reglab/statecodes huggingface dataset:
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.1 - Securities Regulation › Rule 6.10.148 - NOTICE FILINGS FOR OFFERINGS OF FEDERAL COVERED SECURITIES UNDER 18(b) (3) or (4) of the securities act of 1933

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  6.10.209
30-10-107, MCA; IMP,
					 30-10-107,
					 30-10-201,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.1 - Securities Regulation › Rule 6.10.149 - NOTICE FILING PROCEDURES FOR RULE 506 OFFERINGS

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  6.10.210
30-10-107, MCA; IMP,
					 30-10-202,
					 30-10-211,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.1 - Securities Regulation › Rule 6.10.150 - INCORPORATION BY REFERENCE CONSENTS TO SERVICE OF PROCESS PREVIOUSLY FILED

Current through Register Vol. 13, July 5, 2024
(1) For purposes of consents to service of
				process required to be filed pursuant to
				30-10-201 and
				30-10-211, MCA, or the rules
				promulgated thereunder, a broker-dealer, agent, federal covered adviser,
				investment adviser, investment adviser representative, or issuer may
				incorporate by reference any consent to service of process previously filed
				with the commissioner by such person or entity.
30-10-107, MCA; IMP,
					 30-10-201,
					 30-10-202,
					 30-10-209 and
					 30-10-211,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.2 - Offerings › Rule 6.10.201 - SALES MATERIALS

Current through Register Vol. 13, July 5, 2024
(1) Except as
				provided in (3), (4), (5), and (6) of this rule, sales material to be used in
				connection with the offer or sale of securities to persons in this state must
				be filed with the commissioner at least ten days prior to being used in this
				state.
(2) The commissioner may by
				order disallow the use of sales material filed pursuant to this rule if the
				commissioner finds that such an order is necessary to protect the investor or a
				person engaged in securities transactions and is in the public interest. Unless
				the commissioner disallows the use of sales material filed pursuant to this
				rule within ten days from the date filed, the sales material may be
				disseminated.
(3) This rule does
				not apply to sales material that is used exclusively in connection with the
				offer or sale of securities that are registered in this state by notification
				or coordination pursuant to
				30-10-203 or
				30-10-204, MCA.
(4) This rule does not apply to sales
				material that is used exclusively by a broker-dealer registered pursuant to
				30-10-201, MCA, if the sales
				material conforms to the provisions of section 2210 of the conduct rules of
				Financial Industry Regulatory Authority, Inc. (FINRA).
(5) This rule does not apply to sales
				material that is used exclusively in connection with the offer or sale of
				securities that are exempt from registration pursuant to
				30-10-104 or
				30-10-105, MCA, or the rules
				thereunder, unless the exemption statute or rule specifically provides that
				sales material must be filed.
(6)
				This rule does not apply to sales material that is used exclusively in
				connection with the offer or sale of a security that is a federal covered
				security.
(7) The commissioner may,
				upon written request and for good cause shown by a person wishing to use sales
				material, waive any of the requirements of this rule.
30-10-107, MCA; IMP,
					 30-10-107,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.2 - Offerings › Rule 6.10.202 - PROMOTIONAL SECURITIES-ESCROW

Current through Register Vol. 13, July 5, 2024
(1) The
				commissioner may require that promotional securities be placed in escrow with a
				financial institution approved by the commissioner for a period of 2 years from
				the date that the registration becomes effective, or for such other period, or
				upon such terms and conditions as the commissioner may, in his discretion,
				require.
(2) An issuer may not sell
				or transfer an escrowed promotional security or an interest in one, except by
				will, intestate succession, or other similar methods, without first obtaining
				written consent from the commissioner. The owner of an escrowed promotional
				security may exercise voting rights that attach to that security.
30-10-107, MCA; IMP,
					 30-10-107,
					 30-10-206,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.2 - Offerings › Rule 6.10.203 - PROMOTIONAL SECURITIES-REQUIRED WAIVERS

Current through Register Vol. 13, July 5, 2024
(1)
				Each promotional security must contain a provision waiving dividend rights and
				rights of participation, in the distribution of assets in the event of
				liquidation or dissolution, in favor of shareholders who paid cash or its
				equivalent for their securities that are not promotional securities.
(2) A waiver remains in effect only while the
				security is in escrow.
30-10-107, MCA; IMP,
					 30-10-107,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.2 - Offerings › Rule 6.10.205 - NOTICE OF TERMINATION OF OFFERING-CHANGE OF OFFICERS

Current through Register Vol. 13, July 5, 2024
(1) An issuer that has completed,
				discontinued, or terminated the sale of securities registered with the
				commissioner shall annually while registered and upon completion,
				discontinuance, or termination of the sale of registered securities notify the
				commissioner in writing and shall also submit a complete sales report that
				includes, for this state, the number of units and the aggregate dollar amount
				of sales.
(2) Until written notice
				has been provided as required by (1) of this rule, the commissioner shall be
				notified of each change in the officers, directors, trustees, partners, or
				other principal members of a registrant within 15 days of the change.
30-10-107, MCA; IMP,
					 30-10-107,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.2 - Offerings › Rule 6.10.206 - STOCK SUBSCRIPTION AGREEMENT-NO DEFAULT OR PENALTY PROVISION

