SB 115: Revise the Securities Law

As Introduced

136th General Assembly Regular Session 2025-2026

S. B. No. 115

Senators Lang, Wilson

Cosponsors: Senators Cirino, Wilkin

A B I L L

To amend sections 1707.01, 1707.03, 1707.09, 1
1707.091, 1707.092, 1707.13, 1707.23, and 2
1707.39 of the Revised Code to make changes to 3
the Securities Law. 4

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 1707.01, 1707.03, 1707.09, 5
1707.091, 1707.092, 1707.13, 1707.23, and 1707.39 of the Revised 6
Code be amended to read as follows: 7

Sec. 1707.01. As used in this chapter: 8

(A) Whenever the context requires it, "division" or 9
"division of securities" may be read as "director of commerce" 10
or as "commissioner of securities." 11
(B) "Security" means any certificate or instrument, or any 12
oral, written, or electronic agreement, understanding, or 13
opportunity, that represents title to or interest in, or is 14
secured by any lien or charge upon, the capital, assets, 15
profits, property, or credit of any person or of any public or 16
governmental body, subdivision, or agency. It includes shares of 17
stock, certificates for shares of stock, an uncertificated 18

S. B. No. 115 As Introduced

security, membership interests in limited liability companies, 19
voting-trust certificates, warrants and options to purchase 20
securities, subscription rights, interim receipts, interim 21
certificates, promissory notes, all forms of commercial paper, 22
evidences of indebtedness, bonds, debentures, land trust 23
certificates, fee certificates, leasehold certificates, 24
syndicate certificates, endowment certificates, interests in or 25
under profit-sharing or participation agreements, interests in 26
or under oil, gas, or mining leases, preorganization or 27
reorganization subscriptions, preorganization certificates, 28
reorganization certificates, interests in any trust or pretended 29
trust, any investment contract, any life settlement interest, 30
any instrument evidencing a promise or an agreement to pay 31
money, warehouse receipts for intoxicating liquor, and the 32
currency of any government other than those of the United States 33
and Canada, but sections 1707.01 to 1707.50 of the Revised Code 34
do not apply to the sale of real estate. 35
(C)(1) "Sale" has the full meaning of "sale" as applied by 36
or accepted in courts of law or equity, and includes every 37
disposition, or attempt to dispose, of a security or of an 38
interest in a security. "Sale" also includes a contract to sell, 39
an exchange, an attempt to sell, an option of sale, a 40
solicitation of a sale, a solicitation of an offer to buy, a 41
subscription, or an offer to sell, directly or indirectly, by 42
agent, circular, pamphlet, advertisement, or otherwise. 43
(2) "Sell" means any act by which a sale is made. 44
(3) The use of advertisements, circulars, or pamphlets in 45
connection with the sale of securities in this state exclusively 46
to the purchasers specified in division (D) of section 1707.03 47
of the Revised Code is not a sale when the advertisements, 48

S. B. No. 115 Page 3

As Introduced

circulars, and pamphlets describing and offering those 49
securities bear a readily legible legend in substance as 50
follows: "This offer is made on behalf of dealers licensed under 51
sections 1707.01 to 1707.50 of the Revised Code, and is confined 52
in this state exclusively to institutional investors and 53
licensed dealers." 54
(4) The offering of securities by any person in 55
conjunction with a licensed dealer by use of advertisement, 56
circular, or pamphlet is not a sale if that person does not 57
otherwise attempt to sell securities in this state. 58
(5) Any security given with, or as a bonus on account of, 59
any purchase of securities is conclusively presumed to 60
constitute a part of the subject of that purchase and has been 61
"sold." 62
(6) "Sale" by an owner, pledgee, or mortgagee, or by a 63
person acting in a representative capacity, includes sale on 64
behalf of such party by an agent, including a licensed dealer or 65
salesperson. 66
(D) "Person," except as otherwise provided in this 67
chapter, means a natural person, firm, partnership, limited 68
partnership, partnership association, syndicate, joint-stock 69
company, unincorporated association, trust or trustee except 70
where the trust was created or the trustee designated by law or 71
judicial authority or by a will, and a corporation or limited 72
liability company organized under the laws of any state, any 73
foreign government, or any political subdivision of a state or 74
foreign government. 75
(E)(1) "Dealer," except as otherwise provided in this 76

chapter, means every person, other than a salesperson, who 77

S. B. No. 115 As Introduced

engages or professes to engage, in this state, for either all or part of the person's time, directly or indirectly, either in the business of the sale of securities for the person's own account, or in the business of the purchase or sale of securities for the account of others in the reasonable expectation of receiving a commission, fee, or other remuneration as a result of engaging in the purchase and sale of securities. "Dealer" does not mean any of the following:

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81
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84
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(a) Any issuer, including any officer, director, employee, 86
or trustee of, or member or manager of, or partner in, or any 87
general partner of, any issuer, that sells, offers for sale, or 88
does any act in furtherance of the sale of a security that 89
represents an economic interest in that issuer, provided no 90
commission, fee, or other similar remuneration is paid to or 91
received by the issuer for the sale; 92
(b) Any licensed attorney, public accountant, or firm of 93
such attorneys or accountants, whose activities are incidental 94
to the practice of the attorney's, accountant's, or firm's 95
profession; 96
(c) Any person that, for the account of others, engages in 97
the purchase or sale of securities that are issued and 98
outstanding before such purchase and sale, if a majority or more 99
of the equity interest of an issuer is sold in that transaction, 100
and if, in the case of a corporation, the securities sold in 101
that transaction represent a majority or more of the voting 102
power of the corporation in the election of directors; 103
(d) Any person that brings an issuer together with a 104
potential investor and whose compensation is not directly or 105
indirectly based on the sale of any securities by the issuer to 106
the investor; 107

S. B. No. 115 Page 5 As Introduced

(e) Any bank; 108
(f) Any person that the division of securities by rule 109
exempts from the definition of "dealer" under division (E)(1) of 110
this section. 111
(2) "Licensed dealer" means a dealer licensed under this 112
chapter. 113
(F)(1) "Salesman" or "salesperson" means every natural 114
person, other than a dealer, who is employed, authorized, or 115
appointed by a dealer to sell securities within this state. 116
(2) The general partners of a partnership, and the 117
executive officers of a corporation or unincorporated 118
association, licensed as a dealer are not salespersons within 119
the meaning of this definition, nor are clerical or other 120
employees of an issuer or dealer that are employed for work to 121
which the sale of securities is secondary and incidental; but 122
the division of securities may require a license from any such 123
partner, executive officer, or employee if it determines that 124
protection of the public necessitates the licensing. 125
(3) "Licensed salesperson" means a salesperson licensed 126
under this chapter. 127
(G) "Issuer" means every person who has issued, proposes 128
to issue, or issues any security. 129
(H) "Director" means each director or trustee of a 130
corporation, each trustee of a trust, each general partner of a 131
partnership, except a partnership association, each manager of a 132
partnership association, and any person vested with managerial 133
or directory power over an issuer not having a board of 134
directors or trustees. 135

S. B. No. 115 As Introduced

(I) "Incorporator" means any incorporator of a corporation 136
and any organizer of, or any person participating, other than in 137
a representative or professional capacity, in the organization 138
of an unincorporated issuer. 139
(J) "Fraud," "fraudulent," "fraudulent acts," "fraudulent 140
practices," or "fraudulent transactions" means anything 141
recognized on or after July 22, 1929, as such in courts of law 142
or equity; any device, scheme, or artifice to defraud or to 143
obtain money or property by means of any false pretense, 144
representation, or promise; any fictitious or pretended purchase 145
or sale of securities; and any act, practice, transaction, or 146
course of business relating to the purchase or sale of 147
securities that is fraudulent or that has operated or would 148
operate as a fraud upon the seller or purchaser. 149
(K) Except as otherwise specifically provided, whenever 150
any classification or computation is based upon "par value," as 151
applied to securities without par value, the average of the 152
aggregate consideration received or to be received by the issuer 153
for each class of those securities shall be used as the basis 154
for that classification or computation. 155
(L)(1) "Intangible property" means patents, copyrights, 156
secret processes, formulas, services, good will, promotion and 157
organization fees and expenses, trademarks, trade brands, trade 158
names, licenses, franchises, any other assets treated as 159
intangible according to generally accepted accounting 160
principles, and securities, accounts receivable, or contract 161
rights having no readily determinable value. 162
(2) "Tangible property" means all property other than 163
intangible property and includes securities, accounts 164
receivable, and contract rights, when the securities, accounts 165

S. B. No. 115 As Introduced

receivable, or contract rights have a readily determinable 166
value. 167
(M) "Public utilities" means those utilities defined in 168
sections 4905.02, 4905.03, 4907.02, and 4907.03 of the Revised 169
Code; in the case of a foreign corporation, it means those 170
utilities defined as public utilities by the laws of its 171
domicile; and in the case of any other foreign issuer, it means 172
those utilities defined as public utilities by the laws of the 173
situs of its principal place of business. The term always 174
includes railroads whether or not they are so defined as public 175
utilities. 176
(N) "State" means any state of the United States, any 177
territory or possession of the United States, the District of 178
Columbia, and any province of Canada. 179
(O) "Bank" means any bank, trust company, savings and loan 180
association, savings bank, or credit union that is incorporated 181
or organized under the laws of the United States, any state of 182
the United States, Canada, or any province of Canada and that is 183
subject to regulation or supervision by that country, state, or 184
province. 185
(P) "Include," when used in a definition, does not exclude 186
other things or persons otherwise within the meaning of the term 187
defined. 188
(Q)(1) "Registration by description" means that the 189
requirements of section 1707.08 of the Revised Code have been 190
complied with. "Registration by description" does not include 191
registration by coordination. 192
(2) "Registration by qualification" means that the 193
requirements of sections 1707.09 and 1707.11 of the Revised Code 194

