N.Y. General Business Law § 359-E – Definitions

Registration requirements.

1. The following terms, whenever used or referred to in this article, shall have the following meaning unless a different meaning clearly appears from the context:
1. (a) A "dealer" shall mean and include any person, firm, association or corporation engaged in the business of buying and selling securities from or to the public within or from this state for his or its own account, through a broker or otherwise, except a bank unless such bank is considered a dealer under the federal securities exchange act of 1934, but does not include any person, firm, association or corporation in so far as he or it buys or sells securities for his or its bona fide investment account, either individually or in some fiduciary capacity. The term "dealer" shall, except as otherwise provided in this article, also include a person, firm, association or corporation selling or offering for sale from or to the public within or from this state securities issued by it. No person shall be deemed to be a "dealer", as defined in this subdivision, or a broker, as defined in subdivision (b) of this section, solely by reason of the fact that he is engaged in the business of (i) selling, offering for sale, purchasing or offering to purchase any security or securities to, from or through any bank, dealer or broker, or to or from any syndicate, corporation or group formed for the specific purpose of acquiring such securities for resale to the public directly or through other syndicates or groups, or (ii) any offer, sale or distribution by an issuer of stock dividends, nontransferable warrants or transferable warrants exercisable within ninety days of their issuance to existing stockholders, securities issued upon conversion of convertible securities and exercise of warrants and securities issued as part of a recapitalization or reclassification to existing stockholders of the same issuer, or (iii) selling, offering for sale, purchasing or offering to purchase any security or securities on the floor of any securities exchange registered as a national securities exchange under the securities exchange act of nineteen hundred thirty-four. No person, firm, association or corporation shall be deemed to be a "dealer", as defined in this subdivision, solely by reason of selling or offering for sale any security or securities to any bank, corporation, savings institution, trust company, insurance company, investment company, as defined in the federal investment company act of nineteen hundred forty, pension or profit-sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for himself or itself or in some fiduciary capacity, as part of a private placement of securities.
2. (b) A "broker" shall mean and include any person, firm, association or corporation, other than a dealer, engaged in the business of effecting transactions in securities for the account of others within or from this state, but does not include a bank unless such bank is considered a broker under the federal securities exchange act of 1934.
3. (c) A "salesman" shall mean and include every person employed by a broker or dealer as said terms are defined in this section, for the purpose of representing such broker or dealer in the sale or purchase of securities to or from the public within or from this state.
4. (d) A "principal" shall mean and include every person or firm directly or indirectly controlling any broker or dealer.
5. (e) A "bank" shall mean and include a state or national bank, trust company or savings institution incorporated under the laws and subject to the examination, supervision and control of any state or of the United States or of any insular possession thereof.
2. No dealer or broker shall sell or offer for sale to or purchase or offer to purchase from the public within or from this state, as principal, or broker, any securities issued or to be issued unless and until a notice, to be known as the "state notice," containing the name, business or post office address of such dealer or broker and if a corporation the state or country of incorporation thereof, and if a partnership the names of the partners, shall have been filed in the department of state. Such notice shall be in the following form: STATE NOTICE Name(s) of dealer(s), broker(s) ........................................ Business address(es) or post office address(es) (state which) ......................................................................... If a corporation, the state or country in which incorporated. ......................................................................... If a partnership, the names of the partners ............................
3. It shall be unlawful for any dealer, broker or salesman to sell or offer for sale to or purchase or offer to purchase from the public within or from this state, any securities issued or to be issued, unless and until such dealer, broker or salesman shall have filed with the department of law a registration statement as provided herein. A real estate broker or salesman licensed under article twelve-A of the real property law who is not acting as a dealer shall be deemed to be in compliance with such registration statement filing requirements with respect to the sale of securities constituting cooperative interests in real estate, including shares of cooperative apartment corporations, commercial cooperative corporations, condominiums, and interests in homeowners associations.
1. (a) The registration statement relating to dealers and brokers, to be known as the "broker-dealer statement" shall contain such information pertaining to the business history for the last preceding five years, criminal record, and educational background of the applicant and his or its partners, officers, directors or other principals thereof deemed pertinent by the attorney-general. The attorney-general may prescribe forms for the use of such applicants.
