Legal Memorandum: Securities Registration Requirements in MT

Issue: Whether an officer of a corporation is exempt from licensing requirements for sale of the corporation’s debenture bonds under Montana’s blue sky law.

“It is unlawful for a person to transact business in [Montana] as a broker-dealer or salesperson, …*FN1 unless the person is registered under parts 1 through 3 of [the Securities Act of Montana].” 

“Broker-dealer” and “salesperson” are defined by statute.

     (1)(a) “Broker-dealer” means any person engaged in the business of effecting transactions in securities for the account of others or for the person’s own account.

     (b) The term does not include:

     (i) a salesperson, issuer, bank, savings institution, trust company, or insurance company; or

     (ii) a person who does not have a place of business in this state if the person effects transactions in this state exclusively with or through the issuers of the securities involved in the transactions, other broker-dealers, or banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustee.

Mont. Code § 30-10-103(1) (emphasis added).  A “salesperson” is “an individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect sales of securities.  A partner, officer, or director of a broker-dealer or issuer is a salesperson only if the person otherwise comes within this definition.”  Id., § 30-10-103(20)(a).

The statutory provision specifies when a person is not within the definition of salesperson: