TITLE 660. DEPARTMENT OF SECURITIES

 

Chapter	Section
1. Organization and Procedures of Securities Commission .	660:1-1-1
2. Organization and Procedures of Department of Securities ..	660:2-1-1
3. Procedures for the Oklahoma Take-over Disclosure Act of 1985 ...	[RESERVED]
4. Procedures for the Oklahoma Subdivided Land Sales Code ...	660:4-1-1
5. Procedures for the Oklahoma Business Opportunity Sales Act .	[RESERVED]
6. Forms	660:6-1-1
10. Oklahoma Securities Act..............................................................................	[REVOKED]
11. Oklahoma Uniform Securities Act of 2004	660:11-1-1
15. Oklahoma Take-over Disclosure Act of 1985 ..	660:15-1-1
20. Oklahoma Subdivided Land Sales Code ..	660:20-1-1
25. Oklahoma Business Opportunity Sales Act	660:25-1-1

CHAPTER 1. ORGANIZATION AND PROCEDURES OF SECURITIES COMMISSION

 

Subchapter	Section
1. General Provision	660:1-1-1
3. Organization .	660:1-3-1
5. Appeals	660:1-5-1

SUBCHAPTER 1. GENERAL PROVISIONS

Section
660:1-1-1. Purpose
660:1-1-2. Statutory Citations
660:1-1-3. Definitions

660:1-1-1. Purpose

The provisions of this Chapter set forth the organization and procedural rules governing the Oklahoma Securities Commission.

Citations to statutes in this Chapter refer to the most recent codification of Title 71 of the Oklahoma Statutes.

660:1-1-3. Definitions

Unless the context clearly indicates otherwise, or unless defined in this Section, terms used in this Chapter, if defined in the Oklahoma Uniform Securities Act of 2004, the Oklahoma Subdivided Land Sales Code, the Oklahoma Business Opportunity Sales Act or the Oklahoma Take-over Disclosure Act of 1985 shall have the meanings set forth in such acts. The following words and terms, when used in this Chapter, shall have the following meaning, unless the context clearly indicates otherwise:

"Administrator" means the Administrator of the Department of Securities.

"Business Opportunity Act" means the most recent codification of the Oklahoma Business Opportunity Sales Act in Title 71 of the Oklahoma Statutes.

"Commission" means the Oklahoma Securities Commission.

"Department" means the Oklahoma Department of Securities.

"Land Sales Act" means the most recent codification of the Oklahoma Subdivided Land Sales Code in Title 71 of the Oklahoma Statutes.

"NASD" means the National Association of Securities Dealers, Inc.

"SEC" means the United States Securities and Exchange Commission.

"Securities Act" means the most recent codification of the Oklahoma Uniform Securities Act of 2004 in Title 71 of the Oklahoma Statutes.

"Take-over Act" means the most recent codification of the Oklahoma Take-over Disclosure Act of 1985 in Title 71 of the Oklahoma Statutes.

SUBCHAPTER 3. ORGANIZATION

Section
660:1-3-1. Purpose and organization
660:1-3-2 Commission actions

660:1-3-1. Purpose and organization

The Oklahoma Securities Commission shall be the policy making and governing authority of the Department. The organization of the Commission shall be in accordance with the provisions of Section 1-601 of the Securities Act.

660:1-3-2. Commission actions

(a) All official acts of the Commission shall be evidenced by a written record, and all final orders, decisions, opinions, rules and other written statements of policy or interpretations formulated, adopted or used in the discharge of the function of the Commission shall be available for public inspection.

(b) Official action of the Commission shall not be bound or be prejudiced by any informal statement made or opinion given by the Commission or employees of the Department.

Section
660:1-5-1. Procedures for appeals to the Commission

(a) Scope. The provisions of this Section govern the procedures for appeals by a person aggrieved by a final order of the Administrator filed before the Commission. These procedures shall not be construed to extend or limit the jurisdiction of the Commission or the Administrator as established by law.

(b) Appeal-how and when taken. In matters in which an appeal is permitted by law, the person appealing the order shall file with the Administrator a petition within fifteen (15) days after entry of the order. The Administrator shall submit the petition to the Commission at the next scheduled Commission meeting. The Petition shall specify the party or parties requesting the appeal; shall designate the order or part thereof appealed from; shall request a record on appeal be compiled; shall set forth appellant’s agreement to pay for the preparation of the record on appeal; and shall be signed by the party or parties or counsel for the party or parties. For purposes of this subsection, the term "entry of the order" means the day the final order is mailed or personally delivered to the persons entitled to receive the order.

(c) Record on appeal. Upon receipt of the petition of appeal, the Administrator shall direct the Department to compile the record on appeal. The record on appeal shall consist of the record upon which the final order was issued as described in 660:2-9-7. Upon completion of the record on appeal, the Administrator shall notify the appellant that the record has been completed. Upon payment of the costs of preparation of the record on appeal, copies of the record will be served upon the Commission and all parties to the appeal with a notice of the date that the record was served and the briefing schedule.

(d) Briefing schedule and briefs. The appellant shall file six copies of his opening brief on appeal with the Administrator and serve one copy on all other parties to the appeal within fifteen (15) days of service of the record on appeal. The appellee shall file six copies of his opening brief on appeal with the Administrator and serve one copy on all other parties to the appeal within fifteen (15) days of receipt of the brief of appellant. The Chairperson of the Commission, or his designee, may, upon good cause shown, enlarge these periods as he deems appropriate.

(e) Stay pending review. The filing of an appeal with the Commission does not stay the order of the Administrator pending the appeal.

(f) Motions. All applications or motions made to the Commission in connection with an appeal properly filed before the Commission shall be filed with the Administrator and promptly submitted to the Chairperson of the Commission, or his designee, and be promptly ruled upon by the Chairperson of the Commission, or his designee.

(g) Executive session. Deliberations by the Commission may be held in executive session.

(h) Order on appeal. The Order of the Commission on any appeal shall contain a concise statement of the facts as found by the Commission and a concise statement of the conclusions therefrom and the effective date of the Order.

CHAPTER 2. ORGANIZATION AND PROCEDURES OF DEPARTMENT OF SECURITIES

 

Subchapter	Section
1. General provisions .	660:2-1-1
3. Organization	660:2-3-1
5. Authority and actions of administrator	660:2-5-1
7. Investigations ..	660:2-7-1
9. Individual proceeding practices and procedures . ..	660:2-9-1
11. Procedures for inspecting and/or copying public records .	660:2-11-1
13. Declaratory rulings and interpretive opinions ..	660:2-13-1

SUBCHAPTER 1. GENERAL PROVISIONS

Section
660:2-1-1. Purpose
660:2-1-2. Statutory citations
660:2-1-3. Definitions

660:2-1-1. Purpose

(a) The provisions of this Chapter set forth the organization and procedural rules governing the Department of Securities and have been adopted for the purpose of complying with 75 O.S., Section 302.

(b) The provisions of this Chapter relating to investigations and hearings shall apply to all investigations and hearings conducted by the Department in the enforcement of the Business Opportunity Act, the Land Sales Act, the Securities Act, and the Take-over Act.

Citations to statutes in this Chapter refer to the most recent codification of Title 71 of the Oklahoma Statutes.

660:2-1-3. Definitions

Unless the context clearly indicates otherwise, or unless defined in this Section, terms used in this Chapter, if defined in the Oklahoma Uniform Securities Act of 2004, the Oklahoma Land Sales Code, the Oklahoma Business Opportunity Sales Act or the Oklahoma Take-over Disclosure Act of 1985 shall have the meanings set forth in such acts. The following words and terms, when used in this Chapter, shall have the following meaning, unless the context clearly indicates otherwise:

"Administrator" means the Administrator of the Department of Securities.

"Business Opportunity Act" means the most recent codification of the Oklahoma Business Opportunity Sales Act in Title 71 of the Oklahoma Statutes.

"Commission" means the Oklahoma Securities Commission.

"Department" means the Oklahoma Department of Securities.

"Hearing Officer" means a person who has been duly appointed by the Administrator to hold hearings and, as required, render proposed orders.

"Land Sales Act" means the most recent codification of the Oklahoma Subdivided Land Sales Code in Title 71 of the Oklahoma Statutes.

"Securities Act" means the most recent codification of the Oklahoma Uniform Securities Act of 2004 in Title 71 of the Oklahoma Statutes.