Current through Register Vol. 13, July 5, 2024
(1) A stock purchase agreement or stock
				subscription agreement may not contain a default or penalty
				provision.
30-10-107, MCA; IMP,
					 30-10-105,
					 30-10-107,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.2 - Offerings › Rule 6.10.208 - NOTICE FILINGS FOR OFFERINGS OF INVESTMENT COMPANY SECURITIES

Current through Register Vol. 13, July 5, 2024
(1) A notice filing for a security that is a
				federal covered security under 18(b) (2) of the Securities Act of 1933 shall
				consist of the fees required under
				30-10-209, MCA, a Form U-2,
				uniform consent to service of process, unless incorporated by reference by ARM
				6.10.150, and either a copy of the
				issuer's federal registration statement as filed with the securities and
				exchange commissioner or an originally executed Form NF, uniform notice filing
				form.
(2) A notice filing under (1)
				is effective for one year following the date of the commissioner's receipt of
				the filing. A notice filing may be renewed by the filing with the commissioner,
				prior to the expiration date of the notice filing, payment of fees required
				under 30-10-209, MCA, together with
				either a current copy of the issuer's federal registration statement or an
				originally executed Form NF. A renewed notice filing shall be effective for one
				year commencing upon the expiration of the notice filing being
				renewed.
(3) A report detailing the
				amount of shares sold in this state shall be filed with the commissioner on
				Form NF within 60 days after the annual expiration of a notice
				filing.
(4) A notice filing may be
				amended to increase the amount of shares offered in this state by filing with
				the commissioner an amended Form NF together with any additional fees required
				by 30-10-209, MCA.
(5) Except as provided in (6), an investment
				company that has elected to file a Form NF in lieu of its federal registration
				statement is not required to file with the commissioner a copy of any document
				that is part of a federal registration statement filed with the securities and
				exchange commissioner or is part of an amendment to a federal registration
				statement.
(6) An investment
				company that has filed a Form NF shall file, upon written request of the
				commissioner and within the time period set forth in the request, a copy of any
				document identified in the request that is part of the federal registration
				statement filed with the securities and exchange commission or part of an
				amendment to a federal registration statement.
30-10-107, MCA; IMP,
					 30-10-202,
					 30-10-211,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.2 - Offerings › Rule 6.10.209 - NOTICE FILINGS FOR OFFERINGS OF FEDERAL COVERED SECURITIES UNDER 18(b)(3) or (4) OF THE SECURITIES ACT OF 1933

Current through Register Vol. 13, July 5, 2024
(1) Except as
				provided in (3), a notice filing for a security that is a federal covered
				security under 18(b)(3) or (4) of the Securities Act of 1933 shall consist of:
(a) a letter explaining that the security is
				a federal covered security pursuant to 18(b)(3) or (4) of the Securities Act of
				1933;
(b) a U-2 consent to service
				of process form; and
(c) a fee of
				$200.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.2 - Offerings › Rule 6.10.210 - NOTICE FILING PROCEDURES FOR RULE 506 OFFERINGS

Current through Register Vol. 13, July 5, 2024
(1) An issuer
				offering a security that is a covered security under 18(b)(4)(D) of the
				Securities Act of 1933 shall file a notice on Form D (
				17 CFR
				239.500 ), and pay the fee required by
				30-10-209(1)(a) and (1)(c), MCA, no later than 15 days after the first sale of
				the security in this state. An issuer shall file a renewal for each succeeding
				year that a security is offered in this state, and pay the fee required by
				30-10-209(1)(b),
				MCA.
(2) For purposes of this rule,
				the SEC "Form D" is defined as the document, as adopted by the Securities and
				Exchange Commission and in effect on September 1, 1996, as may be amended by
				the SEC from time to time, entitled "Form D; notice of sale of securities
				pursuant to regulation D, section 4(6), and/or uniform limited offering
				exemption," including part E and the Appendix.
(3) Any Form D filing or renewal required
				under (1) must be submitted to the commissioner through the Electronic Filing
				Depository (EFD) operated by the North American Securities Administrators
				Association, Inc., and must comply with the following:
(a) All filing or renewal fees shall likewise
				be submitted through the EFD;
(b) A
				person duly authorized by the issuer shall affix his or her electronic
				signature to the Form D filing by typing his or her name in the appropriate
				fields and submitting the filing through the EFD, which shall constitute
				irrefutable evidence of legal signature by the individual whose name is typed
				on the filing; and
(c) Any
				documents or fees required under (1) to be filed with the commissioner that are
				not permitted to be filed with, or cannot be accepted by, the EFD must be filed
				directly with the commissioner, and must be accompanied by a statement from the
				issuer providing the date the filing was attempted through the EFD.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.3 - Exemptions › Rule 6.10.301 - MONTANA LIMITED OFFERING EXEMPTION

