TITLE 14: COMMERCE
SUBTITLE A: REGULATION OF BUSINESS
CHAPTER I: SECRETARY OF STATE
PART 130 REGULATIONS UNDER ILLINOIS SECURITIES LAW OF 1953
SECTION 130.200 DEFINITIONS OF TERMS USED IN THE ACT AND THE RULES
Section 130.200 Definitions of Terms Used in the Act and the Rules
a) As used in the Act and this Part, unless the context otherwise requires, the term:
"Act" means the Illinois Securities Law of 1953 [815 ILCS 5].
"Affiliate" of, or a person "affiliated" with, a specified person means a person who, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
"Amount", when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to shares, and the number of units if relating to any other kind of security.
"Applicant" means the person making application for registration or exemption.
"Certified", when used in regard to financial statements, means examined and reported upon with an opinion expressed by an independent certified public accountant.
"CFTC" means the Federal Commodity Futures Trading Commission.
"Charter" includes articles of incorporation, a declaration of trust, articles of association or partnership, or any similar instrument, as amended, affecting (either with or without filing with any governmental agency) the organization or creation of an incorporated or unincorporated person.
"Correspondent" means the person authorized in the application for registration or exemption to receive notices and communications from the Secretary.
"Controlling Person" as used in Section 4.F of the Act shall not include any sponsor of a unit investment trust after the completion of the initial distribution.
"CRD" means the computer registration system for the registration of dealers and salespersons known as the "Central Registration Depository" operated by FINRA.
"Customer", as used in Section 130.270, means any person for whom the futures commission merchant effects or intends to effect transactions in futures, options on futures, or any other instruments subject to CFTC jurisdiction.
"Director" means any director of a corporation or any person performing similar functions with respect to any organization whether incorporated or unincorporated.
"Employee" does not include a director, trustee, or officer.
"Federal 1933 Act" means the Act of the Congress of the United States known as the Securities Act of 1933 (15 USC 77a-77aa).
"Federal 1934 Act" means the Act of Congress of the United States known as the "Securities Exchange Act of 1934" (15 USC 78a-78aa).
"Federal 1936 Act" means the Act of Congress of the United States known as the Commodity Exchange Act of 1936 (7 USC 1 et seq.).
"Federal 1940 Investment Company Act" means the Act of Congress of the United States known as the Investment Company Act of 1940 (15 USC 80a-1 through 80a-52).
"Federal 1940 Investment Advisers Act" means the Act of Congress of the United States known as the Investment Advisers Act of 1940 (15 USC 80b-1 through 80b-21).
"Federal Banking Act of 1933" means 12 USC 227.
"Federal Covered Investment Adviser Representative" means any person with a place of business in this State who is an investment adviser representative of a federal covered investment adviser.
"Federal Public Utility Holding Company Act of 1935" means 15 USC 79 through 79z-6).
"FINRA" means the self-regulatory organization registered under the Federal 1934 Act, as defined in this Section, known as the Financial Industry Regulatory Authority.
"Fiscal Year" means the annual accounting period or, if no accounting period has been adopted, the calendar year ending on December 31.
"Futures" and "Futures Contracts", as used in Section 130.270, mean contracts of sale of a commodity for future delivery traded on or subject to the rules of a contract market designated by the CFTC or traded on or subject to the rules of any board of trade located outside the United States, its territories or possessions.
"Futures Commission Merchants", as used in Section 130.270, means individuals, associations, partnerships, corporations and trusts engaged in soliciting or in accepting orders for the purchase or sale of any commodity for future delivery on or subject to the rules of any contract market and that, in or in connection with such solicitation or acceptance of orders, accepts any money, securities, or property (or extends credit in lieu thereof) to margin, guarantee or secure any trades or contracts that result or may result therefrom.
"Hearing" means a proceeding conducted by the Securities Department in which the rights, privileges, immunities, duties or obligations of any person or party are required by law to be determined by the Secretary only after opportunity for a hearing.
"Hearing Officer" means the designee of the Secretary or the Securities Director who, pursuant to Section 11 of the Act, is designated in the Notice of Hearing to preside at a hearing conducted pursuant to Section 11 of the Act or any person so designated as a substitute hearing officer.