"Take-over Act" means the most recent codification of the Oklahoma Take-over Disclosure Act of 1985 in Title 71 of the Oklahoma Statutes.

SUBCHAPTER 3. ORGANIZATION

Section
660:2-3-1. Organization

660:2-3-1. Organization

(a) The Department shall be organized in accordance with Section 1-601 of the Securities Act. It shall be the purpose of the Department to implement the policies of the Commission and to enforce the Securities Act in an efficient and effective manner.

(b) The Department shall be organized in the following divisions: 

(1) registration of broker-dealers, agents and investment advisers.

(2) registration of securities.

(3) investigation and enforcement; and

(4) investor education.

(c) The Department shall have as its chief officer an Administrator who shall be charged with the duty of administering and enforcing the acts under the supervision of the Commission and in accordance with its policies.

SUBCHAPTER 5. AUTHORITY AND ACTIONS OF ADMINISTRATOR

Section
 

660:2-5-1. Official actions
660:2-5-2. Register of actions [REVOKED]
660:2-5-3. Settlements
660:2-5-4. Summary orders

(a) All officials acts of the Administrator shall be evidenced by a written record, and all final orders, decisions, opinions, rules and other written statements of policy or interpretations formulated, adopted or used in the discharge of the function of the Administrator shall be available for public inspection.

(b) Official action of the Administrator shall not be bound or be prejudiced by any informal statement made or opinion given by the Administrator, Commission or employees of the Department of Securities.

In order to avoid the expense and time involved in formal legal proceedings, it is the policy of the Administrator to afford persons who have engaged in unlawful acts and practices an opportunity to enter into settlement agreements, when it appears to the Administrator that such procedure fully safeguards the public interest. The Administrator reserves the right in all cases to withhold the privilege of disposition by settlement agreement.

660:2-5-4. Summary orders

The Administrator may issue summary orders pursuant to the provisions set forth in:

(1) Sections 1-306.D, 1-411.F or 1-604 of the Securities Act;

(2) Section 814(D) of the Business Opportunity Act;

(3) Sections 628(D), 634(C), or 660 of the Land Sales Act; or

(4) Subsection (D) of Section 453 of the Take-over Act.

SUBCHAPTER 7. INVESTIGATIONS

Section
660:2-7-1. Initiation
660:2-7-2. Authority [REVOKED]
660:2-7-3. Investigative processes
660:2-7-4. Subpoenas [REVOKED]
660:2-7-5. Testimony [REVOKED]
660:2-7-6. Reports [REVOKED]
660:2-7-7. Enforcement of process [REVOKED]
660:2-7-8. Right to counsel [REVOKED]
660:2-7-9. Termination of investigation

660:2-7-1. Initiation

Investigations may be initiated upon inquiry, request or complaint by members of the public or by the Administrator or the Commission upon their own motion. The request or complaint by a member of the public should be in writing on the form identified in Chapter 6 of this Title, be signed by the complainant and contain a statement setting forth the acts, activities or matters and the name and address of the party or parties against whom they are complaining. No formal procedures are required in making such requests or complaints. The complainant is not regarded as a party, since the Administrator acts only in the public interest. The Administrator shall not take action when the acts, activities or matters complained of are merely matters of private controversy and do not tend to adversely affect the public.

660:2-7-2. Authority [REVOKED]

660:2-7-3. Investigative processes

(a) Authority. Investigations under the statutes administered by the Administrator shall be conducted by representatives designated and duly authorized for this purpose. Such representatives are authorized to exercise and perform the duties of their office in accordance with the statutes of the state of Oklahoma and the regulations of the Administrator, including administration of oaths and affirmations, in any matter under investigation by the Administrator. Nothing in this section shall prohibit the Administrator or his designee from expanding or restricting the scope of any investigation at any time during an investigation.

(b) Investigative hearings. Investigative hearings, as distinguished from hearings in individual proceedings, may be conducted in the course of any investigation undertaken by the Administrator, including inquiries initiated for the purpose of determining whether or not a respondent is complying with an order of the Administrator. Investigative hearings may be held before the Administrator, or his designee, for the purpose of hearing the testimony of witnesses and receiving documents and other data relating to any subject under investigation. Such hearings shall be non-public.

(c) Subpoena to testify or produce records. While the Administrator encourages voluntary cooperation in investigations, the Administrator, or his designee, at any stage of any investigation, may issue a subpoena ordering the person named therein to appear before a designated representative at a designated time and place, including the offices of the Department, to provide testimony by deposition, sworn statement or affidavit and/or to produce documentary evidence relating to any matter under investigation. Such testimony shall only be reduced to writing or otherwise recorded in any manner by the person taking the testimony, or under his direction.

(d) Subpoena to grant access. The Administrator may issue a subpoena to grant access to, to examine, and to copy documents, books or other records of any person being investigated.

(e) Service. Subpoenas shall be served in the manner provided by law.

(f) Written examination. The Administrator, or his designee, may issue an order requiring persons to file a report or statement, or answers in writing and under oath to specific questions, relating to any matter under investigation.

(g) Rights of witness. Any person under investigation, compelled to furnish information or documentary evidence, shall be advised of the purpose and scope of the investigation, subject to the confidentiality requirements provided by law. Any person required to testify shall be entitled to review a copy of the transcript of his own testimony, if transcribed, at the offices of the Department of Securities. Any person required to submit documentary evidence shall be entitled to retain or, on payment of lawfully prescribed cost, to procure a copy of any document produced by such person. Any party compelled to testify or to produce documentary evidence may be accompanied and advised by counsel, provided that such counsel is duly licensed to practice law by the Supreme Court of Oklahoma. Such counsel may question such person briefly at the conclusion of the examination to clarify any of the answers such person has given.

(h) Confidentiality. Information or documents obtained by the Administrator and subpoenas issued in connection with an investigation shall be kept confidential and shall not be made available to the public, unless expressly ordered by the Administrator, disclosed pursuant to the provisions of Subchapter 9 of this Chapter or as otherwise provided by law.

660:2-7-4. Subpoenas [REVOKED]

660:2-7-5. Testimony [REVOKED]

660:2-7-6. Reports [REVOKED]

660:2-7-7. Enforcement of process [REVOKED]

660:2-7-8. Right to counsel [REVOKED]

660:2-7-9. Termination of investigation

Upon completion of investigation, where the facts indicate that no corrective action by the Administrator is warranted, the investigative files shall be closed, without prejudice to reopening. Where remedial action is appropriate, the files may be referred for the initiation of administrative or civil proceedings, or other disposition as may be permitted under law. At any time during or after completion of an investigation, a matter may be referred to a law enforcement agency or another governmental or regulatory entity.

SUBCHAPTER 9. INDIVIDUAL PROCEEDING PRACTICES AND PROCEDURES

Section
660:2-9-1. Hearings in general
660:2-9-2. Initiation of individual proceedings
660:2-9-3. Prehearing proceedings and processes
660:2-9-4. Authority to subpoena witnesses
660:2-9-5. Representation
660:2-9-6. Conduct of hearings
660:2-9-7. Record of hearing
660:2-9-8. Final orders
660:2-9-9. Rehearings
660:2-9-10. Appeals [REVOKED]

660:2-9-1.         Hearings in general

(a)        Authority.  Prior to issuance of a final order in an individual proceeding, all parties shall be afforded an opportunity for hearing after reasonable notice.  If the person to whom notice is addressed does not request a hearing within twenty (20) days after the service of notice is effective, a final order may be issued.

(b)        Public hearing.  All hearings shall be open to the public but may not be recorded by the public or any respondent by any electronic means.

(c)        Hearings on summary orders.  The provisions of this Subchapter shall not apply to proceedings for summary orders.  The procedures for hearings on summary orders shall be those set forth in:

(1)        Sections 1-306.D, 1-411.F, or 1-604.B of the Securities Act;

(2)             Section 814(D) of the Business Opportunity Act;

(3)             Sections 628(D), 634(C), or 660 of the Land Sales Act; and

(4)             Subsections (D) and (E) of Section 453 of the Take-over Act.

660:2-9-2.         Initiation of individual proceedings

(a)        Request for hearing and answer.  The request for hearing shall be in writing and shall specifically admit or deny each allegation of the Department or state that the party does not have, and is unable to obtain, sufficient information to admit or deny each allegation.  When a person intends in good faith to deny only a part of an allegation, the party shall specify so much of it as is true and shall deny only the remainder.  A statement of a lack of information shall have the effect of a denial. Any allegation not denied shall be deemed admitted.  Failure to file a request for hearing in substantial compliance with this subsection shall constitute grounds for denial of the request.

