Substitute House Bill No. 6512
          Substitute House Bill No. 6512

              PUBLIC ACT NO. 97-220


AN   ACT   CONCERNING   THE   CONNECTICUT  UNIFORM
SECURITIES ACT.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section   1.  Section  36b-3  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    As   used   in   sections   36b-2  to  36b-33,
inclusive, unless the context otherwise requires:
    [(1)  "Commissioner" means the Commissioner of
Banking or any person appointed or  designated  by
the Commissioner of Banking to administer sections
36b-2 to 36b-33, inclusive.
    (2)  "Agent"  means any individual, other than
a broker-dealer, who represents a broker-dealer or
"issuer",  in  effecting  or  attempting to effect
purchases or sales of  securities.  "Agent"  shall
not include an individual who represents an issuer
in  (A)  effecting  transactions  in  a   security
exempted  by  subdivision (1), (2), (3), (4), (6),
(9), (10), (11), or  (21)  of  subsection  (a)  of
section   36b-21,   (B)   effecting   transactions
exempted by  subsection  (b)  of  section  36b-21,
except  for  transactions  exempted by subdivision
(13) of said subsection where the  transaction  is
exempt under Section 4(6) of the Securities Act of
1933, by subdivision (9) of said subsection and by
subdivision   (12)  of  said  subsection,  or  (C)
effecting transactions  with  existing  employees,
partners   or   directors  of  the  issuer  if  no
commission or other remuneration is paid or  given
directly  or  indirectly for soliciting any person
in this state.  "Agent"  shall  not  include  such
other  persons  not  within  the  intent  of  this
subsection as the commissioner may  by  regulation
or  order determine. A general partner, officer or
director of a broker-dealer or issuer, or a person
occupying  a  similar status or performing similar
functions, is an agent only if he otherwise  comes
within  this  definition and any compensation that
he receives is directly or indirectly  related  to
purchases or sales of securities.
    (3)  "Broker-dealer"  means any person engaged
in  the  business  of  effecting  transactions  in
securities  for  the  account of others or for his
own account. "Broker-dealer" shall not include (A)
an  agent,  (B)  an  issuer,  (C) a state bank and
trust company, a national banking  association,  a
savings  bank,  a  savings and loan association, a
federal savings and  loan  association,  a  credit
union,  a  federal credit union, or trust company,
(D) a person who has no place of business in  this
state  if  he  effects  transactions in this state
exclusively with or through (i) the issuers of the
securities  involved  in  the  transactions,  (ii)
other broker-dealers, or (iii) a  state  bank  and
trust  company,  a national banking association, a
savings bank, a savings and  loan  association,  a
federal  savings  and  loan  association, a credit
union, a federal credit union, a trust company, an
insurance   company,   an  investment  company  as
defined in the Investment Company Act of  1940,  a
pension   or   profit-sharing   trust,   or  other
financial  institution  or  institutional   buyer,
whether  acting  for  itself or as trustee, or (E)
such other persons not within the intent  of  this
subsection  as  the commissioner may by regulation
or order determine.
    (4)  "Fraud",  "deceit", and "defraud" are not
limited to common-law deceit.
    (5)   "Guaranteed"   means  guaranteed  as  to
payment of principal, interest or dividends.
    (6)  "Investment  adviser"  means  any  person
who, for compensation, engages in the business  of
advising   others,   either  directly  or  through
publications or  writings,  as  to  the  value  of
securities  or as to the advisability of investing
in, purchasing, or selling securities, or who, for
compensation  and as a part of a regular business,
issues  or   promulgates   analyses   or   reports
concerning  securities.  "Investment adviser" does
not include (A) a state bank and trust company,  a
national  banking  association,  a savings bank, a
savings and loan association,  a  federal  savings
and  loan  association,  a credit union, a federal
credit union or a trust  company;  (B)  a  lawyer,
accountant, engineer, or teacher whose performance
of these services  is  solely  incidental  to  the
practice  of  his  profession; (C) a broker-dealer
whose performance  of  these  services  is  solely
incidental  to  the  conduct  of his business as a
broker-dealer  and   who   receives   no   special
compensation for them; (D) a publisher of any bona
fide newspaper,  news  magazine,  or  business  or
financial  publication  of  general,  regular, and
paid  circulation;  (E)  a  person  whose  advice,
analyses  or  reports  relate  only  to securities
exempted by subdivision (1) of subsection  (a)  of
section  36b-21;  (F)  any insurance company under
the supervision of the Insurance  Commissioner  or
any  affiliate  thereof,  as defined in subsection
(b) of section 38a-129, when providing services to
separate  accounts  of  that  insurance company or
registered  investment  companies  all  of   whose
shares  are owned by such insurance company or its
insurance company affiliates or  by  the  separate
accounts   of   that   insurance  company  or  its
insurance company affiliates;  (G)  a  person  (i)
whose   only  clients  in  this  state  are  other
investment advisers, broker-dealers, a state  bank
and trust company, a national banking association,
a savings bank, a savings and loan association,  a
federal  savings  and  loan  association, a credit
union, a federal credit union, a trust company, an
insurance   company,   an  investment  company  as
defined in the Investment Company Act of  1940,  a
pension   or   profit-sharing   trust,   or  other
financial  institution  or  institutional   buyer,
whether  acting  for itself or as trustee, or (ii)
who during the  course  of  the  preceding  twelve
months  has  had no more than five clients in this
state other than those specified  in  subparagraph
(i),  whether  or  not he or any of the persons to
whom business communications are directed is  then
present  in  this  state,  and  who  does not hold
himself out generally to the public in this  state
as   an  investment  adviser;  (H)  an  investment
advisory publication which during  the  course  of
the  preceding twelve months has no more than five
subscribers in this state and the publisher  files
a   written   notice   to  that  effect  with  the
commissioner;  and  (I)  such  other  persons  not
within  the  intent  of  this  subsection  as  the
commissioner may by regulation or order designate.
    (7)  "Investment  adviser  agent" includes any
individual, other than an investment adviser, or a
sole   proprietor   of   an   investment  adviser,
employed, appointed or authorized by an investment
adviser  to  solicit  business from any person for
such  investment  adviser,  within  or  from  this
state,  and  who  receives  compensation  or other
remuneration, directly  or  indirectly,  for  such
solicitation.  An  officer, partner or director of
an investment adviser, or an individual  occupying
a  similar status or performing similar functions,
is  an  investment  adviser  agent  only   if   he
otherwise comes within this definition.
    (8)  "Issuer"  means  any person who issues or
proposes to issue any security;  except  that  (A)
with   respect   to   certificates   of   deposit,
voting-trust  certificates,  or   collateral-trust
certificates,  or  with respect to certificates of
interest or shares in an unincorporated investment
trust  not  having a board of directors or persons
performing similar  functions  or  of  the  fixed,
restricted  management,  or  unit  type,  the term
"issuer" means the person  or  persons  performing
the  acts  and assuming the duties of depositor or
manager pursuant to the provisions of the trust or
other  agreement  or  instrument  under  which the
security  is  issued;  and  (B)  with  respect  to
certificates  of interest or participation in oil,
gas or mining titles or leases, or in payments out
of   production   under  such  titles  or  leases,
"issuer" means the owner of any such title, lease,
right  or  interest,  whether whole or fractional,
who creates or sells fractional interests therein.
    (9)   "Nonissuer"   means   not   directly  or
indirectly for the benefit of the issuer.
    (10)   "Person"   means   an   individual,   a
corporation,  a  limited  liability   company,   a
partnership,   an   association,   a   joint-stock
company,  a  trust  where  the  interests  of  the
beneficiaries  are  evidenced  by  a  security, an
unincorporated organization,  a  government  or  a
political subdivision of a government.
    (11)  (A)  "Sale"  or  "sell"  includes  every
contract  of  sale  of,  contract  to   sell,   or
disposition  of,  a  security  or  interest  in  a
security for value. (B) "Offer" or "offer to sell"
includes  every attempt or offer to dispose of, or
solicitation of an offer to  buy,  a  security  or
interest in a security for value. (C) Any security
given or delivered with, or as a bonus on  account
of,  any purchase of securities or any other thing
shall be conclusively  presumed  to  constitute  a
part  of  the subject of such purchase and to have
been  sold  for  value.  (D)   Nothing   in   this
subsection   shall  limit  or  diminish  the  full
meaning of the terms "sale",  "sell",  "offer"  or
"offer to sell" as construed by the courts of this
state. (E) A purported gift of assessable stock is
considered to involve an offer and sale. (F) Every
sale or offer of a warrant or right to purchase or
subscribe  to  another  security  of  the  same or
another issuer, as well as every sale or offer  of
a  security  which  gives  the holder a present or
future right or privilege to convert into  another
security   of  the  same  or  another  issuer,  is
considered  to  include  an  offer  of  the  other
security. (G) The terms defined in this subsection
do not include: (i) Any bona fide pledge or  loan;
(ii)  any  stock dividend, whether the corporation
distributing the dividend is  the  issuer  of  the
stock  or  not,  if  nothing  of value is given by
stockholders  for  the  dividend  other  than  the
surrender  of  a  right  to  a  cash  or  property
dividend when each stockholder may elect  to  take
the  dividend  in  cash  or  property or in stock;
(iii) any act incident to a class vote by security
holders  on  a  merger, exchange of securities for
securities,  consolidation,  reclassification   of
securities,  or sale of assets in consideration of
the issuance of securities or securities and  cash
of  another  person  other  than an individual; or
(iv) any security which is issued in exchange  for
one  or  more  bona  fide  outstanding securities,
claims or property interests, or  partly  in  such
exchange  and partly for cash, where the terms and
conditions  of  such  issuance  and  exchange  are
approved by any state or federal court.
    (12)  "Securities  Act  of  1933", "Securities
Exchange Act of  1934",  "Public  Utility  Holding
Company  Act  of 1935" and "Investment Company Act
of 1940" means the federal statutes of those names
as from time to time amended.
    (13)   "Security"   means   any  note,  stock,
treasury  stock,  bond,  debenture,  evidence   of
indebtedness,    certificate    of   interest   or
participation  in  any  profit-sharing  agreement,
interests   of   limited  partners  in  a  limited
partnership,     collateral-trust     certificate,
preorganization   certificate   or   subscription,
transferable    share,    investment     contract,
voting-trust  certificate,  certificate of deposit
for  a  security,  certificate  of   interest   or
participation  in  an  oil, gas or mining title or
lease or in payments out of production under  such
a  title or lease, or, in general, any interest or
instrument commonly known as a "security", or  any
certificate   of  interest  or  participation  in,
temporary or interim certificate for, receipt for,
guarantee  of, or warrant or right to subscribe to
or purchase, any of the foregoing. "Security" does
not  include  any insurance or endowment policy or
annuity contract issued by  an  insurance  company
which  is  subject  to regulation by the Insurance
Commissioner.
    (14)  "State"  means  any state, territory, or
possession of the United States, the  District  of
Columbia and Puerto Rico.
    (15)  "Investment  advisory publication" means
a  publication  distributed   and   published   at
periodic intervals wherein the publisher or any of
his   employees   specifically    recommends    to
subscribers   in   writing,   either  directly  or
indirectly,  the  advisability  of  investing  in,
purchasing   or  selling  specific  securities  or
specific categories of securities.
    (16)  "Branch office" means any location other
than the main office, identified by any  means  to
the  public, customers or clients as a location at
which  a  broker-dealer  or   investment   adviser
conducts   a  securities  or  investment  advisory
business. Branch office shall not  include  (A)  a
location   identified   solely   in   a  telephone
directory line listing or on a  business  card  or
letterhead if (i) the listing, card, or letterhead
also sets forth the address and  telephone  number
of  a  Connecticut  office of the broker-dealer or
investment   adviser   from   which    individuals
conducting  business from such identified location
are directly supervised, and (ii) no more than one
agent   or   investment  adviser  agent  transacts
business  on  behalf  of  the   broker-dealer   or
investment  adviser from such identified location,
or (B) any other location not within the intent of
this subsection as the commissioner may determine.
    (17)  "Blank  check company" means any company
that (A) devotes substantially all of its  efforts
to  establishing  a  new business in which planned
principal operations have not commenced  or,  that
has  commenced  planned  principal operations, but
has not derived significant revenue therefrom; and
(B)  has  no  specific business plan or purpose or
has indicated that its business plan is to  engage
in  a  merger  or acquisition with an unidentified
company or companies, or other entity or person.
