject to any disqualification set forth in 950 CMR 14.402(B)(9)(f) or Section 3(a)(39) of the Securities Exchange Act of 1934; and,
(c) such person is in compliance with any applicable provisions of M.G.L. c. 110A and 950 CMR 10.00 through 14.413.
(4) An individual who represents an issuer in effecting transactions in covered securities exempted by Section 18(b)(4)(D) of the Securities Act of 1933, as amended, provided the filing mandated by 950 CMR 14.402 with respect to the covered security has been timely made.
(5) A person who represents a registered broker-dealer in effecting or attempting to effect transactions solely with or for a customer who is temporarily present in the Commonwealth, with whom the person had a bona fide business-customer relationship for at least 30 days before the customer entered the Commonwealth.
(6) A person who represents an issuer in effecting transactions in any security, including a revenue obligation, issued or guaranteed by the Commonwealth or any political subdivision thereof or any agency or corporate or other instrumentality of one or more of the foregoing or any certificate of deposit for any of the foregoing.
Broker-dealer excludes:
(1) private and institutional investors (including investment companies) effecting transactions as investors in their portfolio securities;
(2) a lawyer, accountant, engineer, or other professional adviser who engages in any activity set forth in M.G.L. c. 110A, § 401(c) incidental to the performance of professional services for his client and who receives no referral fee, finder's fee, commission or any part thereof, or similar transaction-based compensation either directly or indirectly; and
(3) an officer or employee of an issuer unless he receives remuneration directly or indirectly on account of purchases and sales of securities.
(4) A person who has no office or other physical presence in the Commonwealth, and complies with the following conditions:
(a) Only effects or attempts to effect transactions in securities:
1. With or through the issuers of the securities involved in the transactions, brokerdealers, banks, saving institutions, trust companies, insurance companies, investment companies (as defined in the Investment Company Act of 1940), pension or profit sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustees;
2. During any period of 12 consecutive months, with or for fewer than five customers resident in the Commonwealth other than those listed in 950 CMR 14.401(C)(4)(a)1. and 4., each of whom had a bona fide business-customer relationship with the person for at least 30 days before the customer moved to the Commonwealth;
3. With or for a customer who is temporarily present in the Commonwealth, with whom the person had a bona fide business-customer relationship for at least 30 days before the customer entered the Commonwealth; or
4. With or for a person previously or currently resident in Canada who is present in the Commonwealth, whose transactions are solely in a self-directed tax advantaged retirement plan in Canada of which the person is the holder or contributor; and
(b) If the person is effecting transactions with customers described in 950 CMR 14.401(C)(4)(a)4., files a notice in the form of his current application required by the state, province or territory in which his head office is located and a consent to service of process;
(c) If the person is resident in Canada, is a member of a self-regulatory organization or stock exchange in his home jurisdiction;
(d) Maintains his registration in his home state, province or territory and his membership in a self-regulatory organization or stock exchange in good standing; and,
(e) Is not in violation of M.G.L. c. 110A, § 101 and all the rules promulgated thereunder.
Certified, when used in connection with financial statements, means certified by an independent public accountant in accordance with generally accepted accounting principles.
Commonwealth means The Commonwealth of Massachusetts.
Control, Controlling, Controlled By, and Under Common Control With means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
Corporation includes any corporation organized under the laws of the U.S., Canada, any state or territory of the U.S. and any Canadian province. It shall also include any business entity registered as an investment company under the Investment Company Act of 1940, as amended, and any entity which has provisions in its chartering agreement which provide substantially similar protections to security holders with respect to the transactions at issue as provided by the state corporate laws of the jurisdiction where such entity is domiciled.
Director means the Director of the Securities Division.
Division means the Securities Division in the Office of the State Secretary.
Employee, as used in M.G.L. c. 110A, § 402(a)(11), includes an officer, director, trustee, independent contractors and consultants.
Federal Registration Statement means a registration statement filed under the Securities Act of 1933.
FINRA means the Financial Industry Regulatory Authority, Inc.
Institutional Buyer, as used in M.G.L. c. 110A, § 401(c) and M.G.L. c. 110A, § 402(b)(8), includes, but is not limited to, the following:
(1) a Small Business Investment Company licensed by the U.S. Small Business Administration under the Small Business Investment Act of 1958;
(2) a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
(3) a Business Development Company as defined in Section 2(a)(48) of the Investment Company Act of 1940;
(4) an entity with total assets in excess of $5 million and which is either:
(a) a company (whether a corporation, a Massachusetts or similar business trust, partnership, limited liability company or limited liability partnership) not formed for the specific purpose of acquiring the securities offered; a substantial part of whose business activities consists of investing, purchasing, selling or trading in securities issued by others and whose investment decisions are made by persons who are reasonably believed by the seller to have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of investment; or
(b) an organization described in Section 501(c)(3) of the Internal Revenue Code; and
(5) a Qualified Institutional Buyer as defined in 17 CFR 230.144A(a).
Investment Company Shares means securities issued by a face amount certificate company, or redeemable securities issued by an open-end management company or unit investment trust.
Investment Contract, as used in M.G.L. c. 110A, § 401(k), includes:
(1) any investment in a common enterprise with the expectation of profit to be derived through the essential managerial efforts of someone other than the investor. As used in 950 CMR 14.401, a "common enterprise" means an enterprise in which the fortunes of the investor are interwoven with and dependent upon the efforts and successes of those seeking the investment or a third party; and
(2) any investment by which an offeree furnishes initial value to an offer or, and a portion of this initial value is subject to the risks of the enterprise, and the furnishing of the initial value is induced by the offeror's promises or representations which give rise to a reasonable understanding that a valuable benefit of some kind over and above the initial value will accrue to the offeree as a result of the operation of the enterprise, and the offeree does not receive the right to exercise practical and actual control over the management of the enterprise.
Merger includes:
(1) a transaction in which a subsidiary of the issuer is merged with another corporation; and
(2) the acquisition by a corporation of all or substantially all of the outstanding capital stock of another corporation pursuant to a plan of acquisition or similar procedure adopted and carried out in accordance with applicable state, federal or provincial law.
NASAA means North American Securities Administrators Association, Inc.
Officer means a president, vice-president, treasurer, secretary, clerk, managing member and any other person who performs for a broker-dealer or an issuer, whether incorporated or unincorporated, functions corresponding to those ordinarily performed by the foregoing.
Pension or Profit-sharing Trust, as used in M.G.L. c. 110A, § 401(c) and M.G.L. c. 110A, § 402(b)(8), includes the following:
(1) any entity with total assets in excess of $5 million and which is:
(a) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA); or
(b) a self-directed employee benefit plan within the meaning of ERISA, with investment decisions made by a person that is an accredited investor as defined in § 501(a) of SEC Regulation D (17 CFR 230.501(a)); or
(2) any employee benefit plan within the meaning of ERISA with investment decisions made by a plan fiduciary, as defined in Section 2(21) of ERISA, which is either a bank, savings and loan association, insurance company or registered investment adviser; or
(3) an employee benefit plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions.
Person includes a limited liability company and a limited liability partnership.
Principal means general or managing partner in the case of a partnership, officer in the case of a corporation, or trustee in the case of a business trust.
Registration Under Prior Law as used in St. 1972, c. 694, § 7, means filings of the Notice of Intention to Sell required by M.G.L. c. 110A, § 5 which St. 1972, c. 694, § 1 repealed.
Rule or Rules refers to 950 CMR 10.00 through 14.413.
SEC means the United States Securities and Exchange Commission.
Stockholders and Shareholders mean holders of shares, transferable certificates of participation, or other equity interests in any corporation.
950 CMR, § 14.401