(b)        Setting or denial of hearing.  Upon receipt of a written request for a hearing, the Administrator shall either schedule a hearing to commence within ninety (90) days from the receipt of the request or shall issue a written order denying hearing.

(c)             Time of notice.  Notice of all hearings shall be served by regular mail or personal delivery within a time reasonable in light of the circumstances, in advance of the hearing, but not less than forty-five (45) days in advance thereof, to all parties.  For good cause shown, any hearing may be rescheduled, provided all persons entitled to notice of such hearing are promptly advised thereof.

(d)        Contents of notice.  The notice of hearing shall contain the following information:

(1)             the time, place and nature of the hearing;

(2)        a statement of the legal authority and jurisdiction under which the hearing is to be held;

(3)        a short plain statement of the matters asserted; and

(4)        a reference to the particular sections of the statutes and rules involved.

(e)        Appointment of hearing officer.  The Administrator may delegate authority to a Hearing Officer to conduct an individual proceeding whenever deemed appropriate under the circumstances.  The Administrator shall enter into a written contract with each Hearing Officer appointed, which shall govern the terms of appointment.

(f)         Authority of presiding officer.  The Administrator, or the Hearing Officer, shall have the authority to do all things necessary and appropriate to discharge his duties. The duties of the Administrator, or the Hearing Officer, include, but are not limited to, the following:

(1)        Administering oaths and affirmations;

(2)        Issuing subpoenas authorized by law and revoking, quashing, or modifying any such subpoena;

(3)        Receiving relevant evidence and ruling upon the admission of evidence and offers of proof;

(4)        Regulating the course of a proceeding and the conduct of the parties and their counsel;

(5)        Holding prehearing and other conferences and requiring the attendance at any such conference of any party;

(6)        Recusing himself or herself upon motion made by a party or upon his or her own motion;

(7)        Considering and ruling upon all procedural and other motions, subject to any limitations otherwise specified;

(8)        Requiring the filing of briefs, if so desired;

(9)        Requiring the filing of proposed findings of fact and conclusions of law in preparation for the proposed final order if so desired; and

(10)      Preparing a proposed final order for submission to the Administrator.

660:2-9-3.         Prehearing proceedings and processes

(a)      Scheduling.  As soon as is practicable after the request for hearing is received, the Administrator, or Hearing Officer, shall enter a scheduling order that is intended to expedite the disposition of the action and insure the fair, orderly and efficient conduct of the proceedings.  The parties shall confer in person or by telephone and attempt to prepare a single agreed scheduling order to submit to the Hearing Officer. If the proposed scheduling order is acceptable to the Hearing Officer no scheduling conference need be held. If the parties are unable to agree, the Hearing Officer shall issue an appropriate scheduling order or hold a scheduling conference in person or by telephone.  The scheduling order should establish at least the following:

(1)        a statement of the issues as they then appear;

(2)        a schedule of discovery;

(3)        any limitations to be placed on discovery;

(4)        a preliminary list identifying all witnesses, documents and exhibits intended to be utilized at the hearing;

(5)        a schedule for filing and exchanging prehearing briefs, if any;

(6)        identification of any expert witness intended to be called;

(7)        the date or dates and time for the prehearing conference;

(8)        the date and time of the hearing; and

(9)        such other matters as may aid in the disposition of the matter.

(b)        Prehearing conference.

(1)        A prehearing conference shall be held as close to the time of hearing as is reasonable under the circumstances, but not less than twenty (20) days in advance thereof.  No less than ten (10) days before the prehearing conference each party shall submit to the Hearing Officer and serve on all other parties, by personal delivery or facsimile, their final witness list, final exhibit list and specific factual contentions and legal contentions.  No less than five (5) days before the prehearing conference any objections to any witnesses or exhibits listed shall be submitted to the Administrator, or the Hearing Officer, in writing stating the specified grounds for each objection, and served on all other parties, by personal delivery or facsimile.  At the conclusion of the prehearing conference a ruling or order shall be entered reciting the action taken.  The order shall control the subsequent course of the action unless modified by a subsequent order.  The order shall be modified only to prevent manifest injustice.  The order shall include the results of the prehearing conference and shall present:

(A)       all factual and legal issues to be determined in the case;

(B)       the final list of witnesses and exhibits to be utilized at the hearing;

(C)       any admissions of fact and any stipulations regarding admission and authenticity of documents; and

(D)       if there is objection to the admission of any exhibit or witness, a list of the specific grounds for each objection.  Absent proper objection, a listed exhibit or the testimony of a listed witness is admitted when offered at the hearing.

(2)        Each party and the Administrator, or the Hearing Officer, shall approve the prehearing order and the order shall supersede the previous scheduling order and shall govern the hearing unless modified only to prevent manifest injustice.

(3)        The Administrator, or the Hearing Officer, may conduct the prehearing conference by telephone.  Upon notice to the participants, all or part of the prehearing conference may be recorded.

(c)        Failure to participate.  Failure to participate and cooperate in the preparation of a scheduling order or prehearing conference order, failure to appear at any conference, failure to appear at a conference substantially prepared, or failure to participate in good faith in any prehearing proceedings may result in any of the following sanctions:

(1)        striking of any pleading;

(2)        a preclusion order;

(3)        staying the proceeding;

(4)        default judgment; or

(5)        such other order as the Administrator, or the Hearing Officer, may deem just and appropriate.

(d)        Post prehearing conference.  If additional exhibits are discovered after the prehearing conference order is issued, the party intending to use them shall immediately notify all other parties and furnish copies of the additional exhibits to such parties.  If additional witnesses are discovered, all other parties shall be notified immediately and furnished the nature of the testimony along with the names and addresses of the witnesses.  These additional exhibits or the testimony of the additional witnesses shall be deemed admitted unless written objection is filed prior to or at the commencement of the hearing by the party objecting.  If a written objection is filed, no exhibit or witness may be added to the prehearing conference order without a showing to the Administrator, or the Hearing Officer, that manifest injustice would be created if the addition of such exhibit or witness were not permitted.

(e)        Filing of papers.  All papers required to be served by a party shall be filed with the Administrator within the applicable time for service.  When a Hearing Officer is appointed, a person making a filing with the Administrator shall promptly provide to the Hearing Officer a copy of such filing.  Papers filed with the Administrator shall be accompanied by a certificate stating the name of the person or persons served, the date of service, the method or service and the mailing address or facsimile telephone number to which service was made, if not made in person.

(f)         Signature requirement.  Every filing of a party represented by counsel shall be signed by at least one counsel of record in his name and shall state that counsel’s business address and telephone number.  A party who acts as his own counsel shall sign his individual name and state his address and telephone number on every filing. The signature of a counsel or party shall constitute a certification that:

(1)  the person signing the filing has read the filing;

(2)  to the best of his knowledge, information, and belief, formed after reasonable inquiry, the filing is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and the filing is not made for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of adjudication.

(3) If a filing is not signed, the Administrator, or the Hearing Officer, shall strike the filing, unless it is signed promptly after the omission is called to the attention of the party making the filing.

660:2-9-4. Authority to subpoena witnesses

(a) Subpoenas. The Administrator, or the Hearing Officer, shall have the power to subpoena witnesses and administer oaths or to subpoena documentary evidence in any cause before him.  Any party to a hearing shall have the right to have subpoenas issued to require the attendance and testimony of witnesses at a designated time and place, or to require the production of documentary evidence at a designated time and place. Where it appears to the Administrator, or the Hearing Officer, that the subpoena sought may be unreasonable, oppressive, excessive in scope, unduly burdensome, or not relevant, he may, in his discretion, as a condition precedent to the issuance of the subpoena, require the party seeking the subpoena to show the general relevance and reasonable scope of the testimony or other evidence sought.  If after consideration of all the circumstances, the Administrator, or the Hearing Officer, determines that the subpoena or any of its terms is unreasonable, oppressive, excessive in scope, unduly burdensome or not relevant, he may refuse to issue the subpoena, or issue the subpoena only upon such conditions as fairness requires.

(b) Service. Service of the subpoena shall be in the manner provided by law and shall be the responsibility of the party requesting the subpoena.  Appropriate service shall be made at least three (3) calendar days before the person is required to appear. Proof of service shall be filed with the Administrator.

