Information Maintained by the Office of Code Revision Indiana Legislative Services Agency
 05/11/2008 05:32:57 PM EDT
IC 23-2
    ARTICLE 2. SECURITIES AND FRANCHISES

IC 23-2-1 Version a
     Chapter 1. Securities Regulation
    Note: This version of chapter effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.

IC 23-2-1-1 Version a
Definitions
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 1. As used in this chapter, unless the context otherwise requires:
    (a) "Commissioner" means the securities commissioner provided for in section 15(a) of this chapter.
    (b) "Agent" means an individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. A partner, officer, or director of a broker-dealer or issuer or a person occupying a similar status or performing similar functions is an agent only if the person effects or attempts to effect a purchase or sale of securities in Indiana. "Agent" does not include an individual who represents an issuer in:
        (1) effecting transactions in a security exempted by section 2(a)(1), 2(a)(2), 2(a)(3), 2(a)(6), 2(a)(7), or 2(a)(10) of this chapter;
        (2) effecting transactions exempted by section 2(b) of this chapter;
        (3) effecting transactions with existing employees, partners, or directors of the issuer, if no commission or other remuneration is paid or given directly or indirectly for soliciting a person in Indiana; or
        (4) effecting transactions in Indiana limited to those transactions described in Section 15(h)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78o).
    (c) "Broker-dealer" means a person engaged in the business of effecting offers, sales, or purchases of securities for the account of others or for the person's own account. "Broker-dealer" does not include:
        (1) an agent;
        (2) an issuer with respect to the offer or sale of the issuer's own securities;
        (3) a bank, savings institution, or trust company; or
        (4) a person who has no place of business in Indiana if the person effects transactions in Indiana exclusively with:
            (i) the issuers of the securities involved in the transactions;
            (ii) other broker-dealers; or
            (iii) banks, savings institutions, trust companies, insurance companies, investment companies (as defined in the

Investment Company Act of 1940, as in effect on December 31, 1990), pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustees, whether or not the offeror or any of the offerees is then present in Indiana.
    (d) "Fraud", "fraudulent", "deceit", and "defraud" mean a misrepresentation of a material fact, a promise or representation or prediction not made honestly or in good faith, or the failure to disclose a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. This definition does not limit or diminish the full meaning of those terms as applied by or defined in courts of law or equity. These terms are not limited to common law deceit.
    (e) "Guaranteed" means guaranteed as to payment of principal, interest, or dividends.
    (f) "Issuer" means a person who issues or proposes to issue a security, except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors or person performing similar functions or of the fixed, restricted management, or unit type. The term "issuer" means the person or persons performing the acts and assuming the duties of depository or manager pursuant to the provisions of the trust or other agreement or instrument under which the security is issued.
    (g) "Nonissuer" means not directly or indirectly for the benefit of the issuer.
    (h) "Person" means an individual, a corporation, a limited liability company, a partnership, an association, a joint-stock company, a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government.
    (i)(1) "Sale" or "sell" means a contract of sale of, contract to sell, or disposition of, a security, or interest in a security for value.
    (2) "Offer" or "offer to sell" means an attempt or offer to dispose of, or solicitation of an offer to purchase, a security, or interest in a security for value.
    (3) "Transaction" and "transactions" include the meanings of "sale", "sell", "offer", "offer to sell", and "purchase".
    (4) "Purchase" means an acquisition, direct or indirect, of a security or an interest in a security for value.
    (5) A security given or delivered with, or as a bonus on account of, a purchase of securities or any other thing is considered to constitute part of the subject of the purchase and to have been offered and sold for value.
    (6) A purported gift of assessable stock is considered to involve an offer and sale.
    (7) A sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, as well as a sale or offer of a security that gives the holder a present or future right or

privilege to convert into another security of the same or another issuer, is considered to include an offer of the other security.
    (8) The terms defined in this subsection do not include:
        (i) a bona fide secured transaction in or loan of outstanding securities;
        (ii) a stock dividend, whether the corporation distributing the dividend is the issuer of the stock or not, if nothing of value is given by the stockholders for the dividend other than the surrender of a right to a cash or property dividend when each stockholder may elect to take the dividend in cash or property or in stock; or
        (iii) an act incident to a judicially approved reorganization in which a security is issued in exchange for one (1) or more outstanding securities, claims, or property interests, or partly in such exchange and partly for cash.
    (j) "Securities Act of 1933", "Securities Exchange Act of 1934", "Public Utility Holding Company Act of 1935", and "Investment Company Act of 1940" mean the federal statutes of those names, as in effect on December 31, 1990.
    (k) "Security" means a note, stock, treasury stock, bond, debenture, evidence of indebtedness, an interest in a limited liability company or limited liability partnership and any class or series of an interest in a limited liability company or limited liability partnership (including any fractional or other interest in an interest in a limited liability company or limited liability partnership), certificate of interest or participation in a profit-sharing agreement, commodity futures contract, option, put, call, privilege, or other right to purchase or sell a commodity futures contract, margin accounts for the purchase of commodities or commodity futures contracts, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, viatical settlement contract, any fractional or pooled interest in a viatical settlement contract, voting-trust certificate, certificate of deposit for a security, certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under the title or lease, an automatic extension or rollover of an existing security, or, in general, an interest or instrument commonly known as a "security", or a certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant, option, or right to subscribe to or purchase, any of the foregoing. "Security" does not include:
        (1) an insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or some other specified period;
        (2) a contract or trust agreement under which money is paid pursuant to a charitable remainder annuity trust or a charitable remainder unitrust (described in Section 664 of the Internal Revenue Code), or a pooled income fund (described in Section 642(c)(5) of the Internal Revenue Code) or an annuity contract

under which the purchaser receives a charitable contribution deduction under Section 170 of the Internal Revenue Code; or
        (3) an interest in a limited liability company or limited liability partnership if the person claiming that the interest is not a security can prove that all of the members of the limited liability company or limited liability partnership are actively engaged in the management of the limited liability company or limited liability partnership.
    (l) "State" means a state, territory, or possession of the United States, the District of Columbia, and Puerto Rico.
    (m) Corporations are "affiliated" during a period of time when either is the owner of shares of the other representing and possessing fifty percent (50%) or more of the total combined voting power of all classes of stock issued by the other corporation and then outstanding and entitled to vote.
    (n) "Investment adviser" means a person who holds himself out to be an investment adviser, or who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of a regular business, issues and promulgates analyses or reports concerning securities. "Investment adviser" does not include any of the following:
        (1) A bank, savings institution, or trust company.
        (2) A lawyer, an accountant, an engineer, or a teacher whose performance of these services is solely incidental to the practice of the person's profession.
        (3) A broker-dealer or its agent whose performance of these services is solely incidental to the conduct of the broker-dealer's business as a broker-dealer and who receives no special compensation for them.
        (4) A publisher of a bona fide newspaper, news column, newsletter, news magazine, or business or financial publication or service, by whatever means communicated, that does not render advice on the specific investment situation of individual clients.
        (5) An investment adviser representative.
        (6) A person who is an investment adviser to an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.).
        (7) A person who is registered as an investment adviser under Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3).
        (8) A person who is excluded from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2).
        (9) Other persons the commissioner may by rule or order designate.
    (o) "Transferable share" means a security representing an equity interest in a corporation or business trust, but does not include the

shares of open-end investment companies (as defined by the Investment Company Act of 1940, as in effect on December 31, 1990).
    (p) A "qualified transfer agent" means:
        (1) a bank whose deposits are insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation; or
        (2) a person, independent of the issuer, approved by the commissioner by regulation or by individual order in specific cases.
    (q) "Investment adviser representative" means a person, except a person in a clerical or ministerial position:
        (1) who is employed by or associated with an investment adviser registered under this chapter; or
        (2) who has a place of business located in Indiana and is employed by or associated with a person required to be registered as an investment adviser under Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3); and
        (3) who:
            (A) makes recommendations or otherwise renders advice regarding securities;
            (B) manages accounts or portfolios of clients;
            (C) determines recommendations or advice that should be given regarding securities;
            (D) solicits, offers, or negotiates the sale of or sells investment advisory services; or
            (E) supervises employees who perform a duty described in this subsection.
    (r) "Accredited investor" means a person who is within any of the following categories, or who the issuer reasonably believes is within any of the following categories, at the time of the sale of securities to the person:
        (1) A person who meets the definition of "accredited investor" (as defined under the Securities Act of 1933 in 17 CFR 230.215), and in any other rule or regulation modifying the definition adopted by the Securities and Exchange Commission as in effect on December 31, 1990.
        (2) A person to whom an offer or sale may be made without registration pursuant to section 2(b)(8) or 2(b)(9) of this chapter.
        (3) Any other person the commissioner may designate by rule or order.
    (s) "Federal covered security" refers to a security described as a covered security in Section 18(b) of the Securities Act of 1933 (15 U.S.C. 77r).
    (t) "Viatical settlement contract" means an agreement for the purchase, sale, assignment, transfer, devise, or bequest of a portion of a death benefit or ownership of a life insurance policy or contract for consideration that is less than the expected death benefit of the life insurance policy or contract. The term does not include the following:

        (1) A loan by an insurer under the terms of a life insurance policy, including a loan secured by the cash value of a policy.
        (2) An agreement with a bank, savings bank, savings and loan association, credit union, or other licensed lending institution that takes an assignment of a life insurance policy as collateral for a loan.
        (3) The provision of accelerated death benefits by an insurer to an insured under the provisions of a life insurance contract.
        (4) Agreements between an insurer and a reinsurer.
        (5) An agreement by a person who enters into not more than one (1) such agreement in any five (5) year period to purchase a life insurance policy or contract for the transfer of a life insurance policy for a value that is less than the expected death benefit.
(Formerly: Acts 1961, c.333, s.101; Acts 1975, P.L.261, SEC.1.) As amended by Acts 1977, P.L.2, SEC.75; Acts 1977, P.L.268, SEC.1; Acts 1980, P.L.154, SEC.2; Acts 1981, P.L.214, SEC.2; P.L.240-1983, SEC.1; P.L.232-1985, SEC.1; P.L.228-1989, SEC.1; P.L.75-1990, SEC.4; P.L.8-1991, SEC.6; P.L.177-1991, SEC.1; P.L.8-1993, SEC.308; P.L.119-1994, SEC.1; P.L.11-1996, SEC.13; P.L.169-1997, SEC.1; P.L.128-2000, SEC.1.