    (18)  "Shell  company"  or  "dormant  company"
means any company which does not  pursue  nor  has
the  financial  capacity to pursue a business plan
or purpose.]
    (1)  "AGENT"  MEANS ANY INDIVIDUAL, OTHER THAN
A BROKER-DEALER, WHO REPRESENTS A BROKER-DEALER OR
ISSUER   IN  EFFECTING  OR  ATTEMPTING  TO  EFFECT
PURCHASES OR SALES OF SECURITIES. "AGENT" DOES NOT
INCLUDE  AN INDIVIDUAL WHO REPRESENTS AN ISSUER IN
(A) EFFECTING TRANSACTIONS IN A SECURITY  EXEMPTED
BY SUBDIVISION (1), (2), (3), (4), (6), (9), (10),
(11) OR (21) OF SUBSECTION (a) OF SECTION  36b-21,
AS   AMENDED  BY  SECTION  11  OF  THIS  ACT,  (B)
EFFECTING TRANSACTIONS EXEMPTED BY SUBSECTION  (b)
OF  SECTION  36b-21,  AS  AMENDED BY SECTION 11 OF
THIS ACT,  EXCEPT  FOR  TRANSACTIONS  EXEMPTED  BY
SUBDIVISIONS (9), (12) OR (13) OF SAID SUBSECTION,
(C)   EFFECTING   TRANSACTIONS    WITH    EXISTING
EMPLOYEES,  PARTNERS OR DIRECTORS OF THE ISSUER IF
NO COMMISSION OR OTHER  REMUNERATION  IS  PAID  OR
GIVEN  DIRECTLY  OR  INDIRECTLY FOR SOLICITING ANY
PERSON   IN   THIS   STATE,   OR   (D)   EFFECTING
TRANSACTIONS  IN  ANY COVERED SECURITY, EXCEPT FOR
COVERED SECURITIES WITHIN THE MEANING OF  SECTIONS
18(b)(2)  OR  18(b)(4)(D) OF THE SECURITIES ACT OF
1933. "AGENT" DOES NOT INCLUDE SUCH OTHER  PERSONS
NOT  WITHIN  THE  INTENT OF THIS SUBSECTION AS THE
COMMISSIONER MAY BY REGULATION OR ORDER DETERMINE.
A  GENERAL  PARTNER,  OFFICER  OR  DIRECTOR  OF  A
BROKER-DEALER OR ISSUER, OR A PERSON  OCCUPYING  A
SIMILAR STATUS OR PERFORMING SIMILAR FUNCTIONS, IS
AN AGENT ONLY IF HE OTHERWISE  COMES  WITHIN  THIS
DEFINITION  AND  ANY COMPENSATION THAT HE RECEIVES
IS DIRECTLY OR INDIRECTLY RELATED TO PURCHASES  OR
SALES OF SECURITIES.
    (2)  "ASSOCIATED PERSON" HAS THE MEANING GIVEN
TO THAT TERM IN SECTION 3(a)(21) OF THE SECURITIES
EXCHANGE ACT OF 1934.
    (3)  "BLANK  CHECK  COMPANY" MEANS ANY COMPANY
THAT (A) DEVOTES SUBSTANTIALLY ALL OF ITS  EFFORTS
TO  ESTABLISHING  A  NEW BUSINESS IN WHICH PLANNED
PRINCIPAL OPERATIONS HAVE NOT COMMENCED  OR,  THAT
HAS  COMMENCED  PLANNED  PRINCIPAL OPERATIONS, BUT
HAS NOT DERIVED SIGNIFICANT REVENUE THEREFROM; AND
(B)  HAS  NO  SPECIFIC BUSINESS PLAN OR PURPOSE OR
HAS INDICATED THAT ITS BUSINESS PLAN IS TO  ENGAGE
IN  A  MERGER  OR ACQUISITION WITH AN UNIDENTIFIED
COMPANY OR COMPANIES, OR OTHER ENTITY OR PERSON.
    (4)  "BRANCH  OFFICE" MEANS ANY LOCATION OTHER
THAN THE MAIN OFFICE, IDENTIFIED BY ANY  MEANS  TO
THE  PUBLIC, CUSTOMERS OR CLIENTS AS A LOCATION AT
WHICH  A  BROKER-DEALER  OR   INVESTMENT   ADVISER
CONDUCTS   A  SECURITIES  OR  INVESTMENT  ADVISORY
BUSINESS. "BRANCH OFFICE" DOES NOT INCLUDE  (A)  A
LOCATION   IDENTIFIED   SOLELY   IN   A  TELEPHONE
DIRECTORY LINE LISTING OR ON A  BUSINESS  CARD  OR
LETTERHEAD IF (i) THE LISTING, CARD, OR LETTERHEAD
ALSO SETS FORTH THE ADDRESS AND  TELEPHONE  NUMBER
OF  A  CONNECTICUT  OFFICE OF THE BROKER-DEALER OR
INVESTMENT   ADVISER   FROM   WHICH    INDIVIDUALS
CONDUCTING  BUSINESS FROM SUCH IDENTIFIED LOCATION
ARE DIRECTLY SUPERVISED, AND (ii) NO MORE THAN ONE
AGENT   OR   INVESTMENT  ADVISER  AGENT  TRANSACTS
BUSINESS  ON  BEHALF  OF  THE   BROKER-DEALER   OR
INVESTMENT  ADVISER FROM SUCH IDENTIFIED LOCATION,
OR (B) ANY OTHER LOCATION NOT WITHIN THE INTENT OF
THIS SUBSECTION AS THE COMMISSIONER MAY DETERMINE.
    (5)  "BROKER-DEALER"  MEANS ANY PERSON ENGAGED
IN  THE  BUSINESS  OF  EFFECTING  TRANSACTIONS  IN
SECURITIES  FOR  THE  ACCOUNT OF OTHERS OR FOR HIS
OWN ACCOUNT. "BROKER-DEALER" DOES NOT INCLUDE  (A)
AN  AGENT,  (B)  AN  ISSUER,  (C) A BANK AND TRUST
COMPANY, A NATIONAL BANKING ASSOCIATION, A SAVINGS
BANK,  A  SAVINGS  AND LOAN ASSOCIATION, A FEDERAL
SAVINGS AND LOAN ASSOCIATION, A  CREDIT  UNION,  A
FEDERAL  CREDIT  UNION,  OR A TRUST COMPANY, (D) A
PERSON WHO HAS NO PLACE OF BUSINESS IN THIS  STATE
IF   HE   EFFECTS   TRANSACTIONS   IN  THIS  STATE
EXCLUSIVELY WITH OR THROUGH (i) THE ISSUERS OF THE
SECURITIES  INVOLVED  IN  THE  TRANSACTIONS,  (ii)
OTHER BROKER-DEALERS, OR (iii) A  BANK  AND  TRUST
COMPANY, A NATIONAL BANKING ASSOCIATION, A SAVINGS
BANK, A SAVINGS AND LOAN  ASSOCIATION,  A  FEDERAL
SAVINGS  AND  LOAN  ASSOCIATION, A CREDIT UNION, A
FEDERAL  CREDIT  UNION,  A   TRUST   COMPANY,   AN
INSURANCE   COMPANY,   AN  INVESTMENT  COMPANY  AS
DEFINED IN THE INVESTMENT COMPANY ACT OF  1940,  A
PENSION   OR   PROFIT-SHARING   TRUST,   OR  OTHER
FINANCIAL  INSTITUTION  OR  INSTITUTIONAL   BUYER,
WHETHER  ACTING  FOR  ITSELF OR AS TRUSTEE, OR (E)
SUCH OTHER PERSONS NOT WITHIN THE INTENT  OF  THIS
SUBSECTION  AS  THE COMMISSIONER MAY BY REGULATION
OR ORDER DETERMINE.
    (6)  "COMMISSIONER"  MEANS THE COMMISSIONER OF
BANKING OR ANY PERSON APPOINTED OR  DESIGNATED  BY
THE COMMISSIONER OF BANKING TO ADMINISTER SECTIONS
36b-2 TO 36b-33, INCLUSIVE,  AS  AMENDED  BY  THIS
ACT.
    (7)  "COVERED  SECURITY" HAS THE MEANING GIVEN
TO THAT TERM IN SECTION 18(b)  OF  THE  SECURITIES
ACT OF 1933.
    (8)  "FRAUD",  "DECEIT"  AND "DEFRAUD" ARE NOT
LIMITED TO COMMON-LAW DECEIT.
    (9)   "GUARANTEED"   MEANS  GUARANTEED  AS  TO
PAYMENT OF PRINCIPAL, INTEREST OR DIVIDENDS.
    (10)  "INVESTMENT  ADVISER"  MEANS  ANY PERSON
WHO, FOR COMPENSATION, ENGAGES IN THE BUSINESS  OF
ADVISING   OTHERS,   EITHER  DIRECTLY  OR  THROUGH
PUBLICATIONS OR  WRITINGS,  AS  TO  THE  VALUE  OF
SECURITIES  OR AS TO THE ADVISABILITY OF INVESTING
IN, PURCHASING OR SELLING SECURITIES, OR WHO,  FOR
COMPENSATION  AND AS A PART OF A REGULAR BUSINESS,
ISSUES  OR   PROMULGATES   ANALYSES   OR   REPORTS
CONCERNING  SECURITIES.  "INVESTMENT ADVISER" DOES
NOT INCLUDE  (A)  A  BANK  AND  TRUST  COMPANY,  A
NATIONAL  BANKING  ASSOCIATION,  A SAVINGS BANK, A
SAVINGS AND LOAN ASSOCIATION,  A  FEDERAL  SAVINGS
AND  LOAN  ASSOCIATION,  A CREDIT UNION, A FEDERAL
CREDIT UNION OR A TRUST  COMPANY;  (B)  A  LAWYER,
ACCOUNTANT, ENGINEER, OR TEACHER WHOSE PERFORMANCE
OF THESE SERVICES  IS  SOLELY  INCIDENTAL  TO  THE
PRACTICE  OF  HIS  PROFESSION; (C) A BROKER-DEALER
WHOSE PERFORMANCE  OF  THESE  SERVICES  IS  SOLELY
INCIDENTAL  TO  THE  CONDUCT  OF HIS BUSINESS AS A
BROKER-DEALER  AND   WHO   RECEIVES   NO   SPECIAL
COMPENSATION FOR THEM; (D) A PUBLISHER OF ANY BONA
FIDE NEWSPAPER,  NEWS  MAGAZINE,  OR  BUSINESS  OR
FINANCIAL  PUBLICATION  OF  GENERAL,  REGULAR, AND
PAID  CIRCULATION;  (E)  A  PERSON  WHOSE  ADVICE,
ANALYSES  OR  REPORTS  RELATE  ONLY  TO SECURITIES
EXEMPTED BY SUBDIVISION (1) OF SUBSECTION  (a)  OF
SECTION  36b-21,  AS AMENDED BY SECTION 11 OF THIS
ACT;  (F)  ANY   INSURANCE   COMPANY   UNDER   THE
SUPERVISION  OF  THE INSURANCE COMMISSIONER OR ANY
AFFILIATE THEREOF, AS DEFINED IN SUBSECTION (b) OF
SECTION   38a-129,   WHEN  PROVIDING  SERVICES  TO
SEPARATE ACCOUNTS OF  THAT  INSURANCE  COMPANY  OR
REGISTERED   INVESTMENT  COMPANIES  ALL  OF  WHOSE
SHARES ARE OWNED BY SUCH INSURANCE COMPANY OR  ITS
INSURANCE  COMPANY  AFFILIATES  OR BY THE SEPARATE
ACCOUNTS  OF  THAT  INSURANCE   COMPANY   OR   ITS
INSURANCE  COMPANY  AFFILIATES; AND (G) SUCH OTHER
PERSONS NOT WITHIN THE INTENT OF  THIS  SUBSECTION
AS  THE  COMMISSIONER  MAY  BY REGULATION OR ORDER
DESIGNATE.