(c) Fees. Witnesses subpoenaed pursuant to this section shall be paid the same fees and mileage as are paid witnesses in the courts of the state of Oklahoma.  Such fees shall be paid by the party requesting that the subpoena be issued.

660:2-9-5. Representation

(a) Right to counsel. Any party shall have the right to appear in person and by counsel, provided, however, that such counsel representing the party must be duly licensed to practice law by the Supreme Court of Oklahoma. Such counsel may be present during the giving of evidence, may have a reasonable opportunity to examine and inspect all documentary evidence, may examine witnesses and may present evidence in his client's behalf.

(b) Notice of appearance. An attorney representing a party shall promptly file a notice of appearance with the Administrator. The notice of appearance shall contain all of the following:

(1) the attorney’s name, address, telephone number, and bar number;

(2) the firm name, address, and telephone number if the attorney is a member of a firm; and

(3) the name, address, and telephone number of the person represented.

(c) Service on attorney. After a notice of appearance has been filed, service of all papers may be made upon the attorney or firm of record and shall be effective as service upon the person represented.

660:2-9-6. Conduct of hearings

(a) Rules of evidence. The rules of evidence need not be strictly followed or observed by the Administrator, or the Hearing Officer, during the hearing. However, the Administrator, or the Hearing Officer, may look to Section 310 of the Administrative Procedures Act for guidance on any matter not specifically provided for in this Subchapter.

(b) Photocopies. Documentary evidence may be received in the form of copies if the original is not readily available and no party or interested person has objected to the authenticity of the document or asserted it has been altered. Upon such objection or assertion, the Administrator, or the Hearing Officer, may require the original to be produced.

(c) Official notice. Notice may be taken by the Administrator, or the Hearing Officer, of judicially cognizable facts. In addition, notice may be taken of generally recognized practices, procedures and facts relating to the securities industry. Parties shall be notified either before or during the hearing of the material noticed and they shall be afforded an opportunity to contest the material so noticed. The Administrator, or the Hearing Officer, shall utilize his experience, technical competence and specialized knowledge in evaluating the evidence presented.

(d) Sequestration of witnesses. Upon request by any party, the Administrator, or the Hearing Officer, may exclude witnesses other than parties from the hearing room when those witnesses are not testifying. A party that is not a natural person may designate an individual as its representative to remain in the hearing room, even though the individual may also be a witness. An expert witness who is to render an opinion based on the testimony given at the hearing may remain in the hearing room during the testimony. The Administrator, or the Hearing Officer, may order the witnesses, parties, their counsel, and any person under their direction not to disclose to any sequestered witness the substance of the testimony, exhibits, or other evidence introduced during the absence of the witness.

(e) In person testimony. No witness shall testify by telephone or other electronic means unless by agreement of the parties.

660:2-9-7. Record of hearing

(a) Requirement. Oral proceedings shall be electronically recorded at the expense of the Department. Costs of transcription shall be borne by the party requesting transcription and shall be paid directly to the person transcribing the proceeding.

(b) Contents of record. The record in any hearing shall include the following: 

(1) all pleadings, motions and intermediate rulings;

(2) all evidence received or considered, including a statement of matters officially noted;

(3) questions or offers of proof, objections and rulings thereon;

(4) proposed findings and exceptions; 

(5) the decision, opinion, or report of the Administrator, or the Hearing Officer;

(6) all other evidence or data submitted to the Administrator, or the Hearing Officer, in connection with their consideration of the case provided all parties have had access to such evidence; and

(7) the final order of the Administrator.

A final order adverse to a party in any individual proceeding shall be in writing or stated in the record.  A final order shall include findings of fact and conclusions of law, separately stated.  Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings.  If, upon request, a party submits proposed findings of fact, the order shall include a ruling upon each proposed finding.  Parties shall be notified either personally or by certified mail, return receipt requested, of any final order.  A copy of the order shall be delivered or mailed promptly to each party and to his attorney of record, if any.

660:2-9-9. Rehearings

(a) Written request. Any party aggrieved by a final order may request rehearing, reopening or reconsideration if a written request is made therefor within ten days (10) after entry of the final order.

(b) Grounds. In the request for rehearing, reopening or reconsideration, the party shall set forth one or more of the following grounds:

(1) newly discovered or newly available evidence relevant to the issues;

(2) need for additional evidence to adequately develop the facts essential to proper decision;

(3) probable error committed by the Administrator, or the Hearing Officer, in the proceeding or in his decision such as would be ground for reversal on judicial review of the order;

(4) need for further consideration of the issues and the evidence in the public interest; or

(5) a showing that issues not previously considered ought to be examined in order to properly dispose of the matter.

(c) Additional grounds for rehearing. Nothing in these rules shall prevent the Administrator from ordering any matter reheard, reopened or reconsidered in accordance with other applicable statutory provisions or rules or, at any time, on the ground of fraud practiced by the prevailing party or of procurement of the order by perjured testimony or fictitious evidence.

(d) Order granting rehearing. The order granting reconsideration, reopening or rehearing shall set forth the grounds that justify such action.

(e) Scope. The reconsideration, reopening or rehearing shall be confined to those grounds upon which the reconsideration, reopening or rehearing was granted.

660:2-9-10. Appeals [REVOKED]

SUBCHAPTER 11. PROCEDURES FOR INSPECTING AND/OR COPYING PUBLIC RECORDS

Section
660:2-11-1. Purpose
660:2-11-2. Definitions
660:2-11-3. Record Custodians
660:2-11-4. Hours of inspection
660:2-11-5. Procedures for inspection of records
660:2-11-6. Procedures for copying records
660:2-11-7. Fees

660:2-11-1. Purpose

The provisions of this Subchapter set forth the procedures of the Department for public inspection and/or copying of the public records of the Department. Such procedures are established for purposes of complying with the provisions of the Open Records Act as defined in 660:2-11-2 and Section 302 of the Oklahoma Administrative Procedures Act (75 O.S., § 302). Nothing herein is intended to derogate from or be in conflict with the provisions of the Open Records Act. To the extent any provision of this Subchapter is found to be in conflict with any provision of the Open Records Act, the provisions of the Open Records Act shall govern.

The following words and terms, when used in this Subchapter shall have the following meanings, unless the context clearly indicates otherwise:

"Open Records Act" means the Oklahoma Open Records Act, 51 O.S., Sections 24A1 through 24A19.

(a) Authority of record custodians. The persons designated below shall serve as Record Custodians for purposes of the Open Records Act and are hereby charged with responsibility for compliance with that Act pursuant to the procedures set forth in this Section and elsewhere in this Subchapter.

(b) Appointment of Record Custodians. The following officials of the Department are hereby appointed as Record Custodians for the designated records and as such shall have all the powers and duties set forth in this Subchapter and in the Open Records Act:

(1) Administrator - all records of the Department

(2) Deputy Administrator - all records of the Department

(3) Director of Enforcement - all enforcement records of the Department

(4) Director of Registrations and Exemptions - all registration and exemption records of the Department

(5) Director of Licensing - all licensing records of the Department

(c) Substitute Record Custodians. Each of the Record Custodians appointed in subsection (b) of this Section is hereby authorized to designate any other employee of the Department to serve as Record Custodian in the place of the designated Record Custodian. Such substitute Record Custodian shall have the same duties and powers as the Record Custodian set forth above and wherever the term "Record Custodian" is used herein, it shall include any such substitute Record Custodian. Whenever a Record Custodian shall appoint another person as a substitute Record Custodian he or she shall notify the Administrator of such designation and the Administrator shall maintain a register of all such designations.

(d) Duties. All Record Custodians shall protect the public records of the Department from damage and disorganization; prevent excessive disruption of the essential functions of the Department; provide assistance and information upon request; insure efficient and timely action and response to all applications for inspection and/or copying of public records; and shall carry out the procedures adopted by this Department for inspecting and/or copying public records.

(e) Direction of requests to custodians. All members of the public, in seeking access to, or copies of, a public record in accordance with the provisions of the Open Records Act shall address their requests to the Record Custodian charged with responsibility for the maintenance of the record sought to be inspected or copied. Whenever a Record Custodian is presented with a request for inspection or copy of, a public record which record the Record Custodian does not have in his or her possession and which he or she has not been given responsibility to keep and maintain, the Record Custodian shall so advise the person requesting the record. Further, the person making the request shall be informed as to which custodian the request should be addressed, if such is known by the Record Custodian receiving the request.