S. B. No. 115 As Introduced

have been complied with. "Registration by qualification" does 195
not include registration by coordination. 196
(3) "Registration by coordination" means that there has 197
been compliance with section 1707.091 of the Revised Code. 198
Reference in this chapter to registration by qualification also 199
includes registration by coordination unless the context 200
otherwise indicates. 201
(R) "Intoxicating liquor" includes all liquids and 202
compounds that contain more than three and two-tenths per cent 203
of alcohol by weight and are fit for use for beverage purposes. 204
(S) "Institutional investor" means any of the following, 205
whether acting for itself or for others in a fiduciary capacity: 206
(1) A bank or international banking institution; 207
(2) An insurance company; 208
(3) A separate account of an insurance company; 209
(4) An investment company as defined in the "Investment 210
Company Act of 1940," 15 U.S.C. 80a-3; 211
(5) A broker-dealer registered under the "Securities 212
Exchange Act of 1934," 15 U.S.C. $78\mathrm{{o}}$ , as amended, or licensed by 213
the division of securities as a dealer; 214
(6) An employee pension, profit-sharing, or benefit plan 215
if the plan has total assets in excess of ten million dollars or 216
its investment decisions are made by a named fiduciary, as 217
defined in the "Employee Retirement Income Security Act of 218
1974," 29 U.S.C. 1001, that is one of the following: 219
(a) A broker-dealer registered under the "Securities 220
Exchange Act of 1934," 15 U.S.C. $78\mathrm{{o}}$ , as amended; 221

S. B. No. 115 As Introduced

(b) An investment adviser registered or exempt from 222
registration under the "Investment Advisers Act of 1940," 15 223
U.S.C. 80b-3; 224
(c) An investment adviser registered under this chapter, a 225
bank, or an insurance company. 226
(7) A plan established and maintained by a state, a 227
political subdivision of a state, or an agency or 228
instrumentality of a state or a political subdivision of a state 229
for the benefit of its employees, if the plan has total assets 230
in excess of ten million dollars or its investment decisions are 231
made by a duly designated public official or by a named 232
fiduciary, as defined in the "Employee Retirement Income 233
Security Act of 1974," 29 U.S.C. 1001, that is one of the 234
following: 235
(a) A broker-dealer registered under the "Securities 236
Exchange Act of 1934," 15 U.S.C. $78\mathrm{{o}}$ , as amended; 237
(b) An investment adviser registered or exempt from 238
registration under the "Investment Advisers Act of 1940," 15 239
U.S.C. 80b-3; 240
(c) An investment adviser registered under this chapter, a 241
bank, or an insurance company. 242
(8) A trust, if it has total assets in excess of ten 243
million dollars, its trustee is a bank, and its participants are 244
exclusively plans of the types identified in division (S)(6) or 245
(7) of this section, regardless of the size of their assets, 246
except a trust that includes as participants self-directed 247
individual retirement accounts or similar self-directed plans; 248
(9) An organization described in section 501(c)(3) of the 249
"Internal Revenue Code of 1986," 26 U.S.C. 1, as amended, 250

S. B. No. 115 As Introduced

corporation, Massachusetts trust or similar business trust, 251
limited liability company, or partnership, not formed for the 252
specific purpose of acquiring the securities offered, with total 253
assets in excess of ten million dollars; 254
(10) A small business investment company licensed by the 255
small business administration under section 301(c) of the "Small 256
Business Investment Act of 1958," 15 U.S.C. 681(c), with total 257
assets in excess of ten million dollars; 258
(11) A private business development company as defined in 259
section 202(a)(22) of the "Investment Advisers Act of 1940," 15 260
U.S.C. 80b-2(a)(22), with total assets in excess of ten million 261
dollars; 262
(12) A federal covered investment adviser acting for its 263
own account; 264
(13) A "qualified institutional buyer" as defined in 17 265
C.F.R. 230.144A(a)(1), other than 17 C.F.R. 230.144A(a)(1)(H); 266
(14) A "major U.S. institutional investor" as defined in 267
17 C.F.R. 240.15a-6(b)(4)(i); 268
(15) Any other person, other than an individual, of 269
institutional character with total assets in excess of ten 270
million dollars not organized for the specific purpose of 271
evading this chapter; 272
(16) Any other person specified by rule adopted or order 273
issued under this chapter. 274
(T) A reference to a statute of the United States or to a 275
rule, regulation, or form promulgated by the securities and 276
exchange commission or by another federal agency means the 277
statute, rule, regulation, or form as it exists at the time of 278

S. B. No. 115 As Introduced

the act, omission, event, or transaction to which it is applied 279
under this chapter. 280
(U) "Securities and exchange commission" means the 281
securities and exchange commission established by the Securities 282
Exchange Act of 1934. 283
(V)(1) "Control bid" means the purchase of or offer to 284
purchase any equity security of a subject company from a 285
resident of this state if either of the following applies: 286
(a) After the purchase of that security, the offeror would 287
be directly or indirectly the beneficial owner of more than ten 288
per cent of any class of the issued and outstanding equity 289
securities of the issuer. 290
(b) The offeror is the subject company, there is a pending 291
control bid by a person other than the issuer, and the number of 292
the issued and outstanding shares of the subject company would 293
be reduced by more than ten per cent. 294
(2) For purposes of division (V)(1) of this section, 295
"control bid" does not include any of the following: 296
(a) A bid made by a dealer for the dealer's own account in 297
the ordinary course of business of buying and selling 298
securities; 299
(b) An offer to acquire any equity security solely in 300
exchange for any other security, or the acquisition of any 301
equity security pursuant to an offer, for the sole account of 302
the offeror, in good faith and not for the purpose of avoiding 303
the provisions of this chapter, and not involving any public 304
offering of the other security within the meaning of Section 4 305
of Title I of the "Securities Act of 1933," 48 Stat. 77, 15 306
U.S.C.A. 77d(2), as amended; 307

S. B. No. 115 As Introduced

(c) Any other offer to acquire any equity security, or the 308
acquisition of any equity security pursuant to an offer, for the 309
sole account of the offeror, from not more than fifty persons, 310
in good faith and not for the purpose of avoiding the provisions 311
of this chapter. 312
(W) "Offeror" means a person who makes, or in any way 313
participates or aids in making, a control bid and includes 314
persons acting jointly or in concert, or who intend to exercise 315
jointly or in concert any voting rights attached to the 316
securities for which the control bid is made and also includes 317
any subject company making a control bid for its own securities. 318
(X)(1) "Investment adviser" means any person who, for 319
compensation, engages in the business of advising others, either 320
directly or through publications or writings, as to the value of 321
securities or as to the advisability of investing in, 322
purchasing, or selling securities, or who, for compensation and 323
as a part of regular business, issues or promulgates analyses or 324
reports concerning securities. 325
(2) "Investment adviser" does not mean any of the 326
following: 327
(a) Any attorney, accountant, engineer, or teacher, whose 328
performance of investment advisory services described in 329
division (X)(1) of this section is solely incidental to the 330
practice of the attorney's, accountant's, engineer's, or 331
teacher's profession; 332
(b) A publisher of any bona fide newspaper, news magazine, 333
or business or financial publication of general and regular 334
circulation; 335
(c) A person who acts solely as an investment adviser 336

S. B. No. 115 Page 13 As Introduced

representative; 337

(d) A bank holding company, as defined in the "Bank 338
Holding Company Act of 1956," 70 Stat. 133, 12 U.S.C. 1841, that 339
is not an investment company; 340
(e) A bank, or any receiver, conservator, or other 341
liquidating agent of a bank; 342
(f) Any licensed dealer or licensed salesperson whose 343
performance of investment advisory services described in 344
division (X)(1) of this section is solely incidental to the 345
conduct of the dealer's or salesperson's business as a licensed 346
dealer or licensed salesperson and who receives no special 347
compensation for the services; 348
(g) Any person, the advice, analyses, or reports of which 349
do not relate to securities other than securities that are 350
direct obligations of, or obligations guaranteed as to principal 351
or interest by, the United States, or securities issued or 352
guaranteed by corporations in which the United States has a 353
direct or indirect interest, and that have been designated by 354
the secretary of the treasury as exempt securities as defined in 355
the "Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 356
$78\mathrm{{C}}$ ; 357
(h) Any person that is excluded from the definition of 358
investment adviser pursuant to section 202(a)(11)(A) to (E) of 359
the "Investment Advisers Act of 1940," 15 U.S.C. 80b-2(a)(11), 360
or that has received an order from the securities and exchange 361
commission under section 202(a)(11)(F) of the "Investment 362
Advisers Act of 1940," 15 U.S.C. 80b-2(a)(11)(F), declaring that 363
the person is not within the intent of section 202(a)(11) of the 364
Investment Advisers Act of 1940. 365

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(i) A person who acts solely as a state retirement system 366
investment officer or as a bureau of workers' compensation chief 367
investment officer; 368
(j) Any other person that the division designates by rule, 369
if the division finds that the designation is necessary or 370
appropriate in the public interest or for the protection of 371
investors or clients and consistent with the purposes fairly 372
intended by the policy and provisions of this chapter. 373
(Y)(1) "Subject company" means an issuer that satisfies 374
both of the following: 375
(a) Its principal place of business or its principal 376
executive office is located in this state, or it owns or 377
controls assets located within this state that have a fair 378
market value of at least one million dollars. 379
(b) More than ten per cent of its beneficial or record 380
equity security holders are resident in this state, more than 381
ten per cent of its equity securities are owned beneficially or 382
of record by residents in this state, or more than one thousand 383
of its beneficial or record equity security holders are resident 384
in this state. 385
(2) The division of securities may adopt rules to 386
establish more specific application of the provisions set forth 387
in division (Y)(1) of this section. Notwithstanding the 388
provisions set forth in division (Y)(1) of this section and any 389
rules adopted under this division, the division, by rule or in 390
an adjudicatory proceeding, may make a determination that an 391
issuer does not constitute a "subject company" under division 392
(Y)(1) of this section if appropriate review of control bids 393
involving the issuer is to be made by any regulatory authority 394

S. B. No. 115 As Introduced

of another jurisdiction. 395
(Z) "Beneficial owner" includes any person who directly or 396
indirectly through any contract, arrangement, understanding, or 397
relationship has or shares, or otherwise has or shares, the 398
power to vote or direct the voting of a security or the power to 399
dispose of, or direct the disposition of, the security. 400
"Beneficial ownership" includes the right, exercisable within 401
sixty days, to acquire any security through the exercise of any 402
option, warrant, or right, the conversion of any convertible 403
security, or otherwise. Any security subject to any such option, 404
warrant, right, or conversion privilege held by any person shall 405
be deemed to be outstanding for the purpose of computing the 406
percentage of outstanding securities of the class owned by that 407
person, but shall not be deemed to be outstanding for the 408
purpose of computing the percentage of the class owned by any 409
other person. A person shall be deemed the beneficial owner of 410
any security beneficially owned by any relative or spouse or 411
relative of the spouse residing in the home of that person, any 412
trust or estate in which that person owns ten per cent or more 413
of the total beneficial interest or serves as trustee or 414
executor, any corporation or entity in which that person owns 415
ten per cent or more of the equity, and any affiliate or 416
associate of that person. 417
(AA) "Offeree" means the beneficial or record owner of any 418
security that an offeror acquires or offers to acquire in 419
connection with a control bid. 420
(BB) "Equity security" means any share or similar 421
security, or any security convertible into any such security, or 422
carrying any warrant or right to subscribe to or purchase any 423
such security, or any such warrant or right, or any other 424