IC 23-2-1-2 Version a
Exempt securities; exempt transactions
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 2. (a) The following securities are exempted from the registration requirements of section 3 of this chapter:
        (1) A security (including a revenue obligation) issued or guaranteed by the United States, a state, a political subdivision of a state, or an agency or corporate or other instrumentality of one (1) or more of the foregoing or a certificate of deposit for any of the foregoing.
        (2) A security issued or guaranteed by Canada, a Canadian province, a political subdivision of a Canadian province, an agency, or corporate or other instrumentality of one (1) or more of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor.
        (3) A security issued by and representing an interest in or a debt of, or guaranteed by a bank organized under the laws of the United States, a bank, savings institution, or trust company organized and supervised under the laws of a state, a federal savings association, a savings association organized under the laws of a state and authorized to do business in Indiana, a federal credit union or a credit union, industrial loan association, or similar association organized and supervised under the laws of this state, or a corporation or organization whose issuance of securities is required by any other law to be

passed upon and authorized by the department of financial institutions or by a federal agency or authority.
        (4) A security issued or guaranteed by a railroad or other common or contract carrier, a public utility, or a common or contract carrier or public utility holding company. However, an issuer or guarantor must be subject to regulation or supervision as to the issuance of its own securities by a public commission, board, or officer of the government of the United States, of a state, territory, or insular possession of the United States, of a municipality located in a state, territory, or insular possession, of the District of Columbia, or of the Dominion of Canada or a province of Canada.
        (5) A security listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Stock Exchange, the Chicago Stock Exchange, or on any other exchange approved and designated by the commissioner, any other security of the same issuer that is of senior rank or substantially equal rank, a security called for by subscription rights or warrants so listed or approved, or a warrant or right to purchase or subscribe to any of the foregoing.
        (6) A promissory note, draft, bill of exchange, or banker's acceptance that is evidence of:
            (A) an obligation;
            (B) a guarantee of an obligation;
            (C) a renewal of an obligation; or
            (D) a guarantee of a renewal of an obligation;
        to pay cash within nine (9) months after the date of issuance, excluding grace days, that is issued in denominations of at least fifty thousand dollars ($50,000) and receives a rating in one (1) of the three (3) highest rating categories from a nationally recognized statistical rating organization.
        (7) A security issued in connection with an employee stock purchase, savings, pension, profit-sharing, or similar benefit plan.
        (8) A security issued by an association incorporated under IC 15-7-1.
        (9) A security that is an industrial development bond (as defined in Section 103(b)(2) of the Internal Revenue Code of 1954) the interest of which is excludable from gross income under Section 103(a)(1) of the Internal Revenue Code of 1954 if, by reason of the application of paragraph (4) or (6) of Section 103(b) of the Internal Revenue Code of 1954 (determined as if paragraphs (4)(A), (5), and (7) were not included in Section 103(b)), paragraph (1) of Section 103(b) does not apply to the security.
        (10) A security issued by a nonprofit corporation that meets the requirements of Section 103(e) of the Internal Revenue Code of 1954 and is designated by the governor as the secondary market for guaranteed student loans under IC 21-16-5.
        (11) A security designated or approved for designation upon

notice of issuance on the National Association of Securities Dealers Automatic Quotation National Market System or any other national market system approved and designated by the commissioner, any other security of the same issuer that is of senior rank or substantially equal rank, a security called for by subscription rights or warrants so listed or approved, or a warrant or right to purchase or subscribe to any of the foregoing.
        (12) A security that is a "qualified bond" (as defined in Section 141(e) of the Internal Revenue Code, as amended).
    (b) The following transactions are exempted from the registration requirements of section 3 of this chapter:
        (1) An isolated nonissuer offer or sale, whether effected through a broker-dealer or not.
        (2) A nonissuer sale effected by or through a registered broker-dealer pursuant to an unsolicited order or offer to buy.
        (3) A nonissuer offer or sale by a registered broker-dealer, acting either as principal or agent, of issued and outstanding securities if the following conditions are satisfied:
            (A) The securities are sold at prices reasonably related to the current market price at the time of sale, and if the registered broker-dealer is acting as agent, the commission collected by the registered broker-dealer on account of the sale is not in excess of usual and customary commissions collected with respect to securities and transactions having comparable characteristics.
            (B) The securities do not constitute an unsold allotment to or subscription by the broker-dealer as a participant in the distribution of the securities by the issuer or by or through an underwriter.
            (C) Either:
                (i) information consisting of the names of the issuer's officers and directors, a balance sheet of the issuer as of a date not more than eighteen (18) months prior to the date of the sale, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations is published in a securities manual approved by the commissioner;
                (ii) the issuer is required to file reports with the Securities and Exchange Commission pursuant to sections 13 and 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78m and 78o) and is not delinquent in the filing of the reports on the date of the sale; or
                (iii) information consisting of the names of the issuer's officers and directors, a balance sheet of the issuer as of a date not more than sixteen (16) months prior to the date of the sale, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations is on file with the commissioner. The information required by this item to be on file with the

commissioner must be on a form and made in a manner as the commissioner prescribes. The fee for the initial filing of the form shall be twenty-five dollars ($25). The fee for the annual renewal filing shall be fifteen dollars ($15). When a filing is withdrawn or is not completed by the issuer, the commissioner must retain the filing fee.
            (D) There has been compliance with section 6(l) of this chapter.
            (E) Unless the issuer is registered under the Investment Company Act of 1940, all the following must be true at the time of the transaction:
                (i) The security belongs to a class that has been in the hands of the public for at least ninety (90) days.
                (ii) The issuer of the security is a going concern, is actually engaged in business, and is not in bankruptcy or receivership.
                (iii) Except as permitted by order of the commissioner, the issuer and any predecessors have been in continuous operation for at least five (5) years. An issuer or predecessor is in continuous operation only if the issuer or predecessor has gross operating revenue in each of the five (5) years immediately preceding the issuer's or predecessor's claim of exemption and has had total gross operating revenue of at least two million five hundred thousand dollars ($2,500,000) for those five (5) years or has had gross operating revenue of at least five hundred thousand dollars ($500,000) in not less than three (3) of those five (5) years.
        The commissioner may revoke the exemption afforded by this subdivision with respect to any securities by issuing an order:
                (i) if the commissioner finds that the further sale of the securities in this state would work or tend to work a fraud on purchasers of the securities;
                (ii) if the commissioner finds that the financial condition of the issuer is such that it is in the public interest and is necessary for the protection of investors to revoke or restrict the exemption afforded by this subsection; or
                (iii) if the commissioner finds that, due to the limited number of shares in the hands of the public or due to the limited number of broker-dealers making a market in the securities, there is not a sufficient market for the securities so that there is not a current market price for the securities.
        (4) A transaction between the issuer or other person on whose behalf the offering is made by an underwriter, or among underwriters.
        (5) A transaction in a bond or other evidence of indebtedness secured by a real or chattel mortgage or deed of trust, or by agreement for the sale of real estate or chattels, if the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidences of indebtedness, is offered and sold as

a unit.
        (6) A transaction by an executor, administrator, personal representative, sheriff, marshal, receiver, trustee in bankruptcy, guardian, conservator, or a person acting in a trust or fiduciary capacity where the transaction is effected pursuant to the authority of or subject to approval by a court of competent jurisdiction.
        (7) A transaction executed by a bona fide pledgee without any purpose of evading this chapter.
        (8) An offer or sale to a bank, a savings institution, a trust company, an insurance company, an investment company (as defined in the Investment Company Act of 1940 (15 U.S.C. 80a-1 through 80a-52)), a pension or profit-sharing trust, or other financial institution or institutional buyer, or to a broker-dealer, whether the purchaser is acting for itself or in a fiduciary capacity.
        (9) The offer or sale of securities of an issuer:
            (i) to a person who is:
                (A) a director, an executive officer, a general partner, an administrator, or a person who performs similar functions for or who is similarly situated with respect to the issuer;
                (B) a director, an executive officer, or a general partner of a general partner of the issuer; or
                (C) any other natural person employed on a full-time basis by the issuer as an attorney or accountant if the person has been acting in this capacity for at least one (1) year immediately prior to the offer or sale;
            (ii) to an entity affiliated with the issuer;
            (iii) if the issuer is a corporation, to a person who is the owner of shares of the corporation or of an affiliated corporation representing and possessing ten percent (10%) or more of the total combined voting power of all classes of stock (of the corporation or affiliated corporation) issued and outstanding and who is entitled to vote; or
            (iv) if the issuer is a limited liability company, to a person who is the owner of an interest in the limited liability company representing and possessing at least ten percent (10%) of the total combined voting power of all classes of such interests (of the limited liability company or affiliated limited liability company) issued and outstanding.
        (10) The offer or sale of a security by the issuer of the security if all of the following conditions are satisfied:
            (A) The issuer reasonably believes that either:
                (i) there are no more than thirty-five (35) purchasers of the securities from the issuer in an offering pursuant to this subsection, including purchasers outside Indiana; or
                (ii) there are no more than twenty (20) purchasers in Indiana.
            In either case, there shall be excluded in determining the number of purchasers a purchaser whom the issuer