All public records of the Department shall be available for inspection during the regular business hours of the Department. Such hours shall be 8:00 a.m. to 5:00 p.m., Monday through Friday, except legal holidays.

(a) Requests for inspection. To inspect a public record in the possession of the Department, the person requesting the record shall execute a Form OAD 25 - REQUEST FOR RECORD INSPECTION and deliver it to the Record Custodian responsible for the requested record designated in 660:2-11-3. Such request shall be accompanied by the fees set forth in 660:2-11-7. All record inspection forms must be completed by the person requesting the record and signed by the individual making the request. The Record Custodian may demand reasonable identification of any person requesting a record.

(b) Place of inspection. All inspections of public records shall be performed in the offices of the Department under the supervision of the Record Custodian.

(c) Identification of records. A written request for inspection of a record shall reasonably describe the record sought. In instances where the person requesting the record cannot provide sufficient information to identify a record, the Record Custodian shall assist in making such identification.

(d) Delay or denial of requests for inspection. If the record requested is not available for inspection at the time requested, within three (3) business days following the day the request for inspection is received by the Record Custodian, the Record Custodian shall notify the person requesting the record:

(1) that the record will be available for inspection at a later time by returning Form OAD 26 - RECORD INSPECTION DELAY NOTICE; or

(2) that the record will not be available for inspection, by returning to the person requesting the record a copy of Form OAD 27 - RECORD INSPECTION DENIAL.

(a) Requests for copies. To obtain a copy of a public record in the possession of the Department, the person requesting the copy shall execute a Form OAD 28 - REQUEST FOR RECORD COPY and deliver it to the Record Custodian responsible for the requested record designated in 660:2-11-3; except that no form shall be required for requests made for records which have been reproduced for free public distribution. Such request shall be accompanied by the fees set forth in 660:2-11-7. All record copy forms must be completed by the person requesting the record and signed by the individual making the request. The Record Custodian may demand reasonable identification of any person requesting a record.

(b) Responsibility for making copies. All copies of public records shall be performed by the Record Custodian in the offices of the Department except where the Record Custodian determines that the size or the volume of records to be copied warrants sending the record outside the Department for copying, in which event the copies shall be made at a place selected by the Record Custodian and under the supervision of the Record Custodian.

(c) Identification of records. A written request for copies of a record shall reasonably describe the record sought. In instances where the person requesting the copies cannot provide sufficient information to identify a record, the Record Custodian shall assist in making such identification.

(d) Delay or denial of requests for copies. If the record requested is not available for copying at the time requested, within three (3) business days following the day the request for copies is received by the Record Custodian, the Record Custodian shall notify the person requesting the copies:

(1) that the record will be available for copying at a later time by returning Form OAD 29 - RECORD COPY DELAY NOTICE; or

(2) that the record will not be available for copying, by returning to the person requesting the record a copy of Form OAD 30 - RECORD COPY DENIAL.

660:2-11-7. Fees

(a) Amounts payable. The following are the fees that shall be charged by the Department for copying and/or mechanical reproduction of public records and for the search for public records requested by the public pursuant to the Open Records Act and Section 1-612 of the Securities Act; provided, however, no record search and/or copying charge shall be assessed against officers or employees of the Department who make requests which are reasonably necessary to the performance of their official duties:

(1) Inspection fees. No fee shall be charged for inspection of a public record in the offices of the Department.

(2) Copying fees. The following fees shall be charged for copies of public records:

(A) 8 1/2" by 14" or smaller - $ .25 per page

(B) Larger than 8 1/2" by 14" - $1.00 per page

(C) Certified copy 8 1/2" by 14" or smaller - $1.00 per page

(D) Certified copy larger than 8 1/2" by 14" - $2.00 per page

(3) Fee for mechanical reproduction. For copying any public record which cannot be reproduced by photocopying, such as a computer printout or a blueprint, or where the size of the record to be copied warrants sending the record outside for copying, the person requesting the record shall be charged the actual cost to the Department of such copying, including the cost of labor, materials and equipment.

(4) Search fee. If the person requesting a record is using the record solely for a commercial purpose, a search fee shall be charged equal to $20.00 per hour for the time spent by employees in retrieving the record.

(b) Prepayment of fees. The Record Custodian may require prepayment of estimated fees for requests for public records and shall require prepayment of a fee whenever the estimated amount exceeds $200.00. The prepayment amount shall be an estimate of the costs of copying, mechanical reproduction and/or searching for the record. Any overage or underage in the prepayment amount shall be settled prior to producing the requested record or delivering the copy or mechanical reproduction of the record to the person requesting the record.

 

SUBCHAPTER 13. DECLARATORY RULINGS AND INTERPRETIVE OPINIONS

Section
660:2-13-1. Opinions

660:2-13-1. Opinions

The Administrator and/or Commission may honor requests from interested persons for interpretive opinions and as to the applicability of any rule or order, if it be shown that an actual case, controversy or issue is in contemplation and that unreasonable hardship, loss or delay would result if the matter were not determined in advance. The Administrator in his discretion may honor requests from interested persons for formal interpretive opinions relating to a specific factual circumstance and no-action positions, including consideration of waivers, where appropriate and in the public interest, on the basis of facts stated and submitted in writing, with respect to the provisions of the Securities Act or any rule or statement of policy adopted thereunder, provided such requests satisfy and conform to the following requirements:

(1) Such requests shall be in writing and shall include or be accompanied by all information and material required by any statute, rule or statement of policy under which an exception or exemption may be claimed, including but not limited to, copies of prospectuses or offering circulars if applicable or appropriate.

(2) An original and one copy of the request letter itself shall be submitted and the name of the entity for whom the request is being made along with the specific subsection of the particular statute or the particular rule or statement of policy to which the letter pertains shall be indicated in the upper right-hand corner of the letter.

(3) The letter should contain a brief narrative of the fact situation and should set out all of the facts necessary to reach a conclusion in the matter; however, such narratives should be concise and to the point.

(4) The names of the company or companies, organization or organizations and all other persons involved should be stated and should relate and be limited to a particular factual circumstance. Letters relating to unnamed companies, organizations or persons or to hypothetical situations will not warrant a formal response.

(5) Every such request shall include or be accompanied by a manually signed opinion of legal counsel which briefly and concisely states counsel's understanding, counsel's opinion in the matter, which may be expressed tentatively or conditioned upon concurrence by the Administrator, and the basis for such opinion.

(6) Each request for a no-action position and/or interpretive opinion letter shall be accompanied by payment of a fee in the amount specified in Section 1-612 of the Securities Act.

CHAPTER 3. PROCEDURES FOR THE
OKLAHOMA TAKE-OVER DISCLOSURE ACT OF 1985
[RESERVED]

CHAPTER 4. PROCEDURES FOR THE OKLAHOMA SUBDIVIDED LAND SALES CODE

 

Subchapter	Section
1. General Provisions	660:4-1-1
3. Hearings .	660:4-3-1

[Authority: 71 O.S., Section 662; 75 O.S., Section 302]

[Source: Codified 12/31/91]

SUBCHAPTER 1. GENERAL PROVISIONS

Section
660:4-1-1. Purpose
660:4-1-2. Statutory citations

660:4-1-1. Purpose

The provisions of this Chapter have been adopted for the purpose of carrying out the provisions of the Oklahoma Subdivided Land Sales Code, 71 O.S., Sections 601 through 667, including the establishment of administrative procedures.

660:4-1-2. Statutory citations

Citations to statutes in this Chapter refer to the most recent codification of the Oklahoma Subdivided Land Sales Code, 71 O.S., Sections 601 through 667.

SUBCHAPTER 3. HEARINGS

Section
660:4-3-1. Reconsideration of Department action

660:4-3-1. Reconsideration of Department action

(a) Review of final order. Any person aggrieved by a final order of the Administrator under the Land Sales Act may obtain a review by the Oklahoma Securities Commission by filing with the Administrator within fifteen (15) days after the entry of its order, a written petition praying that the order be modified or set aside in whole or in part and stating the grounds therefor.

b) Hearing de novo. The application and petition shall within sixty (60) days be heard de novo by the Commission en banc.

(c) Request for oral argument. If petitioner desires to present oral argument on his petition, it shall be affirmatively requested in writing at the time the petition is submitted to the Administrator.

