North Carolina SB 439: Securities/Investment Advisers/AB.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
1997 SESSION

S.L. 1997-419
SENATE BILL 439

AN ACT TO CONFORM THE NORTH CAROLINA SECURITIES ACT AND THE
INVESTMENT ADVISERS ACT TO THE NATIONAL SECURITIES MARKETS
IMPROVEMENT ACT OF 1996.

The General Assembly of North Carolina enacts:

I. Securities
Section 1. G.S. 78A-2(2)d.1. reads as rewritten:
"1. The security is exempted under subdivisions (1), (2), (3), (4),
(5), (7), (9), (10), (11), (13), or (14) of G.S. 78A-16, or the
security is a security covered under federal law, or the
transaction is exempted under G.S. 78A-17, and such
exemption has not been denied or revoked under G.S. 78A-18,
or the transaction is in a security covered under federal law, and
such exemption has not been denied or revoked under G.S.
78A-18, or".
Section 2. G.S. 78A-2(2) is amended by adding a new sub-subdivision to
read:
"g. An individual who represents an issuer in effecting transactions
in a security described in sub-subdivision (2)d. of this section or
a security covered under federal law, provided no commission
or other special remuneration is paid or given directly or
indirectly for soliciting any prospective purchaser in this State."
Section 3. G.S. 78A-2(9) reads as rewritten:
"(9) 'Salesman' means any individual other than a dealer who represents a
dealer in effecting or attempting to effect purchases or sales of
securities. 'Salesman' does not include an individual who represents a
dealer in effecting transactions in this State limited to those
transactions described in section 15(h)(2) of the Securities Exchange
Act of 1934 (15 U.S.C. § 78o(h)(2)). A partner, executive officer, or
director of a dealer, or a person occupying a similar status or
performing similar functions, is a salesman only if he that person
otherwise comes within this definition."
Section 4. G.S. 78A-2 is amended by adding a new subdivision to read:

Page 2 S.L. 1997-419 Senate Bill 439
"(11a) 'Security covered under federal law' means any security that is a
covered security under section 18(b) of the Securities Act of 1933 (15
U.S.C. § 77r(b)) or rules or regulations adopted under that section."
Section 5. G.S. 78A-17(16) reads as rewritten:
"(16) Any offer to purchase or to sell or any sale or issuance of a security
security, other than a security covered under federal law, pursuant to a
plan approved by the Administrator after a hearing conducted pursuant
to the provisions of G.S. 78A-30 of this Chapter. G.S. 78A-30."
Section 6. The title to Article 4 of Chapter 78A reads as rewritten:
"ARTICLE 4.
"Registration and Notice Filing Procedures of Securities."
Section 7. G.S. 78A-24 reads as rewritten:
"§ 78A-24. Registration requirement.
It is unlawful for any person to offer or sell any security in this State unless (i) it is
registered under this Chapter or Chapter, (ii) the security or transaction is exempted
under G.S. 78A-16 or 78A-17 and such exemption has not been denied or revoked
under G.S. 78A-18. G.S. 78A-18, or (iii) it is a security covered under federal law."
Section 8. G.S. 78A-30(d) reads as rewritten:
"(d) The Administrator's authority under this section shall extend to the issuance
or the delivery of securities or the delivery of other consideration:
(1) By any corporation organized under the laws of this State; or
(2) In any transaction which is subject to the registration or qualification
requirements of this Chapter or which would be so subject except for
the availability of an exemption under G.S. 78A-16 or 78A-17 or by
reason of G.S. 78A-2(8)(f). G.S. 78A-17, by reason of G.S. 78A-
2(8)f., or by reason that the security is a security covered under federal
law."
Section 9. Article 4 of Chapter 78A of the General Statutes is amended by
adding a new section to read:
"§ 78A-31. Notice filings for securities covered under federal law.
(a) The Administrator, by rule or order, may require the filing of any of the
following documents with regard to a security covered under section 18(b)(2) of the
Securities Act of 1933 (15 U.S.C. § 77r(b)(2)):
(1) Prior to the initial offer of the security in this State, all documents that
are part of a federal registration statement filed with the Securities and
Exchange Commission under the Securities Act of 1933, or, in lieu
thereof, a form prescribed by the Administrator, together with a
consent to service of process signed by the issuer and with the
payment of a notice filing fee of one-tenth of one percent (1/10 of 1%)
of the maximum aggregate offering price at which the securities
covered under federal law are to be offered in this State, but the notice
filing fee shall not be less than twenty-five dollars ($25.00) or more
than one thousand six hundred dollars ($1,600).

Senate Bill 439 S.L. 1997-419 Page 3
(2) After the initial offer of the security in this State, all documents that
are part of an amendment to a federal registration statement filed with
the Securities and Exchange Commission under the Securities Act of
1933, or, in lieu thereof, a form pre