Code of Massachusetts Regulations › 950 CMR - OFFICE OF THE SECRETARY OF THE COMMONWEALTH › Title 950 CMR 14.400 - GENERAL PROVISIONS › Section 14.406 - Administration of Chapter

Current through Register 1525, July 5, 2024
(A)(1) There is
			 hereby established in the Office of the State Secretary the Securities
			 Division. The Division shall, under the supervision of the Secretary and the
			 Deputy Secretary of the Commonwealth for the Commercial Bureau, administer and
			 enforce the M.G.L. c. 110A and
			 950 CMR 10.00 through
			 14.413,
			 and, without limiting the foregoing, may issue written interpretations of
			 M.G.L. c. 110A and
			 950 CMR 10.00 through
			 14.413.
			 The head of the Securities Division shall have the title "Director". He shall,
			 subject to the approval of the Secretary and the Deputy Secretary of State for
			 the Commercial Bureau, make, amend and rescind such rules, forms, and orders as
			 are necessary to carry out the statutory policy of M.G.L. c. 110A. The Director
			 is empowered to hear, examine, and investigate matters in accordance with
			 M.G.L. c. 110A. In the absence of the Director, the Deputy Secretary of the
			 Commonwealth for the Commercial Bureau is empowered to take any action allowed
			 to the Director under
			 950 CMR 10.00 through
			 14.413.
(A)(2) All writings shall be
			 addressed or delivered to:
Director, Securities Division
Office of the Secretary of the Commonwealth
John W. McCormack Building, 17th Floor
One Ashburton Place
Boston, MA 02108
All writings are deemed "filed" with the Secretary when
				received in the office of the Director.
(A)(3) Unless otherwise specifically provided
			 by law or
			 950 CMR 10.00 through
			 14.413,
			 computation of any time period referred to in M.G.L. c. 110A or
			 950 CMR 10.00 through
			 14.413
			 shall begin with the first day following the act which initiates the running of
			 the time period. The last day of the time period so computed is to be included
			 unless it is a Saturday, Sunday or legal holiday, or another day on which the
			 Division is closed, in which event the period shall run until the end of the
			 next business day. When a time period is less than seven days, intervening days
			 when the Division is closed shall be excluded from the computation.
(B)(1)950 CMR 14.406 applies to all
			 transactions effected by or on behalf of an employee of the Division, including
			 transactions for the accounts of other persons effected by the employee,
			 directly or indirectly, under a power of attorney or otherwise. An employee is
			 considered to have sufficient interest in the securities transactions of his or
			 her spouse or minor child so that such transactions must be reported and are
			 subject to all the terms of 950 CMR 14.406.
(B)(2) No employee shall effect or cause to
			 be effected any transaction in a security except for
bona fide
investment purposes. 950 CMR 14.406(B)(2) does not apply to securities
			 purchased by an employee prior to the commencement of his or her employment
			 with the Division. Any employee who believes the application of 950 CMR
			 14.406(B)(2) will result in undue hardship in a particular case may make
			 written application to the Secretary (through his Deputy) setting out, in
			 detail, the reasons for his belief and requesting a waiver.
(B)(3) No employee shall carry securities on
			 margin. Also, no employee shall borrow funds or securities, with or without
			 collateral, for the purpose of purchasing or carrying securities with the
			 proceeds unless prior approval of the Secretary has been secured.
(B)(4) No employee shall sell a security
			 which he does not own, or the sale of which is consummated by the delivery of a
			 security borrowed by or for such employee's account.
(B)(5) No employee shall purchase any
			 security which is the subject of a registration statement filed under M.G.L. c.
			 110A, § 301 or any security which is exempted from such registration
			 requirement under M.G.L. c. 110A, § 402 and for which the Division
			 receives communication regarding the exemption, for the period from the filing
			 with the Division of such registration statement or claim of exemption to 60
			 days after the effective date of the registration statement or, in the case of
			 claim of exemption, 60 days after the date of filing.
(B)(6) No employee shall purchase any
			 security in an offeror or target company after the first communication with the
			 Division regarding the pendency of a takeover bid or during the pendency of a
			 takeover bid subject to the provisions of M.G.L. c.110C. These provisions shall
			 apply for a period of 60 days after said bid is completed, withdrawn, otherwise
			 terminated or reasonably believed not to have been undertaken.
(B)(7) No employee shall have a beneficial
			 interest in any broker or dealer through ownership of securities or otherwise.
(B)(8) No employee shall purchase
			 any security which to his knowledge is involved in any pending investigation by
			 the Division or in any proceeding before the Division. Nor shall any employee
			 conduct any business with any respondent (broker, dealer, agent or otherwise)
			 who to his knowledge is involved in any pending investigation by the Division
			 or in any proceeding before the Division.
(B)(9) No employee shall purchase any
			 securities of any company which is in receivership or for which a petition has
			 been filed under Chapter 10 or Chapter 11 of the Bankruptcy Act.
(B)(10) Employees shall report every
			 transaction in any security within five business days to the Secretary through
			 the Director of the Securities Division. Other changes in holdings resulting
			 from inheritance or from reclassification, gifts, stock dividends or split ups,
			 for example, shall be reported promptly. In addition, every employee owning
			 securities shall, on or before May 1st of each year,
			 furnish a complete list of all securities held by him, his spouse or minor
			 child, as well as all securities held in a trust or estate of which he is a
			 fiduciary or beneficiary. New employees shall make the foregoing disclosure
			 prior to the commencement of employment with the Division.
(B)(11)
								950
			 CMR 14.406(B)(2) and (10) do
			 not apply to personal notes, individual real estate mortgages, U. S. Government
			 Securities and securities issued by building and loan association or
			 cooperatives.
(B)(12) The Secretary
			 or his designee is authorized to require the disposition of securities acquired
			 as a result of the unintentional violation of the provisions of
			 950
			 CMR 14.406(B). Any
			 intentional violation of
			 950
			 CMR 14.406(B)  shall be
			 reported to the Secretary for appropriate disciplinary
			 action.