Public Act 90-0070 of the 90th General Assembly

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Public Act 90-0070

HB1168 Enrolled                                LRB9004729SMdv

    AN ACT concerning financial transactions.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  5.   The  Illinois  Securities  Law  of  1953 is
amended by changing Sections 2.3,  2.9,  2.10,  2.11,  2.12b,
2.17b,  2.26,  3,  4, 5, 6, 7, 8, 9, 10, 11, 11a, 12, and 13,
and by adding Sections 2.12c, 2.17f, 2.29, 2.30, 2.31,  2.32,
and 2a as follows:

    (815 ILCS 5/2.3) (from Ch. 121 1/2, par. 137.2-3)
    Sec.  2.3  "Person" means an individual, a corporation, a
partnership, an association, a joint stock company, a limited
liability company, a limited liability partnership,  a  trust
or  any unincorporated organization. As used in this Section,
"trust" includes only a trust where the interest or interests
of the beneficiary or beneficiaries is a security.
(Source: Laws 1961, p. 3663.)

    (815 ILCS 5/2.9) (from Ch. 121 1/2, par. 137.2-9)
    Sec. 2.9.  "Salesperson" means an individual, other  than
an issuer or a dealer, employed or appointed or authorized by
a  dealer, issuer or controlling person to offer, purchase or
sell securities in this State.  The partners or officers of a
dealer or issuer shall  not  be  deemed  to  be  salespersons
within the meaning of this definition if they are not or have
not been regularly engaged in securities offering, purchasing
or  selling  activities other than transactions for their own
respective accounts. No individual shall be deemed  to  be  a
salesperson  solely  by reason of effecting transactions in a
covered security to  qualified  purchasers  as  described  in
Section   18(b)(3)   of   the  Federal  1933  Act,  effecting
transactions in a covered security as  described  in  Section
18(b)(4)(D)  of the Federal 1933 Act, or engaging in the fact
that such individual is engaged in making offers or effecting
sales of securities  to  employees  of  the  issuer  of  such
securities  or to employees of the parent or any wholly-owned
subsidiary of such issuer, provided that such  individual  is
an  employee of such issuer, parent or subsidiary who has not
been employed primarily to make such offers or sales and  who
receives no special compensation, directly or indirectly, for
or  on  account of any such offer or sale. "Salesperson" also
means a limited Canadian salesperson.
(Source: P.A. 84-869.)

    (815 ILCS 5/2.10) (from Ch. 121 1/2, par. 137.2-10)
    Sec. 2.10. "Registered salesperson" means  a  salesperson
registered   under   Section   8  of  this  Act.  "Registered
salesperson"  also  means  a  registered   limited   Canadian
salesperson.
(Source: P.A. 80-556.)

    (815 ILCS 5/2.11) (from Ch. 121 1/2, par. 137.2-11)
    Sec.  2.11.  Investment  adviser.   "Investment  adviser"
means any person who, for compensation, engages in this State
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,
purchasing,  or  selling securities or who, in this State for
direct or indirect compensation and  as  part  of  a  regular
advisory  business, issues or promulgates analyses or reports
concerning securities  or  any  financial  planner  or  other
person  who,  as  an  integral component of other financially
related services, provides the foregoing investment  advisory
services to others for compensation and as part of a business
or  who  holds  himself  or  herself  out  as  providing  the
foregoing   investment   advisory   services  to  others  for
compensation; but "investment adviser" does not include:
    (1)  a bank or trust company, or the regular employees of
a bank or trust company;
    (2)  any  lawyer,  accountant,  engineer,  geologist   or
teacher  (i)  whose  performance  of  such services is solely
incidental to the practice of his or her profession  or  (ii)
who:
         (A)  does  not  exercise  investment discretion with
    respect to the assets of clients or maintain  custody  of
    the  assets of clients for the purpose of investing those
    assets, except when the person is acting as a  bona  fide
    fiduciary  in  a  capacity  such as an executor, trustee,
    personal representative, estate or trust agent, guardian,
    conservator, or person serving  in  a  similar  fiduciary
    capacity;
         (B)  does   not   accept  or  receive,  directly  or
    indirectly, any commission, fee,  or  other  remuneration
    contingent  upon  the  purchase  or  sale of any specific
    security by a client of such person; and
         (C)  does not advise on  the  purchase  or  sale  of
    specific  securities,  except  that this clause (C) shall
    not apply when the advice about  specific  securities  is
    based    on   financial   statement   analyses   or   tax
    considerations that are  reasonably  related  to  and  in
    connection with the person's profession;
    (3)  any  registered dealer or partner, officer, director
or regular employee of a  registered  dealer,  or  registered
salesperson,  whose  performance  of  these services, in each
case, is solely incidental to the conduct of the business  of
the  registered dealer or registered salesperson, as the case
may be, and who receives no special compensation, directly or
indirectly, for such services;
    (4)  any publisher or regular employee of such  publisher
of  a  bona  fide  newspaper,  news  magazine  or business or
financial  publication  of  regular  and   established   paid
circulation;
    (5)  any  person whose advice, analyses or reports relate
only to  securities  which  are  direct  obligations  of,  or
obligations  guaranteed  as  to principal or interest by, the
United States, any state or any political subdivision of  any
state,  or any public agency or public instrumentality of any
one or more of the foregoing; or
    (5.5)  any person who is  a  federal  covered  investment
adviser; or
    (6)  any  other  persons who are not within the intent of
this Section as the Secretary of State may designate by rules
and regulations or order.
(Source: P.A. 87-463.)

    (815 ILCS 5/2.12b) (from Ch. 121 1/2, par. 137.2-12b)
    Sec.   2.12b.    Investment    adviser    representative.
"Investment   adviser   representative"  means  any  partner,
officer, director of (or a person occupying a similar  status
or  performing  similar  functions),  or other natural person
employed by or associated with an investment adviser,  except
clerical or ministerial personnel, who in this State:
    (1)  makes   any  recommendations  or  otherwise  renders
advice regarding securities;
    (2)  manages accounts or portfolios of clients;
    (3)  determines what recommendation or  advice  regarding
securities should be given; or
    (4)  supervises  any  employee  who  performs  any of the
foregoing.
    "Investment  adviser  representative"  does  not  mean  a
federal covered investment adviser, a supervised person of  a
federal  covered  investment  adviser, or a person defined by
rule of the Securities and Exchange Commission under  Section
203A  of the Federal Investment Advisers Act as an investment
adviser representative.
(Source: P.A. 87-463.)

    (815 ILCS 5/2.12c new)
    Sec.    2.12c.      Registered     investment     adviser
representative.       "Registered      investment     adviser
representative" means an  investment  adviser  representative
registered under Section 8 of this Act.

    (815 ILCS 5/2.17b) (from Ch. 121 1/2, par. 137.2-17b)
    Sec.  2.17b.   Federal 1974 Act. "Federal 1974 Act" means
the Act of  Congress  of  the  United  States  known  as  the
Commodity Exchange Futures Trading Commission Act of 1974, as
amended.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 5/2.17f new)
    Sec.  2.17f.  Federal 1996 Act.  "Federal 1996 Act" means
the Act of  Congress  of  the  United  States  known  as  the
National Securities Markets Improvement Act of 1996.

    (815 ILCS 5/2.26) (from Ch. 121 1/2, par. 137.2-26)
    Sec.   2.26.    Mineral  investment  contract.   "Mineral
investment   contract"   means   any   investment,   account,
agreement, or contract whereby  the  investor's  profits  are
dependent  upon the transportation, mining, minting, milling,
flotation, refining, hallmarking, sale, resale, or repurchase
of a metal or mineral, even if there  is  any  potential  for
profit from fluctuation in the value of the metal or mineral,
except  any contract or agreement for the sale or purchase of
a metal or mineral between merchants.  Nothing  herein  shall
affect the jurisdiction or authority of the Commodity Futures
Trading  Commission  under  the  Federal 1974 1936 Act or the
application of any provision thereof or regulation thereunder
to any person or transaction subject thereto.  The  Secretary
of  State  may, for the purposes of this Section by rules and
regulations, define the term "between merchants".
(Source: P.A. 87-463.)

    (815 ILCS 5/2.29 new)
    Sec. 2.29  Covered security.   "Covered  security"  means
any  security  that is a covered security under Section 18(b)
of the Federal 1933 Act or rules or  regulations  promulgated
thereunder.

    (815 ILCS 5/2.30 new)
    Sec. 2.30.  Federal covered investment adviser.  "Federal
covered  investment  adviser"  means  a  person  who  is  (i)
registered  under  Section 203 of the Federal 1940 Investment
Advisers Act or (ii)  is  excluded  from  the  definition  of
"investment  adviser" under Section 202(a)(11) of the Federal
1940 Investment Advisers Act.

    (815 ILCS 5/2.31 new)
    Sec.  2.31.   Limited  Canadian  salesperson.    "Limited
Canadian  salesperson"  means a salesperson who is a resident
of Canada, has no office or other physical presence  in  this
State,   and   complies  with  conditions  specified  by  the
Secretary of State through rule or order.

    (815 ILCS 5/2.32 new)
    Sec. 2.32.  Limited Canadian dealer.   "Limited  Canadian
dealer"  means  a  dealer who is a resident of Canada, has no
office or other physical presence in this State, and complies
with conditions specified by the Secretary of  State  through
rule or order.

    (815 ILCS 5/2a new)
    Sec.  2a.  Notification filing requirements of issuers of
any covered security and payment of fees.  All issuers of any
covered security (except any security  listed  or  authorized
for  listing on the New York Stock Exchange or American Stock
Exchange or listed on  the  National  Market  System  of  the
Nasdaq  Stock  Market (or any successor to such entities), or
listed or authorized for listing  on  a  national  securities
exchange  (or  tier  or  segment  thereof)  that  has listing
standards that the federal Securities and Exchange Commission
by rule (on its own initiative or on the basis  of  petition)
has  determined  are  substantially  similar  to  the listing
standards  applicable  to  any  security  described  in  this
Section, or is a security of the same issuer that is equal in
seniority or that is a  senior  security  described  in  this
Section)   shall   annually  file  a  notification  with  the
Secretary of State in such form and manner as  prescribed  by
rule or order and pay the notification filing fee established
under  Section  11a of this Act which shall not be returnable
in any event.
    Anything in this Act  to  the  contrary  notwithstanding,
until  October  10,  1999  or  other  date  as may be legally
permissible, the refusal to file the notification or pay  the
fee  by  an issuer of any covered security (except issuers of
securities which are being sold under Regulation  D,  Section
506  of  the  Federal  1933  Act) after written notice by the
Secretary of State (which may  be  by  United  States  Postal
Service,   facsimile  or  electronic  transmission  or  other
similar means), shall require the issuer or his, her, or  its
designee  to  file  an  application for registration with the
Secretary of State under subsection A or B of Section  5,  6,
or  7  of  this  Act and pay the registration fee established
under Section 11a of this Act which shall not  be  returnable
in  any  event.   The  failure  to file any such notification
shall constitute a violation of subsection D of Section 12 of
this Act, subject to the penalties enumerated in  Section  14
of this Act.  The civil remedies provided for in subsection A
of  Section  13  of  this  Act  and  the  civil  remedies  of
rescission   and  appointment  of  a  receiver,  conservator,
ancillary receiver, or ancillary conservator provided for  in
subsection F of Section 13 of this Act shall not be available
against  any person by reason of the failure to file any such
notification or to pay the notification fee.