    (11)  "INVESTMENT  ADVISER AGENT" INCLUDES ANY
INDIVIDUAL, OTHER THAN AN INVESTMENT ADVISER, OR A
SOLE   PROPRIETOR   OF   AN   INVESTMENT  ADVISER,
EMPLOYED, APPOINTED OR AUTHORIZED BY AN INVESTMENT
ADVISER  TO  SOLICIT  BUSINESS FROM ANY PERSON FOR
SUCH  INVESTMENT  ADVISER,  WITHIN  OR  FROM  THIS
STATE,  AND  WHO  RECEIVES  COMPENSATION  OR OTHER
REMUNERATION, DIRECTLY  OR  INDIRECTLY,  FOR  SUCH
SOLICITATION.  AN  OFFICER, PARTNER OR DIRECTOR OF
AN INVESTMENT ADVISER, OR AN INDIVIDUAL  OCCUPYING
A  SIMILAR STATUS OR PERFORMING SIMILAR FUNCTIONS,
IS  AN  INVESTMENT  ADVISER  AGENT  ONLY   IF   HE
OTHERWISE COMES WITHIN THIS DEFINITION.
    (12)  "ISSUER"  MEANS ANY PERSON WHO ISSUES OR
PROPOSES TO ISSUE ANY SECURITY;  EXCEPT  THAT  (A)
WITH   RESPECT   TO   CERTIFICATES   OF   DEPOSIT,
VOTING-TRUST  CERTIFICATES,  OR   COLLATERAL-TRUST
CERTIFICATES,  OR  WITH RESPECT TO CERTIFICATES OF
INTEREST OR SHARES IN AN UNINCORPORATED INVESTMENT
TRUST  NOT  HAVING A BOARD OF DIRECTORS OR PERSONS
PERFORMING SIMILAR  FUNCTIONS  OR  OF  THE  FIXED,
RESTRICTED  MANAGEMENT,  OR  UNIT  TYPE,  "ISSUER"
MEANS THE PERSON OR PERSONS  PERFORMING  THE  ACTS
AND  ASSUMING  THE  DUTIES OF DEPOSITOR OR MANAGER
PURSUANT TO THE PROVISIONS OF THE TRUST  OR  OTHER
AGREEMENT  OR  INSTRUMENT UNDER WHICH THE SECURITY
IS ISSUED; AND (B) WITH RESPECT TO CERTIFICATES OF
INTEREST  OR  PARTICIPATION  IN OIL, GAS OR MINING
TITLES OR LEASES, OR IN PAYMENTS OUT OF PRODUCTION
UNDER  SUCH  TITLES  OR LEASES, "ISSUER" MEANS THE
OWNER OF ANY SUCH TITLE, LEASE, RIGHT OR INTEREST,
WHETHER  WHOLE OR FRACTIONAL, WHO CREATES OR SELLS
FRACTIONAL INTERESTS THEREIN.
    (13)   "NONISSUER"   MEANS   NOT  DIRECTLY  OR
INDIRECTLY FOR THE BENEFIT OF THE ISSUER.
    (14)   "PERSON"   MEANS   AN   INDIVIDUAL,   A
CORPORATION,  A  LIMITED  LIABILITY   COMPANY,   A
PARTNERSHIP,   AN   ASSOCIATION,   A   JOINT-STOCK
COMPANY,  A  TRUST  WHERE  THE  INTERESTS  OF  THE
BENEFICIARIES  ARE  EVIDENCED  BY  A  SECURITY, AN
UNINCORPORATED ORGANIZATION,  A  GOVERNMENT  OR  A
POLITICAL SUBDIVISION OF A GOVERNMENT.
    (15)  (A)  "SALE"  OR  "SELL"  INCLUDES  EVERY
CONTRACT  OF  SALE  OF,  CONTRACT  TO   SELL,   OR
DISPOSITION  OF,  A  SECURITY  OR  INTEREST  IN  A
SECURITY FOR VALUE. (B) "OFFER" OR "OFFER TO SELL"
INCLUDES  EVERY ATTEMPT OR OFFER TO DISPOSE OF, OR
SOLICITATION OF AN OFFER TO  BUY,  A  SECURITY  OR
INTEREST IN A SECURITY FOR VALUE. (C) ANY SECURITY
GIVEN OR DELIVERED WITH, OR AS A BONUS ON  ACCOUNT
OF,  ANY PURCHASE OF SECURITIES OR ANY OTHER THING
SHALL BE CONCLUSIVELY  PRESUMED  TO  CONSTITUTE  A
PART  OF  THE SUBJECT OF SUCH PURCHASE AND TO HAVE
BEEN  SOLD  FOR  VALUE.  (D)   NOTHING   IN   THIS
SUBSECTION   SHALL  LIMIT  OR  DIMINISH  THE  FULL
MEANING OF THE TERMS "SALE",  "SELL",  "OFFER"  OR
"OFFER TO SELL" AS CONSTRUED BY THE COURTS OF THIS
STATE. (E) A PURPORTED GIFT OF ASSESSABLE STOCK IS
CONSIDERED TO INVOLVE AN OFFER AND SALE. (F) EVERY
SALE OR OFFER OF A WARRANT OR RIGHT TO PURCHASE OR
SUBSCRIBE  TO  ANOTHER  SECURITY  OF  THE  SAME OR
ANOTHER ISSUER, AS WELL AS EVERY SALE OR OFFER  OF
A  SECURITY  WHICH  GIVES  THE HOLDER A PRESENT OR
FUTURE RIGHT OR PRIVILEGE TO CONVERT INTO  ANOTHER
SECURITY   OF  THE  SAME  OR  ANOTHER  ISSUER,  IS
CONSIDERED  TO  INCLUDE  AN  OFFER  OF  THE  OTHER
SECURITY. (G) THE TERMS DEFINED IN THIS SUBSECTION
DO NOT INCLUDE: (i) ANY BONA FIDE PLEDGE OR  LOAN;
(ii)  ANY  STOCK DIVIDEND, WHETHER THE CORPORATION
DISTRIBUTING THE DIVIDEND IS  THE  ISSUER  OF  THE
STOCK  OR  NOT,  IF  NOTHING  OF VALUE IS GIVEN BY
STOCKHOLDERS  FOR  THE  DIVIDEND  OTHER  THAN  THE
SURRENDER  OF  A  RIGHT  TO  A  CASH  OR  PROPERTY
DIVIDEND WHEN EACH STOCKHOLDER MAY ELECT  TO  TAKE
THE  DIVIDEND  IN  CASH  OR  PROPERTY OR IN STOCK;
(iii) ANY ACT INCIDENT TO A CLASS VOTE BY SECURITY
HOLDERS  ON  A  MERGER, EXCHANGE OF SECURITIES FOR
SECURITIES,  CONSOLIDATION,  RECLASSIFICATION   OF
SECURITIES,  OR SALE OF ASSETS IN CONSIDERATION OF
THE ISSUANCE OF SECURITIES OR SECURITIES AND  CASH
OF  ANOTHER  PERSON  OTHER  THAN AN INDIVIDUAL; OR
(iv) ANY SECURITY WHICH IS ISSUED IN EXCHANGE  FOR
ONE  OR  MORE  BONA  FIDE  OUTSTANDING SECURITIES,
CLAIMS OR PROPERTY INTERESTS, OR  PARTLY  IN  SUCH
EXCHANGE  AND PARTLY FOR CASH, WHERE THE TERMS AND
CONDITIONS  OF  SUCH  ISSUANCE  AND  EXCHANGE  ARE
APPROVED BY ANY STATE OR FEDERAL COURT.
    (16)  "SECURITIES  ACT  OF  1933", "SECURITIES
EXCHANGE ACT OF  1934",  "PUBLIC  UTILITY  HOLDING
COMPANY  ACT OF 1935", "INVESTMENT ADVISERS ACT OF
1940" AND "INVESTMENT COMPANY ACT  OF  1940"  MEAN
THE  FEDERAL STATUTES OF THOSE NAMES, AS FROM TIME
TO TIME AMENDED.
    (17)   "SECURITY"   MEANS   ANY  NOTE,  STOCK,
TREASURY  STOCK,  BOND,  DEBENTURE,  EVIDENCE   OF
INDEBTEDNESS,    CERTIFICATE    OF   INTEREST   OR
PARTICIPATION  IN  ANY  PROFIT-SHARING  AGREEMENT,
INTERESTS   OF   LIMITED  PARTNERS  IN  A  LIMITED
PARTNERSHIP,     COLLATERAL-TRUST     CERTIFICATE,
PREORGANIZATION   CERTIFICATE   OR   SUBSCRIPTION,
TRANSFERABLE    SHARE,    INVESTMENT     CONTRACT,
VOTING-TRUST  CERTIFICATE,  CERTIFICATE OF DEPOSIT
FOR  A  SECURITY,  CERTIFICATE  OF   INTEREST   OR
PARTICIPATION  IN  AN  OIL, GAS OR MINING TITLE OR
LEASE OR IN PAYMENTS OUT OF PRODUCTION UNDER  SUCH
A  TITLE OR LEASE, OR, IN GENERAL, ANY INTEREST OR
INSTRUMENT COMMONLY KNOWN AS A "SECURITY", OR  ANY
CERTIFICATE   OF  INTEREST  OR  PARTICIPATION  IN,
TEMPORARY OR INTERIM CERTIFICATE FOR, RECEIPT FOR,
GUARANTEE  OF, OR WARRANT OR RIGHT TO SUBSCRIBE TO
OR PURCHASE, ANY OF THE FOREGOING. "SECURITY" DOES
NOT  INCLUDE  ANY INSURANCE OR ENDOWMENT POLICY OR
ANNUITY CONTRACT ISSUED BY  AN  INSURANCE  COMPANY
WHICH  IS  SUBJECT  TO REGULATION BY THE INSURANCE
COMMISSIONER.
    (18)  "SHELL  COMPANY"  OR  "DORMANT  COMPANY"
MEANS ANY COMPANY WHICH DOES NOT  PURSUE  NOR  HAS
THE  FINANCIAL  CAPACITY TO PURSUE A BUSINESS PLAN
OR PURPOSE.
    (19)  "STATE"  MEANS  ANY  STATE, TERRITORY OR
POSSESSION OF THE UNITED STATES, THE  DISTRICT  OF
COLUMBIA AND PUERTO RICO.
    Sec.  2. Section 36b-5 of the general statutes
is repealed and the following  is  substituted  in
lieu thereof:
    (a)  No  person  who  directly  or  indirectly
receives compensation or  other  remuneration  for
advising   another  person  as  to  the  value  of
securities or  their  purchase  or  sale,  whether
through  the  issuance  of  analyses or reports or
otherwise, shall: (1) Employ any device, scheme or
artifice to defraud the other person; (2) make any
untrue statement of a material  fact  or  omit  to
state  a  material fact necessary in order to make
the statements made, in light of the circumstances
under  which they are made, not misleading; or (3)
engage in any act, practice or course of  business
which  operates  or  would  operate  as a fraud or
deceit upon such other person.
    (b)  (1)  It  is  unlawful  for any investment
adviser THAT  IS  REGISTERED  OR  REQUIRED  TO  BE
REGISTERED   UNDER   SECTIONS   36b-2  TO  36b-33,
INCLUSIVE, AS AMENDED BY THIS ACT, to have,  enter
into,  extend  or  renew  any  investment advisory
contract, whether written or oral,  unless  it  is
signed  by  the client or clients and discloses in
writing: (A) That the investment adviser shall not
be  compensated on the basis of a share of capital
gains upon or capital appreciation of the funds or
any  portion  of the funds of the client; (B) that
an assignment of the contract may not be  made  by
the  investment adviser without the consent of the
other  party  to  the  contract;  (C)   that   the
investment adviser, if a partnership, shall notify
the other party to the contract of any  change  in
the   membership   of  the  partnership  within  a
reasonable time after  the  change;  (D)  the  fee
arrangement between the investment adviser and the
client or clients; and (E) the services which  the
investment  adviser  will render. [; provided that
investment  advisory  contracts  with  clients  in
effect   on  October  1,  1982,  which  would  not
otherwise be in compliance with subparagraphs  (D)
and (E) of this subdivision may continue in effect
until October 1, 1983.] (2)  Subparagraph  (A)  of
subdivision   (1)  of  this  subsection  does  not
prohibit an  investment  advisory  contract  which
provides  for compensation based upon the total or
net asset value of a fund averaged over a definite
period  or  as  of definite dates or taken as of a
definite  date.  (3)  "Assignment",  as  used   in
subparagraph   (B)  of  subdivision  (1)  of  this
subsection,  includes  any  direct   or   indirect
transfer   or   hypothecation   of  an  investment
advisory  contract  by  the  assignor  or  of  the
beneficial ownership of a controlling block of the
assignor's  outstanding  voting  securities  by  a
security  holder  of  the  assignor,  but,  if the
investment adviser is a partnership, an assignment
of   an   investment   advisory  contract  is  not
considered to result from the death or  withdrawal
of  a  minority  of  the members of the investment
adviser having only a  minority  interest  in  the
business  of  the  investment adviser, or from the
admission to the investment adviser of one or more
members  who,  after  admission,  will  be  only a
minority of the  members  and  will  have  only  a
minority interest in the business.
