Current through Register Vol. 43, No. 12, March 20, 2024
As used in the act, these regulations, and the forms,
instructions, and orders of the administrator, each of the following terms
shall have the meaning specified in this regulation, unless the context
indicates otherwise:
(a) "The act"
means the Kansas uniform securities act, K.S.A. 17-12a101 et seq., and
amendments thereto.
(b)
"Administrator" means the securities commissioner of Kansas, appointed pursuant
to K.S.A. 75-6301 and amendments thereto, or the commissioner's
designee.
(c) "Affiliate" means a
person who directly or indirectly controls, is controlled by, or is under
common control with another person, or who aids and abets or is aided and
abetted by another person.
(d)
"AICPA" means the American institute of certified public accountants.
(e) "Branch office" means any location where
one or more agents or investment adviser representatives regularly conduct
business on behalf of a broker-dealer or investment adviser, or that is held
out as such a location, with the exception of the following locations:
(1) Any location that is established solely
for customer service or back office-type functions, where no sales activities
are conducted, and that is not held out to the public as a branch
office;
(2) any location that is
the agent's or investment adviser representative's primary residence if all of
the following conditions are met:
(A) Only
agents or investment adviser representatives who reside at the location and are
members of the same immediate family conduct business at the
location;
(B) the location is not
held out to the public as an office, and the agent or investment adviser
representative does not meet with customers at the location;
(C) neither customer funds nor securities are
handled at the location;
(D) the
agent or investment adviser representative is assigned to a designated branch
office, and the designated branch office is reflected on all business cards,
stationery, advertisements, and other communications to the public by the agent
or investment adviser representative;
(E) the agent's or investment adviser
representative's correspondence and communications with the public are subject
to the supervision of the broker-dealer or investment adviser with which the
individual is associated;
(F)
electronic communications are made through the electronic system of the
broker-dealer or investment adviser;
(G) all orders for securities are entered
through the designated branch office or an electronic system established by a
broker-dealer or investment adviser;
(H) written supervisory procedures pertaining
to supervision of activities conducted at residence locations are maintained by
the broker-dealer or investment adviser; and
(I) a list of all residence locations is
maintained by the broker-dealer or investment adviser;
(3) any location, other than a primary
residence, that is used for securities or investment advisory business for less
than 30 business days in any one calendar year, if the broker-dealer or
investment adviser complies with the provisions of paragraphs (e)(2)(B) through
(H). For purposes of this paragraph, a business day shall not include any
partial business day if the agent or investment adviser representative spends
at least four hours of the business day at the agent's or investment adviser
representative's designated branch office during the hours that the office is
normally open for business;
(4) any
office of convenience, where associated persons occasionally and exclusively by
appointment meet with customers, that is not held out to the public as an
office;
(5) any location that is
used primarily to engage in non-securities activities and from which the agents
or investment adviser representatives effect no more than 25 securities
transactions in any one calendar year, if any advertisement or sales literature
identifying the location also sets forth the address and telephone number of
the location from which the agents or investment adviser representatives
conducting business at the non-branch locations are directly
supervised;
(6) the floor of a
registered national securities exchange where a broker-dealer conducts a direct
access business with public customers; and
(7) a temporary location established in
response to the implementation of a business continuity plan.
(f) "Close family relationship"
means either a person within the third degree of relationship, by blood or
adoption, or a spouse, stepchild, or fiduciary of a person within the third
degree of relationship.
(g)
"Commission" means any consideration, compensation, fee, or other remuneration
that is directly or indirectly incurred, paid, or given in exchange for
services in connection with the offer, sale, or purchase of securities, the
rendering of investment advice, or the solicitation of prospective purchasers
or clients.
(h) "Control" means the
possession of the power to direct or influence the direction of the management
or policies of a person, directly or indirectly, through the ownership of
voting securities, by contract, or by other means.
(i) "Controlling person" means a person who
has control of any other person. Either of the following persons shall be
presumed to be a controlling person:
(1) An
officer, director, partner, or trustee or an individual occupying similar
status or performing similar functions; or
(2) a person owning 10 percent or more of the
outstanding shares of any class or classes of securities.
(j) "CPA" means certified public accountant
or a firm of certified public accountants.
(k) "CRD" means the central registration
depository jointly administered by FINRA and NASAA.
