Definitions

PURPOSE: This rule defines certain terms used in the administration of the Missouri Securities Act of 2003 and in the corresponding rules, forms, and orders made. (1) When the terms listed in this rule are used in the Missouri Securities Act of 2003 (the Act), these rules, the forms, and the orders of the commissioner, the following meanings shall apply (unless the context otherwise requires), together with those which may later appear to the extent that they are not inconsistent with definitions provided in Chapter 409, RSMo: (A) Act means Chapter 409, RSMo, otherwise known as the Missouri Securities Act of 2003; (B) Affiliate means a person who, directly or indirectly, through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, another person; (C) Applicant means the person executing an application; (D) Application means the form prescribed or approved by the commissioner for filing in connection with the— 1. Registration of securities, including any amendment to the form and any information, document, report, or memorandum filed as a part of the form or incorporated in the form by reference; it includes the registration statement; and 2. Registration as a broker-dealer, agent, investment adviser, or representative of an investment adviser, including any amendment to the form and any information, document, report, or memorandum filed as a part of the form or incorporated in the form by reference; (E) Associate means a corporation or organization (other than an issuer or a majority-owned subsidiary of an issuer) of which a person is an officer or partner, or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities; a trust or other estate in which a person has a substantial beneficial interest or as to which s/he serves as trustee or in a similar capacity; and a relative or spouse of a person, or any relative of his/her spouse, who has the same home as the person or who is a director or officer of an issuer or any of its parents or subsidiaries; (F) Certified means, when used in connection with financial statements, certified by an independent certified public accountant in accordance with generally accepted accounting principles; (G) Chief compliance officer means an individual, who is both a supervised person and an investment adviser representative of the firm, responsible for administering the supervisory or compliance policies and procedures an investment adviser adopts under “Supervision Guidelines for Investment Advisers” in 15 CSR 30-51.173; (H) CRD System means the NASAA/FINRA Central Registration Depository; (I) Control and controlling person mean possession of the power, authority, or means to engage in the management or policy-making functions of a person, directly or indirectly, through ownership of securities, by contract or otherwise. An officer, director, partner, or trustee or individual occupying similar status or performing similar functions or a person owning ten percent (10%) or more of the outstanding shares of any class or classes of securities of another shall be presumed a controlling person; (J) Division or Securities Division means the staff of the Securities Division, Office of Secretary of State of Missouri; (K) FINRA means the Financial Industry Regulatory Authority; (L) IARD System means the NASAA/SEC Investment Adviser Registration Depository; (M) Isolated, for the purpose of section 409.2-202(1) of the Act, means standing alone, disconnected from any other transactions; (N) NASAA means the North American Securities Administrators Association, Inc.; (O) Parent means an affiliate controlling another person; (P) Predecessor means a person, a major portion of whose business, assets, or control has been acquired by another; (Q) Promoter means a person who— 1. Acting alone or in conjunction with one (1) or more other persons, directly or indirectly, takes the initiative in founding and organizing or reorganizing the business or enterprise of an issuer; and 2. In connection with the founding and organizing or reorganizing of the business or enterprise of an issuer, directly or indirectly, receives in consideration of services or property, or both services and property, a substantial amount of any class of securities of the issuer or a substantial amount of the proceeds from the sale of any class of securities; (R) Registrant means an applicant for whom, or an issuer with respect to whose securities, a registration has become effective; (S) SEC means the United States Securities and Exchange Commission; (T) Subsidiary means an affiliate controlled by another person; (U) Supervised person means any partner, officer, director (or other person occupying a similar status or performing similar functions), investment adviser representative, employee of an investment adviser, or other person who provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser; (V) Underwriter means a person who has purchased from an issuer or an affiliate of an issuer with a view to, or offers or sells for an issuer or an affiliate of an issuer in connection with, the distribution of any security, or participates or has a participation in the direct or indirect underwriting of any such undertaking. Not included is a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors’ or sellers’ commission; (W) Viatical settlement, for the purpose of section 409.1102(28)(E), RSMo, includes, but is not limited to, a viatical settlement contract which means a written agreement establishing the terms under which compensation or anything of value will be paid, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the viator’s assignment, transfer, sale, devise, or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance. A viatical settlement contract also includes: 1. A contract for a loan or other financing transaction with a viator secured primarily by an individual or group life insurance policy, other than a loan by a life insurance company pursuant to the terms of the life insurance contract, or a loan secured by the cash value of a policy; and 2. An agreement with a viator to transfer ownership or change the beneficiary designation at a later date regardless of the date that compensation is paid to the viator; and (X) For the purpose of section 409.2-201(3) of the Act, the words banking institution or other depository institution do not include any loan and investment company formed under the provisions of Chapter 368, RSMo. AUTHORITY: section 409.6-605, RSMo Supp. 2013.* Original rule filed June 25, 1968, effective Aug. 1, 1968. Amended: Filed May 21, 1969, effective Aug. 1, 1969. Amended: Filed July 21, 1972, effective Aug. 1, 1972. Amended: Filed Nov. 15, 1974, effective Nov. 25, 1974. Amended: Filed Dec. 19, 1975, effective Dec. 31, 1975. Emergency amendment filed Sept. 19, 1977, effective Sept. 29, 1977, expired Jan. 27, 1978. Amended: Filed Oct. 3, 1977, effective Jan. 13, 1978. Emergency amendment filed Aug. 1, 1980, effective Aug. 13, 1980, expired Dec. 11, 1980. Amended: Filed Aug. 13, 1980, effective Dec. 11, 1980. Emergency amendment filed Aug. 4, 1995, effective Aug. 14, 1995, expired Dec. 11, 1995. Amended: Filed Aug. 4, 1995, effective Jan. 30, 1996. Amended: Filed Dec. 17, 2001, effective July 30, 2002. Emergency amendment filed Aug. 25, 2003, effective Sept. 12, 2003, expired March 9, 2004. Amended: Filed Aug. 25, 2003, effective Feb. 29, 2004. Amended: Filed May 21, 2009, effective Nov. 30, 2009. Amended: Filed Sept. 9, 2010, effective March 30, 2011. Amended: Filed Dec. 3, 2013, effective July 30, 2014. *Original authority: 409.6-605, RSMo 2003.