    (c)  It is unlawful for any investment adviser
THAT IS REGISTERED OR REQUIRED  TO  BE  REGISTERED
UNDER  SECTIONS  36b-2  TO  36b-33,  INCLUSIVE, AS
AMENDED BY THIS ACT, to take or  have  custody  of
any  securities or funds of any client if: (1) The
commissioner  by   [rule]   REGULATION   prohibits
custody;  or  (2)  in  the  absence  of  [rule]  A
REGULATION, the investment adviser fails to notify
the commissioner that he has or may have custody.
    [(d)  Notwithstanding  any other provisions of
sections 36b-2 to  36b-33,  inclusive,  investment
advisory contracts with clients in effect on April
20,  1978,  which  would  not  otherwise   be   in
compliance  with  subsections  (b) and (c) of this
section, may continue  in  effect  until  July  1,
1979.]
    [(e)]  (d) Subparagraph (A) of subdivision (1)
of subsection (b) of this  section  shall  not  be
construed  to  prohibit performance fees permitted
and determined in accordance with Section  205  of
the [Federal] Investment Advisers Act of 1940, [as
amended,] and any rules or regulations adopted  in
accordance with said act.
    [(f)]   (e)   No   person   who   directly  or
indirectly   receives   compensation   or    other
remuneration  for  soliciting advisory business on
behalf of a  person  subject  to  the  prohibition
contained in subsection (a) of this section shall,
in connection with such solicitation:  (1)  Employ
any  device,  scheme  or  artifice to defraud; (2)
make any untrue statement of a  material  fact  or
omit  to  state a material fact necessary in order
to make the  statements  made,  in  light  of  the
circumstances  under  which  they  are  made,  not
misleading; or (3) engage in any act, practice  or
course of business which operates or would operate
as a fraud or deceit.
    [(g)]   (f)   No   person   who   directly  or
indirectly   receives   compensation   or    other
remuneration  for:  (1) Advising another person as
to the value of securities or  their  purchase  or
sale,  whether through the issuance of analyses or
reports or otherwise; or (2)  soliciting  advisory
business  on  behalf  of  a  person subject to the
prohibition contained in subsection  (a)  of  this
section shall engage in any dishonest or unethical
practice in connection with the rendering of  such
advice or in connection with such solicitation.
    Sec.  3. Section 36b-6 of the general statutes
is repealed and the following  is  substituted  in
lieu thereof:
    (a)  No person shall transact business in this
state as a broker-dealer unless he  is  registered
under  sections  36b-2  to  36b-33,  inclusive, AS
AMENDED BY THIS ACT. No individual shall  transact
business  as  an  agent in this state unless he is
(1) registered as an agent of the broker-dealer or
issuer  whom  he  represents  in  transacting such
business  OR  (2)   AN   ASSOCIATED   PERSON   WHO
REPRESENTS    A    BROKER-DEALER    IN   EFFECTING
TRANSACTIONS DESCRIBED IN SUBDIVISIONS (2) AND (3)
OF SECTION 15(h) OF THE SECURITIES EXCHANGE ACT OF
1934.
    (b)  No [broker-dealer or] issuer shall employ
an agent unless such  agent  is  registered  under
sections 36b-2 to 36b-33, inclusive, AS AMENDED BY
THIS ACT. NO BROKER-DEALER SHALL EMPLOY  AN  AGENT
UNLESS SUCH AGENT IS (1) REGISTERED UNDER SECTIONS
36b-2 TO 36b-33, INCLUSIVE,  AS  AMENDED  BY  THIS
ACT,  OR (2) AN ASSOCIATED PERSON WHO REPRESENTS A
BROKER-DEALER IN EFFECTING TRANSACTIONS  DESCRIBED
IN  SUBDIVISIONS  (2)  AND (3) OF SECTION 15(h) OF
THE  SECURITIES  EXCHANGE   ACT   OF   1934.   The
registration  of  an agent is not effective during
any period  when  he  is  not  associated  with  a
particular  broker-dealer  registered  under  said
sections or a particular  issuer.  When  an  agent
begins   or   terminates   a   connection  with  a
broker-dealer or issuer, or begins  or  terminates
those activities which make him an agent, both the
agent  and  the  broker-dealer  or  issuer   shall
promptly notify the commissioner.
    (c)  No  person  shall transact business as an
investment adviser, within  or  from  this  state,
unless  registered  as such by the commissioner as
provided in sections 36b-2 to  36b-33,  inclusive,
AS  AMENDED  BY  THIS ACT, OR EXEMPTED PURSUANT TO
SUBSECTION (e)  OF  THIS  SECTION.  No  individual
shall  transact  business as an investment adviser
agent, within or from this  state,  unless  he  is
registered  as  an investment adviser agent of the
investment adviser for whom he acts in transacting
such  business. No investment adviser shall engage
an investment adviser agent unless such investment
adviser  agent  is registered under said sections.
The registration of an investment adviser agent is
not  effective  during  any  period when he is not
associated with a particular  investment  adviser.
[registered   under   said   sections.]   When  an
investment adviser agent begins  or  terminates  a
connection  with  an  investment adviser, both the
investment  adviser  agent  and   the   investment
adviser shall promptly notify the commissioner. If
an investment adviser or investment adviser  agent
provides  such  notice, such investment adviser or
investment adviser agent shall not be  liable  for
the failure of the other to give such notice.
    (d)  No  broker-dealer  or  investment adviser
shall transact business from any place of business
located  within  this  state  unless that place of
business is registered as a branch office with the
commissioner   pursuant  to  this  subsection.  An
application for branch office  registration  shall
be  made  on  forms prescribed by the commissioner
and shall be filed with him, with a  nonrefundable
fee  of  one  hundred dollars per branch office. A
broker-dealer or investment adviser shall promptly
notify   the   commissioner  in  writing  if  such
broker-dealer or investment adviser (1) engages  a
new  manager at a branch office in this state, (2)
acquires a branch office of another  broker-dealer
or  investment  adviser  in  this  state,  or  (3)
relocates a branch office in this  state.  In  the
case of a branch office acquisition or relocation,
the broker-dealer or investment adviser shall  pay
to  the  commissioner  an additional nonrefundable
fee of one hundred  dollars.  Each  registrant  or
applicant for branch office registration shall pay
the actual cost, as determined by the commissioner
of  any  reasonable  investigation  or examination
made of such registrant  or  applicant  by  or  on
behalf of the commissioner.
    (e)  THE  FOLLOWING  INVESTMENT  ADVISERS  ARE
EXEMPTED FROM THE REGISTRATION REQUIREMENTS  UNDER
SUBSECTION  (c)  OF  THIS  SECTION: ANY INVESTMENT
ADVISER THAT (1) IS REGISTERED OR REQUIRED  TO  BE
REGISTERED  UNDER  SECTION  203  OF THE INVESTMENT
ADVISERS ACT OF 1940; (2)  IS  EXCEPTED  FROM  THE
DEFINITION  OF  INVESTMENT  ADVISER  UNDER SECTION
202(a)(11) OF THE INVESTMENT ADVISERS ACT OF 1940;
OR (3) HAS NO PLACE OF BUSINESS IN THIS STATE AND,
DURING THE PRECEDING TWELVE  MONTHS,  HAS  HAD  NO
MORE  THAN  FIVE CLIENTS WHO ARE RESIDENTS OF THIS
STATE.  ANY   INVESTMENT   ADVISER   CLAIMING   AN
EXEMPTION  PURSUANT  TO  SUBDIVISION (1) OR (2) OF
THIS SUBSECTION THAT  IS  NOT  OTHERWISE  EXCLUDED
UNDER SUBSECTION (10) OF SECTION 36b-3, AS AMENDED
BY SECTION 1 OF THIS ACT, SHALL  FIRST  FILE  WITH
THE  COMMISSIONER  A  NOTICE OF EXEMPTION TOGETHER
WITH A CONSENT TO SERVICE OF PROCESS  AS  REQUIRED
BY SUBSECTION (g) OF SECTION 36b-33, AS AMENDED BY
SECTION 14 OF THIS ACT. THE  NOTICE  OF  EXEMPTION
SHALL CONTAIN SUCH INFORMATION AS THE COMMISSIONER
MAY  REQUIRE  AND  SHALL  BE  ACCOMPANIED   BY   A
NONREFUNDABLE  FEE  OF  TWO HUNDRED FIFTY DOLLARS.
SUCH NOTICE OF  EXEMPTION  SHALL  BE  VALID  UNTIL
DECEMBER  THIRTY-FIRST  OF  THE  CALENDAR  YEAR IN
WHICH IT  WAS  FIRST  FILED  AND  MAY  BE  RENEWED
ANNUALLY   THEREAFTER   UPON  SUBMISSION  OF  SUCH
INFORMATION  AS  THE  COMMISSIONER   MAY   REQUIRE
TOGETHER  WITH  A NONREFUNDABLE FEE OF ONE HUNDRED
FIFTY DOLLARS. IF ANY INVESTMENT ADVISER  THAT  IS
EXEMPTED FROM REGISTRATION PURSUANT TO SUBDIVISION
(1) OR (2) OF THIS SUBSECTION FAILS OR REFUSES  TO
PAY  ANY  FEE  REQUIRED  BY  THIS  SUBSECTION, THE
COMMISSIONER MAY REQUIRE SUCH  INVESTMENT  ADVISER
TO  REGISTER  PURSUANT  TO  SUBSECTION (c) OF THIS
SECTION. FOR PURPOSES OF THIS SUBSECTION, A  DELAY
IN  THE  PAYMENT  OF A FEE OR AN UNDERPAYMENT OF A
FEE  WHICH  IS   PROMPTLY   REMEDIED   SHALL   NOT
CONSTITUTE A FAILURE OR REFUSAL TO PAY SUCH FEE.
    [(e)  A  registered]  (f) ANY broker-dealer or
investment adviser ceasing to transact business at
any  office  in  this  state shall, in addition to
providing written notice to the commissioner prior
to  the  termination  of business activity at that
office,  (1)  provide  written  notice   to   each
customer  or  client  serviced  by  such office at
least ten business days prior to  the  termination
of   business  activity  at  that  office  or  (2)
demonstrate to the commissioner, in  writing,  the
reasons  why  such  notice to customers or clients
cannot be provided within the time prescribed.  If
the  commissioner  finds that the broker-dealer or
investment  adviser  cannot  provide   notice   to
customers  or  clients  at least ten business days
prior to the termination of business activity, the
commissioner   may  exempt  the  broker-dealer  or
investment adviser from giving  such  notice.  The
commissioner  shall  act  upon  a request for such
exemption within five business days following  his
receipt of the written request for such exemption.
The notice to customers or clients  shall  contain
the  following  information:  The date and reasons
why  business  activity  will  terminate  at   the
office;   if  applicable,  a  description  of  the
procedure the customer or  client  may  follow  to
maintain  the  customer's  account  at  any  other
office of the broker-dealer or investment adviser;
the  procedure  for transferring the customer's or
client's  account  to  another  broker-dealer   or
investment  adviser;  and the procedure for making
delivery to the customer or client of any funds or
securities held by the broker-dealer or investment
adviser.
    [(f)  A  registered]  (g) ANY broker-dealer or
investment adviser ceasing to transact business at
any  office in this state as a result of executing
an agreement and plan  of  merger  or  acquisition
shall  provide  written notice to the commissioner
and to each customer or client  serviced  by  such
office  not  later  than  the  date such merger or
acquisition is completed. The notice  provided  to
each   customer   or   client  shall  contain  the
information specified in subsection [(e)]  (f)  of
this section.