Current through Register Vol. 13, July 5, 2024
(1) By the
				authority delegated to the commissioner in
				30-10-105, MCA, an offer or sale
				of securities offered or sold in compliance with Securities Act of 1933,
				Regulation D, Rules 230.501 through 230.503 and 230.505 (
				17 CFR
				230.501,
				230.502,
				230.503 and
				230.505 (1998)), is exempt from
				the registration requirements of
				30-10-202, MCA.
(2) Each person who offers or sells
				securities in this state to nonaccredited and/or accredited investors, as
				defined in Securities Act of 1933, Regulation D, Rule 230.501(a)(5) through
				230.501(a)(7), shall be registered in accordance with
				30-10-201, MCA.
(3) An exemption under this rule is not
				available for the securities of an issuer if any of the parties described in
				Securities Act of 1933, Regulation A, Rule 230.262:
(a) has filed a registration statement that
				is the subject of a currently effective registration stop order entered
				pursuant to a state's securities law within five years prior to the filing of
				the notice required under this exemption;
(b) has been convicted within five years
				prior to the filing if the notice required under this exemption of a felony or
				misdemeanor in connection with the offer, purchase, or sale of a security or a
				felony involving fraud or deceit, including but not limited to forgery,
				embezzlement, obtaining money under false pretenses, larceny, or conspiracy to
				defraud;
(c) is currently subject
				to a state administrative enforcement order or judgment entered by that state's
				securities administrator within five years prior to the filing of the notice
				required under this exemption or is subject to a state's administrative
				enforcement order or judgment in which fraud or deceit, including but not
				limited to making untrue statements of material facts and omitting to state
				material facts, was found and the order or judgment was entered within five
				years prior to the filing of the notice required under this
				exemption;
(d) is subject to a
				state's administrative enforcement order or judgment that prohibits, denies, or
				revokes the use of an exemption from registration in connection with the offer,
				purchase, or sale of securities; or
(e) is currently subject to an order,
				judgment, or decree of a court of competent jurisdiction temporarily or
				preliminarily restraining or enjoining, or is subject to an order, judgment, or
				decree of a court of competent jurisdiction, permanently restraining or
				enjoining the party from engaging in or continuing any conduct or practice in
				connection with the purchase or sale of a security or involving the making of a
				false filing with the state entered within five years prior to the filing of
				the notice required under this exemption.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.3 - Exemptions › Rule 6.10.302 - FOREIGN SAVINGS AND LOAN ASSOCIATION EXEMPTION

Current through Register Vol. 13, July 5, 2024
(1) By authority delegated to the
				commissioner in
				30-10-105, MCA, a transaction in a
				security issued by and representing an interest in or a debt of or guaranteed
				by a savings and loan association or a building and loan or similar
				association, other than those described in
				30-10-104(4),
				MCA, is exempt from the registration requirements of
				30-10-202, MCA, if:
(a) it is sold through a registered
				broker-dealer and registered salesperson;
(b) the issuer is a member of the federal
				deposit insurance corporation;
(c)
				in the case of a certificate of deposit, the sums representing the certificate
				of deposit are fully insured by the federal deposit insurance
				corporation.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.3 - Exemptions › Rule 6.10.303 - SECOND TIER LIMITED OFFERING EXEMPTION

Current through Register Vol. 13, July 5, 2024
(1)
				Pursuant to
				30-10-105(8)(b),
				MCA, securities offered or sold in accordance with all the conditions set forth
				in this rule are exempt from the requirements of
				30-10-201
				through
				30-10-207,
				MCA. This exemption may be cited as the "second tier limited offering
				exemption."
(2) An issuer using the
				second tier limited offering exemption shall file with the Commissioner of
				Securities:
(a) an original, manually signed
				copy of the second tier limited offering exemption form;
(b) a consent to service of process which is
				attached to and made part of the second tier limited offering exemption form;
				and
(c) such other information as
				the Commissioner of Securities may require.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.4 - Fraudulent and Unethical Practices › Rule 6.10.401 - FRAUDULENT AND UNETHICAL PRACTICES PROHIBITED BY BROKER-DEALERS AND SALESMEN

Current through Register Vol. 13, July 5, 2024
(1) For purposes of
				30-10-201 and
				30-10-301, MCA, fraudulent and
				unethical practices means, but is not limited to:
(a) engaging in a pattern of unreasonable and
				unjustifiable delays in either or both the:
(i) delivery of securities purchased by a
				customer;
(ii) payment upon request
				of free credit balances reflecting completed transactions of a
				customer;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.4 - Fraudulent and Unethical Practices › Rule 6.10.403 - SANCTIONS AGAINST FRAUDULENT FOREIGN SECURITIES AND THEIR DEALERS

