Sec. 19. (a) The prohibitions set forth in section 17 of this chapter do not apply to any of the following:
(1) An account, an agreement, or a transaction that is within the exclusive jurisdiction of the Commodity Futures Trading Commission as provided under the Commodity Exchange Act.
(2) A commodity contract:
(A) that is for the purchase of at least one (1) precious metal;
(B) that requires physical delivery of the quantity of the precious metals purchased not later than twenty-eight (28) calendar days after payment of any portion of the purchase price; and
(C) under which the purchaser receives physical delivery of the quantity of precious metals purchased not later than twenty-eight (28) calendar days after payment of any portion of the purchase price.
(3) A commodity contract solely between persons engaged in producing, processing, using commercially, or handling as merchants:
(A) each commodity subject to the contract; or
(B) any byproduct of the commodity subject to the contract.
(4) A commodity contract under which the offeree or the purchaser is any of the following:
(A) A person described in section 18(a) of this chapter.
(B) An insurance company.
(C) An investment company (as defined in the Investment Company Act of 1940).
(b) For purposes of this section, physical delivery is considered to have occurred if both of the following occur:
(1) The quantity of precious metals purchased is delivered (in specifically segregated or fungible bulk form) within the twenty-eight (28) day period to the possession of a depository that:
(A) is not the seller; and
(B) is any of the following:
(i) A depository that issues warehouse receipts that are recognized for delivery purposes for any commodity on a contract market designated by the Commodity Futures Trading Commission.
(ii) A storage facility that is licensed or regulated by the United States or any agency of the United States.
(iii) A depository designated by the commissioner.
(2) The depository, any other person described in subdivision (1)(B), or a qualified seller issues and the purchaser receives a certificate, document of title, confirmation, or other instrument that evidences that the quantity of precious metals:
(A) has been delivered to the depository; and
(B) is held and will continue to be held:
(i) by the depository on the purchaser's behalf; and
(ii) 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 that have previously been disclosed to the purchaser.
(c) For the purposes of this section, a qualified seller is a person who meets the following conditions:
(1) Is a seller of precious metals.
(2) Has:
(A) a tangible net worth of at least five million dollars ($5,000,000); or
(B) has an affiliate who:
(i) has unconditionally guaranteed the obligations and liabilities of the person; and
(ii) has a tangible net worth of at least five million dollars ($5,000,000).
(3) Has stored precious metals with at least one (1) depository on behalf of customers for at least the preceding three (3) years.
(4) Before any offer, and annually after any offer, files with the commissioner a sworn notice of intent to act as a qualified seller under this section that contains the following:
(A) The person's name and address.
(B) The names of the person's directors, officers, controlling shareholders, partners, principals, and other controlling persons.
(C) The address of the person's principal place of business.
(D) The state and date of the person's incorporation or organization.
(E) The name and address of the person's registered agent in Indiana.
(F) A statement that:
(i) the person; or
(ii) an affiliate of the person who has guaranteed the obligations and liabilities of the person;
has a tangible net worth of at least five million dollars ($5,000,000).
(G) Depository information required by the commissioner, including the following:
(i) The name and address of any depository that the person intends to use.
(ii) The name and address of each depository in which the person has stored precious metals on behalf of customers at any time during the preceding three (3) years.
(iii) Independent verification from each depository named in item (ii) that the person has in fact stored precious metals on behalf of the person's customers in the depository during the preceding three (3) years and a statement by each depository showing the total deposits made by the person during the three (3) years.
(H) A financial statement, audited by an independent certified public accountant, for:
(i) the person; or
(ii) an affiliate of the person who has guaranteed the obligations and liabilities of the person;
for the past three (3) years.
(I) The certified public accountant's audit report of the financial statement described in clause (H).
(J) A statement describing the details of any civil, criminal, or administrative proceedings currently pending or adversely resolved against the person or the person's directors, officers, controlling shareholders, partners, principals, or other controlling persons during the preceding ten (10) years, including the following:
(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 a self-regulatory organization registered under the Securities Exchange Act of 1934 or the Commodities Exchange Act.
(K) A statement declaring that proceedings described in clause (J) have not occurred if there have been no proceedings of that type.
(5) Notifies the commissioner of any material changes in the information provided in the notice of intent under subdivision (4) not later than fifteen (15) days after the changes occur or are made.
(6) Annually furnishes to:
(A) each purchaser for whom the seller is currently storing precious metals; and
(B) the commissioner;
a report by an independent certified public accountant of the accountant's examination of the seller's precious metals storage program.
As added by P.L.177-1991, SEC.10.