2. (b) The registration statement relating to salesmen, to be known as the "salesman's statement," shall contain such information pertaining to the business history for the last preceding five years, criminal record and educational background of the applicant deemed pertinent by the attorney-general. The attorney-general may prescribe forms for use of such applicants and, as a condition of registration, shall require that prior to the filing of such a registration statement any such applicant shall undertake and successfully complete the uniform securities agent state law examination ("series 63") or the uniform combined state law examination ("series 66") as administered by or on behalf of the North American Securities Administrators Association, Inc. (NASAA) by any national securities association or national securities exchange; provided that, if an applicant registers with the attorney-general solely for the purpose of selling condominiums, shares of cooperative apartment corporations or commercial cooperative corporations, interests in homeowners associations or interests in timeshare projects, such applicant shall not be required to undertake the aforementioned examination as a condition of registration.
3. (c) The registration of brokers, dealers and salesmen shall be for periods of four years commencing on January fifth, nineteen hundred sixty. Such statements for brokers, dealers or salesmen shall be filed every four years within sixty days prior to the expiration of the four year period, provided that previously filed statements shall continue to be effective for a period of ninety days following the end of the four year period. Initial statements for those having no previous filing may be made at any time and shall be effective from the date of filing for a period of four years. All statements filed pursuant to prior provisions of law shall remain in effect until January fifth, nineteen hundred sixty.
4. The attorney-general may by rule or order provide for the filing of supplemental statements prescribed by him which shall contain such information as the attorney-general may deem necessary to keep reasonably current the information on file.
5. The department of law shall collect the following fees: (a) twelve hundred dollars for each broker-dealer's statement; (b) twelve hundred dollars for each broker-dealer's statement filed by a person, firm, association or corporation selling or offering for sale from or to the public within or from this state securities issued by it for any amount in excess of five hundred thousand dollars; (c) three hundred dollars for each broker-dealer's statement filed by a person, firm, association or corporation selling or offering for sale from or to the public within or from this state securities issued by it for any amount of five hundred thousand dollars or less; (d) three hundred dollars for each broker-dealer's statement filed by a person, firm, association or corporation solely for the purpose of selling or offering for sale from or to the public within or from this state securities consisting of condominiums, shares of cooperative apartment corporations or commercial cooperative corporations, interests in homeowners associations or interests in timeshare projects, plus fifteen dollars for each partner, officer, director or principal of any such firm, association or corporation; (e) one hundred fifty dollars for each salesman's statement; (f) thirty dollars for each supplemental statement; (g) three hundred dollars for each application granted pursuant to subdivision two of section three hundred fifty-nine-f of this article; and (h) two hundred twenty-five dollars for the issuance of a "no filing required letter"; these fees shall obtain for both original statements and their renewals. No fee, however, shall be collected for filing a supplemental statement by a salesman cancelling his prior registration as such salesman. Any partner, officer, director or principal who is named as such in a broker-dealer statement and who shall act as a salesman for such broker or dealer, shall not be required to register as a salesman.
6. Any false statement of a material fact contained in any such broker-dealer or salesman's statement or supplemental statement or in any certificate attached thereto shall constitute a violation of this section within the meaning of section three hundred fifty-nine-g of this article.
7. Any person, partnership, corporation, company, trust or association representing in any manner that the state, the department of law or any officer thereof has recommended the purchase of any stocks, bonds, or other securities, in advertising or offering such stocks, bonds or other securities for sale shall be guilty of a misdemeanor punishable as provided in subdivision two of section three hundred fifty-nine-g of this article.
8. After this subdivision as hereby amended takes effect no dealer shall sell or offer for sale to the public within this state as principal or agent, any securities issued or to be issued which are not exempted from the provisions of this subdivision by section three hundred and fifty-nine-f hereof unless and until such dealer shall cause to be filed a "further state notice" containing the information, other than the names of partners, required to be published by subdivision two of this section, but opposite the heading "name of dealer", if the person or persons causing such notice to be filed are acting pursuant to the provisions of this subdivision, there shall be added either the words "syndicate manager" or "syndicate managers" as the case may be; and in addition thereto and as part of each such further state notice the name of the security or securities, name, post office address and state or country of incorporation or organization of the corporation, association, common law trust or similar organization issuing or to issue the security or securities to be sold or offered for sale, in the following form: FURTHER STATE NOTICE Name of security or securities ......................................... Name of issuer of securities ........................................... Post Office address of issuer of securities ............................ The state or country in which organized ................................ Two or more dealers may jointly file such further state notice required by this subdivision, and a dealer or exchange must file a further state notice for each issue about to be offered which has not heretofore been published by the issuer. A syndicate manager or co-manager with an office in this state may file on behalf of an entire syndicate.