    [(g)  A  registered]  (h) ANY broker-dealer or
investment adviser ceasing to transact business at
any  office  in  this  state  as  a  result of the
commencement of a bankruptcy  proceeding  by  such
broker-dealer   or  investment  adviser  or  by  a
creditor or creditors  of  such  broker-dealer  or
investment  adviser  shall  immediately  upon  the
filing of a petition with  the  bankruptcy  court,
provide  written  notice  to the commissioner. The
commissioner shall determine the time  and  manner
in which notice shall be provided to each customer
or client serviced by such office.
    Sec.  4. Section 36b-7 of the general statutes
is repealed and the following  is  substituted  in
lieu thereof:
    A   broker-dealer,   agent,   [or]  investment
adviser or investment adviser agent may obtain  an
initial or renewal registration by filing with the
commissioner   or   other   depository   as    the
commissioner  may by regulation or order designate
an application together with a consent to  service
of  process  pursuant to subsection (g) of section
36b-33, AS AMENDED BY SECTION 14 OF THIS ACT.  The
application  shall contain such information as the
commissioner may require.
    Sec.  5. Section 36b-9 of the general statutes
is repealed and the following  is  substituted  in
lieu thereof:
    [Each]  THE COMMISSIONER MAY REQUIRE THAT EACH
application for registration of a broker-dealer or
investment  adviser  [shall]  be  accompanied by a
true and correct statement of financial condition,
in  such  form  and  containing  such  data as the
commissioner  may  require.  Such   statement   of
financial  condition  shall  be sworn to, before a
person  qualified  to  administer  oaths,  by  the
applicant,  and shall state that the alleged facts
therein contained are true to his  own  knowledge.
If  such  applicant  is  a  partnership, such oath
shall be made by a general partner  thereof,  and,
if  such  applicant is a corporation or other form
of association, such oath  shall  be  made  by  an
executive   officer  thereof.  Such  statement  of
financial   condition   shall   be   kept   in   a
confidential  file  and  shall  not be open to the
public.
    Sec.   6.   Section   36b-13  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  Each person registered as a broker-dealer
or investment adviser may renew such  registration
for  a  one-year  period  not  later than December
thirty-first  of  each  calendar  year  by  making
application   [on   a  form]  IN  SUCH  MANNER  AS
prescribed  by  the  commissioner.  The  fee   for
renewal   of   registration  for  each  registered
broker-dealer or investment adviser shall  be  one
hundred  fifty  dollars  per  renewal application,
nonrefundable, payable at the time of renewal, and
shall  be  submitted,  together  with  the renewal
application, to the  commissioner  or  any  person
designated  in  writing  by  the  commissioner  to
collect such fee on his behalf.  [Each  registered
broker-dealer  or  registered  investment  adviser
whose registration expires on June 30, 1983, shall
pay the commissioner a renewal fee of seventy-five
dollars for the period ending December  31,  1983,
and   any   registration  renewal  effected  after
December 31, 1983, shall be effected in accordance
with this section.]
    (b)  Each  person  registered  as  an agent or
investment   adviser   agent   may   renew    such
registration  for  a  one-year  period by December
thirty-first  of  each  calendar  year  by  making
application   [on   a  form]  IN  SUCH  MANNER  AS
prescribed  by  the  commissioner.  The  fee   for
renewal of registration for each person registered
as an agent or investment adviser agent  shall  be
[forty]  FIFTY  dollars, nonrefundable, payable at
the time  of  renewal,  and  shall  be  submitted,
together  with  the  renewal  application,  to the
commissioner or any person designated  in  writing
by  the  commissioner  to  collect such fee on his
behalf.  [Each  registered  agent  or   registered
investment   adviser   agent   whose  registration
expires  on  June  30,   1983,   shall   pay   the
commissioner  a renewal fee of fifteen dollars for
the period  ending  December  31,  1983,  and  any
renewal  registration  effected after December 31,
1983, shall be effected in  accordance  with  this
section.]
    (c)   Each  registrant  or  person  requesting
renewal of a registration  shall  pay  the  actual
cost,  as  determined  by the commissioner, of any
reasonable investigation or  examination  made  of
such person by or on behalf of the commissioner.
    Sec.  7.  Subsection  (a) of section 36b-14 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (a)   Every   registered   broker-dealer   and
investment  adviser  shall  make  and  keep   such
accounts, correspondence, memoranda, papers, books
and  other  records   as   the   commissioner   by
regulation  prescribes.  All  records  so required
shall be preserved for [three years  unless]  SUCH
PERIOD   AS   the   commissioner   by   regulation
prescribes. [otherwise  for  particular  types  of
records.] Such records may be stored on microfilm,
microfiche or on  an  electronic  data  processing
system  or  similar  system  utilizing an internal
memory device provided that a printed copy of  any
such record is immediately accessible.
    Sec.   8.   Section   36b-16  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    No  person shall offer or sell any security in
this state  unless  (1)  it  is  registered  under
sections  36b-2  to  36b-33,  inclusive,  [or]  AS
AMENDED  BY  THIS  ACT,  (2)   the   security   or
transaction  is  exempted under section 36b-21, AS
AMENDED BY SECTION 11 OF  THIS  ACT,  OR  (3)  THE
SECURITY  IS  A  COVERED  SECURITY  PROVIDED  SUCH
PERSON COMPLIES WITH ANY  APPLICABLE  REQUIREMENTS
IN SUBSECTIONS (c), (d) AND (e) OF SECTION 36b-21,
AS AMENDED BY SECTION 11 OF THIS ACT.
    Sec.   9.   Section   36b-19  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  A  registration statement may be filed by
the issuer, any other person on whose  behalf  the
offering   is   to   be   made   or  a  registered
broker-dealer.
    (b)   Every   person  [filing  a  registration
statement relating to either a security issued  by
a  face-amount certificate company or a redeemable
security issued by an open-end management  company
or  unit  investment  trust,  as  those  terms are
defined in the Investment  Company  Act  of  1940,
shall  pay  a  nonrefundable  filing  fee  of five
hundred dollars for registration  by  coordination
and  qualification.  All  other  persons] filing a
registration   statement   for   registration   by
coordination   and   qualification   shall  pay  a
nonrefundable filing fee of one-tenth of  one  per
cent  of  the  maximum aggregate offering price of
securities to be offered in this state,  such  fee
not  to  exceed  fifteen hundred dollars nor to be
less than three hundred dollars.
    (c)   Every   registration   statement   shall
specify  (1)  the  amount  of  securities  to   be
offered;  (2)  the  states in which a registration
statement or similar document in  connection  with
the  offering  has been or is to be filed; (3) the
name of  any  broker-dealer  or  agent  of  issuer
registered  to do business under sections 36b-2 to
36b-33, inclusive, AS AMENDED BY THIS ACT, who may
offer  the  securities  in this state; and (4) any
adverse order,  judgment,  or  decree  entered  in
connection  with  the  offering  by the regulatory
authorities in each state or by any court  or  the
Securities and Exchange Commission.
    (d)  Any  document  filed under sections 36b-2
to 36b-33, inclusive, AS AMENDED BY THIS ACT, or a
predecessor  act  within  five years preceding the
filing  of  a  registration   statement   may   be
incorporated  by  reference  in  the  registration
statement to  the  extent  that  the  document  is
currently accurate.
    (e)  The  commissioner  may  by  regulation or
otherwise permit  the  omission  of  any  item  of
information  or  document  from  any  registration
statement.
    (f)  In  the case of a nonissuer distribution,
information may  not  be  required  under  section
36b-18 or subsection (j) of this section unless it
is known to the  person  filing  the  registration
statement  or  to  the persons on whose behalf the
distribution is to be made, or can be furnished by
them without unreasonable effort or expense.
    (g)  The  commissioner  may  by  regulation or
order require as a condition  of  registration  by
qualification   or   coordination   (1)  that  any
security issued within the past three years or  to
be  issued  to  a  promoter  for  a  consideration
substantially different from the  public  offering
price,  or to any person for a consideration other
than cash, be deposited in escrow;  and  (2)  that
the  proceeds  from  the  sale  of  the registered
security in this  state  be  impounded  until  the
issuer  receives  a specified amount from the sale
of the security either in this state or elsewhere.
The   commissioner  may  by  regulation  or  order
determine  the  conditions  of   any   escrow   or
impounding  required  hereunder,  but  he  may not
reject a depository solely because of location  in
another state.
    (h)  The  commissioner  may  by  regulation or
order require as a condition of registration  that
any   security   registered  by  qualification  or
coordination be sold only on a specified  form  of
subscription or sale contract and that a signed or
conformed copy of each contract be filed with  the
commissioner  or  preserved  for  any period up to
three years specified in the regulation or order.
    (i)  Every registration statement is effective
for one  year  from  its  effective  date,  except
during  the  time  a stop order is in effect under
section 36b-20, AS AMENDED BY SECTION 10  OF  THIS
ACT.  All outstanding securities of the same class
as a registered  security  are  considered  to  be
registered   for  the  purpose  of  any  nonissuer
transaction  (1)  so  long  as  the   registration
statement   is   effective  and  (2)  between  the
thirtieth day after the entry of  any  stop  order
suspending  or  revoking  the effectiveness of the
registration statement under  section  36b-20,  AS
AMENDED   BY  SECTION  10  OF  THIS  ACT,  if  the
registration statement did not relate in whole  or
in  part  to a nonissuer distribution and one year
from  the  effective  date  of  the   registration
statement.  A  registration  statement  may not be
withdrawn for one year from its effective date  if
any  securities of the same class are outstanding;
provided,  if  within  such  one-year  period  the
security    or   transaction   covered   by   such
registration statement  becomes  eligible  for  an
exemption   from  registration,  the  registration
statement shall be terminated if the  commissioner
is notified in writing within such one-year period
of  the  exempt  status   of   the   security   or
transaction.   A  registration  statement  may  be
withdrawn otherwise only in the discretion of  the
commissioner.
    (j)  So  long  as  a registration statement is
effective, the commissioner may by  regulation  or
order   require   the   person   who   filed   the
registration statement to file  reports  not  more
often  than  quarterly, to keep reasonably current
the  information  contained  in  the  registration
statement  and  to  disclose  the  progress of the
offering.
    [(k)  A  registration  statement relating to a
security  issued  by  a  face-amount   certificate
company  or  unit investment trust, as those terms
are defined in the federal Investment Company  Act
of  1940, shall continue in force and effect for a
period of one year from the date of effectiveness,
without  limitation  as  to  number  of  shares or
aggregate   amount.   A   registration   statement
relating  to  a  redeemable  security issued by an
open-end  management  company,  as  that  term  is
defined  in  the federal Investment Company Act of
1940, shall continue in force  and  effect  for  a
period  of  two  months  following  the end of the
applicant's   current   fiscal    year,    without
limitation as to the number of shares or aggregate
amount. A registration  statement  relating  to  a
security  issued  by  a  unit  investment trust or
face-amount certificate company may be renewed  by
the  applicant by filing with the commissioner not
earlier than thirty days nor later than five  days
prior  to the date upon which such registration or
renewal registration would expire, a nonrefundable
renewal  fee  of  five  hundred  dollars.  Such  a
renewal becomes effective when the commissioner so
orders.  A  registration  statement  relating to a
security issued by an open-end management  company
may be renewed by the applicant by filing with the
commissioner, not later than two months  following
the   end   of  the  applicant's  fiscal  year,  a
nonrefundable renewal fee of five hundred dollars.
Such   a   renewal   becomes  effective  when  the
commissioner so orders.]
    [(l)]  (k)  When any securities have been sold
without compliance with the provisions of  section
36b-16,  AS  AMENDED BY SECTION 8 OF THIS ACT, any
person may apply in writing on forms designated by
the   commissioner   for   the   registration   by
qualification   of   such   securities.   If   the
commissioner   finds   as   the   result   of   an
investigation that no person has  been  defrauded,
prejudiced  or  damaged  by  the  prior failure to
effect a registration, the commissioner may permit
such  securities to be registered upon the payment
of fifty dollars plus the fees prescribed in  this
section.  Such registration by qualification under
this subsection shall not relieve anyone  who  has
violated   any  provision  of  sections  36b-2  to
36b-33, inclusive, AS AMENDED BY  THIS  ACT,  from
prosecution hereunder.