Current through Register Vol. 13, July 5, 2024
(1) The commissioner may by order revoke or
				suspend any foreign security exemption with respect to any such security or the
				use of such exemption by any dealer if he finds that the further sale in this
				state of such security, or sales by a broker-dealer, would work, or tend to
				work, a fraud or deceit on purchasers or prospective purchasers.
30-10-104, MCA; IMP,
					 30-10-104,
					 30-10-107,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.5 - Broker-Dealers and Investment Advisers › Rule 6.10.501 - REGISTRATION AND EXAMINATION - SECURITIES SALESPERSON, INVESTMENT ADVISER REPRESENTATIVES, BROKER-DEALERS, AND INVESTMENT ADVISERS

Current through Register Vol. 13, July 5, 2024
(1) To become registered in this state as a
				securities salesperson or an investment adviser representative, the individual
				applicant shall pass the Financial Industry Regulatory Authority, Inc. (FINRA)
				uniform securities agent state law exam or the uniform combined state law
				examination, or an examination designated by the commissioner. The applicant
				must also complete an application form described in (2). A salesperson applying
				to register with an issuer does not have to take an examination.
(2) Each application for registration in this
				state must be made on the most current revised uniform application form as
				adopted by the North American Securities Administrators Association (NASAA),
				unless the commissioner, by order, designates another form. Broker-dealers
				shall use FINRA form BD, investment adviser representatives shall use FINRA
				form ADV, and securities salespersons and investment adviser representatives
				shall use FINRA form U-4.
(3)
				Except as provided in (3)(a) and (b), all applications, amendments, reports,
				notices, related filings, and fees required to be filed with the commissioner
				shall be filed electronically with and transmitted to the FINRA's investment
				adviser registration depositor (IARD) for investment advisers and investment
				adviser representatives or to the FINRA's central registration depository (CRD)
				for broker-dealers and salespersons:
(a)
				except as provided in (3)(b), salespersons representing issuers, salespersons
				of non-FINRA firms and broker-dealers that are not members of the FINRA shall
				file all applications, amendments, reports, notices, related filings, and fees
				directly with the commissioner;
(b)
				in the commissioner's discretion, the commissioner may by order provide for a
				manner of filing an application to register or an application to terminate
				registration different from the procedures provided in this rule;
(c) notwithstanding (3) of this rule, the
				electronic filing of any particular document and the collection of related
				processing fees shall not be required until such time as IARD provides for
				receipt of such filings and fees. Any documents or fees required to be filed
				with the commissioner that are not permitted to be filed with or cannot be
				accepted by IARD shall be filed directly with the commissioner.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.5 - Broker-Dealers and Investment Advisers › Rule 6.10.502 - CANADIAN BROKER-DEALERS AND SALESPERSONS

Current through Register Vol. 13, July 5, 2024
(1) A Canadian broker-dealer that is resident
				in Canada, and has no office or other physical presence in the United States,
				and is not an office of, branch of, or a natural person associated with a
				broker-dealer otherwise registered in the United States may transact business
				in this state without registering as a broker-dealer pursuant to
				30-10-201, MCA, under the
				following conditions:
(a) the business
				transacted by the Canadian broker-dealer must be limited to:
(i) transactions subject to the exemption
				provided by
				30-10-105(7),
				MCA;
(ii) transactions with or for
				a Canadian person who is temporarily present in this state and with whom the
				Canadian broker-dealer had a bona fide customer relationship before the person
				entered this state; or
(iii)
				transactions with or for a Canadian person in a self-directed tax advantaged
				retirement plan in Canada of which that person is the holder or contributor;
				and
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.5 - Broker-Dealers and Investment Advisers › Rule 6.10.503 - MINIMUM FINANCIAL REQUIREMENTS AND FINANCIAL REPORTING OF BROKER-DEALERS

Current through Register Vol. 13, July 5, 2024
(1) Each
				broker-dealer registered or required to be registered under this act shall
				comply with SEC rule 15c3-1 ( 17 CFR 240.15c3 - 1 (1998)), 15c3-2 ( 17 CFR
				240.15c3 - 2 (1998)), and 15c3-3 ( 17 CFR 240.15c-3 (1998)).
(2) Each broker-dealer registered or required
				to be registered under this act shall comply with SEC rule 17a-11 (
				17 CFR
				240.17a-11 (1998)) and shall file with the
				commissioner upon request copies of notices and reports required under SEC
				rules 17a-5 ( 17 CFR
				240.17a-5 (1998)), 17a-10(
				17 CFR
				240.17a-10 (1998)), and 17a-11 ( 17 CFR
				240.17 a- 11 (1998)).
(3) The
				commissioner adopts and incorporates by reference the rules cited in (1) and
				(2), which establish net capitalization requirements, customer free credit
				balance requirements, customer protection reserves, net capital decline
				reporting requirements, and capitalization reporting requirements. A copy of
				these rules may be obtained from the Securities Department, 840 Helena Avenue,
				Helena, MT 59601.
30-10-107, MCA; IMP,
					 30-10-107,
					 30-10-201,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.5 - Broker-Dealers and Investment Advisers › Rule 6.10.504 - BROKER-DEALER BOOKS AND RECORDS

