Kentucky Statutes 355.8-103 – Rules for determining whether certain obligations and interests are securities or financial assets
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(1) A share or similar equity interest issued by a corporation, business trust, joint stock company, or similar entity is a security.
(2) An “investment company security” is a security. “Investment company security” means a share or similar equity interest issued by an entity that is registered as an investment company under the federal investment company laws, an interest in a unit investment trust that is so registered, or a face-amount certificate issued by a face-amount certificate company that is so registered. Investment company security does not include an insurance policy or endowment policy or annuity contract issued by an insurance company.
(3) An interest in a partnership or limited liability company is not a security unless it is dealt in or traded on securities exchanges or in securities markets, its terms expressly provide that it is a security governed by this article, or it is an investment company security. However, an interest in a partnership or limited liability company is a financial asset if it is held in a securities account.
(4) A writing that is a security certificate is governed by this article and not by Article 3 of this chapter, even though it also meets the requirements of that article. However, a negotiable instrument governed by Article 3 of this chapter is a financial asset if it is held in a securities account.
(5) An option or similar obligation issued by a clearing corporation to its participants is not a security, but is a financial asset.
(6) A commodity contract, as defined in KRS § 355.9-102(1)(o), is not a security or a financial asset.
(7) A document of title, as defined in KRS § 355.1-201(2)(p), is not a financial asset unless KRS § 355.8-102(1)(i)3. applies.
Effective: July 12, 2012
History: Amended 2012 Ky. Acts ch. 132, sec. 59, effective July 12, 2012. — Amended
2000 Ky. Acts ch. 408, sec. 169, effective July 1, 2001. — Repealed and reenacted
1996 Ky. Acts ch. 130, sec. 116, effective January 1, 1997. — Amended 1986 Ky. Acts ch. 118, sec. 11, effective July 1, 1987. — Created 1958 Ky. Acts ch. 77, sec. 8-
103, effective July 1, 1960.
(2) An “investment company security” is a security. “Investment company security” means a share or similar equity interest issued by an entity that is registered as an investment company under the federal investment company laws, an interest in a unit investment trust that is so registered, or a face-amount certificate issued by a face-amount certificate company that is so registered. Investment company security does not include an insurance policy or endowment policy or annuity contract issued by an insurance company.
Terms Used In Kentucky Statutes 355.8-103
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Business trust: includes , except when utilized in KRS Chapter 386, a "statutory trust" as organized under KRS Chapter 386A. See Kentucky Statutes 446.010
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Contract: A legal written agreement that becomes binding when signed.
- 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.
- Corporation: may extend and be applied to any corporation, company, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Federal: refers to the United States. See Kentucky Statutes 446.010
- 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.
- Partnership: includes both general and limited partnerships. See Kentucky Statutes 446.010
(3) An interest in a partnership or limited liability company is not a security unless it is dealt in or traded on securities exchanges or in securities markets, its terms expressly provide that it is a security governed by this article, or it is an investment company security. However, an interest in a partnership or limited liability company is a financial asset if it is held in a securities account.
(4) A writing that is a security certificate is governed by this article and not by Article 3 of this chapter, even though it also meets the requirements of that article. However, a negotiable instrument governed by Article 3 of this chapter is a financial asset if it is held in a securities account.
(5) An option or similar obligation issued by a clearing corporation to its participants is not a security, but is a financial asset.
(6) A commodity contract, as defined in KRS § 355.9-102(1)(o), is not a security or a financial asset.
(7) A document of title, as defined in KRS § 355.1-201(2)(p), is not a financial asset unless KRS § 355.8-102(1)(i)3. applies.
Effective: July 12, 2012
History: Amended 2012 Ky. Acts ch. 132, sec. 59, effective July 12, 2012. — Amended
2000 Ky. Acts ch. 408, sec. 169, effective July 1, 2001. — Repealed and reenacted
1996 Ky. Acts ch. 130, sec. 116, effective January 1, 1997. — Amended 1986 Ky. Acts ch. 118, sec. 11, effective July 1, 1987. — Created 1958 Ky. Acts ch. 77, sec. 8-
103, effective July 1, 1960.