) The following securities are exempted from Ԥ 46301 and 46303: (1) any security (including a revenue obligation) issued or
guaranteed by the United States, any state, any political subdivision of
a state, or any agency or corporate or other instrumentality of one or more of the foregoing; or any certificate of deposit for any of the foregoing;
(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;

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(3) any security issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution, or trust company organized and supervised under the laws of any state;

(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 any state and authorized to do business in this state;
(5) any security issued by and representing an interest in or a debt of, or guaranteed by, any insurance company organized under the laws of any state and authorized to do business in this state; but this exemption does not apply to an annuity contract, investment contract, or similar security under which the promised payments are not fixed in dollars but are substantially dependent upon the investment results of a segregated fund or account invested in securities;
(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 this state;

(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 Company Act of
1935 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; or (D) regulated in respect of the issuance of guarantee of the security of a governmental authority of the United States, any state, Canada, or any Canadian province;
(8) any security listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Sock Exchange, or the Midwest Stock Exchange; any other security of the same issuer which is of senior or substantially equal rank; any security called for by subscription rights or warrants so listed or approved; or any warrant or right to purchase or subscribe to any of the foregoing;
(9) 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;

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(10) any commercial paper which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which evidences an obligation to pay cash within nine (9) months of the date of issuance, exclusive of days of grace, or any renewal of such paper which is likewise limited, or any guarantee of such paper or of any such renewal;
(11) any investment contract issued in connection with an employees’ stock purchase, savings, pension, profit-sharing, or similar benefit plan if the Administrator is notified in writing thirty (30) days before the inception of the plan or, with respect to plans which are in effect on the effective date of this Act, within sixty (60) days thereafter (or within thirty (30) days before they are reopened if they are closed on the effective date of this Act);

(12) any security issued by an open-end investment company registered under the Investment Company Act of 1940.
(b) The following transactions are exempted from Ԥ 46301 and
46403:

(1) any isolated non-issuer transaction, whether effected through a broker-dealer or not;

(2) any non-issuer distribution of an outstanding security if (A) a recognized securities manual contains the names of the issuer’s officers and directors, a balance sheet of the issuer as of a date within eighteen (18) months, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations, or (B) the security has a fixed maturity or a fixed interest or dividend provision and there has been no default during the current fiscal year or within the three (3) preceding fiscal years, or during the existence of the issuer and any predecessors if less than three (3) years, in the payment of principal, interest, or dividends on the security;

(3) any non-issuer transaction effected by or through a registered broker-dealer pursuant to an unsolicited order or offer to buy; but the Administrator may by rule require that the customer acknowledge upon a specified form that the sale was unsolicited, and that a signed copy of each such form be preserved by the broker-dealer for a specified period;

(4) any transaction between the issuer or other person on whose behalf the offering is made and underwriter, or among underwriters;

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(5) any transaction in a bond or other evidence of indebtedness secured by a real or chattel mortgage or deed of trust, or by an agreement for the sale of real estate or chattels, if the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidences of indebtedness security thereby is offered and sold as a unit;
(6) any transaction by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator;
(7) any transaction executed by a bona fide pledgee without any purpose of evading this Act;

(8) any offer or sale to a bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit-sharing trust, or other financial institution or institutional buyer, or to a broker-dealer, whether the purchaser is acting for itself or in some fiduciary capacity;

(9) any transaction pursuant to an offer directed by the offeror to not more than ten person (other than those designated in paragraph (8)) in this state during any period of twelve (12) consecutive months, whether or not the offeror or any of the offerees is then present in this state, if (A) the seller reasonably believes that all the buyers in this state (other than those designated in paragraph (8)) are purchasing for investment, and (B) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer in this state (other than those designated in paragraph (8)); but the Administrator may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exception, or increase or decrease the number of offerees permitted, or waive the conditions in clauses (A) or (B) with or without the substitution of a limitation on remuneration;

(10) any offer or sale of a preorganization certificate or subscription if (A) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective subscriber, (B) the number of subscribers does not exceed ten (10), and (C) no payment is made by any subscriber;

(11) any transaction pursuant to an offer to existing security holders of the issuer, including persons who at the time of the transaction are holders of convertible securities, non-transferable

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warrants, or transferable warrants exercisable within not more than ninety (90) days of their issuance, if (A) no commission or other remuneration (other than a standby commission) is paid or given directly or indirectly for soliciting any security holder in this state, or (B) the issuer first files a notice specifying the terms of the offer and the Administrator does not by order disallow the exemption within the next five (5) full business days;

(12) Any offer or sale of a security if (i) the security or transaction is not subject to, or is exempted from the registration requirements of the Securities Act of 1933, other than by reason of Section 3(a) of that Act, or (ii) a registration statement relating to such security has been filed under the Securities Act of 1933 and no stop order or refusal order is in effect and no public proceeding or examination looking toward such an order is pending under that Act, provided that the issuer or such security or a registered broker-dealer files with the Administrator a notice of intention to sell such security in such form as the Administrator may prescribe, together with a filing fee of Fifty Dollars ($50).
(13) Any offer or sale of securities of an Investment Company or an International Finance Company to an offeree or purchaser who is neither a citizens nor a resident of the United States or of Guam.
(c) The Administrator may by order deny or revoke any exemption specified in clause (9) or (11) of subsection (a) or in subsection (b) with respect to a specific security or transaction. No such order may be entered without appropriate prior notice to all interested parties, opportunity for hearing, and written findings of fact and conclusions of law, except that the Administrator may by order summarily deny or revoke any of the specified exemptions pending final determination of any proceeding under this subsection. Upon the entry of a summary order, the Administrator shall promptly notify all interested parties that it has been entered and of the reasons therefor and that within fifteen (15) days of the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the Administrator, the order will remain in effect until it is modified or vacated by the Administrator. If a hearing is requested or ordered, the Administrator, after notice of and opportunity for hearing to all interested persons, may modify or vacate the order or extend it until final determination. No order under this subsection may operate retroactively. No person may be considered to have violated § 46301 or § 46403 by reason of

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any offer or sale effected after the entry of an order under this subsection if he sustains the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the order.

(d) In any proceeding under this Act, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

SOURCE: GC § 45402. Subsection (b)(12) repealed and reenacted by P.L. 15-102:1;
subsection (b)(13) added by P.L. 16-115:11.