Illinois Administrative Code › Title 14 - COMMERCE › Part 130 - REGULATIONS UNDER ILLINOIS SECURITIES LAW OF 1953 › Subpart B - DEFINITIONS › Section 130.200 - Definitions of Terms Used in the Act and the Rules

Current through Register Vol. 48, No. 28, July 12, 2024
a) As used in the Act and this Part, unless
				the context otherwise requires, the term:
"Act" means the Illinois Securities Law of 1953 [815 ILCS 5
				  ].
"Affiliate" of, or a person "affiliated" with, a specified
				  person means a person who, directly or indirectly through one or more
				  intermediaries, controls, or is controlled by, or is under common control with,
				  the person specified.
"Amount", when used in regard to securities, means the
				  principal amount if relating to evidences of indebtedness, the number of shares
				  if relating to shares, and the number of units if relating to any other kind of
				  security.
"Applicant" means the person making application for
				  registration or exemption.
"Certified", when used in regard to financial statements,
				  means examined and reported upon with an opinion expressed by an independent
				  certified public accountant.
"CFTC" means the Federal Commodity Futures Trading
				  Commission.
"Charter" includes articles of incorporation, a declaration
				  of trust, articles of association or partnership, or any similar instrument, as
				  amended, affecting (either with or without filing with any governmental agency)
				  the organization or creation of an incorporated or unincorporated
				  person.
"Correspondent" means the person authorized in the
				  application for registration or exemption to receive notices and communications
				  from the Secretary.
"Controlling Person" as used in Section 4.F of the Act shall
				  not include any sponsor of a unit investment trust after the completion of the
				  initial distribution.
"CRD" means the computer registration system for the
				  registration of dealers and salespersons known as the "Central Registration
				  Depository" operated by FINRA.
"Customer", as used in Section
				  130.270,
				  means any person for whom the futures commission merchant effects or intends to
				  effect transactions in futures, options on futures, or any other instruments
				  subject to CFTC jurisdiction.
"Director" means any director of a corporation or any person
				  performing similar functions with respect to any organization whether
				  incorporated or unincorporated.
"Employee" does not include a director, trustee, or
				  officer.
"Federal 1933 Act" means the Act of the Congress of the
				  United States known as the Securities Act of 1933 (
				  15 USC
				  77 a - 77aa ).
"Federal 1934 Act" means the Act of Congress of the United
				  States known as the "Securities Exchange Act of 1934" ( 15 USC 78 a - 78aa
				  ).
"Federal 1936 Act" means the Act of Congress of the United
				  States known as the Commodity Exchange Act of 1936 (
				  7 USC
				  1 et seq.).
"Federal 1940 Investment Company Act" means the Act of
				  Congress of the United States known as the Investment Company Act of 1940 (
				  15 USC
				  80a-1 through
				  80a-52 ).
"Federal 1940 Investment Advisers Act" means the Act of
				  Congress of the United States known as the Investment Advisers Act of 1940 (
				  15 USC
				  80b-1 through
				  80b-21 ).
"Federal Banking Act of 1933" means
				  12 USC
				  227.
"Federal Covered Investment Adviser Representative" means any
				  person with a place of business in this State who is an investment adviser
				  representative of a federal covered investment adviser.
"Federal Public Utility Holding Company Act of 1935" means
				  15 USC
				  79 through
				  79z-6 ).
"FINRA" means the self-regulatory organization registered
				  under the Federal 1934 Act, as defined in this Section, known as the Financial
				  Industry Regulatory Authority.
"Fiscal Year" means the annual accounting period or, if no
				  accounting period has been adopted, the calendar year ending on December
				  31.
"Futures" and "Futures Contracts", as used in Section
				  130.270, mean contracts of sale of a commodity for future delivery traded on or
				  subject to the rules of a contract market designated by the CFTC or traded on
				  or subject to the rules of any board of trade located outside the United
				  States, its territories or possessions.
"Futures Commission Merchants", as used in Section 130.270,
				  means individuals, associations, partnerships, corporations and trusts engaged
				  in soliciting or in accepting orders for the purchase or sale of any commodity
				  for future delivery on or subject to the rules of any contract market and that,
				  in or in connection with such solicitation or acceptance of orders, accepts any
				  money, securities, or property (or extends credit in lieu thereof) to margin,
				  guarantee or secure any trades or contracts that result or may result
				  therefrom.
"Hearing" means a proceeding conducted by the Securities
				  Department in which the rights, privileges, immunities, duties or obligations
				  of any person or party are required by law to be determined by the Secretary
				  only after opportunity for a hearing.
"Hearing Officer" means the designee of the Secretary or the
				  Securities Director who, pursuant to Section 11 of the Act, is designated in
				  the Notice of Hearing to preside at a hearing conducted pursuant to Section 11
				  of the Act or any person so designated as a substitute hearing officer.