CHAPTER 5. PROCEDURES FOR THE
OKLAHOMA BUSINESS OPPORTUNITY SALES ACT
[RESERVED]

CHAPTER 6. FORMS

 

Subchapter	Section
1. General Provisions........................................................................................	660:6-1-1
3. Forms for General Purposes...........................................................................	660:6-3-1
5. Forms used under the Securities Act..................................	660:6-5-1
7. Forms used under the Take-over Act...............................................................	[RESERVED]
9. Forms used under the Land Sales Act............................................................	660:6-9-1
11. Forms used under the Business Opportunity Act............................................	[RESERVED]

Section
660:6-1-1. Purpose

The provisions of this Chapter have been adopted for the purpose of describing the various forms accepted by the Department for compliance with the various provisions of the acts subject to the jurisdiction of the Administrator.

Section
660:6-3-1. Forms to inspect or copy records
660:6-3-2. Forms to file a complaint

The following forms are required to obtain records of the Department under the Open Records Act:

(1) OAD-25 -- Request for Record Inspection

(2) OAD-26 -- Record Inspection Delay Notice

(3) OAD-27 -- Record Inspection Denial

(4) OAD-28 -- Request for Record Copy

(5) OAD-29 -- Record Copy Delay Notice

(6) OAD 30 -- Record Copy Denial

(a) Form. The following form is used to file a complaint with the Department: OEN-002 -- Complaint Form

(b) Obtaining form. The form listed in Subsection (a) of this Section may be obtained from the Department.

SUBCHAPTER 5. FORMS USED UNDER THE SECURITIES ACT

Section
660:6-5-1. Forms for registration or exemption of securities [AMENDED]
660:6-5-2. Licensing forms [AMENDED]

660:6-5-1. Forms for registration or exemption of securities

(a) The following is a list of forms accepted by the Department in connection with the registration or exemption of securities under the Securities Act:

(1) U-1 -- Uniform Application to Register Securities

(2) U-2 -- Uniform Consent to Service of Process

(3) U-2A -- Uniform Form of Corporate Resolution

(4) U-7 -- Small Corporate Offerings Registration Form

(5) NF -- Uniform Investment Company Notice Filing

(6) USR-1 -- Uniform Sales Report for Issuers

(7) Form D -- Notice of Sale of Securities Pursuant to Regulation D

(8) Oklahoma Accredited Investor Exemption Supplemental Information Form

(b) Obtaining forms.

(1) Copies of forms listed in (a)(1) through (6) of this Section, can be obtained from The North American Securities Administrators Association, Inc. at 10 G Street Northeast, Suite 710, Washington, D.C. 20002 or on the NASAA web site at http://www.nasaa.org.

(2) Copies of Form D may be obtained from The Public Reference Branch of the main office of the SEC, 450 5th Street, N.W., Washington, D.C. 20549, from any of the regional or branch offices of the SEC, or on the SEC web site at http://www.sec.gov.

(3) Copies of the form listed in (a)(8) of this Section can be obtained from the Department.

(4) The referenced forms are also available from the Department's website at www.securities.ok.gov.

660:6-5-2. Licensing forms

(a) The following is a list of forms used by the Department in connection with licensing persons as broker-dealers, agents, principals, issuer agents, investment advisers or investment adviser representatives, under the Securities Act:

(1) BD -- Uniform Application for Broker-Dealers, Investment Advisers and Agents

(2) ADV -- Uniform Application for Investment Adviser Registration

(3) U-2 -- Uniform Consent to Service of Process

(4) U-2A -- Uniform Form of Corporate Resolution

(5) U-4 -- Uniform Application for Securities Industry Registration or Transfer

(6) U-5 -- Uniform Application for Termination of Registration

(7) U-10 -- Uniform Examination Request for Non-NASD Candidates

(8) OBD-001 -- Applicant/Management Certification for Non-NASD Principals

(9) OBD-008 -- Application for Renewal of Non-NASD Broker-Dealer Registration

(10) OBD-015 -- Application for Renewal of Issuer Agent Registration

(11) OBD-016 -- Application for Renewal of Non-NASD Broker-Dealer Principal Registration

(12) OBD-018 -- Applicant/Management Certification for Issuer Agents

(13) OBD-019 -- Application for Renewal of Non-NASD Broker-Dealer Agent Registration

(14) OBD-020 -- NonBranch Sales Office Form

(b) Obtaining forms.

(1) Copies of the forms listed in (a)(1) and (2) of this Section, can be obtained from the SEC, 450 5th Street, N.W., Washington, D.C. 20549 or from any of the regional or branch offices of the SEC.

(2) Copies of the forms listed in (a)(1), (5) and (6) of this Section, can be obtained by contacting the NASD, 9509 Key West Avenue, Rockville, Maryland 20850, 301-590-6500.

(3) Copies of forms listed in (a)(3) through (7) of this Section, can be obtained from The North American Securities Administrators Association, Inc. at 10 G Street, Northeast, Suite 710, Washington, D.C. 20002.

4) Copies of forms listed in (a)(8) through (14) of this Section, can be obtained from the Department. 

(5) Many of the referenced forms are available from the Department's website at www.securities.ok.gov.

SUBCHAPTER 7. FORMS USED UNDER THE TAKE-OVER ACT
[RESERVED]

Section
660:6-9-1. Forms for registration of subdivided land
660:6-9-2. Forms for licensing of agents

(a) Forms. The following is a list of forms required by the Department in connection with the registration of subdivided land under the Land Sales Act:

(1) LRF-625 -- Application for Registration of Subdivided Lands

(2) LRF-626A -- Public Offering Statement-Instruction Guide

(3) LRF-626B -- Summary Disclosure Statement Guide

(4) LRF-627 -- Registrants Semi-Annual Report

(b) Obtaining forms. The forms listed above may be obtained from the Department.

(a) Forms. The following is a list of forms required by the Department in connection with the licensing of agents under the Land Sales Act: LRF-632 -- Application for License for Subdivided Land Sales Agent

(b) Obtaining form. The form listed in Subsection (a) may be obtained from the Department.

SUBCHAPTER 11. FORMS USED UNDER THE BUSINESS OPPORTUNITY ACT
[RESERVED]

CHAPTER 10. OKLAHOMA SECURITIES ACT
[REVOKED]

CHAPTER 11. OKLAHOMA UNIFORM SECURITIES ACT OF 2004

 

Subchapter	Section
1. General provisions .. ...	660:11-1-1
3. Investment Certificate Issuers . .	660:11-3-1
5. Broker-dealers and agents ..................	660:11-5-1
7. Investment advisers and investment adviser representatives ... ..	660:11-7-1
9. Registration of securities .................. ...	660:11-9-1
11. Exemptions from securities registration ................. .	660:11-11-1
13. Sales literature .................... .	660:11-13-1
15. Miscellaneous provisions .................. ..	660:11-15-1

SUBCHAPTER 1. GENERAL PROVISIONS

Section
660:11-1-1. Purpose
660:11-1-2. Statutory citations
660:11-1-3. Definitions
660:11-1-4. [RESERVED]
660:11-1-5. [RESERVED]
660:11-1-6. Amendments

660:11-1-1. Purpose

The provisions of this chapter have been adopted for the purpose of carrying out the provisions of the Oklahoma Uniform Securities Act of 2004 including, but not limited to, provisions governing the offer, sale and issuance of securities.

660:11-1-2. Statutory citations

Citations to statutes in this chapter refer to the most recent codification of the Oklahoma Uniform Securities Act of 2004 in Title 71 of the Oklahoma Statutes.

660:11-1-3. Definitions

Unless the context otherwise requires, or unless defined in this section or in 660:11-5-2, terms used in this chapter, if defined in the Securities Act, shall have the meaning as defined in the Securities Act. The following words and terms, when used in this chapter, shall have the following meaning, unless the context clearly indicates otherwise:

"Authorized to do business in Oklahoma" means authorized to do business in Oklahoma pursuant to the Oklahoma Uniform Securities Act of 2004.

"Audited financial statements" means "Certified financial statements."

"Certified financial statements" means financial statements prepared in accordance with generally accepted accounting principles and examined by Independent accountants in accordance with generally accepted auditing standards, accompanied by an opinion as described in 660:11-15-1.

"CFR" means the Code of Federal Regulations.

"CRD" means the NASAA/NASD Central Registration Depository System.