    Sec.  10.  Subsection (a) of section 36b-20 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (a)  The  commissioner  may issue a stop order
denying  effectiveness  to,   or   suspending   or
revoking  the  effectiveness  of, any registration
statement if he finds (1) that the order is in the
public interest and (2) that: (A) The registration
statement as of its effective date or  as  of  any
earlier  date  in  the  case  of  an order denying
effectiveness, [or any renewal registration  under
subsection  (k)  of  section  36b-19,  as  of  its
effective date,] or any  report  under  subsection
(j)  of section 36b-19, AS AMENDED BY SECTION 9 OF
THIS ACT, is incomplete in any material respect or
contains  any statement which was, in the light of
the circumstances under which it was  made,  false
or  misleading  with respect to any material fact;
(B) any provision of  sections  36b-2  to  36b-33,
inclusive,   AS   AMENDED  BY  THIS  ACT,  or  any
regulation, order or  condition  lawfully  imposed
under said sections has been wilfully violated, in
connection with the offering, by  (i)  the  person
filing   the   registration  statement,  (ii)  the
issuer, any partner, officer or  director  of  the
issuer,  any  person occupying a similar status or
performing  similar  functions,  or   any   person
directly  or  indirectly controlling or controlled
by the issuer,  provided  the  person  filing  the
registration  statement  is directly or indirectly
controlled by or acting for the issuer,  or  (iii)
any  underwriter;  (C)  the security registered or
sought to be  registered  is  the  subject  of  an
administrative  stop  order  or similar order or a
permanent or temporary injunction of any court  of
competent  jurisdiction  entered  under  any other
federal or state act applicable to  the  offering;
except  the  commissioner  (i) may not institute a
proceeding  against  an   effective   registration
statement  under  this  subparagraph more than one
year from the date  of  the  order  or  injunction
relied  on,  and (ii) may not enter an order under
this subparagraph on the  basis  of  an  order  or
injunction  entered  under  any  other  state  act
unless that order or injunction was based on facts
which  would  currently  constitute a ground for a
stop order under this section;  (D)  the  issuer's
enterprise or method of business includes or would
include  activities  which   are   illegal   where
performed;  (E)  the offering has worked or tended
to work  a  fraud  upon  purchasers  or  would  so
operate;  (F)  the  offering  has been or would be
made with unreasonable  amounts  of  underwriters'
and   sellers'  discounts,  commissions  or  other
compensation,    or    promoters'    profits    or
participation, or unreasonable amounts or kinds of
options; (G) when  a  security  is  sought  to  be
registered  by  coordination,  there  has  been  a
failure to comply with the undertaking required by
subdivision  (4)  of  subsection  (b)  of  section
36b-17; (H) the applicant or registrant has failed
to pay the proper filing fee; but the commissioner
may enter only a denial order  under  this  clause
and  he  shall  vacate  any  such  order  when the
deficiency has been corrected; or (I)  the  issuer
is a blank check company. The commissioner may not
institute  a  stop  order  proceeding  against  an
effective registration statement on the basis of a
fact  or  transaction  known  to  him   when   the
registration statement became effective unless the
proceeding is instituted within one hundred eighty
days  of  the  effective date of such registration
statement.
    Sec.   11.   Section  36b-21  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  The  following  securities  are  exempted
from sections 36b-16, AS AMENDED BY SECTION  8  OF
THIS  ACT, and 36b-22, AS AMENDED BY SECTION 12 OF
THIS ACT: (1) Any  security  including  a  revenue
obligation  issued  or  guaranteed  by  the United
States, any state, any political subdivision of  a
state,   or  any  agency  or  corporate  or  other
instrumentality of one or more of  the  foregoing;
or  any  certificate  of  deposit  for  any of the
foregoing; (2) any security issued  or  guaranteed
by  Canada,  any  Canadian province, any political
subdivision of any such province,  any  agency  or
corporate  or other instrumentality of one or more
of the foregoing, or any other foreign  government
with  which  the United States currently maintains
diplomatic   relations,   if   the   security   is
recognized  as a valid obligation by the issuer or
guarantor;  (3)  any  security   issued   by   and
representing  an  interest  in  or  a  debt of, or
guaranteed by, any bank organized under  the  laws
of   the  United  States,  or  any  bank,  savings
institution  or  trust   company   organized   and
supervised  under  the  laws of any state; (4) any
security issued by and representing an interest in
or  a  debt  of,  or  guaranteed  by,  any federal
savings and loan association, or any  savings  and
loan  or  similar  association organized under the
laws of any state; (5) any security issued by  and
representing  an  interest  in  or  a  debt of, or
guaranteed by,  any  insurance  company  organized
under  the  laws of any state and authorized to do
business in this state; (6) any security issued or
guaranteed  by  any  federal  credit  union or any
credit  union,  industrial  loan  association   or
similar association organized and supervised under
the laws of this state; (7) any security issued or
guaranteed  by any railroad, other common carrier,
public utility or holding  company  which  is  (A)
subject  to  the  jurisdiction  of  the Interstate
Commerce Commission or its successor agency; (B) a
registered   holding   company  under  the  Public
Utility  Holding  Company  Act  of   1935   or   a
subsidiary of such a company within the meaning of
that act; (C) regulated in respect  of  its  rates
and  charges  by  a  governmental authority of the
United States or any state; or  (D)  regulated  in
respect  of  the  issuance  or  guarantee  of  the
security by a governmental authority of the United
States,   any   state,   Canada  or  any  Canadian
province; (8) ANY WARRANT OR RIGHT TO PURCHASE  OR
SUBSCRIBE  TO  any security listed or approved for
listing upon notice of issuance  on  (A)  the  New
York  Stock Exchange, the American Stock Exchange,
the Chicago Board Options Exchange and such  other
securities  exchanges  as may be designated by the
commissioner from  time  to  time,  [any  security
appearing  on]  (B)  the  list of over-the-counter
securities approved for margin  by  the  Board  of
Governors  of  the Federal Reserve System, [or any
security designated or  approved  for  designation
upon  notice  of  issuance  as  a  national market
system security on] OR  (C)  THE  NATIONAL  MARKET
SYSTEM  OF  the National Association of Securities
Dealers  Automated  Quotation  System  established
pursuant  to  the Securities Exchange Act of 1934;
[if, in each case, quotations have been  available
and  public trading has taken place for such class
of security prior to the offer  or  sale  of  that
security  in  reliance  upon  this  exemption; any
other security of the  same  issuer  which  is  of
senior  or  substantially equal rank; any security
called for by subscription rights or  warrants  so
listed,  approved or designated; or any warrant or
right to purchase  or  subscribe  to  any  of  the
foregoing;]  (9) any security issued by any person
organized and operated not for private profit  but
exclusively     for     religious,    educational,
benevolent,   charitable,    fraternal,    social,
athletic  or reformatory purposes, or as a Chamber
of Commerce or trade or professional  association;
(10)  any  commercial  paper which arises out of a
current transaction or the proceeds of which  have
been  or  are to be used for current transactions,
and which evidences  an  obligation  to  pay  cash
within  nine  months  of  the  date  of  issuance,
exclusive of days of grace, or any renewal of such
paper  which is likewise limited, or any guarantee
of such paper or of any  such  renewal;  (11)  any
security  issued  in connection with an employees'
stock purchase, stock  option,  savings,  pension,
profit-sharing  or  similar benefit plan; (12) any
security  issued  by  any  cooperative   apartment
corporation  incorporated  under  the laws of this
state, located in and operating wholly within  the
borders  of  this  state,  in conjunction with the
execution of proprietary leases; (13) any security
issued  by  any  person,  organized and located in
this  state  and  operating  exclusively  for  the
purpose  of promoting the industrial or commercial
development of this state, or such development  of
any   political   subdivision   thereof   or  such
development of any regional planning  area  within
this  state,  if  such persons are approved by the
Commissioner of Economic and Community Development
and  such approval has been certified, in writing,
by said Commissioner  of  Economic  and  Community
Development to the commissioner; such approval and
certification shall be conclusive as to the nature
and  purpose  of  such  person;  (14) any security
issued  by  the  Connecticut  Development   Credit
Corporation;  (15)  any  security  issued  by  any
nonstock corporation, which is incorporated  under
the  laws of this state as a cooperative marketing
corporation  and  has  its  principal   place   of
business  in  this  state, and which is a farmers'
cooperative organization as defined in Section 521
of  the  Internal  Revenue  Code  of  1986, or any
subsequent corresponding internal revenue code  of
the  United  States, as from time to time amended,
if such corporation has been certified in  writing
by  the  Connecticut  Department of Agriculture to
the commissioner to be  a  bona  fide  cooperative
marketing corporation; such certification shall be
conclusive as to the nature and  purpose  of  such
corporation;  (16)  any  security  issued  by  all
cooperative  associations  organized  or  existing
under chapter 595; (17) any security issued by any
person organized, located and operating within  or
from  the  borders  of this state, when selling or
offering for  sale  an  interest  in  real  estate
limited  partnerships  or real estate syndications
exclusively, if such person has obtained a  permit
from the Real Estate Commission; (18) any security
which, prior to or within sixty days after October
1,  1977,  has  been  sold  or  disposed of by the
issuer or bona fide offered  to  the  public,  but
this exemption shall not apply to any new offer of
any such security  by  an  issuer  or  underwriter
subsequent  to  such sixty days; (19) any interest
or participation  in  any  common  trust  fund  or
similar fund established and maintained by a bank,
or by one or more banks under  common  control  as
otherwise    authorized    by   general   statute,
exclusively  for  the  collective  investment  and
reinvestment of assets contributed thereto by such
bank in its fiduciary capacity; (20) any  security
issued  by a worker cooperative corporation formed
under  the  provisions  of  sections  33-418f   to
33-418o,  inclusive;  (21) any other security that
the  commissioner  may  exempt,  conditionally  or
unconditionally, on a finding that registration is
not  necessary  or  appropriate  in   the   public
interest or for the protection of investors.
    (b)  The  following  transactions are exempted
from sections 36b-16, AS AMENDED BY SECTION  8  OF
THIS  ACT, and 36b-22, AS AMENDED BY SECTION 12 OF
THIS ACT: (1) Any isolated nonissuer  transaction,
whether  effected  through a broker-dealer or not;
(2) any nonissuer distribution of  an  outstanding
security  if  (A)  a  recognized securities manual
contains the names of the  issuer's  officers  and
directors,  a  balance sheet of the issuer as of a
date within eighteen months, and a profit and loss
statement  for  either  the  fiscal year preceding
that date or the most recent year  of  operations,
except  that  the exemption shall not be available
for any distribution of  securities  issued  by  a
blank   check   company,  shell  company,  dormant
company or any issuer  that  has  been  merged  or
consolidated  with or has bought out a blank check
company, shell company or dormant  company  unless
the  issuer  or  any  predecessor has continuously
operated its business for at least  the  preceding
five  years and has had gross operating revenue in
each of the preceding five years, including  gross
operating   revenue   of  at  least  five  hundred
thousand  dollars  per  year  in  three   of   the
preceding  five  years  or  (B) the security has a
fixed maturity or a  fixed  interest  or  dividend
provision and there has been no default during the
current fiscal year or within the three  preceding
fiscal  years,  or  during  the  existence  of the
issuer and any predecessors  if  less  than  three
years,  in  the  payment of principal, interest or
dividends  on  the  security;  (3)  any  nonissuer
transaction  effected  by  or through a registered
broker-dealer pursuant to an unsolicited order  or
offer   to   buy;  but  the  commissioner  may  by
regulation require that the  customer  acknowledge
upon   a   specified   form   that  the  sale  was
unsolicited, and that a signed copy of  each  such
form  be  preserved  by  the  broker-dealer  for a
specified  period   or   that   the   confirmation
delivered   to   the  purchaser  or  a  memorandum
delivered in connection  therewith  shall  confirm
that   such   purchase   was  unsolicited  by  the
broker-dealer or any agent of  the  broker-dealer;
(4)  any  transaction  between the issuer or other
person on whose behalf the offering is made and an
underwriter,   or   among  underwriters;  (5)  any
transaction  in  a  bond  or  other  evidence   of
indebtedness secured by a real or chattel mortgage
or deed of trust or by an agreement for  the  sale
of   real   estate  or  chattels,  if  the  entire
mortgage, deed of  trust  or  agreement,  together
with   all   the   bonds  or  other  evidences  of
indebtedness secured thereby, is offered and  sold
as  a  unit;  (6)  any transaction by an executor,
administrator, sheriff, marshal, receiver, trustee
in   bankruptcy,   creditors'   committee   in   a
proceeding under the Bankruptcy Act,  guardian  or
conservator;  (7)  any  transaction  executed by a
bona fide pledgee without any purpose  of  evading
sections 36b-2 to 36b-33, inclusive, AS AMENDED BY
THIS ACT; (8) any offer or sale to a [state]  bank
and trust company, a national banking association,
a savings bank, a savings and loan association,  a
federal  savings  and  loan  association, a credit
union, a  federal  credit  union,  trust  company,
insurance  company,  investment company as defined
in  the  Investment  Company  Act  of  1940,   [as
amended,]  pension  or  profit-sharing  trust,  or
other  financial  institution   or   institutional
buyer,   or   to   a  broker-dealer,  whether  the
purchaser  is  acting  for  itself  or   in   some
fiduciary   capacity;   (9)  (A)  subject  to  the
provisions of this  subdivision,  any  transaction
not involving a public offering within the meaning
of Section 4(2) of the Securities Act of 1933, [as
amended,  and]  BUT  NOT INCLUDING ANY TRANSACTION
SPECIFIED IN the rules and regulations thereunder;
(B) subject to the provisions of this subdivision,
any  transaction  made  in  accordance  with   the
uniform  exemption  from  registration  for  small
issuers authorized in Section 19(c)(3)(C)  of  the
Securities  Act  of  1933. [, as amended.] (C) The
exemptions set forth in  subdivisions  (9)(A)  and
(9)(B)  of  this subsection shall not be available
for transactions in securities issued by any blank
check  company,  shell company or dormant company.