"IARD" means the computer web-based registration system for
				  the registration of investment advisers and investment adviser representatives
				  known as the Investment Adviser Registration Depository operated by
				  FINRA.
"Identifying Statement" means a written or oral communication
				  or advertisement meeting the requirements of Section
				  130.210(b)(1).
"Insolvency" or "Insolvent" means the inability to pay debts
				  and obligations when due or when current liabilities exceed current assets. Any
				  party regulated by this Part claiming insolvency shall file with the Securities
				  Department a balance sheet prepared as of a current date and executed and
				  verified by the chief financial officer of the issuer.
"Internal Revenue Code" means the Internal Revenue Code of
				  1986 (
				  26
				  USC 1 -
				  9602
				  ).
"Majority-Owned Subsidiary" means a subsidiary more than 50%
				  of whose outstanding securities, which represent the right, other than as
				  affected by events of default, to vote for the election of directors, is owned
				  by the subsidiary's parent and/or one or more of the parent's other
				  majority-owned subsidiaries.
"Material", when used to qualify a requirement for the
				  furnishing of information as to any subject, limits the information required to
				  those matters as to which there is a substantial likelihood that a reasonable
				  investor would consider it important in deciding upon a course of action to be
				  taken, including, but without limitation, purchasing, selling or holding the
				  security or securities involved, or accepting or rejecting an offer or proposal
				  made with regard to any security or securities.
"Nonaccredited Investor", as used in Section
				  130.420,
				  means a person who is not a person set forth in Section 4.C, 4.H, 4.R or 4.S of
				  the Act.
"Office", unless otherwise clarified, refers to the Office of
				  the Securities Department of the Secretary of State, and not to any particular
				  address or location.
"Officer" means the president; any vice president in charge
				  of a principal business unit, division or function; the secretary; the
				  treasurer; any principal financial officer, comptroller or principal accounting
				  officer; any other officer performing a principal policy-making function; and
				  any other person performing similar functions with respect to any organization
				  whether incorporated or unincorporated.
"Options on Futures", as used in Section 130.270, means puts
				  or calls on a futures contract traded on or subject to the rules of a contract
				  market designated by the CFTC or traded or subject to the rules of any board of
				  trade located outside the United States, its territories or possessions.
"Pacific Coast Stock Exchange, Inc." means the Pacific Stock
				  Exchange, Inc.
"Parent" of a specified person means an affiliate controlling
				  such person directly or indirectly through one or more intermediaries.
"Party" means any person named as a petitioner or a
				  respondent in a hearing conducted by the Securities Department.
"Person" means a natural person, a corporation, a
				  partnership, a limited partnership, a limited liability company, a limited
				  liability limited partnership, an association, a joint stock company, a trust
				  or any unincorporated organization, except that, as used in this Section, the
				  word "trust" includes only a trust where the interest or the interests of the
				  beneficiary or beneficiaries are a security.
"Place of Business" of a federal covered investment adviser
				  representative means a location at which the federal covered investment adviser
				  representative provides investment advisory services, solicits, meets with, or
				  otherwise communicates with clients, and any other location that is held out to
				  the general public as a location at which the investment adviser representative
				  provides investment advisory services, solicits, meets with, or otherwise
				  communicates with clients.
"Predecessor" means a person, the major portion of the
				  business and assets of which another person acquired in a single succession or
				  in a series of related successions in each of which the acquiring person
				  acquired the major portion of the business and assets of the acquired
				  person.
"Preliminary Prospectus" means a document meeting the
				  requirements of Section
				  130.210(b)(2).
"Principal Underwriter" means an underwriter in privity of
				  contract with the issuer of the securities as to which that person is an
				  underwriter.
"Promoter" means any person who, acting alone or in
				  conjunction with one or more other persons, directly or indirectly takes
				  initiative in founding and organizing the business or enterprise of an issuer;
				  or any person who, in connection with the founding and organizing of the
				  business or enterprise of an issuer, directly or indirectly receives in
				  consideration of services or property, or both, 10% or more of any class of
				  securities of the issuer or 10% or more of the proceeds from the sale of any
				  class of securities of the issuer. However, a person who receives the
				  securities or proceeds either solely as underwriting commissions or solely in
				  consideration of property shall not be deemed a promoter within the meaning of
				  this definition if the person does not otherwise take part in founding and
				  organizing the enterprise.
