2.3.1.2 Agents Representing Issuers
Agents representing issuers do not have to register in a state if:
• They only engage in transactions in certain exempt securities.
Explanation: If an agent works for an issuer of certain exempt securities and she effects transactions only in these securities, the agent will not have to register. These exempt securities include:
• Federal and municipal securities
• Securities issued by foreign governments with which the U.S. has diplomatic relations
• Securities issued by commercial banks, savings institutions, or trust companies
• Investment grade commercial paper (notes) that has a maturity of 9 or fewer months, is issued in denominations of at least $50,000, and receives a rating in one of the three highest rating categories from a nationally recognized statistical rating organization
• Investment contracts issued in connection with an employee benefit plan if the administrator is notified in writing 30 days before the inception of the plan
• They engage in transactions only for existing employees, partners or directors of the issuer and their pay is not tied to how much they actually help sell. For example, an employee who works in human resources and assists with the purchase of stock options for other employees will not have to register as an agent as long as she does not receive specific compensation for this activity.
• They engage in exempt transactions.
Explanation: Common exempt transactions* include:
• Isolated non-issuer transactions
• Transactions between issuers and underwriters
• Private placements
• Transactions in federal covered securities for qualified purchasers. (A qualified purchaser is an individual or family-owned company with $5 million to invest, or any other company with $25 million to invest.)
*See Chapter Three for a full list.
Remember, though, that just because an agent represents an issuer of securities does not mean