CHAPTER 302. EXEMPTIONS

§ 302.051. Agent registration: bona fide officers, directors and employes.

 Whether a person may be deemed a bona fide officer, director, partner or employe of an issuer, or other individual occupying similar status or performing similar functions is dependent upon the particular facts and circumstances, including by way of illustration:

   (1)  The duties of the person in addition to those connected with the sale of the issuer’s securities.

   (2)  The arrangements regarding the person’s compensation.

   (3)  The parties’ intentions as to the persons employment prior and subsequent to the securities offering.

 A controlling person of two otherwise unaffiliated, registered broker-dealers simultaneously may be an agent of both the broker-dealers; provided that, during the period in which the person simultaneously is an agent:

   (1)  The person’s functions and activities on behalf of one broker-dealer are limited exclusively to dealings and transactions with issuers and involve no function or activity in any sales or offers of sales to investors of any securities.

   (2)  Neither the person’s functions and activities on behalf of the other broker-dealer nor the activities of the other broker-dealer involve the sale or offer of sale of a security of an issuer for whom the first broker-dealer conducted, or participated in the conduct of, a transaction at a time when the controlling person was the agent of the first broker-dealer.

 (a)  Under the authority contained in section 302(f) of the act (70 P. S. §  1-302(f)), the Commission deems it appropriate and in the public interest to exempt persons from the broker-dealer and agent registration provisions of section 301 of the act (70 P. S. §  1-301) if all of the following conditions are met:

   (1)  The person meets one of the following conditions:

     (i)   Is licensed as an auctioneer, apprentice auctioneer, auction company or auction house under the Auctioneers License Act (AALA) (63 P. S. § §  734.1—734.34).

     (ii)   Is exempt from registration under section 3(h) of the AALA (63 P. S. §  734.3(h)).

     (iii)   Holds a special license to conduct an auction under section 3(i) of the AALA.

   (2)  The person effects transactions in securities solely at an ‘‘auction’’ or at a ‘‘sale at auction’’ as these terms are defined in the AALA.

   (3)  The person engages only in effecting transactions in securities at an auction or for sale at auction which constitute a ‘‘nonissuer transaction’’ as that term is defined in section 102(m) of the act (70 P. S. §  1-102(m)).

   (4)  The person does not effect transactions in securities at an auction or for sale at auction more than three times in any consecutive period of 24 months.

   (5)  The person and any affiliate of the person currently is not subject or, within the past 10 years, was not subject to any of the following:

     (i)   An order described in section 305(a)(iv) of the act (70 P. S. §  1-305(a)(iv)).

     (ii)   An injunction described in section 305(a)(iii) of the act.

     (iii)   A criminal conviction described in section 305(a)(ii) of the act.

     (iv)   An order of the Commission issued under section 512 of the act (70 P. S. §  1-512).

     (v)   A court order finding civil contempt under section 509(c) of the act (70 P. S. §  1-509(c)).

     (vi)   An order of the Commission imposing an administrative assessment under section 602.1 of the act (70 P. S. §  1-602.1) which has not been paid in full.

   (b)  Solely for purposes of subsection (a)(3), a transaction where a bank, as that term is defined in section 102(d) of the act (70 P. S. §  1-102(d)), acting as a fiduciary under a trust agreement, estate administration or other similar relationship, causes the bank’s securities to be offered and sold at auction from such accounts shall be deemed to be a nonissuer transaction.

   The provisions of this §  302.061 amended under sections 302(f) and 609(a) of the Pennsylvania Securities Act of 1972 (70 P. S. § §  1-302(f) and 1-609(a)).

 (a)  Under section 302(f) of the act (70 P. S. §  1-302(f)), the Commission deems it appropriate and in the public interest to exempt financial institutions and individuals representing financial institutions from the broker-dealer and agent registration provisions of section 301 of the act (70 P. S. §  1-301), if the activities of the financial institution and individuals representing the financial institutions are conducted under a networking arrangement or brokerage affiliate arrangement.