"IARD" means the computer web-based registration system for the registration of investment advisers and investment adviser representatives known as the Investment Adviser Registration Depository operated by FINRA.
"Identifying Statement" means a written or oral communication or advertisement meeting the requirements of Section 130.210(b)(1).
"Insolvency" or "Insolvent" means the inability to pay debts and obligations when due or when current liabilities exceed current assets. Any party regulated by this Part claiming insolvency shall file with the Securities Department a balance sheet prepared as of a current date and executed and verified by the chief financial officer of the issuer.
"Internal Revenue Code" means the Internal Revenue Code of 1986 (26 USC 1-9602).
"Majority-Owned Subsidiary" means a subsidiary more than 50% of whose outstanding securities, which represent the right, other than as affected by events of default, to vote for the election of directors, is owned by the subsidiary's parent and/or one or more of the parent's other majority-owned subsidiaries.
"Material", when used to qualify a requirement for the furnishing of information as to any subject, limits the information required to those matters as to which there is a substantial likelihood that a reasonable investor would consider it important in deciding upon a course of action to be taken, including, but without limitation, purchasing, selling or holding the security or securities involved, or accepting or rejecting an offer or proposal made with regard to any security or securities.
"Nonaccredited Investor", as used in Section 130.420, means a person who is not a person set forth in Section 4.C, 4.H, 4.R or 4.S of the Act.
"Office", unless otherwise clarified, refers to the Office of the Securities Department of the Secretary of State, and not to any particular address or location.
"Officer" means the president; any vice president in charge of a principal business unit, division or function; the secretary; the treasurer; any principal financial officer, comptroller or principal accounting officer; any other officer performing a principal policy-making function; and any other person performing similar functions with respect to any organization whether incorporated or unincorporated.
"Options on Futures", as used in Section 130.270, means puts or calls on a futures contract traded on or subject to the rules of a contract market designated by the CFTC or traded or subject to the rules of any board of trade located outside the United States, its territories or possessions.
"Pacific Coast Stock Exchange, Inc." means the Pacific Stock Exchange, Inc.
"Parent" of a specified person means an affiliate controlling such person directly or indirectly through one or more intermediaries.
"Party" means any person named as a petitioner or a respondent in a hearing conducted by the Securities Department.
"Person" means a natural person, a corporation, a partnership, a limited partnership, a limited liability company, a limited liability limited partnership, an association, a joint stock company, a trust or any unincorporated organization, except that, as used in this Section, the word "trust" includes only a trust where the interest or the interests of the beneficiary or beneficiaries are a security.
"Place of Business" of a federal covered investment adviser representative means a location at which the federal covered investment adviser representative provides investment advisory services, solicits, meets with, or otherwise communicates with clients, and any other location that is held out to the general public as a location at which the investment adviser representative provides investment advisory services, solicits, meets with, or otherwise communicates with clients.
"Predecessor" means a person, the major portion of the business and assets of which another person acquired in a single succession or in a series of related successions in each of which the acquiring person acquired the major portion of the business and assets of the acquired person.
"Preliminary Prospectus" means a document meeting the requirements of Section 130.210(b)(2).
"Principal Underwriter" means an underwriter in privity of contract with the issuer of the securities as to which that person is an underwriter.
"Promoter" means any person who, acting alone or in conjunction with one or more other persons, directly or indirectly takes initiative in founding and organizing the business or enterprise of an issuer; or any person who, in connection with the founding and organizing of the business or enterprise of an issuer, directly or indirectly receives in consideration of services or property, or both, 10% or more of any class of securities of the issuer or 10% or more of the proceeds from the sale of any class of securities of the issuer. However, a person who receives the securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this definition if the person does not otherwise take part in founding and organizing the enterprise.
"Prospectus" means any prospectus, notice, circular, advertisement, letter or communication, written or by radio, television or other communications medium that offers any security for sale or confirms the sale of any security; except that a communication sent or given after the effective date of the registration of the security (other than a prospectus permitted under section 10(b) of the Federal 1933 Act) shall not be deemed a prospectus if it is proved that, prior to or at the same time as the communication, a written prospectus, meeting the requirements of section 10(a) of the Federal 1933 Act at the time of the communication, was sent or given to the person to whom the communication was made, and a notice, circular, advertisement, letter or communication in respect to a security shall not be deemed to be a prospectus if it states from whom a written prospectus meeting the requirements of Section 5 of the Act may be obtained and, in addition, does no more than identify the security, state the price thereof, state by whom orders will be executed, and contain such other information as the Secretary by this Part deems necessary or appropriate in the public interest and for the protection of investors and, subject to such terms and conditions as may be described therein, may permit.