    (815 ILCS 5/3) (from Ch. 121 1/2, par. 137.3)
    Sec. 3.  The provisions of Sections 2a, 5,  6  and  7  of
this Act shall not apply to any of the following securities:
    A.  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 corporation or other
instrumentality  of  any one or more of the foregoing, or any
certificate of deposit for any such security.
    B.  Any security issued  or  guaranteed  by  Canada,  any
Canadian  province,  any  political  subdivision  of any such
province, any agency or corporation or other  instrumentality
of  one  or  more  of  the  foregoing,  or  any other foreign
government  with  which  the  United  States  then  maintains
diplomatic relations, if the  security  is  recognized  as  a
valid obligation by the issuer or guarantor.
    C. (1)  Any   security  issued  by  and  representing  an
interest in or a debt of,  or  guaranteed  by,  any  bank  or
savings  bank  organized under the laws of the United States,
or any bank,  savings  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  any  such  bank,  savings  bank,
savings  institution  or  trust  company  exclusively for the
collective investment and reinvestment of assets  contributed
thereto  by  such  bank, savings bank, savings institution or
trust company or any affiliate thereof, in  its  capacity  as
fiduciary, trustee, executor, administrator or guardian.
    (2)  Any  security issued or guaranteed to both principal
and interest by an international bank  of  which  the  United
States is a member.
    D. (1)  Any   security  issued  by  and  representing  an
interest in or a debt  of,  or  guaranteed  by,  any  federal
savings  and  loan  association,  or  any  savings  and  loan
association  or  building  and loan association organized and
supervised under the laws of any state.
    (2)  Any security issued or  guaranteed  by  any  federal
credit   union   or   any   credit   union,  industrial  loan
association, or similar organization organized and supervised
under the laws of any state.
    E.  Any security issued or guaranteed  by  any  railroad,
other common carrier, public utility or holding company where
such  issuer  or  guarantor is subject to the jurisdiction of
the Interstate Commerce Commission or successor entity, or is
a registered holding company under the Public Utility Holding
Company Act of 1935 or a subsidiary of such a company  within
the  meaning  of  that Act, or is regulated in respect of its
rates and charges by a governmental authority of  the  United
States  or  any  state,  or  is  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.
    F.  Equipment trust certificates in respect of  equipment
leased  or  conditionally  sold  to  a  person, if securities
issued by such person would be exempt under subsection  E  of
this Section.
    G.  Any  security  which at the time of sale is listed or
approved for listing upon notice of issuance on the New  York
Stock  Exchange, Inc., the American Stock Exchange, Inc., the
Pacific Stock Exchange, Inc.,  the  Chicago  Stock  Exchange,
Inc.,  the  Chicago  Board  of  Trade, the Philadelphia Stock
Exchange,  Inc.,  the   Chicago   Board   Options   Exchange,
Incorporated, the Nasdaq National Market System of the Nasdaq
Stock  Market,  or  any  other  exchange, automated quotation
system or board of trade which the  Secretary  of  State,  by
rule  or  regulation,  deems to have substantially equivalent
standards for listing or designation as required by any  such
exchange,  automated  quotation system or board of trade; and
securities senior or of substantially equal rank, both as  to
dividends  or interest and upon liquidation, to securities so
listed or designated; and warrants and rights to purchase any
of the foregoing; provided, however, that this  subsection  G
shall  not  apply  to investment fund shares or securities of
like character, which are  being  continually  offered  at  a
price  or  prices  determined in accordance with a prescribed
formula.
    The Secretary of State may, after notice and  opportunity
for   hearing,     revoke  the  exemption  afforded  by  this
subparagraph with respect to any  securities  by  issuing  an
order  if  the Secretary of State finds that the further sale
of the securities in this State would work or tend to work  a
fraud on purchasers of the securities.
    H.  Any   security  issued  by  a  person  organized  and
operated  not  for  pecuniary  profit  and  exclusively   for
religious,  educational, benevolent, fraternal, agricultural,
charitable,  athletic,   professional,   trade,   social   or
reformatory  purposes,  or  as a chamber of commerce or local
industrial development corporation, or for more than  one  of
said purposes and no part of the net earnings of which inures
to the benefit of any private stockholder or member.
    I.  Instruments    evidencing   indebtedness   under   an
agreement for the acquisition of property under  contract  of
conditional sale.
    J.  A  note  secured  by  a  first mortgage upon tangible
personal  or  real  property  when  such  mortgage  is  made,
assigned, sold, transferred and delivered with such  note  or
other  written obligation secured by such mortgage, either to
or for the benefit of the purchaser or lender;  or  bonds  or
notes  not more than 10 in number secured by a first mortgage
upon the  title  in  fee  simple  to  real  property  if  the
aggregate  principal amount secured by such mortgage does not
exceed $500,000 and also does not  exceed  75%  of  the  fair
market value of such real property.
    K.  A note or notes not more than 10 in number secured by
a  junior  mortgage lien if the aggregate principal amount of
the indebtedness represented thereby does not exceed  50%  of
the  amount  of  the then outstanding prior lien indebtedness
and provided  that  the  total  amount  of  the  indebtedness
(including the indebtedness represented by the subject junior
mortgage  note  or  notes)  shall  not exceed 90% of the fair
market value of the property securing such indebtedness;  and
provided  further  that  each  such  note or notes shall bear
across the face thereof the following legend  in  letters  at
least  as  large as 12 point type: "THIS NOTE IS SECURED BY A
JUNIOR MORTGAGE".
    L.  Any negotiable promissory  note  or  draft,  bill  of
exchange or bankers' acceptance which arises out of a current
transaction  or  the proceeds of which have been or are to be
used  for  current  transactions,  and  which  evidences   an
obligation  to  pay  cash  within  9  months  of  the date of
issuance exclusive of days of grace, or any renewal  of  such
note, draft, bill or acceptance which is likewise limited, or
any  guarantee  of such note, draft, bill or acceptance or of
any such renewal, provided that the  note,  draft,  bill,  or
acceptance  is a negotiable security eligible for discounting
by banks that are members of the Federal Reserve System.  Any
instrument  exempted   under   this   subsection   from   the
requirement  of  Sections  5, 6, and 7 of this Act shall bear
across the face thereof the following legend  in  letters  at
least  as large as 12 point type: "THIS INSTRUMENT IS NEITHER
GUARANTEED, NOR IS THE  ISSUANCE  THEREOF  REGULATED  BY  ANY
AGENCY  OR  DEPARTMENT OF THE STATE OF ILLINOIS OR THE UNITED
STATES.".   However,  the  foregoing  legend  shall  not   be
required with respect to any such instrument:
         (i)  sold to a person described in subsection C or H
    of Section 4 of this Act;
         (ii)  sold  to  a "Qualified Institutional Buyer" as
    that term is defined  in  Rule  144a  adopted  under  the
    Securities Act of 1933;
         (iii)  where  the  minimum  initial subscription for
    the purchase of such instrument is $100,000 or more; or
         (iv)  issued by an issuer  that  has  any  class  of
    securities  registered under Section 12 of the Securities
    Exchange Act of 1934 or  has  any  outstanding  class  of
    indebtedness  rated in one of the 3 highest categories by
    a rating agency designated by the Department;
    M.  Any security issued by and representing  an  interest
in  or  a  debt  of,  or guaranteed by, any insurance company
organized under the laws of any state.
    N.  Any  security  issued  pursuant  to  (i)  a   written
compensatory  benefit plan (including without limitation, any
purchase, savings, option, bonus, stock appreciation,  profit
sharing,  thrift,  incentive,  pension,  or similar plan) and
interests in such plans established by one  or  more  of  the
issuers thereof or its parents or majority-owned subsidiaries
for  the participation of their employees, directors, general
partners, trustees (where the issuer is  a  business  trust),
officers,  or  consultants or advisers of such issuers or its
parents or majority-owned subsidiaries,  provided  that  bona
fide  services  are  rendered  by consultants or advisers and
those services are not in connection with the offer and  sale
of  securities  in  a  capital-raising  transaction or (ii) a
written contract relating to the  compensation  of  any  such
person.
    O.  Any option, put, call, spread or straddle issued by a
clearing  agency  registered  as  such under the Federal 1934
Act, if the security, currency, commodity, or other  interest
underlying  the  option, put, call, spread or straddle is not
required to be registered under Section 5.
    P.  Any  security  which  meets  all  of  the   following
conditions:
         (1)  If  the  issuer is not organized under the laws
    of the United States or a state, it has appointed a  duly
    authorized  agent  in  the  United  States for service of
    process and has set forth the name  and  address  of  the
    agent in its prospectus.
         (2)  A  class of the issuer's securities is required
    to be and is registered under Section 12 of  the  Federal
    1934  Act, and has been so registered for the three years
    immediately preceding the offering date.
         (3)  Neither the issuer nor a significant subsidiary
    has had a material default during the last  seven  years,
    or  for the period of the issuer's existence if less than
    seven 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
    leases with terms of three years or more.
         (4)  The issuer has  had  consolidated  net  income,
    before  extraordinary  items and the cumulative effect of
    accounting changes, of at least $1,000,000 in four of its
    last five fiscal years including its  last  fiscal  year;
    and  if  the  offering is of interest bearing securities,
    has had for its last  fiscal  year,  net  income,  before
    deduction  for income taxes and depreciation, of at least
    1-1/2 times the issuer's annual interest expense,  giving
    effect  to  the proposed offering and the intended use of
    the proceeds.  For the  purposes  of  this  clause  "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  15
    months from the commencement of the offering.
         (5)  If  the  offering  is  of stock or shares other
    than preferred  stock  or  shares,  the  securities  have
    voting  rights  and  the  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.
         (6)  If the offering is of stock  or  shares,  other
    than  preferred stock or shares, the securities are owned
    beneficially or of record, on any date within six  months
    prior  to  the  commencement of the offering, by at least
    1,200 persons, and  on  that  date  there  are  at  least
    750,000  such shares outstanding with an aggregate market
    value, based on the average bid price for that day, of at
    least $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 dealer may
    rely in good faith for the purposes of this  clause  upon
    written information furnished by the record owners.
         (7)  The  issuer  meets  the conditions specified in
    paragraphs (2), (3) and  (4)  of  this  subsection  P  if
    either   the  issuer  or  the  issuer  and  the  issuer's
    predecessor, taken together, meet such conditions and if:
    (a) the succession  was  primarily  for  the  purpose  of
    changing the state of incorporation of the predecessor or
    forming  a holding company and the assets and liabilities
    of the successor at  the  time  of  the  succession  were
    substantially  the  same  as those of the predecessor; or
    (b) all predecessors met such conditions at the  time  of
    succession  and  the  issuer has continued to do so since
    the succession.
    Q.  Any security appearing on  the  List  of  OTC  Margin
Stocks  published  by  the  Board of Governors of the Federal
Reserve System; any other securities of the same issuer which
are of senior or substantially  equal  rank;  any  securities
called  for  by  subscription rights or warrants so listed or
approved; or any warrants or rights to purchase or  subscribe
to any of the foregoing.
    R.  Any  security  issued  by  a  bona  fide agricultural
cooperative operating in this State that is  organized  under
the   laws   of  this  State  or  as  a  foreign  cooperative
association organized under the law of another state that has
been duly qualified to transact business in this State.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 5/4) (from Ch. 121 1/2, par. 137.4)
    Sec. 4.  Exempt transactions.  The provisions of Sections
2a, 5, 6 and 7 of this Act shall not  apply  to  any  of  the
following  transactions,  except where otherwise specified in
this Section 4:
    A.  Any offer  or  sale,  whether  through  a  dealer  or
otherwise,  of  securities  by a person who is not an issuer,
underwriter, dealer or controlling person in respect of  such
securities,  and  who,  being  the  bona  fide  owner of such
securities, disposes thereof for  his  or  her  own  account;
provided,  that  such  offer  or sale is not made directly or
indirectly for the benefit of the issuer or of an underwriter
or controlling person.
    B.  Any offer, sale, issuance or exchange  of  securities
of  the  issuer  to  or  with  security holders of the issuer
except to or with persons who are security holders solely  by
reason   of   holding   transferable  warrants,  transferable
options, or similar transferable rights of the issuer, if  no
commission or other remuneration is paid or given directly or
indirectly  for  or on account of the procuring or soliciting
of  such  sale  or  exchange  (other  than  a  fee  paid   to
underwriters  based  on  their  undertaking  to  purchase any
securities not purchased by security  holders  in  connection
with such sale or exchange).
    C.  Any  offer,  sale  or  issuance  of securities to any
corporation, bank, savings bank, savings institution, savings
and  loan  association,  trust  company,  insurance  company,
building and loan association, or dealer; to a pension  fund,
pension  trust,  or  employees'  profit  sharing trust, other
financial  institution   or   institutional   investor,   any
government   or   political  subdivision  or  instrumentality
thereof, whether the purchaser is acting  for  itself  or  in
some   fiduciary   capacity;  to  any  partnership  or  other
association engaged as a substantial part of its business  or
operations  in purchasing or holding securities; to any trust
in respect of which a bank or trust  company  is  trustee  or
co-trustee; to any entity in which at least 90% of the equity
is  owned by persons described under subsection C, H, or S of
this Section 4; to  any  employee  benefit  plan  within  the
meaning  of  Title  I  of  the  Federal  ERISA Act if (i) the
investment decision is made by a plan fiduciary as defined in
Section  3(21)  of  the  Federal  ERISA  Act  and  such  plan
fiduciary is either a bank,  savings  and  loan  association,
insurance   company,  registered  investment  adviser  or  an
investment  adviser  registered  under   the   Federal   1940
Investment Advisers Act, or (ii) the plan has total assets in
excess of $5,000,000, or (iii) in the case of a self-directed
plan,  investment  decisions  are made solely by persons that
are described under subsection C, D, H or S of  this  Section
4;  to  any  plan  established and maintained by, and for the
benefit  of  the  employees  of,  any  state   or   political
subdivision or agency or instrumentality thereof if such plan
has   total  assets  in  excess  of  $5,000,000;  or  to  any
organization described in Section 501(c)(3) of  the  Internal
Revenue  Code  of 1986, any Massachusetts or similar business
trust, or any partnership, if such  organization,  trust,  or
partnership has total assets in excess of $5,000,000.
    D.  The Secretary of State is granted authority to create
by  rule  or  regulation  a  limited  offering  transactional
exemption  that furthers the objectives of compatibility with
federal exemptions and  uniformity  among  the  states.   The
Secretary  of State shall prescribe by rule or regulation the
amount of the fee for filing any report required  under  this
subsection,  but  the  fee shall not be less than the minimum
amount nor more than the  maximum  amount  established  under
Section  11a  of  this Act and shall not be returnable in any
event.
    E.  Any offer or  sale  of  securities  by  an  executor,
administrator, guardian, receiver or trustee in insolvency or
bankruptcy,  or  at any judicial sale, or at a public sale by
auction held at an advertised time and place, or the offer or
sale of securities in good faith and not for the  purpose  of
avoiding   the  provisions  of  this  Act  by  a  pledgee  of
securities pledged for a bona fide debt.
    F.  Any offer or sale by a registered dealer,  either  as
principal  or  agent,  of  any securities (except face amount
certificate contracts and investment fund shares) at a  price
reasonably  related  to  the  current  market  price  of such
securities, provided:
         (1)(a)  the securities are issued and outstanding;
         (b)  the issuer is required to file reports pursuant
    to Section 13 or Section 15(d) of the  Federal  1934  Act
    and  has  been subject to such requirements during the 90
    day period immediately preceding the date of the offer or
    sale, or is an issuer of a security  covered  by  Section
    12(g)(2)(B) or (G) of the Federal 1934 Act;
         (c)  the dealer has a reasonable basis for believing
    that the issuer is current in filing the reports required
    to   be  filed  at  regular  intervals  pursuant  to  the
    provisions of Section 13 or Section 15(d),  as  the  case
    may  be,  of  the  Federal  1934  Act,  or in the case of
    insurance companies exempted from Section  12(g)  of  the
    Federal 1934 Act by subparagraph 12(g)(2)(G) thereof, the
    annual statement referred to in Section 12(g)(2)(G)(i) of
    the Federal 1934 Act; and
         (d)  the  dealer  has  in  its  records,  and  makes
    reasonably   available   upon   request   to  any  person
    expressing an interest in a proposed transaction  in  the
    securities, the issuer's  most recent annual report filed
    pursuant  to  Section 13 or 15(d), as the case may be, of
    the Federal 1934 Act or the annual statement in the  case
    of  an  insurance  company exempted from Section 12(g) of
    the Federal 1934 Act by subparagraph 12(g)(2)(G) thereof,
    together with any other reports required to be  filed  at
    regular  intervals  under  the  Federal  1934  Act by the
    issuer after such  annual  report  or  annual  statement;
    provided  that  the  making  available  of  such  reports
    pursuant   to   this   subparagraph,   unless   otherwise
    represented, shall not constitute a representation by the
    dealer  that  the  information  is  true and correct, but
    shall constitute a representation by the dealer that  the
    information is reasonably current; or
         (2)(a)  prior  to  any offer or sale, an application
    for the authorization thereof and a report as  set  forth
