Tennessee Securities Act of 1980

Tenn. Code Ann. tit. 48, ch. 1, pt. 1

in effect

Tenn. Code Ann. § 48-1-101 Short title.

48-1-101. Short title. This part shall be known as the “Tennessee Securities Act of 1980.” Acts 1980, ch. 866, § 1; T.C.A., § 48-16-101; T.C.A., § 48-2-101.

Tenn. Code Ann. § 48-1-102 Part definitions.

48-1-102. Part definitions. As used in this part, unless the context otherwise requires: (1) “Accredited investor” means accredited investor, as that term is defined in Rule 501 of Regulation D under the Securities Act of 1933 (17 CFR 230.501), as amended; (2) “Affiliate” means a person who directly, or indirectly through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, another person; (3) “Agent” means any individual, other than a broker-dealer, who represents a broker-dealer in effecting or attempting to effect purchases or sales of securities from, in, or into this state. A partner, officer, director, or manager of a broker-dealer, or a person occupying similar status or performing similar functions, is an agent only if such person otherwise comes within this definition or receives compensation specifically related to purchases or sales of securities from, in, or into this state. “Agent” does not include such other persons not within the intent of this subdivision (3) as the commissioner may, by rule, exempt from this definition as not in the public interest and necessary for the protection of investors; (4) “Broker-dealer” means any person engaged in the business of effecting transactions in securities for the account of others, or any person engaged in the business of buying or selling securities issued by one (1) or more other persons for such person's own account and as part of a regular business rather than in connection with such person's investment activities. “Broker-dealer” does not include: (A) Issuers, except to the extent provided in § 48-1-110(f); (B) An agent; (C) An institutional investor; (D) A person who has no place of business in this state and who is registered as a broker-dealer with the securities and exchange commission or the Financial Industry Regulatory Authority (FINRA) or any successor regulatory entity if: (i) The person effects transactions in this state exclusively with or through: (a) The issuers of the securities involved in the transactions; (b) Other broker-dealers; or (c) Institutional investors; or (ii) During any period of twelve (12) consecutive months, the person does not effect more than fifteen (15) transactions in securities from, in, or into this state (other than to persons specified in subdivision (4)(D)(i)); or (E) Such other persons not within the intent of this subdivision (4) as the commissioner may by rule exempt from this definition as not in the public interest and necessary for the protection of investors; (5) “Canadian retirement account” means a trust or other arrangement, including, but not limited to, a “registered retirement savings plan” or “registered retirement income fund” administered under Canadian law, that is managed by the natural person who contributes to, or is or will be entitled to receive the income and assets from such account; (6) “Commissioner” means the commissioner of commerce and insurance; (7) “Control,” including “controlling,” “controlled by,” and “under common control with,” means the possession, directly or indirectly, of the power to direct or compel the direction of the management or policies of a person, whether through the ownership of voting securities, by contract, or otherwise; (8) “Covered security” means a security that is, or upon completion of a transaction will be, a covered security under § 18(b) of the Securities Act of 1933 (15 U.S.C. § 77r(b)), as amended, or rules or regulations adopted pursuant to that provision; (9) “Department” means the department of commerce and insurance; (10) “Designated adult” means: (A) An individual sixty-five (65) years of age or older; or (B) An individual who is eighteen (18) years of age or older and who, because of mental or physical dysfunction, is unable to manage such person's own resources, carry out activities of daily living, or protect against neglect or hazardous or abusive situations, without assistance from others; (11) “Financial exploitation” means: (A) The wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, or property of a designated adult; or (B) Any act or omission by a person, including through the use of a power of attorney, guardianship, or conservatorship of a designated adult, to: (i) Obtain control, through deception, intimidation, or undue influence, over the designated adult's money, assets, or property to deprive the designated adult of the ownership, use, benefit, or possession of his or her money, assets, or property; or (ii) Convert money, assets, or property of the designated adult to deprive such designated adult of the ownership, use, benefit, or possession of his or her money, assets, or property; (12) “Institutional investor” means a bank (unless the bank is acting as a broker-dealer as such term is defined in § 48-1-109(a)), trust company, insurance company, investment company registered under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), as amended, a holding company which controls any of the foregoing, a trust or fund over which any of the foregoing has or shares investment discretion, a pension or profit-sharing plan, an institutional buyer (as the commissioner may further define by rule), or any other person engaged as a substantial part of its business in investing in securities unless such other person is within the definition of a broker-dealer in the first sentence of subdivision (4) (in which case such other person is not an institutional investor), in each case having a net worth in excess of one million dollars ($1,000,000); (13) “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, buying, 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” includes a financial planner or other person who, as an integral component of other financially related services, provides investment advice to others for compensation as part of a business or who holds oneself out as providing investment advice to others for compensation. “Investment adviser” does not include: (A) A bank (unless it is acting as an investment adviser for a registered investment company), savings institution, or trust company; (B) A lawyer, accountant, engineer, or teacher whose performance of investment advisory services is solely incidental to the practice of such lawyer's, accountant's, engineer's, or teacher's profession; (C) A broker-dealer whose performance of investment advisory services is solely incidental to the conduct of such person's business as a broker-dealer and who receives no special compensation for such services; (D) A publisher of any bona fide newspaper, news magazine, or business or financial publication of general, regular, and paid circulation; (E) A person who has no place of business in this state if: (i) The person's only clients in this state are other investment advisers, broker-dealers, or institutional investors; or (ii) During any period of twelve (12) consecutive months, the person does not direct business communications into this state in any manner to more than five (5) clients (other than those specified in subdivision (12)(E)(i)), whether or not such person or any of the persons to whom the communications are directed are then present in this state; or (F) Such other persons not within the intent of this subdivision (12) as the commissioner may by rule exempt from this definition as not in the public interest and necessary for the protection of investors; (14)(A) “Investment adviser representative” means any partner, officer, or director of (or person occupying a similar status or performing similar functions) an investment adviser, or other individual, except clerical or ministerial personnel, who is employed by or associated with an investment adviser and does any of the following: (i) Makes any recommendation or otherwise renders advice regarding securities; (ii) Manages accounts or portfolios of clients; (iii) Determines which recommendation or advice regarding securities should be given; (iv) Solicits, offers, or negotiates for sale of or sells investment advisory services; or (v) Supervises employees who perform any such actions; (vi) Provides investment advice or holds oneself out as providing investment advice; (B) “Investment adviser representative” does not include such other persons not within the intent of this subdivision (13) as the commissioner may, by rule, exempt from this definition as not in the public interest and necessary for the protection of investors; (15) “Investment-related” means any activities connected to any of the following business areas: (A) Securities; (B) Commodities; (C) Banking; (D) Insurance; or (E) Real estate; (16)(A) “Issuer” means every person who issues any security, except that: (i) With respect to certificates of deposit, voting-trust certificates, collateral-trust certificates, certificates of interest or shares in an unincorporated investment trust which is of the fixed, restricted management or unit type or which does not have either a board of directors or persons performing similar functions, “issuer” means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the trust or other agreement under which such securities are issued; (ii) With respect to equipment-trust certificates or like securities, “issuer” means the person by whom the property is or is to be used; and (iii) With respect to a fractional undivided interest in oil, gas, or other mineral rights, “issuer” means the owner of such right or of an interest in such right (whether whole or fractional) who creates fractional interests therein for the purpose of sale; (B) Any person who acts as a promoter for or on behalf of a corporation, trust, or unincorporated association or partnership of any kind to be formed shall be deemed to be an issuer of preincorporation subscriptions or certificates; (17) “Person” means a natural person, a sole proprietorship, a corporation, a partnership, an association, a limited liability company, a joint-stock company, a trust, a governmental entity or agency, or any other unincorporated organization; (18) “Promoter” means: (A) Any person who, acting alone or in conjunction with one (1) or more persons, directly or indirectly takes the initiative in founding and organizing the business or enterprise of an issuer; or (B) Any person who, in connection with the founding or organizing of the business or enterprise of an issuer, directly or indirectly receives in consideration of services or property, or both services and property, ten percent (10%) or more of any class of securities of the issuer or ten percent (10%) or more of the proceeds from the sale of any class of securities; provided, that a person who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this subdivision (17) if such person does not otherwise take part in founding and organizing the enterprise; (19) “Qualified individual” means any agent, investment adviser representative, or person who serves in a supervisory, compliance, or legal capacity for a broker-dealer or investment adviser; (20)(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 property is considered to constitute part of the subject of the purchase and to have been offered and sold for value; (D) A purported gift of an assessable security is considered to involve an offer and sale; (E) 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 such security into another security of the same or another issuer, is considered to include an offer of the other security; (F) The terms defined in this subdivision (19) do not include any bona fide: (i) Gift other than as set forth in subdivision (19)(D); (ii) Transfer by death; (iii) Transfer by termination of a trust; (iv) Pledge or security loan; (v) Stock split or reverse stock split; (vi) Security dividend, whether the security is issued by the same or another company, if nothing of value is surrendered by security holders for the security dividend other than the right to a cash or property dividend where each security holder may elect to take the dividend in cash or property or in stock; (vii) Act incident to a class vote by stockholders, pursuant to the charter or the applicable corporation statute, on a merger, consolidation, recapitalization, or sale of assets in exchange for securities of another corporation; or (viii) Act incident to a judicially approved transaction in which a security is issued in exchange for one (1) or more outstanding securities, claims, or property interests, or part in such exchange and partly for cash; (21)(A) “Security” means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, a life settlement investment or any fractional or pooled interest in a life insurance policy or life settlement investment, certificate of interest or participation in any profit-sharing agreement, 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; (B) For the purposes of this subdivision (20), “life settlement investment” means the contractual right to receive any portion of the death benefit or ownership of a life insurance policy or certificate, for consideration that is less than the expected death benefit of the life insurance policy or certificate. “Life settlement investment” also includes written agreements commonly referred to as viatical settlement investments. “Life settlement investment” does not include: (i) A viatical settlement contract, between a viator and a viatical settlement provider, as such terms are defined in § 56-50-102; (ii) Any transfer of ownership or beneficial interest in a life insurance policy from a viatical settlement provider to another viatical settlement provider, as defined in § 56-50-102, or to any legal entity formed solely for the purpose of holding ownership or beneficial interest in a life insurance policy or policies; (iii) Any agreement for the original issuance of an insurance policy or certificate of insurance from the insured or policy owner to any provider of a life insurance policy; (iv) An assignment, transfer, sale, devise, or bequest of a death benefit under or ownership of either an insurance policy or certificate of insurance by the original owner or a person who has an insurable interest in the insured; (v) An assignment of an insurance policy or certificate of insurance to any bank, savings bank, savings and loan association, credit union, or other licensed lending institution as collateral for a loan; or (vi) The exercise of accelerated benefits pursuant to a life insurance policy; and (C) “Security” does not include: (i) Currency; (ii) A check, whether or not certified; draft; bill of exchange; or bank letter of credit; (iii) A note or other evidence of indebtedness issued in a mercantile or consumer, rather than an investment, transaction; (iv) An interest in a deposit account with a bank or a savings and loan association; or (v) An insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or for some other specified period; (22) “Senior security” means any bond, debenture, note, or similar obligation or instrument constituting a security and evidencing indebtedness, and any stock of a class having priority over any other class as to distribution of assets or payment of dividends; and (23) “Underwriter” means any person who has purchased from an issuer or an affiliate of an issuer with a view to, or who sells for an issuer or an affiliate of an issuer in connection with, the distribution of any security, or participates or has a direct or indirect participation in any such undertaking, or participates or has a participation in the direct or indirect underwriting of any such undertaking; provided, that a person shall be presumed not to be an underwriter of a security which such person has owned beneficially for two (2) years or more; and provided further, that a broker-dealer shall be presumed not to be an underwriter with respect to any security which does not represent part of an unsold allotment to or subscription by the broker-dealer as a participant in the distribution of such security; and provided further, that in the case of any security acquired on the conversion of another security without payment of additional consideration, the length of time such convertible security has been beneficially owned by such person shall include the period during which such convertible security was beneficially owned and the period during which the security acquired on conversion was beneficially owned. Acts 1980, ch. 866, § 2; 1983, ch. 312, § 2; T.C.A., § 48-16-102; Acts 1985, ch. 26, § 1; 1994, ch. 868, § 13; 1995, ch. 477, § 2; 1996, ch. 1072, § 10; 1997, ch. 164, §§ 1, 2; 1999, ch. 74, § 1; 2000, ch. 699, § 2; 2001, ch. 80, §§ 1, 2; 2001, ch. 278, § 1; 2002, ch. 550, § 1; 2002, ch. 700, §§ 1-3; 2010, ch. 697, § 1; 2010, ch. 829, § 1; T.C.A., § 48-2-102; Acts 2017, ch. 424, § 1; 2023, ch. 112, §§ 1, 2, 3.

Tenn. Code Ann. § 48-1-103 Exemptions.