(D)  The  exemptions  set  forth  in  subdivisions
(9)(A)  and  (9)(B)  of  this subsection may, with
respect to any security or transaction or any type
of   security   or   transaction,   be   modified,
withdrawn, further conditioned  or  waived  as  to
conditions,  in whole or in part, conditionally or
unconditionally, by the  commissioner,  acting  by
regulation,  rule or order, on a finding that such
regulation,  rule  or  order   is   necessary   or
appropriate  in  the  public  interest  or for the
protection of investors. (E) A fee of one  hundred
fifty dollars shall accompany any filing made with
the commissioner  pursuant  to  this  subdivision;
(10)  any  offer  or  sale  of  a  preorganization
certificate or subscription if (A)  no  commission
or other remuneration is paid or given directly or
indirectly   for   soliciting   any    prospective
subscriber, (B) the number of subscribers does not
exceed ten, and (C) no  payment  is  made  by  any
subscriber;  (11)  any  transaction pursuant to an
offer to existing security holders of the  issuer,
including   persons   who   at  the  time  of  the
transaction are holders of convertible securities,
nontransferable  warrants or transferable warrants
exercisable within not more than  ninety  days  of
their  issuance,  if  (A)  no  commission or other
remuneration other than a  standby  commission  is
paid   or   given   directly   or  indirectly  for
soliciting any security holder in this  state,  or
(B)  the issuer first files a notice, in such form
and   containing   such   information    as    the
commissioner    may   by   regulation   prescribe,
specifying  the  terms  of  the  offer   and   the
commissioner   does  not  by  order  disallow  the
exemption within the next ten full business  days;
(12)  any offer, but not a sale, of a security for
which  registration  statements  have  been  filed
under both sections 36b-2 to 36b-33, inclusive, AS
AMENDED BY THIS ACT, and  the  Securities  Act  of
1933,  [as  amended,]  if no stop order or refusal
order is in effect and  no  public  proceeding  or
examination   looking  toward  such  an  order  is
pending  under  either  said   sections   or   the
Securities  Act  of 1933; [, as amended;] (13) any
transaction exempt under  [Section  4(1),  Section
4(4)  or] Section 4(6) of the [federal] Securities
Act of 1933,  [as  amended,]  and  the  rules  and
regulations    thereunder.    [With   respect   to
transactions exempt  under  Section  4(6)  of  the
federal  Securities  Act of 1933, as amended, the]
THE issuer shall, prior to the  first  sale,  file
with  the  commissioner a notice, in such form and
containing such information  as  the  commissioner
may  by regulation, rule or order prescribe. A fee
of one hundred fifty dollars shall  accompany  any
such  filing  made  pursuant  to this subdivision;
(14)  any  transaction  if   all   the   following
conditions  are  satisfied: (A) The offer and sale
is effectuated by the issuer of the security;  (B)
the  total  number of purchasers of all securities
of the issuer does not exceed  ten.  A  subsequent
sale  of  securities  THAT (i) IS registered under
sections  36b-2  to  36b-33,  inclusive,  [or]  AS
AMENDED  BY  THIS ACT, (ii) IS sold pursuant to an
exemption under  said  sections  other  than  this
subdivision, OR (iii) INVOLVES COVERED SECURITIES,
shall not be integrated with a  sale  pursuant  to
this   exemption   in   computing  the  number  of
purchasers hereunder.  For  the  purpose  of  this
subdivision, each of the following is deemed to be
a single purchaser of a security:  A  husband  and
wife,  a child and his parent or guardian when the
parent or guardian  holds  the  security  for  the
benefit   of   the   child,   a   corporation,   a
partnership,    an    association     or     other
unincorporated  entity, a joint stock company or a
trust, but only if the  corporation,  partnership,
association,  unincorporated  entity,  joint stock
company or trust was not formed for the purpose of
purchasing  the  security;  (C)  no advertisement,
article, notice or other  communication  published
in  any  newspaper, magazine or similar medium, or
broadcast over television or radio, or  any  other
general  solicitation  is  used in connection with
the sale; and (D) no commission, discount or other
remuneration   is   paid   or  given  directly  or
indirectly in connection with the offer and  sale,
and   the  total  expenses,  excluding  legal  and
accounting fees, in connection with the offer  and
sale do not exceed one per cent of the total sales
price of the  securities.  For  purposes  of  this
subdivision,  a  difference  in the purchase price
among the purchasers shall not, in and of  itself,
be  deemed  to  constitute  indirect remuneration;
(15) any other transaction that  the  commissioner
may exempt, conditionally or unconditionally, on a
finding that  registration  is  not  necessary  or
appropriate  in  the  public  interest  or for the
protection of investors.
    (c)  (1)  ANY  PERSON  WHO  OFFERS  OR SELLS A
SECURITY THAT IS A COVERED SECURITY UNDER  SECTION
18(b)(2)  OF THE SECURITIES ACT OF 1933 SHALL FILE
WITH THE COMMISSIONER A NOTICE FOR EACH SERIES  OR
PORTFOLIO  PRIOR  TO  THE  INITIAL  OFFER  OF SUCH
SECURITY IN THIS STATE. THE NOTICE  SHALL  CONTAIN
SUCH  INFORMATION  AS THE COMMISSIONER MAY REQUIRE
AND SHALL BE ACCOMPANIED BY A CONSENT  TO  SERVICE
OF  PROCESS  AS  REQUIRED  BY  SUBSECTION  (g)  OF
SECTION 36b-33, AS AMENDED BY SECTION 14  OF  THIS
ACT,  AND  A  NONREFUNDABLE  FEE  OF  FIVE HUNDRED
DOLLARS; (2) ANY NOTICE  FILED  PURSUANT  TO  THIS
SUBSECTION  RELATING  TO  A  SECURITY  ISSUED BY A
FACE-AMOUNT CERTIFICATE COMPANY OR UNIT INVESTMENT
TRUST, AS SUCH TERMS ARE DEFINED IN THE INVESTMENT
COMPANY ACT OF 1940, SHALL BE VALID FOR  A  PERIOD
OF  ONE  YEAR  FROM THE DATE THAT SUCH SECURITY IS
DECLARED EFFECTIVE BY THE SECURITIES AND  EXCHANGE
COMMISSION, WITHOUT LIMITATION AS TO THE NUMBER OF
SHARES OR AGGREGATE AMOUNT.  SUCH  NOTICE  MAY  BE
RENEWED  ANNUALLY  THEREAFTER  UPON  SUBMISSION OF
SUCH INFORMATION AS THE COMMISSIONER MAY  REQUIRE,
NOT  EARLIER  THAN THIRTY DAYS NOR LATER THAN FIVE
DAYS PRIOR TO THE DATE UPON WHICH SUCH  PREVIOUSLY
FILED  NOTICE  IS  DUE  TO EXPIRE, TOGETHER WITH A
NONREFUNDABLE FEE OF FIVE HUNDRED DOLLARS; (3) ANY
NOTICE  FILED PURSUANT TO THIS SUBSECTION RELATING
TO A REDEEMABLE SECURITY  ISSUED  BY  AN  OPEN-END
MANAGEMENT  COMPANY,  AS DEFINED IN THE INVESTMENT
COMPANY ACT OF 1940, SHALL BE VALID UNTIL DECEMBER
THIRTY-FIRST  OF THE CALENDAR YEAR IN WHICH IT WAS
FIRST FILED, WITHOUT LIMITATION AS TO  THE  NUMBER
OF  SHARES OR AGGREGATE AMOUNT. SUCH NOTICE MAY BE
RENEWED ANNUALLY  THEREAFTER  UPON  SUBMISSION  OF
SUCH  INFORMATION  AS THE COMMISSIONER MAY REQUIRE
TOGETHER WITH A NONREFUNDABLE FEE OF FIVE  HUNDRED
DOLLARS.
    (d)  ANY PERSON WHO OFFERS OR SELLS A SECURITY
THAT IS A COVERED SECURITY UNDER SECTION  18(b)(3)
OF THE SECURITIES ACT OF 1933 SHALL FILE A CONSENT
TO SERVICE OF PROCESS  WITH  THE  COMMISSIONER  AS
REQUIRED  BY  SUBSECTION (g) OF SECTION 36b-33, AS
AMENDED BY SECTION 14 OF THIS ACT,  PRIOR  TO  THE
FIRST  OFFER  OR  SALE  OF  SUCH  SECURITY IN THIS
STATE.
    (e)  ANY PERSON WHO OFFERS OR SELLS A SECURITY
THAT  IS  A   COVERED   SECURITY   UNDER   SECTION
18(b)(4)(D)  OF  THE  SECURITIES ACT OF 1933 SHALL
FILE A NOTICE WITH THE COMMISSIONER WITHIN FIFTEEN
DAYS  AFTER  THE  FIRST SALE OF SUCH A SECURITY IN
THIS  STATE.  SUCH  NOTICE  SHALL   CONTAIN   SUCH
INFORMATION  AS  THE  COMMISSIONER MAY REQUIRE AND
SHALL BE ACCOMPANIED BY A CONSENT  TO  SERVICE  OF
PROCESS  AS  REQUIRED BY SUBSECTION (g) OF SECTION
36b-33, AS AMENDED BY SECTION 14 OF THIS ACT,  AND
A NONREFUNDABLE FEE OF ONE HUNDRED FIFTY DOLLARS.
    [(c)]  (f)  The  commissioner may by order (1)
deny  or  revoke  any   exemption   specified   in
subdivision  (9)  or  (11) of subsection (a) or in
subsection (b) of this section with respect  to  a
specific  security or transaction, (2) SUSPEND THE
OFFER OR SALE OF A COVERED SECURITY IN THIS  STATE
IF  ANY PERSON WHO OFFERS A COVERED SECURITY FAILS
TO COMPLY WITH ANY OF THE REQUIREMENTS  SET  FORTH
IN SUBSECTIONS (c), (d) OR (e) OF THIS SECTION, OR
(3)  REQUIRE  ANY  PERSON  WHO  OFFERS  A  COVERED
SECURITY  IN THIS STATE AND REFUSES TO PAY ANY FEE
REQUIRED BY SUBSECTIONS (c) OR (e) OF THIS SECTION
TO  REGISTER  SUCH  SECURITY  PURSUANT  TO SECTION
36b-16, AS AMENDED BY SECTION 8 OF THIS  ACT.  FOR
PURPOSES  OF  THIS  SUBSECTION,  A  DELAY  IN  THE
PAYMENT OF A FEE OR UNDERPAYMENT OF A FEE THAT  IS
PROMPTLY  REMEDIED  SHALL NOT CONSTITUTE A REFUSAL
TO PAY SUCH FEE. No  such  order  may  be  entered
without appropriate prior notice to all interested
parties,  opportunity  for  hearing  and   written
findings  of  fact  and conclusions of law, except
that the commissioner may by order summarily  deny
or  revoke  any  of  the  specified  exemptions OR
SUMMARILY SUSPEND THE OFFER OR SALE OF ANY COVERED
SECURITY  SUBJECT  TO  ANY OF THE REQUIREMENTS SET
FORTH IN SUBSECTIONS  (c),  (d)  OR  (e)  OF  THIS
SECTION   pending   final   determination  of  any
proceeding under this subsection. Upon  the  entry
of   a   summary  order,  the  commissioner  shall
promptly notify all interested parties that it has
been  entered and of the reasons therefor and that
within fifteen days of the receipt  of  a  written
request  the  matter will be set down for hearing.
