Rules & Regulations of the State of Tennessee
Title 0780 - Commerce and Insurance
Subtitle 0780-04 - Division of Securities
Chapter 0780-04-03 - Industry Regulation
Section 0780-04-03-.04 - PERSONS DEEMED NOT TO BE BROKER-DEALERS
Universal Citation: TN Comp Rules and Regs 0780-04-03-.04
Current through September 24, 2024
(1) Associated Persons of an Issuer.
(a) An
associated person of an issuer of securities shall not be deemed to be a
broker-dealer by reason of his participation in the offer, sale, or transfer of
the securities of such issuer if the associated person:
1. Is not subject to a statutory
disqualification, as the term is defined in Section 3(a)(39) of the 1934 Act,
at the time of his participation;
2. 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;
3. Is not at the time of his participation an
associated person of a broker-dealer; and
4. Meets the conditions of any one of the
following subparts (1)(a)4.(i), (1)(a)4.(ii), or (1)(a)4.(iii) of this Rule:
(i) The associated person restricts his
participation to transactions involving offers, sales, or transfers of
securities.
(I) To a registered broker-dealer
or an institutional investor;
(II)
That are exempted from the registration requirements of the Act under T.C.A.
§
48-1-103(a)(11),
or that are offered, sold, or transferred pursuant to transactions that are
exempt from the registration requirements of the Act under T.C.A. §§
48-1-103(b)(2), (b)(9), or
(b)(10); or
(III) That are made pursuant to any of the
events described in T.C.A. §
48-1-102(15)(F).
(ii) 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;
(II) The associated person was not a
broker-dealer, or an associated person of a broker-dealer, within the preceding
twelve (12) months; and
(III) The
associated person does not participate in selling an offering of securities for
any issuer more than once every twelve (12) months other than in reliance on
subparts (1)(a)4.(i) or (1)(a)4.(iii) of this Rule, except that for securities
issued pursuant to SEC Rule 415 (
17 C.F.R.
§230.415) , the twelve (12) months shall
begin with the last sale of any security included within one (1) SEC Rule 415
registration.
(iii) The
associated person restricts his participation to any one (1) 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
Act or other offering document; or
(III) Performing ministerial and clerical
work involved in effecting any transaction.
(b) No presumption shall arise
that an associated person of an issuer has violated T.C.A. §
48-1-109 solely by reason of his
participation in the offer, sale, or transfer of securities of the issuer if he
does not meet the conditions specified in this Rule.
(c) Definitions. When used in this Rule:
1. The term "associated person of an issuer"
means any natural person who is a partner, officer, director, or employee of:
(i) The issuer;
(ii) A corporate general partner of a limited
partnership that is the issuer;
(iii) A company or partnership that controls,
is controlled by, or is under common control with, the issuer; or
(iv) An investment adviser, registered under
the Investment Advisers Act to an investment company registered under the
Investment Company Act, which is the issuer.
2. The term "associated person of a
broker-dealer" means any partner, officer, director, or branch manager of such
broker-dealer (or the person occupying a similar status or performing similar
functions), any person directly or indirectly controlling, controlled by, or
under common control with such broker-dealer, any agent of such broker-dealer,
or any employee of such broker-dealer, except that any person associated with a
broker-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-dealer in
that state solely because such person is an issuer of securities or an
associated person of an issuer of securities shall not be included in the
meaning of such term for purposes of this Rule.
(2) A retail or financing institution whose dealings in securities are limited to transactions for its own account with institutional investors or other retail or financing institutions in notes or other evidences of indebtedness secured by mortgages, deeds of trust, or agreements for the sale of real estate or personality, will not be deemed a broker-dealer if the entire mortgage, deed of trust, or agreement, together with all notes or other evidences of indebtedness secured thereby, is offered and sold as a unit.
(3) The exclusions set forth herein shall not exempt any person from the operation of the antifraud provisions of the Act.
Authority: T.C.A. §§ 48-1-102, 48-1-103, 48-1-109, 48-1-110(f), 48-1-115, 48-1-116, 48-1-121, §3(a)(39) of the Securities Act of 1933, and 17 C.F.R. §230.415.
Disclaimer: These regulations may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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