48-1-103. Exemptions. (a) The following securities are exempted from § 48-1-104 and, except as the commissioner may otherwise require by rule, §§ 48-1-113 and 48-1-124(e): (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 (1) 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 (1) or more of the foregoing, any international bank of which the United States is a member, 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; or any interest or participation in any common trust fund or similar fund maintained by a bank exclusively for the collective investment or reinvestment of assets contributed thereto by such bank in its capacity as trustee, executor, administrator, guardian, or in a similar fiduciary capacity; (4) Any security issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association, any federally insured savings and loan or similar association organized under the laws of any state and authorized to do business in this state, or any thrift certificates which are issued and sold by an industrial bank organized and supervised under the laws of this state which is insured pursuant to the Federal Deposit Insurance Act (12 U.S.C. § 1811 et seq.), as that act may be amended from time to time; (5) Any security issued or guaranteed by any federal credit union or any credit union supervised under the laws of this state; (6) 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; (B) A registered holding company under the Public Utility Holding Company Act of 1935 [repealed], as amended, 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; (7) 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; provided, that at least ten (10) days prior to any sale of a security pursuant to an exemption under this subdivision (a)(7), such person has filed with the commissioner all information as the commissioner may by rule require and paid a fee of one hundred dollars ($100), and that the commissioner does not by order disallow the exemption under this subdivision (a)(7) and no sales are made until expiration of that ten (10) days; provided further, that the commissioner may restrict the availability of this exemption to any class or subclass of securities of such issuer; (8) Any security which meets all of the following conditions: (A) If the issuer is not organized under the laws of the United States or a state, it has appointed a duly authorized agent in this state for service of process and has set forth the name and address of such agent in its prospectus or offering circular; (B) A class of the issuer's securities is registered under § 12 of the Securities Exchange Act of 1934 (15 U.S.C. § 78l), as amended, and has been so registered for the three (3) years preceding the offering date, and the issuer has filed all reports required to be filed by § 13 or § 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78m and 15 U.S.C. § 78o(d)), respectively, as amended, during the preceding twelve (12) months; (C) Neither the issuer nor a significant subsidiary has had a material default (which was not cured within ten (10) days) during the last five (5) years in the payment of: (i) Principal, interest, dividend or sinking fund installment on preferred stock or indebtedness for borrowed money; or (ii) Rentals under material leases with terms of three (3) years or more; (D) The issuer has had consolidated net income (before extraordinary items and the cumulative effect of accounting changes) of at least one million dollars ($1,000,000) in four (4) of its last five (5) fiscal years including its last fiscal year and, if the offering is of interest-bearing securities, has had for its last fiscal year, such net income, but before deduction for income taxes and depreciation, of at least one and one-half (1½) times the issuer's annual interest expense, giving effect to the proposed offering and the intended use of the proceeds. “Last fiscal year” means the most recent year for which audited financial statements are available; provided, that such statements cover a fiscal period ended not more than fifteen (15) months from the commencement of the offering; (E) If the offering is of stock or shares, other than preferred stock or shares, such securities have voting rights and such rights include: (i) The right to have at least as many votes per share; and (ii) The right to vote on at least as many general corporate decisions, as each of the issuer's outstanding classes of stock or shares, except as otherwise required by law; (F) If the offering is of stock or shares, other than preferred stock or shares, outstanding stock or shares of the same class are owned beneficially or of record, on any date within six (6) months prior to the commencement of the offering, by at least one thousand two hundred (1,200) persons, and on such date there are at least seven hundred fifty thousand (750,000) such shares outstanding with an aggregate market value, based on the closing bid price for that day, of at least three million seven hundred fifty thousand dollars ($3,750,000). In connection with the determination of the number of persons who are beneficial owners of the stock or shares of an issuer, the issuer or broker-dealer may rely in good faith, for the purposes of this subdivision (a)(8), upon written information furnished by the record owners; and (G) If the offering is of interest-bearing securities of a finance company with liquid assets of at least one hundred five percent (105%) of its liabilities (other than deferred income taxes, deferred investment tax credits, capital stock and surplus) at the end of each of its last five (5) fiscal years, the applicable net income requirement of subdivision (a)(8)(D), but before deduction for interest expense, shall be one hundred twenty-five percent (125%) of the issuer's annual interest expense. “Finance company” means a company engaged, directly or through consolidated subsidiaries, primarily in the business of wholesale, retail, installment, mortgage, commercial, industrial or consumer financing, banking, or factoring. “Liquid assets” means cash receivables payable on demand or not more than twelve (12) years following the close of the company's last fiscal year, and readily marketable securities, in each case less applicable reserves and unearned income; (9)(A) Any class of securities currently listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Stock Exchange, or any other exchange which the commissioner may by order designate; (B) Any other security of the same issuer which is of senior or substantially equal rank; (C) Any security called for by subscription rights or warrants so listed or approved; or (D) Any warrant or right to purchase or subscribe to any of the foregoing; (10) Any security exchanged by the issuer exclusively with its existing securities holders where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange; (11) Securities, stocks, and bonds of corporations organized pursuant to the Cooperative Marketing Law, as compiled in title 43, chapter 16, and domiciled within the state of Tennessee; (12) Any security issued by a bank holding company or a savings and loan holding company if: (A) Such bank holding company or savings and loan holding company is registered with the federal reserve board; and (B) At least ten (10) days prior to any sale of a security in this state pursuant to an exemption under this subdivision (a)(12), such bank holding company or savings and loan holding company has filed with the commissioner all information as the commissioner may by rule require and paid a fee of one hundred dollars ($100), and the commissioner does not by order disallow the exemption under this subdivision (a)(12) and no sales are made until expiration of that ten (10) days. The commissioner may restrict the availability of the exemption under this subdivision (a)(12) to any class or subclass of securities of such issuer; and (13)(A) Any security issued by a person that meets the following requirements: (i) The sale of the security must meet the requirements of the federal exemption for intrastate offerings in either: (a) Section 3(a)(11) of the Securities Act of 1933 (15 U.S.C. § 77c(a)(11)), and 17 C.F.R. 230.147 or 17 C.F.R. 230.147A; or (b) 17 C.F.R. 230.147A; (ii) The sum of all cash and other consideration to be received for all sales of the security in reliance upon this subdivision (a)(13)(A) shall not exceed five million dollars ($5,000,000) less the aggregate amount received for all sales of securities by the issuer within the twelve (12) months before the first offer. The commissioner may, by rule, require a sales report in a designated format; (iii) The issuer shall not accept more than ten thousand dollars ($10,000) from an investor unless the investor is an accredited investor pursuant to 17 C.F.R. 230.501; (iv) All funds received from the sale of a security in reliance upon this subdivision (a)(13)(A) shall be deposited in a bank, trust company, or depository institution authorized to do business in this state, and all funds received from buyers of a security in reliance upon this subdivision (a)(13)(A) shall be used consistent with written representations made by the issuer to investors; (v) Before offering to sell any security, the issuer shall provide a notice to the commissioner in writing or in electronic form; the notice shall specify that the issuer will offer or has sold the security in reliance upon this subdivision (a)(13)(A) and shall include the names and addresses of the following: (a) The issuer; (b) All persons who will sell or offer to sell the security on behalf of the issuer; and (c) The bank, trust company, or depository institution in which proceeds from the sale of the security will be deposited; (vi) The issuer shall not be, either before or as a result of the offering, an investment company as defined in § 3, Investment Company Act of 1940 (15 U.S.C. § 80a-3) or subject to the reporting requirements of § 13, Securities Exchange Act of 1934 (15 U.S.C. § 78m) or § 15(d), Securities Exchange Act of 1934 (15 U.S.C. § 78o(d)); and (vii) The issuer shall inform all buyers prior to the sale of a security that falls within this subdivision (a)(13)(A) that the security has not been registered under this part and: (a) With respect to issuers utilizing 17 C.F.R. 230.147, the issuer shall also inform all buyers that the security is subject to the limitation on resales contained in 17 C.F.R. 230.147(e); or (b) With respect to issuers utilizing 17 C.F.R. 230.147A, the issuer shall also inform all buyers that the security is subject to the limitations on resales contained in 17 C.F.R. 230.147A(e); (B)(i) Subdivision (a)(13)(A) shall not be used with any other exemption under this part unless the offer or sale is to any of the following: (a) An officer, director, partner, or trustee of the entity offering the sale of the security, or an individual occupying similar status or performing similar functions for the entity offering the sale of the security; or (b) A person owning ten percent (10%) or more of the outstanding shares of any class or classes of securities issued by the entity offering the sale of the security; and (ii) Offers or sales to persons listed in subdivisions (a)(13)(B)(i)(a) and (b) shall not count toward the monetary limit of sales set out in subdivision (a)(13)(A)(ii); and (C) Subdivision (a)(13)(A) shall not be available to the issuer: (i) If the person selling or offering to sell the security is subject to a disqualifying event specified in § 48-1-112(a)(2)(A)-(H); (ii) If the offering does not qualify for the exemption provided in 17 C.F.R. 230.147 or 17 C.F.R. 230.147A. The burden of proof of qualification for either exemption is on the issuer claiming the exemption. Failure to qualify for the claimed exemption will result in any offers or sales of the security to be unregistered offers to sell or sales in violation of § 48-1-104; or (iii) If the issuer, any of the issuer's predecessors, any affiliate of the issuer, any of the issuer's directors, officers, general partners, or beneficial owners of ten percent (10%) or more of any class of its equity securities, any of the issuer's promoters presently connected with the issuer in any capacity, any underwriter of the securities to be offered, or any partner, director, or officer of such underwriter: (a) Within the past five (5) years, has filed a registration statement that is the subject of a currently effective registration stop order entered by any state securities administrator or the securities and exchange commission; (b) Within the past five (5) years, has been convicted of any criminal offense in connection with the offer, purchase, or sale of any security, or involving fraud or deceit; (c) Is currently subject to any state or federal administrative enforcement order or judgment, entered within the past five (5) years, finding fraud or deceit in connection with the purchase or sale of any security; or (d) Is currently subject to any order, judgment, or decree of any court of competent jurisdiction, entered within the past five (5) years, that temporarily, preliminarily, or permanently restrains or enjoins the party from engaging in or continuing to engage in any conduct or practice involving fraud or deceit in connection with the purchase or sale of any security. (b) The following transactions are exempted from § 48-1-104 and, except as the commissioner may otherwise require by rule, §§ 48-1-113 and 48-1-124(e): (1) Any transaction by a person acting as an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator; (2) Any bona fide pledge transaction; (3) Any sale to an institutional investor or to a broker-dealer; (4) Any transaction involving the sale of securities of an issuer by or on behalf of such issuer or an affiliate of such issuer if all of the following conditions are met: (A) The aggregate number of persons in this state purchasing such securities from the issuer and all affiliates of the issuer pursuant to this subdivision (b)(4) during the twelve-month period ending on the date of such sale shall not exceed fifteen (15) persons, exclusive of persons who acquire such securities in transactions which are not subject to this part or which are otherwise exempt from registration under this section or which have been registered pursuant to § 48-1-105 or § 48-1-106; (B) Such securities are not offered for sale by means of publicly disseminated advertisements or sales literature; and (C) All purchasers in this state have purchased such securities with the intent of holding such securities for investment for their own accounts and without the intent of participating directly or indirectly in a distribution of such securities. Any person who holds such securities for a period of two (2) years or more from the date such securities have been fully paid for by such person shall be presumed to have purchased such securities for investment; (5) Any transaction in the outstanding securities of an issuer by an affiliate of such issuer; provided, that: (A) Such affiliate is not acting as an underwriter with respect to the sale of such securities; (B) Such securities are sold by the affiliate, through a broker-dealer registered under § 48-1-109, in “broker's transactions” as defined by Rule 144 of the securities and exchange commission (17 C.F.R. § 230.144); (C) There is no solicitation, directly or indirectly, of orders to purchase any of such securities by the issuer or the affiliate; and (D) Neither the issuer nor the affiliate makes any payments directly or indirectly in connection with the execution of such transactions other than to the broker-dealer who executes the order to sell the securities; (6) Any offering of securities by or on behalf of an issuer organized under the laws of or domiciled in this state in which the aggregate amount sold in this state does not exceed two hundred fifty thousand dollars ($250,000) during any twelve-month period, if no commission or other remuneration is paid or given directly or indirectly for soliciting any purchaser in this state, exclusive of any amount of securities sold in exempt transactions pursuant to subdivision (b)(3); provided, that this exemption shall not be available for any offering of certificates 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; (7) Any transaction in the outstanding securities of an issuer by or on behalf of a person who is neither the issuer of such securities nor an affiliate of such issuer, at a price reasonably related to the market price and: (A) If the issuer is required to file reports with the securities and exchange commission pursuant to § 13 or § 15 of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m and 78o) respectively, as amended, the issuer is not delinquent in the filing of any such reports at the date of sale; (B) In the case of issuers which are not required to file such reports, if there is publicly available the information concerning the issuer specified in Rule 15c2-11 (17 CFR 240.15c2-11), promulgated under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.); or (C) The issuer is an investment company registered under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), as amended, and is not delinquent in filing any reports required pursuant to such act; (8) Any isolated transaction in securities not involving the issuer of such securities, an underwriter of such securities, or an affiliate of the issuer of such securities; (9)(A) Any transaction involving the issuance of a security: (i) In connection with a stock bonus plan requiring payment of no consideration other than services; (ii) In connection with a stock bonus, pension, profit sharing, savings, thrift, or retirement plan for employees or self-employed individuals qualified under § 401 of the Internal Revenue Code of 1954 (26 U.S.C. § 401), as amended, or individual retirement accounts qualified under § 408 of the Internal Revenue Code of 1954 (26 U.S.C. § 408), as amended; or (iii) In connection with a transaction that meets the following requirements: (a) The offering meets the requirements of Rule 701 of the regulations under the Securities Act of 1933 (17 CFR 230.701), as amended; (b) The offering is exempt from § 5 of the Securities Act of 1933 (15 U.S.C. § 77e), as amended; and (c) [Deleted by 2023 amendment.] (B) No commission, discount, or other remuneration is paid or given in connection with any transaction in this state under this subdivision (b)(9) unless paid or given to a broker-dealer or agent registered under this part; and (C) The issuance of any security representing an interest in a collective investment fund is exempt only if such security is issued pursuant to a plan established and administered by a bank organized under the laws of the United States or any bank or trust company organized and supervised under the laws of any state of the United States or sponsored by any investment company registered under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), as amended, or sponsored by any insurance company licensed to do business in this state; (10) Any issuance and delivery of securities of a bank holding company, as defined in § 45-2-1402, to a bank or another bank holding company or to the security holders thereof in exchange for all or substantially all of the assets or the voting securities of the bank or other bank holding company, or in connection with a consolidation or merger of the bank holding company and a bank or other bank holding company; provided, that such exchanges, consolidations or mergers are made in accordance with the applicable statutory requirements; (11) Any transaction which the commissioner by rule or order exempts as not being in the public interest or necessary for the protection of investors. Any rule under this section may require a notice filing, and may require the payment of a filing fee not in excess of that required by § 48-1-107(b). In the event of withdrawal of a notice filing, no funds shall be returned to the applicant; (12) Any transaction pursuant to an offer to existing security holders of the issuer, including the persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants exercisable within not more than ninety (90) days of their issuance if 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; (13)(A) Any offer or sale of a security by an issuer in a transaction that meets the following requirements: (i) Sales of securities are made only to persons who are, or who the issuer reasonably believes are, accredited investors. An issuer's belief under this subdivision (b)(13) shall be deemed reasonable if the issuer: (a) Obtains from such a person a written certification certifying that the person has reviewed the definition of “accredited investor” in § 48-1-102, and certifying that such person meets the definition of “accredited investor” in § 48-1-102; (b) Obtains from such person such other information as the commissioner may by rule require; and (c) Maintains, for a period of not less than three (3) years from the date of sale, the written certification and other information required by the commissioner; (ii) The issuer reasonably believes that all purchasers are purchasing for investment and not with a view to or for resale in connection with a distribution of the security. Any resale of a security sold in reliance on this exemption within twelve (12) months of sale shall be presumed to be with a view to distribution and not for investment, except a resale to which any of the following applies: (a) The resale is pursuant to a registration statement effective under § 48-1-105 or § 48-1-106; (b) The resale is to an accredited investor; or (c) The resale is to an institutional investor in an exempt transaction pursuant to subdivision (b)(3); (B) The exemption under this subdivision (b)(13) is not available to an issuer that is in the development stage and that either 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 entities or persons; (C)(i) The exemption under this subdivision (b)(13) is not available to an issuer if the issuer, any of the issuer's predecessors, any affiliate of the issuer, any of the issuer's directors, officers, general partners, or beneficial owners of ten percent (10%) or more of any class of its equity securities, any of the issuer's promoters presently connected with the issuer in any capacity, any underwriter of the securities to be offered, or any partner, director, or officer of such underwriter: (a) Within the past five (5) years, has filed a registration statement that is the subject of a currently effective registration stop order entered by any state securities administrator or the securities and exchange commission; (b) Within the past five (5) years, has been convicted of any criminal offense in connection with the offer, purchase, or sale of any security, or involving fraud or deceit; (c) Is currently subject to any state or federal administrative enforcement order or judgment, entered within the past five (5) years, finding fraud or deceit in connection with the purchase or sale of any security; or (d) Is currently subject to any order, judgment, or decree of any court of competent jurisdiction, entered within the past five (5) years, that temporarily, preliminarily, or permanently restrains or enjoins the party from engaging in or continuing to engage in any conduct or practice involving fraud or deceit in connection with the purchase or sale of any security; (ii) Subdivision (b)(13)(C)(i) is inapplicable if any of the following applies: (a) The party subject to the disqualification is licensed or registered to conduct securities business in the state in which the order, judgment, or decree creating the disqualification was entered against the party described in subdivision (b)(13)(C)(i); (b) Before the first offer is made under this exemption, the state securities administrator, the court, or regulatory authority that entered that order, judgment, or decree, waives the disqualification; or (c) The issuer did not know and, in the exercise of reasonable care based on reasonable investigation, could not have known that a disqualification from the exemption existed under subdivision (b)(13)(C)(i); (D) A general announcement of the proposed offering may be made by any means; provided, the general announcement shall include only the following information, unless additional information is specifically permitted by the commissioner: (i) The name, address, and telephone number of the issuer of the securities; (ii) The name, a brief description, and price of any security to be issued; (iii) A brief description of the business of the issuer; (iv) The type, number, and aggregate amount of securities being offered; (v) The name, address, and telephone number of the person to contact for additional information; and (vi) A statement that: (a) Sales will be made only to accredited investors; (b) No money or other consideration is being solicited or will be accepted by way of this general announcement; and (c) The securities have not been registered with or approved by any state securities administrator or the securities and exchange commission and are being offered and sold pursuant to an exemption from registration; (E) The issuer, in connection with an offer, may provide information in addition to the general announcement described in subdivision (b)(13)(D); provided, that either of the following applies: (i) The information is delivered through an electronic database that is restricted to persons who are accredited investors; or (ii) The information is delivered after the issuer reasonably believes that the prospective purchaser is an accredited investor; (F) No telephone solicitation shall be conducted, unless prior to placing the telephone call, the issuer reasonably believes that the prospective purchaser to be solicited is an accredited investor; (G) Dissemination of the general announcement described in subdivision (13)(D) to persons who are not accredited investors does not disqualify the issuer from claiming an exemption under this subdivision (b)(13); and (H) No later than fifteen (15) days after the first sale in this state, the issuer shall file with the commissioner a notice of transaction, on a form adopted by the commissioner, accompanied by a consent to service of process, a copy of the general announcement, if one is made regarding the proposed offering, and a nonrefundable filing fee of five hundred dollars ($500); (14) Any offer or sale of a charitable gift annuity as that term is defined in § 56-52-102; (15) An offer or sale of a security effected by a Canadian broker-dealer and its agents if, at the time of the offer or sale, the Canadian broker-dealer and its agents have qualified for exemption from registration with the commissioner of commerce and insurance pursuant to § 48-1-109; (16) A nonissuer transaction by or through a broker-dealer registered or exempt from registration under this part in a security that: (A) Is rated at the time of the transaction by a nationally recognized statistical rating organization in one (1) of its four (4) highest rating categories; or (B) Has a fixed maturity or a fixed interest or dividend, if: (i) A default has not occurred during the current fiscal year or within the three (3) previous fiscal years or during the existence of the issuer and any predecessor if less than three (3) fiscal years, in the payment of principal, interest, or dividends on the security; and (ii) The issuer is engaged in business, is not in the organizational stage or in bankruptcy or receivership, and is not and has not been within the previous twelve (12) months a blank check, blind pool, or shell company that has no specific business plan or purpose or has indicated that its primary business plan is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person; (17) A nonissuer transaction by or through a broker-dealer registered or exempt from registration under this part in a security of a foreign issuer: (A) That is a margin security defined in regulations or rules adopted by the board of governors of the federal reserve system; or (B) That relates to securities, including american depository receipts (ADRs) representing such securities, that are exempted from § 12(g) of the Securities Exchange Act of 1934 (15 U.S.C. § 78l (g)), pursuant to § 12(g)(3) (15 U.S.C. § 78l (g)(3)). This subdivision (b)(17)(B) shall apply if the foreign issuer of the securities is in compliance with the conditions of Rule 12g3-2(b) (17 CFR 240.12g3-2(b)), promulgated under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), and the primary trading market of the foreign issuer: (i) Qualifies as a primary trading market as that term is defined in Rule 12g3-2(b), note 1 to paragraph (b)(1); (ii) Maintains listing requirements; (iii) Has delisting authority; and (iv) Has disclosure requirements; or (C) If, at the time of the transaction, the foreign issuer maintains a listing that: (i) Includes the following: (a) A description of the business and operations of the foreign issuer; (b) The names of the executive officers and directors (or their corporate equivalents in the foreign issuer's country of domicile), if any; (c) An audited balance sheet of the foreign issuer as of a date within eighteen (18) months before the date of the transaction or, in the case of a reorganization or merger, either an audited balance sheet of each party to the reorganization or merger or a pro forma balance sheet of the combined organization, in each case as of a date within eighteen (18) months before the date of the transaction; and (d) An audited income statement for each of the foreign issuer's immediately preceding two (2) fiscal years or for the period of existence of the issuer, whichever is shorter, or, in the case of a reorganization or merger either an audited income statement of each party to the reorganization or merger or a pro forma income statement of the combined organization, in each case as of a date within eighteen (18) months before the date of the transaction; and (ii) Is published in a securities manual designated by the commissioner through rule promulgated in accordance with § 48-1-116; (18) A nonissuer transaction by an investment adviser registered pursuant to § 203 of the federal Investment Advisers Act of 1940 (15 U.S.C. § 80b-3), with investments under management in excess of one hundred million dollars ($100,000,000) acting in the exercise of discretionary authority in a signed record for the account of others; and (19) Any nonissuer transaction by or through a broker-dealer, registered or exempt from registration under this chapter, effecting an unsolicited order or offer to purchase; provided, that the broker-dealer acts solely as an agent for the purchaser, has no direct or indirect interest in the sale or distribution of the security ordered, and receives no commission, profit, or other compensation from any source other than the purchaser; and provided further, that the commissioner may by rule 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. Acts 1980, ch. 866, § 3; 1982, ch. 686, § 1; 1983, ch. 274, § 21; 1983, ch. 312, § 1; T.C.A., § 48-16-103; Acts 1986, ch. 596, § 1; 1989, ch. 207, §§ 1, 2; 1993, ch. 98, §§ 1-3; 1996, ch. 768, § 35; 2001, ch. 278, §§ 2-4; 2002, ch. 517, § 1; 2002, ch. 700, §§ 4-6; 2007, ch. 417, § 1; 2010, ch. 829, § 2; 2011, ch. 79, § 1; T.C.A., § 48-2-103; Acts 2013, ch. 261, § 1; 2014, ch. 943, § 1; 2017, ch. 424, §§ 2-10; 2020, ch. 604, §§ 1-3; 2023, ch. 112, §§ 4, 5, 6, 7.

