2018 New Mexico Statutes
Chapter 58 - Financial Institutions and Regulations
Article 13C - New Mexico Uniform Securities
Section 58-13C-201 - Exempt securities.

Universal Citation: NM Stat § 58-13C-201 (2018)
58-13C-201. Exempt securities.

The following securities are exempt from the requirements of Sections 301 [58-13C-301 NMSA 1978] through 306 [58-13C-306 NMSA 1978] of the New Mexico Uniform Securities Act and, unless otherwise noted, Section 504 [58-13C-504 NMSA 1978] of that act:

A. a security, including a revenue obligation or a separate security as defined in Rule 131 (17 C.F.R. 230.131) adopted pursuant to the federal Securities Act of 1933, issued, insured or guaranteed by the United States, by a state, by a political subdivision of a state, by a public authority, agency or instrumentality of one or more states, including the New Mexico mortgage finance authority, by a political subdivision of one or more states or by a person controlled or supervised by and acting as an instrumentality of the United States pursuant to authority granted by the congress or a certificate of deposit for any of the foregoing; but this exemption does not include a security issued by a New Mexico governmental entity, payable solely from the revenues of a nongovernmental commercial or industrial enterprise, unless such security is directly or indirectly insured or guaranteed by, or such revenues are derived from, a person whose securities are exempt from registration by this subsection or Subsection B, C, D, E or G of this section. For purposes of this subsection, a nongovernmental commercial or industrial enterprise does not include the financing of student loans or single-family residential mortgage loans;

B. a security issued, insured or guaranteed by a foreign government with which the United States maintains diplomatic relations, or any of its political subdivisions, if the security is recognized as a valid obligation by the issuer, insurer or guarantor;

C. a security issued by and representing or that will represent an interest in or a direct obligation of, or be guaranteed by:

(1) an international banking institution;

(2) a banking institution organized pursuant to the laws of the United States; a member bank of the federal reserve system; or a depository institution a substantial portion of the business of which consists or will consist of receiving deposits or share accounts that are insured to the maximum amount authorized by statute by the federal deposit insurance corporation, the national credit union share insurance fund or a successor authorized by federal law or exercising fiduciary powers that are similar to those permitted for national banks pursuant to the authority of the comptroller of currency pursuant to Section 1 of Public Law 87-722 (12 U.S.C. Section 92a);

(3) a trust company or other institution that is authorized by federal or state law to exercise fiduciary powers of the type a national bank is permitted to exercise pursuant to the authority of the comptroller of the currency and is regulated, supervised and examined by an official or agency of a state or the United States; or

(4) any other depository institution, unless by rule or order the director proceeds pursuant to Section 204 [58-13C-204 NMSA 1978] of the New Mexico Uniform Securities Act;

D. a security issued by and representing an interest in, or a debt of, or insured or guaranteed by, an insurance company authorized to transact insurance in New Mexico pursuant to the New Mexico Insurance Code [59A-1-1 NMSA 1978];

E. a security issued or guaranteed by a railroad, other common carrier, public utility or public utility holding company that is:

(1) regulated in respect to its rates and charges by the United States or a state;

(2) regulated in respect to the issuance or guarantee of the security by the United States, a state, Canada or a Canadian province or territory; or

(3) a public utility holding company registered pursuant to the federal Public Utility Holding Company Act of 1935 or a subsidiary of such a registered holding company within the meaning of that act;

F. a federal covered security specified in Section 18(b)(1) of the federal Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)) or by rule adopted pursuant to that provision or a security listed or approved for listing on another securities market specified by rule pursuant to the New Mexico Uniform Securities Act; a put or a call option contract, a warrant or a subscription right on or with respect to such securities; an option or similar derivative security on a security or an index of securities or foreign currencies issued by a clearing agency registered pursuant to the federal Securities Exchange Act of 1934 and listed or designated for trading on a national securities exchange, a facility of a national securities exchange or a facility of a national securities association registered pursuant to the federal Securities Exchange Act of 1934 or an offer or sale of the underlying security in connection with the offer, sale or exercise of an option or other security that was exempt when the option or other security was written or issued; or an option or a derivative security designated by the securities and exchange commission pursuant to Section 9(b) of the federal Securities Exchange Act of 1934 (15 U.S.C. Section 78i(b));

G. a security issued by a person organized and operated exclusively for religious, educational, benevolent, fraternal, charitable, social, athletic or reformatory purposes, or as a chamber of commerce, and not for pecuniary profit, no part of the net earnings of which inures to the benefit of a private stockholder or other person, or a security of a company that is excluded from the definition of an investment company pursuant to Section 3(c)(10)(B) of the federal Investment Company Act of 1940 (15 U.S.C. Section 80a-3(c)(10)(B)); except that with respect to the offer or sale of a note, bond, debenture or other evidence of indebtedness issued by such a person, a rule may be adopted pursuant to the New Mexico Uniform Securities Act limiting the availability of this exemption by classifying securities, persons and transactions, imposing different requirements for different classes, specifying with respect to Paragraph (2) of this subsection the scope of the exemption and the grounds for denial or suspension and requiring an issuer:

(1) to file a notice specifying the material terms of the proposed offer or sale and copies of any proposed sales and advertising literature to be used and provide that the exemption becomes effective if the director does not disallow the exemption within the period established by the rule;

(2) to file a request for exemption authorization for which a rule pursuant to the New Mexico Uniform Securities Act may specify the scope of the exemption, the requirement of an offering statement, the filing of sales and advertising literature, the filing of consent to service of process complying with Section 611 [58-13C-611 NMSA 1978] of the New Mexico Uniform Securities Act and grounds for denial or suspension of the exemption; or

(3) to register pursuant to Section 304 [58-13C-304 NMSA 1978] of the New Mexico Uniform Securities Act;

H. a member's or owner's interest in, or a retention certificate or like security given in lieu of a cash patronage dividend issued by, a cooperative organized and operated as a nonprofit membership cooperative pursuant to the cooperative laws of a state, but not a member's or owner's interest, retention certificate or like security sold to persons other than bona fide members of the cooperative; and

I. a certificate of participation in a real property lease or an equipment trust certificate with respect to equipment leased or conditionally sold to a person, if any security issued by the person would be exempt pursuant to this section or would be a federal covered security pursuant to Section 18(b)(1) of the federal Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)).

History: Laws 2009, ch. 82, § 201.

ANNOTATIONS

Effective dates.Laws 2009, ch. 82, § 704 made the New Mexico Uniform Securities Act effective January 1, 2010.

Cross references. — For the New Mexico mortgage finance authority, see 58-18-4 NMSA 1978.

Cases under prior law. — The pre-2010 cases below were decided under the former New Mexico Securities Act of 1986, Chapter 58, Article 13B. Due to the similarities between the two laws, the case annotations have been retained and included as annotations to the New Mexico Uniform Securities Act.

Former Subsection A exempted inter-tribal Indian council bonds from registration. — Any bond issued by the inter-tribal Indian council as authorized under former Section 28-12-1 NMSA 1978 was exempt from registration under the State Securities Act by virtue of the provisions of Subsection A of former Section 58-13-29 NMSA 1978. 1969 Op. Att'y Gen. No. 69-32 (decided under former law).

"Commercial paper". — "Commercial paper," as used in Subsection H of former Section 58-13-29 NMSA 1978 was descriptive of the kind of paper and not of the mode in which it was issued or used in a particular situation. State v. Sheets, 1980-NMCA-041, 94 N.M. 356, 610 P.2d 760, cert. denied, 94 N.M. 675, 615 P.2d 992 (decided under former law).

Its ordinary meaning applies. — There being nothing indicating the New Mexico legislature intended a special meaning for "commercial paper," the ordinary meaning of "commercial paper" applies. State v. Sheets, 1980-NMCA-041, 94 N.M. 356, 610 P.2d 760, cert. denied, 94 N.M. 675, 615 P.2d 992 (decided under former law).

Not same meaning as used in U.C.C. — "Commercial paper," in Subsection H of former Section 58-13-29 NMSA 1978 did not have a meaning identical to "commercial paper" under New Mexico's U.C.C.; although a document might be commercial paper under both acts, the purposes of the two acts were not the same. State v. Sheets, 1980-NMCA-041, 94 N.M. 356, 610 P.2d 760, cert. denied, 94 N.M. 675, 615 P.2d 992 (decided under former law).

Obligation to pay cash within nine months of date of issuance in Subsection H of former Section 58-13-29 NMSA 1978 meant an obligation for payment in full within nine months of the date of issuance. State v. Sheets, 1980-NMCA-041, 94 N.M. 356, 610 P.2d 760, cert. denied, 94 N.M. 675, 615 P.2d 992 (decided under former law).

Scope of Sale of Insurance Security Act. — The Sale of Insurance Security Act covers more than just securities exempt under the Securities Act because it covers securities of all insurance companies whether or not authorized to do any business of insurance in this state. 1969 Op. Att'y Gen. No. 69-97 (rendered under former law).

Law reviews. — For article, "A Survey of the Securities Act of New Mexico," see 2 N.M.L. Rev. 1 (1972).

For article, "The Use (or Abuse) of the Limited Partnership in Financing Real Estate Ventures in New Mexico," see 3 N.M.L. Rev. 251 (1973).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 69A Am. Jur. 2d Securities Regulation - State § 131 et seq.

Exempted securities under § 3(a)(2)-3(a)(8) of Securities Act of 1933 (15 USCS §§ 77c(a)(2)-77c(a)(8)), 119 A.L.R. Fed. 259.

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