Louisiana Revised Statutes 51:708 – Exempt securities
Terms Used In Louisiana Revised Statutes 51:708
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commissioner: means the commissioner of financial institutions who is also the commissioner of securities. See Louisiana Revised Statutes 51:702
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Executor: A male person named in a will to carry out the decedent
- Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
- Issuer: means every person who issues or proposes to issue any security, except that 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 in an unincorporated investment trust of the fixed, restricted management, or unit type, the term "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which such securities are issued, except that:
(a) In the case of an unincorporated association which provides by its articles for limited liability of any or all of its members or in the case of a trust, committee, or other legal entity, the trustees or members thereof shall not be individually liable as issuers of any security issued by the association, trust, committee, or other legal entity. See Louisiana Revised Statutes 51:702
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: means an individual, a corporation, a partnership, an association, a joint-stock company, a trust where the interest of the beneficiaries is evidenced by a security, or any unincorporated organization. See Louisiana Revised Statutes 51:702
- Personal property: All property that is not real property.
- Prospectus: means any notice, circular, advertisement, sales literature, letter, offering circular, offering sheet, or communication, written or by radio or television, which offers any security for sale or which is used in connection with any such offer or which confirms the sale of any security, except that:
(a) A confirmation of the sale of a security which is sent or given after the effective date of the registration statement shall not be deemed a prospectus if it is proved that prior to or at the same time with such confirmation a written prospectus, meeting the requirements of Louisiana Revised Statutes 51:702
- Security: means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting-trust certificate; certificate of deposit for a security; fractional undivided interest in oil, gas, or other mineral rights; any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof); or, in general, any interest or instrument commonly known as a "security"; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. See Louisiana Revised Statutes 51:702
- Service of process: The service of writs or summonses to the appropriate party.
- Significant subsidiary: means a subsidiary meeting any one of the following conditions:
(a) 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 ten percent of the assets of the parent and its subsidiaries on a consolidated basis. See Louisiana Revised Statutes 51:702
- State: means any state (or a designated state), territory, or possession of the United States, the District of Columbia, Puerto Rico and the Virgin Islands. See Louisiana Revised Statutes 51:702
- Subsidiary: when used with reference to a specified person, means an affiliate controlled by such person, directly or indirectly, through one or more intermediaries. See Louisiana Revised Statutes 51:702
- Trustee: A person or institution holding and administering property in trust.
The provisions of La. Rev. Stat. 51:705 shall not apply to any of the following securities:
(1) Any security, including a revenue obligation or certificate of participation, issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency, authority, public corporation, or other instrumentality of one or more of the foregoing, including any underlying or separate security which secures any of the foregoing securities. Pursuant to the authority granted in Section 106(b) and Section 106(c) of the Secondary Mortgage Market Enhancement Act of 1984, La. Rev. Stat. 51:708(1) shall not be deemed to apply to securities issued by any person, trust, corporation, partnership, association, business trust, or business entity created pursuant to or existing under the laws of the United States or any state which is offering securities pursuant to Section 106(a)(1) or (2) of the Secondary Mortgage Market Enhancement Act of 1984.
(2) Any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any such province, any agency or corporate or other instrumentality of one or more of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor.
(3) Any security issued by or guaranteed by any bank organized under the laws of the United States, or any bank, or savings institution, organized and supervised under the laws of Louisiana, or any bank holding company organized under the laws of Louisiana that controls one or more banks whose principal place of business is in Louisiana and that is under the supervision of the Board of Governors of the Federal Reserve System, including any interest or participation in any common trust fund or similar fund maintained by any such bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as a trustee, executor, administrator, or guardian.
(4) Any security issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association or any building and loan or similar association organized under the laws of Louisiana and authorized to do business in this state.
(5) Any security issued by a bona fide agricultural cooperative.
(6) Any security issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of Louisiana.
(7) Any security issued or guaranteed by any railroad, other common carrier, public utility, or holding company which is:
(a) Subject to the jurisdiction of the Interstate Commerce Commission.
(b) A registered holding company under the Public Utility Holding Company Act of 1935, as now or hereafter amended, or a subsidiary of such a company within the meaning of that act.