reasonably believes to be an accredited investor or who purchases the securities after they are registered under this chapter.
            (B) The issuer does not offer or sell the securities by means of a form of general advertisement or general solicitation.
            (C) The issuer reasonably believes that each purchaser of the securities is acquiring the securities for the purchaser's own investment and is aware of any restrictions imposed on transferability and resale of the securities. The basis for reasonable belief may include:
                (i) obtaining a written representation signed by the purchaser that the purchaser is acquiring the securities for the purchaser's own investment and is aware of any restrictions imposed on the transferability and resale of the securities; and
                (ii) placement of a legend on the certificate or other document that evidences the securities stating that the securities have not been registered under section 3 of this chapter, and setting forth or referring to the restrictions on transferability and sale of the securities.
            (D) The issuer:
                (i) files with the commissioner and provides to each purchaser in this state an offering statement that sets forth all material facts with respect to the securities; and
                (ii) reasonably believes immediately before making a sale that each purchaser who is not an accredited investor either alone or with a purchaser representative has knowledge and experience in financial and business matters to the extent that the purchaser is capable of evaluating the merits and risks of the prospective investment.
            (E) If the aggregate offering price of the securities in an offering pursuant to this subdivision (including securities sold outside of Indiana) does not exceed five hundred thousand dollars ($500,000), the issuer is not required to comply with clause (D) if the issuer files with the commissioner and provides to each purchaser in Indiana the following information and materials:
                (i) copies of all written materials, if any, concerning the securities that have been provided by the issuer to any purchaser; and
                (ii) unless clearly presented in all written materials, a written notification setting forth the name, address, and form of organization of the issuer and any affiliate, the nature of the principal businesses of the issuer and any affiliate, and the information required in section 5(b)(1)(B), 5(b)(1)(C), 5(b)(1)(D), 5(b)(1)(E), 5(b)(1)(H), and 5(b)(1)(I) of this chapter.
            (F) The commissioner does not disallow the exemption provided by this subdivision within ten (10) full business

days after receipt of the filing required by clause (D) or (E). The issuer may make offers (but not sales) before and during the ten (10) day period, if:
                (i) each prospective purchaser is advised in writing that the offer is preliminary and subject to material change; and
                (ii) no enforceable offer to purchase the securities may be made by a prospective purchaser, and no consideration in any form may be accepted or received (directly or indirectly) from a prospective purchaser, before the expiration of the ten (10) day period and the vacation of an order disallowing the exemption.
            (G) The issuer need not comply with clause (D), (E), or (F) if:
                (i) each purchaser has access to all the material facts with respect to the securities by reason of the purchaser's active involvement in the organization or management of the issuer or the purchaser's family relationship with a person actively involved in the organization or management of the issuer;
                (ii) there are not more than fifteen (15) purchasers in Indiana and each Indiana purchaser is an accredited investor or is a purchaser described in item (i); or
                (iii) the aggregate offering price of the securities, including securities sold outside Indiana, does not exceed five hundred thousand dollars ($500,000), the total number of purchasers, including purchasers outside of Indiana, does not exceed twenty-five (25) and each purchaser either receives all of the material facts with respect to the security or is an accredited investor or a purchaser described in item (i).
            (H) If the issuer makes or is required to make a filing with the commissioner under clause (D) or (E), the issuer must also file with the commissioner at the time of the filing the consent to service of process required by section 16 of this chapter. The issuer shall also file with the commissioner, at the times and in the forms as the commissioner may prescribe, notices of sales made in reliance upon this subdivision.
            (I) The commissioner may by rule deny exemption provided in this subdivision to a particular class of issuers, or may make the exemption available to the issuers upon compliance with additional conditions and requirements, if appropriate in furtherance of the intent of this chapter.
        (11) An offer or sale of securities to existing security holders of the issuer, including persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants exercisable within not more than ninety (90) days of their issuance if no commission or other remuneration (other than a standby commission) is paid or given for soliciting a security holder in this state.

        (12) An offer (but not a sale) of a security for which registration statements or applications have been filed under this chapter and the Securities Act of 1933 (15 U.S.C. 77a-77aa), if no stop order or refusal order is in effect and no public proceeding or examination looking toward an order is pending under either law.
        (13) The deposit of shares under a voting-trust agreement and the issue of voting-trust certificates for the deposit.
        (14) The offer or sale of a commodity futures contract.
        (15) The offer or sale of securities to or for the benefit of security holders incident to a vote by the security holders pursuant to the articles of incorporation or applicable instrument, on a statutorily approved merger or share exchange, reclassification of securities, exchange of securities under IC 28-1-7.5, or sale of assets of the issuer in consideration of the issuance of securities of the same or another issuer.
        (16) A limited offering transactional exemption, which may be created by rule adopted by the commissioner. The exemption must further the objectives of compatibility with federal exemptions and uniformity among the states.
    (c) The commissioner may consider and determine if a proposed sale, transaction, issue, or security is entitled to an exemption accorded by this section. The commissioner may decline to exercise the commissioner's authority as to a proposed sale, transaction, issue, or security. An interested party desiring the commissioner to exercise the commissioner's authority must submit to the commissioner a verified statement of all material facts relating to the proposed sale, transaction, issue, or security, which must be accompanied by a request for a ruling as to the particular exemption claimed, together with a filing fee of one hundred dollars ($100). After notice to the interested parties as the commissioner determines is proper and after a hearing, if any, the commissioner may enter an order finding the proposed sale, transaction, issue, or security entitled or not entitled to the exemption claimed. An order entered, unless an appeal is taken from it in the manner prescribed in section 20 of this chapter, is binding upon the commissioner and upon all interested parties, provided that the proposed sale, transaction, issue, or security when consummated or issued conforms in every relevant and material particular with the facts as set forth in the verified statement submitted.
    (d) The commissioner may by order deny or revoke an exemption specified in subsection (a)(6), (a)(7), or (b) with respect to a specific security or transaction, if the commissioner finds that the securities to which the exemption applies would not qualify for registration under sections 4 and 5 of this chapter. No order may be entered without appropriate prior notice to all interested parties, opportunity for hearing, and written findings of fact and conclusions of law, except that the commissioner may by order summarily deny or revoke any of the specific exemptions pending final determination of a proceeding under this subsection. Upon the entry of a summary

order, the commissioner shall promptly notify all interested parties that it has been entered, of the reasons for the order, and that within fifteen (15) days of the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing to all interested persons, may modify or vacate the order or extend it until final determination. No order under this subsection may operate retroactively. No person may be considered to have violated section 3 of this chapter by reason of an offer or sale effected after the entry of an order under this subsection if the person sustains the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the order.
    (e) If, with respect to an offering of securities, any notices or written statements are required to be filed with the commissioner under subsection (b)(10), the first filing made with respect to the offering must be accompanied by a filing fee of one hundred dollars ($100).
    (f) A condition, stipulation, or provision requiring a person acquiring a security to waive compliance with this chapter or a rule or order under this chapter is void.
(Formerly: Acts 1961, c.333, s.102; Acts 1967, c.255, s.1; Acts 1969, c.190, s.1; Acts 1975, P.L.261, SEC.2.) As amended by Acts 1980, P.L.154, SEC.3; Acts 1981, P.L.214, SEC.3; P.L.238-1983, SEC.2; P.L.240-1983, SEC.2; P.L.232-1985, SEC.2; P.L.2-1987, SEC.32; P.L.34-1987, SEC.280; P.L.228-1989, SEC.2; P.L.75-1990, SEC.5; P.L.177-1991, SEC.2; P.L.119-1994, SEC.2; P.L.169-1997, SEC.2; P.L.79-1998, SEC.19; P.L.73-2004, SEC.5; P.L.48-2006, SEC.1; P.L.2-2007, SEC.314.

IC 23-2-1-3 Version a
Unlawful acts
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 3. It is unlawful for any person to offer or sell any security in Indiana unless:
        (1) it is registered under this chapter;
        (2) the security or transaction is exempted under section 2 of this chapter; or
        (3) it is a federal covered security.
(Formerly: Acts 1961, c.333, s.201.) As amended by P.L.34-1987, SEC.281; P.L.169-1997, SEC.3.