Current through Register Vol. 13, July 5, 2024
(1) Unless
				otherwise provided by order of the commissioner, each registered broker-dealer
				shall make, maintain, and preserve books and records in compliance with the
				United States Securities and Exchange Commission rules 17a-3 ( 17 CFR 240.17 a-
				3 (1998)), 17a-4 ( 17 CFR
				240.17a-4 (1998)), and 15c2-11 ( 17 CFR
				240.15c2 - 11 (1998)) which are adopted and incorporated by this reference, and
				establish recordkeeping requirements related to the conduct of the business as
				a securities broker-dealer. Copies of these rules may be obtained from the
				Commissioner of Securities, 840 Helena Avenue, Helena, MT 59601.
(2) To the extent that the Securities and
				Exchange Commission promulgates changes to the above-referenced rules, dealers
				in compliance with such rules as amended shall not be subject to enforcement
				action by the commissioner for violation of this rule to the extent that the
				violation results solely from the dealer's compliance with the amended
				rule.
30-10-107, MCA; IMP,
					 30-10-201,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.5 - Broker-Dealers and Investment Advisers › Rule 6.10.506 - MINIMUM FINANCIAL REQUIREMENTS FOR INVESTMENT ADVISERS

Current through Register Vol. 13, July 5, 2024
(1) An investment adviser registered or
				required to be registered under the Act who has custody of client funds or
				securities shall maintain at all times a minimum net worth of $35,000, and
				every investment adviser registered or required to be registered under the Act
				who has discretionary authority over client funds or securities but does not
				have custody of client funds or securities shall maintain at all times a
				minimum net worth of $10,000.
(2)
				An investment adviser registered or required to be registered under the Act who
				has custody or discretion of client funds or securities, but does not meet the
				minimum net worth requirements in (1) shall be bonded in the amount of the net
				worth deficiency rounded up to the nearest $5,000. Any bond required by this
				section shall be:
(a) in the form determined
				by the director;
(b) issued by a
				company qualified to do business in this state; and
(c) subject to the claim of all clients of
				the investment adviser regardless of the client's state of residence.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.5 - Broker-Dealers and Investment Advisers › Rule 6.10.507 - BONDING REQUIREMENTS FOR CERTAIN INVESTMENT ADVISERS

Current through Register Vol. 13, July 5, 2024
(1) Any bond required by this rule shall be
				issued by a company qualified to do business in this state in the form
				determined by the commissioner and shall be subject to the claims of all
				clients of such investment adviser regardless of the client's state of
				residence.
(a) every investment adviser
				registered or required to be registered under the Act having custody of or
				discretionary authority over client funds or securities shall be bonded in an
				amount determined by the commissioner based upon the number of clients and the
				total assets under management of the investment adviser;
(b) every investment adviser registered or
				required to be registered under the Act who has custody or discretion of client
				funds or securities who does not meet the minimum net worth standard in ARM
				6.10.140(1) shall
				be bonded in the amount of the net worth deficiency rounded up to the nearest
				$5,000.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.5 - Broker-Dealers and Investment Advisers › Rule 6.10.508 - CUSTODY OF CLIENT FUNDS OR SECURITIES BY INVESTMENT ADVISERS

Current through Register Vol. 13, July 5, 2024
(1) It shall be unlawful for any investment
				adviser to take, or have custody of, any securities or funds of any client
				unless:
(a) the investment adviser notifies
				the commissioner in writing that the investment adviser has, or may have,
				custody. Such notification may be given on Form ADV;
(b) the securities of each client are
				segregated, marked to identify the particular client having the beneficial
				interest therein, and held in safekeeping in some place reasonably free from
				risk of destruction or other loss:
(i) all
				client funds are deposited in one or more bank accounts containing only
				clients' funds;
(ii) such account
				or accounts are maintained in the name of the investment adviser as agent or
				trustee for such clients; and
(iii)
				the investment adviser maintains a separate record for each such account
				showing the name and address of the bank where the account is maintained, the
				dates and amounts of deposits in and withdrawals from the account, and the
				exact amount of each client's beneficial interest in the account;
(c) immediately after accepting
				custody or possession of funds or securities from any client, the investment
				adviser notifies the client in writing of the place where, and the manner in
				which, the funds and securities will be maintained and subsequently, if and
				when there is a change in the place where, or the manner in which, the funds or
				securities are maintained, the investment adviser gives written notice thereof
				to the client;
(d) at least once
				every three months, the investment adviser sends each client an itemized
				statement showing the funds and securities in the investment adviser's custody
				at the end of such period, and all debits, credits, and transactions in the
				client's account during such period; and
(e) at least once every calendar year, an
				independent certified public accountant or public accountant verifies all
				client funds and securities by actual examination at a time chosen by the
				accountant without prior notice to the investment adviser. A report stating
				that such accountant has made an examination of such funds and securities, and
				describing the nature and extent of the examination, shall be filed with the
				commissioner promptly after each such examination;
(f) for purposes of this rule, a person will
				be deemed to have custody if said person directly, or indirectly, holds client
				funds or securities, has any authority to obtain possession of them, or has the
				ability to appropriate them.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.5 - Broker-Dealers and Investment Advisers › Rule 6.10.511 - NOTICE FILING REQUIREMENTS FOR FEDERAL COVERED ADVISERS