(l) "Designated security" means any equity
security other than the following:
(1) A
security registered, or approved for registration upon notice of issuance, on a
national securities exchange;
(2) a
security authorized, or approved for authorization upon notice of issuance, for
listing on the Nasdaq stock market;
(3) a security issued by an investment
company registered under the investment company act of 1940;
(4) a security that is a put option or call
option issued by the options clearing corporation; or
(5) a security whose issuer has net tangible
assets in excess of $4,000,000 as demonstrated by financial statements dated
within the previous 15 months that the broker-dealer has reviewed and has a
reasonable basis to believe are true and complete in relation to the date of
the transaction with the person, if either of the following conditions is met:
(i) The issuer is other than a foreign
private issuer, and the financial statements are the most recent financial
statements for the issuer that have been audited and reported on by a CPA in
accordance with the provisions of 17 C.F.R. 210.2-02, as adopted by reference
in K.A.R. 81-2-1; or
(ii) the
issuer is a foreign private issuer, and the financial statements are the most
recent financial statements for the issuer that have been filed with the SEC;
published electronically in English pursuant to 17 C.F.R. 240.12g3 - 2 (b), as
adopted by reference in K.A.R. 81-2-1; or prepared in accordance with generally
accepted accounting principles in the country of incorporation, audited in
compliance with the requirements of that jurisdiction, and reported on by an
accountant duly registered and in good standing in accordance with the
regulations of that jurisdiction.
(m) "EFD" means the electronic filing
depository administered by NASAA.
(n) "FINRA" means the financial industry
regulatory authority, inc., a self-regulatory organization registered with the
SEC pursuant to section 15A of the securities exchange act of 1934, 15 U.S.C.
§
78o-3, as adopted by reference in K.A.R. 81-2-1, that was organized upon
consolidation with NASD, its predecessor, and the regulatory functions of the
New York stock exchange.
(o) "GAAP"
means generally accepted accounting principles in the United States.
(p) "General solicitation" means an offer to
one or more persons by any of the following means or as a result of contact
initiated through any of these means:
(1)
Television, radio, or any broadcast medium;
(2) newspaper, magazine, periodical, or any
other publication of general circulation;
(3) poster, billboard, internet posting, or
other communication posted for the general public;
(4) brochure, flier, handbill, or similar
communication, unless the offeror has a substantial preexisting business
relationship or close family relationship with each of the offerees;
(5) seminar or group meeting, unless the
offeror has a substantial preexisting business relationship or close family
relationship with each of the offerees; or
(6) telephone, facsimile, mail, delivery
service, social media, or electronic communication, unless the offeror has a
substantial preexisting business relationship or close family relationship with
each of the offerees.
(q) "IARD" means the investment adviser
registration depository jointly administered by the SEC and NASAA and operated
by FINRA in conjunction with the CRD system.
(r) "NASAA" means the North American
securities administrators association, inc.
(s) "NASD" means the national association of
securities dealers, inc., a self-regulatory organization that was registered
with the SEC pursuant to section 15A of the securities exchange act of 1934, 15
U.S.C. §
78o-3, as adopted by reference in K.A.R. 81-2-1, until its
consolidation with the regulatory functions of the New York stock exchange upon
organization of its successor, FINRA.
(t) "Nasdaq" means the Nasdaq stock market,
which is comprised of the Nasdaq global select market; the Nasdaq global
market, formerly the Nasdaq national market; and the Nasdaq capital market,
formerly the Nasdaq smallcap market.
(u) "Officer" means a person charged with
managerial responsibility or control over a person, including the president,
vice president, secretary, treasurer, partner, and any other controlling
person.
(v) "Parent" means an
affiliate who controls another person.
(w) "PCAOB" means the public company
accounting oversight board.
(x)
"Predecessor" means a person, a major portion of whose business, assets, or
control has been acquired by another.
(y) "Promoter" means a person who, acting
alone or in conjunction with one or more other persons, directly or indirectly
founds, organizes, reorganizes, or controls the business, financing, or
operations of an issuer.
(z)
"Prospectus" means any prospectus defined in section 2(a)(10) of the securities
act of 1933, 15 U.S.C. 77 b(a)(10), as adopted by reference in K.A.R. 81-2-1.
This term shall not include any communication meeting the requirements of
K.S.A. 17-12a202(16), and amendments thereto, or SEC rule 134, 17 C.F.R.
230.134, as adopted by reference in K.A.R. 81-2-1.
(aa) "Registrant" means a person registered
under the act.
(bb) "SCOR" means
small company offering registration.
(cc) "SEC" means the United States securities
and exchange commission.
(dd)
"Subsidiary" means an affiliate who is controlled by another person.