S. B. No. 115 As Introduced

security that, for the protection of security holders, is 425
treated as an equity security pursuant to rules of the division 426
of securities. 427
(CC)(1) "Investment adviser representative" means a 428
supervised person of an investment adviser, provided that the 429
supervised person has more than five clients who are natural 430
persons other than excepted persons defined in division (EE) of 431
this section, and that more than ten per cent of the supervised 432
person's clients are natural persons other than excepted persons 433
defined in division (EE) of this section. "Investment adviser 434
representative" does not mean any of the following: 435
(a) A supervised person that does not on a regular basis 436
solicit, meet with, or otherwise communicate with clients of the 437
investment adviser; 438
(b) A supervised person that provides only investment 439
advisory services described in division (X)(1) of this section 440
by means of written materials or oral statements that do not 441
purport to meet the objectives or needs of specific individuals 442
or accounts; 443
(c) Any other person that the division designates by rule, 444
if the division finds that the designation is necessary or 445
appropriate in the public interest or for the protection of 446
investors or clients and is consistent with the provisions 447
fairly intended by the policy and provisions of this chapter. 448
(2) For the purpose of the calculation of clients in 449
division (CC)(1) of this section, a natural person and the 450
following persons are deemed a single client: Any minor child of 451
the natural person; any relative, spouse, or relative of the 452
spouse of the natural person who has the same principal 453

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residence as the natural person; all accounts of which the 454
natural person or the persons referred to in division (CC)(2) of 455
this section are the only primary beneficiaries; and all trusts 456
of which the natural person or persons referred to in division 457
(CC)(2) of this section are the only primary beneficiaries. 458
Persons who are not residents of the United States need not be 459
included in the calculation of clients under division (CC)(1) of 460
this section. 461
(3) If subsequent to March 18, 1999, amendments are 462
enacted or adopted defining "investment adviser representative" 463
for purposes of the Investment Advisers Act of 1940 or 464
additional rules or regulations are promulgated by the 465
securities and exchange commission regarding the definition of 466
"investment adviser representative" for purposes of the 467
Investment Advisers Act of 1940, the division of securities 468
shall, by rule, adopt the substance of the amendments, rules, or 469
regulations, unless the division finds that the amendments, 470
rules, or regulations are not necessary for the protection of 471
investors or in the public interest. 472
(DD) "Supervised person" means a natural person who is any 473
of the following: 474
(1) A partner, officer, or director of an investment 475
adviser, or other person occupying a similar status or 476
performing similar functions with respect to an investment 477
adviser; 478
(2) An employee of an investment adviser; 479
(3) A person who provides investment advisory services 480
described in division (X)(1) of this section on behalf of the 481
investment adviser and is subject to the supervision and control 482

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of the investment adviser. 483
(EE) "Excepted person" means a natural person to whom any 484
of the following applies: 485
(1) Immediately after entering into the investment 486
advisory contract with the investment adviser, the person has at 487
least seven hundred fifty thousand dollars under the management 488
of the investment adviser. 489
(2) The investment adviser reasonably believes either of 490
the following at the time the investment advisory contract is 491
entered into with the person: 492
(a) The person has a net worth, together with assets held 493
jointly with a spouse, of more than one million five hundred 494
thousand dollars. 495
(b) The person is a qualified purchaser as defined in 496
division (FF) of this section. 497
(3) Immediately prior to entering into an investment 498
advisory contract with the investment adviser, the person is 499
either of the following: 500
(a) An executive officer, director, trustee, general 501
partner, or person serving in a similar capacity, of the 502
investment adviser; 503
(b) An employee of the investment adviser, other than an 504
employee performing solely clerical, secretarial, or 505
administrative functions or duties for the investment adviser, 506
which employee, in connection with the employee's regular 507
functions or duties, participates in the investment activities 508
of the investment adviser, provided that, for at least twelve 509
months, the employee has been performing such nonclerical, 510

S. B. No. 115 As Introduced

nonsecretarial, or nonadministrative functions or duties for or 511

on behalf of the investment adviser or performing substantially 512
similar functions or duties for or on behalf of another company. 513
If subsequent to March 18, 1999, amendments are enacted or 514
adopted defining "excepted person" for purposes of the 515
Investment Advisers Act of 1940 or additional rules or 516
regulations are promulgated by the securities and exchange 517
commission regarding the definition of "excepted person" for 518
purposes of the Investment Advisers Act of 1940, the division of 519
securities shall, by rule, adopt the substance of the 520
amendments, rules, or regulations, unless the division finds 521
that the amendments, rules, or regulations are not necessary for 522
the protection of investors or in the public interest. 523
(FF)(1) "Qualified purchaser" means either of the 524
following: 525
(a) A natural person who owns not less than five million 526
dollars in investments as defined by rule by the division of 527
securities; 528
(b) A natural person, acting for the person's own account 529
or accounts of other qualified purchasers, who in the aggregate 530
owns and invests on a discretionary basis, not less than twenty- 531
five million dollars in investments as defined by rule by the 532
division of securities. 533
(2) If subsequent to March 18, 1999, amendments are 534
enacted or adopted defining "qualified purchaser" for purposes 535
of the Investment Advisers Act of 1940 or additional rules or 536
regulations are promulgated by the securities and exchange 537
commission regarding the definition of "qualified purchaser" for 538
purposes of the Investment Advisers Act of 1940, the division of 539

S. B. No. 115 As Introduced

securities shall, by rule, adopt the amendments, rules, or 540
regulations, unless the division finds that the amendments, 541
rules, or regulations are not necessary for the protection of 542
investors or in the public interest. 543
(GG)(1) "Purchase" has the full meaning of "purchase" as 544
applied by or accepted in courts of law or equity and includes 545
every acquisition of, or attempt to acquire, a security or an 546
interest in a security. "Purchase" also includes a contract to 547
purchase, an exchange, an attempt to purchase, an option to 548
purchase, a solicitation of a purchase, a solicitation of an 549
offer to sell, a subscription, or an offer to purchase, directly 550
or indirectly, by agent, circular, pamphlet, advertisement, or 551
otherwise. 552
(2) "Purchase" means any act by which a purchase is made. 553
(3) Any security given with, or as a bonus on account of, 554
any purchase of securities is conclusively presumed to 555
constitute a part of the subject of that purchase. 556
(HH) "Life settlement interest" means the entire interest 557
or any fractional interest in an insurance policy or certificate 558
of insurance, or in an insurance benefit under such a policy or 559
certificate, that is the subject of a life settlement contract. 560
For purposes of this division, "life settlement contract" 561
means an agreement for the purchase, sale, assignment, transfer, 562
devise, or bequest of any portion of the death benefit or 563
ownership of any life insurance policy or contract, in return 564
for consideration or any other thing of value that is less than 565
the expected death benefit of the life insurance policy or 566
contract. "Life settlement contract" includes a viatical 567
settlement contract as defined in section 3916.01 of the Revised 568

S. B. No. 115 Page 21

As Introduced

Code, but does not include any of the following: 569
(1) A loan by an insurer under the terms of a life 570
insurance policy, including, but not limited to, a loan secured 571
by the cash value of the policy; 572
(2) An agreement with a bank that takes an assignment of a 573
life insurance policy as collateral for a loan; 574
(3) The provision of accelerated benefits as defined in 575
section 3915.21 of the Revised Code; 576
(4) Any agreement between an insurer and a reinsurer; 577
(5) An agreement by an individual to purchase an existing 578
life insurance policy or contract from the original owner of the 579
policy or contract, if the individual does not enter into more 580
than one life settlement contract per calendar year; 581
(6) The initial purchase of an insurance policy or 582
certificate of insurance from its owner by a viatical settlement 583
provider, as defined in section 3916.01 of the Revised Code, 584
that is licensed under Chapter 3916. of the Revised Code. 585
(II) "State retirement system" means the public employees 586
retirement system, Ohio police and fire pension fund, state 587
teachers retirement system, school employees retirement system, 588
and state highway patrol retirement system. 589
(JJ) "State retirement system investment officer" means an 590
individual employed by a state retirement system as a chief 591
investment officer, assistant investment officer, or the person 592
in charge of a class of assets or in a position that is 593
substantially equivalent to chief investment officer, assistant 594
investment officer, or person in charge of a class of assets. 595
(KK) "Bureau of workers' compensation chief investment 596

S. B. No. 115 As Introduced

officer" means an individual employed by the administrator of 597
workers' compensation as a chief investment officer or in a 598
position that is substantially equivalent to a chief investment 599
officer. 600

Sec. 1707.03. (A) As used in this section, "exempt" means that, except in the case of securities the right to buy, sell, or deal in which has been suspended or revoked under an existing order of the division of securities under section 1707.13 of the Revised Code or under a cease and desist order under division (G) (A)(7) of section 1707.23 of the Revised Code, transactions in securities may be carried on and completed without compliance with sections 1707.08 to 1707.11 of the Revised Code.

(B) A sale of securities made by or on behalf of a bona fide owner, neither the issuer nor a dealer, is exempt if the sale is made in good faith and not for the purpose of avoiding this chapter and is not made in the course of repeated and successive transactions of a similar character. Any sale of securities over a stock exchange that is lawfully conducted in this state and regularly open for public patronage and that has been established and operated for a period of at least five years prior to the sale at a commission not exceeding the commission regularly charged in such transactions also is exempt.

(C) The sale of securities by executors, administrators, receivers, trustees, or anyone acting in a fiduciary capacity is exempt, where such relationship was created by law, by a will, or by judicial authority, and where such sales are subject to approval by, or are made in pursuance to authority granted by, any court of competent jurisdiction or are otherwise authorized and lawfully made by such fiduciary.