"Date of filing" means the date on which a proper registration statement is filed for purposes of determining the dates of the statements of financial condition to be filed with a registration statement. If amendments to a registration statement are necessary to comply fully with the registration requirements, "date of filing" means the date on which the last amendment is filed.

"FDIC" means the Federal Deposit Insurance Corporation.

"Financial statements" means, but is not limited to, the statement of financial condition, statement of income, and statement of changes in stockholders’ or owners’ equity, as well as all related footnotes and supporting schedules applicable thereto, prepared in accordance with generally accepted accounting principles.

"Independent accountants" means independent certified public accountants. The concept of independence shall be that promulgated by the American Institute of Certified Public Accountants.

"NASAA" means the North American Securities Administrators Association.

"NASD" means the National Association of Securities Dealers, Inc.

"NASDR" means the National Association of Securities Dealers Regulation, Inc.

"1933 Act" means the Securities Act of 1933, as amended.

"1934 Act" means the Securities Exchange Act of 1934, as amended.

"1940 Act" means the Investment Company Act of 1940, as amended.

"Predecessor of an issuer" means:

(A) a person the major portion of whose assets have been acquired directly or indirectly by the issuer, or

(B) a person from which the issuer acquired directly or indirectly the major portion of its assets.

"Promotional or developmental stage company" means an issuer for which any of the following conditions exist:

(A) the company and any predecessors were formed within the twelve-month period ending on the date of the filing of the application for registration;

(B) the company has no significant revenues from the line of business being undertaken with the offering proceeds;

(C) the principal operations to be conducted with offering proceeds have not commenced or have been commenced within the twelve-month period ending on the date of the filing of the application for registration; or

(D) the principal operations to be conducted with offering proceeds have commenced, but the issuer has not demonstrated profitable operations for two of the three fiscal years prior to registration, evidenced by net income determined in accordance with generally accepted accounting principles after taxes, and excluding extraordinary items.

"Prospectus" means a prospectus in a form and containing such information as may be required by the Administrator, including a prospectus filed under the 1933 Act or an offering circular used in connection with an exempt security or transaction regardless of the designation of the document (i.e., prospectus, offering circular, memorandum, etc.).

"Registration statement" means an application for registration of securities under Sections 1-303 and 1-304 of the Securities Act and all documents and exhibits related thereto, including a Prospectus.

"SEC" means the United States Securities and Exchange Commission.

"Securities Act" means the most recent codification of the Oklahoma Uniform Securities Act of 2004 in Title 71 of the Oklahoma Statutes.

"SIPC" means the Securities Investor Protection Corporation.

660:11-1-4. [RESERVED]

660:11-1-5. [RESERVED]

660:11-1-6. Amendments

The Administrator may by order amend the provisions of this chapter to conform references to the Securities Act or to rules promulgated thereunder to numerical redesignations occasioned by legislative or rulemaking activities.

SUBCHAPTER 3. INVESTMENT CERTIFICATE ISSUERS

PART 1. GENERAL PROVISIONS

Section
660:11-3-1. Definitions

PART 3. REPORTING AND ACCOUNTING REQUIREMENTS

660:11-3-21. Loans
660:11-3-22. Valuation of other assets
660:11-3-23. Reserve against bad debts
660:11-3-24. Books and records
660:11-3-25. Reports

PART 5. MISCELLANEOUS PROVISIONS

660:11-3-31. Qualifications of conservator or liquidator
660:11-3-32. Acknowledgment
660:11-3-33. Examination standards

PART 1. GENERAL PROVISIONS

660:11-3-1. Definitions

The following words and terms, when used in this subchapter, shall have the following meaning, unless the context clearly indicates otherwise:

"Allowance" means an allowance for loan losses or a reserve against bad debts.

"Net loans outstanding" means total gross loans outstanding less unearned discount.

"Nonperforming loan" means a loan over 90 days past due with respect to principal and/or interest.

"Uncollectible" means the potential for collection is virtually nonexistent.

"Worthless" means lacking value.

PART 3. REPORTING AND ACCOUNTING REQUIREMENTS

660:11-3-21. Loans

(a) Classifications. Each investment certificate issuer shall observe the following prescribed classification standards of loans:

(1) Loss - all, or a portion, of the loan considered uncollectible or worthless.

(2) Doubtful - all, or a portion, of the loan the ultimate collection of which is doubtful and in which a substantial loss is probable, but not as yet definitely ascertainable in amount.

(3) Substandard - all, or a portion, of the loan not classified as doubtful or loss and which involves more than normal risk due to the financial condition or unfavorable record of the borrower, insufficiency of security, or other factors.

(4) Special mention - loans not warranting classification as substandard, doubtful, or loss but which are of an unusual nature carrying more than the usual risk, and should have the careful attention of management.

(b) Appraisals. Each investment certificate issuer shall perform an in-house appraisal or obtain an appraisal by a licensed independent appraiser of collateral at the time of the origination of each loan. Said appraisal shall be updated by a licensed independent appraiser upon the Administrator's written request upon a change in the economic or market conditions or if the loan becomes nonperforming.

(c) Aging schedules.

(1) The provisions of this subsection shall apply to determining the age of loans. Loans shall be aged on the basis of contract terms in effect at the close of business each month. Account balances not in current status shall be classified in the following categories (assuming monthly payments):

(A) One installment or a portion in excess of 5% of an installment due and unpaid 0 to 30 days past due.

(B) Two installments or one and a portion in excess of 5% of an installment due and unpaid 31 to 60 days past due.

(C) Three installments or two and a portion in excess of 5% of an installment due and unpaid 61 to 90 days past due.

(D) Four installments or three and a portion in excess of 5% of an installment due and unpaid over 90 days past due.

(2) Amortizing real estate loans are to be reported as past due when the borrower is in arrears two or more monthly payments. Such obligations with payments scheduled other than monthly are to be reported as past due when one scheduled payment is due and unpaid for 30 days or more.

(3) Single payment and demand notes providing for the payment of interest at stated intervals are to be reported as past due after one interest payment is due and unpaid for 30 days or more.

(4) Single payment notes providing for the payment of interest at maturity are to be reported as past due after maturity if interest or principal remains unpaid for 30 days or more.

(d) Interest. Loans are to be reported as being in nonaccrual status if:

(1) said loans are maintained on a cash basis because of deterioration in the financial position of the borrower;

(2) payment in full of interest or principal is not expected; or

(3) principal or interest has been in default for a period of 90 days or more unless the obligation is both well secured and in the process of collection. A debt is "well secured" if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt in full, or (2) by the guaranty of a financially responsible party. A debt is "in the process of collection" if collection of the debt is proceeding in due course either through legal action, including judgment enforcement procedures, or, in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or in its restoration to a current status.

(e) Charge-offs. Each investment certificate issuer shall charge-off the whole or any part of a loan at such times that said loan is classified by the Administrator as "loss" as defined in (a) above.

660:11-3-22. Valuation of other assets

(a) Real property. Real property shall be recorded on the balance sheet in accordance with generally accepted accounting principles. Each investment certificate issuer shall maintain an appraisal of all real property recorded on the balance sheet. Said appraisal shall be updated by a licensed, independent appraiser upon the Administrator's request if a change in the economic or market conditions occur. If said appraisal indicates that the value of the asset is materially overstated on the balance sheet such that the financial statements are materially misstated, said asset shall be written down to market value upon the written request of the Administrator.

(b) Other assets. All other assets of the investment certificate issuer shall be recorded on the balance sheet in accordance with generally accepted accounting principles.

(c) Charge-offs. Each investment certificate issuer shall charge-off the whole of any other asset, including real property, at such time that said asset is deemed to be lacking in value by the Administrator.

660:11-3-23. Reserve against bad debts

(a) Requirement to maintain reserve. Each investment certificate issuer shall at all times maintain a reserve against bad debts, that is, an Allowance for Loan Losses, in an amount equal to two percent (2%) of the total loans outstanding.

(b) Determination of amount of reserve. As of the end of each quarter, the management of each investment certificate issuer shall evaluate the collectibility of the loan portfolio to bring the Allowance, by means of a charge or credit, to a level adequate to absorb anticipated loan losses. Any recoveries during the reporting period should be credited to the Allowance, and any charge-offs should be charged to the Allowance. With respect to those loans classified as "doubtful" in accordance with 660:11-3-21, the Allowance shall be increased by an amount equal to fifty percent (50%) of the amounts classified as "doubtful." With respect to those loans classified as "substandard" in accordance with 660:11-3-21, the Allowance shall be increased by ten percent (10%) of the amounts of the outstanding loans classified as "substandard."