    under  sub-paragraph  (d)  of this paragraph (2) has been
    filed by any registered dealer with and approved  by  the
    Secretary of State pursuant to such rules and regulations
    as the Secretary of State may prescribe;
         (b)  the  Secretary of State shall have the power by
    order to refuse to  approve  any  application  or  report
    filed pursuant to this paragraph (2) if
              (i)  the  application or report does not comply
         with the provisions of this paragraph (2), or
              (ii)  the offer  or  sale  of  such  securities
         would work or tend to work a fraud or deceit, or
              (iii)  the issuer or the applicant has violated
         any of the provisions of this Act;
         (c)  each  application  and report filed pursuant to
    this paragraph (2) shall be accompanied by a  filing  fee
    and an examination fee in the amount established pursuant
    to Section 11a of this Act, which shall not be returnable
    in any event;
         (d)  there  shall  be  submitted to the Secretary of
    State no later than 120 days following  the  end  of  the
    issuer's  fiscal year, each year during the period of the
    authorization, one copy of a report which shall contain a
    balance sheet and income statement  prepared  as  of  the
    issuer's  most  recent  fiscal  year  end certified by an
    independent certified public  accountant,  together  with
    such  current  information  concerning the securities and
    the  issuer  thereof  as  the  Secretary  of  State   may
    prescribe by rule or regulation or order;
         (e)  prior  to any offer or sale of securities under
    the provisions of this  paragraph  (2),  each  registered
    dealer  participating  in  the  offer  or  sale  of  such
    securities  shall  provide  upon  request  of prospective
    purchasers of such securities a copy of the  most  recent
    report required under the provisions of sub-paragraph (d)
    of this paragraph (2);
         (f)  approval  of  an  application filed pursuant to
    this paragraph (2) of subsection F shall expire  5  years
    after  the  date  of the granting of the approval, unless
    said approval is sooner terminated by (1)  suspension  or
    revocation  by  the Secretary of State in the same manner
    as is provided for in subsections E, F and G  of  Section
    11  of  this  Act,  or  (2) the applicant filing with the
    Secretary of State an affidavit to the  effect  that  (i)
    the subject securities have become exempt under Section 3
    of this Act or (ii) the applicant no longer is capable of
    acting  as the applicant and stating the reasons therefor
    or (iii) the applicant no longer desires to  act  as  the
    applicant.   In  the  event of the filing of an affidavit
    under either preceding sub-division  (ii)  or  (iii)  the
    Secretary  of  State  may  authorize  a  substitution  of
    applicant   upon   the   new   applicant   executing  the
    application   as   originally   filed.    However,    the
    aforementioned substituted execution shall have no effect
    upon  the  previously  determined  date  of expiration of
    approval  of   the   application.   Notwithstanding   the
    provisions  of  this  subparagraph (f), approvals granted
    under this paragraph (2) of subsection  F  prior  to  the
    effective  date  of  this  Act  shall  be governed by the
    provisions  of  this  Act  in  effect  on  such  date  of
    approval; and
         (g)  no person shall be considered to have  violated
    Section  5  of  this  Act  by reason of any offer or sale
    effected in reliance upon an approval granted under  this
    paragraph  (2)  after  a  termination  thereof  under the
    foregoing subparagraph (f) if  official  notice  of  such
    termination  has not been circulated generally to dealers
    by the Secretary of State and if such person sustains the
    burden of proof that he or she did not know, and  in  the
    exercise of reasonable care, could not have known, of the
    termination; or
         (3)  the  securities,  or  securities  of  the  same
    class,  are the subject of an existing registration under
    Section 5 of this Act.
    The exemption provided in this subsection F  shall  apply
only  if  the offer or sale is made in good faith and not for
the purpose of avoiding any of the provisions  of  this  Act,
and  only  if the offer or sale is not made for the direct or
indirect benefit of the issuer  of  the  securities,  or  the
controlling person in respect of such issuer.
    G. (1)  Any  offer,  sale  or  issuance  of  a  security,
whether  to  residents  or  to  non-residents  of this State,
where:
         (a)  all sales of such security to residents of this
    State (including the most recent such  sale)  within  the
    immediately  preceding  12-month period have been made to
    not more than 35 persons or have  involved  an  aggregate
    sales price of not more than $1,000,000 $500,000;
         (b)  such  security  is not offered or sold by means
    of any general advertising  or  general  solicitation  in
    this State; and
         (c)  no  commission, discount, or other remuneration
    exceeding 20% of the sale price of such security, if sold
    to a resident of this State, is paid or given directly or
    indirectly for or on account of such sales.
    (2)  In computing the number of  resident  purchasers  or
the  aggregate  sales  price  under  paragraph (1) (a) above,
there shall be excluded any purchaser  or  dollar  amount  of
sales price, as the case may be, with respect to any security
which  at  the time of its sale was exempt under Section 3 or
was registered under Section 5, 6 or  7  or  was  sold  in  a
transaction exempt under other subsections of this Section 4.
    (3)  A  prospectus or preliminary prospectus with respect
to a security for which a registration statement  is  pending
or  effective  under the Federal 1933 Act shall not be deemed
to constitute general advertising or general solicitation  in
this State as such terms are used in paragraph (1) (b) above,
provided  that  such prospectus or preliminary prospectus has
not been  sent  or  otherwise  delivered  to  more  than  150
residents of this State.
    (4)  The  Secretary  of State shall by rule or regulation
require the filing of a report or reports of  sales  made  to
residents  of  this  State  in  reliance  upon  the exemption
provided by this subsection G and prescribe the form of  such
report  and the time within which such report shall be filed.
Such report shall set forth  the  name  and  address  of  the
issuer and of the controlling person, if the sale was for the
direct  or  indirect benefit of such person, the total amount
of the securities sold under this subsection G  to  residents
of  this  State,  the  names  and  addresses  of the resident
purchasers, a representation that sales  of  such  securities
were  not  made to residents of this State in excess of those
permitted by this subsection G,  and  any  other  information
deemed  necessary  by  the  Secretary  of  State  to  enforce
compliance  with  this  subsection G.  The Secretary of State
shall prescribe by rule or regulation the amount of  the  fee
for  filing  any  such report, but such fee shall not be less
than the minimum amount nor  more  than  the  maximum  amount
established  pursuant  to  Section 11a of this Act, which and
shall not be returnable in any event.  The Secretary of State
may impose, in such cases as he or she may deem  appropriate,
a  penalty  for  failure  to file any such report in a timely
manner, but no such penalty shall exceed an amount  equal  to
five  times  the filing fee.  The contents of any such report
or portion thereof may shall be deemed  confidential  by  the
Secretary  of  State  by rule or order and if so deemed shall
not be disclosed to the public except by order of court or in
court proceedings.  The failure to file any such report shall
not affect the  availability  of  such  exemption,  but  such
failure  to file any such report shall constitute a violation
of subsection D of Section 12 of this  Act,  subject  to  the
penalties  enumerated  in  Section 14 of this Act.  The civil
remedies provided for in subsection A of Section 13  of  this
Act and the civil remedies of rescission and appointment of a
receiver,   conservator,   ancillary  receiver  or  ancillary
conservator provided for in subsection F  of  Section  13  of
this  Act shall not be available against any person by reason
of the failure to file any such report or on account  of  the
contents of any such report.
    H.  Any  offer, sale or issuance of a security to (1) any
natural person who has, or  is  reasonably  believed  by  the
person relying upon this subsection H to have, a net worth or
joint net worth with that person's spouse, at the time of the
offer,  sale or issuance, in excess of $1,000,000, or (2) any
natural person who had, or  is  reasonably  believed  by  the
person  relying upon this subsection H to have had, an income
or joint income with  that  person's  spouse,  in  excess  of
$200,000  in  each  of  the  two  most  recent  years and who
reasonably expects, or is reasonably  expected  to  have,  an
income  in excess of $200,000 in the current year, or (3) any
person that is not a natural person and in which at least 90%
of the equity interest is owned by persons who meet either of
the tests set forth in clauses (1) or (2) of this  subsection
H;  provided  that  such  security  is not offered or sold by
means of any general advertising or general  solicitation  in
this State.
    I.  Any  offer,  sale or issuance of securities to or for
the benefit of security holders of any person incident  to  a
vote  by  such  security  holders  pursuant  to such person's
organizational document or  any  applicable  statute  of  the
jurisdiction  of  such  person's  organization,  on a merger,
consolidation, reclassification of  securities,  or  sale  or
transfer  of  assets  in  consideration  of  or  exchange for
securities of the same or another person.
    J.  Any offer, sale or issuance of securities in exchange
for one or more outstanding securities,  claims  or  property
interests,  or  partly  in such exchange and partly for cash,
where  such  offer,  sale  or  issuance  is  incident  to   a
reorganization,  recapitalization,  readjustment, composition
or settlement of a claim, as approved by a court of competent
jurisdiction of the United States, or any state.
    K.  Any  offer,  sale  or  issuance  of  securities   for
patronage,  or  as  patronage  refunds, or in connection with
marketing agreements by  cooperative  associations  organized
exclusively    for    agricultural,    producer,   marketing,
purchasing,  or  consumer   purposes;   and   the   sale   of
subscriptions   for   or   shares  of  stock  of  cooperative
associations   organized   exclusively   for    agricultural,
producer,  marketing, purchasing, or consumer purposes, if no
commission or other remuneration is paid or given directly or
indirectly for or on account of such  subscription,  sale  or
resale, and if any person does not own beneficially more than
5%  of the aggregate amount of issued and outstanding capital
stock of such cooperative association.
    L.  Offers for sale or solicitations  of  offers  to  buy
(but not the acceptance thereof), of securities which are the
subject  of  a pending registration statement filed under the
Federal 1933 Act and  which are  the  subject  of  a  pending
application for registration under this Act.
    M.  Any  offer  or  sale of preorganization subscriptions
for any securities prior to the  incorporation,  organization
or  formation  of  any  issuer  under  the laws of the United
States, or any state, or the issuance by such  issuer,  after
its  incorporation,  organization or formation, of securities
pursuant to such preorganization subscriptions, provided  the
number  of  subscribers  does not exceed 25 and either (1) no
commission or other remuneration is paid or given directly or
indirectly for or  on  account  of  such  sale  or  sales  or
issuance,  or  (2) if any commission or other remuneration is
paid or given directly or indirectly for  or  on  account  of
such  sale  or  sales  or  issuance,  the  securities are not
offered or sold  by  any  means  of  general  advertising  or
general solicitation in this State.
    N.  The execution of orders for purchase of securities by
a  registered  salesperson  and dealer, provided such persons
act as agent for the purchaser, have made no solicitation  of
the order to purchase the securities, have no direct interest
in  the  sale  or  distribution  of  the  securities ordered,
receive no commission, profit, or  other  compensation  other
than the commissions involved in the purchase and sale of the
securities  and deliver to the purchaser written confirmation
of the order which clearly identifies the commissions paid to
the registered dealer.
    O.  Any offer, sale or issuance of securities, other than
fractional undivided  interests  in  an  oil,  gas  or  other
mineral  lease,  right or royalty, for the direct or indirect
benefit of the issuer thereof, or of  a  controlling  person,
whether  through  a  dealer  (acting  either  as principal or
agent) or otherwise,  if  the  securities  sold,  immediately
following the sale or sales, together with securities already
owned  by  the purchaser, would constitute 50% or more of the
equity interest of any one issuer, provided that  the  number
of purchasers is not more than 5 and provided further that no
commission,  discount  or other remuneration exceeding 15% of
the aggregate sale price of the securities is paid  or  given
directly  or  indirectly  for  or  on  account of the sale or
sales.
    P.  Any offer, sale or  issuance  of  securities  (except
face amount certificate contracts and investment fund shares)
issued  by and representing an interest in an issuer which is
a business corporation incorporated under the  laws  of  this
State,  the  purposes  of  which  are  to provide capital and
supervision solely for the redevelopment  of  blighted  urban
areas  located  in  a  municipality  in  this State and whose
assets  are  located  entirely  within   that   municipality,
provided:   (1) no commission, discount or other remuneration
is paid or given directly or indirectly for or on account  of
the  sale  or  sales  of  such  securities; (2) the aggregate
amount of any securities of the issuer  owned  of  record  or
beneficially  by any one person will not exceed the lesser of
$5,000 or 4% of the equity capitalization of the issuer;  (3)
the  officers and directors of the corporation have been bona
fide residents of the municipality  not  less  than  3  years
immediately preceding the effectiveness of the offering sheet
for  the  securities  under  this  subsection  P; and (4) the
issuer files with the Secretary of State  an  offering  sheet
descriptive of the securities setting forth:
         (a)  the name and address of the issuer;
         (b)  the  title and total amount of securities to be
    offered;
         (c)  the price at which the  securities  are  to  be
    offered; and
         (d)  such additional information as the Secretary of
    State may prescribe by rule and regulation.
    The  Secretary  of  State  shall within a reasonable time
examine the offering sheet so filed and, unless the Secretary
of State shall make a determination that the  offering  sheet
so  filed  does  not  conform  to  the  requirements  of this
subsection  P,  shall  declare  the  offering  sheet  to   be
effective,  which offering sheet shall continue effective for
a period of 12 months from the  date  it  becomes  effective.
The  fee  for  examining  the  offering  sheet  shall  be  as
established  pursuant  to  Section 11a of this Act, and shall
not be returnable in any event.  The Secretary of State shall
by rule or regulation require  the  filing  of  a  report  or
reports  of sales made to residents of this State in reliance
upon  the  exemption  provided  by  this  subsection  P   and
prescribe  the  form of such report and the time within which
such report shall be filed.  The  Secretary  of  State  shall
prescribe  by  rule  or  regulation the amount of the fee for
filing any such report, but such fee shall not be  less  than
the   minimum   amount  nor  more  than  the  maximum  amount
established pursuant to Section 11a of this  Act,  and  shall
not  be  returnable in any event.  The Secretary of State may
impose, in such cases as he or she may  deem  appropriate,  a
penalty  for  failure  to  file  any  such report in a timely
manner, but no such penalty shall exceed an amount  equal  to
five  times  the filing fee.  The contents of any such report
shall be deemed confidential and shall not  be  disclosed  to
the  public except by order of court or in court proceedings.
The failure to file any such  report  shall  not  affect  the
availability  of such exemption, but such failure to file any
such report shall constitute a violation of subsection  D  of
Section  12  of this Act, subject to the penalties enumerated
in Section 14 of this Act.  The civil remedies  provided  for
in  subsection  A  of  Section  13  of this Act and the civil
remedies  of  rescission  and  appointment  of  a   receiver,
conservator,  ancillary  receiver  or  ancillary  conservator
provided  for in subsection F of Section 13 of this Act shall
not be available against any person by reason of the  failure
to  file any such report or on account of the contents of any
such report.
    Q.  Any  isolated  transaction,  whether  effected  by  a
dealer or not.
    R.  Any offer, sale or issuance  of  a  security  to  any
person  who  purchases  at  least  $150,000 of the securities
being offered, where the  purchaser's  total  purchase  price
does  not, or it is reasonably believed by the person relying
upon this subsection R that said  purchase  price  does  not,
exceed 20 percent of the purchaser's net worth at the time of
sale,  or  if  a  natural  person a joint net worth with that
person's spouse, for one or any combination of the following:
(i) cash, (ii) securities for  which  market  quotations  are
readily  available,  (iii) an unconditional obligation to pay
cash  or  securities  for  which   quotations   are   readily
available,  which  obligation is to be discharged within five
years of the sale of the securities to the purchaser, or (iv)
the cancellation of any indebtedness owed by  the  issuer  to
the  purchaser; provided that such security is not offered or
sold  by  means  of  any  general  advertising   or   general
solicitation in this State.
    S.  Any  offer,  sale  or  issuance  of a security to any
person who is, or who is reasonably believed  by  the  person
relying  upon  this subsection S to be, a director, executive
officer, or general partner of the issuer of  the  securities
being offered or sold, or any director, executive officer, or
general  partner  of  a  general  partner of that issuer. For
purposes of this subsection S, "executive officer" shall mean
the president, any vice president in charge  of  a  principal
business   unit,   division   or  function  (such  as  sales,
administration or finance), any other officer who performs  a
policy  making  function,  or  any  other person who performs
similar policy making functions for  the  issuer.   Executive
officers  of subsidiaries may be deemed executive officers of
the issuer if they perform such policy making  functions  for
the issuer.
    A  document  being filed pursuant to this Section 4 shall
be deemed filed, and any fee paid pursuant to this Section  4
shall be deemed paid, upon the date of actual receipt thereof
by the Secretary of State.
(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96.)