IC 23-2-1-4 Version a
Registration under Securities Act of 1933; registration by coordination; required information
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 4. (a) A security for which a registration statement has been

filed under the Securities Act of 1933 in connection with the same offering may be registered by coordination.
    (b) An application for registration under this section shall be filed with the commission and shall contain the following information and be accompanied by the following documents, in addition to the information specified in section 6(e) of this chapter, and the consent to service of process required by section 16 of this chapter:
        (1) One (1) copy of the latest registration statement filed under the Securities Act of 1933 as of the date of filing under this section.
        (2) If the commissioner, by rule or otherwise, requires a copy of the articles of incorporation and bylaws (or their substantial equivalents) currently in effect, a copy of any agreements with or among underwriters, a copy of an indenture or other instrument governing the issuance of the security to be registered, and a specimen or copy of the security.
        (3) If the commissioner requests, other information, or copies of other documents, filed under the Securities Act of 1933.
        (4) An undertaking to forward all future amendments to the federal prospectus other than an amendment that merely delays the effective date of the registration promptly, and in any event not later than the first business day after the day they are forwarded to or filed with the Securities and Exchange Commission, whichever first occurs.
    (c) An application for registration under this section automatically becomes effective at the moment the federal registration statement becomes effective if all the following conditions are satisfied:
        (1) No stop order is in effect and no proceeding is pending under section 7 of this chapter.
        (2) The application for registration has been on file with the commissioner for at least ten (10) business days.
        (3) A statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions has been on file for two (2) full business days or a shorter period as the commissioner permits by rule or otherwise and the offering is made within those limitations.
        (4) The registrant promptly notifies the commissioner by telephone or telegram of the date and time when the federal registration statement became effective and the content of the price amendment, if any.
        (5) The registrant promptly files a posteffective amendment containing the information and documents in the price amendment. "Price amendment" means the final federal amendment that includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and other matters dependent upon the offering price.
    (d) Upon failure to receive the required notification and posteffective amendment with respect to the price amendment, the commissioner may enter a stop order, without notice or hearing,

retroactively denying effectiveness to the application for registration or suspending its effectiveness until compliance with this subsection, if the commissioner promptly notifies the registrant by telephone or telegram (and promptly confirms by letter or telegram when the commissioner notifies by telephone) of the issuance of the order. If the registrant proves compliance with the requirements of this subsection as to notice and posteffective amendment, the stop order is void as of the time of its entry. The commissioner may by rule or otherwise waive either or both of the conditions specified in subsection (c)(2), (c)(3), (c)(4), and (c)(5). If the federal registration statement becomes effective before all conditions in this subsection are satisfied and they are not waived, the application for registration automatically becomes effective as soon as all the conditions are satisfied. If the registrant advises the commissioner of the date when the federal registration statement is expected to become effective, the commissioner shall promptly advise the registrant by telephone or telegram at the registrant's expense, whether all the conditions are satisfied and whether the commissioner then contemplates the institution of a proceeding under section 7 of this chapter. The advice of the commissioner does not preclude the institution of a proceeding at any time.
(Formerly: Acts 1961, c.333, s.203; Acts 1975, P.L.261, SEC.3.) As amended by P.L.228-1989, SEC.3; P.L.177-1991, SEC.3; P.L.119-1994, SEC.3; P.L.169-1997, SEC.4.

IC 23-2-1-5 Version a
Registration by qualification; registration statement; required information; prospectus; annual report
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 5. (a) A security may be registered by qualification.
    (b) A registration statement under this section shall be filed with the commissioner, shall contain the following information, and shall be accompanied by the following documents in addition to the information specified in section 6(e) of this chapter and the consent to service of process required by section 16 of this chapter:
        (1) A copy of the prospectus or offering circular to be used as of the effective date in connection with the offering that must include the following:
            (A) With respect to the issuer and a significant subsidiary of the issuer:
                (i) the issuer's name, address, and form of organization;
                (ii) the state or foreign jurisdiction and date of the issuer's organization;
                (iii) the general character and location of the issuer's business;
                (iv) a description of the issuer's physical properties and equipment; and
                (v) a statement of the general competitive conditions in the industry or business in which the issuer is or will be

engaged.
            (B) With respect to a director and officer of the issuer, or person occupying a similar status or performing similar functions:
                (i) the person's name, address, principal occupation, and personal and business history for the past ten (10) years;
                (ii) the amount of securities of the issuer held by the person as of a specified date within thirty (30) days of the filing of the registration statement;
                (iii) the amount of the securities covered by the registration statement to which the person has indicated the person's intention to subscribe; and
                (iv) a description of a material interest in any material transaction with the issuer or an affiliated corporation effected within the past three (3) years or proposed to be effected.
            (C) With respect to persons covered by clause (B), the remuneration paid during the past twelve (12) months and estimated to be paid during the next twelve (12) months, directly or indirectly, by the issuer (together with all predecessors, parents, subsidiaries, and affiliates of the issuer) to all the persons in the aggregate.
            (D) With respect to a person owning of record or beneficially, if known, ten percent (10%) or more of the outstanding shares of a class of equity security of the issuer, the information specified in clause (B) other than the person's occupation.
            (E) With respect to a promoter, if the issuer was organized within the past three (3) years, the information specified in clause (B), an amount paid to the promoter within that period or intended to be paid to the promoter, and the consideration for any payments.
            (F) With respect to a person on whose behalf a part of the offering is to be made in a nonissuer distribution:
                (i) the person's name and address;
                (ii) the amount of securities of the issuer held by the person as of the date of the filing of the registration statement;
                (iii) a description of a material interest in a material transaction with the issuer or a significant subsidiary effected within the past three (3) years or proposed to be effected; and
                (iv) a statement of the person's reasons for making the offering.
            (G) The capitalization and long term debt (on both a current and a pro forma basis) of the issuer and a significant subsidiary, including a description of each security outstanding or being registered or otherwise offered, and a statement of the amount and kind of consideration (whether in the form of cash, physical assets, services, patents,

goodwill, or anything else) for which the issuer or a subsidiary has issued any of its securities within the past two (2) years or is obligated to issue any of its securities.
            (H) The kind and amount of securities to be offered, the proposed offering price or the method by which it is to be computed, a variation from the price at which a proportion of the offering is to be made to a person or class of persons other than the underwriters, with a specification of the person or class, the basis upon which the offering is to be made if the basis is for something other than cash, the estimated aggregate underwriting and selling discounts or commissions and finders' fees (including separately cash, securities, contracts, or anything else of value to accrue to the underwriters or finders in connection with the offering) or, if the selling discounts or commissions are variable, the basis of determining them and their maximum and minimum amounts, the estimated amounts of other selling expenses, including legal, engineering, and accounting charges, the name and address of each underwriter and each recipient of a finder's fee, and a description of the plan of distribution of the securities to be offered.
            (I) The estimated cash proceeds to be received by the issuer from the offering, the purposes for which the proceeds are to be used by the issuer, the amount to be used for each purpose, the order or priority in which the proceeds will be used for the purposes stated, the amounts of funds to be raised from other sources to achieve the purposes stated, the sources of the funds, and, if a part of the proceeds is to be used to acquire any property (including goodwill) otherwise than in the ordinary course of business, the names and addresses of the vendors, the purchase price, the names of persons who have received commissions in connection with the acquisition, the amounts of any commissions, and any other expense in connection with the acquisition (including the cost of borrowing money to finance the acquisition).
            (J) A description of stock options or other security options outstanding, or to be created in connection with the offering, together with the amount of the options held or to be held by a person required to be named in clause (B), (D), (E), (F), or (H) and by a person who holds or will hold ten percent (10%) or more in the aggregate of the options.
            (K) The dates of, parties to, and general effect concisely stated of, a management or other material contract made or to be made otherwise than in the ordinary course of business if it is to be performed in whole or in part at or after the filing of the registration statement or was made within the past two (2) years, together with a copy of the contract and a description of any pending litigation or proceeding to which the issuer is a party and that materially affects the issuer's business or assets (including any litigation or

proceeding known to be contemplated by government authorities).
            (L) Condensed versions of the financial statements required under subdivision 6.
            (M) The names of an accountant, engineer, appraiser, or other person who has prepared or certified a report or valuation used in connection with the offering.
            (N) The name and address of counsel for the issuer, a nonissuer, and an underwriter.
            (O) A statement on the front cover of the prospectus or offering circular in the size, type, and form, and located as the commissioner may by rule prescribe, to the effect that the Indiana securities division has not in any way passed upon the merits or qualifications of, or recommended or given approval to, the securities offered, or passed upon the accuracy or adequacy of the prospectus or offering circular.
            (P) Additional information the commissioner requires by rule or order so that the prospectus meets the requirements of sections 3 and 12 of this chapter.
        (2) Copies of pamphlets, circulars, form letters, advertisements, or other sales literature intended to be used in connection with the offering.
        (3) A specimen or copy of the security being registered, a copy of the issuer's articles of incorporation, if not already on file with the secretary of state, a copy of the issuer's bylaws as currently in effect, and a copy of an indenture or other instrument covering the security to be registered.
        (4) A signed or conformed copy of an opinion of counsel as to the legality of the security being registered (with an English translation if it is in a foreign language), that shall state whether the security when sold will be legally issued, fully paid, and nonassessable, and, if a debt security, a binding obligation of the issuer.
        (5) The written consent of an accountant, engineer, appraiser, or other person whose profession gives authority to a statement made by the person, if the person is named as having prepared or certified a report or valuation (other than a public and official document or statement) that is used in connection with the registration statement.
        (6) The following financial statements prepared in accordance with generally accepted accounting principles applied on a consistent basis shall be furnished:
            (A) A balance sheet of the issuer as of the close of its last fiscal year, certified by an independent certified or public accountant or firm of accountants.
            (B) Statements of income and changes in financial position for each of the last three (3) fiscal years or for the period of the issuer's and any predecessor's existence, if less than three (3) years, certified by an independent certified or public accountant or firm of accountants.