9. A broker-dealer or salesman registration statement or any other document is filed when it is received in the New York city office of the attorney-general.
10. The attorney-general may from time to time in the public interest make, amend, and rescind such forms as are necessary to carry out the provisions of this act, including forms governing registration statements and applications. For the purpose of forms, the attorney-general may classify securities, persons and matters within his jurisdiction, and may prescribe different forms and requirements for different classes.
11. It is unlawful for any broker or dealer to employ a salesman unless the salesman is registered. The registration of a salesman is suspended during any period when he is not associated with a particular broker or dealer registered under this act or a particular issuer. When a salesman begins or terminates a connection with a broker or dealer, or begins or terminates those activities which make him a salesman, the salesman as well as the broker or dealer shall promptly notify the attorney-general.
12. All persons, including partners, officers, directors and salesmen employed by a member or a member organization of a national securities exchange, a national securities association, or any other broker-dealer, registered with the federal securities exchange commission or any broker or dealer required to be registered with the department of law pursuant to this article except those dealers required to be registered solely by reason of the fact that they are engaged in selling or offering for sale securities issued by themselves, and any employee of a clearing corporation affiliated with any such registered national securities exchange or with any national securities association registered with the federal securities exchange commission, employed on or after September first, nineteen hundred sixty-nine, who are regularly employed within the state of New York shall, as a condition of employment, be fingerprinted. Every set of fingerprints taken pursuant to this subdivision shall be promptly submitted to the attorney general for appropriate processing, except that individuals fingerprinted in compliance with the rules of the securities and exchange commission need not file with the attorney general so long as records of those fingerprints, as well as information received in response to their filing, are available to the attorney general for inspection. The department of law shall collect from a member or member organization of a national securities exchange, a national securities association, or any registered broker-dealer as described above or a clearing corporation affiliated with any such registered national securities exchange or with any such registered national securities association submitting fingerprints to the attorney general for processing a fee in the amount prescribed therefor by the division of criminal justice services for each set of fingerprints submitted. Failure to comply with this section shall be deemed a violation of and a fraudulent practice within the meaning of this article.
12-a. Any employee of a national securities exchange or national securities association registered with the federal securities and exchange commission, and any employee of a clearing corporation or securities information processor affiliated with any such registered national securities exchange or national securities association, and who are regularly employed within the state of New York, shall, as a condition of employment, be fingerprinted. Every national securities exchange, national securities association, clearing corporation or securities information processor that is required to submit fingerprints pursuant to this section shall also obtain fingerprints from any individual not employed by such organization who provides services to such organization within the state of New York provided that the individual has access to records including electronic records, as defined by section three hundred two of the state technology law, or other material or secure buildings or secure property, which place the security of such organization at risk. Every set of fingerprints taken pursuant to this subdivision shall be promptly submitted to the federal bureau of investigation for the purpose of a nationwide criminal history check. Such reports received from the federal bureau of investigation shall be kept confidential, although the contents of any such report may be disclosed to exchange officials involved in personnel and security matters, to the attorney general, to law enforcement authorities and to the securities and exchange commission. Unless inconsistent with federal law, fingerprints supplied by such employee or employment applicant shall be returned to such person upon termination or denial of such employment. Fingerprints supplied by such other individuals providing services shall be returned upon completion of such services.
