(A)The prohibitions in Section 39-73-20 do not apply to:
(1)an account, an agreement, or a transaction within the exclusive jurisdiction of the Commodity Futures Trading Commission as granted under the Commodity Exchange Act;
(2)a commodity contract for the purchase of one or more precious metals which requires, and under which the purchaser receives, within twenty-eight calendar days from the payment in good funds of a portion of the purchase price, physical delivery of the quantity of the precious metals purchased by the payment. For purposes of this paragraph physical delivery is deemed to have occurred if, within the twenty-eight-day period, the quantity of precious metals purchased by the payment is delivered, whether in specifically segregated or fungible bulk forms into the posse
Free access — add to your briefcase to read the full text and ask questions with AI
(A) The prohibitions in Section 39-73-20 do not apply to: (1) an account, an agreement, or a transaction within the exclusive jurisdiction of the Commodity Futures Trading Commission as granted under the Commodity Exchange Act; (2) a commodity contract for the purchase of one or more precious metals which requires, and under which the purchaser receives, within twenty-eight calendar days from the payment in good funds of a portion of the purchase price, physical delivery of the quantity of the precious metals purchased by the payment. For purposes of this paragraph physical delivery is deemed to have occurred if, within the twenty-eight-day period, the quantity of precious metals purchased by the payment is delivered, whether in specifically segregated or fungible bulk forms into the possession of a depository other than the seller which is: (a) a financial institution; (b) a depository the warehouse receipts of which are recognized for delivery purposes for a commodity on a contract market designated by the Commodity Futures Trading Commission; (c) a storage facility licensed or regulated by the United States or its agencies, or (d) a depository designated by the administrator. The depository or other person which itself qualifies as a depository or a qualified seller shall issue and the purchaser shall receive a certificate, a document of title, confirmation, or other instrument evidencing that the quantity of precious metals has been delivered to the depository and is being and will continue to be held by the depository on the purchaser's behalf, free and clear of all liens and encumbrances other than liens of the purchaser, tax liens, liens agreed to by the purchaser, or liens of the depository for fees and expenses, which previously have been disclosed to the purchaser; (3) a commodity contract solely between persons engaged in producing, processing, using commercially, or handling as merchants, each commodity subject to the contract or a by-product of it; or (4) a commodity contract under which the offeree or the purchaser is a person referred to in Section 39-73-30, an insurance company, an investment company as defined in the Investment Company Act of 1940, or an employee pension and profit-sharing or benefit plan other than a self-employed individual retirement plan or individual retirement account. (B) For purposes of item (2) of subsection (A) a qualified seller is a person who: (1) is a seller of precious metals and has a tangible net worth of at least five million dollars or has an affiliate who unconditionally has guaranteed the obligations and liabilities of the seller, and the affiliate has a tangible net worth of at least five million dollars; (2) has stored precious metals with one or more depositories on behalf of customers for at least the previous three years; (3) before an offer and annually files with the administrator a sworn notice of intent to act as a qualified seller under item (2) of subsection (A) containing: (a) the seller's name and address and names of its directors, officers, controlling shareholders, partners, principals, and other controlling persons; (b) the address of its principal place of business, state and date of incorporation or organization, and the name and address of the seller's registered agent in this State; (c) a statement that the seller, or a person affiliated with the seller who has guaranteed the obligations and liabilities of the seller has a tangible net worth of at least five million dollars; (d) depository information, including: (i) the name and address of the depository or depositories that the seller intends to sue; (ii) the name and address of each depository where the seller has stored precious metals on behalf of customers for the previous three years; (iii) independent verification from each depository named in sub-subitem (ii) that the seller has in fact stored precious metals on behalf of the seller's customers for the previous three years and a statement of total deposits made during this period; (e) financial statements for the seller or the person affiliated with the seller who has guaranteed the obligations and liabilities of the seller for the past three years, audited by an independent certified public accountant, with the accountant's report; (f) a statement describing the details of all civil, criminal, or administrative proceedings currently pending or adversely resolved against the seller or its directors, officers, controlling