            (C) An interim balance sheet as of the close of the last fiscal quarter ending forty-five (45) or more days prior to the date of filing, and statements of income and change in financial position for the period between the dates of the audited and interim balance sheets.
            (D) If a part of the proceeds of the offering is to be applied to the purchase of a business, the same financial statements that would be required if that business were the registrant.
        (7) A copy of an underwriting or selling group agreement under which the distribution is to be made, or the proposed form of the agreement whose terms have not yet been determined, and a description of the plan of distribution of securities that are to be offered otherwise than through an underwriter.
        (8) A copy of a management or other material contract made or to be made otherwise than in the ordinary course of business, if it is to be performed in whole or in part, at or after the filing of the registration statement or was made within the past two (2) years.
        (9) Additional information as the commissioner requires by rule or order.
    (c) Except as otherwise provided, the effective date of a registration statement under this section shall be the thirtieth day after the filing of the statement or an earlier date as the commissioner may determine, having due regard to the adequacy of the information respecting the issuer already available to the public, to the facility with which the nature of the securities to be registered, the security's relationship to the capital structure of the issuer, and the rights of holders of the securities can be understood, to the public interest, and to the protection of investors. If an amendment to a statement is filed before the effective date of the statement, the registration statement shall be considered to have been filed when the amendment was filed, except that an amendment filed with the consent of the commissioner before the effective date of the registration statement, or filed pursuant to an order of the commissioner, shall be treated as a part of the registration statement.
    (d) The commissioner shall require as a condition of registration of a security under this section that an adequate prospectus be sent or given to each person to whom an offer is made or from whom an offer to buy is solicited before or concurrently with:
        (1) the first written offer or the first written solicitation of an offer to buy made to the person (otherwise and by means of a public advertisement) by or for the account of the issuer or a person on whose behalf the offering is being made, or by any underwriter or broker-dealer who is offering part of an unsold allotment or subscription taken by the underwriter or broker-dealer as a participant in the distribution;
        (2) the confirmation of a sale made by or for the account of the person;
        (3) payment pursuant to the sale; or
        (4) delivery of the security pursuant to the sale;
whichever first occurs. The prospectus shall be adequate if it contains all of the information specified in subsection (b)(1). So long as an offering continues, the prospectus shall be revised and brought current by the filing of an amended prospectus at least once every twelve (12) months after the registration statement becomes effective and so long as the offering is not discontinued.
    (e) The commissioner shall require, as a condition of registration by an issuer of securities under this section, that the issuer shall subsequently furnish, not less often than annually financial reports to the holders of the issuer's securities, containing information the commissioner shall require by rule or order, including with respect to an issuer that is a business trust or real estate investment trust, information concerning transactions with an officer, director, person holding a similar position with the issuer, or any other affiliated person as defined by the commissioner, and information disclosing the source of distributions from capital made to the holders of its securities.
(Formerly: Acts 1961, c.333, s.204; Acts 1967, c.255, s.3.) As amended by P.L.240-1983, SEC.3; P.L.228-1989, SEC.4; P.L.169-1997, SEC.5.

IC 23-2-1-5.5 Version a
Prospectus; Small Corporate Offerings Registration Form
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 5.5. (a) The prospectus required for registration by qualification under section 5 of this chapter may be satisfied by the Small Corporate Offerings Registration Form (Form U-7) adopted by the North American Securities Administrators Association if all the qualifications in the instructions for use of the form are fulfilled.
    (b) The commissioner shall adopt rules, orders, and forms to implement this section.
As added by P.L.177-1991, SEC.4.

IC 23-2-1-6 Version a
Application for registration; filing fee; contents; effective period; amendment; exemptions
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 6. (a) An application for registration may be filed by:
        (1) the issuer;
        (2) any other person on whose behalf the offering is to be made; or
        (3) a registered broker-dealer.
    (b) A person filing an application for registration shall pay a filing fee of one-twentieth of one percent (0.05%) of the maximum aggregate offering price at which the registered securities are to be offered in Indiana, but the fee may not be less than two hundred fifty dollars ($250) and may not be more than one thousand dollars ($1,000).

    (c) When an application for registration under subsection (b) is withdrawn before the effective date or a preeffective stop order is entered under section 7 of this chapter, the commissioner shall retain two hundred fifty dollars ($250) of the fee.
    (d) A person filing an amendment to an effective registration which requires an order of the commissioner shall pay a twenty-five dollar ($25) filing fee.
    (e) An application for registration shall specify:
        (1) the amount of securities to be offered in this state;
        (2) the states in which a registration statement or similar document in connection with the offering has been or is to be filed; and
        (3) an adverse order, judgment, or decree entered in connection with the offering by the regulatory authorities in each state or by a court or the Securities and Exchange Commission.
    (f) A document filed under this chapter within five (5) years preceding the filing of an application for registration may be incorporated by reference in the application for registration if the document is currently accurate.
    (g) The commissioner may by rule or otherwise permit the omission of an item of information or document from an application for registration.
    (h) In the case of a nonissuer distribution, any part of the information that might otherwise be required under section 5 of this chapter or subsection (i) need not be furnished if the person filing the application for registration produces evidence to the reasonable satisfaction of the commissioner that the person, or the persons on whose behalf the distribution is to be made, cannot furnish that part of the required information without unreasonable effort or expense.
    (i) A registration is effective for:
        (1) two (2) years from its effective date; or
        (2) a shorter period during which the security is being offered or distributed in a nonexempted transaction by or for the account of the issuer or the person on whose behalf the offering is being made or by an underwriter or broker-dealer who is still offering part of an unsold allotment or subscription taken by the underwriter or broker-dealer as a participant in the distribution, except during the time a stop order is in effect under section 7 of this chapter.
    (j) So long as a registration is effective, the commissioner may by rule or order require the person who filed the application for registration to file reports, not more often than quarterly, to keep reasonably current the information contained in the application for registration and to disclose the progress of the offering.
    (k) The commissioner may by rule or order require as a condition of registration by qualification or coordination:
        (1) that a security issued within the past three (3) years or to be issued to a promoter for a consideration substantially different from the public offering price, or to a person for a consideration other than cash, be deposited in escrow; and
        (2) that the proceeds from the sale of the registered security be impounded until the issuer receives a specified amount.
The commissioner may by rule or order determine the conditions of an escrow or impounding required under this subsection, but the commissioner may not reject a depository solely because of location in another state.
    (l) No transferable share is exempt from registration under section 2(b)(3) of this chapter or is qualified for registration under sections 4 or 5 of this chapter unless the issuer has designated a qualified transfer agent to handle all transfers. The commissioner may adopt rules to implement this subsection. The commissioner may by rule or order exempt an issuer, wholly or partially, from the requirements of this subsection.
    (m) A registration statement may be amended after its effective date to increase the securities specified to be offered and sold if the public offering price and underwriters' discounts and commissions are not changed from the amounts reported to the commissioner. An amendment becomes effective upon an order of the commissioner. A person filing an amendment must pay a late registration fee of twenty-five dollars ($25) and a filing fee under subsection (b) for the additional securities proposed to be offered. An amendment relates back to the date of the sale of additional securities being registered if the amendment is filed within three (3) months after the date of the sale and the additional filing fee and late registration fee are paid.
    (n) As permitted by Section 106(c) of the Secondary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-1(c)), securities that are offered and sold pursuant to Section 4(5) of the Securities Act of 1933 or that are mortgage-related securities (as that term is defined in Section 3(a)(41) of the Securities Exchange Act of 1934, 15 U.S.C. 78c(a)(41)):
        (1) must comply with all applicable:
            (A) registration and qualification requirements of this chapter; and
            (B) rules adopted by the commissioner; and
        (2) shall not be treated as obligations issued by the United States for the purposes of this chapter.
    (o) If:
        (1) the division:
            (A) does not approve an application for registration by coordination or qualification; and
            (B) notifies the applicant not later than ten (10) days after the date the application was not approved of a deficiency in the application that, if satisfied, would allow the approval of the application;
        the applicant may satisfy the deficiency within sixty (60) days after the date described in clause (B); and
        (2) an applicant does not satisfy the deficiency described in subdivision (1):
            (A) the application is considered abandoned;
            (B) the issuer does not receive a refund of the application

fee; and
            (C) no further action is required by the division.
(Formerly: Acts 1961, c.333, s.205; Acts 1967, c.255, s.4; Acts 1975, P.L.261, SEC.4.) As amended by Acts 1979, P.L.234, SEC.5; Acts 1981, P.L.214, SEC.4; P.L.130-1984, SEC.7; P.L.228-1989, SEC.5; P.L.177-1991, SEC.5; P.L.169-1997, SEC.6; P.L.73-2004, SEC.6.