S. B. No. 115 As Introduced

(D) A sale to the issuer, to a dealer, or to an 627
institutional investor is exempt. 628

(E) A sale in good faith, and not for the purpose of avoiding this chapter, by a pledgee of a security pledged for a bona fide debt is exempt.

(F) The sale at public auction by a corporation of shares of its stock because of delinquency in payment for the shares is exempt.

(G)(1) The giving of any conversion right with, or on account of the purchase of, any security that is exempt, is the subject matter of an exempt transaction, has been registered by description, by coordination, or by qualification, or is the subject matter of a transaction that has been registered by description is exempt.

(2) The giving of any subscription right, warrant, or option to purchase a security or right to receive a security upon exchange, which security is exempt at the time the right, warrant, or option to purchase or right to receive is given, is the subject matter of an exempt transaction, is registered by description, by coordination, or by qualification, or is the subject matter of a transaction that has been registered by description is exempt.

(3) The giving of any subscription right or any warrant or 649
option to purchase a security, which right, warrant, or option 650
expressly provides that it shall not be exercisable except for a 651
security that at the time of the exercise is exempt, is the 652
subject matter of an exempt transaction, is registered by 653
description, by coordination, or by qualification, or at such 654
time is the subject matter of a transaction that has been 655

S. B. No. 115 As Introduced

registered by description is exempt. 656

(H) The sale of notes, bonds, or other evidences of 6
indebtedness that are secured by a mortgage lien upon real 65
estate, leasehold estate other than oil, gas, or mining 65
leasehold, or tangible personal property, or which evidence of 66
indebtedness is due under or based upon a conditional-sale 66
contract, if all such notes, bonds, or other evidences of 66
indebtedness are sold to a single purchaser at a single sale, is 6
exempt.

(I) The delivery of securities by the issuer on the exercise of conversion rights, the sale of securities by the issuer on exercise of subscription rights or of warrants or options to purchase securities, the delivery of voting-trust certificates for securities deposited under a voting-trust agreement, the delivery of deposited securities on surrender of voting-trust certificates, and the delivery of final certificates on surrender of interim certificates are exempt; but the sale of securities on exercise of subscription rights, warrants, or options is not an exempt transaction unless those rights, warrants, or options when granted were the subject matter of an exempt transaction under division (G) of this section or were registered by description, by coordination, or by qualification.

(J) The sale of securities by a bank, savings and loan 679
association, savings bank, or credit union organized under the 680
laws of the United States or of this state is exempt if at a 681
profit to that seller of not more than two per cent of the total 682
sale price of the securities. 683
(K)(1) The distribution by a corporation of its securities 684
to its security holders as a share dividend or other 685

S. B. No. 115 As Introduced

ibution out of earnings or surplus is exempt. 686

(2) The exchange or distribution by the issuer of any of its securities or of the securities of any of the issuer's wholly owned subsidiaries exclusively with or to its existing security holders, if no commission or other remuneration is given directly or indirectly for soliciting the exchange, is exempt.

(3) The sale of preorganization subscriptions for shares of stock of a corporation prior to the incorporation of the corporation is exempt, when the sale is evidenced by a written agreement, no remuneration is given, or promised, directly or indirectly, for or in connection with the sale of those securities, and no consideration is received, directly or indirectly, by any person from the purchasers of those securities until registration by qualification, by coordination, or by description of those securities is made under this chapter.

687
688
689
690
691
692
693
694
695
696
697
698
699
700
701
702
703
704
705
706
707
708
709
710
711
712
713
714
715

(L) The issuance of securities in exchange for one or more bona fide outstanding securities, claims, or property interests, not including securities sold for a consideration payable in whole or in part in cash, under a plan of reorganization, recapitalization, or refinancing approved by a court pursuant to the Bankruptcy Act of the United States or to any other federal act giving any federal court jurisdiction over such plan of reorganization, or under a plan of reorganization approved by a court of competent jurisdiction of any state of the United States is exempt. As used in this division, "reorganization," "recapitalization," and "refinancing" have the same meanings as in section 1707.04 of the Revised Code.

(M) A sale by a licensed dealer, acting either as

S. B. No. 115 As Introduced

principal or as agent, of securities issued and outstanding 716
before the sale is exempt, unless the sale is of one or more of 717
the following: 718
(1) Securities constituting the whole or a part of an 719
unsold allotment to or subscription by a dealer as an 720
underwriter or other participant in the distribution of those 721
securities by the issuer, whether that distribution is direct or 722
through an underwriter, provided that, if the issuer is such by 723
reason of owning one-fourth or more of those securities, the 724
dealer has knowledge of this fact or reasonable cause to believe 725
this fact; 726
(2) Any class of shares issued by a corporation when the 727
number of beneficial owners of that class is less than twenty- 728
five, with the record owner of securities being deemed the 729
beneficial owner for this purpose, in the absence of actual 730
knowledge to the contrary; 731
(3) Securities that within one year were purchased outside 732
this state or within one year were transported into this state, 733
if the dealer has knowledge or reasonable cause to believe, 734
before the sale of those securities, that within one year they 735
were purchased outside this state or within one year were 736
transported into this state; but such a sale of those securities 737
is exempt if any of the following occurs: 738
(a) A recognized securities manual contains the names of 739
the issuer's officers and directors, a balance sheet of the 740
issuer as of a date within eighteen months, and a profit and 741
loss statement for either the fiscal year preceding that date or 742
the most recent year of operations; 743

(b) Those securities, or securities of the same class,

S. B. No. 115 Page 27

As Introduced

within one year were registered or qualified under section 745
1707.09 or 1707.091 of the Revised Code, and that registration 746
or qualification is in full force and effect; 747
(c) The sale is made by a licensed dealer on behalf of the 748
bona fide owner of those securities in accordance with division 749
(B) of this section; 750
(d) Those securities were transported into Ohio in a 751
transaction of the type described in division (L), (K), or (I) 752
of this section, or in a transaction registered under division 753
(A) of section 1707.06 of the Revised Code. 754
(N) For the purpose of this division and division (M) of 755
this section, "underwriter" means any person who has purchased 756
from an issuer with a view to, or sells for an issuer in 757
connection with, the distribution of any security, or who 758
participates directly or indirectly in any such undertaking or 759
in the underwriting thereof, but "underwriter" does not include 760
a person whose interest is limited to a discount, commission, or 761
profit from the underwriter or from a dealer that is not in 762
excess of the customary distributors' or sellers' discount, 763
commission, or profit; and "issuer" includes any person or any 764
group of persons acting in concert in the sale of such 765
securities, owning beneficially one-fourth or more of the 766
outstanding securities of the class involved in the transactions 767
in question, with the record owner of securities being deemed 768
the beneficial owner for this purpose, in the absence of actual 769
knowledge to the contrary. 770
(O)(1) The sale of any equity security is exempt if all 771
the following conditions are satisfied: 772

(a) The sale is by the issuer of the security. 773

S. B. No. 115 As Introduced

(b) The total number of purchasers in this state of all 774
securities issued or sold by the issuer in reliance upon this 775
exemption during the period of one year ending with the date of 776
the sale does not exceed ten. A sale of securities registered 777
under this chapter or sold pursuant to an exemption under this 778
chapter other than this exemption shall not be integrated with a 779
sale pursuant to this exemption in computing the number of 780
purchasers under this exemption. 781
(c) No advertisement, article, notice, or other 782
communication published in any newspaper, magazine, or similar 783
medium or broadcast over television or radio is used in 784
connection with the sale, but the use of an offering circular or 785
other communication delivered by the issuer to selected 786
individuals does not destroy this exemption. 787
(d) The issuer reasonably believes after reasonable 788
investigation that the purchaser is purchasing for investment. 789
(e) The aggregate commission, discount, and other 790
remuneration, excluding legal, accounting, and printing fees, 791
paid or given directly or indirectly does not exceed ten per 792
cent of the initial offering price. 793
(f) Any such commission, discount, or other remuneration 794
for sales in this state is paid or given only to dealers or 795
salespersons registered pursuant to this chapter. 796
(2) For the purposes of division (O)(1) of this section, 797
each of the following is deemed to be a single purchaser of a 798
security: husband and wife, a child and its parent or guardian 799
when the parent or guardian holds the security for the benefit 800
of the child, a corporation, a limited liability company, a 801
partnership, an association or other unincorporated entity, a 802

S. B. No. 115 As Introduced

joint-stock company, or a trust, but only if the corporation, 803
limited liability company, partnership, association, entity, 804
joint-stock company, or trust was not formed for the purpose of 805
purchasing the security. 806

(3) As used in division (O)(1) of this section, "equity security" means any stock or similar security of a corporation or any membership interest in a limited liability company; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right; or any other security that the division considers necessary or appropriate, by such rules as it may prescribe in the public interest or for the protection of investors, to treat as an equity security.

(P) The sale of securities representing interests in or under profit-sharing or participation agreements relating to oil or gas wells located in this state, or representing interests in or under oil or gas leases of real estate situated in this state, is exempt if the securities are issued by an individual, partnership, limited partnership, partnership association, syndicate, pool, trust or trust fund, or other unincorporated association and if each of the following conditions is complied with:

(1) The beneficial owners of the securities do not, and 826
will not after the sale, exceed five natural persons; 827
(2) The securities constitute or represent interests in 828
not more than one oil or gas well; 829
(3) A certificate or other instrument in writing is 830
furnished to each purchaser of the securities at or before the 831

S. B. No. 115 As Introduced

consummation of the sale, disclosing the maximum commission, 832
compensation for services, cost of lease, and expenses with 833
respect to the sale of such interests and with respect to the 834
promotion, development, and management of the oil or gas well, 835
and the total of that commission, compensation, costs, and 836
expenses does not exceed twenty-five per cent of the aggregate 837
interests in the oil or gas well, exclusive of any landowner's 838
rental or royalty; 839
(4) The sale is made in good faith and not for the purpose 840
of avoiding this chapter. 841
(Q) The sale of any security is exempt if all of the 842
following conditions are satisfied: 843
(1) The provisions of section 5 of the Securities Act of 844
1933 do not apply to the sale by reason of an exemption under 845
section 4 (2) of that act. 846
(2) The aggregate commission, discount, and other 847
remuneration, excluding legal, accounting, and printing fees, 848
paid or given directly or indirectly does not exceed ten per 849
cent of the initial offering price. 850
(3) Any such commission, discount, or other remuneration 851
for sales in this state is paid or given only to dealers or 852
salespersons registered under this chapter. 853
(4) The issuer or dealer files with the division of 854
securities, not later than sixty days after the sale, a report 855
setting forth the name and address of the issuer, the total 856
amount of the securities sold under this division, the number of 857
persons to whom the securities were sold, the price at which the 858
securities were sold, and the commissions or discounts paid or 859
given. 860

S. B. No. 115 As Introduced

(5) The issuer pays a filing fee of one hundred dollars 861
for the first filing and fifty dollars for every subsequent 862
filing during each calendar year. 863
(R) A sale of a money order, travelers' check, or other 864
instrument for the transmission of money by a person qualified 865
to engage in such business under Chapter 1315. of the Revised 866
Code is exempt. 867

(S) A sale by a licensed dealer of securities that are in the process of registration under the Securities Act of 1933, unless exempt under that act, and that are in the process of registration, if registration is required under this chapter, is exempt, provided that no sale of that nature shall be consummated prior to the registration by description or qualification of the securities.