Tenn. Code Ann. § 48-1-104 Securities registration requirement — Civil penalty.

48-1-104. Securities registration requirement — Civil penalty. (a) It is unlawful for any person to sell any security in this state unless: (1) It is registered under this part; (2) The security or transaction is exempted under § 48-1-103; or (3) The security is a covered security. (b) The commissioner may, after notice and opportunity for a hearing under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, impose a civil penalty against any person found to be in violation of this section, or any rule or order adopted or issued under this section, in an amount not to exceed ten thousand dollars ($10,000) per violation, or in an amount not to exceed twenty thousand dollars ($20,000) per violation if an individual who is a designated adult is a victim. Acts 1980, ch. 866, § 4; T.C.A., § 48-16-104; Acts 1997, ch. 164, § 3; 2001, ch. 61, § 2; T.C.A., § 48-2-104; Acts 2017, ch. 424, § 11.

Tenn. Code Ann. § 48-1-105 Registration by coordination.

48-1-105. Registration by coordination. (a) Any security for which a registration statement under the Securities Act of 1933 (15 U.S.C. § 77a et seq.), as amended, or a notification under Tier 1 of Regulation A of the Securities Act of 1933 (17 CFR 230.251 et seq.), as amended, has been filed in connection with the same offering may be registered by coordination as provided in this section. (b) A registration statement under this section shall contain the following information and be accompanied by the following documents in addition to the consent to service of process required by § 48-1-124(e): (1) If not included in the registration statement, one (1) copy of the latest form of prospectus or offering circular filed under the Securities Act of 1933 as amended, or Regulation A thereunder as amended, in a format approved by the commissioner; (2) If the commissioner by rule requires, a copy of the charter and bylaws (or their substantial equivalents) of the issuer, as then in effect, a copy of any agreements with or among underwriters, a copy of any indenture or other instrument governing the issuance of the security to be registered, and a specimen or copy of the security; (3) If the commissioner by rule requires, copies of any other documents filed under the Securities Act of 1933, as amended, or Regulation A, as amended, thereof; (4) An undertaking to forward promptly to the commissioner all amendments to the prospectus or offering circular; and (5) If the commissioner by rule or order requires, such other information as is necessary to determine that the registration statement does not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c)(1) A registration statement under this section which has been filed with the securities and exchange commission (SEC) automatically becomes effective with the commissioner when it is declared effective by the SEC if all the following conditions are satisfied: (A) No stop order is in effect and no proceeding is pending under § 48-1-108; (B) The registration statement has been on file with the commissioner for at least twenty (20) days; and (C) A statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions has been on file for two (2) full business days or such shorter period as the commissioner permits by rule or order and the offering is made within those limitations. (2) The registrant shall promptly notify the commissioner, by telephone or other electronic means, of the date and time when the registration statement or notification filed with the SEC is declared effective by the SEC and the contents of the price amendment, if any, and shall promptly file a post-effective amendment containing the information and documents in the price amendment. “Price amendment” means the final amendment filed with the SEC, which includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and other matters dependent upon the offering price. (3) The commissioner may by rule or order waive either or both of the conditions specified in subdivisions (c)(1)(B) and (C). If the registration statement or notification filed with the SEC is declared effective by the SEC before all the conditions in this subsection (c) are satisfied and they are not waived, the registration statement automatically becomes effective with the commissioner as soon as all the conditions are satisfied. (4) If the registrant advises the commissioner of the date when the registration statement or notification filed with the SEC is expected to be declared effective, the commissioner shall promptly advise the registrant, by telephone or other electronic means, at the registrant's expense, whether or not all the conditions are satisfied and whether or not the commissioner then contemplates the institution of a proceeding under § 48-1-108. This notice by the commissioner does not preclude the institution of such a proceeding at any time. Acts 1980, ch. 866, § 5; T.C.A., § 48-16-105; Acts 1986, ch. 596, § 2; 2001, ch. 61, § 3; T.C.A., § 48-2-105; Acts 2017, ch. 424, §§ 12-18.