IC 23-2-1-6.1 Version a
Federal covered securities
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 6.1. (a) The commissioner, by rule or otherwise, may require the filing of the following or any combination of the following documents with respect to a federal covered security described in Section 18(b)(2) of the Securities Act of 1933 (15 U.S.C. 77r(b)(2)):
        (1) Before the initial offer of the federal covered security in Indiana, all documents that are part of a current federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933 (15 U.S.C. 77a et seq.) and:
            (A) a consent to service of process signed by the issuer; and
            (B) a fee of:
                (i) five hundred dollars ($500) for an issuer with net assets not exceeding ten million dollars ($10,000,000); or
                (ii) one thousand dollars ($1,000) for other issuers.
        (2) After the initial offer of the federal covered security in Indiana, all documents that are part of an amendment to a current federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933 (15 U.S.C. 77a et seq.).
        (3) An annual or periodic report of the value of federal covered securities offered or sold in Indiana and:
            (A) a fee of two hundred fifty dollars ($250); and
            (B) a fee equal to five-hundredths of one percent (0.05%) of the excess of the dollar amount of securities sold during the fiscal year over the dollar amount of securities redeemed, not to exceed two thousand dollars ($2,000) in any one (1) year. The fee required under subdivision (1) shall be applied as a credit against the fee required under this clause.
    (b) With respect to a security that is a federal covered security described in Section 18(b)(4)(D) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)(d)), the commissioner, by rule or otherwise, may require the issuer to file:
        (1) a notice on Securities and Exchange Commission Form D (17 CFR 230.500); and
        (2) a consent to service of process signed by the issuer;
not later than fifteen (15) days after the first sale of the federal covered security in Indiana.
    (c) The commissioner, by rule or otherwise, may require the filing of any document filed with the Securities and Exchange Commission

under the Securities Act of 1933 with respect to a federal covered security described in Section 18(b)(3) or 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(3) or 77r(b)(4)).
    (d) This section does not apply to a federal covered security described in Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. 77r(b)(1)). The commissioner may issue a stop order suspending the offer and sale of a federal covered security if the commissioner finds all of the following:
        (1) The order is in the public interest.
        (2) There is a failure to comply with a condition established under this section.
    (e) The commissioner, by rule or otherwise, may waive any or all of the provisions of this section.
    (f) Notwithstanding this section, until October 11, 1999, if the commissioner provides written notification to an issuer of a federal covered security that fees under this section have not been paid or have been underpaid and the fees are not paid promptly after the notice, the commissioner may require the federal covered security to be registered. An issuer is considered to pay fees promptly if the fees are remitted with fifteen (15) days following the issuer's receipt of the written notice from the commissioner.
As added by P.L.169-1997, SEC.7.

IC 23-2-1-7 Version a
Stop order, suspension, or revocation; postponement; modification of order
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 7. (a) The commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, a registration if the commissioner finds that the order is in the public interest and that any of the following exist:
        (1) The application for registration as of its effective date or as of an earlier date in the case of an order denying effectiveness, or an amendment under section 6(d) or 6(m) of this chapter as of its effective date, or a report under section 6(j) of this chapter is incomplete in a material respect or contains a statement that was, in the light of the circumstances under which it was made, false or misleading with respect to a material fact.
        (2) This chapter or a rule, an order, or a condition lawfully imposed under this chapter has been violated, in connection with the offering, by:
            (A) the person filing the application for registration;
            (B) the issuer, a partner, an officer, or a director of the issuer, a person occupying a similar status or performing similar functions, or a person directly or indirectly controlling or controlled by the issuer, but only if the person filing the application for registration is directly or indirectly controlled by or acting for the issuer; or
            (C) an underwriter.

        (3) The security registered or sought to be registered is the subject of an administrative stop order or similar order or a permanent or temporary injunction of a court of competent jurisdiction entered under any other federal or state statute applicable to the offering, but:
            (A) the commissioner may not institute a proceeding against an effective registration under this subdivision more than one (1) year from the date of the order or injunction relied on; and
            (B) the commissioner may not enter an order under this subdivision on the basis of an order or injunction entered under any other law unless that order or injunction was based on facts that would currently constitute a ground for stop order under this section.
        (4) The issuer's enterprise or method of business includes or would include activities that are illegal where performed.
        (5) The offering has been or would be made with unreasonable amounts of underwriters' and sellers' discounts, commissions, or other compensation, or promoters' profits or participation, or unreasonable amounts or kinds of options.
        (6) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by section 4(b)(4) of this chapter.
        (7) The applicant or registrant has failed to pay the proper filing fee. The commissioner may enter only a denial order under this subdivision and the commissioner shall vacate the order when the deficiency has been corrected.
        (8) The offering has worked or tended to work a fraud upon purchasers or would so operate.
The commissioner may not institute a stop order proceeding against an effective registration on the basis of a fact or transaction known to the commissioner when the registration became effective unless the proceeding is instituted within the next one hundred eighty (180) days.
    (b) The commissioner may by order summarily postpone or suspend the effectiveness of the registration pending final determination of a proceeding under this section. Upon the entry of the order, the commissioner shall promptly notify each person specified in subsection (c) that:
        (1) the order has been entered and the reasons for the entry; and
        (2) upon receipt of a written request the matter will be set down for hearing to commence within fifteen (15) business days after receipt of the request unless the applicant consents to a later date.
If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing to each person specified in subsection (c), may modify or vacate the order or extend it until final determination.
    (c) No stop order may be entered under this section (except the first sentence of subsection (b)) without:
        (1) appropriate prior notice to the applicant or registrant, the issuer, and the person on whose behalf the securities are to be or have been offered;
        (2) opportunity for hearing; and
        (3) written findings of fact and conclusions of law.
    (d) The commissioner may vacate or modify a stop order if the commissioner finds that the conditions that prompted entry have changed or that it is in the public interest to do so.
(Formerly: Acts 1961, c.333, s.206; Acts 1967, c.255, s.5; Acts 1975, P.L.261, SEC.5.) As amended by P.L.34-1987, SEC.282; P.L.228-1989, SEC.6; P.L.113-1992, SEC.1; P.L.169-1997, SEC.8.

IC 23-2-1-8 Version a
Broker-dealers; agents; investment advisers; investment adviser representatives; registration
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 8. (a) It is unlawful for a person to transact business in Indiana as a broker-dealer or agent unless the person is registered under this chapter.
    (b) It is unlawful for a broker-dealer or issuer to employ an agent unless the agent is registered under this chapter. The registration of an agent is not effective during a period when the agent is not associated with a particular broker-dealer registered under this chapter or a particular issuer.
    (c) It is unlawful for a person to transact business in Indiana as an investment adviser or an investment adviser representative unless:
        (1) the person is registered under this chapter;
        (2) the person's only clients in Indiana are investment companies (as defined in the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.)), other investment advisers, broker-dealers, banks, trust companies, savings institutions, insurance companies, employee benefit plans with assets of not less than one million dollars ($1,000,000), and governmental agencies or instrumentalities, whether acting for themselves or as trustees with investment control, or other institutional investors as are designated by rule or by order of the commissioner; or
        (3) the person, during the preceding twelve (12) months, has had less than six (6) clients who are residents of Indiana.
    (d) It is unlawful for an investment adviser who is required to be registered under this chapter to employ an investment adviser representative who is not registered under this chapter. The registration of an investment adviser representative is not effective when the investment adviser representative is not employed by an investment adviser registered under this chapter.
    (e) It is a violation of this chapter for a person required to be registered as an investment adviser under Section 203 of the

Investment Advisers Act of 1940 (15 U.S.C. 80b-3) to employ, supervise, or associate with an investment adviser representative having a place of business in Indiana, unless the investment adviser's representative is:
        (1) registered; or
        (2) exempt from registration;
under this chapter.
    (f) The registration of a broker-dealer, an agent, an investment adviser, or an investment adviser representative expires December 31 of each year unless renewed.
    (g) This subsection does not apply to an investment adviser whose only clients are those described in subsection (c)(3). It is a violation of this chapter for a person who is required to be registered under Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3) as an investment adviser to conduct advisory business in Indiana if:
        (1) the commissioner requires by rule or otherwise that the person file with the commissioner:
            (A) documents filed by the person with the Securities and Exchange Commission;
            (B) a consent to service of process; or
            (C) both clauses (A) and (B); and
        (2) the person fails to file the items required by the commissioner.
(Formerly: Acts 1961, c.333, s.301; Acts 1967, c.255, s.13; Acts 1975, P.L.261, SEC.6.) As amended by Acts 1981, P.L.214, SEC.5; P.L.228-1989, SEC.7; P.L.75-1990, SEC.6; P.L.169-1997, SEC.9.

IC 23-2-1-9 Version a
Registration; contents of application; renewal; fees; capital requirements
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 9. (a) A broker-dealer, an agent, an investment adviser, or an investment adviser representative may apply for registration by filing with the commissioner or a person designated by the commissioner an application together with a consent to service of process pursuant to section 16 of this chapter and payment of the fee prescribed in subsection (d). The application shall contain whatever information the commissioner requires concerning the following matters:
        (1) The applicant's form and place of organization.
        (2) The applicant's proposed method of doing business.
        (3) The qualifications and business history of the applicant, in the case of a broker-dealer or investment adviser, the qualifications and business history of a partner, an officer, a director, or other person occupying a similar status or performing similar functions or a person directly or indirectly controlling the broker-dealer or investment adviser.
        (4) An injunction, an administrative order, or a conviction of a misdemeanor involving a security or an aspect of the securities

business and a conviction of a felony.
        (5) The applicant's financial condition and history.
        (6) Any information to be given to a client or prospective client if the applicant is an investment adviser.
    (b) If no denial order is in effect and no proceeding is pending under section 11 of this chapter, registration becomes effective at noon of the thirtieth day after an application is filed. The commissioner may by rule or order specify an earlier effective date and the commissioner may by order defer the effective date until noon of the thirtieth day after the filing of an amendment. Registration of a broker-dealer or an agent shall be effective until December 31 of each year and may be renewed as provided. The registration of an agent terminates when the agent is no longer associated with the issuer or registered broker-dealer specified in the agent's application. The agent and issuer or registered broker-dealer shall promptly notify the commissioner of a termination. The registration of an investment adviser representative terminates when the investment adviser representative is no longer associated with the investment adviser specified in the investment adviser representative's application. The investment adviser representative and the investment adviser shall promptly notify the commissioner of a termination.
    (c) Registration of a broker-dealer, an agent, an investment adviser, or an investment adviser representative may be renewed annually by filing with the commissioner prior to the expiration of the registration an application containing information the commissioner may require to indicate any material change in the information contained in the original application or a renewal application for registration as a broker-dealer, an agent, an investment adviser, or an investment adviser representative filed with the commissioner by the applicant, payment of the prescribed fee, and, in the case of a broker-dealer, a financial statement showing the financial condition of the broker-dealer as of a date within ninety (90) days prior to application. A registered broker-dealer or an investment adviser may file an application for registration of a successor, whether or not the successor is then in existence, for the unexpired portion of the year without payment of a fee.
    (d) For a broker-dealer, the annual fee shall be two hundred fifty dollars ($250) for initial registration and one hundred twenty-five dollars ($125) for renewal registration. For an investment adviser, the annual fee shall be one hundred dollars ($100) for initial registration and fifty dollars ($50) for renewal registration. For an agent or investment adviser representative, the annual fee for initial or renewal registration shall be twenty-five dollars ($25). The fee for issuance of a duplicate license shall be five dollars ($5). Whenever an initial or renewal application for registration of an agent or investment adviser representative is denied or withdrawn, the commissioner shall retain the entire amount paid. When an initial or renewal application for registration of a broker-dealer or investment adviser is denied or withdrawn prior to registration, the