12-b. Any employee of a designated contract market, as that term is defined in the Commodity Exchange Act, under the authority of the federal Commodity Futures Trading Commission, and any employee of a derivatives clearing organization, as that term is defined under the Commodity Exchange Act, that is affiliated with any such designated contract market, and who are regularly employed within the state of New York, shall, as a condition of employment, be fingerprinted. Every designated contract market and derivatives clearing organization that is required to submit fingerprints pursuant to this section shall also obtain fingerprints from any individual not employed by such organization who provides services to such organization within the state of New York provided that the individual has access to records including electronic records, as defined by section three hundred two of the state technology law, or other material or secure buildings or secure property, which place the security of such organization at risk. Every set of fingerprints taken pursuant to this subdivision shall be promptly submitted to the federal bureau of investigation for the purpose of a nationwide criminal history check. Such reports received from the federal bureau of investigation shall be kept confidential, although the contents of any such report may be disclosed to designated contract market or derivatives clearing organization officials involved in personnel and security matters, to the attorney general, to law enforcement authorities and to the Commodity Futures Trading Commission. Unless inconsistent with federal law, fingerprints supplied by such employee or employment applicant shall be returned to such person upon termination or denial of such employment. Fingerprints supplied by such other individuals providing services shall be returned upon completion of such services.
13.
1. (a) The attorney general may by regulation, rule or order provide an alternative method of registration by which any dealer, broker or salesman acting as such or as principal in more than one state or who engages in multi-state securities offerings may supply the information otherwise required to be furnished in the state notice, registration statement, supplemental statements and further state notice mandated by subdivisions two, three, four and eight of this section. Such alternative method, when complied with, shall be deemed to fulfill the filing requirements of subdivisions two, eight and nine of this section, and shall be in lieu thereof. The regulation, rule or order of the attorney general may also provide for alternative filing periods and expiration dates and an alternate method for the payment of fees, to be known as "in lieu filing fees", which shall be collected pursuant to such regulation, rule or order of the attorney general in the same amounts as, and for the same information otherwise required to be collected for statements filed as specified by subdivision five of this section.
2. (b) No alternative method may be provided by the attorney general which does not have, as its purpose, the facilitation of a central registration depository whereby brokers, dealers or salesmen can centrally or simultaneously register and pay fees for all states in which they plan to transact business which requires registration. The attorney general is hereby authorized to enter into an agreement or otherwise facilitate such alternative method with any national securities association, national securities exchange, national association of state securities administrators or similar association or agents thereof to effectuate the provisions of this subdivision.
3. (c) Any false statement of a material fact contained in any substitute for a broker-dealer statement or salesman's statement or supplemental statement which is provided pursuant to the attorney general's regulation, rule or order specified in paragraph (a) of this subdivision, shall constitute a violation of this section within the meaning of section three hundred fifty-nine-g of this article.
4. (d) It shall be unlawful for any dealer, broker or salesman to sell or offer for sale to or purchase or offer to purchase from the public within or from this state, any securities issued or to be issued, unless and until such dealer, broker or salesman shall have complied with the requirements of either: (i) the regulation, rule or order of the attorney general specified in paragraph (a) of this subdivision; or (ii) the filing of a state notice and registration statement and supplemental statements and further state notice as applicable to said dealer, broker or salesman, in accordance with subdivisions two, three, four and eight of this section.
5. (e) To the extent inconsistent therewith, the provisions of this subdivision shall supersede the provisions of any other subdivision of this section.
14.
1. (a) Definitions. For purposes of this subdivision the following definitions shall apply:
  1. (i) "Commodity" means, except as otherwise specified by the attorney general by rule, regulation or order, any agricultural, grain, animal, chemical, metal or mineral product or byproduct, any gem or gemstone (whether characterized as precious, semi-precious or otherwise), any fuel (whether liquid, gaseous or otherwise), any foreign currency, and any other good, article, or material.
  2. (ii) "Commodity contract" means any account, agreement or contract for the purchase or sale of, or any option or right to purchase or sell, primarily for speculation or investment purposes and not for use or consumption by the offeree or purchaser, one or more commodities, whether for immediate or subsequent delivery or for storage and whether or not delivery is intended by the parties, and whether characterized as a cash contract, deferred shipment or deferred delivery contract, forward contract, futures contract, installment or margin contract, leverage contract, option, privilege, indemnity, bid, offer, put, call, advance guaranty, decline guaranty or otherwise. Any commodity contract offered for sale or sold to a person other than a producer, processor, merchant, handler, commercial user or ultimate consumer of the commodity shall, in the absence of evidence to the contrary, be presumed to be offered for sale or sold for speculation or investment purposes.
  3. (iii) "Commodity broker-dealer" means any person engaged in the business of selling or offering to sell commodities through commodity contracts to the public within or from the state of New York.