Tenn. Code Ann. § 48-1-106 Registration by qualification.

48-1-106. Registration by qualification. (a) Any security may be registered by qualifications as provided in this section. (b) A registration statement under this section shall contain the following information and be accompanied by the following documents, in addition to the consent to service of process required by § 48-1-124(e): (1) If not included in the registration statement, one (1) copy of an offering circular or prospectus in a format approved by the commissioner, containing such financial statements and such information, including information concerning the securities offered, the offering, the issuer, the issuer's promoters, directors, officers, security holders and personnel, material contracts, litigation, transactions, and remuneration, as the commissioner shall specify by rule; (2) A specimen or copy of the security being registered, a copy of the issuer's charter and bylaws (or their substantial equivalents), as then in effect, and a copy of any indenture or other instrument defining the rights of the holders of the security to be registered; (3) A signed copy of an opinion of counsel as to the legality of the security being registered, and to the effect that the security, when sold, shall be legally issued, fully paid, nonassessable and, if a debt security, a binding obligation of the issuer; (4) The written consent of any accountant, attorney, engineer, appraiser, or other person whose profession gives authority to a statement made by the accountant, attorney, engineer, appraiser, or other person, if any such person is named as having prepared or certified a report or valuation (other than a public and official document or statement) which is used in connection with the registration statement; (5) A copy of any notice, circular, advertisement, sales literature, or communication, which is to be used in connection with the offering, containing such information as the commissioner may require by rule and subject to such terms and conditions as may be prescribed therein; and (6) If the commissioner by rule or order requires such additional information or documents as are necessary to determine that the registration statement does not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c) A registration statement under this section shall become effective twenty (20) days following filing unless the commissioner by order specifies an earlier effective date, or the commissioner may by order defer the effective date for any reason shown to be in the public interest and necessary for the protection of investors. (d) A prospectus which is part of a registration statement effective under this section shall be delivered to any purchaser at or prior to the execution by the purchaser of a written agreement to purchase, the delivery of a confirmation of sale, or the payment for securities offered by means of such prospectus, whichever occurs first. Acts 1980, ch. 866, § 6; T.C.A., § 48-16-106; Acts 2001, ch. 61, § 4; T.C.A., § 48-2-106; Acts 2017, ch. 424, § 19.

Tenn. Code Ann. § 48-1-107 Provisions applicable to registration generally.

48-1-107. Provisions applicable to registration generally. (a) A registration statement with respect to a security may be filed by the issuer or a broker-dealer registered under this part. (b) Every person filing a registration statement under §§ 48-1-105 and 48-1-106 shall pay a filing fee of one tenth of one percent (0.1%) of the maximum aggregate offering price at which the registered securities are to be offered in this state, but the fee shall in no case be more than one thousand dollars ($1,000) nor less than an amount which the commissioner shall by rule establish. When a registration statement is withdrawn before the effective date or before a preeffective stop order is entered under § 48-1-108, the commissioner shall retain the minimum filing fee established pursuant to this subsection (b) and return the remainder of the fee, if any, to the applicant. (c) Every registration statement shall specify: (1) The amount of securities to be offered in this state; (2) The states in which a registration statement or similar document in connection with the offering has been or is to be filed; and (3) Any adverse order, judgment, or decree entered in connection with the offering by the regulatory authorities in any state or by any court or by the securities and exchange commission. (d) The commissioner may by order permit the omission of any item of information or document from any registration statement if the commissioner finds that the omission of such information or document is in the public interest and inclusion of such information or document is not necessary for the protection of investors. (e) The commissioner may by rule declare standards of fairness and reasonableness concerning securities offerings generally and may by rule or order require as a condition of registration that: (1) Any security issued to a promoter within the past three (3) 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 for a reasonable period; and (2) The proceeds from the sale of the security registered in this state be held in escrow until the issuer receives a specified amount from the sale of the security either in this state or elsewhere; provided, that any such order be clearly shown to be in the public interest and necessary for the protection of investors. The commissioner may by rule determine the conditions of any escrow required hereunder, but the commissioner may not reject a depository solely because of its location in another state. (f) Every registration statement is effective for one (1) year from its effective date, unless the commissioner is sooner notified of the completion of the offering, or unless such registration is sooner terminated by order of the commissioner. Notwithstanding the foregoing, when a prospectus is used more than nine (9) months after the effective date of the registration statement, the information contained therein shall be as of a date not more than sixteen (16) months prior to such use. (g) Renewal registration for the succeeding one-year period may be issued upon written application and upon payment of fees as provided by this section for original registration, even though the maximum fee was paid in the preceding period, without the filing of further statements or furnishing of any further information except as the commissioner by rule requires. All applications for renewal received after the expiration of the previous registration shall be treated as original applications. (h) So long as a registration statement is effective, the person who filed the registration statement shall file such reports as the commissioner shall by rule require, keep reasonably current the information contained in the registration statement, and disclose the progress of the offering. For the purpose of avoiding unnecessary duplication, the commissioner, insofar as the commissioner deems it practicable in administering this subsection (h), may cooperate with the securities administrators of other jurisdictions, the securities and exchange commission, any national securities exchange or national securities association registered under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), as amended, and any association of securities administrators. (i) Any prospectus shall contain such other information as the commissioner may by rule require as being in the public interest and necessary for the protection of investors. (j) In the exercise of the commissioner's power under this section, § 48-1-105 or § 48-1-106, the commissioner shall have authority by rule to classify prospectuses according to the nature and circumstances of their use or the nature of the security, issue, issuer, or otherwise, and, subject to such terms and conditions as the commissioner shall specify therein, to prescribe as to each class the form and contents which the commissioner may find to be in the public interest and necessary for the protection of investors. (k) A registration statement may be withdrawn prior to its effectiveness or the issuance of a preeffective stop order under § 48-1-108. An effective registration statement may be withdrawn otherwise only in the discretion of the commissioner. (l) A registration statement relating to a security may be amended after its effective date so as to increase the securities specified as proposed to be offered. As to securities not yet sold, such an amendment becomes effective when the commissioner so orders. In the case of securities which are sold in an amount in excess of the amount or number of securities specified in an effective registration statement, as proposed to be offered, the person or persons who filed the registration statement may, in accordance with rules the commissioner shall promulgate as in the public interest and necessary for the protection of investors, elect to have the registration of those securities deemed effective as of the time of their sale, upon payment to the commissioner, within six (6) months after the sale, of a registration fee equal to the difference between the registration fee previously paid and the amount of the fee which would have otherwise been applicable to those additional securities had they been included in the registration statement, if any, plus a late registration fee of twenty-five dollars ($25.00). Upon such an election and payment, the registration statement shall be considered to have been in effect with respect to those shares. Every person filing an amendment under this subsection (m) shall pay a filing fee, calculated in the manner specified in subsection (b), with respect to the additional securities. (m) Any amendment to a registration statement which changes the name of the offering of securities shall pay a processing fee of fifty dollars ($50.00) payable upon the amendment's filing with the commissioner. Acts 1980, ch. 866, § 7; 1981, ch. 459, § 1; T.C.A., § 48-16-107; Acts 1988, ch. 663, § 1; 1993, ch. 98, §§ 4-8; 1996, ch. 1072, §§ 1, 2; 2001, ch. 61, §§ 5-7; T.C.A., § 48-2-107; Acts 2017, ch. 424, §§ 20-22.

Tenn. Code Ann. § 48-1-108 Stop order denying, suspending, or revoking registration.

48-1-108. Stop order denying, suspending, or revoking registration. (a) The commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement if the commissioner finds that: (1) The order is in the public interest; and (2)(A) The registration statement, or any amendment under § 48-1-107 (as of its effective date or as of the date of an order denying effectiveness), or any report under § 48-1-107(h) includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (B) Any provision of this part or any rule, order or condition lawfully imposed under this part has been willfully 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, controlled by, or under common control with the issuer, but only if 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; provided, that the commissioner may not: (i) Institute a proceeding against an effective registration statement under this subdivision (a)(2)(C) more than one (1) year from the date of the order or injunction relied on; or (ii) Enter an order under this subdivision (a)(2)(C) 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) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by § 48-1-105(b)(4); or (G) The applicant or registrant has failed to pay the proper filing fee; provided, that the commissioner may enter only a denial order under this subdivision (a)(2)(G) and the commissioner shall vacate any such order when the deficiency has been corrected. (b) No order may be entered under any part of this section without full compliance with § 48-1-116. Upon issuance of an order under this section, the commissioner shall give notice of the issuance of such order and of the reasons therefor and opportunity for hearing by personal service or by certified mail, return receipt requested, to the addressee's last known business mailing address. The commissioner shall vacate or modify the order at any time for good cause or if such registration statement or prospectus has been filed or amended in accordance with such order. (c) The commissioner may not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to the commissioner when the registration statement became effective, unless the proceeding is instituted within the thirty (30) days immediately following the date the registration statement became effective. (d) In any case in which the commissioner is authorized to issue a stop order denying, suspending or revoking the effective registration of the securities of an issuer, the commissioner may impose a fine of five thousand dollars ($5,000) upon the issuer of such securities for all violations arising from any single transaction. Acts 1980, ch. 866, § 8; T.C.A., § 48-16-108; Acts 1996, ch. 1072, §§ 6, 8; T.C.A., § 48-2-108; Acts 2017, ch. 424, § 23.

Tenn. Code Ann. § 48-1-109 Registration as broker-dealers, agents, investment advisers, and investment adviser representatives.

