Chapter 393
AN ACT
SB 257
Relating to variable annuities; creating new provisions; and amending
ORS 59.015 and 731.046.
Be It Enacted by the People of
the State of
SECTION 1.
ORS 59.015 is amended to read:
59.015. As used in the
Oregon Securities Law, unless the context otherwise requires:
(1) “Broker-dealer”
means a person who engages, all or part of the time, in effecting transactions
in securities for the account of others or for the person’s own account. “Broker-dealer”
does not include:
(a) An issuer effecting
sales in its own securities;
(b) The following
institutions:
(A) A financial
institution or trust company, as defined in ORS 706.008; or
(B) A financial holding
company or a bank holding company, as defined in ORS 706.008, holding an
institution described in subparagraph (A) of this paragraph; a savings and loan
holding company as defined in section 408 of the National Housing Act, 12
U.S.C. section 1730a, holding an association described in subparagraph (A) of this
paragraph; the subsidiaries and affiliates of the financial holding company,
bank holding company or savings and loan holding company; or subsidiaries and
affiliates of institutions described in subparagraph (A) of this paragraph, if
the appropriate statutory regulatory authority is exercising control over, or
is regulating or supervising the person in the sale of securities in accord
with the purposes of the Oregon Securities Law;
(c) A person who has no
place of business in this state effecting transactions in this state
exclusively with broker-dealers;
(d) A person effecting
sales exempted by ORS 59.035;
(e) A salesperson;
(f) A person effecting
sales of securities owned by the person registered for sale pursuant to ORS
59.065;
(g) A person effecting
sales of securities exempted by ORS 59.025 (7);
(h) A person licensed as
a mortgage banker or a mortgage broker under ORS 59.840 to 59.980 when
effecting sales of securities involving real estate paper registered for sale
pursuant to ORS 59.065; or
(i) A person designated
by rule or order by the director.
(2) “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
(3) “Director” means the
Director of the Department of Consumer and Business Services.
(4) “Federal covered
investment adviser” means a person who is registered as an investment adviser
pursuant to section 203 of the Investment Advisers Act of 1940, as amended.
(5) “Federal covered
security” means any security that is a covered security under section 18 of the
Securities Act of 1933, as amended, and for which such Act provides that the
director may require filing of a notice and payment of a fee.
(6) “Fraud,” “deceit”
and “defraud” are not limited to common-law deceit.
(7) “Guaranteed” means
guaranteed as to payment of principal, interest or dividends.
(8)(a) “Investment
adviser representative” means any partner, officer, director or person
occupying a similar status or performing a similar function, or other
individual, except clerical or ministerial personnel, who is employed by or
associated with:
(A) A state investment
adviser that is licensed or required to be licensed in this state and who does
any of the following:
(i) Makes any
recommendations or otherwise renders advice regarding securities;
(ii) Manages accounts or
portfolios of clients;
(iii) Determines which
recommendation or advice regarding securities should be given;
(iv) Solicits, offers or
negotiates for the sale of or sells investment advisory services; or
(v) Supervises employees
acting under this subparagraph; or
(B) A federal covered
investment adviser, subject to the limitations of section 203A of the
Investment Advisers Act of 1940, as amended, as the director may designate by
rule or order.
(b) “Investment adviser
representative” does not include a person designated by rule or order of the
director.
(9) “Issuer” means a
person who issues, proposes to issue or has issued a security and includes an
issuer to be formed. 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 persons performing similar functions or of the fixed,
restricted management or unit type, the “issuer” is the person or persons
performing the acts and assuming the duties of depositor or manager pursuant to
the provisions of the trust or other instrument or agreement under which the
security is issued.
(10) “License” means a
license as provided under the Oregon Securities Law.
(11) “Mortgage banker”
means a mortgage banker as defined in ORS 59.840.
(12) “Mortgage broker”
means a mortgage broker as defined in ORS 59.840.
(13) “Offer” or “offer
to sell” includes every attempt or offer to dispose of, or solicitation of an
offer to buy, a security or interest in a security for value. Every sale or
offer of a warrant or right to purchase or subscribe to another security of the
same or another issuer, as well as every sale or offer of a security which
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.
(14) “Person” includes
an individual, a joint venture, a partnership, a cooperative, a limited
liability company, an association, a joint stock company, a corporation, a
trust, an unincorporated organization or a government or political subdivision
of a government.
(15) “Real estate paper”
means any obligation secured or purportedly secured by an interest in real
property. Real estate paper includes, but is not limited to, mortgage-backed securities,
collateralized mortgage obligations, and real estate mortgage investment
conduits.
(16) “Registered” means
registered as provided in the Oregon Securities Law.
(17)(a) “
(b) For purposes of the
authority of the director under ORS 59.245 and 59.255, the terms “sale” and “sell”
include the terms “offer” and “offer to sell.”