(c) Regulated in respect of its rates and charges by a governmental authority of the United States or any state.
(d) Regulated in respect of the issuance or guarantee of the security by a governmental authority of the United States, any state, Canada, or any Canadian province.
(8) Securities listed or approved for listing upon notice of issuance on the New York Stock Exchange or the American Stock Exchange or a security designated or approved for designation as a national market system security by the NASDAQ Stock Market, LLC or any other stock exchange or market system approved by the commissioner as provided in this Paragraph, and all securities senior or equal in rank to any securities so listed, designated, or approved, any security represented by subscription rights which have been so listed, designated, or approved, or any warrant or right to purchase or subscribe to any of the foregoing, provided:
(a) That the commissioner, if he finds that the public interest would be served thereby, may by rule or regulation disqualify some or all securities listed, designated, or approved on such stock exchange or market system from the exemption provided by this Paragraph.
(b) That the commissioner may, by written order, approve any stock exchange or market system in addition to those specified in this Paragraph if he finds that it would be in the public interest for securities listed or designated on such stock exchange or market system to be exempt under this Paragraph.
(c) That the commissioner shall have the power at any time, by written order, to withdraw the approval theretofore so granted.
(9) Promissory notes maturing in not more than nine months from date of issuance, provided that said securities are not offered for sale by means of advertisements publicly disseminated in the news media or through the mails.
(10) Notes issued in connection with the acquisition of real or personal property or renewals thereof, if such notes are issued to the sellers of and are secured by all or part of the real or personal property so acquired.
(11) Any security which meets all of the following conditions:
(a) If the issuer is not organized under the laws of the United States or a state, it has appointed a duly authorized agent in the United States for service of process and has set forth the name and address of such agent in any prospectus offering such securities for sale.
(b) The issuer has a class of securities registered under Section 12 of the Securities Exchange Act of 1934 which has been so registered for the three years immediately preceding the offering date.
(c) Neither the issuer nor a significant subsidiary has had a material default during the last seven years, or during the issuer’s existence if less than seven years, in the payment of:
(i) Principal, interest, dividend, or sinking fund installment on preferred stock or indebtedness for borrowed money; or
(ii) Rentals under leases with terms of three years or more.
(d) The issuer has had consolidated net income, before extraordinary items and the cumulative effect of accounting changes, of at least one million dollars in four of its last five fiscal years including its last fiscal year and, if the offering is of interest-bearing securities, has had for its last fiscal year such net income, but before deduction for income taxes and depreciation, of at least one and one-half times the issuer’s annual interest expense, giving effect to the proposed offering and the intended use of the proceeds. “Last fiscal year” means the most recent year for which audited financial statements are available, provided that such statements cover a fiscal period ended not more than fifteen months from the commencement of the offering.
(e) If the offering is of stock or shares, other than preferred stock or shares, such securities have voting rights.
(f) If the offering is of stock or shares, other than preferred stock or shares, such securities are owned beneficially or of record, on any date within six months prior to the commencement of the offering, by at least one thousand two hundred persons, and on such date there are at least seven hundred fifty thousand such shares outstanding with an aggregate market value, based on the average bid price for that day, of at least three million seven hundred fifty thousand dollars. In connection with the determination of the number of persons who are beneficial owners of the stock or shares of an issuer, the issuer or broker-dealer may rely in good faith for the purposes of this Section upon written information furnished by the record owners.
(12) Any security issued by any person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes, or as a chamber of commerce or trade or professional association, other than:
(a) A debt security, or
(b) A hybrid security whose terms include significant features common to debt securities and that is found by the commissioner by written order after notice and an opportunity to the issuer or proposed issuer for hearing to be the functional equivalent of a debt security.
Acts 1985, No. 722, §1; Acts 1988, No. 142, §1; Acts 1989, No. 30, §1, eff. June 15, 1989; Acts 2006, No. 544, §1, eff. June 22, 2006; Acts 2010, No. 7, §4, eff. May 19, 2010; Acts 2012, No. 52, §1, eff. May 11, 2012.