(T) The execution by a licensed dealer of orders for the purchase of any security is exempt, provided that the dealer acts only as agent for the purchaser, has made no solicitation of the order to purchase the security, has no interest in the distribution of the security, and delivers to the purchaser written confirmation of the transaction that clearly itemizes the dealer's commission. "Solicitation," as used in this division, means solicitation of the order for the specific security purchased and does not include general solicitations or advertisements of any kind.

(U) The sale insofar as the security holders of a person 885
are concerned, where, pursuant to statutory provisions of the 886
jurisdiction under which that person is organized or pursuant to 887
provisions contained in its articles of incorporation, 888
certificate of incorporation, partnership agreement, declaration 889
of trust, trust indenture, or similar controlling instrument, 890

S. B. No. 115 As Introduced

there is submitted to the security holders, for their vote or 891
consent, (1) a plan or agreement for a reclassification of 892
securities of that person that involves the substitution of a 893
security of that person for another security of that person, (2) 894
a plan or agreement of merger or consolidation or a similar plan 895
or agreement of acquisition in which the securities of that 896
person held by the security holders will become or be exchanged 897
for securities of any other person, or (3) a plan or agreement 898
for a combination as defined in division (Q) of section 1701.01 899
of the Revised Code or a similar plan or agreement for the 900
transfer of assets of that person to another person in 901
consideration of the issuance of securities of any person, is 902
exempt if, with respect to any of the foregoing transactions, 903
either of the following conditions is satisfied: 904
(a) The securities to be issued to the security holders 905
are effectively registered under sections 6 to 8 of the 906
Securities Act of 1933 and offered and sold in compliance with 907
section 5 of that act; 908
(b) At least twenty days prior to the date on which a 909
meeting of the security holders is held or the earliest date on 910
which corporate action may be taken when no meeting is held, 911
there is submitted to the security holders, by that person, or 912
by the person whose securities are to be issued in the 913
transaction, information substantially equivalent to the 914
information that would be required to be included in a proxy 915
statement or information statement prepared by or on behalf of 916
the management of an issuer subject to section 14(a) or 14(c) of 917
the Securities Exchange Act of 1934. 918
(V) The sale of any security is exempt if the division by 919
rule finds that registration is not necessary or appropriate in 920

S. B. No. 115 As Introduced

the public interest or for the protection of investors. 921

(W) Any offer or sale of securities made in reliance on 922
the exemptions provided by Rule 505 of Regulation D made 923
pursuant to the Securities Act of 1933 and the conditions and 924
definitions provided by Rules 501 to 503 thereunder is exempt if 925
the offer or sale satisfies all of the following conditions: 926

(1) No commission or other remuneration is given, directly or indirectly, to any person for soliciting or selling to any person in this state in reliance on the exemption under this division, except to dealers licensed in this state.

(2)(a) Unless the cause for disqualification is waived under division (W)(2)(b) of this section, no exemption under this section is available for the securities of an issuer unless the issuer did not know and in the exercise of reasonable care could not have known that any of the following applies to any of the persons described in Rule 262(a) to (c) of Regulation A under the Securities Act of 1933:

(i) The person has filed an application for registration or qualification that is the subject of an effective order entered against the issuer, its officers, directors, general partners, controlling persons or affiliates thereof, pursuant to the law of any state within five years before the filing of a notice required under division (W)(3) of this section denying effectiveness to, or suspending or revoking the effectiveness of, the registration statement.

(ii) The person has been convicted of any offense in connection with the offer, sale, or purchase of any security or franchise, or any felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, fraud, theft, or

S. B. No. 115 As Introduced

conspiracy to defraud. 950
(iii) The person is subject to an effective administrative 951
order or judgment that was entered by a state securities 952
administrator within five years before the filing of a notice 953
required under division (W)(3) of this section and that 954
prohibits, denies, or revokes the use of any exemption from 955
securities registration, prohibits the transaction of business 956
by the person as a dealer, or is based on fraud, deceit, an 957
untrue statement of a material fact, or an omission to state a 958
material fact. 959
(iv) The person is subject to any order, judgment, or 960
decree of any court entered within five years before the filing 961
of a notice required under division (W)(3) of this section, 962
temporarily, preliminarily, or permanently restraining or 963
enjoining the person from engaging in or continuing any conduct 964
or practice in connection with the offer, sale, or purchase of 965
any security, or the making of any false filing with any state. 966
(b)(i) Any disqualification under this division involving 967
a dealer may be waived if the dealer is or continues to be 968
licensed in this state as a dealer after notifying the 969
commissioner of the act or event causing disqualification. 970
(ii) The commissioner may waive any disqualification under 971
this paragraph upon a showing of good cause that it is not 972
necessary under the circumstances that use of the exemption be 973
denied. 974
(3) Not later than five business days before the earlier 975
of the date on which the first use of an offering document or 976
the first sale is made in this state in reliance on the 977
exemption under this division, there is filed with the 978

S. B. No. 115 Page 35 As Introduced

commissioner a notice comprised of offering material in 979
compliance with the requirements of Rule 502 of Regulation D 980
under the Securities Act of 1933 and a fee of one hundred 981
dollars. Material amendments to the offering document shall be 982
filed with the commissioner not later than the date of their 983
first use in this state. 984
(4) The aggregate commission, discount, and other 985
remuneration paid or given, directly or indirectly, does not 986
exceed twelve per cent of the initial offering price, excluding 987
legal, accounting, and printing fees. 988
(X) Any offer or sale of securities made in reliance on 989
the exemption provided in Rule 506 of Regulation D under the 990
Securities Act of 1933, and in accordance with Rules 501 to 503 991
of Regulation D under the Securities Act of 1933, is exempt 992
provided that all of the following apply: 993
(1) The issuer makes a notice filing with the division on 994
form D of the securities and exchange commission within fifteen 995
days of the first sale in this state; 996
(2) Any commission, discount, or other remuneration for 997
sales of securities in this state is paid or given only to 998
dealers or salespersons licensed under this chapter; 999
(3) The issuer pays a filing fee of one hundred dollars to 1000
the division; however, no filing fee shall be required to file 1001
amendments to the form D of the securities and exchange 1002
commission. 1003
(Y) The offer or sale of securities by an issuer is exempt 1004
provided that all of the following apply: 1005
(1) The sale of securities is made only to persons who 1006
are, or who the issuer reasonably believes are, accredited 1007

S. B. No. 115 As Introduced

investors as defined in Rule 501 of Regulation D under the 1008
Securities Act of 1933. 1009
(2) The issuer reasonably believes that all purchasers are
purchasing for investment and not with a view to or for sale in 1011
connection with a distribution of the security. Any resale of a 1012
security sold in reliance on this exemption within twelve months 1013
of sale shall be presumed to be with a view to distribution and 1014
not for investment, except a resale to which any of the 1015
following applies: 1016
(a) The resale is pursuant to a registration statement 1017
effective under section 1707.09 or 1707.091 of the Revised Code. 1018
(b) The resale is to an accredited investor, as defined in 1019
Rule 501 of Regulation D under the Securities Act of 1933. 1020
(c) The resale is to an institutional investor pursuant to 1021
the exemptions under division (B) or (D) of this section. 1022
(3) The exemption under this division is not available to 1023
an issuer that is in the development stage and that either has 1024
no specific business plan or purpose or has indicated that its 1025
business plan is to engage in a merger or acquisition with an 1026
unidentified company or companies, or other entities or persons. 1027
(4) The exemption under this division is not available to 1028
an issuer, if the issuer, any of the issuer's predecessors, any 1029
affiliated issuer, any of the issuer's directors, officers, 1030
general partners, or beneficial owners of ten per cent or more 1031
of any class of its equity securities, any of the issuer's 1032
promoters presently connected with the issuer in any capacity, 1033
any underwriter of the securities to be offered, or any partner, 1034
director, or officer of such underwriter: 1035
(a) Within the past five years, has filed a registration 1036

S.B.No.115 AsIntroduced	Page 37
statement that is the subject of a currently effective	1037
registration stop order entered by any state securities	1038
administrator or the securities and exchange commission;	1039
(b) Within the past five years, has been convicted of any	1040
criminal offense in connection with the offer, purchase, or sale	1041
of any security, or involving fraud or deceit;	1042
(c) Is currently subject to any state or federal	1043
administrative enforcement order or judgment, entered within the	1044
past five years， finding fraud or deceit in connection with the	1045
purchase or sale of any security;	1046
' )	1047
of any court of competent jurisdiction, entered within the past	1048
five years, that temporarily, preliminarily, or permanently	1049
	1050
engage in any conduct or practice involving fraud or deceit in	1051
connection with the purchase or sale of any security.	1052
(5） Division (Y)(4） of this section is inapplicable if any	1053
of the following applies:	1054
(a） The party subject to the disqualification is licensed	1055
or registered to conduct securities business in the state in	1056
which the order， judgment, or decree creating the	1057
disqualification was entered against the party described in	1058
division (Y)(4） of this section.	1059
(b) Before the first offer is made under this exemption,	1060
the state securities administrator, or the court or regulatory	1061
authority that entered the order, judgment, or decree, waives	1062
the disqualification.	1063
(c） The issuer did not know and, in the exercise of	1064
reasonable care based on reasonable investigation, could not	1065