    (815 ILCS 5/5) (from Ch. 121 1/2, par. 137.5)
    Sec.  5.   Registration  of  Securities.   All securities
except those set forth under Section 2a of this Act, or those
exempt under Section 3 of this Act, or those offered or  sold
in  transactions  exempt under Section 4 of this Act, or face
amount certificate contracts required to be registered  under
Section  6 of this Act, or investment fund shares required to
be  registered  under  Section  7  of  this  Act,  shall   be
registered  either  by  coordination  or by qualification, as
hereinafter in this Section provided, prior to their offer or
sale in this State.
    A.  Registration by Coordination.
         (1)  Securities  which  are  being  or   have   been
    registered  under  the Federal 1933 Act may be registered
    by coordination in the manner provided in this subsection
    A, if the effective date of the  registration  under  the
    Federal  1933  Act  is  not  more than 30 days before the
    filing with the Secretary of State.
         (2)  Securities may be registered by coordination by
    the filing with the Secretary of State by the issuer,  by
    a controlling person or by a registered dealer of:
              (a)  One  copy  of  the  registration statement
         (without exhibits) descriptive of the securities  on
         file  with the Securities and Exchange Commission in
         its most recent form as of the date of  the  initial
         filing under this subsection A.;
              (b)  An application, in such form and executed,
         verified,  or  authenticated  by  such person as the
         Secretary of  State  shall  by  rule  or  regulation
         prescribe,  setting  forth  the  title and the total
         amount of securities to be offered,  the  amount  of
         securities  and the proposed maximum aggregate price
         thereof to be  offered  in  this  State  under  this
         subsection  A  and, if the applicant is electing the
         date of effectiveness of a post-effective  amendment
         as its effective date as provided in Section 2.13 of
         this Act, specifying such date as the effective date
         for  purposes  of registration under this subsection
         A;
              (c)  An undertaking to forward to the Secretary
         of State, in writing (which  may  be  by  electronic
         telegraphic  or facsimile transmission), any and all
         subsequent amendments  of  and  supplements  to  the
         registration  statement  not  later than the 7th day
         after the forwarding thereof to the  Securities  and
         Exchange  Commission,  or  such longer period as the
         Secretary of State may permit by rule, regulation or
         order; and
              (d)  If  the  applicant  is  not  a  registered
         dealer, the name of at least one  registered  dealer
         for  the  securities  being  registered  under  this
         subsection A (except that, in the case of securities
         being  offered  and  sold on a delayed or continuous
         basis pursuant to Rule 415 under  the  Federal  1933
         Act,  17  C.F.R.  Section 230.415, or any similar or
         successor rule thereto as may be designated  by  the
         Secretary  of  State by rule or regulation, the name
         of the registered dealer may be furnished  no  later
         than  the  close  of business on the second business
         day following  the  commencement  of  sales  of  the
         registered  securities  in  this State) or a written
         statement setting forth the method of offer and sale
         in this State of the securities being registered  in
         compliance with Section 8 of this Act.
         (3)  Registration   of  securities  by  coordination
    shall take effect automatically as of the effective  date
    of   the   registration   statement   (or  post-effective
    amendment) filed under the  Federal  1933  Act,  provided
    that  on  the effective date, the information required by
    sub-paragraphs (a), (b),  and  (d)  and  the  undertaking
    required  by  sub-paragraph  (c) of paragraph (2) of this
    subsection A have been on  file  with  the  Secretary  of
    State  for  at  least  10  business days, or such shorter
    period as the Secretary of  State  may  permit  by  rule,
    regulation  or  order.   If,  however,  the  time  period
    referred  to  in  the  preceding  sentence shall not have
    expired  on  the  effective  date  of  the   registration
    statement  (or  post-effective amendment) filed under the
    Federal 1933 Act,  registration  of  such  securities  by
    coordination  shall,  upon  the  expiration  of such time
    period, take effect automatically  as  of  the  effective
    date  of  the  registration  statement (or post-effective
    amendment) filed under the Federal 1933 Act.
         (4)  If the information required  by  sub-paragraphs
    (a),  (b),  and  (d)  and  the  undertaking  required  by
    sub-paragraph  (c)  of paragraph (2) of this subsection A
    are not filed with the Secretary of State  prior  to  the
    effective   date   of   the  registration  statement  (or
    post-effective amendment) filed under  the  Federal  1933
    Act, any registration of securities by coordination under
    this subsection A shall take effect automatically as soon
    as all of the following conditions have been satisfied:
              (a)  the information required by sub-paragraphs
         (a),  (b),  and  (d) and the undertaking required by
         sub-paragraph  (c)  of   paragraph   (2)   of   this
         subsection A have been on file with the Secretary of
         State  for  10  business  days,  or for such shorter
         period as the Secretary of State may permit by rule,
         regulation or order;
              (b)  the     registration     statement      or
         post-effective  amendment  filed  under  the Federal
         1933 Act is then in effect; and
              (c)  the  prospectus  then  on  file  with  the
         Secretary of State  satisfies  the  requirements  of
         Section 10(a)(3) of the Federal 1933 Act.
         (5)  The applicant shall furnish to the Secretary of
    State   written  notice  (which  may  be  by  electronic,
    telegraphic, or facsimile  transmission)  confirming  the
    date  of  effectiveness  and  the title of the securities
    registered under the  Federal  1933  Act,  final  pricing
    information,  the  total  amount of securities registered
    under the Federal 1933 Act, and the amount registered  in
    this  State  if  different  than the amounts then on file
    with the Secretary of State, no later than the  close  of
    business on the second business day following the date on
    which  the registration statement becomes effective under
    the Federal 1933 Act.
         (6)  No action by the Secretary of  State  shall  be
    necessary   to   evidence   the   effectiveness   of  the
    registration by coordination  under  this  subsection  A.
    The  Secretary  of  State  may, at his or her discretion,
    provide a statement attesting to such registration, which
    statement shall be in such form as the Secretary of State
    may deem appropriate.
         (7)  Notwithstanding  the  foregoing,  the   issuer,
    controlling  person  or  registered  dealer who filed the
    application set forth in subparagraph  (b)  of  paragraph
    (2)  of  this subsection A may request, in writing (which
    may  be  by   electronic,   telegraphic,   or   facsimile
    transmission)  prior  to  or upon notice of effectiveness
    under  the  Federal  1933  Act,  a  waiver  of  automatic
    effectiveness of the registration of securities  and  the
    Secretary  of  State may, at his or her discretion, grant
    such waiver of automatic effectiveness.  Upon  the  grant
    by  the  Secretary  of  State of the request of waiver of
    automatic effectiveness, such registration of  securities
    shall become effective automatically on the date that the
    issuer, controlling person or registered dealer who filed
    the   application   set  forth  in  subparagraph  (b)  of
    paragraph (2) of this subsection A notifies the Secretary
    of State in writing.
    B.  Registration by  Qualification.   Securities  may  be
registered  by  qualification  in the manner provided in this
subsection B.
         (1)  An    application    for    registration     by
    qualification   shall   be  made  by  the  issuer,  by  a
    controlling person or by  a  registered  dealer  together
    with  the examination fee established pursuant to Section
    11a of this Act, which is not returnable  in  any  event.
    Such   application   shall   be  executed,  verified,  or
    authenticated  by  the  applicant  and  filed  with   the
    Secretary of State.  The application shall set forth:
              (a)  The name and address of the issuer;
              (b)  The   title   and   total  amount  of  the
         securities to be offered;
              (c)  The amount of the securities to be offered
         in this State;
              (d)  The price at which the securities  are  to
         be  offered, or the method by which such price is to
         be determined, provided that such  price  or  method
         may  be furnished by written notice (which may be by
         electronic, telegraphic, or facsimile  transmission)
         to  the  Secretary of State subsequent to the filing
         of the application but prior to registration of  the
         securities under this Law; and
              (e)  The  aggregate  underwriting  commissions,
         remuneration or discount.
         (2)  If  the  issuer,  dealer, or controlling person
    has not filed a registration statement that  is  then  in
    effect  under  the Federal 1933 Act, there shall be filed
    with the application:
              (a)  (Blank); If the issuer is a corporation, a
         copy of its charter or articles of incorporation  as
         then  in  effect,  unless  then  on  file  with  the
         Secretary  of  State; if other than a corporation, a
         copy of all instruments, if any, by which the issuer
         was created and all amendments thereto;
              (b)  (Blank); A copy of the by-laws,  or  other
         code of regulations, if any, of the issuer;
              (c)  A   copy   of   the   indenture  or  other
         instrument, if any, under which the  securities  are
         to be or have been issued;
              (d)  A  specimen  copy  of  the securities or a
         copy of the form of the instrument to  evidence  the
         securities;
              (e)  An  opinion  of counsel as to the legality
         of the securities;
              (f)  A copy of  the  underwriting  and  selling
         agreements, if any;
              (g)  An  undertaking to file promptly (no later
         than 2 business days after  the  occurrence  of  any
         event  which  requires  a  material  change  in  the
         prospectus)   with   the   Secretary  of  State  all
         amendments of and supplements to the  prospectus  as
         theretofore  filed under this subsection B, together
         with  any  additional   information,   document   or
         undertaking  which the Secretary of State, at his or
         her discretion, deems material, accompanied  by  the
         amendment filing fee established pursuant to Section
         11a  of this Act or, in lieu thereof, a notification
         in  writing  that  all  offers  and  sales  of   the
         securities  have  been  suspended pending the filing
         with the Secretary of State of such amendment of  or
         supplement to the prospectus; and
              (h)  A written statement setting forth the name
         of at least one registered dealer for the securities
         being  registered  under  this  subsection  B, or an
         application for registration of a salesperson  or  a
         written  statement setting forth the method of offer
         and sale in  this  State  of  the  securities  being
         registered in compliance with Section 8 of this Act.
         (3)  In  addition,  there  shall  be  filed with the
    application such additional information and  material  in
    such  form  as  the  Secretary  of  State  may  by  rule,
    regulation  or  order  prescribe  and  a prospectus which
    contains but is not limited to the following:
              (a)  The date and form of organization  of  the
         issuer;
              (b)  A   brief   description  of  the  business
         conducted and intended to be conducted by the issuer
         and by its subsidiaries and the general  development
         of  such  business  during  the past 5 years or such
         shorter period as the issuer and  such  subsidiaries
         may have been in existence;
              (c)  The  location and general character of the
         physical  properties  of  the  issuer  and  of   its
         subsidiaries;
              (d)  The  authorized  and issued capitalization
         of the issuer and a description  of  the  securities
         being registered and of all authorized securities;
              (e)  The   proposed   method  of  sale  of  the
         securities, the price thereof to the public  or  the
         method  by  which  such price is to be computed, and
         the   underwriting   and   selling   discounts   and
         commissions;
              (f)  The intended use  by  the  issuer  of  the
         proceeds of the securities;
              (g)  The  names  and  addresses  of  all of the
         issuer's  officers   and   directors,   or   persons
         performing   similar   functions,   their   business
         experience  during  the  preceding  5  years and the
         remuneration paid to each  by  the  issuer  and  its
         subsidiaries  during  the  fiscal year last past and
         proposed to be paid  for  the  then  current  fiscal
         year;
              (h)  The  names  and  addresses  of all persons
         owning  of  record,  and  of  all   persons   owning
         beneficially,  to the extent known to the applicant,
         10% or more of any class of equity securities of the
         issuer, and the percentage owned by each;
              (i)  A  brief  description   of   any   pending
         material legal proceeding, and of any material legal
         proceeding  known to be contemplated by governmental
         authorities,   involving   the   issuer    or    its
         subsidiaries;
              (j)  The  following financial statements of the
         issuer:
                        (i)  A balance sheet  as  of  a  date
                   within  135  days  prior  to  the  date of
                   submitting  the  application.    If   such
                   balance  sheet  is  not  certified  by  an
                   independent  certified  public accountant,
                   the  prospectus  shall  also   contain   a
                   balance  sheet certified by an independent
                   certified  public  accountant  as  of  the
                   close of the issuer's  last  fiscal  year,
                   unless  such  fiscal year ended within 135
                   days prior  to  the  time  of  filing  the
                   application,  in  which case the certified
                   balance sheet may be as of the end of  the
                   preceding fiscal year.
                        (ii)  An income statement for each of
                   the  issuer's  3  fiscal years (or for the
                   period of existence of the issuer if  less
                   than  3  years) next preceding the date of
                   the certified balance sheet  and  for  the
                   period,  if  any,  between the date of the
                   certified balance sheet and  the  date  of
                   the   most  recent  balance  sheet.   Such
                   statement  shall  be   certified   by   an
                   independent  certified  public  accountant
                   for  the  periods  ending with the date of
                   the certified balance sheet.
                        (iii)  An analysis  of  each  surplus
                   account  of the issuer for each period for
                   which  an  income  statement   is   filed,
                   certified   by  an  independent  certified
                   public  accountant  for  the  periods  for
                   which  certified  income  statements   are
                   filed.
                        (iv)  An  analysis (which need not be
                   certified  to  by  independent   certified
                   public  accountants  and  which  may be in
                   narrative   form   if   desired   by   the
                   applicant) of all surplus accounts of  the
                   issuer  for  a  period beginning on a date
                   not less than 8 years prior to the date of
                   the certified balance  sheet  required  by
                   the   above   sub-division   (i)  of  this
                   sub-paragraph (j), or from the date of the
                   organization of the issuer,  whichever  is
                   later,  and  ending  on the day before the
                   first day of the earliest  period  covered
                   by   the   analysis  of  surplus  accounts
                   furnished   pursuant    to    the    above
                   sub-division  (iii)  of this sub-paragraph
                   (j); and
              (k)  If the issuer owns more than  50%  of  the
         voting  securities  of  one  or more entities, there
         shall also be included in the prospectus either  (i)
         like  financial  statements for each such entity, or
         (ii) like consolidated financial statements for  the
         issuer and such entities;
              (l)  Anything  in sub-paragraphs (j) and (k) of
         this paragraph (3) to the contrary  notwithstanding,
         the financial statements contained in the prospectus
         need  not  be  certified by an independent certified
         public accountant if the securities being registered
         under  this  subsection   B   are   covered   by   a
         Notification under Regulation A or an Offering Sheet
         under  Regulation  D adopted pursuant to the Federal
         1933 Act or any other regulation  so  adopted  which
         the  Secretary of State may by rule or regulation or
         by order determine  to  have  filing  or  disclosure
         requirements    substantially    similar   to   such
         Regulation A or Regulation D  unless  the  financial
         statements  furnished  pursuant  to any such Federal
         regulation are required to be or are certified by an
         independent certified public accountant.
         (4)  If the securities being registered  under  this
    subsection  B  are  certificates of deposit, voting trust
    certificates, collateral-trust certificates, certificates
    of interest, fractional interests in oil,  gas  or  other
    mineral   rights   of   unincorporated  issuers  or  like
    securities, the prospectus may omit such of the foregoing
    items in sub-paragraphs (a) through (k) of paragraph  (3)
    of  this  subsection  B, but shall include such pertinent
    information, as the  Secretary  of  State  may  by  rule,
    regulation  or  order  prescribe;  such  prospectus shall
    contain a description of the  properties  and  businesses
    from  which such certificates, shares or interests derive
    value.
         (5)  The  Secretary  of  State  may,  upon   written
    request  by  the  applicant and where consistent with the
    protection of investors, permit the omission  of  one  or
    more   of  the  financial  statements  required  by  this
    subsection B or the filing in  substitution  therefor  of
    appropriate  financial statements of comparable character
    or permit the omission of any of the information required
    by this subsection B.  The Secretary of State may also by
    written notice require  the  filing  of  other  financial
    statements   or   information   in  addition  to,  or  in
    substitution for, the financial statements or information
    required by this subsection B  in  any  case  where  such
    additional   financial   statements   or  information  is
    necessary or appropriate for an adequate presentation  of
    the  financial  condition  of  any  issuer  or  otherwise
    required  for fair disclosure respecting the business and
    property of any issuer.
         (6)  The  Secretary  of   State   shall   within   a
    reasonable  time  examine  the  application and documents
    filed with him or her, and unless the Secretary of  State
    makes  a determination that the application and documents
    so filed do not  conform  to  the  requirements  of  this
    subsection  B,  or  there  is  a proceeding pending under
    Section 11 of this Act, shall register the securities for
    offer and sale in this State under this subsection B.  If
    the securities registered shall not have  been  sold  and
    distributed  at  the  expiration  of a period of 6 months
    following the date  of  registration,  the  Secretary  of
    State  may require the filing of such current information
    concerning the securities and the issuer thereof as he or
    she may by rule, regulation or order prescribe.
         (7)  The Secretary of State is granted authority  to
    create   by   rule   or  regulation  a  limited  offering
    registration provision that furthers  the  objectives  of
    compatibility  with  federal  exemptions  and  uniformity
    among the states.  The Secretary of State shall prescribe
    by  rule  or  regulation  the  amount  of  the  fees  for
    examining  and  filing  any documents required under this
    subparagraph, but each fee shall not  be  less  than  the
    minimum   amount   nor   more  than  the  maximum  amount
    established under Section 11a of this Act and  shall  not
    be returnable in any event.
    C.  Pending  Application,  Filing  Fee  and  Oversales of
Securities.
         (1)  No application shall be deemed to be  filed  or
    pending  and  no  securities  covered by such application
    shall be deemed to be registered under  subsection  A  of
    this  Section  5  unless  a filing fee has been paid.  No
    application shall be deemed to be filed or pending and no
    securities covered by such application shall be deemed to
    be registered under subsection B of this Section 5 unless
    the examination fee and filing fee have been  paid.   The
    filing  fee payable under the provisions of subsections A
    and B of this Section 5 shall be established by  rule  or
    regulation,  but  in  no event shall the fee be less than
    the minimum amount nor more than the  maximum  amount  of
    filing  fee  established  pursuant to Section 11a of this
    Act, and in no case shall such  fee  be  returnable.  The
    "maximum aggregate price" as used in subsection A of this
    Section   5  and  in  this  subsection  C  shall  be  the
    applicant's bona fide estimate thereof, determined in the
    manner prescribed by the Secretary of State  by  rule  or
    regulation.
         (2)  If   after   an   offering   of  securities  is
    registered under this Section 5  (except  for  securities
    registered  under  subsection B of this Section 5 wherein
    the entire offering of securities  was  registered),  the
    offeror  sells  or determines that it will sell, prior to
    the expiration of the period  during  which  the  offeror
    intends  the registration of the securities together with
    any renewals thereof to remain in effect in  this  State,
    an  amount  of  that  offering  in  excess  of the amount
    registered, the applicant may amend the registration  and
    register  the  excess  securities  by  filing  an amended
    application  and  paying  a  filing  fee  equal  to   the
    difference  between  the  initial filing fee paid and the
    filing fee which would have been paid under paragraph (1)
    of this subsection C for  the  entire  amount  registered
    together  with  an additional fee established pursuant to
    Section  11a  of  this  Act.   The  fees  shall  not   be
    returnable  in  any  event.   With  respect to the excess
    securities  being  registered,  the  "maximum   aggregate
    price"   shall   be   the  actual  sales  price  of  such
    securities.  Upon receipt of  such  amended  application,
    filing  fee,   and  additional  fee  by  the Secretary of
    State, registration of the excess securities shall become
    effective  retroactively  to  the  date  of  the  initial
    registration.
    D.  Effective Period and Sales Reports.
         (1)  A registration effected under Section 5 of this
    Act shall continue effective for a  period  of  one  year
    from  the date of registration or renewal of registration
    unless sooner terminated by (1) suspension or  revocation
    by  the  Secretary  of State; or (2) the applicant filing
    with the  Secretary  of  State  an  affidavit  evidencing
    either  that  (a) the securities have been fully sold and
    distributed to the public or (b) that  it  is  no  longer
    desired  to  offer  such  securities in this State or (c)
    that  such  securities  have  become  exempt   from   the
    registration  requirements  under  Section 3 or paragraph
    (1) of subsection F of Section 4 of this Act.
         (2)  The Secretary of  State  may,  at  his  or  her
    discretion,  require  each  issuer, controlling person or
    registered dealer  on  whose  behalf  a  registration  of
    securities  is  effected  under  this Section 5 to file a
    report, in such form and of such  content  and  for  such
    time  period  as  the  Secretary  of State may by rule or
    regulation prescribe, stating the aggregate dollar amount
    of securities sold  to  Illinois  residents.   The  civil
    remedies  provided  for  in subsection A of Section 13 of
    this  Act  and  the  civil  remedies  of  rescission  and
    appointment  of  a   receiver,   conservator,   ancillary
    receiver   or   ancillary  conservator  provided  for  in
    subsection I of Section 11 and in subsection F and  G  of
    Section  13  of  this  Act  and  the  civil  remedies  of
    restitution, damages and disgorgement of profits provided
    for  in  subsection I of Section 11 of this Act shall not
    be available against any person by reason of the  failure
    to  file any such report or on account of the contents of
    any such report.
    E.  Renewal of Registration. A registration of securities
in effect under subsection A of this Section 5 or  subsection
B   of   this  Section  5  if  a  registration  statement  or
post-effective amendment is then in effect under the  Federal
1933  Act  may  be renewed for the amount of securities which
remain unsold under such registration as then in  effect,  by
the issuer, by a controlling person or by a registered dealer
by  filing  an  application for renewal with the Secretary of
State no later than 10 business days prior to  the  date  (or
such lesser period as the Secretary of State may prescribe by
rule  or  regulation)  upon  which  such  registration  would
otherwise  expire,  in  such  form and executed, verified, or
authenticated by such person as the Secretary of State  shall
prescribe  by  rule or regulation.  Such application shall be
accompanied by a prospectus in its most current form together
with a renewal fee equal in  amount  to  a  registration  fee
calculated  in  accordance with paragraph (1) of subsection C
of this Section 5 and based upon  the  amount  of  securities
initially  registered for sale in this State but which remain
unsold; except that the "maximum  aggregate  price"  of  such
securities  shall  be  the  applicant's  bona  fide  estimate
thereof   at   the   time  the  application  for  renewal  of
registration is filed with the Secretary of State pursuant to
this subsection E. A renewal of  registration  of  securities
shall  take  effect  as  of  the date and time that the prior
registration under subsection A of this Section  5  or  prior
renewal  under this subsection E would otherwise have expired
and thereafter shall be deemed to be a  new  registration  of
the  amount of unsold securities specified in the application
for  renewal.   The  Secretary  of  State  may  by  rule   or
regulation  prescribe  an  additional  fee for the failure to
file timely an application for renewal and limit  the  number
of times that a registration may be renewed.
    F.  The   applicant   or   registrant  shall  notify  the
Secretary of State,  by  written  notice  (which  may  be  by
electronic, telegraphic, or facsimile transmission), within 2
business  days  after  its receipt of any stop order, denial,
order  to  show  cause,  suspension  or   revocation   order,
injunction  or restraining order, or similar order entered or
issued by any state, federal or other regulatory authority or
by any court, concerning the securities which  are  being  or
have been registered in this State or any other securities of
the  issuer  currently being or proposed to be offered to the
public, if the matter which is the subject of, or the failure
to disclose the existence of, such order would in this  State
constitute  a  violation  of subsection E, F, G, H, I or J of
Section 12 of this Act.  The  obligation  contained  in  this
subsection  F  shall  continue  until such time as offers and
sales of the securities registered under this Section  5  are
no  longer  being  made  in  this  State  by the applicant or
registrant.
    G.  Any document being filed pursuant to this  Section  5
shall  be  deemed  filed,  and any fee being paid pursuant to
this Section 5 shall be deemed paid, upon the date of  actual
receipt thereof by the Secretary of State.
    H.  The  Secretary  of  State  may  require  by  rule  or
regulation the payment of an additional fee for the filing of
information or documents required to be filed by this Section
5  which  have  not been filed in a timely manner.  Such fees
shall be deposited into the  Securities  Investors  Education
Fund,  a  special  fund hereby created in the State treasury.
The amounts deposited into such Fund shall be used to promote
public awareness of the dangers of securities fraud.
(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96.)