Current through Register Vol. 13, July 5, 2024
(1) The notice filing for a federal covered
				adviser pursuant to
				30-10-201, MCA, shall be filed
				with the commissioner, or with a central registration depository designated by
				the commissioner on an executed Form ADV (uniform application for investment
				adviser registration ( 17
				CFR 279.1 (1998)) and shall include:
(a) the consent to service of process
				required by
				30-10-208, MCA, unless
				incorporated by reference by ARM
				6.10.150; and
(b) the fee required under
				30-10-209, MCA.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.6 - Senior Specific Certifications and Designations › Rule 6.10.601 - SENIOR SPECIFIC CERTIFICATIONS AND DESIGNATIONS GENERALLY UNLAWFUL

Current through Register Vol. 13, July 5, 2024
(1) The use of a senior specific
				certification or designation by any person in connection with the offer, sale,
				or purchase of securities, or the provision of advice as to the value of or the
				advisability of investing in, purchasing, or selling securities, either
				directly or indirectly or through publications or writings, or by issuing or
				promulgating analyses or reports relating to securities, that indicates or
				implies that the user has special certification or training in advising or
				servicing senior citizens or retirees, in such a way as to mislead any person
				shall be a dishonest, fraudulent, and unethical practice in the securities
				business within the meaning of
				30-10-201(13)(g)
				and 30-10-301, MCA. The prohibited use
				of such certifications or professional designation includes, but is not limited
				to, the following:
(a) use of a certification
				or professional designation by a person who has not actually earned or is
				otherwise ineligible to use such certification or designation;
(b) use of a nonexistent or self-conferred
				certification or professional designation;
(c) use of a certification or professional
				designation that indicates or implies a level of occupational qualifications
				obtained through education, training, or experience that the person using the
				certification or professional designation does not have; and
(d) use of a certification or professional
				designation that was obtained from a designating or certifying organization
				that:
(i) is primarily engaged in the
				business of instruction in sales and/or marketing;
(ii) does not have reasonable standards or
				procedures for assuring the competency of its designees or
				certificants;
(iii) does not have
				reasonable standards or procedures for monitoring and disciplining its
				designees or certificants for improper or unethical conduct; or
(iv) does not have reasonable continuing
				education requirements for its designees or certificants in order to maintain
				the designation or certificate.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.6 - Senior Specific Certifications and Designations › Rule 6.10.602 - REBUTTABLE PRESUMPTION REGARDING CERTAIN DISQUALIFICATIONS

Current through Register Vol. 13, July 5, 2024
(1) There is a rebuttable presumption that a
				designating or certifying organization is not disqualified solely for purposes
				of ARM 6.10.601I(1)(d), when the organization has been accredited by:
(a) The American National Standards
				Institute;
(b) The National
				Commission for Certifying Agencies; or
(c) an organization that is on the United
				States Department of Education's list entitled "Accrediting Agencies Recognized
				for Title IV Purposes" and the designation or credential issued therefrom does
				not primarily apply to sales and/or marketing.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.6 - Senior Specific Certifications and Designations › Rule 6.10.604 - FACTORS CONSIDERED TO DETERMINE UNLAWFUL CERTIFICATIONS OR DESIGNATIONS

Current through Register Vol. 13, July 5, 2024
(1) In determining whether a combination of
				words (or an acronym standing for a combination of words) constitutes a
				certification or professional designation indicating or implying that a person
				has special certification or training in advising or servicing senior citizens
				or retirees, factors to be considered shall include:
(a) use of one or more words such as
				"senior," "retirement," "elder," or like words, combined with one or more words
				such as "certified," "registered," "chartered," "adviser," "specialist,"
				"consultant," "planner," or like words, in the name of the certification or
				professional designation; and
(b)
				the manner in which those words are combined.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.6 - Senior Specific Certifications and Designations › Rule 6.10.605 - CERTIFICATIONS OR DESIGNATIONS NOT CONSIDERED UNLAWFUL

Current through Register Vol. 13, July 5, 2024
(1) For purposes of this rule, a senior
				certification or professional designation does not include a job title within
				an organization that is licensed or registered by a state or federal financial
				services regulatory agency, when that job title:
(a) indicates seniority or standing within
				the organization; or
(b) specifies
				an individual's area of specialization within the organization.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.6 - Senior Specific Certifications and Designations › Rule 6.10.607 - RULES NOT LIMITING AUTHORITY