commissioner shall retain the entire amount paid.
    (e) The commissioner may by rule or otherwise require a minimum amount of capital for registered broker-dealers, not to exceed the limitations provided in Section 15 of the Securities and Exchange Act of 1934 (15 U.S.C. 78o), and establish minimum financial requirements for investment advisers, not to exceed the limitations provided in Section 222 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-18a), which may include different requirements for those investment advisers who maintain custody of client funds or securities or who have discretionary authority over clients' funds or securities and those investment advisers who do not.
(Formerly: Acts 1961, c.333, s.302; Acts 1967, c.255, s.6; Acts 1969, c.221, s.1; Acts 1975, P.L.261, SEC.7.) As amended by Acts 1979, P.L.234, SEC.6; Acts 1981, P.L.214, SEC.6; P.L.232-1985, SEC.3; P.L.228-1989, SEC.8; P.L.177-1991, SEC.6; P.L.113-1992, SEC.2; P.L.169-1997, SEC.10.

IC 23-2-1-9.1 Version a
Surety bond; cash or securities in lieu of bond; exemptions
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 9.1. (a) This section applies to a person who is:
        (1) a registered broker-dealer or agent; or
        (2) an investment adviser;
who has custody of or discretionary authority over client funds or securities.
    (b) Except as provided in subsection (d), the commissioner may by order or otherwise require a person as a condition of registration to post a surety bond and establish the amount and conditions of the bond.
    (c) A deposit of cash and securities shall be accepted instead of a bond.
    (d) A bond may not be required of:
        (1) an investment registrant whose net capital exceeds the amount required by the commissioner; or
        (2) an investment adviser whose minimum financial requirements exceed the amount required by the commissioner;
under section 9(e) of this chapter.
    (e) A bond shall provide for an action on the bond by a person who has a cause of action:
        (1) under section 19 of this chapter; or
        (2) not arising under this chapter, if the commissioner by rule or order requires that such an action may be brought on the bond.
    (f) A bond shall provide that an action may not be maintained to enforce any liability on the bond unless the action is initiated within the time limitations set forth in section 19 of this chapter.
As added by P.L.169-1997, SEC.11.

IC 23-2-1-10 Version a

Records and reports; examination and disclosure
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 10. (a) A registered broker-dealer shall make and keep accounts, correspondence, memoranda, papers, books, and other records as the commissioner requires by rule or otherwise. The commissioner's requirements may not exceed the limitations provided in Section 15 of the Securities and Exchange Act of 1934 (15 U.S.C. 78o).
    (b) An investment adviser shall make and keep accounts, correspondence, memoranda, papers, books, and other records as the commissioner requires by rule or otherwise. The commissioner's requirements may not exceed the limitations provided in Section 222 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-18a). The commissioner may prescribe by rule or otherwise the period that an investment adviser must retain records.
    (c) All the records of a registered broker-dealer or an investment adviser are subject at any time to reasonable periodic, special, or other examinations by representatives of the commissioner, within or without Indiana, as the commissioner deems necessary or appropriate in the public interest or for the protection of investors. No charges or other examination fees may be assessed against a registered broker-dealer or an investment adviser as a result of an examination under this subsection unless the examination results in an investigation or examination made under section 16(d) of this chapter. To avoid duplication of examinations of records, the commissioner may cooperate with the securities administrators of other states, the Securities and Exchange Commission, and any national securities exchange or national securities association registered under the Securities and Exchange Act of 1934 (15 U.S.C. 77b et seq.).
    (d) Every registered broker-dealer and investment adviser shall file financial reports and other reports as the commissioner by rule or order prescribes. The commissioner's reporting requirements for registered broker-dealers may not exceed the limitations provided in Section 15 of the Securities and Exchange Act of 1934 (15 U.S.C. 78o). The commissioner's reporting requirements for investment advisers may not exceed the limitations provided in Section 222 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-18a).
    (e) If the information contained in a document filed with the commissioner is or becomes inaccurate or incomplete in any material respect, the registrant shall promptly file a correcting amendment.
    (f) The commissioner may require investment advisers to furnish or disseminate certain information necessary or appropriate for the public interest or to protect investors or clients. The commissioner may determine that the information furnished to clients or prospective clients of an investment adviser under the Investment Advisors Act of 1940 (15 U.S.C. 80a-1 et seq.) and the rules adopted under the Investment Advisers Act of 1940 may be used to satisfy this requirement.
    (g) The commissioner may annually select as many as twenty-five percent (25%) of all Indiana home and branch offices of registered broker-dealers for completion of compliance reports. Each broker-dealer office that is selected shall file its compliance report according to rules adopted by the commissioner under IC 4-22-2 not more than ninety (90) days after being notified of selection under this subsection. No charges or other examination fees may be assessed against a registered broker-dealer as a result of the examination of a compliance report filed under this subsection unless the examination results in an investigation or examination made under section 16(d) of this chapter.
(Formerly: Acts 1961, c.333, s.303; Acts 1967, c.255, s.7; Acts 1975, P.L.261, SEC.8.) As amended by P.L.228-1989, SEC.9; P.L.178-1991, SEC.1; P.L.205-1993, SEC.1; P.L.169-1997, SEC.12; P.L.164-2001, SEC.1; P.L.48-2006, SEC.2.

IC 23-2-1-11 Version a
Denial, suspension, revocation, or cancellation of registration; censure; grounds; procedure
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 11. (a) The commissioner may by order deny, suspend, or revoke a registration, censure a registrant or an officer, a director, a partner, or a person performing similar functions for a registrant, or other persons who offered or sold securities in Indiana, or bar a registrant or an officer, a director, a partner, or a person performing similar functions for a registrant or other persons who offered or sold securities in Indiana from employment with a registered broker-dealer or an investment adviser if the commissioner finds that the order is in the public interest and that the applicant or registrant or, in the case of a broker-dealer or an investment adviser, a partner, an officer, or a director or a person performing similar functions or a person directly or indirectly controlling the broker-dealer or an investment adviser, or other persons who offered or sold securities in Indiana has done any of the following:
        (1) Has filed an application for registration which, as of its effective date or as of a date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained a statement that was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact.
        (2) Has knowingly violated or failed to comply with this chapter or a rule under this chapter.
        (3) Is permanently or temporarily enjoined by a court from engaging in or continuing any conduct or practice involving any aspect of the securities business.
        (4) Is the subject of an order of the commissioner denying, suspending, or revoking registration as a broker-dealer, an agent, an investment adviser, or an investment adviser representative.

        (5) Is the subject of an order entered within the past five (5) years by the securities administrator of any other state or by the Securities and Exchange Commission denying or revoking registration as a broker-dealer, an agent, an investment adviser, an investment adviser representative, or the substantial equivalent of those terms as defined in this chapter, is the subject of an order of the Securities and Exchange Commission suspending or expelling the person from a national securities exchange or national securities association registered under the Securities Exchange Act of 1934 (15 U.S.C. 78a-78kk), or is the subject of a United States post office fraud order.
        (6) Has engaged in dishonest or unethical practices in the securities business.
        (7) Is insolvent, either in the sense that the person's liabilities exceed the person's assets or in the sense that the person cannot meet the person's obligations as they mature. The commissioner may not enter an order against a broker-dealer or an investment adviser under this subdivision without a finding of insolvency as to the broker-dealer or investment adviser.
        (8) Has not complied with the conditions imposed by sections 9(e) and 9.1 of this chapter.
        (9) Is lacking in integrity, is not of good business reputation, or is not qualified on the basis of such factors as training, experience, or knowledge of the securities business.
        (10) Has failed to pay the proper filing fee. The commissioner may enter only a denial order under this subdivision and the commissioner shall vacate the order when the deficiency has been corrected.
        (11) Has unreasonably delayed the delivery of securities purchased or the remittance for securities sold.
        (12) Has failed to give notice in writing to a customer whether the broker-dealer is dealing as a principal or as agent, and if as an agent, whether for buyer or seller, or both.
        (13) Has failed to deliver the purchased stock certificate or other securities to a buyer or payment to a seller of securities within forty-five (45) days of the date of the transaction. (If, within forty-five (45) days of the date of the transaction, the broker-dealer or the broker-dealer's agent notifies in writing the commissioner that delivery will not be completed within the statutory period, and a written notification gives good and sufficient cause for the delay, this provision for suspension shall not be applicable. Good and sufficient cause shall include but not be limited to delay caused by a transfer agent after delivery of securities to the same for transfer on the records of the corporation. The forty-five (45) day period shall not be regarded as a standard of reasonableness for the purposes of subdivision (11).)
        (14) Has failed reasonably to supervise the person's agents or employees if the person is a broker-dealer or the person's investment adviser representatives or employees if the person