660:11-3-24. Books and records

(a) Maintenance of books and records. Each investment certificate issuer shall maintain its books and records in such a manner that said books and records will facilitate preparation of financial statements in accordance with generally accepted accounting principles. Said books and records shall be maintained in sufficient detail to afford an analysis of all transactions.

(b) Financial statements. Each investment certificate issuer shall prepare a balance sheet and statement of income at the close of business on the last day of each month. Said financial statements shall be prepared not later than fifteen (15) business days after the end of the accounting period.

660:11-3-25. Reports

(a) Reports required. Each investment certificate issuer shall prepare and file with the Administrator quarterly reports for the quarters other than the quarter ending the fiscal year. Each report shall include the following:

(1) balance sheet and statement of income at the close of business on the last day of the quarter covered by said report;

(2) a schedule of the loans classified as loss, doubtful, substandard or special mention pursuant to 660:11-3-21, to include the loan balance amount of accrued interest and value of collateral for each loan appearing thereon; and

(3) aging schedules as prepared in accordance with 660:11-3-21.

(b) When to file. Each report shall be submitted to the Administrator within thirty (30) days of the end of the quarter for which the report applies.

PART 5. MISCELLANEOUS PROVISIONS

660:11-3-31. Qualifications of conservator or liquidator

A conservator or liquidator, who may be the Administrator of the Department, a member of his staff, or an independent party, appointed under Section 1-308.I.2. of the Securities Act shall be of legal age, of good moral character, a resident of the state of Oklahoma and competent to perform the duties of conservator or liquidator.

660:11-3-32. Acknowledgment

The purpose of Section 1-308.C of the Securities Act is to aid investment certificate issuers in applying for insurance by the FDIC. The prior issuance and continued effectiveness of a registration order shall constitute the written acknowledgment addressed by Section 1-308.C of the Securities Act. A formal acknowledgment for purposes of seeking insurance by the FDIC will be issued by the Administrator upon receipt of a written request therefor. Said request shall be accompanied by a copy of the application filed or to be filed with the FDIC. Upon obtaining membership in the FDIC, an investment certificate issuer shall not be subject to the prospectus preparation and delivery requirements set forth in Section 1-304.E of the Securities Act.

660:11-3-33. Examination standards

Examinations made by the Administrator or designated members of his staff may be performed in reliance upon the American Institute of Certified Public Accountants industry audit guides for financial institutions and federal regulatory guidelines for financial institutions.

SUBCHAPTER 5. BROKER-DEALERS AND AGENTS

PART 1. GENERAL PROVISIONS

Section
660:11-5-1. Purpose
660:11-5-2. Definitions

PART 3. LICENSING PROCEDURES

660:11-5-11. Initial registration
660:11-5-12. Renewal
660:11-5-13. Agent transfer
660:11-5-14. Agent termination
660:11-5-15. Categories of registration
660:11-5-16. Qualification examination requirements
660:11-5-17. Net capital for broker-dealers
660:11-5-18. [RESERVED]
660:11-5-19. Piecemeal filings
660:11-5-20. Cross-border licensing exemption

PART 5. REPORTING REQUIREMENTS

660:11-5-31. Post-registration reporting requirements

PART 7. RECORD KEEPING AND ETHICAL STANDARDS

660:11-5-41. Books and records requirements for broker-dealers
660:11-5-42. Standards of ethical practices for broker-dealers and their agents
660:11-5-42.1. Standards of ethical practices--issuer agents
660:11-5-43. Examination of broker-dealers
660:11-5-44. [RESERVED]
660:11-5-45. Financial statements for broker-dealers

PART 1. GENERAL PROVISIONS

660:11-5-1. Purpose

The rules in this subchapter have been adopted to provide procedures for complying with the provisions of Sections 1-401 through 1-402 of the Securities Act relating to the licensing of broker-dealers and agents under the Securities Act.

660:11-5-2. Definitions

In addition to the terms defined in 660:11-1-3, the following words and terms when used in this subchapter shall have the following meaning, unless the context clearly indicates otherwise:

"Branch office" means any business location of a broker-dealer identified to the public or customers by any means as a location at which a securities business is conducted on behalf of the broker-dealer, excluding any location identified solely in a telephone directory line listing or on a business card or letterhead, which listing, card, or letterhead also sets forth the address and telephone number of the office of the broker-dealer responsible for supervising the activities of the identified location.

"Complaint" means and includes any written statement of a customer or any person acting on behalf of a customer alleging a grievance involving the activities of those persons under the control of the broker-dealer in connection with the solicitation or execution of any transaction or the disposition of securities or funds of that customer.

"Completion of the transaction" means:

(A) In the case of a customer who purchases a security through or from a broker-dealer, except as provided in (B), the time when such customer pays the broker-dealer any part of the purchase price, or, if payment is effected by bookkeeping entry, the time when such bookkeeping entry is made by the broker-dealer for any part of the purchase price;

(B) In the case of a customer who purchases a security through or from a broker-dealer and who makes payments therefor prior to the time when payment is requested or notification is given that payment is due, the time when such broker-dealer delivers the security to or into the account of such customer;

(C) In the case of a customer who sells a security through or to a broker-dealer, except as provided in (D), if any security is not in the custody of the broker-dealer at the time of sale, the time when the security is delivered to the broker-dealer, and if the security is in the custody of the broker-dealer at the time of sale, the time when the broker-dealer transfers the security from the account of such customer;

(D) In the case of a customer who sells a security through or to a broker-dealer and who delivers such security to such broker-dealer prior to the time when delivery is requested or notification is given that delivery is due, the time when such broker-dealer makes payment to or into the account of such customer.

"Customer" means any person who, in the regular course of a broker-dealer's business, has cash or securities in the possession of such broker-dealer. "Customer" shall not include a broker-dealer.

"Direct participation programs" mean programs which provide for flow-through tax consequences regardless of the structure of the legal entity or vehicle for distribution including, but not limited to, oil and gas programs, real estate programs, agricultural programs, cattle programs, condominium securities, Subchapter S corporate offerings and all other programs of a similar nature, regardless of the industry represented by the program, or any combination thereof; excluded from this definition are real estate investment trusts, tax qualified pension and profit sharing plans pursuant to Sections 401 and 403(a) of the Internal Revenue Code and individual retirement plans Section 408 of that code, tax sheltered annuities pursuant to the provisions of Section 403(b) of the Internal Revenue Code and any company including separate accounts registered pursuant to the 1940 Act.

"Investment company and variable contracts products" means:

(A) redeemable securities of companies registered pursuant to the 1940 Act;

(B) securities of closed-end companies registered pursuant to the 1940 Act during the period of original distribution only; and

(C) variable contracts and insurance premium funding programs and other contracts issued by an insurance company except contracts which are exempt securities pursuant to Section 3(a)(8) of the 1933 Act.

"Municipal securities" mean securities which are direct obligations of, or obligations guaranteed as to principal or interest by, a state or any political subdivision thereof, or any agency or instrumentality of a state or any political subdivision thereof, or any municipal corporate instrumentality of one of more states, or any security which is an industrial development bond as defined in Section 3(a)(29) of the 1934 Act.

"Nonbranch sales office" means any business location of the broker-dealer identified to the public or customers by any means as a location at which a securities business is conducted on behalf of the broker-dealer which location is identified solely in a telephone directory line listing or on a business card or letterhead, which listing, card, or letterhead also sets forth the address and telephone number of the office of the broker-dealer responsible for supervising the activities of the identified location.

"Office" means any location where a broker-dealer and/or one or more of its agents regularly conduct the business of handling funds or securities or effecting any transactions in, or inducing or attempting to induce the purchase or sale, of any security.

"Option" means any put, call, straddle or other option or privilege, which is a "security" as defined in Section 2(1) of the 1933 Act, as amended, but shall not include any tender offer, registered warrant, right, convertible security or any other option in respect to which the writer is the issuer of the security which may be purchased or sold upon the exercise of the option.

"OSJ" or "Office of supervisory jurisdiction" means any office designated as directly responsible for the review of the activities of registered agents or associated persons in such office and/or in other offices of the broker-dealer. An office of supervisory jurisdiction would be any business location of a broker-dealer at which one or more of the following functions take place:

(A) order execution and/or market making;