    (815 ILCS 5/6) (from Ch. 121 1/2, par. 137.6)
    Sec.  6.   Registration  of   Face   Amount   Certificate
Contracts.   All  face  amount  certificate  contracts except
those set forth under Section 2a of this Act, or those exempt
under Section 3 of this Act, or  those  offered  or  sold  in
transactions  exempt  under  Section  4 of this Act, shall be
registered either by coordination  or  by  qualification,  as
hereinafter in this Section provided, prior to their offer or
sale in this State.
    A.  Registration  of Face Amount Certificate Contracts by
Coordination.
         (1) Face  amount  certificate  contracts  which  are
    being  or have been registered under the Federal 1933 Act
    may be registered by coordination in the manner  provided
    in  this  subsection  A,  if  the  effective  date of the
    registration under the Federal 1933 Act is not more  than
    30 days before the filing with the Secretary of State.
         (2)  Face   amount   certificate  contracts  may  be
    registered  by  coordination  by  the  filing  with   the
    Secretary of State by the issuer, by a controlling person
    or by a registered dealer of:
              (a)  One  copy  of  the  registration statement
         (without exhibits) descriptive of  the  face  amount
         certificate  contracts  on  file with the Securities
         and Exchange Commission in its most recent  form  as
         of  the  date  of  the  initial  filing  under  this
         subsection A;
              (b)  An application, in such form and executed,
         verified,  or  authenticated  by  such person as the
         Secretary of  State  shall  by  rule  or  regulation
         prescribe,  setting forth the title of every series,
         type or class of face amount  certificate  contracts
         to  be offered in this State under this subsection A
         and, if  the  applicant  is  electing  the  date  of
         effectiveness  of  a post-effective amendment as its
         effective date as provided in Section 2.13  of  this
         Act,  specifying such date as the effective date for
         purposes of registration under this subsection A;
              (c)  An undertaking to forward to the Secretary
         of State, in writing (which  may  be  by  electronic
         telegraphic  or facsimile transmission), any and all
         subsequent amendments  of  and  supplements  to  the
         registration  statement  not  later than the 7th day
         after the forwarding thereof to the  Securities  and
         Exchange  Commission,  or  such longer period as the
         Secretary of State may permit by rule, regulation or
         order; and
              (d)  If  the  applicant  is  not  a  registered
         dealer, the name of at least one  registered  dealer
         for  the  face  amount  certificate  contracts being
         registered under this  subsection  A  or  a  written
         statement setting forth the method of offer and sale
         in   this  State  of  the  face  amount  certificate
         contracts  being  registered  in   compliance   with
         Section 8 of this Act.
         (3)  Registration   of   face   amount   certificate
    contracts by coordination shall take effect automatically
    as  of  the  effective date of the registration statement
    (or post-effective amendment)  filed  under  the  Federal
    1933  Act,  provided  that  on  the  effective  date, the
    information required by sub-paragraphs (a), (b), and  (d)
    and  the  undertaking  required  by  sub-paragraph (c) of
    paragraph (2) of this subsection A have been on file with
    the Secretary of State for at least 10 business days,  or
    such  shorter period as the Secretary of State may permit
    by rule, regulation or  order.   If,  however,  the  time
    period  referred  to  in the preceding sentence shall not
    have expired on the effective date  of  the  registration
    statement  (or  post-effective amendment) filed under the
    Federal  1933  Act,  registration  of  such  face  amount
    certificate contracts by  coordination  shall,  upon  the
    expiration of such time period, take effect automatically
    as  of  the  effective date of the registration statement
    (or post-effective amendment)  filed  under  the  Federal
    1933 Act.
         (4)  If  the  information required by sub-paragraphs
    (a),  (b),  and  (d)  and  the  undertaking  required  by
    sub-paragraph (c) of paragraph (2) of this  subsection  A
    are  not  filed  with the Secretary of State prior to the
    effective  date  of  the   registration   statement   (or
    post-effective  amendment)  filed  under the Federal 1933
    Act,  any  registration  of   face   amount   certificate
    contracts  by  coordination under this subsection A shall
    take effect automatically as soon as all of the following
    conditions have been satisfied:
              (a) the information required by  sub-paragraphs
         (a),  (b),  and  (d) and the undertaking required by
         sub-paragraph  (c)  of   paragraph   (2)   of   this
         subsection A have been on file with the Secretary of
         State  for  10  business  days,  or for such shorter
         period as the Secretary of State may permit by rule,
         regulation or order;
              (b)  the     registration     statement      or
         post-effective  amendment  filed  under  the Federal
         1933 Act is then in effect; and
              (c)  the  prospectus  then  on  file  with  the
         Secretary of State  satisfies  the  requirements  of
         Section 10(a)(3) of the Federal 1933 Act.
         (5)  The applicant shall furnish to the Secretary of
    State   written  notice  (which  may  be  by  electronic,
    telegraphic, or facsimile  transmission)  confirming  the
    date  of  effectiveness  and the title of the face amount
    certificate contracts registered under the  Federal  1933
    Act,  no  later  than the close of business on the second
    business day following the  date  on  which  registration
    becomes effective under the Federal 1933 Act.
         (6)  No  action  by  the Secretary of State shall be
    necessary  to   evidence   the   effectiveness   of   the
    registration  by  coordination  under  this subsection A.
    The Secretary of State may, at  his  or  her  discretion,
    provide a statement attesting to such registration, which
    statement shall be in such form as the Secretary of State
    may deem appropriate.
         (7)  Notwithstanding   the  foregoing,  the  issuer,
    controlling person or registered  dealer  who  filed  the
    application  set  forth  in subparagraph (b) of paragraph
    (2) of this subsection A may request, in  writing  (which
    may   be   by   electronic,   telegraphic,  or  facsimile
    transmission) prior to or upon  notice  of  effectiveness
    under  the  Federal  1933  Act,  a  waiver  of  automatic
    effectiveness  of  the  registration  of  the face amount
    certificate contracts and the Secretary of State may,  at
    his  or  her  discretion,  grant such waiver of automatic
    effectiveness.  Upon the grant by the Secretary of  State
    of the request of waiver of automatic effectiveness, such
    registration  of  the  face  amount certificate contracts
    shall become effective automatically on the date that the
    issuer, controlling person or registered dealer who filed
    the  application  set  forth  in  subparagraph   (b)   of
    paragraph (2) of this subsection A notifies the Secretary
    of State in writing.
    B.  Registration  of Face Amount Certificate Contracts by
Qualification.  Face  amount  certificate  contracts  may  be
registered by qualification in the manner  provided  in  this
subsection B.
         (1)  An     application    for    registration    by
    qualification  shall  be  made  by  the  issuer,   by   a
    controlling  person  or  by  a registered dealer together
    with the examination fee established pursuant to  Section
    11a  of  the  Act,  which  shall not be returnable in any
    event.  Such application shall be executed, verified,  or
    authenticated   by  the  applicant  and  filed  with  the
    Secretary of State.  The application shall set forth:
              (a)  The names and  addresses  of  the  persons
         creating  or  sponsoring the face amount certificate
         contracts; and
              (b)  The title of each series, type or class of
         face amount certificate contracts to be offered.
         (2)  If the issuer, dealer,  or  controlling  person
    has  not filed a registration statement or post-effective
    amendment which is then in effect under the Federal  1933
    Act, there shall be filed with the application:
              (a)  Specimen  copies of each and every series,
         type or class of face  amount  certificate  contract
         proposed  to  be offered in this State, and specimen
         copies  of  each  and  every  form  of  face  amount
         certificate contract or other security being  issued
         or proposed to be offered and issued elsewhere;
              (b)  (Blank); If the issuer is a corporation, a
         copy of its charter or articles of incorporation and
         all amendments thereto, unless then on file with the
         Secretary  of State; or if other than a corporation,
         a copy of all instruments,  if  any,  by  which  the
         issuer was created, and all amendments thereto;
              (c)  (Blank);  A  copy  of the by-laws or other
         code of regulations, if any, of the issuer;
              (d)  An opinion of counsel as to  the  legality
         of the face amount certificate contracts;
              (e)  An  undertaking to file promptly (no later
         than 2 business days after  the  occurrence  of  any
         event  which  requires  a  material  change  in  the
         prospectus)  with the Secretary of State any and all
         amendments of and supplements to the  prospectus  as
         theretofore  filed under this subsection B, together
         with  any  additional   information,   document   or
         undertaking  which  the Secretary of State at his or
         her discretion, deems material, accompanied  by  the
         amendment filing fee established pursuant to Section
         11a  of this Act or, in lieu thereof, a notification
         in writing that all offers and  sales  of  the  face
         amount  certificate  contracts  have  been suspended
         pending the filing with the Secretary  of  State  of
         such  amendment  of or supplement to the prospectus;
         and
         (3)  In addition, there  shall  be  filed  with  the
    application  such  additional information and material in
    such  form  as  the  Secretary  of  State  may  by  rule,
    regulation or order  prescribe  and  a  prospectus  which
    contains, but is not limited to the following:
              (a)  The  date  and form of organization of the
         issuer;
              (b)  A  brief  description  of   the   business
         conducted and intended to be conducted by the issuer
         and  by its subsidiaries and the general development
         of such business during the past  5  years  or  such
         shorter  period  as the issuer and such subsidiaries
         may have been in existence;
              (c)  The location and general character of  the
         physical   properties  of  the  issuer  and  of  its
         subsidiaries;
              (d)  A complete description of  the  terms  and
         conditions  of  each and every series, type or class
         of face amount certificate contracts being issued or
         proposed to be offered in this State  or  elsewhere,
         which  description  shall include appropriate tables
         of initial or periodic installment payments required
         of the purchaser, surrender or  liquidation  values,
         maturity values, optional plans of extended contract
         periods  and schedules of annuity payments which may
         be elected by a  face  amount  certificate  contract
         holder;
              (e)  A  schedule  of  all  types  of deductions
         which may be made from plan payments or  the  income
         therefrom  or the avails thereof as charges prior to
         distributions  to  holders  of   the   face   amount
         certificate contracts;
              (f)  The  names  and  addresses  of  all of the
         issuer's  officers   and   directors,   or   persons
         performing   similar   functions,   their   business
         experience  during  the  preceding  5  years and the
         remuneration paid to each  by  the  issuer  and  its
         subsidiaries  during  the  fiscal year last past and
         proposed to be paid  for  the  then  current  fiscal
         year;
              (g)  The  names  and  addresses  of all persons
         owning  of  record,  and  of  all   persons   owning
         beneficially,  to the extent known to the applicant,
         10% or more of any class of equity securities of the
         issuer, and the percentage owned by each;
              (h)  A  brief  description   of   any   pending
         material legal proceeding, and of any material legal
         proceeding  known to be contemplated by governmental
         authorities,   involving   the   issuer    or    its
         subsidiaries; and
              (i)  The  following financial statements of the
         issuer:
                   (i)  a balance sheet as of a  date  within
              135  days  prior  to  the  date application for
              registration is received by  the  Secretary  of
              State, which balance sheet, if not certified by
              an  independent  certified  public  accountant,
              shall  be  accompanied  by  a certified balance
              sheet of the issuer as of the close of the last
              prior fiscal year;
                   (ii) a detailed statement  of  income  and
              expenses,  including  income  from investments,
              service  fees,  loading  and   other   sources,
              operating  expenses and provisions for contract
              reserves or any additional credits to  contract
              liabilities,   profits   realized   and  losses
              sustained in transactions in  investments,  and
              all  other  charges to operations, for a period
              of not less than 3 fiscal  years  (or  for  the
              period  of existence of the issuer if less than
              3 years) last preceding the date of the balance
              sheet presented under subdivision (i)  of  this
              subparagraph (i), which statement of income and
              expenses,  if  not  certified by an independent
              certified   public   accountant,    shall    be
              accompanied  by a certified statement of income
              and expenses for  a  period  of  3  years  last
              preceding  the  uncertified  period  or periods
              presented as and for this subdivision (ii);
                   (iii) a detailed analysis of each  surplus
              and  reserve  account  for  the  same period or
              periods covered by  subdivision  (ii)  of  this
              subparagraph  (i),  with  like  requirement for
              independent certification; and
                   (iv) such  other  financial  data  as  the
              Secretary  of  State  may reasonably require in
              any specific case or by rule or regulation.
         (4)  The  Secretary  of   State   shall   within   a
    reasonable  time  examine  the  application  and  related
    documents filed with him or her and, unless the Secretary
    of  State  makes a determination that the application and
    related  documents  so  filed  do  not  conform  to   the
    requirements   of   this  subsection  B  or  there  is  a
    proceeding pending under Section 11 of  this  Act,  shall
    upon  receipt  of the deposit required by subsection G of
    this Section 6 and upon receipt of the  registration  fee
    as  hereinafter  prescribed,  register  the  face  amount
    certificate  contracts,  as  described by series, type or
    class within the application, for offer and sale in  this
    State under this subsection B.
    C.  Pending  Application  and Filing Fee.  No application
for registration of face amount certificate  contracts  shall
be  deemed  to  be  filed  or  pending  and  no  face  amount
certificate  contracts  covered  by such application shall be
deemed to be registered under subsection A of this Section  6
unless  a  filing  fee  in the amount established pursuant to
Section 11a of this Act has been paid,  which  shall  not  be
returnable  in  any event. No application for registration of
face amount certificate contracts shall be deemed to be filed
or pending and no face amount certificate  contracts  covered
by  such  application  shall be deemed to be registered under
subsection B of this Section 6 unless the examination fee and
filing fee established pursuant to Section 11a  of  this  Act
have  been  paid,  which  fees shall not be returnable in any
event.
    D.  Effective Period and Sales Reports.
         (1) A registration under subsection A or B  of  this
    Section  6,  unless  sooner  terminated  by the voluntary
    action of the issuer, or by suspension or  revocation  by
    the  Secretary  of  State,  shall  continue  in force and
    effect for  a  period  of  one  year  from  the  date  of
    registration  or  renewal  of  registration or such other
    period of time as the Secretary of State may prescribe by
    rule or regulation, and shall permit the offer  and  sale
    of   face  amount  certificate  contracts  so  registered
    without limitation  as  to  number  or  aggregate  amount
    during  such  period  of registration; provided, however,
    that, in the case of face  amount  certificate  contracts
    registered  under  subsection  B  of  this Section 6, the
    issuer shall promptly file with the Secretary  of  State,
    throughout  such registration year, (i) one specimen copy
    of each monthly, quarterly, semi-annual or other periodic
    or  special  report  and  of  each  financial   statement
    distributed  to contract holders; (ii) one certified copy
    of all statements and reports filed with  any  regulatory
    authority  or  agency  of  the  Federal  Government which
    relate to the issuer or the issuance  of  the  securities
    registered  pursuant to this Section 6 and (iii) one copy
    of each independently certified audit  report  pertaining
    to  the  financial  affairs  and  position  of the issuer
    covering the  issuer's  fiscal  year  ending  during  the
    registration  year,  to  be  supplied to the Secretary of
    State as  soon  as  available  after  the  close  of  the
    issuer's fiscal year.
         (2)  The  Secretary  of  State  may,  at  his or her
    discretion, require each issuer,  controlling  person  or
    registered  dealer on whose behalf a registration of face
    amount certificate  contracts  is  effective  under  this
    Section  6  to  file  a  report, in such form and of such
    content and for such time  period  as  the  Secretary  of
    State  may  by  rule or regulation prescribe, stating the
    aggregate  dollar  amount  of  face  amount   certificate
    contracts sold to Illinois residents.  The civil remedies
    provided  for  in  subsection A of Section 13 of this Act
    and the civil remedies of rescission and appointment of a
    receiver, conservator, ancillary  receiver  or  ancillary
    conservator  provided  for  in subsection I of Section 11
    and in subsections F and G of Section 13 of this Act  and
    the   civil   remedies   of   restitution,   damages  and
    disgorgement of profits provided for in subsection  I  of
    Section 11 of this Act shall not be available against any
    person  by  reason of the failure to file any such report
    or on account of the contents of any such report.
    E.  Amendatory  statements  and   required   fees.    The
Secretary  of  State  may  by  rule or regulation require the
filing of an amendatory statement and prescribe its form  and
content.    The   fee  for  filing  the  statement  shall  be
established pursuant to Section 11a of  this  Act.   The  fee
shall not be returnable in any event.
    F.  Renewal  of  Registration.  A  registration  of  face
amount  certificate contracts in effect under subsection A or
B of this Section 6 may be renewed by the issuer by filing an
application for renewal with the Secretary of State no  later
than  10  business  days  prior  to  the date upon which such
registration would otherwise expire,  (or such lesser  period
as   the   Secretary  of  State  may  prescribe  by  rule  or
regulation)  in  such  form  and   executed,   verified,   or
authenticated  by such person as the Secretary of State shall
prescribe  by  rule or regulation.  Such application shall be
accompanied by a prospectus in its most current form together
with a renewal fee established pursuant  to  Section  11a  of
this  Act,  which  shall  not be returnable in any event.   A
renewal of registration of face amount certificate  contracts
shall  take  effect  as  of  the date and time that the prior
registration under subsection A of this Section  6  or  prior
renewal  under this subsection F would otherwise have expired
and (or such alternative date as the Secretary of  State  may
prescribe  by  rule or regulation) thereafter shall be deemed
to be a new  registration  of  the  face  amount  certificate
contracts  covered  thereby.   The  Secretary of State may by
rule or  regulation  prescribe  an  additional  fee  for  the
failure  to  file timely an application for renewal and limit
the number of times a registration may be renewed.
    G.  Deposit of Securities.  No  face  amount  certificate
contract  shall  be  registered  under  subsection  B of this
Section 6 unless the issuer shall establish and maintain with
the Secretary of State, for the benefit  of  the  holders  of
such   contracts   residing  in  this  State,  a  deposit  of
securities representing debt obligations of the kind in which
life insurance companies organized under  the  laws  of  this
State  are  permitted  to  invest  their  funds, in an amount
having a fair market value of not less than $100,000  and  at
no  time less than the current contract liability on all such
face amount certificate contracts held by persons residing in
this State, and provided further that  deposited  securities,
other  than  those  secured by entire first mortgage or trust
deeds on improved unencumbered real estate, are issued by  an
issuer  required  to  file  reports pursuant to Section 13 or
15(d) of the Federal 1934  Act  or  are  covered  by  Section
12(g)(2)(B)  or  (G)  of  the  Federal 1934 Act, or appear in
current quotations in transactions on exchanges recognized by
subsection G of Section 3 of this Act, and provided  further,
that  bonds  or  notes secured by mortgages or trust deeds be
limited to those (i)  constituting  the  entire  indebtedness
secured  thereby,  (ii) establishing a first lien on improved
real estate held in fee simple,  and  (iii)  insured  by  the
Federal Housing Administrator under an Act of Congress of the
United  States  entitled  "National  Housing Act". Debentures
issued by the Federal Housing Administrator under an  Act  of
Congress  of the United States entitled the "National Housing
Act" may be  included  in  the  deposit  prescribed  by  this
subsection  in  amounts  related to, and in substitution for,
specific insured mortgage loans then included in the  subject
deposit  which  are  in  default,  but  at  no time shall the
aggregate principal amount of such debentures included in the
subject deposit  exceed  5%  of  the  fair  market  value  of
securities  comprising  the  subject  deposit.   The  current
contract  liability  in  respect of contracts held by persons
residing in this State shall be that as  determined  in  such
contracts  as  computed by the issuer and regularly certified
to the Secretary of State, on or before the last day of  each
calendar month as of the close of the month last prior to the
date of reporting.
    Securities  deposited  as  hereinabove  required  may  be
withdrawn  by  the  depositor  at  any time, and from time to
time, whenever other securities eligible for deposit and of a
fair market value not less than that withdrawn are  deposited
in substitution for securities withdrawn.
    The  Secretary  of State may, upon receipt of appropriate
certification in writing, deemed by the Secretary of State to
be  competent  and  adequate,  evidencing  the  reduction  of
contract liability on contracts held by persons  residing  in
this  State to an aggregate amount representing not more than
90% of the fair  market  value  of  the  securities  then  on
deposit,  permit  an  equivalent  reduction  in the deposited
securities.
    H.  Minimum Deposit; Annual Fee; Transaction Charge.  The
initial and continuing deposit required hereby shall, so long
as the face amount  certificate  contracts  registered  under
subsection  B of this Section 6 are being offered and sold in
this State, and until all contract liability on all contracts
outstanding  in  this  State  has  been  discharged,  include
obligations of the United States or the State of Illinois  in
bearer   form  or  fully  registered,  or  registered  as  to
principal,  in  the  title  of  Treasurer  of  the  State  of
Illinois, and his or her successors in office, in the minimum
principal amount  of  $50,000.   An  issuer  of  face  amount
certificate  contracts,  in  respect  of  which  a deposit is
required to be established and maintained under this  Section
6,  and  an  issuer  of  face  amount  certificate  contracts
heretofore qualified for issuance to persons residing in this
State under "An Act relating to the sale or other disposition
of  securities  and  providing  penalties  for  the violation
thereof and to repeal Acts in conflict  therewith",  approved
June  10, 1919, as amended, and in respect of which a deposit
of securities was established and has been  maintained  under
the  Act approved June 10, 1919, as cited above, shall pay to
the Secretary of State an annual fee determined at  the  rate
of  1/30th  of  one  percent  on  the  average  of  quarterly
computations   on  the  aggregate  of  principal  amounts  of
market-quoted or listed  securities  and  the  original  loan
amounts  of  real estate loans insured by the Federal Housing
Administrator, and in addition each such issuer shall pay  to
the  Secretary of State, against quarterly billings therefor,
a transaction charge in the amount  established  pursuant  to
Section  11a  of  this  Act, which annual fee and transaction
charge shall  not  be  returnable  in  any  event,  for  each
separate   issue   or  loan  included  in  additions  to  and
withdrawals from such deposits,  provided  however  that  the
transaction  charge  established  pursuant  to Section 11a of
this Act for each separate issue of market-quoted  or  listed
securities  shall  apply  to  all  the  items  of  that issue
included in a single transaction, regardless of the aggregate
principal amount, and in respect of real  estate  loans  such
transaction  charge  shall  apply  to  the group of documents
pertaining to each separate loan, and  not  to  the  separate
items and documents included in such group.
    Nothing herein contained in respect of prescribed custody
of  deposited  securities  with  the  State  Treasurer and of
permissible procedures of liquidation of deposited securities
by the Secretary of State in the event of  insolvency  of  an
issuer   of   face   amount  certificate  contracts,  or  the
appointment of a trustee in bankruptcy,  shall  preclude  the
surrender of deposited securities to a duly qualified trustee
under  appointment  by  a Court having jurisdiction under the
Federal Bankruptcy Code under an appropriate  order  of  such
Court.
    I.  Liquidation  of  Securities.   Upon the insolvency of
the  issuer  of  face   amount   certificate   contracts   or
appointment  of  a  receiver  or  trustee  in bankruptcy, the
Secretary of State, if not required otherwise  under  Federal
law  or  under  an  order  of  a  Federal  Court of competent
jurisdiction, may apply to  the  Circuit  Court  of  Sangamon
County,  or  any  other  court of competent jurisdiction, for
authority to proceed for the liquidation of  such  securities
held  for  the  benefit  of the holders of such contracts who
reside in this State.   The  Secretary  of  State  is  hereby
authorized  to  deal  with such securities on deposit in this
State for the benefit of the  holders  of  such  face  amount
certificate  contracts,  in  his or her name or, if the Court
shall so order, in the name of the issuer.  The Secretary  of
State  may,  subject  to  the  approval of the Court, sell or
otherwise dispose of the securities so deposited or any  part
thereof.   The  Secretary  of  State  shall as soon as may be
conveniently possible, give notice by publication as provided
by law, and as the Court may direct, to all contract  holders
residing in this State who may have claims against the issuer
under  such  face  amount certificate contracts and for whose
benefit such deposit is held, to file and prove their  claims
in the manner and within the time the Court shall direct.  In
order to preserve so far as possible the rights and interests
of  the  holders  of outstanding contracts of such issuer who
reside in this State, the Secretary of  State  may  liquidate
such  securities  on  deposit  in this State by entering into
contracts  with  any  issuer  or  person  able  to  buy  such
securities in whole, or in part.  Upon receiving an offer  or
offers  for  the  purchase of such securities in whole, or in