S. B. No. 115 As Introduced

have known that a disqualification from the exemption existed 1066
under division (Y)(4) of this section. 1067
(6) A general announcement of the proposed offering may be 1068
made by any means; however, the general announcement shall 1069
include only the following information, unless additional 1070
information is specifically permitted by the division by rule: 1071
(a) The name, address, and telephone number of the issuer 1072
of the securities; 1073
(b) The name, a brief description, and price of any 1074
security to be issued; 1075
(c) A brief description of the business of the issuer; 1076
(d) The type, number, and aggregate amount of securities 1077
being offered; 1078
(e) The name, address, and telephone number of the person 1079
to contact for additional information; and 1080
(f) A statement indicating all of the following: 1081
(i) Sales will only be made to accredited investors as 1082
defined in Rule 501 of Regulation D under the Securities Act of 1083
1933; 1084
(ii) No money or other consideration is being solicited or 1085
will be accepted by way of this general announcement; 1086
(iii) The securities have not been registered with or 1087
approved by any state securities administrator or the securities 1088
and exchange commission and are being offered and sold pursuant 1089
to an exemption from registration. 1090
(7) The issuer, in connection with an offer, may provide 1091
information in addition to the general announcement described in 1092

S. B. No. 115

B.NO.115 AsIntroduced
division (Y)(6）of this section, provided that either of the	1093
following applies:	1094
(a) The information is delivered through an electronic	1095
database that is restricted to persons that are accredited	1096
investors as defined in Rule 50l of Regulation D under the	1097
Securities Act of 1933.	1098
(b) The information is delivered after the issuer	1099 1100
reasonably believes that the prospective purchaser is an accredited investor as defined in Rule 501 of Regulation D under	1101
the Securities Act of 1933.	1102
(8) No telephone solicitation shall be done, unless prior	1103 1104
to placing the telephone call, the issuer reasonably believes	1105
investor as defined in Rule 50l of Regulation D under the	1106
Securities Act of 1933.	1107
(9） Dissemination of the general announcement described in	1108
division (Y)(6） of this section to persons that are not	1109
accredited investors, as defined in Rule 50l of Regulation D	1110
under the Securities Act of 1933， does not disqualify the issuer	1111
	1112
(l0) The issuer shall file with the division notice of the	1113
offering of securities within fifteen days after notice of the	1114
offering is made or a general announcement is made in this	1115
state. The filing shall be on forms adopted by the division and	1116
shall include a copy of the general announcement, if one is made	1117
regarding the proposed offering, and copies of any offering	1118
materials, circulars, or prospectuses. A filing fee of one	1119
hundred dollars also shall be included.	1120
(Z） The offer or sale of securities by an OhioInvests	1121

S. B. No. 115 As Introduced

issuer under sections 1707.05 to 1707.058 of the Revised Code is exempt.

Sec. 1707.09. (A)(1) All securities, except those enumerated in section 1707.02 of the Revised Code and , those that are the subject matter of a transaction permitted by section 1707.03, 1707.04, or 1707.06 of the Revised Code, and those that are subject to registration by coordination under section 1707.091 of the Revised Code, shall be qualified in the manner provided by this section before being sold in this state. No security subject to registration by coordination under section 1707.091 of the Revised Code is subject to this section. (2) Applications for qualification, on forms prescribed by the division of securities, shall be made in writing either by the issuer of the securities or by any licensed dealer desiring to sell them within this state and shall be signed by the applicant, sworn to by any individual having knowledge of the facts stated in the application, and filed in the office of the division.

1122
1123
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1125
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1128
1129
1130
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1136
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1142
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1144
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1149
1150
1151

(3) The individual who executes the application for qualification of securities on behalf of the applicant shall state the individual's relationship to the applicant and certify that: the individual has executed the application on behalf of the applicant; the individual is fully authorized to execute and file the application on behalf of the applicant; the individual is familiar with the applicant's application; and to the best of the individual's knowledge, information, and belief, the statements made in the application are true, and the documents submitted with the application are true copies of the original documents.

) The division shall require the applicant for

S. B. No. 115 As Introduced

qualification of securities to submit to it the following 1152
information: 1153
(1) The names and addresses of the directors or trustees 1154
and of the officers of the issuer, if the issuer is a 1155
corporation or an unincorporated association; of all the members 1156
of the issuer, if the issuer is a limited liability company in 1157
which management is reserved to its members; of all the managers 1158
of the issuer, if the issuer is a limited liability company in 1159
which management is not reserved to its members; of all 1160
partners, if the issuer is a general or limited partnership or a 1161
partnership association; and the name and address of the issuer, 1162
if the issuer is an individual; 1163
(2) The address of the issuer's principal place of 1164
business and principal office in this state, if any; 1165
(3) The purposes and general character of the business 1166
actually being transacted, or to be transacted, by the issuer, 1167
and the purpose of issuing the securities named in the 1168
application; 1169
(4) A statement of the capitalization of the issuer; a 1170
balance sheet made up as of the most recent practicable date, 1171
showing the amount and general character of its assets and 1172
liabilities; a description of the security for the qualification 1173
of which application is being made; and copies of all circulars, 1174
prospectuses, advertisements, or other descriptions of the 1175
securities, that are then prepared by or for the issuer, or by 1176
or for the applicant if the applicant is not the issuer, or by 1177
or for both, to be used for distribution or publication in this 1178
state; 1179
(5) A statement of the amount of the issuer's income, 1180

S. B. No. 115 As Introduced

expenses, and fixed charges during the last fiscal year or, if 1181

1182 the time that the issuer has been in actual business; 1183

1184

to be offered for Sale; 1185

(7） A statement showing the considerations received or to 1186

1187

purchased from the issuer and an itemized statement of all 1188

1189

to show the aggregate net amount actually received or to be 1190

received by the issuer; 1191

(8） All other information, including an opinion of counsel 1192

as to the validity of the securities that are the subject matter 1193

of the application, that the division considers necessary to 1194

enable it to ascertain whether the securities are entitled to 1195

qualification; 1196

(9） If the issuer is a corporation, there shall be filed 1197

with the application a certified copy of its articles of 1198

incorporation with all amendments to the articles, if the 1199

articles or amendments are not already on file in the office of 1200

the secretary of state; if the issuer is a limited liability 1201

company, there shall be filed with the application a certified 1202

copy of its articles of organization with all amendments to the 1203

articles, if the articles or amendments are not already on file 1204

in the office of the secretary of state; if the issuer is a 1205

trust or trustee, there shall be filed with the application a 1206

copy of all instruments by which the trust was created; and if 1207

the issuer is a partnership or an unincorporated association, or 1208

any other form of organization, there shall be filed with the 1209

application a copy of its articles of partnership or association 1210

S. B. No. 115 As Introduced

and of all other papers pertaining to its organization, if the articles or other papers are not already on file in the office of the secretary of state;

(10) If the application is made with respect to securities to be sold or distributed by or on behalf of the issuer, or by or on behalf of an underwriter, as defined in division (N) of section 1707.03 of the Revised Code, a statement showing that the issuer has received, or will receive at or prior to the delivery of those securities, not less than eighty-five per cent of the aggregate price at which all those securities are sold by or on behalf of the issuer, without deduction for any additional commission, directly or indirectly, and without liability to pay any additional sum as commission;

			ing to its organization， if the	1211
		t already on file in the office		1212
				1213
	S made with respect to securities			1214
		on behalf of the issuer， or by		1215
		as defined in division (N） of		1216
	Code, a statement showing that			1217
	l receive at or prior to the			1218
				1219
	all those securities are sold by			1220
	hout deduction for any additional			1221
	Ked o 1itq1t anouatm pue '1			1222 1223
n;
	ermits with respect to a			1224
	with the division, in lieu of		1225
	a copy of the registration			1226
	ity， with all amendments to that			1227
	h the securities and exchange				1228
	under the "Securities Act of				1229
	h all additional data,				1230
	the division requires.				1231
	that it is not necessary in the				1232
	tection of investors to require				1233
	n divisions(B)(l）to（lo）of			1234
	filing of applications for				1235
	information that it considers				1236
	e public interest and for the				1237
	is provision applies only in the				1238
	ication of securities previously				1239
	not be made the subject matter			1240

(11) If the division so permits with respect to a security, an applicant may file with the division, in lieu of the division's prescribed forms, a copy of the registration statement relating to the security, with all amendments to that statement, previously filed with the securities and exchange commission of the United States under the "Securities Act of 1933," as amended, together with all additional data, information, and documents that the division requires.

(C) If the division finds that it is not necessary in the public interest and for the protection of investors to require all the information specified in divisions (B)(1) to (10) of this section, it may permit the filing of applications for qualification that contain the information that it considers necessary and appropriate in the public interest and for the protection of investors, but this provision applies only in the case of applications for qualification of securities previously issued and outstanding that may not be made the subject matter

S. B. No. 115 As Introduced

of transactions exempt under division (M) of section 1707.03 of 1241
the Revised Code by reason of the fact that those securities 1242
within one year were purchased outside this state or within one 1243
year were transported into this state. 1244

(D) All the statements, exhibits, and documents required by the division under this section, except properly certified public documents, shall be verified by the oath of the applicant for qualification, of the issuer, or of any individual having knowledge of the facts, and in the manner and form that may be required by the division. Failure or refusal to comply with the requests of the division shall be sufficient reason for a refusal by the division to register securities.

(E) If it appears to the division that substantially the only consideration to be paid for any of the securities to be qualified is to be intangible property of doubtful value, the division may require that the securities be delivered in escrow to a bank in this state under the terms that the division may reasonably prescribe or require to prevent a deceitful misrepresentation or sale of the securities; that the securities be subordinated in favor of those sold for sound value until they have a value bearing a reasonable relation to the value of those sold for sound value; or that a legend of warning specifying the considerations paid or to be paid for the securities be stamped or printed on all advertisements, circulars, pamphlets, or subscription blanks used in connection with the sale of any securities of the same issuer; or it may impose a combination of any two or more of these requirements.

(F) At the time of filing the information prescribed in 1268
this section, the applicant shall pay to the division a filing 1269
fee of one hundred dollars. 1270

S. B. No. 115 As Introduced

(G)(1) The division, at any time, as a prerequisite to 1271
qualification, may make an examination of the issuer of 1272
securities sought to be qualified. The applicant for 1273
qualification of any securities may be required by the division 1274
to advance sufficient funds to pay all or any part of the actual 1275
expenses of that examination, an itemized statement of which 1276
shall be furnished the applicant. 1277

(2) If (2)(a) Subject to division (G)(2)(b) of this section, if the division finds that the business of the issuer is not fraudulently conducted, that the proposed offer or disposal of securities is not on grossly unfair terms, that the plan of issuance and sale of the securities referred to in the proposed offer or disposal would not defraud or deceive, or tend to defraud or deceive, purchasers, and that division (B)(10) of this section applies and has been complied with, the division shall notify the applicant of its findings, and, upon payment of a registration fee of one-tenth of one per cent of the aggregate price at which the securities are to be sold to the public in this state, which fee, however, shall in no case be less than one hundred or more than one thousand dollars, the division shall register the qualification of the securities.

