North Dakota Code 41-08-03 – (8-103) Rules for determining whether certain obligations and interests are securities or financial assets
In this chapter:
Terms Used In North Dakota Code 41-08-03
- 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.
- 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.
- 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 a limited liability partnership registered under chapter 45-22. See North Dakota Code 1-01-49
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 chapter, 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 chapter and not by chapter 41-03, even though it also meets the requirements of that chapter. However, a negotiable instrument governed by chapter 41-03 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 section 41-09-02, is not a security or a financial asset.
7. A document of title is not a financial asset unless paragraph 3 of subdivision j of subsection 1 of section 41-08-02 applies.
8. A controllable account, controllable electronic record, or controllable payment intangible is not a financial asset unless paragraph 3 of subdivision j of subsection 1 of section 41-08-02 applies.