 (b)  For purposes of this section, the following terms have the following meanings:

   Financial institution—A Federal or State chartered bank, savings and loan association, savings bank or credit union and any service corporation affiliated with these entities.

   Networking arrangement or brokerage affiliate arrangement—A contractual arrangement between a broker-dealer registered under section 301 of the act and a financial institution whereby the broker-dealer effects transactions in securities for the account of customers of the financial institution and the general public which transactions are effected on, or emanate from, the premises of a financial institution.

   The provisions of this §  302.063 issued under section 302(f) of the Pennsylvania Securities Act of 1972 (70 P. S. §  1-302(f)); amended under sections 202(i), 206(b) and (d), 302(f), 606(d), 609(a) and (c) and 610 of the Pennsylvania Securities Act of 1972 (70 P. S. § §  1-202(i), 1-206(b) and (d), 1-302(f), 1-606(d), 1-609(a) and (c) and 1-610).

 Under the authority contained in section 302(f) of the act (70 P. S. §  1-302(f)), the Commission deems it appropriate in the public interest to exempt agents from the registration provisions of section 301 of the act (70 P. S. §  1-301), if all the following requirements are met:

   (1)  The agent is representing a broker-dealer which meets the following requirements:

     (i)   Registered under section 301 of the act.

     (ii)   A member of a National securities exchange registered with the United States Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C.A. § §  78a—78kk).

   (2)  The agent’s only customers are broker-dealers registered with the United States Securities and Exchange Commission under the Securities Exchange Act of 1934 or section 301 of the act.

   (3)  The agent is not subject to a currently effective order under section 305 of the act (70 P. S. §  1-305) denying, suspending, conditioning or revoking registration or an order of the Commission issued under section 512 of the act (70 P. S. §  1-512).

   The provisions of this §  302.064 issued under sections 302(f) and 609(a) of the Pennsylvania Securities Act of 1972 (70 P. S. § §  1-302(f) and 1-609(a)).

 Under section 302(f) of the act (70 P. S. §  1-302(f)), the Commission deems it appropriate and in the public interest to exempt Canadian broker-dealers and agents representing Canadian broker-dealers from the broker-dealer and agent registration provisions of section 301 of the act (70 P. S. §  1-301) when effecting transactions in securities in this Commonwealth with persons described in paragraph (1), if the broker-dealer meets the conditions of paragraph (2).

   (1)  The customer is one of the following:

     (i)   A person from Canada who temporarily is present in this Commonwealth with whom the Canadian broker-dealer had a bona fide business-customer relationship before the person entered this Commonwealth.

     (ii)   A person from Canada who is present in this Commonwealth whose only transactions with a Canadian broker-dealer in this Commonwealth relate to a self-directed, tax advantaged retirement plan in Canada as to which the person is the holder or contributor.

   (2)  The Canadian broker-dealer meets the following conditions:

     (i)   Is a member in good standing of a self-regulatory organization or stock exchange in Canada at the time it is effecting transactions into this Commonwealth in reliance on this section.

     (ii)   Is registered as a broker or dealer in good standing in the Province or Territory of Canada from which it is effecting transactions into this Commonwealth in reliance on this section.

     (iii)   Discloses to its customers in this Commonwealth at the time of a transaction made in reliance on this section that it is not registered under the act.

   The provisions of this §  302.065 amended under sections 102(k), 202(h) and (i), 203(r), 204(a), 207(h), (i) and (k), 209(a), 606(a) and 609(a) of the Pennsylvania Securities Act of 1972 (70 P. S. § §  1-102(k), 2-202(h) and (i), 2-203(r), 2-204(a), 2-207(h), (i) and (k), 2-209(a), 6-606(a) and 6-609(a)).

   The provisions of this §  302.065 adopted October 10, 1997, effective October 11, 1997, 27 Pa.B. 5255.

   This section cited in 64 Pa. Code §  203.202 (relating to certain transactions with persons from Canada exempt).