Compilation of Rules and Regulations of the State of Georgia
Department 590 - RULES OF OFFICE OF SECRETARY OF STATE
Chapter 590-4 - COMMISSIONER OF SECURITIES
Subject 590-4-5 - BROKER-DEALERS AND AGENTS
Rule 590-4-5-.17 - Associated Persons of an Issuer Deemed not to be Broker-Dealers
Universal Citation: GA Rules and Regs r 590-4-5-.17
Current through Rules and Regulations filed through March 20, 2024
(1) An associated person of an issuer of securities shall not be deemed to be a broker-dealer solely by reason of his participation in the sale of the securities of such issuer if the associated person:
(a) Is not
subject to a statutory disqualification, as that term is defined in section
3(a)(39) of the Securities Exchange Act of 1934, at the time of his
participation;
(b) Is not
compensated in connection with his participation by the payment of commissions
or other remuneration based either directly or indirectly on transactions in
securities;
(c) Is not at the time
of his participation an associated person of a broker-dealer; and
(d) Meets the conditions of any one of
paragraph (1)(d) 1., 2., or 3.of this section.
1. The associated person restricts his
participation to transactions involving offers and sales of securities:
(i) To an Institutional Investor, as defined
in O.C.G.A. section
10-5-2(13);
(ii) That are exempted by reason of section
3(a)(7), 3(a)(9) or 3(a)(10) of the Securities Act of 1933 from the
registration provisions of that Act;
(iii) That are made pursuant to a plan or
agreement submitted for the vote or consent of the security holders who will
receive securities of the issuer in connection with a reclassification of
securities of the issuer, a merger or consolidation or a similar plan of
acquisition involving an exchange of securities, or a transfer of assets of any
other person to the issuer in exchange for securities of the issuer;
or
(iv) That are made pursuant to a
bonus, profit-sharing, pension, retirement, thrift, savings, incentive, stock
purchase, stock ownership, stock appreciation, stock option, dividend
reinvestment or similar plan for employees of an issuer or a subsidiary of the
issuer;
2. The
associated person meets all of the following conditions:
(i) The associated person primarily performs,
or is intended primarily to perform at the end of the offering, substantial
duties for or on behalf of the issuer otherwise than in connection with
transactions in securities; and
(ii) The associated person was not a
broker-dealer, or an associated person of a broker-dealer, within the preceding
12 months; and
(iii) The associated
person does not participate in selling an offering of securities for any issuer
more than once every 12 months other than in reliance on paragraph (1)(d)(i) or
(iii) of this section, except that for securities issued pursuant to rule 415
under the Securities Act of 1933, the 12 months shall begin with the last sale
of any security included within one rule 415 registration.
3. The associated person restricts his
participation to any one or more of the following activities:
(i) Preparing any written communication or
delivering such communication through the mails or other means that does not
involve oral solicitation by the associated person of a potential purchaser;
provided, however, that the content of such communication is approved by a
partner, officer or director of the issuer;
(ii) Responding to inquiries of a potential
purchaser in a communication initiated by the potential purchaser; provided,
however, that the content of such responses are limited to information
contained in a registration statement filed under the Securities Act of 1933 or
other offering document; or
(iii)
Performing ministerial and clerical work involved in effecting any
transaction.
(2) No presumption shall arise that an associated person of an issuer has violated O.C.G.A. § 10-5-30solely by reason of his participation in the sale of securities of the issuer if he does not meet the conditions specified in paragraph (1) of this section.
(3) Definitions. When used in this section:
(a) The term associated
person of an issuer means any natural person who is a partner, officer,
director, or employee of:
1. The
issuer;
2. A corporate general
partner of a limited partnership, or managing member of a limited liability
company, that is the issuer;
3. A
company or partnership that controls, is controlled by, or is under common
control with, the issuer; or
4. An
investment adviser registered under the Investment Advisers Act of 1940 to an
investment company registered under the Investment Company Act of 1940 which is
the issuer.
(b) The term
associated person of a broker-dealer means any partner, officer, director, or
branch manager of such broker or dealer (or any person occupying a similar
status or performing similar functions), any person directly or indirectly
controlling, controlled by, or under common control with such broker or dealer,
or any employee of such broker or dealer, except that any person associated
with a broker or dealer whose functions are solely clerical or ministerial and
any person who is required under the laws of any State to register as a broker
or dealer in that State solely because such person is an issuer of securities
or associated person of an issuer of securities shall not be included in the
meaning of such term for purposes of this section.
O.C.G.A. Sec. 10-5-2(3)(E).
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