"Prospectus" means any prospectus, notice, circular,
				  advertisement, letter or communication, written or by radio, television or
				  other communications medium that offers any security for sale or confirms the
				  sale of any security; except that a communication sent or given after the
				  effective date of the registration of the security (other than a prospectus
				  permitted under section 10(b) of the Federal 1933 Act) shall not be deemed a
				  prospectus if it is proved that, prior to or at the same time as the
				  communication, a written prospectus, meeting the requirements of section 10(a)
				  of the Federal 1933 Act at the time of the communication, was sent or given to
				  the person to whom the communication was made, and a notice, circular,
				  advertisement, letter or communication in respect to a security shall not be
				  deemed to be a prospectus if it states from whom a written prospectus meeting
				  the requirements of Section 5 of the Act may be obtained and, in addition, does
				  no more than identify the security, state the price thereof, state by whom
				  orders will be executed, and contain such other information as the Secretary by
				  this Part deems necessary or appropriate in the public interest and for the
				  protection of investors and, subject to such terms and conditions as may be
				  described therein, may permit.
"Regulated Account", as used in Section 130.270, means a
				  customer segregation account subject to
				  17
				  CFR 1.20 (August 1, 1997); provided, however,
				  that, where such regulations do not permit to be maintained in such an account
				  or require to be maintained in a separate regulated account funds or securities
				  in proprietary accounts or funds or securities used as margin for or excess
				  funds related to futures contracts, options on futures or any other instruments
				  subject to CFTC jurisdiction that trade outside the United States, its
				  territories or possessions, the term "regulated account" means such separate
				  regulated account or any other account subject to
				  17 CFR
				  1.31 et seq. (August 1, 1997).
"Registrant" means the issuer of the securities that are the
				  subject of the application for registration.
"Rules" refers to all rules adopted by the Secretary pursuant
				  to the Act.
"Share" means a share of stock in a corporation or unit of
				  interest in an unincorporated person.
"SEC" means the United States Securities and Exchange
				  Commission.
"Secretary of State" or "Secretary" means the Secretary of
				  State of Illinois.
"Section" refers to a Section of this Part unless a reference
				  to the Act is specifically made.
"Securities Department" means the Securities Department of
				  the Office of the Secretary of State.
"Securities Protection Act of 1970" means the Securities
				  Investor Protection Act of 1970 ( 15 USC 78 aaa et seq.).
"Segregated Customer Funds", as used in Section 130.270,
				  means funds subject to
				  17
				  CFR 1.20 (August 1, 1997).
"SRD" means the automated computer registration system for
				  the registration and renewal of registration of securities, investment fund
				  shares and unit investment trusts registered under the Federal 1933 Act and
				  Federal 1940 Investment Company Act known as the Securities Registration
				  Depository.
"Significant Subsidiary" means a subsidiary for which:
the assets of the subsidiary, or the investments in and
				  advances to the subsidiary by its parent and the parent's other subsidiaries,
				  if any, exceed 15% of the assets of the parent and its subsidiaries on a
				  consolidated basis; or
the sales and operating revenues of the subsidiary exceed 15%
				  of the sales and operating revenues of its parent and the parent's subsidiaries
				  on a consolidated basis.
In determining whether a subsidiary is a significant
				  subsidiary, such a subsidiary shall be considered in the aggregate with any
				  subsidiaries of which it is the parent.
"State Bond and Mortgage Company" means the company currently
				  known as SBM Certificate Company or any successor company.
"Subsidiary" of a specified person is an affiliate controlled
				  by such person directly or indirectly through one or more intermediaries. (See
				  also "Majority-Owned Subsidiary", "Significant Subsidiary" and "Totally-Held
				  Subsidiary".)
"Succession" means the direct acquisition of the assets
				  comprising a going business, whether by merger, consolidation, purchase, or
				  other direct transfer. The term does not include the acquisition of control of
				  a business unless followed by the direct acquisition of its assets. The terms
				  "succeed" and "successor" have the same meaning as "succession".
"Totally-Held Subsidiary" means a subsidiary substantially
				  all of whose outstanding securities are owned by its parent and/or the parent's
				  other totally-held subsidiaries, and that is not indebted to any person other
				  than its parent and/or the parent's other totally-held subsidiaries in an
				  amount that is material in relation to the particular subsidiary, excepting
				  indebtedness incurred in the ordinary course of business that is not overdue
				  and that matures within one year from the date of its creation, whether
				  evidenced by securities or not.
"Unit Investment Trust" means an investment company
				  that:
is organized under a trust indenture, agency or custodianship
				  contract or similar instrument, does not have a board of directors; and
issues only redeemable securities, each of which represents
				  an undivided interest in a unit of specified securities.
The term "unit investment trust" does not include a voting
				  trust.
"Unsolicited Transaction", as used in Section 130.270, means
				  a transaction that is not effected in a discretionary account or recommended to
				  a customer by the futures commission merchant, an associated person of a
				  futures commission merchant, a business affiliate that is controlled by,
				  controlling, or under common control with, the futures commission merchant, or
				  an introducing broker that is guaranteed by the futures commission
				  merchant.
b) A Section in
				this Part that defines a term without express reference to the Act or to this
				Part defines that term for all purposes as used both in the Act and in this
				Part. Terms defined in the Act and not defined in this Part have the meanings
				given them in the Act.