Current through Register Vol. 13, July 5, 2024
(1) Nothing
				in these rules shall limit the commissioner's authority to enforce existing
				provisions of law.
30-10-107, MCA; IMP,
					 30-10-201,
					 30-10-301,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.6 - Senior Specific Certifications and Designations › Rule 6.10.608 - FILINGS REQUIREMENT FOR TRANSACTIONAL EXEMPTION PURSUANT TO 30-10-105(15), MCA

Current through Register Vol. 13, July 5, 2024
(1) A request for a
				transactional exemption pursuant to
				30-10-105(15),
				MCA, shall include:
(a) a letter of request
				explaining why an exemption would serve the purposes of
				30-10-102, MCA;
(b) a U-2 consent to service of process form;
				and
(c) a fee of $50.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.7 - Securities Restitution Fund › Rule 6.10.701 - SECURITIES RESTITUTION FUND

Current through Register Vol. 13, July 5, 2024
(1) The purpose
				of these rules is to set forth:
(a) the
				procedures for allocating money from the Securities Restitution Fund to the
				victims of securities fraud in Montana;
(b) the procedures that victims shall use to
				apply for compensation from the fund;
(c) the composition of a recommendation
				committee and its operating procedures; and
(d) the method for calculating what
				percentage of money a victim shall be eligible for when the fund approaches
				zero.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.7 - Securities Restitution Fund › Rule 6.10.702 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
For purposes of this subchapter:
(1) "Approaching zero" means the fund balance
				is under $1,000,000.
(2) "Claimant"
				means a claimant as defined under
				30-10-1003(1),
				MCA.
(3) "Commissioner" means the
				Commissioner of Securities and Insurance, Montana State Auditor.
(4) "Committee" means the committee defined
				in ARM 6.10.705.
(5) "Department" means the department as
				defined in
				30-10-1003(2),
				MCA.
(6) "Eligible persons" means
				persons eligible for restitution assistance under
				30-10-1005, MCA.
(7) "Fund" means the fund as defined in
				30-10-1003(4),
				MCA.
(8) "Investment scheme" means
				the underlying plan constituting the basis of a final order in a legal action
				initiated by the commissioner.
(9)
				"Loss ratio" means the ratio consisting of the victim's total investment loss
				over the victim's total net worth.
(10) "Total net loss" means a person's total
				loss in an investment scheme.
(11)
				"Total net worth" means the difference between the total value of a person's
				assets and a person's liabilities.
(12) "Victim" means a victim as defined under
				30-10-1003(6),
				MCA.
30-10-1008, MCA; IMP,
					 30-10-1008,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.7 - Securities Restitution Fund › Rule 6.10.703 - METHOD FOR CALCULATING PERCENTAGES AS THE FUND APPROACHES ZERO

Current through Register Vol. 13, July 5, 2024
(1) When the fund
				is approaching zero, the committee shall utilize loss ratio to determine how
				much money a person is eligible to receive, except as specified in (4).
(2) The committee shall use the
				following percentages when making recommendations to the commissioner as the
				fund approaches zero:
(a) eligible persons
				whose loss ratio is less than 10% are eligible for up to $2,500. Eligible
				persons 60 years and older are eligible for up to $5,000;
(b) eligible persons whose loss ratio is
				between 10% and 25% are eligible for up to $7,500. Eligible persons 60 years
				and older are eligible for up to $15,000;
(c) eligible persons whose loss ratio is
				between 25% and 50% are eligible for up to $12,500. Eligible persons 60 years
				and older are eligible for up to $25,000;
(d) eligible persons whose loss ratio is
				between 50% and 75% are eligible for up to $17,500. Eligible persons 60 years
				and older are eligible for up to $35,000; and
(e) eligible persons whose loss ratio is
				greater than 75% are eligible for the full amount under
				30-10-1006(3),
				MCA.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.7 - Securities Restitution Fund › Rule 6.10.705 - COMPOSITION OF THE COMMITTEE

Current through Register Vol. 13, July 5, 2024
(1) The
				committee shall be composed of three employees of the CSI. Those three persons
				shall be appointed by the Commissioner, at the Commissioner's
				discretion.
30-10-1008, MCA; IMP,
					 30-10-1008,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.7 - Securities Restitution Fund › Rule 6.10.706 - COMMITTEE PROCEDURES

Current through Register Vol. 13, July 5, 2024
(1) The committee
				shall meet quarterly to determine award recommendations.
(2) The committee shall review all completed
				applications received in the preceding quarter prior to making any
				recommendations.
(3) Within two
				weeks following the committee meeting, the attorney shall prepare a
				recommendation for the commissioner.
(4) Applications shall only be considered in
				two consecutive quarters. After the second quarter review, the application
				shall be deemed closed and eligible for review solely at the discretion of the
				committee.
(5) The commissioner
				may:
(a) adopt the recommendations in
				full;
(b) reject the
				recommendations in full; or
(c)
				request another meeting of the committee to reexamine fund
				allocation.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.10 - SECURITIES DEPARTMENT › Subchapter 6.10.7 - Securities Restitution Fund › Rule 6.10.707 - APPLICATION REVIEW REQUIREMENTS