1278
1279
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1282
1283
1284
1285
1286
1287
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1289
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1291
1292
1293
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1297
1298
1299
1300

(b) To eliminate and preclude excessive and duplicative rules and regulations that stand in the way of job creation, the division shall not condition or delay any registration due to any noncompliance or partial compliance with any requirement, formal or informal rule, or principle of law or policy of the division that is inconsistent with, or more stringent or burdensome than, federal law and rule require.

(H) An application for qualification of securities may be amended by the person filing it at any time prior to the

B.No.115 Introduced	Page46
	1301
lalification or in refusing to do so. Subsequent to any such	1302
ction by the division, the person who filed the application may	1303
le with the consent of the division one or more amendments to	1304
that shall become effective upon the making by the division	1305
	1306
ving of notice of those findings to the applicant by the	1307
	1308
	1309
lat would have been payable had the application, as it ceviously became effective, contained the amendment.	1310
	1311
(I） When any securities have been qualified and the fees or the qualification have been paid as provided in this	1312
ection, any licensed dealer subsequently may sell the	1313
ecurities under the qualification, so long as the qualification	1314
emains in full force, and any dealer of that nature that	1315
esires may file with the division a written notice of intention	1316
） sell the securities or any designated portion of them. For	1317
lat filing, no fee need be paid.	1318
	1319
Sec. 1707.091. (A) Any security for which a registration s	1320
ct of 1933 or for which a notification form and offering	1321
rcular has been filed pursuant to regulation A of the general	1322
ales and regulations of the securities and exchange commission,	1323
C.F.R. sections 230.251 to 230.256 and 230.258 to 230.263, aS	1324
lended before or after the effective date of this section, in	1325
onnection with the same offering may shall be registered by	1326
oordination_rather than by qualification under section 1707.09
	1327
the Revised Code or any other method of registration.	1328
(B） A registration statement filed by or on behalf of the	1329
ssuer under this section with the division of securities shall	1330

S. B. No. 115 As Introduced

contain the following information and be accompanied by the 1331
following items in addition to the consent to service of process 1332
required by section 1707.11 of the Revised Code: 1333
(1) One copy of the latest form of prospectus or offering 1334
circular and notification filed with the securities and exchange 1335
commission; 1336
(2) If the division of securities by rule or otherwise 1337
requires, a copy of the articles of incorporation and code of 1338
regulations or bylaws, or their substantial equivalents, as 1339
currently in effect, a copy of any agreements with or among 1340
underwriters, a copy of any indenture or other instrument 1341
governing the issuance of the security to be registered, and a 1342
specimen or copy of the security; 1343
(3) If the division of securities requests, any other 1344
information, or copies of any other documents, filed with th 1345
securities and exchange commission; 1346
(4) An undertaking by the issuer to forward to the 1347
division, promptly and in any event not later than the first 1348
business day after the day they are forwarded to or thereafter 1349
are filed with the securities and exchange commission, whichever 1350
occurs first, all amendments to the federal prospectus, offering 1351
circular, notification form, or other documents filed with the 1352
securities and exchange commission, other than an amendment that 1353
merely delays the effective date; 1354
(5) A filing fee of one hundred dollars. 1355
(C) A Subject to division (E) of this section, a 1356
registration statement filed under this section becomes 1357
effective, without delay or waiver of any condition by the 1358
division of securities or issuer, either at the moment the 1359

S.B.No.115 AsIntroduced	Page 48
	1360
the offering may otherwise be commenced in accordance with the	1361
rules, regulations, or orders of the securities and exchange	1362
commission, if all of the following conditions are satisfied:	1363
(l） No stop order is in effect, no proceeding is pending	1364
under section 1707.13 of the Revised Code， and no cease and	1365
oo	1366
Revised Code;	1367
(2） The registration statement has been on file with the	1368
division for at least fifteen days or for such shorter period as	1369
the division by rule or otherwise permits; provided, that if the	1370
registration statement is not filed with the division within	1371
five days of the initial filing with the securities and exchange	1372
commission, the registration statement must be on file with the	1373
	1374
division by rule or otherwise permits.	1375
(3） A statement of the maximum and minimum proposed	1376
offering prices and the maximum underwriting discounts and	1377
commissions has been on file with the division for two full	1378
	1379
or otherwise permits and the offering is made within those	1380
limitations;	1381
	1382
	1383
securities are to be sold to the public in this state, which	1384
fee, however， shall in no case be less than one hundred or more	1385
than one thousand dollars.	1386
(D) The issuer shall promptly notify the division by	1387
telephone of the date and time when the federal registration	1388

S. B. No. 115 As Introduced

statement became effective, or when the offering may otherwise be commenced in accordance with the rules, regulations, or orders of the securities and exchange commission, and of the contents of the price amendment, if any, and shall promptly file the price amendment.

"Price amendment" for the purpose of this division, means the final federal registration statement amendment that includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and other matters dependent upon the offering price.

1389
1390
1391
1392
1393
1394
1395
1396
1397
1398
1399
1400
1401
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1403
1404
1405
1406
1407
1408
1409
1410
1411
1412
1413
1414
1415
1416
1417
1418
1419

If the division fails to receive the required notice and required copies of the price amendment, the division may enter a provisional stop order retroactively denying effectiveness to the registration statement or suspending its effectiveness until there is compliance with this division, provided the division promptly notifies the issuer or its representative by telephone, and promptly confirms by letter when it notifies by telephone, of the entry of the order. If the issuer or its representative proves compliance with the requirements of this division as to notice and price amendment filing, the stop order is void as of the time of its entry. The division may by rule or otherwise waive either or both of the conditions specified in divisions (C)(2) and (3) of this section. If the federal registration statement becomes effective, or if the offering may otherwise be commenced in accordance with the rules, regulations, or orders of the securities and exchange commission, before all of the conditions specified in divisions (C) and (D) of this section are satisfied and they are not waived by the division the registration statement becomes effective as soon as all of the conditions are satisfied.

S. B. No. 115 As Introduced

If the issuer advises the division of the date when the federal registration statement is expected to become effective, or when the offering may otherwise be commenced in accordance with the rules, regulations, or orders of the securities and exchange commission, the division shall promptly advise the issuer or its representative by telephone, at the issuer's expense, whether all of the conditions have been satisfied or whether the division then contemplates the institution of a proceeding under section 1707.13 or 1707.23 of the Revised Code, but such advice does not preclude the institution of such a proceeding at any time.

1420
1421
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1423
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1425
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1428
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1449

(E) To eliminate and preclude excessive and duplicative rules and regulations that stand in the way of job creation, the division shall not condition or delay any registration under this section, or enter any stop order respecting any such registration, due to any noncompliance or partial compliance with any requirement, formal or informal rule, or principle of law or policy of the division that is inconsistent with, or more stringent or burdensome than, federal law and rule require. (F) The division shall not issue a comment letter concerning a registration under this section. (G) The division shall not issue any written guidance or interpretation, policy statement, advisory opinion, standard, or similar statement concerning registration by coordination, other than statements solely of an administration nature that have no general and uniform operation.

Sec. 1707.092. (A) For the purposes of selling securities in this state, except securities that are the subject matter of transactions enumerated in section 1707.03 of the Revised Code, an investment company, as defined by the Investment Company Act

S. B. No. 115 As Introduced

of 1940, that is registered or has filed a registration 1450
statement with the securities and exchange commission under the 1451
Investment Company Act of 1940 and a business development 1452
company that has elected to be subject to 15 U.S.C. 80a-54 to 1453
80a-64, shall file the following with the division of 1454
securities: 1455
(1) A notice filing consisting of either of the following: 1456
(a) A copy of the investment company's or business 1457
development company's federal registration statement as filed 1458
with the securities and exchange commission; 1459
(b) A form U-1 or form NF of the North American securities 1460
administrators association. 1461
(2) Appropriate filing fees consisting of both of the 1462
following: 1463
(a) A flat fee of one hundred dollars; 1464
(b) A fee calculated at one-tenth of one per cent of the 1465
aggregate price at which the securities are to be sold to the 1466
public in this state, which calculated fee, however, shall in no 1467
case be less than one hundred or more than one thousand dollars. 1468
(B)(1) Upon payment of the maximum filing fees as provided 1469
in division (A)(2) of this section, an investment company or 1470
business development company may sell an indefinite amount of 1471
securities in this state. 1472
(2) An investment company or business development company 1473
making a notice filing as provided in this section shall comply 1474
with section 1707.11 of the Revised Code. An investment company 1475
or business development company that previously filed with the 1476
division a valid consent to service of process pursuant to 1477

S. B. No. 115 As Introduced

section 1707.1l of the Revised Code may incorporate that consent 1478 by reference.

1479

(C)(l） For offerings involving covered securities, as 1480

1481

77r, that are not subject to section 1707.02, 1707.03, 1707.04, 1482

1707.06, 1707.08, 1707.09, 0r 1707.091 of the Revised Code, or 1483

division (A） of this section, a notice filing shall be submitted 1484

to the division together with a consent to service of process 1485

pursuant to section 17o7.ll of the Revised Code and a filing fee 1486

as provided in division (A)(2) of this section. 1487

(2） The notice filing described in division (C)(l） of this 1488

section shall consist of any document filed with the Securities 1489

1490

together with annual or periodic reports of the value of the 1491

securities sold or offered to be sold to persons located in this 1492

state. 1493

() 1494 effective for thirteen months. 1495

Sec. 17o7.i3. (A)_The division of securities may suspend 1496

the registration by description or by qualification of any 1497

securities， or the right of any dealers or of the issuer, or of 1498

both, to buy, sell, or deal in any particular security whether 1499

it is registered, qualified, or exempt or even though 1500

transactions in it are registered or exempt, if the division 1501

finds that the issuer has violated sections 1707.01 to 1707.50, 1502

inclusive， of the Revised Code, or any lawful order or 1503

requirement of the division, has fraudulently conducted its 1504

business, or has been engaged in or is engaged or about to 1505

engage in deceptive or fraudulent acts, practices, or 1506

transactions; that such security is being disposed of or 1507

S. B. No. 115 As Introduced

purchased on grossly unfair terms, in such manner as to deceive or defraud or as to tend to deceive or defraud purchasers or sellers, or in disregard of the lawful rules and regulations of the division applicable to such security or to transactions therein; or, in the case of securities being sold under a registration or qualification, that the issuer is insolvent.