48-1-109. Registration as broker-dealers, agents, investment advisers, and investment adviser representatives. (a) It is unlawful for any person to transact business from, in, or into this state as a broker-dealer or agent unless such person is registered as a broker-dealer or agent under this part, except that: (1) A bank shall be exempt from registration as a broker-dealer to the extent its activities are excepted under either the definition of “broker” in § 3(a)(4)(B) of the Securities Exchange Act of 1934 (15 U.S.C. § 78c(a)(4)(B)), or the definition of “dealer” in § 3(a)(5)(C) of the Securities Exchange Act of 1934 (15 U.S.C. § 78c(a)(5)(C)); (2) A person who limits such person's activity as a broker-dealer to acting solely as a broker-dealer with regard to charitable gift annuities, as that term is defined by § 56-52-102, shall be exempt from registration as a broker-dealer; (3) A person who limits such person's activity as an agent to acting solely as an agent on behalf of a person who is eligible for the exemption from broker-dealer registration in subdivision (a)(2) shall be exempt from registration as an agent. (b) It is unlawful for any broker-dealer to employ an agent to transact business as an agent unless the agent is registered under this part. The registration of an agent is not effective during any period when the agent is not associated with a particular broker-dealer registered under this part. When an agent begins or terminates a connection with a broker-dealer, or begins or terminates those activities which make such person an agent, both the agent and the broker-dealer shall promptly notify the commissioner. (c) It is unlawful for any person to transact business from, in, or into this state as an investment adviser or investment adviser representative unless: (1) The person is registered as an investment adviser or investment adviser representative under this part; (2) The person is required to register as an investment adviser pursuant to § 203 of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-3); provided, however, that an initial notice filing, consisting of any documents filed with the securities and exchange commission, a consent to service of process, and a nonrefundable fee of one hundred dollars ($100) shall be filed with the commissioner or the commissioner's designee, with payment of any reasonable costs charged by the designee for processing such filings, ten (10) days prior to the person acting as an investment adviser; and a renewal notice filing containing such information as the commissioner by rule requires and a nonrefundable fee of one hundred dollars ($100) shall be filed with the commissioner or the commissioner's designee, with payment of any reasonable costs charged by the designee for processing such filing for each successive year in which such person acts as such investment adviser; every notice filing of an investment adviser expires annually, unless timely renewed, on December 31 of each year; (3) The person's only clients in this state are insurance companies; or (4) The person is exempted from the definition of an investment adviser or investment adviser representative by rule adopted by the commissioner pursuant to § 48-1-102(13)(F) or § 48-1-102(14)(B). (d)(1) Every registration of a broker-dealer or investment adviser expires annually, unless timely renewed, on December 31 of each year. (2) Every registration of an agent or investment adviser representative expires annually, unless timely renewed, on December 31 of each year. (3) Every notice filing of an investment adviser expires annually, unless timely renewed, on December 31 of each year. (4) A registration or notice filing is timely renewed if the renewal application, all required exhibits, and fees are on file with the commissioner by December 31 of each year. (e) The commissioner may, after notice and an opportunity for a hearing under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, impose a civil penalty against any person found to be in violation of this section, or any rule or order adopted or issued under this section, in an amount not to exceed ten thousand dollars ($10,000) per violation, or in an amount not to exceed twenty thousand dollars ($20,000) per violation if an individual who is a designated adult is a victim. (f) It is unlawful for any investment adviser to employ an investment adviser representative unless the investment adviser representative is registered under this part. The registration of an investment adviser representative is not effective during any period when the investment adviser representative is not associated with a particular investment adviser. When an investment adviser representative begins or terminates a connection with an investment adviser, or begins or terminates those activities which make that person an investment adviser representative, both the investment adviser representative and the investment adviser shall promptly notify the commissioner. (g) Notwithstanding subsection (a), a Canadian broker-dealer that is resident in Canada and has no office or other physical presence in the United States and is not an office of, branch of, or a natural person associated with, a broker-dealer otherwise registered in the United States may transact business in this state without registering with the commissioner of commerce and insurance as a broker-dealer under the following conditions: (1) The business transacted in this state by the Canadian broker-dealer must be limited to the effecting of or attempt to effect transactions in securities: (A) With or for a natural person who regularly resides in Canada and who is temporarily present in this state and with whom the Canadian broker-dealer had a bona fide customer relationship before the natural person entered the United States; or (B) With or for a natural person who is a resident of this state, or is temporarily present in this state, and who contributes to, or is or will be entitled to receive the income and assets from, a Canadian retirement account; (2) The Canadian broker-dealer files the following with the commissioner of commerce and insurance: (A) An annual notice in the form prescribed by the commissioner of commerce and insurance; (B) A consent to service of process; and (C) An annual fee of two hundred dollars ($200); (3) The Canadian broker-dealer is a member of a self-regulatory organization or stock exchange in Canada; (4) The Canadian broker-dealer maintains its provincial or territorial registration and its membership in a self-regulatory organization or stock exchange in good standing; (5) The Canadian broker-dealer discloses to its customers in this state that the Canadian broker-dealer is not subject to the full regulatory requirements of this part; and (6) The Canadian broker-dealer is not in violation of § 48-1-121 and all rules promulgated thereunder. (h) Notwithstanding subsection (a), a Canadian agent representing a Canadian broker-dealer transacting business in this state pursuant to this section need not register with the commissioner of commerce and insurance as an agent; provided, that such agent is registered in good standing in the appropriate Canadian jurisdiction. Acts 1980, ch. 866, § 9; T.C.A., § 48-16-109; Acts 1985, ch. 26, § 2; 1997, ch. 164, § 4; 2001, ch. 61, §§ 8-10; 2001, ch. 80, § 3; 2002, ch. 517, §§ 2, 3; 2002, ch. 550, §§ 2-5; 2002, ch. 700, § 7; T.C.A., § 48-2-109; Acts 2017, ch. 424, §§ 24-29; 2026, ch. 920, § 1.

Tenn. Code Ann. § 48-1-110 Registration procedure.

48-1-110. Registration procedure. (a)(1) A broker-dealer, agent, investment adviser, or investment adviser representative may obtain an initial or renewal registration by filing with the commissioner or the commissioner's designee an application, together with a consent to service of process pursuant to § 48-1-124(e), and by paying any reasonable costs charged by the designee for processing such filings. (2) The application shall be on such form and contain such information as the commissioner by rule requires concerning such matters as: (A) The applicant's form and place of organization; (B) The applicant's proposed method of doing business; (C) The qualifications and business history of the applicant and, if appropriate, the qualifications and business history of any affiliate, partner, officer, director, or any person occupying a similar status or performing similar functions for the applicant; (D) Any injunction or administrative order or conviction of a misdemeanor involving a security or any aspect of the securities business and any conviction of a felony; and (E) The applicant's financial condition and history. (3)(A) The commissioner shall require, at the applicant's expense, an agent or investment adviser representative applicant to submit a complete and legible set of fingerprints, in a format prescribed by the commissioner, to the commissioner or to the Tennessee bureau of investigation, for the purpose of obtaining a fingerprint-based criminal history check from the Tennessee bureau of investigation and the federal bureau of investigation. (B) The commissioner shall conduct a fingerprint-based criminal history check of each applicant described in subdivision (a)(3)(A) by using information that is: (i) Provided by the applicant under this subsection (a); and (ii) Made available to the commissioner by the Tennessee bureau of investigation, the federal bureau of investigation, or another law enforcement agency. (C) The commissioner shall: (i) Enter into an agreement with the Tennessee bureau of investigation to administer a fingerprint-based criminal history check authorized under this subdivision (a)(3); and (ii) Authorize the Tennessee bureau of investigation to collect from the applicant the costs incurred by the department in conducting the fingerprint-based criminal history check. (4) If no denial order is in effect and no proceeding is pending under § 48-1-112, such registration becomes effective at twelve o'clock (12:00) noon, central time, of the thirtieth day after a completed application is filed. The commissioner may by rule or order specify an earlier effective date, and may by order defer the effective date until twelve o'clock (12:00) noon, central time, of the thirtieth day after the filing of any amendment. (5) Registration of a broker-dealer automatically constitutes registration of any partner, officer, or director of the broker-dealer, or a person occupying a similar status or performing similar functions. (b) Every applicant for initial or renewal registration shall pay a nonrefundable filing fee of two hundred dollars ($200) in the case of a broker-dealer, fifty dollars ($50.00) in the case of an agent, two hundred dollars ($200) in the case of an investment adviser, and fifty dollars ($50.00) in the case of an investment adviser representative. (c) A registered broker-dealer or investment adviser may file an application for registration of a successor, whether or not the successor is then in existence, for the unexpired portion of the year. There shall be no filing fee for the registration of any successor. (d) The commissioner may by rule require a minimum net capital for registered broker-dealers and investment advisers. (e) The commissioner may by rule require registered broker-dealers, agents, investment advisers, and investment adviser representatives to post surety bonds in amounts up to ten thousand dollars ($10,000), or reasonable fidelity bonds, and may determine their conditions. Any appropriate deposit of cash or securities shall be accepted in lieu of any surety bond so required. No surety bond may be required of any registrant whose net capital, which may be defined by rule, exceeds one hundred thousand dollars ($100,000). Every surety bond shall provide coverage of any suit thereon by any person who has a cause of action under § 48-1-122 and, if the commissioner by rule requires, by any person who has a cause of action not arising under this part. No suit may be maintained to enforce any liability on any bond unless brought within two (2) years after the sale or other act upon which such suit is based. (f)(1) Any person who is included in the definition of “issuer” by virtue of § 48-1-102(15)(A)(iii) shall register as an issuer-dealer unless either: (A) Such person sells less than one hundred thousand dollars ($100,000) per year in undivided fractional interests in oil, gas, or other mineral interests in any twelve-month period; or (B) Such person contributes money or services for lease acquisition and drilling or mining activities on property covered by the undivided fractional interests in proportion to the person's interest in the proceeds from such activities on the same basis as all purchasers of undivided fractional interests. For purposes of this subdivision (f)(1)(B), services shall be valued at the fair market value of similar services and at competitive rates, and such value shall be established prior to the sale of any interests. (2) An issuer-dealer is not deemed to be a “broker-dealer” and is not subject to regulation other than as provided by this subsection (f) and rules permitted hereby so long as its securities business is restricted to the sale of undivided fractional interests. (3) The commissioner shall by rule provide the forms for application and renewal as an issuer-dealer, the term of the registration, and fees for initial application and renewal which shall not exceed those provided by subsection (b) for broker-dealers. (4) To determine eligibility for registration, the commissioner may require by rule: (A) Evidence of the qualifications and business history of the applicant and, if appropriate, the qualifications and business history of an affiliate, partner, officer, director, or other person occupying a similar status or performing similar functions for the applicant; (B) Evidence of the applicant's injunctions, administrative orders, or misdemeanor convictions involving a security or an aspect of the securities business, if any, and the applicant's felony convictions, if any; and (C) Evidence of the applicant's financial condition and history. (5) Registration as an issuer-dealer becomes effective at twelve o'clock (12:00) noon, central time, of the thirtieth day after the department receives the completed application and the appropriate fee, if any, unless the department institutes a denial proceeding or grants an earlier effective date by order of the commissioner. The department may deny, revoke, or suspend the registration if the action is in the public interest and if the applicant or an affiliate, partner, officer, director, or other person occupying a similar status or performing similar functions: (A) Has filed a registration application that included an untrue or misleading statement of a material fact; (B) Has been convicted within the past ten (10) years of a misdemeanor involving an aspect of the securities business or an investment-related business, or a felony; (C) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing a conduct or practice involving an aspect of the securities business or an investment-related business; or (D) Is the subject of an order entered within the past ten (10) years by an agency having regulatory authority with respect to the securities business or investment-related business, denying, revoking, or suspending a registration as a broker-dealer, agent, investment adviser, investment adviser representative, issuer-dealer, or the substantial equivalent of those terms as defined or described in this part, or ordering the person to cease and desist from continuing a conduct or practice involving an investment-related transaction based on fraud, deceit, or misrepresentation, or applicable law similar to § 48-1-121(a) and (b). Acts 1980, ch. 866, § 10; 1983, ch. 312, § 3; T.C.A., § 48-16-110; Acts 1985, ch. 26, § 3; 1989, ch. 15, §§ 1, 2; 2001, ch. 61, § 11; 2002, ch. 550, §§ 6-8; T.C.A., § 48-2-110; Acts 2017, ch. 424, §§ 30-32; 2023, ch. 112, §§ 9, 8.

Tenn. Code Ann. § 48-1-111 Records and reports — Examinations.

48-1-111. Records and reports — Examinations. (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 rule prescribes. All records so required shall be preserved for three (3) years unless the commissioner by rule prescribes otherwise for particular types of records. (b) Every registered broker-dealer and investment adviser shall file such financial reports and other documents as the commissioner by rule prescribes. (c) If the information contained in any document filed with the commissioner is or becomes inaccurate or incomplete in any material respect, the registrant shall promptly file a correcting amendment. (d)(1) All the records referred to in subsection (a) are subject at any time and from time to time to such reasonable periodic, special, or other examinations, within or outside of this state, by representatives of the commissioner, as the commissioner deems necessary or appropriate in the public interest or for the protection of investors. (2) The cost of such examination shall be borne by the person examined and shall include the expenses of the commissioner or the commissioner's deputy and the expenses and compensation of the commissioner's assistants employed in the examination; provided, that not more than two (2) such examinations shall be charged to such person in any twelve-month period. (3) For the purpose of avoiding unnecessary duplication of examinations, the commissioner, insofar as the commissioner deems it practicable in administering this subsection (d), may cooperate with the securities administrators of other states, the securities and exchange commission, any national securities exchange or national securities association registered under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), as amended, or any securities administrators' association. (4) All working papers, recorded information, documents, and required records and copies of working papers, recorded information, documents, and required records produced by, obtained by, or disclosed to the commissioner or another person in the course of an examination made under this chapter are confidential and must not be made public by the commissioner or another person. This subdivision (d)(4) does not prohibit the commissioner from disclosing the content of an examination as provided in subdivision (d)(3). Acts 1980, ch. 866, § 11; T.C.A., § 48-16-111; T.C.A., § 48-2-111; Acts 2017, ch. 424, §§ 33, 34; 2023, ch. 112, § 10; 2026, ch. 920, § 2.

Tenn. Code Ann. § 48-1-112 Denial, revocation, suspension, cancellation, or withdrawal of registration.