shareholders, partners, principals, or other controlling persons during the past ten years, including: (i) civil litigation and administrative proceedings involving securities or commodities violations or fraud; (ii) criminal proceedings; (iii) denials, suspensions, or revocations of securities or commodities, licenses, or registrations; (iv) suspensions or expulsions from membership in or associations with self-regulatory organizations registered under the Securities Exchange Act of 1934 or the Commodities Exchange Act; (v) a statement that there were no proceedings. (4) notifies the administrator within fifteen days of material changes in the information provided in the notice of intent; (5) annually furnishes to each purchaser for whom the seller is then storing precious metals, and to the administrator a report by an independent certified public accountant of the accountant's examination of the seller's precious metals storage program. (C) The administrator, upon request by the seller, may waive one or more of the exemption requirements in subsection (B), conditionally or unconditionally. (D) The administrator, by order, may deny, suspend, revoke, or place limitations on the authority to engage in business as a qualified seller under item (2) of subsection (A) if the administrator finds that the order is in the public interest and that the person, the person's officers, directors, partners, agents, servants, or employees, a person occupying a similar status or performing similar functions, or a person who directly or indirectly controls or is controlled by the seller, or his affiliates or subsidiaries: (1) has filed a notice of intention under subsection (C) with the administrator or the designee of the administrator which was incomplete in material respect or contained a statement which was, in light of the circumstances under which it was made, false or misleading with respect to a material fact; (2) within the last ten years, has pled guilty or nolo contendere to, or been convicted of a crime indicating a lack of fitness to engage in the investment commodity business; (3) has been enjoined permanently or temporarily by a court of competent jurisdiction from engaging in or continuing conduct or a practice which injunction indicates a lack of fitness to engage in the investment commodities business; (4) is the subject of an order of the administrator denying, suspending, or revoking the person's license as a securities broker-dealer, agent, sales representative, investment advisor, or investment advisor representative; (5) is the subject of one or more of the following orders which currently are effective and which were issued within the last five years: (a) an order by a securities agency or an administrator of another state, Canadian province or territory, the Securities and Exchange Commission, or the Commodity Futures Trading Commission entered after notice and opportunity for hearing, denying, suspending, or revoking the person's registration as a futures commission merchant, commodity trading adviser, commodity pool operator, securities broker-dealer, agent, sales representative, investment adviser or investment advisor representative, or the substantial equivalent of the foregoing; (b) suspension or expulsion from membership in, or association with, a self-regulatory organization registered under the Securities Exchange Act of 1934 or the Commodity Exchange Act; (c) a United States Postal Service fraud order; (d) a cease and desist order entered after notice and opportunity of hearing by the administrator or a securities agency or an administrator of another state, Canadian province or territory, the Securities and Exchange Commission, or the Commodity Futures Trading Commission; (e) an order entered by the Commodity Futures Trading Commission denying, suspending, or revoking registration under the Commodity Exchange Act. (6) has engaged in an unethical or a dishonest act or practice in the investment commodities or securities business; or (7) has failed reasonably to supervise sales representatives or employees. (E) If the public interest or the protection of investors so requires, the administrator, by order, summarily may deny or suspend the exemption for a qualified seller. Upon the entry of the order the administrator promptly shall notify the person claiming the status that an order has been entered, the reasons for it, and that within thirty days after the receipt of a written request the matter will be set for hearing. Section 39-73-355 applies with respect to subsequent proceedings. (F) If the administrator finds that an applicant or a qualified seller is no longer in existence, has ceased to do business, is subject to an adjudication of mental incompetence or to the control of a committee, conservator, or guardian, or cannot be located after reasonable search, he, by order, may deny or revoke the exemption for a qualified seller. (G) The administrator may promulgate regulations prescribing the terms and conditions of transactions and contracts covered by this chapter which are not within the exclusive jurisdiction of the Commodity Futures Trading Commission as granted by the Commodity Exchange Act exempting and conditionally or unconditionally and otherwise implementing this chapter for the protection of purchasers and sellers of commodities.