part, the Secretary of  State  shall  submit  such  offer  or
offers  to  the  Court, and if, after a full hearing upon the
petition filed by the Secretary of  State,  the  court  shall
find  that  the  Secretary  of State endeavored to obtain the
best contract price for the benefit of the contract  holders,
and  if  the court shall find that the best contract price in
the interests of the contract holders has been obtained,  and
that  it  is  for  the  best interests of the holders of such
contracts that such securities be sold, the court  shall,  by
written  order approve the acts of the Secretary of State and
authorize him or her to dispose of such securities. Upon  the
conversion of such securities to cash, the Secretary of State
may  then  proceed  to  dispose  of the sum received for such
securities among the respective holders of such contracts  as
their   interests  may  appear.   Upon  the  liquidation  and
distribution of such funds, the Secretary of State  may  make
proper liquidation of such securities and the distribution or
disposition  thereof  or  of the proceeds therefrom as herein
provided.
    For the purpose of liquidation of  such  securities,  the
Secretary  of  State  shall  have the power to appoint one or
more special deputies as his or her agent or  agents  and  to
employ  such clerks, assistants or attorneys as may by him or
her be deemed necessary and to give each of such persons such
power to assist him or her as he or she  may  consider  wise.
The  compensation of every such special deputy, agent, clerk,
assistant or attorney shall be fixed,  and  all  expenses  of
taking  possession  of  such securities of the issuer and the
administration thereof shall be approved, by the Secretary of
State subject to the approval of the court and shall be  paid
out  of  the funds or assets received from the liquidation of
such securities.
    J.  The  applicant  or  registrant   shall   notify   the
Secretary  of  State,  by  written  notice  (which  may be by
electronic, telegraphic, or facsimile transmission), within 2
business days after its receipt of any  stop  order,  denial,
order   to   show  cause,  suspension  or  revocation  order,
injunction or restraining order, or similar order entered  or
issued by any state, federal or other regulatory authority or
by   any   court,  concerning  the  face  amount  certificate
contracts which are being or have  been  registered  in  this
State  or  any other securities of the issuer currently being
or proposed to be offered to the public, if the matter  which
is  the  subject of, or the failure to disclose the existence
of,  such order would in this State constitute a violation of
subsection E, F, G, H, I or J of Section 12 of this Act.  The
obligation contained in  this  subsection  J  shall  continue
until  such  time  as  offers  and  sales  of the face amount
certificate contracts registered under this Section 6 are  no
longer   being  made  in  this  State  by  the  applicant  or
registrant.
    K.  Any document being filed pursuant to this  Section  6
shall  be  deemed  filed,  and any fee being paid pursuant to
this Section 6 shall be deemed paid, upon the date of  actual
receipt thereof by the Secretary of State.
    L.  The  Secretary  of  State  may  require  by  rule  or
regulation the payment of an additional fee for the filing of
information or documents required to be filed by this Section
6  which  have  not been filed in a timely manner.  Such fees
shall be deposited into the  Securities  Investors  Education
Fund  and  used to promote public awareness of the dangers of
securities fraud.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 5/7) (from Ch. 121 1/2, par. 137.7)
    Sec. 7. Registration of  Investment  Fund  Shares.    All
investment  fund  shares except those set forth under Section
2a of this Act, or those exempt under Section 3 of this  Act,
or those offered or sold in transactions exempt under Section
4  of this Act, or face amount certificate contracts required
to be registered under  Section  6  of  this  Act,  shall  be
registered  either  by  coordination  or by qualification, as
hereinafter in this Section provided, prior to their offer or
sale in this State.  Additional classes of shares that are of
the same rank, general description,  and  characteristics  as
those   currently  registered  may  be  added  to  a  current
registration  under  this  Section  upon  the  filing  of  an
amendment  and  the  payment  of  the  additional   fees   as
prescribed  by  the Secretary of State by rule or regulation.
Any change in organization or plans  of  operation  shall  be
disclosed to the Secretary of State by filing an amendment to
a current registration and the payment of the additional fees
as   prescribed   by  the  Secretary  of  State  by  rule  or
regulation.
    A.  Registration   of   Investment   Fund    Shares    by
Coordination.
         (1)  Investment  fund shares which are being or have
    been registered  under  the  Federal  1933  Act  and  the
    Federal  1940 Investment Company Act may be registered by
    coordination in the manner provided in this subsection A,
    if the effective  date  of  the  registration  under  the
    Federal  1933  Act  is  not  more than 30 days before the
    filing with the Secretary of State.
         (2)  Investment fund shares  may  be  registered  by
    coordination by the filing with the Secretary of State by
    the  issuer,  by  a controlling person or by a registered
    dealer of:
              (a)  One copy  of  the  registration  statement
         (without  exhibits)  descriptive  of  the investment
         fund shares on file with the Securities and Exchange
         Commission in its most recent form as of the date of
         the initial filing under this subsection A;
              (b)  An application, in such form and executed,
         verified, or authenticated  by such  person  as  the
         Secretary  of  State  shall  by  rule  or regulation
         prescribe, setting forth the title of the investment
         fund shares to be offered in this State  under  this
         subsection  A  and, if the applicant is electing the
         date of effectiveness of a post-effective  amendment
         as its effective date as provided in Section 2.13 of
         this Act, specifying such date as the effective date
         for  purposes  of registration under this subsection
         A; and
              (c)  An undertaking to forward to the Secretary
         of State, in writing (which  may  be  by  electronic
         telegraphic  or facsimile transmission), any and all
         subsequent amendments  of  and  supplements  to  the
         registration  statement  not  later than the 7th day
         after the forwarding thereof to the  Securities  and
         Exchange  Commission,  or  such longer period as the
         Secretary of State may permit by rule, regulation or
         order; and
              (d)  if  the  applicant  is  not  a  registered
         dealer, the name of at least one  registered  dealer
         for  the  investment  fund  shares  being registered
         under this  subsection  A  or  a  written  statement
         setting  forth  the method of offer and sale in this
         State of the investment fund shares being registered
         in compliance with Section 8 of this Act.
         (3)  Registration  of  investment  fund  shares   by
    coordination  shall  take  effect automatically as of the
    effective  date  of  the   registration   statement   (or
    post-effective  amendment)  filed  under the Federal 1933
    Act, provided that on the effective date, the information
    required by sub-paragraphs (a),  (b),  and  (d)  and  the
    undertaking  required  by  sub-paragraph (c) of paragraph
    (2) of this subsection A  have  been  on  file  with  the
    Secretary of State for at least 10 business days, or such
    shorter  period  as  the Secretary of State may permit by
    rule, regulation or order.  If, however, the time  period
    referred  to  in  the  preceding  sentence shall not have
    expired  on  the  effective  date  of  the   registration
    statement  (or  post-effective amendment) filed under the
    Federal 1933 Act, registration of  such  investment  fund
    shares by coordination shall, upon the expiration of such
    time   period,   take  effect  automatically  as  of  the
    effective  date  of  the   registration   statement   (or
    post-effective  amendment)  filed  under the Federal 1933
    Act.
         (4)  If the information required  by  sub-paragraphs
    (a),  (b),  and  (d)  and  the  undertaking  required  by
    sub-paragraph  (c)  of paragraph (2) of this subsection A
    are not filed with the Secretary of State  prior  to  the
    effective   date   of   the  registration  statement  (or
    post-effective amendment) filed under  the  Federal  1933
    Act,  any  registration  of  investment  fund  shares  by
    coordination  under  this  subsection A shall take effect
    automatically as soon as all of the following  conditions
    have been satisfied:
              (a)  the information required by sub-paragraphs
         (a),  (b),  and  (d) and the undertaking required by
         sub-paragraph  (c)  of   paragraph   (2)   of   this
         subsection A have been on file with the Secretary of
         State  for  10  business  days,  or for such shorter
         period as the Secretary of State may permit by rule,
         regulation or order;
              (b)  the     registration     statement      or
         post-effective  amendment  filed  under  the Federal
         1933 Act is then in effect; and
              (c)  the  prospectus  then  on  file  with  the
         Secretary of State  satisfies  the  requirements  of
         Section 10(a)(3) of the Federal 1933 Act.
         (5)  The applicant shall furnish to the Secretary of
    State   written  notice  (which  may  be  by  electronic,
    telegraphic, or facsimile  transmission)  confirming  the
    date  of  effectiveness  and  the title of the investment
    fund shares registered under the  Federal  1933  Act,  no
    later  than  the close of business on the second business
    day following the date on  which  registration  statement
    becomes effective under the Federal 1933 Act.
         (6)  No  action  by  the Secretary of State shall be
    necessary  to   evidence   the   effectiveness   of   the
    registration  by  coordination  under  this subsection A.
    The Secretary of State may, at  his  or  her  discretion,
    provide a statement attesting to such registration, which
    statement shall be in such form as the Secretary of State
    may deem appropriate.
         (7)  Notwithstanding   the  foregoing,  the  issuer,
    controlling person or registered  dealer  who  filed  the
    application  set  forth  in subparagraph (b) of paragraph
    (2) of this subsection A may request, in  writing  (which
    may   be   by   electronic,   telegraphic,  or  facsimile
    transmission) prior to or upon  notice  of  effectiveness
    under  the  Federal  1933  Act,  a  waiver  of  automatic
    effectiveness  of  the  registration  of  investment fund
    shares and the Secretary of State  may,  at  his  or  her
    discretion, grant such waiver of automatic effectiveness.
    Upon  the  grant by the Secretary of State of the request
    of waiver of automatic effectiveness,  such  registration
    of   investment   fund   shares  shall  become  effective
    automatically on the date that  the  issuer,  controlling
    person or registered dealer who filed the application set
    forth  in  subparagraph  (b)  of  paragraph  (2)  of this
    subsection A notifies the Secretary of State in writing.
    B.  Registration   of   Investment   Fund    Shares    by
Qualification.   Investment  fund shares may be registered by
qualification in the manner provided in this subsection B.
         (1)  An    application    for    registration     by
    qualification   shall   be  made  by  the  issuer,  by  a
    controlling person or by  a  registered  dealer  together
    with  the examination fee established pursuant to Section
    11a of the Act, which shall  not  be  returnable  in  any
    event.   Such  application  shall be signed, verified, or
    authenticated   by  the  applicant  and  filed  with  the
    Secretary of State. The application shall set forth:
              (a)  The name and address of the issuer;
              (b)  The title of the investment  fund  shares;
         and
              (c)  The  names  and  addresses  of the persons
         creating or sponsoring the investment fund shares.
         (2)  If the issuer, dealer,  or  controlling  person
    has  not filed a registration statement or post-effective
    amendment which is then in effect under the Federal  1933
    Act, there shall be filed with the application:
              (a)  A  specimen  copy  of  the investment fund
         shares, if any,  or  a  copy  of  the  form  of  the
         instrument  to  evidence the investment fund shares,
         if any;
              (b)  (Blank); If the issuer is a corporation, a
         copy of its charter or articles of incorporation and
         all amendments thereto, unless then on file  in  the
         office  of the Secretary of State; or, if other than
         a corporation, a copy of all instruments, if any, by
         which the investment trust or fund was  created  and
         all amendments thereto;
              (c)  (Blank);  A  copy  of the by-laws or other
         code of regulations, if any, of the issuer;
              (d)  An opinion of counsel as to  the  legality
         of the investment fund shares;
              (e)  An undertaking to file promptly (not later
         than  2  business  days  after the occurrence of any
         event  which  requires  a  material  change  in  the
         prospectus) with the Secretary of State any and  all
         amendments  of  and supplements to the prospectus as
         theretofore filed under this subsection B,  together
         with   any   additional   information,  document  or
         undertaking which the Secretary of State, at his  or
         her  discretion,  deems material, accompanied by the
         amendment filing fee established pursuant to Section
         11a of this Act or, in lieu thereof, a  notification
         in   writing  that  all  offers  and  sales  of  the
         investment fund shares have been  suspended  pending
         the  filing  with  the  Secretary  of  State  of the
         amendment of or supplement to the prospectus;
              (f)  A written statement setting forth the name
         of at least one registered dealer for the investment
         fund shares being registered under this subsection B
         or an application for registration of a  salesperson
         or  a  written statement setting forth the method of
         offer and sale in this State of the investment  fund
         shares being registered in compliance with Section 8
         of this Act.
         (3)  In  addition,  there  shall  be  filed with the
    application such additional information and  material  in
    such  form  as  the  Secretary  of  State  may  by  rule,
    regulation  or  order  prescribe  and  a prospectus which
    contains, but is not limited to the following:
              (a)  The date and form of organization  of  the
         fund or trust;
              (b)  The  authorized  and issued capitalization
         of the fund  or  trust  and  a  description  of  the
         investment  fund  shares being registered and of all
         authorized securities;
              (c)  A schedule  of  the  types  of  deductions
         which  may  be  made  from the trust or corporate or
         fund assets and the income therefrom or  the  avails
         thereof  as charges prior to distribution to holders
         of the investment fund shares;
              (d)  The names and  addresses  of  all  of  the
         fund's or trust's officers and directors, or persons
         performing   similar   functions,   their   business
         experience  during  the  preceding  5  years and the
         remuneration paid to each by the fund  or  trust  or
         any  affiliate  thereof  during the fiscal year last
         past and proposed to be paid for  the  then  current
         fiscal year;
              (e)  A   brief   description   of  any  pending
         material legal proceeding, and of any material legal
         proceeding known to be contemplated by  governmental
         authorities involving the fund or trust;
              (f)  A  statement  of  the  plan  of operation,
         management policies and provisions and  restrictions
         in   respect   of  investment  and  reinvestment  of
         principal funds and undistributed income therefrom;
              (g)  A statement of the plan and  intention  in
         respect  of  distributions  of  ordinary  income and
         capital gains, which statement  shall  disclose  the
         taking  of adequate measures for specific separation
         and identification  of  distributions  arising  from
         ordinary  income  and  those  arising  from  profits
         realized from the disposition of securities;
              (h)  Specimen computations illustrating typical
         applications   of   the   formulae  to  be  used  in
         determining  asset   value,   offering   price   and
         liquidating price of the investment fund shares; and
              (i)  The   following  financial  statements  in
         respect of the issuer if the investment fund  shares
         represent  shares  of  an issuing corporation, or in
         respect of the trust fund, if  the  investment  fund
         shares  represent  beneficial  interests  in a trust
         fund:
                   (i)  a balance sheet as of a  date  within
              135  days  prior  to the date of submitting the
              application.  If  such  balance  sheet  is  not
              certified  by  an  independent certified public
              accountant, the prospectus shall also contain a
              balance  sheet  certified  by  an   independent
              certified  public accountant as of the close of
              the fund's last fiscal year, unless such fiscal
              year ended within 135 days prior to the time of
              filing  the  application,  in  which  case  the
              certified balance sheet may be as of the end of
              the preceding fiscal year;
                   (ii)  a detailed statement of  income  and
              expenses  and  of  profits  realized and losses
              sustained from the sale of securities for  each
              of the three fiscal years (or for the period of
              existence  of  the issuer if less than 3 years)
              next  preceding  the  date  of  the   certified
              balance  sheet  and  for  the  period,  if any,
              between the date of the certified balance sheet
              and the date of the most recent balance  sheet.
              Such   statements  shall  be  certified  by  an
              independent certified public accountant for the
              periods ending with the date of  the  certified
              balance sheet;
                   (iii)  an analysis of each surplus account
              (or, in lieu thereof, a statement of changes in
              net   assets)  for  each  period  for  which  a
              statement of  income  and  expenses  is  filed,
              certified  by  an  independent certified public
              accountant for the periods for which  certified
              statements   of   income   and   expenses   are
              submitted; and
                   (iv)  such  other financial statements and
              supporting schedules as the Secretary of  State
              may by rule or regulation prescribe.
         (4)  The  Secretary of State may make or cause to be
    made  an  examination  of  matters  pertaining   to   the
    investment fund shares as to which registration is sought
    under   this  subsection  B  and  the  persons  creating,
    sponsoring or having general charge of  the  distribution
    of  the  investment  fund shares, or any of them, and may
    require the applicant  to  advance  sufficient  funds  to
    defray  all  actual  expenses  of  such  examination.  An
    itemized statement of such expenses shall be furnished to
    the applicant.
         (5)  No investment fund shares shall  be  registered
    under  this subsection B unless the underlying securities
    or cash are and are to be deposited  and  held  under  an
    appropriate  agreement  for the benefit of the holders of
    the investment fund shares  with  and  by  a  trustee  or
    custodian  which  is  a clearing corporation, bank, trust
    company or  member  of  a  national  securities  exchange
    registered  under the Federal 1934 Act, provided that any
    such bank  or  trust  company  shall  have  an  aggregate
    capital,  surplus  and  undivided  profits  of  at  least
    $2,000,000  and  any such member of a national securities
    exchange shall have  capital  stock,  additional  paid-in
    capital and retained earnings of at least $2,000,000 if a
    corporation or partnership capital of at least $2,000,000
    if  a  partnership  and  further  provided  that any such
    member of a national  securities  exchange  shall  comply
    with  the  provisions  of  the  Federal  1940  Investment
    Company   Act  and  the  rules  and  regulations  of  the
    Securities and Exchange Commission promulgated under that
    Act relating to the custody of the underlying  securities
    of investment funds.
         (6)  The   Secretary   of   State   shall  within  a
    reasonable time examine  the  application  and  documents
    filed  with  him  or  her  and  may  make such additional
    examination pursuant to paragraph (4) of this  subsection
    B  as  he  or  she  may  deem appropriate, and unless the
    Secretary  of  State  makes  a  determination  that   the
    application  and documents so filed do not conform to the
    requirements  of  this  subsection  B,  or  there  is   a
    proceeding  pending  under  Section  11  of this Act, the
    Secretary of State shall  register  the  investment  fund
    shares  for  offer  and  sale  in  this  State under this
    subsection B.
    C.  Pending Application and Filing Fee.   No  application
for registration of investment fund shares shall be deemed to
be  filed or pending and no investment fund shares covered by
such application shall  be  deemed  to  be  registered  under
subsection  A  of  this  Section 7 unless a filing fee in the
amount established pursuant to Section 11a of  this  Act  has
been paid, which fee shall not be returnable in any event. No
application  shall  be  deemed  to be filed or pending and no
investment fund shares covered by such application  shall  be
deemed  to be registered under subsection B of this Section 7
unless  the  examination  fee  and  filing  fee   established
pursuant  to  Section  11a  of this Act have been paid, which
fees shall not be returnable in any event.
    D.  Amendatory  statements  and   required   fees.    The
Secretary  of  State  may  by  rule or regulation require the
filing of an amendatory statement and prescribe its form  and
content.    The   fee  for  filing  the  statement  shall  be
established pursuant to Section 11a of  this  Act.   The  fee
shall not be returnable in any event.
    E.  Discontinuance   of   Registration.    An  amendatory
statement or statements may be submitted by the applicant  at
any  time,  and  from  time  to  time,  when it is desired to
discontinue registration in respect of one or  more  classes,
series,  or  portfolios   and if the Secretary of State shall
find that such  discontinuance  is  not  against  the  public
interest,  such  amendatory  statement or statements shall be
filed by the Secretary of  State  without  charge,  but  such
discontinuance   of   registration   shall  not  entitle  the
applicant to any  refund  of  any  fees  previously  paid  in
respect  of  such  discontinued  class or classes, series, or
portfolios.
    F.  Effective Period and Sales Reports.
         (1)  A registration of investment fund shares  under
    this Section 7, unless sooner terminated by the voluntary
    action  of the applicant or by action of the Secretary of
    State under Section 11 hereof, shall  continue  in  force
    and  effect  for  a  period  of one year from the date of
    registration or renewal of registration  (or  such  other
    period of time as the Secretary of State may prescribe by
    rule  or  regulation  or order), without limitation as to
    number of shares or aggregate amount; provided,  however,
    that  in  the  case  of investment fund shares registered
    under subsection B of this Section 7,  the  issuer  which
    has  no  registration  statement then in effect under the
    Federal 1933 Act and the Federal 1940 Investment  Company
    Act  shall  promptly  file  with  the  Secretary of State
    throughout such registration period,  one  copy  of  each
    monthly, quarterly, semi-annual, annual or other periodic
    report  and  financial  statement  sent to holders of its
    outstanding investment fund shares, and one copy of  each
    statement  and  report  relating  to such investment fund
    shares filed with any regulatory authority or  agency  of
    the Federal Government.
         (2)  The  Secretary  of  State  may,  at  his or her
    discretion, require each issuer,  controlling  person  or
    registered  dealer  on  whose  behalf  a  registration of
    investment fund shares is effected under this  Section  7
    to  file  a  report, in such form and of such content and
    for such time period as the Secretary  of  State  may  by
    rule  or  regulation  prescribe,  stating  the  aggregate
    dollar  amount of investment fund shares sold to Illinois
    residents.  The civil remedies provided for in subsection
    A of Section 13 of this Act and  the  civil  remedies  of
    rescission  and  appointment  of a receiver, conservator,
    ancillary receiver or ancillary conservator provided  for
    in  subsection I of Section 11 and in subsections F and G
    of Section 13 of this  Act  and  the  civil  remedies  of
    restitution, damages and disgorgement of profits provided
    for  in  subsection I of Section 11 of this Act shall not
    be available against any person by reason of the  failure
    to  file any such report or on account of the contents of
    any such report.
    G.  Renewal   of   Registration.    A   registration   of
investment fund shares in effect under subsection A or  B  of
this  Section  7  may  be  renewed by the issuer by filing an
application for renewal of registration with the Secretary of
State no later than 10 business days prior to the  date  upon
which such registration would otherwise expire or such lesser
period  as  the  Secretary  of State may prescribe by rule or
regulation,  in  such  form  and   executed,   verified,   or
authenticated  by such person as the Secretary of State shall
prescribe  by  rule or regulation.  Such application shall be
accompanied by a prospectus in its most current form together
with a renewal fee established pursuant  to  Section  11a  of
this  Act,  which  shall  not  be returnable in any event.  A
renewal of registration of securities shall take effect as of
the  date  and  time  that  the  prior   registration   under
subsection  A  of  this Section 7 or prior renewal under this
paragraph  (1)  would  otherwise  have   expired   (or   such
alternative  date  as the Secretary of State may prescribe by
rule or regulation) and thereafter shall be deemed  to  be  a
new  registration  of  the  investment  fund  shares  covered
thereby.   The  Secretary  of State may by rule or regulation
prescribe an additional fee for the failure to file timely an
application for renewal and  limit  the  number  of  times  a
registration may be renewed.
    H.  The   applicant   or   registrant  shall  notify  the
Secretary of State,  by  written  notice  (which  may  be  by
electronic, telegraphic, or facsimile transmission), within 2
business  days  after  its receipt of any stop order, denial,
order  to  show  cause,  suspension  or   revocation   order,
injunction  or restraining order, or similar order entered or
issued by any state, federal or other regulatory authority or
by any court, concerning the investment fund shares which are
being or have been registered in  this  State  or  any  other
securities  of  the  issuer currently being or proposed to be
offered to the public, if the matter which is the subject of,
or the failure to disclose the existence of, such order would
in this State constitute a violation of subsection E,  F,  G,
H,  I  or  J  of  Section  12  of  this  Act.  The obligation
contained in this subsection H shall continue until such time
as offers and sales of the investment fund shares  registered
under  this  Section 7 are no longer being made in this State
by the applicant or registrant.
    I.  Any document being filed pursuant to this  Section  7
shall  be  deemed  filed,  and any fee being paid pursuant to
this Section 7 shall be deemed paid, upon the date of  actual
receipt thereof by the Secretary of State.
    J.  The  Secretary  of  State  may  require  by  rule  or
regulation the payment of an additional fee for the filing of
information or documents required to be filed by this Section
7  which  have  not  been filed in a timely manner. Such fees
shall be deposited into the  Securities  Investors  Education
Fund  and  use  to promote public awareness of the dangers of
securities fraud.
(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96.)