"Regulated Account", as used in Section 130.270, means a customer segregation account subject to 17 CFR 1.20 (August 1, 1997); provided, however, that, where such regulations do not permit to be maintained in such an account or require to be maintained in a separate regulated account funds or securities in proprietary accounts or funds or securities used as margin for or excess funds related to futures contracts, options on futures or any other instruments subject to CFTC jurisdiction that trade outside the United States, its territories or possessions, the term "regulated account" means such separate regulated account or any other account subject to 17 CFR 1.31 et seq. (August 1, 1997).
"Registrant" means the issuer of the securities that are the subject of the application for registration.
"Rules" refers to all rules adopted by the Secretary pursuant to the Act.
"Share" means a share of stock in a corporation or unit of interest in an unincorporated person.
"SEC" means the United States Securities and Exchange Commission.
"Secretary of State" or "Secretary" means the Secretary of State of Illinois.
"Section" refers to a Section of this Part unless a reference to the Act is specifically made.
"Securities Department" means the Securities Department of the Office of the Secretary of State.
"Securities Protection Act of 1970" means the Securities Investor Protection Act of 1970 (15 USC 78aaa et seq.).
"Segregated Customer Funds", as used in Section 130.270, means funds subject to 17 CFR 1.20 (August 1, 1997).
"SRD" means the automated computer registration system for the registration and renewal of registration of securities, investment fund shares and unit investment trusts registered under the Federal 1933 Act and Federal 1940 Investment Company Act known as the Securities Registration Depository.
"Significant Subsidiary" means a subsidiary for which:
the assets of the subsidiary, or the investments in and advances to the subsidiary by its parent and the parent's other subsidiaries, if any, exceed 15% of the assets of the parent and its subsidiaries on a consolidated basis; or
the sales and operating revenues of the subsidiary exceed 15% of the sales and operating revenues of its parent and the parent's subsidiaries on a consolidated basis.
In determining whether a subsidiary is a significant subsidiary, such a subsidiary shall be considered in the aggregate with any subsidiaries of which it is the parent.
"State Bond and Mortgage Company" means the company currently known as SBM Certificate Company or any successor company.
"Subsidiary" of a specified person is an affiliate controlled by such person directly or indirectly through one or more intermediaries. (See also "Majority-Owned Subsidiary", "Significant Subsidiary" and "Totally-Held Subsidiary".)
"Succession" means the direct acquisition of the assets comprising a going business, whether by merger, consolidation, purchase, or other direct transfer. The term does not include the acquisition of control of a business unless followed by the direct acquisition of its assets. The terms "succeed" and "successor" have the same meaning as "succession".
"Totally-Held Subsidiary" means a subsidiary substantially all of whose outstanding securities are owned by its parent and/or the parent's other totally-held subsidiaries, and that is not indebted to any person other than its parent and/or the parent's other totally-held subsidiaries in an amount that is material in relation to the particular subsidiary, excepting indebtedness incurred in the ordinary course of business that is not overdue and that matures within one year from the date of its creation, whether evidenced by securities or not.
"Unit Investment Trust" means an investment company that:
is organized under a trust indenture, agency or custodianship contract or similar instrument, does not have a board of directors; and
issues only redeemable securities, each of which represents an undivided interest in a unit of specified securities.
The term "unit investment trust" does not include a voting trust.
"Unsolicited Transaction", as used in Section 130.270, means a transaction that is not effected in a discretionary account or recommended to a customer by the futures commission merchant, an associated person of a futures commission merchant, a business affiliate that is controlled by, controlling, or under common control with, the futures commission merchant, or an introducing broker that is guaranteed by the futures commission merchant.
b) A Section in this Part that defines a term without express reference to the Act or to this Part defines that term for all purposes as used both in the Act and in this Part. Terms defined in the Act and not defined in this Part have the meanings given them in the Act.
(Source: Amended at 36 Ill. Reg. 2852, effective February 8, 2012)