LD 509
pg. 39
Page 38 of 183 An Act To Adopt the Maine Uniform Securities Act Page 40 of 183
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LR 441
Item 1

 
3. Section 16102(15)(B): This paragraph excludes from the
definition of "investment adviser" certain professionals whose
performance of investment advice is "solely incidental" to the
practice of their profession. Consistent with the predecessor act,
receiving additional compensation solely for investment advice
negates this definitional exclusion, because specific compensation
indicates that the advice was not incidental in nature.

 
4. Section 16102(17)(D): Maine has modified the model
Uniform Securities Act by adding paragraph (D), "[t]he issuer of
a fractional or pooled interest in a viatical or life settlement
contract," within the definition of issuer, similar to the
predecessor act.

 
5. Section 16102(28): Maine has modified the model Uniform
Securities Act definition of security so as to place investments
in a viatical and life settlement contract within the main body
of the definition (as they appeared in the Revised Maine
Securities Act) and not as examples of investment contracts.
This modification is intended to ensure that the same standards
will be applied in Maine when determining whether such
investments fall within the definition. Further, Maine has added
into the body of the definition certain oil and gas interests
that were also included in the Revised Maine Securities Act as a
type of security.

 
6. Section 16102(28)(B): Maine has elected to exclude
variable annuities in the definition of a security, an option
included in the model Uniform Securities Act. In evaluating this
option, Maine determined that it would be appropriate to update
the Maine Insurance Code to include rule-making authority for the
Superintendent of Insurance to adopt rules regarding the
suitability of sales of variable annuities.

 
7. Section 16102(28)(D): The term "profits" should be
interpreted in light of the United States Supreme Court's
decision in SEC v. Edwards, 124 S. Ct. 892 (2004), which
clarified the meaning of the investment contract definition first
set forth in SEC v. Howey, 66 S. Ct. 1100 (1946). Referring to
Howey, the Court stated: "[W]e were speaking of the profits that
investors seek on their investment, not the profits of the scheme
in which they invest. We used 'profits' in the sense of income
or return, to include for example, dividends, other periodic
payments, or the increased value of the investment. There is no
reason to distinguish between promises of fixed returns and
promises of variable returns for purposes of the test, so
understood." Edwards, 124 S. Ct. at 897.


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