  4. (iv) "Commodity salesperson" means any person employed by or representing a commodity broker-dealer in selling or offering for sale commodities through commodity contracts to the public within or from the state of New York.
  5. (v) "Commodity investment advisor" means any person who, for compensation, within or from the state of New York, engages in the business of advising members of the public, either directly or through publications or writings, as to the advisability of investing in, purchasing, selling or holding commodity contracts.
2. (b) Any person acting as a commodity broker-dealer, commodity salesperson or commodity investment advisor and any person who manages or supervises any such broker-dealer, salesperson or investment advisor shall file a registration statement with the attorney general as a commodity broker-dealer, commodity salesperson, or commodity investment advisor relating to the activity actually engaged in.
3. (c) The attorney general may adopt rules and regulations governing the form and content of such registration statements for each such activity which may include information pertaining to the business history for the last preceding five years, record of criminal convictions, litigation history, and educational background of the registrant and the registrant's partners, officers, directors or other principals deemed pertinent by the attorney general and the names of persons employed as commodity salespersons or commodity investment advisors by the registrant.
4. (d) The registration statement shall be effective for a period of one year from the date of filing.
5. (e) The attorney general shall by rule or regulation provide for the method of renewing such registration statements and may require the filing of supplemental statements which shall contain such information as the attorney general may deem necessary to keep reasonably current the information on file.
6. (f) The attorney general shall collect the following annual fees: one hundred dollars for each commodity broker-dealer registration statement or commodity investment advisor registration statement; twenty-five dollars for each commodity salesperson registration statement; and ten dollars for each supplemental statement.
7. (g) The provisions of this subdivision shall not apply to (i) any person who is a member or member firm of a national securities exchange, board of trade designated as a contract market by the Commodity Futures Trading Commission pursuant to the commodity exchange act, as amended, the National Association of Securities Dealers, Inc., or the National Futures Association, Inc., or is an affiliate of such a member or member firm, or employed by such a member or member firm or by an affiliate of such a member or member firm; (ii) any board of trade designated as a contract market as aforesaid; (iii) any other person registered, temporarily licensed, or exempt from registration under the commodity exchange act, as amended, or the rules and regulations promulgated thereunder where such registration, license or exemption relates directly to the activity engaged in; and (iv) any bank or trust company as defined in this article or any person acting as an employee of any bank or trust company or any licensed money transmitter or employee thereof.
8. (h) In addition to those persons exempt under paragraph (g) of this subdivision, no person shall be required to register as a commodity investment advisor pursuant to paragraph (b) of this subdivision who is (i) a lawyer, accountant, engineer, or teacher who renders investment advice solely incidental to the practice of his or her profession; (ii) a broker or dealer in securities or a commodity broker-dealer or a commodity salesperson who renders investment advice solely incidental to the conduct of his or her business as a broker or dealer in securities or a commodity broker-dealer or a commodity salesperson respectively, and who receives no special compensation for such advice; (iii) a publisher of, editor of, or writer for a bona fide newspaper or news magazine, whether published in print or by electronic means; or (iv) a person who during the course of the preceding twelve months has not advised more than fifteen persons as to the advisability of investing in, purchasing, selling or holding commodity contracts and who does not hold himself out generally to the public as engaging in any of the activities set forth in subparagraph (iii), (iv) or (v) of paragraph (a) of this subdivision.
9. (i) The provisions of this subdivision shall not apply to any contract or transaction involving the sale of commodities by the owner or lessee of real property upon which such commodities are grown or raised, the sale of items by art dealers or licensed auctioneers at public auction or the sale or resale by a distributor or wholesaler of goods for consumption by the public.
10. (j) Any person required to be registered by this subdivision who is not registered shall be guilty of a misdemeanor punishable as provided in the penal law.
11. (k) Any person who engages in a business requiring registration under this article and who knowingly employs two or more persons for the purpose of engaging in conduct requiring registration as a commodity broker-dealer, commodity salesperson or commodity investment advisor under this article with the knowledge that they are not so registered shall be guilty of a class E felony.
12. (l) A violation of this subdivision shall constitute a fraudulent practice as that term is used in this article.
13. (m) If any provision of this subdivision or the application thereof to any persons or circumstances is held invalid, the validity of the remainder of this subdivision or of the application of such provision to other persons and circumstances shall not be affected thereby.