Section 14.406 - Administration of Chapter(A)(1) There is hereby established in the Office of the State Secretary the Securities Division. The Division shall, under the supervision of the Secretary and the Deputy Secretary of the Commonwealth for the Commercial Bureau, administer and enforce the M.G.L. c. 110A and 950 CMR 10.00 through 14.413, and, without limiting the foregoing, may issue written interpretations of M.G.L. c. 110A and 950 CMR 10.00 through 14.413. The head of the Securities Division shall have the title "Director". He shall, subject to the approval of the Secretary and the Deputy Secretary of State for the Commercial Bureau, make, amend and rescind such rules, forms, and orders as are necessary to carry out the statutory policy of M.G.L. c. 110A. The Director is empowered to hear, examine, and investigate matters in accordance with M.G.L. c. 110A. In the absence of the Director, the Deputy Secretary of the Commonwealth for the Commercial Bureau is empowered to take any action allowed to the Director under 950 CMR 10.00 through 14.413. (A)(2) All writings shall be addressed or delivered to: Director, Securities Division
Office of the Secretary of the Commonwealth
John W. McCormack Building, 17th Floor
One Ashburton Place
Boston, MA 02108
All writings are deemed "filed" with the Secretary when received in the office of the Director.
(A)(3) Unless otherwise specifically provided by law or 950 CMR 10.00 through 14.413, computation of any time period referred to in M.G.L. c. 110A or 950 CMR 10.00 through 14.413 shall begin with the first day following the act which initiates the running of the time period. The last day of the time period so computed is to be included unless it is a Saturday, Sunday or legal holiday, or another day on which the Division is closed, in which event the period shall run until the end of the next business day. When a time period is less than seven days, intervening days when the Division is closed shall be excluded from the computation.(B)(1)950 CMR 14.406 applies to all transactions effected by or on behalf of an employee of the Division, including transactions for the accounts of other persons effected by the employee, directly or indirectly, under a power of attorney or otherwise. An employee is considered to have sufficient interest in the securities transactions of his or her spouse or minor child so that such transactions must be reported and are subject to all the terms of 950 CMR 14.406.(B)(2) No employee shall effect or cause to be effected any transaction in a security except for bona fide investment purposes. 950 CMR 14.406(B)(2) does not apply to securities purchased by an employee prior to the commencement of his or her employment with the Division. Any employee who believes the application of 950 CMR 14.406(B)(2) will result in undue hardship in a particular case may make written application to the Secretary (through his Deputy) setting out, in detail, the reasons for his belief and requesting a waiver.(B)(3) No employee shall carry securities on margin. Also, no employee shall borrow funds or securities, with or without collateral, for the purpose of purchasing or carrying securities with the proceeds unless prior approval of the Secretary has been secured.(B)(4) No employee shall sell a security which he does not own, or the sale of which is consummated by the delivery of a security borrowed by or for such employee's account.(B)(5) No employee shall purchase any security which is the subject of a registration statement filed under M.G.L. c. 110A, § 301 or any security which is exempted from such registration requirement under M.G.L. c. 110A, § 402 and for which the Division receives communication regarding the exemption, for the period from the filing with the Division of such registration statement or claim of exemption to 60 days after the effective date of the registration statement or, in the case of claim of exemption, 60 days after the date of filing.(B)(6) No employee shall purchase any security in an offeror or target company after the first communication with the Division regarding the pendency of a takeover bid or during the pendency of a takeover bid subject to the provisions of M.G.L. c.110C. These provisions shall apply for a period of 60 days after said bid is completed, withdrawn, otherwise terminated or reasonably believed not to have been undertaken.(B)(7) No employee shall have a beneficial interest in any broker or dealer through ownership of securities or otherwise. (B)(8) No employee shall purchase any security which to his knowledge is involved in any pending investigation by the Division or in any proceeding before the Division. Nor shall any employee conduct any business with any respondent (broker, dealer, agent or otherwise) who to his knowledge is involved in any pending investigation by the Division or in any proceeding before the Division.(B)(9) No employee shall purchase any securities of any company which is in receivership or for which a petition has been filed under Chapter 10 or Chapter 11 of the Bankruptcy Act.(B)(10) Employees shall report every transaction in any security within five business days to the Secretary through the Director of the Securities Division. Other changes in holdings resulting from inheritance or from reclassification, gifts, stock dividends or split ups, for example, shall be reported promptly. In addition, every employee owning securities shall, on or before May 1st of each year, furnish a complete list of all securities held by him, his spouse or minor child, as well as all securities held in a trust or estate of which he is a fiduciary or beneficiary. New employees shall make the foregoing disclosure prior to the commencement of employment with the Division.(B)(11)950 CMR 14.406(B)(2) and (10) do not apply to personal notes, individual real estate mortgages, U. S. Government Securities and securities issued by building and loan association or cooperatives.(B)(12) The Secretary or his designee is authorized to require the disposition of securities acquired as a result of the unintentional violation of the provisions of 950 CMR 14.406(B). Any intentional violation of 950 CMR 14.406(B) shall be reported to the Secretary for appropriate disciplinary action.Amended by Mass Register Issue 1284, eff. 4/10/2015.Amended by Mass Register Issue 1387, eff. 3/22/2019.Amended by Mass Register Issue 1524, eff. 3/22/2019.