(B) To eliminate and preclude excessive and duplicative rules and regulations that stand in the way of job creation, the division shall not suspend, revoke, condition, or delay any registration of securities, or enter any stop order respecting any registration of securities due to noncompliance or partial compliance with any requirement, formal or informal rule, or principle of law or policy of the division that is inconsistent with, or more stringent or burdensome than, federal law and rule require.

1508
1509
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1523
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1537

(C) Notice of such suspension shall be mailed by the division to the issuer and to all licensed dealers concerned. Such notice shall specify the particular security whose registration is being suspended and shall set a date, not more than ten days later than the date of the order of suspension, for a hearing on the continuation or revocation of such suspension. For good cause the division may continue such hearing on application of any interested party. In conducting such hearing the division shall have all the authority and powers set forth in section 1707.23 of the Revised Code. Following such hearing the division shall either confirm or revoke such suspension. No such suspension shall invalidate any sale of securities made prior thereto; and the rights of persons defrauded by any sale shall in no wise be impaired.

(D) If the issuer of a security refuses to permit an

S. B. No. 115 As Introduced

examination to be made by the division of its books, records, and property, or refuses to furnish the division any information which it may lawfully require under sections 1707.01 to 1707.50, inclusive, of the Revised Code, such refusal is a sufficient ground for the division to suspend the registration by description or by qualification of such security, or the right of any dealers or of the issuer, or of both, to buy, sell, or deal in such security.

If any interested party desires an investigation at a place other than the office of the division, such person may be required by the division to advance sufficient funds to pay the actual expenses of such investigation.

the division of its books， records,	1538
to furnish the division any information	1539
uire under sections 1707.01 to 1707.50,	1540
Code, such refusal is a sufficient	1541
o suspend the registration by	1542
cation of such security， or the right	1543
issuer, or of both, to buy， sell, or	1544
	1545
arty desires an investigation at a	1546
ce of the division, such person may be	1547
to advance sufficient funds to pay the	1548
nvestigation.	1549
on determines, upon hearing, that any	1550
tion was made, or that any securities	1551
gistered by description, by a person	1552
ements were contained in such	1553
n, the division may proceed under	1554
, and 1707.44 of the Revised Code, or	1555
person who filed such application or	1556
ription.	1557
henever it appears to the division of	1558
S， upon complaint, or otherwise, that	1559
， is engaged in, or is about to engage	1560
to be illegal or prohibited by this	1561
under this chapter by the division, or	1562
this chapter or rules adopted under	1563
ion, or any other deceptive scheme or	1564
th the sale of securities, or acting as	1565
an investment adviser， investment	1566
ureau of workers' compensation chief	1567

application for qualification was made, or that any securities or any transaction was registered by description, by a person who knew that untrue statements were contained in such application or description, the division may proceed under sections 1707.19, 1707.23, and 1707.44 of the Revised Code, or any of them, against the person who filed such application or such registration by description.

securities, from its files, upon complaint, or otherwise, that any person has engaged in, is engaged in, or is about to engage in any practice declared to be illegal or prohibited by this chapter or rules adopted under this chapter by the division, or defined as fraudulent in this chapter or rules adopted under this chapter by the division, or any other deceptive scheme or practice in connection with the sale of securities, or acting as a dealer, a salesperson, an investment adviser, investment adviser representative, bureau of workers' compensation chief

S. B. No. 115 As Introduced

investment officer, state retirement system investment officer, 1568
or portal operator as defined in section 1707.05 of the Revised 1569
Code or when the division believes it to be in the best 1570
interests of the public and necessary for the protection of 1571
investors, the division may do any of the following: 1572

(A) (1) Require any person to file with it, on such forms as it prescribes, an original or additional statement or report in writing, under oath or otherwise, as to any facts or circumstances concerning the issuance, sale, or offer for sale of securities within this state by the person, as to the person's acts or practices as a dealer, a salesperson, an investment adviser, investment adviser representative, bureau of workers' compensation chief investment officer, state retirement system investment officer, or portal operator within this state, and as to other information as it deems material or relevant thereto;

1573
1574
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1580
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1582
1583
1584
1585
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(B) (2) Examine any investment adviser, investment adviser representative, state retirement system investment officer, bureau of workers' compensation chief investment officer, or any seller, dealer, salesperson, or issuer of any securities, or any portal operator, and any of their agents, employees, partners, officers, directors, members, or shareholders, wherever located, under oath; and examine and produce records, books, documents, accounts, and papers as the division deems material or relevant to the inquiry;

(C) (3) Require the attendance of witnesses, and the production of books, records, and papers, as are required either by the division or by any party to a hearing before the division, and for that purpose issue a subpoena for any witness, or a subpoena duces tecum to compel the production of any books,

S. B. No. 115 As Introduced

records, or papers. The subpoena shall be served by personal service or by certified mail, return receipt requested. If the subpoena is returned because of inability to deliver, or if no return is received within thirty days of the date of mailing, the subpoena may be served by ordinary mail. If no return of ordinary mail is received within thirty days after the date of mailing, service shall be deemed to have been made. If the subpoena is returned because of inability to deliver, the division may designate a person or persons to effect either personal or residence service upon the witness. The person designated to effect personal or residence service under this division may be the sheriff of the county in which the witness resides or may be found or any other duly designated person. The fees and mileage of the person serving the subpoena shall be the same as those allowed by the courts of common pleas in criminal cases, and shall be paid from the funds of the division. Fees and mileage for the witness shall be determined under section 119.094 of the Revised Code, and shall be paid from the funds of the division upon request of the witness following the hearing.

(D) (4) Initiate criminal proceedings under section 1707.042 or 1707.44 of the Revised Code or rules adopted under those sections by the division by laying before the prosecuting attorney of the proper county any evidence of criminality which comes to its knowledge; and in the event of the neglect or refusal of the prosecuting attorney to prosecute such violations, or at the request of the prosecuting attorney, the division shall submit the evidence to the attorney general, who may proceed in the prosecution with all the rights, privileges, and powers conferred by law on prosecuting attorneys, including the power to appear before grand juries and to interrogate witnesses before such grand juries.

S. B. No. 115 As Introduced

			1629
		ion copies of prospectuses, circulars, or advertisements	1630
		cting securities that they publish or generally distribute,	1631
		quire any investment advisers immediately to furnish to the	1632
		ion copies of brochures, advertisements， publications,	1633
ibute;		ses, reports， or other writings that they publish or	1634 1635
		(F)(6)_Require any dealers to mail to the division, prior	1636
	e, notices of intention to sell, in respect to all		1637
		ties which are not exempt under section 1707.02 of the	1638
		ed Code, or which are sold in transactions not exempt under	1639
	on 1707.03 or 1707.04 of the Revised Code;		1640
		(G)(7)_Issue and cause to be served by certified mail	1641
		all persons affected an order requiring the person or	1642
			1643
		e division to constitute violations of this chapter or	1644
		adopted under this chapter by the division. The order	1645
		state specifically the section or sections of this chapter	1646
		e rule or rules adopted under this chapter by the division	1647
		appear to the division to have been violated and the facts	1648
		tuting the violation. If after the issuance of the order	1649
		o n	1650
			1651
	or persons shall have been required, by the order, to		1652
	and desist, the director of commerce may apply to the		1653
		of common pleas of any county for， and upon proof of the	1654
	ty of the order of the division， the delivery of the order		1655
		person or persons affected, and of the illegality and the	1656
	luation of the acts or practices that are the subject of		1657
		cder, the court may grant an injunction implementing the	1658
of the division.			1659

S. B. No. 115 As Introduced

(H) (8) Issue and initiate contempt proceedings in this 1660
state regarding subpoenas and subpoenas duces tecum at the 1661
request of the securities administrator of another state, if it 1662
appears to the division that the activities for which the 1663
information is sought would violate this chapter if the 1664
activities had occurred in this state. 1665

(I) (9) The remedies provided by this section are cumulative and concurrent with any other remedy provided in this chapter, and the exercise of one remedy does not preclude or require the exercise of any other remedy.

(B) To eliminate and preclude excessive and duplicative rules and regulations that stand in the way of job creation, the division shall not suspend, revoke, condition, or delay any registration of securities, or enter any stop order respecting any registration of securities due to any noncompliance or partial compliance with any requirement, formal or informal rule, or principle of law or policy of the division that is inconsistent with, or more stringent or burdensome than, federal law and rule require.

Sec. 1707.39. When any securities have been sold without compliance with sections 1707.01 to 1707.50 of the Revised Code, or any former law in force at the time of such sale, any interested person may apply in writing to the division of securities for the qualification of such securities under such sections. If it appears to the division that no person has been defrauded, prejudiced, or damaged by such noncompliance or sale and that no person will be defrauded, prejudiced, or damaged by such qualification, the division may permit such securities to be so qualified upon the payment of a fee of one hundred dollars plus a fee of one-fifth of one per cent of the aggregate price

S. B. No. 115 As Introduced

at which the securities have been sold in this state, which fee 1690
shall in no case be less than one hundred dollars nor more than 1691
two thousand dollars. In addition, the division may require the 1692
applicant to advance sufficient funds to pay the actual expenses 1693
of an examination or investigation by the division, whether to 1694
be conducted in this state or outside this state. An itemized 1695
statement of such expenses shall be furnished to the applicant. 1696
Such qualification shall estop the division from 1697
proceeding under division (D)(A)(4) of section 1707.23 of the 1698
Revised Code against anyone who has violated division (C)(1) of 1699
section 1707.44 of the Revised Code for acts within the scope of 1700
the application, or from proceeding with administrative action 1701
pursuant to section 1707.13 of the Revised Code. 1702
Section 2. That existing sections 1707.01, 1707.03, 1703
1707.09, 1707.091, 1707.092, 1707.13, 1707.23, and 1707.39 of 1704
the Revised Code are hereby repealed. 1705