48-1-112. Denial, revocation, suspension, cancellation, or withdrawal of registration. (a) The commissioner may by order deny, suspend, or revoke any registration under this part if the commissioner finds that: (1) The order is in the public interest and necessary for the protection of investors; and (2) The applicant or registrant or, in the case of a broker-dealer or investment adviser, any affiliate, partner, officer, director, or any person occupying a similar status or performing similar functions: (A) Has filed an application for registration which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (B) Has willfully violated or willfully failed to comply with any provision of this part or a predecessor chapter or any rule or order under this part or a predecessor chapter, including, without limitation, any net capital requirements; (C) Has been convicted of any felony, or within the previous ten (10) years has been convicted of a misdemeanor involving a security or any aspect of the securities business or any investment-related business; (D) Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business or any investment-related business; (E) Is the subject of an order of the commissioner denying, suspending, or revoking any registration as a broker-dealer, agent, investment adviser, or investment adviser representative, or ordering any person to cease and desist from violating any provision of this part; (F)(i)(a) Is the subject of any order entered within the past ten (10) years by the securities administrator of any other jurisdiction or by the securities and exchange commission or any other federal or state agency having jurisdiction over investment-related businesses: (1) Denying or revoking any registration as a broker-dealer, agent, investment adviser, or investment adviser representative, or the substantial equivalent of those terms as defined in this part; or (2) Ordering such person to cease and desist from any conduct or practice involving any aspect of the securities business or any investment-related business based on findings of fraud, deceit, or misrepresentation or violations of laws similar to § 48-1-121(a) or (b); or (b) Is the subject of an order suspending or expelling such person from a national securities exchange or national securities association registered under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), as amended, or is the subject of a United States post office fraud order; (ii) The commissioner may not either: (a) Institute a revocation or suspension proceeding under this subdivision (a)(2)(F) more than one (1) year from the date of the order relied on as long as the registrant notified the commissioner within thirty (30) days of the date of the order; or (b) Enter an order under this subdivision (a)(2)(F) on the basis of an order under another jurisdiction's act unless that order was based on facts which would currently constitute a ground for an order denying or revoking registration under this part, or is based on findings of fraud, deceit, misrepresentation or violations of law similar to § 48-1-121(a) and (b); (G) Has engaged in dishonest or unethical practices in the securities business; (H) Is insolvent, either in the sense that the applicant's liabilities exceed its assets or in the sense that it cannot meet its obligations as they mature; provided, that the commissioner may not enter an order against a broker-dealer or investment adviser under this subdivision (a)(2)(H) without a specific finding that the broker-dealer or investment adviser is insolvent; (I) Is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (c); (J) Has failed reasonably to supervise such person's agents if the person is a broker-dealer, or such person's investment adviser representatives if the person is an investment adviser; or (K) Has failed to pay any required fee; provided, that the commissioner shall vacate any such order when the deficiency has been corrected. (b) The commissioner may not institute a revocation or suspension proceeding under subsection (a) based solely on material facts actually known by the commissioner unless an investigation or the revocation or suspension proceeding is instituted within one (1) year after the commissioner actually acquires knowledge of the material facts. (c) The following provisions govern the application of subdivision (a)(2)(I): (1) The commissioner may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than: (A) The broker-dealer personally if the broker-dealer is an individual; (B) A general partner, officer, director, or controlling person of such broker-dealer; or (C) An agent of such broker-dealer; (2) The commissioner may not enter an order against an investment adviser on the basis of the lack of qualification of any person other than: (A) The investment adviser personally if the investment adviser is an individual; (B) A general partner, officer, director, or controlling person of such investment adviser; or (C) An investment adviser representative; (3) The commissioner may not enter an order solely on the basis of lack of experience if the applicant or registrant is qualified by training or knowledge or both; (4) The commissioner shall consider that an agent who will work under the supervision of a registered broker-dealer need not have the same qualifications as such broker-dealer; (5) The commissioner shall consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker-dealer or agent. When the commissioner finds that an applicant for registration (including a renewal of an effective registration) as a broker-dealer is not qualified as an investment adviser, the commissioner may by order condition the applicant's registration as a broker-dealer upon the registrant's not transacting business in this state as an investment adviser; (6) The commissioner may by rule provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants for registration as a broker-dealer or investment adviser, as well as persons who represent or will represent a broker-dealer or an investment adviser in doing any broker-dealer or investment adviser activities; (7) The commissioner shall consider that an investment adviser representative who will work under the supervision of a registered investment adviser need not have the same qualification as such investment adviser; (d) In any case in which the commissioner is authorized to deny, revoke, or suspend the registration of a broker-dealer, agent, investment adviser, investment adviser representative, or applicant for broker-dealer, agent, investment adviser, or investment adviser representative registration, the commissioner may, in lieu of or in addition to such disciplinary action, impose a civil penalty in an amount not to exceed five thousand dollars ($5,000) for all violations for any single transaction, or in an amount not to exceed ten thousand dollars ($10,000) per violation if an individual who is a designated adult is a victim. (e) Pending final determination whether or not any registration under this section shall be revoked, the commissioner may by order suspend such registration, if after notice and opportunity for hearing, the commissioner finds such suspension to be in the public interest and necessary for the protection of investors. (f)(1) Upon such terms and conditions as the commissioner deems in the public interest and necessary for the protection of investors, any registered broker-dealer, agent, investment adviser, or investment adviser representative may withdraw from registration by filing a written notice of withdrawal with the commissioner or by filing a notice of withdrawal through a designated filing depository. (2) Withdrawal from registration as a broker-dealer, agent, investment adviser, or investment adviser representative becomes effective thirty (30) days after receipt of an application to withdraw or within such shorter period of time as the commissioner by rule or order may permit. (g) If the commissioner finds that any registered broker-dealer, agent, investment adviser, or investment adviser representative is no longer in existence or has ceased to do business as a broker-dealer, agent, investment adviser, or investment adviser representative, the commissioner shall by order cancel the registration of such broker-dealer, agent, investment adviser, or investment adviser representative. (h) The commissioner may bar or censure a registrant or an officer, director, partner, or other person occupying a similar status or performing similar functions for a registrant, or restrict, condition, or limit a registrant as to a function or activity of the business for which registration is required in this state. Acts 1980, ch. 866, § 12; 1983, ch. 312, §§ 4, 5; T.C.A., § 48-16-112; Acts 1986, ch. 596, § 3; 2001, ch. 61, §§ 12, 13; 2002, ch. 550, §§ 9-17; 2007, ch. 272, §§ 1, 2; 2010, ch. 697, § 2; 2010, ch. 829, § 3; T.C.A., § 48-2-112; Acts 2017, ch. 424, §§ 35, 36; 2023, ch. 112, § 11.

Tenn. Code Ann. § 48-1-113 Filing of sales and advertising literature.

48-1-113. Filing of sales and advertising literature. The commissioner may by rule 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. Acts 1980, ch. 866, § 13; T.C.A., § 48-16-113; T.C.A. § 48-2-113; Acts 2017, ch. 424, § 37.

Tenn. Code Ann. § 48-1-114 Unlawful representation concerning registration or exemption.

48-1-114. Unlawful representation concerning registration or exemption. (a) Neither the fact that an application for registration or notice filing under §§ 48-1-109 - 48-1-112 or a registration statement or notice filing under §§ 48-1-104 - 48-1-108 or § 48-1-125 has been filed, nor the fact that a person or security is effectively registered, constitutes a finding by the commissioner that any document filed under this part is true, complete, and not misleading. (b) Neither any such fact nor the fact that an exemption or exception is available for a security or transaction means that the commissioner has passed in any way upon the merits or qualifications of, or that the commissioner has recommended or given approval to, any person, security, or transaction. (c) Any representation to the contrary is unlawful. Acts 1980, ch. 866, § 14; T.C.A., § 48-16-114; Acts 1997, ch. 164, § 5; T.C.A. § 48-2-114; Acts 2017, ch. 424, § 38.

Tenn. Code Ann. § 48-1-115 Administration.

48-1-115. Administration. (a) The administration of this part shall be vested in the commissioner. The commissioner, as authorized by the governor, shall appoint a director or assistant commissioner of securities and may delegate to such director or assistant commissioner of securities, by rule, such of the commissioner's powers and duties hereunder as are appropriate for the protection of investors and the efficient administration of this part. (b) The commissioner has the authority to employ attorneys, auditors, examiners, investigative agents, clerks and stenographers and other professional and clerical employees as the proper administration of this part may require. (c) The commissioner, or any persons employed by the commissioner, shall be paid, in addition to their regular compensation, the transportation fare, board, lodging, and other traveling expenses necessary and actually incurred by each of them in the performance of their duties under this part. (d) The revenues collected by the commissioner under this part are for the purpose of defraying a portion of the expenses incurred by the commissioner in the administration of this part. Such fees shall be payable in addition to other fees and taxes now required by law and shall be expendable receipts for the use of the commissioner in defraying a portion of the cost of the administration of this part. (e)(1) It is unlawful for the commissioner or any of the commissioner's officers or employees to use for personal benefit any information which is filed with or obtained by the commissioner and which is not made public. No provision of this part authorizes the commissioner or any of the commissioner's officers or employees to disclose any such information except among themselves or when necessary or appropriate in a proceeding or investigation under this part. (2) No provision of this part either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the commissioner or any of the commissioner's officers or employees. (f)(1) The commissioner may designate filing depositories for all records required to be filed and maintained under this part. These records may be maintained in original form or by means of microfilm, microfiche, microphotographic reproduction, photographic reproduction, word processing, computerization, or other acceptable reproductive methods. (2) The commissioner is further authorized to participate, in whole or in part, in the Central Registration Depository systems Web Central Registration Depository (Web CRD) and Web Investment Advisers Registration Depository (IARD), in cooperation with the Financial Industry Regulatory Authority (FINRA) or any successor regulatory entity, the North American Securities Administrators Association (NASAA), other states, the United States, and other entities, to the extent the commissioner deems participation as being in the public interest and necessary for the protection of investors. (3) The commissioner is further authorized to participate, in whole or in part, in securities registration depository systems, in cooperation with NASAA, other states, the United States, and other entities, to the extent the commissioner deems participation as being in the public interest and necessary for the protection of investors. Acts 1980, ch. 866, § 15; T.C.A., § 48-16-115; Acts 1985, ch. 26, § 4; 1996, ch. 1072, § 7; 2001, ch. 61, § 14; 2010, ch. 697, §§ 1, 3; T.C.A. § 48-2-115; Acts 2017, ch. 424, § 39.

Tenn. Code Ann. § 48-1-116 Rules, forms, orders, and hearings.

48-1-116. Rules, forms, orders, and hearings. (a) The commissioner may from time to time make, promulgate, amend, and rescind such rules, forms, and orders as are necessary to carry out this part, including rules, forms, and orders governing registration statements, applications, reports, and filing fees, and defining any terms, whether or not used in this part, insofar as the definitions are not inconsistent with this part. For the purpose of rules and forms, the commissioner may classify securities, persons, and matters within the commissioner's jurisdiction, and prescribe different requirements for different classes. (b) No rule, form, or order may be made, promulgated, amended, or rescinded unless the commissioner finds that the action is in the public interest, necessary for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of this part. In prescribing rules and forms, the commissioner may cooperate with the securities administrators of other jurisdictions, the securities and exchange commission, or any national securities exchange or national securities association registered under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), as amended, with a view to effectuating the policy of this part to achieve maximum uniformity in the form and content of registration statements, applications, and reports wherever practicable. (c)(1) The commissioner may by rule prescribe: (A) The form and content of financial statements required under this part; (B) The circumstances under which consolidated financial statements shall be filed; and (C) Whether or not any required financial statements shall be certified by independent or certified public accountants. (2) All financial statements shall be prepared in accordance with generally accepted accounting principles or the rules adopted by the securities and exchange commission. (d) No provision of this part imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, order, or interpretive opinion under § 48-1-117(e), of the commissioner, notwithstanding that the rule, form, or order may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason. (e)(1) All rules and forms provided for in this part shall be adopted, promulgated, and contested as provided in the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. (2) No order may be entered under this part (except routine orders of effective registration, registration termination by operation of law, or registration abandonment) without: (A) Notice to the affected parties (which shall be prior notice unless the commissioner determines that prior notice would not be in the public interest and would be detrimental to the protection of investors); (B) Opportunity for a hearing before the commissioner; and (C) Written findings of fact and conclusions of law. (3) Every investigation, hearing or other proceeding (other than private investigations under § 48-1-118(a)) held under this part which determines or affects the legal rights, duties, or privileges of particular specified parties shall be deemed to be a “contested case” under the Uniform Administrative Procedures Act, and shall be conducted as required by that act. (4) The commissioner may, after notice and opportunity for a hearing pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, enter an order of restitution, disgorgement, including interest and legal interest, or rescission, directed to a person who has violated this chapter, a rule authorized by this chapter, or an order issued pursuant to this chapter. Restitution, disgorgement, or rescission is in addition to any other remedy or penalty provided for under this chapter. Acts 1980, ch. 866, § 16; T.C.A., § 48-16-116; T.C.A. § 48-2-116; Acts 2017, ch. 424, § 40; 2023, ch. 112, § 12.

Tenn. Code Ann. § 48-1-117 Administrative files and opinions.

48-1-117. Administrative files and opinions. (a) A document is filed when it is received by the commissioner. (b) The commissioner shall keep a register of all applications for registration and registration statements which are or have ever been declared effective under this part and all denial, suspension, or revocation orders which have ever been entered under this part. The register shall be open for public inspection during the commissioner's normal business hours. (c) The information contained in or filed with any registration statement, application, notice filing, or report may be made available to the public under such rules as the commissioner prescribes. (d) Upon request and upon payment of such reasonable charges as the commissioner by rule prescribes, the commissioner shall furnish to any person copies (certified under the commissioner's seal of office if requested) of any entry in the register or any document which is a matter of public record. In any proceeding or prosecution under this part, any copy so certified is prima facie evidence of the contents of the entry or document certified. (e) The commissioner, in the commissioner's discretion, may honor requests from interested persons for interpretative opinions pertaining to this part. Acts 1980, ch. 866, § 17; T.C.A., § 48-16-117; Acts 1997, ch. 164, § 6; T.C.A., § 48-2-117; Acts 2017, ch. 424, § 41.

Tenn. Code Ann. § 48-1-118 Investigations and subpoenas.