If no hearing is requested and none is ordered  by
the  commissioner, the order will remain in effect
until  it  is   modified   or   vacated   by   the
commissioner.   If   a  hearing  is  requested  or
ordered, the commissioner  after  notice  of,  and
opportunity for, hearing to all interested persons
may modify or vacate the order or extend it  until
final   determination.   No   order   under   this
subsection may operate  retroactively.  No  person
may   be  considered  to  have  violated  sections
36b-16, AS AMENDED BY SECTION 8 OF THIS  ACT,  and
36b-22,  AS  AMENDED BY SECTION 12 OF THIS ACT, by
reason of any offer or  sale  effected  after  the
entry  of  an  order  under  this subsection if he
sustains the burden of proof that he did not know,
and  in  the exercise of reasonable care could not
have known, of the order.
    [(d)]  (g)  In  any  proceeding under sections
36b-2 to 36b-33, inclusive,  AS  AMENDED  BY  THIS
ACT,  the  burden  of  proving  an exemption or an
exception from a definition  is  upon  the  person
claiming it.
    Sec.   12.   Section  36b-22  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    The  commissioner  may  by regulation or order
require the filing of  any  prospectus,  pamphlet,
circular,  form  letter,  advertisement  or  other
sales  literature  or  advertising   communication
addressed   or   intended   for   distribution  to
prospective  investors,   including   clients   or
prospective   clients  of  an  investment  adviser
unless the security or transaction is (1) exempted
by  subsection  (a)  or  (b) of section 36b-21, AS
AMENDED BY SECTION 11  OF  THIS  ACT,  except  for
transactions   exempted  by  subdivision  (12)  of
subsection (b) of said section, OR (2)  A  COVERED
SECURITY.
    Sec.   13.   Section  36b-27  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  Whenever  it  appears to the commissioner
after an investigation that any person or  persons
HAVE  VIOLATED,  are  violating  or  are  about to
violate any of the provisions of sections 36b-2 to
36b-33,  inclusive, AS AMENDED BY THIS ACT, or any
regulation, rule or order adopted or issued  under
said  sections,  or that the further sale or offer
to sell securities would constitute a violation of
said  sections  or  any  such  regulation, rule or
order, the  commissioner  may  in  his  discretion
order  the  person  or persons to cease and desist
from the violations  of  the  provisions  of  said
sections  or  of  the regulations, rules or orders
thereunder or from the further sale  or  offer  to
sell   securities   constituting  or  which  would
constitute a violation of the provisions  of  said
sections  or  of  the regulations, rules or orders
thereunder. After such an  order  is  issued,  the
person   or  persons  named  therein  may,  within
fourteen days after receipt of the order,  file  a
written  request for a hearing. Said hearing shall
be held  in  accordance  with  the  provisions  of
chapter 54.
    (b)  Whenever  it appears to the commissioner,
after an investigation, that any person or persons
have  violated  any  of the provisions of sections
36b-2 to 36b-33, inclusive,  AS  AMENDED  BY  THIS
ACT,  or  any regulation, rule or order adopted or
issued under said sections, or  that  the  further
sale  or offer to sell securities would constitute
a  violation  of  said  sections   or   any   such
regulation,  rule  or order, the commissioner may,
in  addition  to  any  other  remedy  under   this
section,  (1)  order the person or persons to make
restitution  of  any  sums  shown  to  have   been
obtained  in violation of any of the provisions of
said sections or  any  such  regulation,  rule  or
order  plus  interest  at  the  rate  set forth in
section 37-3a or (2) order the person  or  persons
to  provide disgorgement of any sums shown to have
been  obtained  in  violation  of   any   of   the
provisions   of   said   sections   or   any  such
regulation, rule or order. After such an order  is
issued,  the  person or persons named therein may,
within fourteen days after receipt of  the  order,
file a written request for a hearing. Said hearing
shall be held in accordance with the provisions of
chapter 54.
    (c)  The  commissioner,  in the commissioner's
discretion, may order any person who  directly  or
indirectly   controls   a   person   liable  under
subsection (b) of this section to make restitution
or  to  provide  disgorgement of any sums shown to
have been obtained in  violation  of  any  of  the
provisions of sections 36b-2 to 36b-33, inclusive,
AS AMENDED BY THIS ACT,  unless  such  controlling
person  allegedly  liable  under  this  subsection
sustains the burden of proof that such person  did
not  know,  and in the exercise of reasonable care
could not have known, of the existence of facts by
reason of which the liability is alleged to exist.
After such an  order  is  issued,  the  person  or
persons  named  therein  may, within fourteen days
after receipt of the order, file a written request
for  a  hearing.  Said  hearing  shall  be held in
accordance with  the  provisions  of  chapter  54.
There   shall  be  contribution  as  in  cases  of
contract among the several people so liable  under
this subsection.
    (d)  (1)  Whenever  the  commissioner finds as
the result of an investigation that any person  or
persons  have  violated  any  of the provisions of
sections 36b-2 to 36b-33, inclusive, AS AMENDED BY
THIS ACT, or any regulation, rule or order adopted
or issued under said  sections,  the  commissioner
may  send  a  notice  to such person or persons by
[certified]  REGISTERED   mail,   return   receipt
requested.  Any  such  notice shall include: (A) A
reference to the title, chapter, regulation,  rule
or  order  alleged  to  have  been violated; (B) a
short and plain statement of the  matter  asserted
or  charged;  (C)  the  maximum  fine  that may be
imposed for such violation; and (D) the  time  and
place for the hearing. Such hearing shall be fixed
for a date not earlier than  fourteen  days  after
the notice is mailed.
    (2)  The  commissioner  shall  hold  a hearing
upon  the  charges  made  unless  such  person  or
persons  fail  to  appear  at  the  hearing.  Said
hearing shall  be  held  in  accordance  with  the
provisions of chapter 54. After the hearing if the
commissioner finds that the person or persons have
violated  any  of the provisions of sections 36b-2
to 36b-33, inclusive, AS AMENDED BY THIS  ACT,  or
any  regulation,  rule  or order adopted or issued
under said sections, the commissioner may, in  his
discretion  and  in  addition  to any other remedy
authorized by said sections, order  that  a  civil
penalty  not  exceeding  ten  thousand dollars per
violation be imposed upon such person or  persons.
If  such  person  or persons fail to appear at the
hearing,  the  commissioner  may,  as  the   facts
require,  order that a civil penalty not exceeding
ten thousand dollars per violation be imposed upon
such  person  or  persons.  The commissioner shall
send a copy of any order issued pursuant  to  this
subsection  by [certified] REGISTERED mail, return
receipt requested, to any person or persons  named
in such order.
    (e)  Whenever  it  appears to the commissioner
that any person  or  persons  have  violated,  are
violating  or  are  about  to  violate  any of the
provisions of sections 36b-2 to 36b-33, inclusive,
AS AMENDED BY THIS ACT, or any regulation, rule or
order adopted or issued under  said  sections,  or
that  the further sale or offer to sell securities
would constitute a violation of said  sections  or
any   such   regulation,   rule   or   order,  the
commissioner  may,  in  his  discretion   and   in
addition  to  any  other remedy authorized by this
section: (1) Bring an action in the superior court
for the judicial district of Hartford-New Britain*
to enjoin the acts or  practices  and  to  enforce
compliance   with   sections   36b-2   to  36b-33,
inclusive, AS AMENDED BY THIS  ACT,  or  any  such
regulation, rule or order. Upon a proper showing a
permanent  or  temporary  injunction,  restraining
order  or  writ of mandamus shall be granted and a
receiver or conservator may be appointed  for  the
defendant  or  the  defendant's  assets. The court
shall not require the commissioner to post a bond;
(2)  seek  a  court  order  imposing a fine not to
exceed ten thousand dollars per violation  against
any person found to have violated any order issued
by the commissioner; or (3) apply to the  superior
court  for  the  judicial district of Hartford-New
Britain* for an order of restitution  whereby  the
defendants in such action shall be ordered to make
restitution   of   those   sums   shown   by   the
commissioner  to  have  been  obtained  by them in
violation of any of  the  provisions  of  sections
36b-2  to  36b-33,  inclusive,  AS AMENDED BY THIS
ACT, plus  interest  at  the  rate  set  forth  in
section  37-3a.  Such  restitution  shall,  at the
option of the court, be payable to the receiver or
conservator appointed pursuant to this subsection,
or directly  to  the  persons  whose  assets  were
obtained in violation of any provision of sections
36b-2 to 36b-33, inclusive,  AS  AMENDED  BY  THIS
ACT.
    (f)  Any  time  after the issuance of an order
provided for in subsection (a), (b) or (c) of this
section,  the commissioner may accept an agreement
by any person charged with violating any provision
of sections 36b-2 to 36b-33, inclusive, AS AMENDED
BY THIS ACT, to enter into a written consent order
in lieu of an adjudicative hearing. The acceptance
of a consent order shall be  within  the  complete
discretion  of the commissioner. The consent order
provided for in this subsection shall contain  (1)
an  express  waiver  of the right to seek judicial
review  or  otherwise  challenge  or  contest  the
validity  of  the  order; (2) a provision that the
order may be used in construing the terms  of  the
consent  order;  (3)  a statement that the consent
order  shall  become  final  when  issued;  (4)  a
specific  assurance  that  none  of the violations
alleged in the order shall occur  in  the  future;
(5)   such  other  terms  and  conditions  as  are
necessary to further the purposes and policies  of
sections 36b-2 to 36b-33, inclusive, AS AMENDED BY
THIS  ACT;  (6)  the  signature  of  each  of  the
individual respondents evidencing his consent; and
(7) the signature of the commissioner  or  of  his
authorized representative.
    Sec.  14.  Subsection (g) of section 36b-33 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (g)  Every  applicant  for  registration under
sections 36b-2 to 36b-33, inclusive, AS AMENDED BY
THIS  ACT,  EVERY  INVESTMENT ADVISER EXEMPT UNDER
SUBSECTION (e) OF SECTION  36b-6,  AS  AMENDED  BY
SECTION  3  OF  THIS  ACT, and every issuer, other
than the United States, any  state,  Canada,  [or]
any other foreign government with which the United
States currently maintains  diplomatic  relations,
OR  ANY ISSUER OF COVERED SECURITIES UNDER SECTION
18(b)(1) OF THE  SECURITIES  ACT  OF  1933,  which
proposes to offer a security in this state through
any person  acting  on  an  agency  basis  in  the
common-law sense shall file with the commissioner,
in such form as he by  regulation  prescribes,  an
irrevocable consent appointing the commissioner or
his successor in office  to  be  his  attorney  to
receive  service  of  any  lawful  process  in any
noncriminal suit, action,  or  proceeding  against
him  or  his  successor  executor or administrator
which  arises  under  sections  36b-2  to  36b-33,
inclusive,   AS   AMENDED  BY  THIS  ACT,  or  any
regulation or order thereunder after  the  consent
has  been  filed, with the same force and validity
as if served personally on the person  filing  the
consent.  A person who has filed such a consent in
connection with a previous registration  need  not
file  another.  Service  may  be made by leaving a
copy  of  the  process  in  the  office   of   the
commissioner,  but  it is not effective unless (1)
the plaintiff, who may be the  commissioner  in  a
suit,  action,  or  proceeding  instituted by him,
forthwith sends notice of the service and  a  copy
of the process by registered mail to the defendant
or respondent at his last address on file with the
commissioner, and (2) the plaintiff's affidavit of
compliance with this subsection is  filed  in  the
case  on  or before the return day of the process,
if any, or within such further time as  the  court
allows.
    Sec.  15.  This  act shall take effect July 1,
1997.

Approved June 27, 1997