Current through Register Vol. 13, July 5, 2024
(1)
				Claimants shall submit a written application on a form prescribed by the
				commissioner.
(2) Only persons
				whose applications are complete and show they meet all of the eligibility
				requirements specified in
				30-10-1005, MCA, and other
				relevant statutes shall have their applications reviewed by the
				committee.
(3) Incomplete
				applications shall be returned to the claimant. Any request by the department
				for additional information must be answered within 30 days for an application
				to be considered by the committee in the following quarter. Claimants failing
				to respond within 30 days shall not be considered in the following quarter,
				except for good cause shown.
(4)
				The committee shall not review more than one application per victim per
				investment scheme.
30-10-1008, MCA; IMP,
					 30-10-1006,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.12 - SECURITIES DEPARTMENT › Subchapter 6.12.12 - Living Trusts › Rule 6.12.1201 - APPLICABILITY OF SUB-CHAPTER

Current through Register Vol. 13, July 5, 2024
(1) This
				sub-chapter applies to living trusts and to transactions involving living
				trusts, subject to the Montana Living Trust Act, Title 30, chapter 10, part 9,
				MCA.
Sec.
					 30-10-905, MCA; IMP, Sec.
					 30-10-901 through
					 30-10-915,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.12 - SECURITIES DEPARTMENT › Subchapter 6.12.12 - Living Trusts › Rule 6.12.1202 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
As used in this sub-chapter, unless the context indicates
				  otherwise:
(1) The definitions in
				30-10-903, MCA, apply.
(2) "Living trust representative" means a
				person licensed to sell living trusts under
				30-10-901 through
				30-10-915, MCA.
Sec.
					 30-10-905, MCA; IMP, Sec.
					 30-10-901 through
					 30-10-915,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.12 - SECURITIES DEPARTMENT › Subchapter 6.12.12 - Living Trusts › Rule 6.12.1203 - LICENSURE

Current through Register Vol. 13, July 5, 2024
(1) Each application for a license to offer
				and sell living trusts in this state must be made on Form LT-1, available from
				the state auditor.
(2)
(a) A license granted under
				30-10-904, MCA, to an investment
				advisor entitles an investment advisor representative affiliated with the
				investment advisor and registered in this state to act under that license
				pursuant to (b).
(b) An investment
				advisor licensed under
				30-10-904, MCA, shall provide the
				state auditor with the names of each investment advisor representative who will
				offer or sell living trusts in this state under that license by completing
				Schedule A to Form LT-1, and paying the fees required by
				30-10-904, MCA.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.12 - SECURITIES DEPARTMENT › Subchapter 6.12.12 - Living Trusts › Rule 6.12.1204 - LIVING TRUST REPRESENTATIVE BOOKS AND RECORDS

Current through Register Vol. 13, July 5, 2024
(1) Each living trust representative shall
				make and keep all books and records relating to the representative's offering
				and sales of living trusts, including, but not limited to, the following:
(a) each written agreement (or copy thereof)
				entered into by the living trust representative with a client;
(b) a complaint file containing each written
				customer or client complaint, the action taken by the living trust
				representative with respect to each complaint, and all documents related to the
				complaint;
(c) a litigation file
				documenting each criminal or civil action filed in a state or federal court
				against the living trust representative, and the disposition of any such
				action;
(d) a correspondence file
				containing all correspondence to and received from the public; and
(e) a file containing a copy of all letters
				of solicitation to clients with whom a living trust agreement is
				executed.
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.12 - SECURITIES DEPARTMENT › Subchapter 6.12.12 - Living Trusts › Rule 6.12.1205 - SALES AND PROMOTIONAL MATERIAL

Current through Register Vol. 13, July 5, 2024
(1) Sales
				and promotional material used in connection with the offer or sale of living
				trusts by persons required to be licensed under
				30-10-904, MCA, to persons in this
				state must be filed with the state auditor at least 10 days prior to use in
				this state.
(2) The state auditor
				may by order disallow the use of sales or promotional material filed pursuant
				to this rule if the state auditor finds that such an order is in the public
				interest or necessary to protect consumers in this state. Unless the state
				auditor disallows the use of material filed pursuant to this rule within 10
				business days from the day it is filed, the material may be used.
Sec.
					 30-10-905, MCA; IMP, Sec.
					 30-10-909 and
					 30-10-913,
					 MCA;
Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.12 - SECURITIES DEPARTMENT › Subchapter 6.12.12 - Living Trusts › Rule 6.12.1206 - INTERNET

Current through Register Vol. 13, July 5, 2024
(1) An offer of sale of living trusts made
				through the internet or similar proprietary or common carrier electronic system
				is exempt from
				30-10-901 through
				30-10-915, MCA, if the following
				conditions are met:
(a) the offer indicates
				that the offer is not being made to residents of Montana;
(b) the offer is not specifically directed to
				any person in Montana; and
(c) no
				sale of a living trust is made in Montana as a result of the offer until the
				person making the offer is licensed under
				30-10-901 through
				30-10-915, MCA.