48-1-118. Investigations and subpoenas. (a)(1) The commissioner, in the commissioner's discretion, may: (A) Make such public or private investigations within or outside of this state as the commissioner deems necessary to determine whether or not any person has violated or is about to violate any provision of this part or any rule, regulation, or order hereunder, or to aid in the enforcement of this part, or in the prescribing of rules hereunder; (B) Require or permit any person to file a statement in writing, under oath or otherwise as the commissioner determines, as to all the facts and circumstances concerning the matter to be investigated; and (C) Publish information concerning any violation of this part or any rule or order hereunder. (2) All investigations conducted under this subsection (a) shall be commenced by an order of the commissioner, specifying the specific provision or provisions of this part which may have been or may be about to be violated and the basis for such investigation. Upon request, such order shall be made available to any person named in such order as being investigated. (b)(1) For the purpose of conducting any investigation as provided in this section, the commissioner has the power to administer oaths, to call any party to testify under oath at such investigations, to require the attendance of witnesses, the production of books, records, and papers, and to take the depositions of witnesses. (2) For such purposes, the commissioner is authorized to issue a subpoena for any witness or a subpoena duces tecum to compel the production of any books, records or papers. These subpoenas may be served by registered mail, return receipt requested, to the addressee's business mailing address, or by such personnel of the department as the commissioner may designate, or shall be directed for service to the sheriff of the county where such witness resides or is found or where such person in custody of any books, records, or papers resides or is found. (c) In case of a refusal to obey a subpoena issued to any person under subsection (b), any circuit or chancery court of this state within the jurisdiction in which the person refusing to obey the subpoena is found or resides may issue to such person, upon application by the commissioner, an order requiring such person to appear before the court to show cause why the person should not be held in contempt for refusal to obey the subpoena. Failure to obey a subpoena may be punished by the court as a contempt of court. (d)(1) The commissioner may, with the written approval of the attorney general and reporter, issue to any person who has been or may be called to a hearing or other proceeding under this part, a written order requiring the individual to give testimony or provide other information which the person refuses to give or provide on the basis of the person's privilege against self-incrimination. Such order shall be issued only if the commissioner finds that: (A) The testimony or other information from such individual may be in the public interest; and (B) Such individual has refused or is likely to refuse to testify or provide other information on the basis of the individual's privilege against self-incrimination. (2) Whenever any witness refuses, on the basis of the witness's privilege against self-incrimination, to testify or provide other information at any hearing or other proceeding under this part, and the person presiding over the proceeding delivers to the witness a written order issued under subdivision (d)(1), the witness may not refuse to comply with the order on the basis of the witness's privilege against self-incrimination; but no testimony or other information compelled under the order as to which the witness could validly assert the privilege against self-incrimination (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, false swearing, giving a false statement to the commissioner pursuant to this part, or otherwise failing to comply with the order. (e)(1) In the case of any investigation conducted under this section, the commissioner may hold hearings, or may appoint an investigative agent to conduct such hearings who shall have the same powers and authority in conducting such hearings as are in this section granted to the commissioner. The agent shall be possessed of such qualifications as the commissioner may require. (2) A transcript of the testimony and evidence and objections resulting from such hearings shall be taken, unless waived in writing by all parties present at such hearings. Copies of such transcript shall be available to all parties present at the hearing (to the extent of their testimony if a private hearing) upon payment of a reasonable fee for reproducing such transcript. (3) All recommendations of the investigative agent shall be advisory only and shall not have the effect of an order of the commissioner. (f) In any case where hearings are conducted by an investigative agent, such agent shall submit to the commissioner a written report which shall include a transcript of the testimony in evidence (if requested by the commissioner), findings of fact, and a recommendation of the action to be taken by the commissioner with reasons therefor. The recommendation of such agent shall be approved, modified, or disapproved by the commissioner. The commissioner may direct an investigative agent to take additional testimony or permit the introduction of further documentary evidence. (g) In addition to any other hearings and investigations which the commissioner is authorized or required by this part to conduct, the commissioner is also authorized to hold general investigative hearings on the commissioner's own motion with respect to any matter under this part. A general investigative hearing as provided for herein may be conducted by any person designated by the commissioner for that purpose and may, but need not be, transcribed by the commissioner or by any other interested party. No formal action may be taken as a result of such investigative hearing, but the commissioner may take such action as the commissioner deems appropriate, based on the information developed in the hearing and on any other information which the commissioner may have. Acts 1980, ch. 866, § 18; 1981, ch. 459, § 2; T.C.A., § 48-16-118; T.C.A., § 48-2-118; 2023, ch. 112, § 18.

Tenn. Code Ann. § 48-1-119 Injunctions.

48-1-119. Injunctions. (a) Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this part or any rule or order hereunder, the commissioner may, in the commissioner's discretion, bring an action in the chancery court of any county in this state to enjoin the acts or practices and to enforce compliance with this part or any rule or order hereunder. (b) Upon a proper showing, a permanent or temporary injunction, restraining order, writ of mandamus, disgorgement, or other proper equitable relief shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. Upon request of the commissioner, the chancery court shall appoint the commissioner as the receiver or the conservator for the defendant or the defendant's assets. (c) The court may not require the commissioner to post a bond. Acts 1980, ch. 866, § 19; T.C.A., § 48-16-119; T.C.A., § 48-2-119; 2026, ch. 920, § 3.

Tenn. Code Ann. § 48-1-120 Judicial review.

48-1-120. Judicial review. Any person aggrieved by a final order of the commissioner under this part may obtain judicial review of the order in the chancery court of Davidson County by proceedings in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. Acts 1980, ch. 866, § 20; T.C.A., § 48-16-120; T.C.A., § 48-2-120.

Tenn. Code Ann. § 48-1-121 Fraudulent acts or devices.

48-1-121. Fraudulent acts or devices. (a) It is unlawful for any person, in connection with the offer, sale or purchase of any security in this state, directly or indirectly, to: (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 the 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 any person. (b) It is unlawful for any person who receives any consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise, in this state, to: (1) Employ any device, scheme, or artifice to defraud the other person; (2) Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the other person; or (3) Take or have custody of any securities or funds of any client except as the commissioner may by rule permit or unless the person is licensed as a broker-dealer under this part. (c) It is unlawful for any person to make or cause to be made, in any document filed with the commissioner or in any proceeding under this part, any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading. (d) The commissioner may, after notice and opportunity for a hearing under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, impose a civil penalty against any person found to be in violation of this section, or any rule or order adopted or issued under this section, in an amount not to exceed ten thousand dollars ($10,000) per violation, or in an amount not to exceed twenty thousand dollars ($20,000) per violation if an individual who is a designated adult is a victim. Acts 1980, ch. 866, § 21; T.C.A., § 48-16-121; Acts 1996, ch. 1072, § 9; 1997, ch. 164, § 7; 2010, ch. 829, § 4; T.C.A., § 48-2-121; Acts 2017, ch. 424, § 42.

Tenn. Code Ann. § 48-1-122 Civil liabilities.

48-1-122. Civil liabilities. (a)(1) Any person who: (A) Sells a security in violation of §§ 48-1-104 — 48-1-109, 48-1-110(f), or of any condition imposed under § 48-1-107(e), or any rule, or order under this part of which the person has notice; or (B) Sells a security in violation of § 48-1-121(a) (the purchaser not knowing of the violation of § 48-1-121(a), and who does not carry the burden of proof of showing that the person did not know and in the exercise of reasonable care could not have known of the violation of § 48-1-121(a)); shall be liable to the person purchasing the security from the seller to recover the consideration paid for the security, together with interest at the legal rate from the date of payment, less the amount of any income received on the security, upon the tender of the security, or, if the purchaser no longer owns the security, the amount that would be recoverable upon a tender, less the value of the security when the purchaser disposed of it and interest at the legal rate from the date of disposition. (2) Tender shall require only notice of willingness to exchange the security for the amount specified. (3) Any notice may be given by service as in civil actions or by certified mail addressed to the last known address of the person liable. (b)(1) Any person who purchases a security in violation of § 48-1-121(a) (the seller not knowing of the violation of § 48-1-121(a), and who does not carry the burden of proof of showing that the purchaser did not know and in the exercise of reasonable care could not have known of the violation of § 48-1-121(a)) shall be liable to the person selling the security to the purchaser to return the security, plus any income received by the purchaser thereon, upon tender of the consideration received, or, if the purchaser no longer owns the security, the excess of the value of the security when the purchaser no longer owns the security, the excess of the value of the security when the purchaser disposed of it, plus interest at the legal rate from the date of disposition, over the consideration paid for the security. (2) Tender requires only notice of willingness to pay the amount specified in exchange for the security. (3) Any notice may be given by service as in civil actions or by certified mail to the last known address of the person liable. (c)(1) Any person who willfully engages in any act or conduct which violates § 48-1-121 shall be liable to any other person (not knowing that any such conduct constituted a violation of § 48-1-121) who purchases or sells any security at a price which was affected by the act or conduct for the damages sustained as a result of such act or conduct unless the person sued shall prove that the person sued acted in good faith and did not know, and in the exercise of reasonable care could not have known, that such act or conduct violated § 48-1-121. (2) Damages shall be the difference between the price at which the other person purchased or sold securities and the market value which the securities would have had at the time of the other person's purchase or sale in the absence of the act or conduct plus interest at the legal rate. (d) Any person who shall make or cause to be made any statement in any application, report, or document filed pursuant to this part or any rule or order hereunder or any undertaking contained in a registration statement hereunder, or in any advice given in such person's capacity as an investment adviser, which statement was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, shall be liable to any person (not knowing that any such statement was false or misleading) who, in reliance upon such statement, shall have purchased or sold a security at a price which was affected by such statement, for damages (calculated as provided in subsections (a) and (b)) caused by such reliance, unless the person sued shall prove that the person sued acted in good faith and had no knowledge that such statement was false or misleading and in the exercise of reasonable care could not have known that such statement was false or misleading. (e) A person seeking to enforce any liability under this section may sue either at law or in equity in any court of competent jurisdiction. (f) In any such suit under this section, the court may, in its discretion, require an undertaking for the payment of the costs of such suit, and assess reasonable costs, including reasonable attorneys' fees, against either party litigant. (g) Every person who directly or indirectly controls a person liable under this section, every partner, principal executive officer, or director of such person, every person occupying a similar status or performing similar functions, every employee of such person who materially aids in the act or transaction constituting the violation, and every broker-dealer or agent who materially aids in the act or transaction constituting the violation, are also liable jointly and severally with and to the same extent as such person, unless the person who would be liable under this subsection (g) proves that the person who would be liable did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There is contribution as in cases of contract among the several persons so liable. (h) A private right of action brought by any person under this section must not be maintained unless commenced before the expiration of five (5) years after the act or transaction constituting the violation or the expiration of two (2) years after the discovery of the facts constituting the violation, or after such discovery should have been made by the exercise of reasonable diligence, whichever expires first. (i) Any condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this part or any rule or order hereunder is void. (j) The rights and remedies under this part are in addition to any other rights or remedies that may exist at law or in equity. (k) The legal rate of interest shall be that as provided by § 47-14-121. Acts 1980, ch. 866, § 22; 1981, ch. 459, §§ 3, 4; T.C.A., § 48-16-122; Acts 1996, ch. 1072, §§ 4, 5; 2003, ch. 100, §§ 1, 2; T.C.A., § 48-2-122; 2026, ch. 920, § 4.

Tenn. Code Ann. § 48-1-123 Criminal prosecution.

48-1-123. Criminal prosecution. (a) Any person who willfully violates any provision of this part or who willfully violates any rule or order under this part commits a Class D felony. No person may be imprisoned for the violation of any rule or order if the person proves that the person had no actual knowledge of the rule or order. (b) The commissioner may refer such evidence as is available concerning violations of this part or of any rule or order hereunder to the attorney general and reporter, or the district attorney general in the county where the violation was committed, either of whom may, with or without such a reference, institute the appropriate criminal proceedings under this part. (c) Nothing in this part limits the power of this state to punish any person for any conduct which constitutes a crime by statute or at common law. Acts 1980, ch. 866, § 23; T.C.A., § 48-16-123; Acts 1989, ch. 591, § 42; 1996, ch. 1072, § 3; T.C.A., § 48-2-123.

Tenn. Code Ann. § 48-1-124 Scope of law — Service of process.