    (815 ILCS 5/8) (from Ch. 121 1/2, par. 137.8)
    Sec.  8.   Registration  of  dealers,  limited   Canadian
dealers,   salespersons,   and   investment   advisers,   and
investment adviser representatives.
    A.  Except  as  otherwise  provided in this subsection A,
every  dealer,  limited  Canadian  dealer,  salesperson,  and
investment adviser,  and  investment  adviser  representative
shall  be registered as such with the Secretary of State.  No
dealer  or  salesperson  need  be  registered  as  such  when
offering or selling securities in  transactions  believed  in
good  faith to be exempted by subsection A, B, C, D, E, G, H,
I, J, K, M, O, P, Q, R  or  S  of  Section  4  of  this  Act,
provided  that  such  dealer  or salesperson is not regularly
engaged in the business of offering or selling securities  in
reliance upon the exemption set forth in subsection G or M of
Section  4  of  this  Act.  No  dealer, issuer or controlling
person shall employ a salesperson unless such salesperson  is
registered as such with the Secretary of State or is employed
for  the  purpose of offering or selling securities solely in
transactions  believed  in  good  faith  to  be  exempted  by
subsection A, B, C, D, E, G, H, I, J, K, L, M, O, P, Q, R  or
S  of  Section  4 of this Act; provided that such salesperson
need not be registered when effecting  transactions  in  this
State  limited  to  those  transactions  described in Section
15(h)(2) of the Federal 1934 Act or engaging engaged  in  the
offer or sale of securities in respect of which he or she has
beneficial  ownership  and  is  a  controlling  person.   The
Secretary  of  State  may,  by  rule, regulation or order and
subject  to  such  terms,  conditions  as  fees  as  may   be
prescribed in such rule, regulation or order, exempt from the
registration  requirements  of  this Section 8 any investment
adviser, if the Secretary  of  State  shall  find  that  such
registration  is  not  necessary  in  the  public interest by
reason of the small  number of clients or  otherwise  limited
character of operation of such investment adviser.
    B.  An  application  for  registration  as  a  dealer  or
limited Canadian dealer, executed, verified, or authenticated
by  or  on  behalf  of the applicant, shall be filed with the
Secretary of State, in such form as the  Secretary  of  State
may  by rule, regulation or order prescribe, setting forth or
accompanied by:
         (1)  The name and  address  of  the  applicant,  the
    location  of its principal business office and all branch
    offices, if any, and the date of its organization;
         (2)  A statement  of  any  other  Federal  or  state
    licenses  or  registrations  which  have been granted the
    applicant and whether any such licenses or  registrations
    have  ever been refused, cancelled, suspended, revoked or
    withdrawn;
         (3)  The  assets  and  all  liabilities,   including
    contingent liabilities of the applicant, as of a date not
    more than 60 days prior to the filing of the application;
         (4) (a)  A   brief   description  of  any  civil  or
    criminal  proceeding  of  which  fraud  is  an  essential
    element pending against the  applicant  and  whether  the
    applicant  has ever been convicted of a felony, or of any
    misdemeanor of which fraud is an essential element;
         (b)  A list setting forth the  name,  residence  and
    business  address and a 10 year occupational statement of
    each  principal  of  the  applicant   and   a   statement
    describing  briefly  any civil or criminal proceedings of
    which fraud is an essential element pending  against  any
    such principal and the facts concerning any conviction of
    any  such principal of a felony, or of any misdemeanor of
    which fraud is an essential element;
         (5)  If the applicant is a corporation:  a  copy  of
    its articles of incorporation in their most current form,
    unless  they  are  already  on  file in the office of the
    Secretary of State; a list of its officers and  directors
    setting forth the residence and business address of each;
    a  10-year occupational statement of each such officer or
    director; and a statement describing briefly any civil or
    criminal proceedings  of  which  fraud  is  an  essential
    element pending against each such officer or director and
    the  facts  concerning  any  conviction of any officer or
    director of a felony, or  of  any  misdemeanor  of  which
    fraud is an essential element;
         (6)  If  the  applicant  is a sole proprietorship, a
    partnership, limited liability company, an unincorporated
    association or any similar form of business organization:
    the  name,  residence  and  business   address   of   the
    proprietor or of each partner, member, officer, director,
    trustee  or  manager;  the  limitations,  if  any, of the
    liability of each such individual; a 10-year occupational
    statement of each such individual; a statement describing
    briefly any civil or criminal proceedings of which  fraud
    is   an  essential  element  pending  against  each  such
    individual and the facts concerning any conviction of any
    such individual of a felony, or  of  any  misdemeanor  of
    which fraud is an essential element;
         (7)  Such additional information as the Secretary of
    State may by rule or regulation prescribe as necessary to
    determine   the   applicant's  financial  responsibility,
    business repute and qualification to act as a dealer.
         (8) (a)  No  applicant  shall   be   registered   or
    re-registered  as  a  dealer  or  limited Canadian dealer
    under this Section unless and until each principal of the
    dealer  has  passed  an  examination  conducted  by   the
    Secretary  of  State or a self-regulatory organization of
    securities dealers or similar person,  which  examination
    has  been  designated by the Secretary  of State by rule,
    regulation or order to be satisfactory  for  purposes  of
    determining   whether   the   applicant   has  sufficient
    knowledge of the securities business  and  laws  relating
    thereto to act as a registered dealer. Any dealer who was
    registered on September 30, 1963, and has continued to be
    so  registered;  and  any  principal  of  any  registered
    dealer,   who   was   acting  in  such  capacity  on  and
    continuously since September 30, 1963; and any individual
    who has previously passed a securities dealer examination
    administered by the Secretary of State or any examination
    designated by the Secretary of State to  be  satisfactory
    for  purposes  of  determining  whether the applicant has
    sufficient knowledge of the securities business and  laws
    relating  thereto  to act as a registered dealer by rule,
    regulation or order, shall not be  required  to  pass  an
    examination in order to continue to act in such capacity.
    The Secretary of State may by order waive the examination
    requirement   for  any  principal  of  an  applicant  for
    registration under this subsection B  who  has  had  such
    experience   or  education  relating  to  the  securities
    business as may be determined by the Secretary  of  State
    to  be  the  equivalent of such examination.  Any request
    for such a waiver shall be filed with  the  Secretary  of
    State  in  such  form  as  may  be  prescribed by rule or
    regulation.
         (b)  Unless an applicant is a  member  of  the  body
    corporate  known  as  the  Securities Investor Protection
    Corporation established pursuant to the Act  of  Congress
    of  the  United  States  known as the Securities Investor
    Protection Act of 1970, as amended, or  a  member  of  an
    association   of   dealers   registered   as  a  national
    securities association pursuant to  Section  15A  of  the
    Federal  1934  Act,  or  a  member  of  a self-regulatory
    organization  or  stock  exchange  in  Canada  which  the
    Secretary of State has designated by rule  or  order,  an
    applicant shall not be registered or re-registered unless
    and  until  there  is  filed  with the Secretary of State
    evidence that such applicant has in effect  insurance  or
    other  equivalent  protection  for  each client's cash or
    securities held by such  applicant,  and  an  undertaking
    that   such  applicant  will  continually  maintain  such
    insurance  or  other  protection  during  the  period  of
    registration or re-registration.  Such insurance or other
    protection shall be  in  a  form  and  amount  reasonably
    prescribed   by   the  Secretary  of  State  by  rule  or
    regulation.
         (9)  The  application  for  the  registration  of  a
    dealer or limited Canadian dealer  shall  be  accompanied
    by  a filing fee and a fee for each branch office in this
    State, in each case in the amount established pursuant to
    Section  11a  of  this  Act,  which  fees  shall  not  be
    returnable in any event.
         (10)  The Secretary of State shall notify the dealer
    or  limited  Canadian dealer by written notice (which may
    be by electronic, telegraphic, or facsimile transmission)
    of the effectiveness of the registration as a  dealer  in
    this State.
         (11)  Any  change  which  renders no longer accurate
    any  information  contained  in   any   application   for
    registration  or  re-registration  of a dealer or limited
    Canadian dealer shall be reported  to  the  Secretary  of
    State  within  10  business  days after the occurrence of
    such change;  but in respect to  assets  and  liabilities
    only materially adverse changes need be reported.
    C.  Any   registered  dealer,  limited  Canadian  dealer,
issuer,  or  controlling  person  desiring  to   register   a
salesperson  shall  file an application with the Secretary of
State, in such form as the Secretary of State may by rule  or
regulation  prescribe,  which  the salesperson is required by
this Section to provide to the dealer, issuer, or controlling
person,  executed,  verified,   or   authenticated   by   the
salesperson setting forth or accompanied by:
         (1)  The name, residence and business address of the
    salesperson;
         (2)  Whether   any   federal  or  State  license  or
    registration  as  dealer,  limited  Canadian  dealer,  or
    salesperson has ever  been  refused  the  salesperson  or
    cancelled, suspended, revoked, or withdrawn;
         (3)  The  nature  of  employment with, and names and
    addresses of, employers of the  salesperson  for  the  10
    years immediately preceding the date of application;
         (4)  A  brief  description  of any civil or criminal
    proceedings  of  which  fraud  is  an  essential  element
    pending  against  the  salesperson,   and   whether   the
    salesperson  has  ever  been convicted of a felony, or of
    any misdemeanor of which fraud is an essential element;
         (5)  Such additional information as the Secretary of
    State may by  rule,  regulation  or  order  prescribe  as
    necessary  to determine the salesperson's business repute
    and qualification to act as a salesperson; and
         (6)  No   individual   shall   be   registered    or
    re-registered  as a salesperson under this Section unless
    and until  such  individual  has  passed  an  examination
    conducted  by the Secretary of State or a self-regulatory
    organization of securities  dealers  or  similar  person,
    which examination has been designated by the Secretary of
    State by rule, regulation or order to be satisfactory for
    purposes   of   determining  whether  the  applicant  has
    sufficient knowledge of the securities business and  laws
    relating thereto to act as a registered salesperson.
         Any   salesperson   who   was  registered  prior  to
    September  30,  1963,  and  has  continued   to   be   so
    registered,   and   any   individual  who  has  passed  a
    securities salesperson examination  administered  by  the
    Secretary  of  State  or an examination designated by the
    Secretary of State by rule, regulation  or  order  to  be
    satisfactory  for  purposes  of  determining  whether the
    applicant has  sufficient  knowledge  of  the  securities
    business and laws relating thereto to act as a registered
    salesperson, shall not be required to pass an examination
    in  order  to  continue  to  act  as  a  salesperson. The
    Secretary of State may by  order  waive  the  examination
    requirement for any applicant for registration under this
    subsection  C  who  has  had such experience or education
    relating to the securities business as may be  determined
    by  the  Secretary  of State to be the equivalent of such
    examination.  Any request for  such  a  waiver  shall  be
    filed  with the Secretary of State in such form as may be
    prescribed by rule, regulation or order.
         (7)  The   application   for   registration   of   a
    salesperson shall be accompanied by a filing  fee  and  a
    Securities  Audit  and  Enforcement Fund fee, each in the
    amount established pursuant to Section 11a of  this  Act,
    which shall not be returnable in any event.
         (8)  Any change which renders no longer accurate any
    information contained in any application for registration
    or  re-registration as a salesperson shall be reported to
    the Secretary of State within 10 business  days after the
    occurrence  of  such  change.  If  the   activities   are
    terminated which rendered an individual a salesperson for
    the  dealer,  issuer  or  controlling person, the dealer,
    issuer or controlling person, as the case may be,   shall
    notify the Secretary of State, in writing, within 30 days
    of  the  salesperson's cessation of activities, using the
    appropriate termination notice form.
         (9)  A registered salesperson may  transfer  his  or
    her  registration  under this Section 8 for the unexpired
    term  thereof  from  one  registered  dealer  or  limited
    Canadian dealer to another by the giving of notice of the
    transfer by the new registered dealer or limited Canadian
    dealer to the Secretary of State in such form and subject
    to such conditions as the Secretary  of  State  shall  by
    rule  or regulation prescribe.  The new registered dealer
    or  limited  Canadian  dealer  shall  promptly  file   an
    application  for  registration  of  such  salesperson  as
    provided  in this subsection C, accompanied by the filing
    fee prescribed by paragraph (7) of this subsection C.
    C-5.  Except with respect to federal  covered  investment
advisers  whose  only  clients  are  investment  companies as
defined in the Federal 1940 Act, other  investment  advisers,
federal  covered  investment  advisers, or any similar person
which the Secretary of State may prescribe by rule or  order,
a  federal  covered  investment  adviser  shall file with the
Secretary of State, prior to  acting  as  a  federal  covered
investment adviser in this State, such documents as have been
filed  with  the  Securities  and  Exchange Commission as the
Secretary of State by  rule  or  order  may  prescribe.   The
notification of a federal covered investment adviser shall be
accompanied by a notification filing fee established pursuant
to  Section 11a of this Act, which shall not be returnable in
any  event.   Every  person  acting  as  a  federal   covered
investment  adviser  in  this State shall file a notification
filing and pay an annual notification filing fee  established
pursuant to Section 11a of this Act, which is not  returnable
in  any  event.   The  failure  to file any such notification
shall constitute a violation of subsection D of Section 12 of
this Act, subject to the penalties enumerated in  Section  14
of  this  Act. Until October 10, 1999 or other date as may be
legally permissible, a federal covered investment adviser who
fails to file the notification or refuses to pay the fees  as
required  by  this subsection shall register as an investment
adviser with the Secretary of State under Section 8  of  this
Act.  The  civil  remedies  provided  for  in subsection A of
Section 13 of this Act and the civil remedies  of  rescission
and appointment of receiver, conservator, ancillary receiver,
or  ancillary  conservator  provided  for  in subsection F of
Section 13 of this Act shall not  be  available  against  any
person by reason of the failure to file any such notification
or  to pay the notification fee or on account of the contents
of any such notification.