is an investment adviser to assure their compliance with this chapter.
        (15) Has been convicted within ten (10) years before the date of the application or registration of a crime involving fraud or deceit or has a felony conviction (as defined in IC 35-50-2-1) within five (5) years before the date of application or registration.
        (16) Is on the most recent tax warrant list supplied to the commissioner by the department of state revenue.
        (17) Has, within the last ten (10) years, been the subject of an adjudication or determination by a court of competent jurisdiction or by the Securities and Exchange Commission, the Commodity Futures Trading Commission, or by a securities or commodities agency or administrator of another state, and, after notice and opportunity for a hearing, has been found to have willfully violated the Securities Act of 1933 (15 U.S.C. 77a et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the Investment Advisers Act of 1940 (15 U.S.C. 80b et seq.), the Investment Company Act of 1940 (15 U.S.C. 80a et seq.), the Commodity Exchange Act (7 U.S.C. 1 et seq.), or the securities or commodities law of any other state.
        (18) Has been denied the right to do business in the securities, commodities, banking, financial services, or insurance industry, or the person's respective authority to do business in the securities, commodities, banking, financial services, or insurance industry has been revoked or suspended by any other state, federal, or foreign governmental agency or self-regulatory organization for cause.
        (19) Is the subject of a cease and desist order entered by the Securities and Exchange Commission, the Commodity Futures Trading Commission, or by a securities or commodities agency or administrator of another state.
A person described in subdivisions (1) through (19) violates this chapter.
    (b) The following provisions govern the application of subsection (a)(9):
        (1) The commissioner may not enter an order against a broker-dealer on the basis of the lack of qualification of a person other than:
            (A) the broker-dealer if the broker-dealer is an individual; or
            (B) an agent of the broker-dealer.
        (2) The commissioner may not enter an order solely on the basis of lack of experience if the applicant or registrant is qualified by training or knowledge, or both.
        (3) The commissioner shall consider that an agent who will work under the supervision of a registered broker-dealer need not have the same qualifications as a broker-dealer, and that an investment adviser representative who will work under the supervision of a registered investment adviser need not have the same qualifications as an investment adviser.

        (4) The commissioner may by rule provide for an examination, including an examination developed or approved by an organization of securities administrators, which may be written or oral or both, to be taken by a class of or all applicants. The commissioner may by rule or order waive the examination requirement for a person or class of persons if the commissioner determines the examination is not necessary for the protection of the public.
        (5) The commissioner may not enter an order against an investment adviser on the basis of the lack of qualification of a person other than:
            (A) the investment adviser if the investment adviser is an individual; or
            (B) an investment adviser representative.
        (6) The commissioner shall consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker-dealer or an agent. When the commissioner finds that an applicant for a broker-dealer registration is not qualified as an investment adviser, the commissioner may by order condition the applicant's registration as a broker-dealer upon the applicant's not transacting business in Indiana as an investment adviser.
    (c) The commissioner may not institute a suspension or revocation proceeding on the basis of a fact or transaction known to the commissioner when registration became effective, unless the proceeding is instituted within the next one hundred eighty (180) days. The commissioner may by order summarily postpone or suspend registration pending final determination of a proceeding under this section concerning an application for registration or renewal of registration. Upon the entry of the order, the commissioner shall promptly notify the applicant or registrant, as well as the employer or prospective employer if the applicant or registrant is an agent or an investment adviser representative, that:
        (1) the order has been entered and the reasons for the order; and
        (2) within fifteen (15) days after receipt of a written request the matter will be set for hearing.
If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing, may modify or vacate the order or extend it until final determination.
    (d) Withdrawal from registration as a broker-dealer, an agent, an investment adviser, or an investment adviser representative becomes effective thirty (30) days after receipt of an application to withdraw or within a shorter period of time as the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke, suspend, or impose conditions upon the withdrawal is instituted within thirty (30) days after the application is filed. If a proceeding is pending or instituted, withdrawal becomes effective at the time and upon the

conditions as the commissioner by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner may institute a revocation or suspension proceeding under subsection (a) within one (1) year after withdrawal became effective and enter a revocation or suspension order as of the last date on which registration was effective.
    (e) No order may be entered under this section except for orders of postponement entered under subsection (c) or orders of suspension under subsection (i), without appropriate prior notice to the applicant or registrant (as well as the employer or prospective employer if the applicant or registrant is an agent or an investment adviser representative), opportunity for hearing, and written findings of fact and conclusions of law.
    (f) If the commissioner finds that a registrant or applicant for registration is no longer in existence or has ceased to do business as a broker-dealer, an agent, an investment adviser, or an investment adviser representative, is subject to an adjudication of mental incompetence or to the control of a committee, conservator, or guardian, or cannot be located after reasonable search, the commissioner may by order cancel the registration or application.
    (g) For purposes of proceedings by the commissioner under this chapter with respect to the registration of an agent or an investment adviser representative, the commissioner may institute proceedings under subsection (a) within one (1) year after termination or expiration of a registration and enter a revocation or suspension order as of the last date on which the registration was effective.
    (h) The commissioner shall notify the insurance commissioner when an order is issued under this section denying, suspending, or revoking registration.
    (i) The commissioner may by order summarily suspend a registration pending a final determination of a proceeding under this section. Upon the entry of the order, the commissioner shall promptly notify the registrant, as well as the employer if the registrant is an agent, that the order has been entered. The notice must include a statement:
        (1) of reasons for entry of the order; and
        (2) that within fifteen (15) days after the receipt of a written request the matter will be set down for a hearing.
If a hearing is not requested and none is ordered by the commissioner, the order remains in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing, may modify or vacate the order or extend it until a final determination.
(Formerly: Acts 1961, c.333, s.304; Acts 1967, c.255, s.8; Acts 1975, P.L.261, SEC.9.) As amended by Acts 1978, P.L.2, SEC.2305; P.L.232-1985, SEC.4; P.L.19-1986, SEC.41; P.L.6-1987, SEC.19; P.L.31-1988, SEC.7; P.L.228-1989, SEC.10; P.L.75-1990, SEC.7; P.L.113-1992, SEC.3; P.L.11-1996, SEC.14; P.L.169-1997, SEC.13; P.L.164-2001, SEC.2; P.L.1-2006, SEC.407.

IC 23-2-1-12 Version a
Fraudulent or deceitful acts
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 12. It is unlawful for any person in connection with the offer, sale or purchase of any security, either directly or indirectly, (1) to employ any device, scheme or artifice to defraud, or (2) to make any untrue statements of a material fact or to omit to state a material fact necessary in order to make the statements made in the light of circumstances under which they are made, not misleading, or (3) to engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.
(Formerly: Acts 1961, c.333, s.401.)

IC 23-2-1-12.1 Version a
Unlawful practices; investment advisers and investment adviser representatives
     Note: This version of section effective until 7-1-2008. See also following repeal of this chapter, effective 7-1-2008.
    Sec. 12.1. (a) It is unlawful for an investment adviser or an investment adviser representative who receives consideration, directly or indirectly, from another person for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise to:
        (1) employ a device, scheme, or artifice to defraud the other person;
        (2) engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon the other person; or
        (3) knowingly sell to or purchase from a client a security when the investment adviser or investment adviser representative is acting as principal for the adviser's or the representative's own account, or knowingly sell to or purchase for the account of a client a security when the investment adviser or investment adviser representative is acting as a broker for a person other than the client without:
            (A) disclosing to the client in writing before the completion of the sale or purchase the fact that the investment adviser or investment adviser representative is acting as a broker for a person other than the client; and
            (B) obtaining consent from the client for the sale or purchase.
        The prohibitions of this subdivision do not apply to a transaction with a client of a broker-dealer if the broker-dealer is not acting as an investment adviser in the transaction.
    (b) Except as permitted by rule or order of the commissioner, it is unlawful for an investment adviser to enter into, extend, or renew an investment advisory contract unless it provides in writing that:
        (1) the investment adviser shall not be compensated on the basis of a share of capital gains upon or capital appreciation of the

funds or a portion of the funds of the client;
        (2) no assignment of the contract may be made by the investment adviser without the consent of the other party to the contract; and
        (3) the investment adviser, if a partnership, shall notify the other party to the contract of a change in the membership of the partnership within a reasonable time after the change.
Subdivision (1) does not prohibit an investment advisory contract which provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date. "Assignment", as used in subdivision (2), includes a direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or of a controlling block of the assignor's outstanding voting securities by a security holder of the assignor, but if the investment adviser is a partnership, no assignment of an investment advisory contract is considered to result from the death or withdrawal of a minority interest in the business of the investment adviser or from the admission to the investment adviser of one (1) or more members who, after admission, will be only a minority of the members and will have only a minority interest in the business.
    (c) It is unlawful for an investment adviser to take or have custody of the securities of a client if:
        (1) the commissioner by rule prohibits custody; or
        (2) in the absence of a rule, the investment adviser fails to notify the commissioner that the investment adviser has or may have custody.
    (d) When soliciting advisory clients, it is unlawful for a person to make an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading.
    (e) The commissioner may by rule or order allow exemptions from subsections (a)(3), (b)(1), (b)(2), and (b)(3) if the exemptions are in the public interest and within the purposes of this chapter.
    (f) The commissioner may by rule or order require disclosure in writing of the information specified by the commissioner by an investment adviser or an investment adviser representative to a client or prospective client.