48-1-124. Scope of law — Service of process. (a) This part applies to persons who buy or sell securities from, in, or into this state, or who give or receive advice concerning the purchase or sale of securities from, in, or into this state. (b) For the purpose of this section, a purchase or sale is made in this state, whether or not either party is then present in this state, when: (1) An offer that results in a sale originates from this state; (2) An offer to purchase or sell a security is accepted in this state; or (3) An offer that results in a sale is directed by the offeror to this state and received at the place to which it is directed or at any post office in this state in the case of a mailed offer. (c) For the purpose of this section, an offer to buy or to sell is accepted in this state when acceptance is communicated to the offeror in this state and: (1) Has not previously been communicated to the offeror, orally or in writing, outside this state; and (2) Whether or not either party is then present in this state, when the offeree directs it to the offeror in this state reasonably believing the offeror to be in this state and it is received at the place to which it is directed (or at any post office in this state in the case of a mailed acceptance). (d) Sections 48-1-109(a) and (c) and 48-1-121 apply when any act instrumental in effecting prohibited conduct is done in this state, whether or not either party is then present in this state. (e) Every applicant for registration and renewal under this part, every person making a notice filing, and every issuer for whom a registration, exemption from registration, or notice filing or renewal is required under this part, shall file with the commissioner, in such form as the commissioner by rule prescribes, an irrevocable consent appointing the commissioner or the commissioner's successor in office to be the applicant's or issuer's attorney-in-fact to receive service of any lawful process in any noncriminal suit, action, or proceeding against the applicant or issuer or the applicant's or issuer's successor, executor, or administrator, which arises under this part or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. 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 the commissioner, forthwith sends notice of the service and a copy of the process by registered mail to the defendant or respondent at the defendant's or respondent's last address on file with the commissioner; and (2) The plaintiff's affidavit of compliance with this subsection (e) 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. (f) When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this part or any rule or order hereunder, and has not filed a consent to service of process under subsection (e) and personal jurisdiction over the person cannot otherwise be obtained in this state, the conduct shall be considered equivalent to the appointment of the commissioner or the commissioner's successor in office to be such person's attorney-in-fact to receive service of any lawful process to the same extent as if such person had filed a consent to service of process under subsection (e). (g) When process is served under this section, the court, or the commissioner in a proceeding before the commissioner, shall order such continuance as may be necessary to afford the defendant or respondent reasonable opportunity to defend. (h) Pursuant to Section 6(c) of the federal Philanthropy Protection Act of 1995, Public Law 104-62 (15 U.S.C. § 80a-3a(c)), this part shall not be preempted. Acts 1980, ch. 866, § 24; T.C.A., § 48-16-124; Acts 1997, ch. 61, § 2; T.C.A., § 48-2-124; Acts 2017, ch. 424, §§ 43-45.

Tenn. Code Ann. § 48-1-125 Notice filing and fee requirements for covered securities.

48-1-125. Notice filing and fee requirements for covered securities. (a)(1)(A) Any issuer, except an issuer of any security that is a covered security under subdivisions (a)(1)(B)-(D), which proposes to sell any security which is a covered security shall file with the commissioner, prior to a sale of such security in this state, a notice consisting of all documents filed with the securities and exchange commission, together with: (i) A consent to service of process as required under § 48-1-124(e), unless built into the notice filing form; and (ii) A nonrefundable filing fee of five hundred dollars ($500). (B) An issuer planning to offer and sell securities in this state in an offering pursuant to Tier 2 of Regulation A shall submit the following at least twenty-one (21) days prior to the initial sale in this state: (i) A completed Regulation A-Tier 2 notice filing form or copies of all documents filed with the securities and exchange commission; (ii) A consent to service of process as required under § 48-1-124(e), if not filing on the Regulation A-Tier 2 notice filing form; and (iii) A nonrefundable filing fee of five hundred dollars ($500). (C)(i) With respect to any security that is a covered security under § 18(b)(4)(C) of the Securities Act of 1933 (15 U.S.C. § 77r(b)(4)(C)), the issuer shall file with the commissioner a notice consisting of: (a) A completed Uniform Notice of Federal Crowdfunding Offering form or copies of all documents filed with the securities and exchange commission; (b) A consent to service of process as required under § 48-1-124(e), if not filing on the Uniform Notice of Federal Crowdfunding Offering form; and (c) A nonrefundable filing fee of five hundred dollars ($500). (ii) If the issuer has its principal place of business in this state, the filing required under subdivision (a)(1)(C)(i) shall be filed with the commissioner concurrently when the issuer files its initial Form C with the securities and exchange commission. (iii) If the issuer does not have its principal place of business in this state but residents of this state have purchased fifty percent (50%) or greater of the aggregate amount of the offering, the filing required under subdivision (a)(1)(C)(i) shall be filed when the issuer becomes aware that such purchases have met that threshold and, in any event, no later than thirty (30) days from the date of completion of the offering. (D) With respect to any security that is a covered security under § 18(b)(4)(F) of the Securities Act of 1933, the issuer shall file with the commissioner, no later than fifteen (15) days after the first sale of such covered security in this state, a notice consisting of: (i) Form D signed by the issuer; and (ii) A nonrefundable filing fee of five hundred dollars ($500). (2) After the initial offer of a covered security in this state, all documents that are part of an amendment to a federal registration statement or Form D filed with the securities and exchange commission under the Securities Act of 1933 (15 U.S.C. § 77a et seq.), shall be filed concurrently with the commissioner. (3) All documents referred to in subdivisions (a)(1) and (a)(2) that have been filed and recorded on the Electronic Data Gathering Access and Retrieval (EDGAR) system, the Interactive Data Electronic Applications (IDEA) system, the Electronic Filing Depository (EFD), or any other electronic data gathering system either maintained by the securities and exchange commission or approved by the commissioner, may be utilized in lieu of filing such documents in paper form with the commissioner or the commissioner's designee; provided, that the person making the notice filing provides an accurate filing number or other identifying designation issued by the securities and exchange commission, and that a printed or electronically stored copy is immediately accessible to the commissioner or the commissioner's designee. (b)(1) Notice filings made pursuant to subdivision (a)(1)(A) are effective for one (1) year commencing on the later of the notice filing date or the securities and exchange commission effective date. Notice filings may be renewed by making a filing and paying a fee as provided under subdivision (a)(1)(A) no later than the close of business on the tenth business day prior to the date of expiration. (2) Notice filings made pursuant to subdivision (a)(1)(B) are effective for one (1) year from the date of filing and may be renewed by making a filing as required by subdivision (a)(1)(B) and paying a nonrefundable renewal fee of one hundred dollars ($100). (3) Notice filings made pursuant to subdivision (a)(1)(C) are effective for one (1) year from the date of filing and may be renewed by making a filing as required by subdivision (a)(1)(C) and paying a nonrefundable renewal fee of one hundred dollars ($100). (4) Notice filings made pursuant to subdivision (a)(1)(D) are effective for one (1) year from the date of filing unless the issuer conducts a continuous offering and files concurrent amendments as required by subdivision (a)(2) and pays a nonrefundable renewal fee of one hundred dollars ($100). (c)(1) The commissioner may issue a stop order suspending the offer and sale of a covered security, except a covered security under § 18(b)(1) of the Securities Act of 1933 (15 U.S.C. § 77r(b)(1)), upon a finding that: (A) The order is in the public interest; and (B) There is a failure to comply with any filing or fee required under this part. (2) Any issuer of a covered security that does not promptly remedy a delay in payment of any fee or promptly remedy a delay in making any filing required under this part shall be deemed not to have complied with such filing or fee requirements. For purposes of this subdivision (c)(2), an issuer will have promptly remedied a delay in payment or filing if the issuer remits the required fee or filing within ten (10) business days of receipt of notification of the delay or underpayment. (d) When any amendment to a notice filing filed under this section changes the name of the offering of securities, the issuer shall pay a processing fee of fifty dollars ($50.00), payable upon filing the amendment with the commissioner. (e) The following are subject to a late filing fee as established by the commissioner by rule: (1) An initial notice filing received more than thirty (30) days after the date of first sale; (2) An initial notice filing received more than one (1) year from the date of the first sale; or (3) A late filed renewal notice. Acts 1997, ch. 164, § 8; 2001, ch. 61, §§ 15-17; 2010, ch. 697, § 4; T.C.A., § 48-2-125; Acts 2017, ch. 424, § 46; 2023, ch. 112, §§ 13, 14.

Tenn. Code Ann. § 48-1-126 Exemptions from notice filing and fee requirements.

48-1-126. Exemptions from notice filing and fee requirements. Notwithstanding § 48-1-125(a)(1)(A)(i) and (ii), the following covered securities are exempt from the notice filing and fee requirements set forth in § 48-1-125: (1) Any covered security sold to an institutional investor, as defined under § 48-1-102; (2) Any security that is defined to be a covered security pursuant to § 48-1-102 and is exempt from federal securities registration pursuant to § 3(a)(2) of the Securities Act of 1933; (3) Any security that is defined to be a covered security pursuant to § 48-1-102 and is exempt from federal securities registration pursuant to § 3(a)(3) of the Securities Act of 1933; (4) Any security that is defined to be a covered security pursuant to § 48-1-102 and is exempt from federal securities registration pursuant to § 3(a)(5) of the Securities Act of 1933; (5) Any security that is defined to be a covered security pursuant to § 48-1-102 and is exempt from federal securities registration pursuant to § 3(a)(6) of the Securities Act of 1933; (6) Any security that is defined to be a covered security pursuant to § 48-1-102 and is exempt from federal securities registration pursuant to § 3(a)(7) of the Securities Act of 1933; (7) Any security that is defined to be a covered security pursuant to § 48-1-102 and is sold in a transaction exempt from federal registration pursuant to § 3(a)(9) of the Securities Act of 1933; (8) Any security that is defined to be a covered security pursuant to § 48-1-102 and is sold in a transaction exempt from federal registration pursuant to § 3(a)(10) of the Securities Act of 1933; (9) Any security that is defined to be a covered security pursuant to § 48-1-102 and is exempt from federal registration pursuant to § 3(a)(12) of the Securities Act of 1933; (10) Any security that is defined to be a covered security pursuant to § 48-1-102 and is exempt from federal registration pursuant to § 3(a)(13) of the Securities Act of 1933; (11) Any security that is defined to be a covered security pursuant to § 48-1-102 and is determined, by rule or order of the commissioner, that such notice filing is not necessary for the protection of investors; (12) Any security issued by a unit investment trust that is registered under the federal Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), as amended, if: (A) The units have been the subject of a previous notice filing and fee under this part and have been sold; (B) The units are offered or sold by a broker-dealer registered under this part; and (C) The units are sold by or on behalf of a sponsor or depositor of the unit investment trust or affiliate of the sponsor or depositor; and (13) Any security that is defined to be a covered security pursuant to § 18(b)(1) of the Securities Act of 1933, or will be such a covered security upon completion of the transaction. Acts 1999, ch. 74, § 2; 2010, ch. 697, § 5; T.C.A., § 48-2-126; Acts 2017, ch. 424, § 47.

Tenn. Code Ann. § 48-1-127 Senior exploitation reporting and records.

48-1-127. Senior exploitation reporting and records. (a)(1) If a qualified individual reasonably believes that financial exploitation of a designated adult has occurred, has been attempted or may have been attempted, or is being attempted, the qualified individual, in cooperation with the qualified individual's broker-dealer or investment adviser, may notify the commissioner. (2) Subsequent to notifying the commissioner, a qualified individual may, to the extent permitted under federal law, notify any of the following concerning the qualified individual's belief that financial exploitation may have occurred: (A) A relative of the designated adult as defined in § 71-6-102; (B) A legal guardian of the designated adult; (C) A trustee, co-trustee, or successor trustee of the account of the designated adult; (D) An agent under a power of attorney of the designated adult; or (E) Any other person permitted under existing laws, rules, regulations, or customer agreement. (b)(1) A broker-dealer or investment adviser may delay a disbursement from an account of a designated adult or an account on which a designated adult is a beneficiary if: (A) The broker-dealer, investment adviser, or qualified individual reasonably believes, after initiating an internal review of the requested disbursement and the suspected financial exploitation, that the requested disbursement may result in financial exploitation of a designated adult; and (B) The broker-dealer or investment adviser: (i) Immediately, but in no event more than two (2) business days after the requested disbursement, provides written notification of the delay and the reason for the delay to all parties authorized to transact business on the account, unless any such party is reasonably believed to have engaged in or attempted financial exploitation of the designated adult; (ii) Immediately, but in no event more than two (2) business days after the requested disbursement, notifies the commissioner; and (iii) Continues its internal review of the suspected or attempted financial exploitation of the designated adult, as necessary, and reports any additional results to the commissioner within seven (7) business days after the requested disbursement. (2) The commissioner is authorized to establish additional disbursement-delay guidelines by rules promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. (3) Any delay of a disbursement as authorized by this section shall expire upon the sooner of: (A) A determination by the broker-dealer or investment adviser that the disbursement will not result in financial exploitation of the designated adult; or (B) Fifteen (15) business days after the date on which the broker-dealer or investment adviser first delayed disbursement of the funds, unless the commissioner requests that the broker-dealer or investment adviser extends the delay, in which case the delay shall expire no more than twenty-five (25) business days after the date on which the broker-dealer or investment adviser first delayed disbursement of the funds unless otherwise terminated or extended by the commissioner or an order of a court of competent jurisdiction. (4) A court of competent jurisdiction may enter an order extending the delay of the disbursement of funds or an order granting other protective relief based on the petition of the commissioner, the broker-dealer or investment adviser that initiated the delay under this section, or any other interested party. (c) A broker-dealer, investment adviser, or qualified individual that, in good faith and exercising reasonable care, complies with subsections (a) and (b) is immune from liability for such conduct. (d) A broker-dealer or investment adviser shall provide access to or copies of records that are relevant to the suspected financial exploitation of a designated adult to the commissioner. The records may include historical records or records relating to the most recent disbursement as well as disbursements that comprise the suspected financial exploitation of a designated adult. All records made available to the commissioner under this section shall not be open to inspection by members of the public under § 10-7-503. Acts 2017, ch. 242, § 48.

Source: Tennessee Code (state release 76 via Public.Resource.Org) + public chapters (Tennessee Secretary of State)URL: https://archive.org/download/gov.tn.tca/release76.2021.05.21/gov.tn.tca.title.48.htmlFetched: 10/24/2026