(c) “
(A) A bona fide pledge
or loan of securities;
(B) A bona fide security
dividend, whether the corporation distributing the dividend is the issuer of
the security or not, if nothing of value is given by the recipients for the
dividend other than payments in connection with the elimination of fractional
shares; or
(C) An act incident to a
judicially approved reorganization in which a security is issued in exchange
for one or more outstanding securities, claims or property interests, or partly
in such exchange and partly for cash.
(18)(a) “Salesperson”
means a person, other than a broker-dealer, who represents or purports to
represent a broker-dealer, issuer or owner of securities in effecting or
attempting to effect in any manner transactions in securities.
(b) “Salesperson” does
not include:
(A) A person who
represents an issuer in effecting sales in a security exempted by ORS 59.025;
(B) A person who
represents an issuer in effecting sales exempted by ORS 59.035;
(C) A person who
represents an issuer in effecting sales with existing partners or directors of
the issuer, if no commission or other remuneration is paid or given directly or
indirectly for soliciting any person in this state;
(D) An employee of an institution
or organization described in subsection (1)(b) of this section to the extent
the employee is not a dual employee of the institution and a broker-dealer;
(E) A person effecting
transactions in this state limited to those transactions described in section
15(h)(2) and (3) of the Securities Exchange Act of 1934, as amended; or
(F) A person designated
by rule or order by the director.
(c) A person who is a
partner, director or officer of a broker-dealer, issuer or owner of securities,
or a person who occupies a similar status or performing similar functions, is a
“salesperson” only if the person otherwise comes within this definition.
(19)(a) “Security” means
a note, stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in a pension plan or profit-sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust
certificate, variable annuity, 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 such title or lease, real estate
paper sold by a broker-dealer, mortgage banker, mortgage broker or a person
described in subsection (1)(b) of this section to persons other than persons
enumerated in ORS 59.035 (4), or, in general, any interest or instrument
commonly known as a “security,” or any certificate of interest or participation
in, temporary or interim certificates for, receipt for, guarantee of, or
warrant or right to subscribe to or purchase any of the foregoing.
(b) “Security” does not
include:
(A) An insurance or
endowment policy or annuity contract, other than a variable annuity
contract, under which an insurance company promises to pay a fixed or
variable sum of money either in a lump sum or periodically for life or some
other specified period;
(B) A beneficial
interest in a voluntary inter vivos trust unless the trust is created solely
for the purpose of voting or is part of an attempt to evade the provisions of
ORS 59.005 to 59.451; or
(C) A beneficial
interest in a testamentary trust.
(20)(a) “State
investment adviser” means a person who, for compensation:
(A) Engages all or part
of the time of the person, in this state, in the business of advising others,
either directly or by mail or through publication or writing, as to the value
of securities or as to the advisability of investing in, purchasing or selling
securities;
(B) Engages all or part
of the time of the person, in this state, in the business of managing an
investment or trading account in securities for other persons; or
(C) Issues or
promulgates, as part of a regular business in this state, analyses or reports
concerning securities.
(b) “State investment
adviser” does not include:
(A) An investment
adviser representative;
(B) An institution or
organization described in subsection (1)(b) of this section;
(C) A licensed
broker-dealer whose performance of investment advisory services is solely
incidental to the conduct of business as a broker-dealer and who receives no
special compensation for such services;
(D) A salesperson
licensed to a broker-dealer whose performance of investment advisory services
is solely incidental to that person’s activities as a salesperson and who
receives no special compensation for such services;
(E) A publisher of or
contributor to a bona fide newspaper, newsmagazine, investment manual or
service, or business or financial publication of general, regular and paid
circulation;
(F) A person whose only
clients are federal covered investment advisers, state investment advisers,
broker-dealers, mortgage bankers, mortgage brokers, banks, savings institutions
or trust companies, insurance companies, investment companies as defined in the
Investment Company Act of 1940, as amended, pension or profit-sharing trusts,
or other financial institutions or institutional buyers, whether acting for
themselves or as trustees;
(G) A duly licensed
lawyer, engineer or accountant whose performance of investment advisory
services is solely incidental to the practice of the profession;
(H) A person whose
advice, analyses or reports relate only to securities exempted by ORS 59.025
(1);
(I) A federal covered
investment adviser in compliance with ORS 59.165 (7);
(J) A person, advising
others, that has no place of business in this state and during the preceding
12-month period has had fewer than six clients, other than those persons
included in subparagraph (F) of this paragraph, who are residents of this
state; or
(K) Such other persons
as the director may by rule or order designate.
SECTION 2.
ORS 731.046 is amended to read:
731.046. Any policy,
other than a variable annuity policy, whose form has been filed with and
approved by the Director of the Department of Consumer and Business Services [shall be] is exempt from the
application of ORS 59.005 to 59.451, 59.660 to 59.830, 59.991 and 59.995, and
the marketing of such policy [shall be]
is likewise exempt.
SECTION 3. The
amendments to ORS 59.015 and 731.046 by sections 1 and 2 of this 2007 Act apply
to variable annuities offered for sale on or after the effective date of this
2007 Act.
Approved by the Governor June 13, 2007
Filed in the office of Secretary of State June 13, 2007
Effective date January 1, 2008
__________