    D.  An application  for  registration  as  an  investment
adviser, executed, verified, or authenticated by or on behalf
of the applicant, shall be filed with the Secretary of State,
in  such  form  as  the  Secretary  of  State  may by rule or
regulation prescribe, setting forth or accompanied by:
         (1)  The name and form of organization  under  which
    the  investment  adviser  engages or intends to engage in
    business;  the  state  or  country  and   date   of   its
    organization;  the  location  of  the adviser's principal
    business office and branch offices, if any; the names and
    addresses of the adviser's principal, partners, officers,
    directors, and persons performing similar  functions  or,
    if  the  investment  adviser  is  an  individual,  of the
    individual; and the number of the adviser's employees who
    perform investment advisory functions;
         (2)  The education, the  business  affiliations  for
    the  past 10 years, and the present business affiliations
    of the investment adviser and of the adviser's principal,
    partners, officers,  directors,  and  persons  performing
    similar  functions  and  of  any  person  controlling the
    investment adviser;
         (3)  The nature of the business  of  the  investment
    adviser,  including  the  manner  of  giving  advice  and
    rendering analyses or reports;
         (4)  The  nature  and  scope of the authority of the
    investment adviser with respect  to  clients'  funds  and
    accounts;
         (5)  The  basis  or  bases upon which the investment
    adviser is compensated;
         (6)  Whether   the   investment   adviser   or   any
    principal, partner, officer, director, person  performing
    similar  functions  or  person controlling the investment
    adviser  (i)  within  10  years  of  the  filing  of  the
    application has been convicted of a  felony,  or  of  any
    misdemeanor  of  which  fraud is an essential element, or
    (ii) is permanently or temporarily enjoined by  order  or
    judgment   from   acting   as   an   investment  adviser,
    underwriter, dealer, principal or  salesperson,  or  from
    engaging  in  or  continuing  any  conduct or practice in
    connection with any such activity or in  connection  with
    the  purchase  or  sale of any security, and in each case
    the facts relating to the conviction, order or judgment;
         (7) (a)  A statement as to  whether  the  investment
    adviser  is  engaged  or  is  to  engage primarily in the
    business of rendering  investment  supervisory  services;
    and
         (b)  A  statement  that  the investment adviser will
    furnish his, her, or its clients with such information as
    the Secretary  of  State  deems  necessary  in  the  form
    prescribed   by   the  Secretary  of  State  by  rule  or
    regulation;
         (8)  Such additional information as the Secretary of
    State may, by rule,  regulation  or  order  prescribe  as
    necessary   to   determine   the   applicant's  financial
    responsibility, business repute and qualification to  act
    as an investment adviser.
         (9)  No    applicant    shall   be   registered   or
    re-registered as an investment adviser under this Section
    unless and until each principal of the applicant  who  is
    actively  engaged  in  the  conduct and management of the
    applicant's advisory business in this State has passed an
    examination or completed an educational program conducted
    by the Secretary of State or an association of investment
    advisers  or  similar  person,   which   examination   or
    educational  program has been designated by the Secretary
    of State by rule, regulation or order to be  satisfactory
    for  purposes  of  determining  whether the applicant has
    sufficient knowledge of the securities business and  laws
    relating  thereto to conduct the business of a registered
    investment adviser.
         Any person who was a registered  investment  adviser
    prior  to  September 30, 1963, and has continued to be so
    registered,  and  any  individual  who  has   passed   an
    investment   adviser   examination  administered  by  the
    Secretary of State, or passed an examination or completed
    an educational program designated  by  the  Secretary  of
    State by rule, regulation or order to be satisfactory for
    purposes   of   determining  whether  the  applicant  has
    sufficient knowledge of the securities business and  laws
    relating  thereto to conduct the business of a registered
    investment adviser, shall not  be  required  to  pass  an
    examination  or  complete an educational program in order
    to  continue  to  act  as  an  investment  adviser.   The
    Secretary of State may by order waive the examination  or
    educational  program  requirement  for  any applicant for
    registration under this subsection D if the principal  of
    the  applicant who is actively engaged in the conduct and
    management of the applicant's advisory business  in  this
    State  has  had  such experience or education relating to
    the securities business  as  may  be  determined  by  the
    Secretary   of   State   to  be  the  equivalent  of  the
    examination or educational program.  Any  request  for  a
    waiver shall be filed with the Secretary of State in such
    form as may be prescribed by rule or regulation.
         (10)  No    applicant   shall   be   registered   or
    re-registered as an investment adviser under this Section
    8  unless  (i)  the  application  for   registration   or
    re-registration  is  accompanied  by  an  application for
    registration or re-registration for each person a list of
    all   persons   acting   as   an    investment    adviser
    representative  representatives  on behalf of the adviser
    and (ii) a Securities Audit and Enforcement Fund fee that
    shall not be returnable in any event is paid with respect
    to  each  investment  adviser  representative.   No  fee,
    however, shall be required under this  paragraph  if  the
    investment adviser representative is also registered as a
    salesperson and the Securities Audit and Enforcement Fund
    fee  required  under subsection C or subsection H of this
    Section has been paid to the Secretary of State.
         (11)  The  application  for   registration   of   an
    investment  adviser  shall be accompanied by a filing fee
    and a fee for each branch office in this State,  in  each
    case in the amount established pursuant to Section 11a of
    this  Act,  which  fees  shall  not  be returnable in any
    event.
         (12)  The  Secretary  of  State  shall  notify   the
    investment  adviser  by  written  notice (which may be by
    electronic, telegraphic, or  facsimile  transmission)  of
    the  effectiveness  of  the registration as an investment
    adviser in this State.
         (13)  Any change which renders  no  longer  accurate
    any   information   contained   in  any  application  for
    registration or re-registration of an investment  adviser
    shall  be  reported  to  the Secretary of State within 10
    business days after the occurrence  of  the  change.   In
    respect  to  assets  and  liabilities  of  an  investment
    adviser   that   retains  custody  of  clients'  cash  or
    securities or accepts pre-payment of fees  in  excess  of
    $500  per  client  and  6  or more months in advance only
    materially adverse changes need be  reported  by  written
    notice   (which  may  be  by  electronic  telegraphic  or
    facsimile  transmission)  no  later  than  the  close  of
    business  on  the  second  business  day  following   the
    discovery thereof.
         (14)  Each   application   for  registration  as  an
    investment adviser shall become  effective  automatically
    on  the 45th day following the filing of the application,
    required documents or information,  and  payment  of  the
    required  fee  unless  (i)  the  Secretary  of  State has
    registered the investment adviser prior to that  date  or
    (ii)  an  action with respect to the applicant is pending
    under Section 11 of this Act.
    D-5.  A registered investment adviser or federal  covered
investment  adviser    desiring  to  register  an  investment
adviser  representative  shall  file  an application with the
Secretary of State, in the form as the Secretary of State may
by rule or order  prescribe,  which  the  investment  adviser
representative  is required by this Section to provide to the
investment adviser, executed, verified, or  authenticated  by
the  investment  adviser  representative and setting forth or
accompanied by:
         (1)  The name, residence, and  business  address  of
    the investment  adviser representative;
         (2)  A   statement  whether  any  federal  or  state
    license  or  registration  as  a   dealer,   salesperson,
    investment  adviser, or investment adviser representative
    has ever been refused, canceled,  suspended,  revoked  or
    withdrawn;
         (3)  The  nature  of  employment with, and names and
    addresses  of,    employers  of  the  investment  adviser
    representative for the 10 years immediately preceding the
    date of application;
         (4)  A brief description of any  civil  or  criminal
    proceedings,  of  which  fraud  is  an essential element,
    pending against the investment adviser representative and
    whether the investment adviser  representative  has  ever
    been convicted of a felony or of any misdemeanor of which
    fraud is an essential element;
         (5)  Such additional information as the Secretary of
    State  may  by  rule  or  order prescribe as necessary to
    determine   the   investment   adviser   representative's
    business repute or qualification to act as an  investment
    adviser representative;
         (6)  Documentation that the individual has passed an
    examination  conducted  by  the  Secretary  of  State, an
    organization of investment advisers, or  similar  person,
    which examination has been designated by the Secretary of
    State by rule or order to be satisfactory for purposes of
    determining   whether   the    applicant  has  sufficient
    knowledge  of  the  investment  advisory  or   securities
    business  and  laws relating to that business to act as a
    registered investment  adviser representative; and
         (7)  A Securities Audit  and  Enforcement  Fund  fee
    established  under  Section  11a of this Act, which shall
    not be returnable in any event.
    The Secretary of State may by order waive the examination
requirement for an  applicant  for  registration  under  this
subsection  D-5  who  has  had  the  experience  or education
relating to the investment advisory or securities business as
may be determined  by  the  Secretary  of  State  to  be  the
equivalent  of the examination.  A request for a waiver shall
be filed with the Secretary of State in the form  as  may  be
prescribed by rule or order.
    A  change that renders no longer accurate any information
contained  in  any      application   for   registration   or
re-registration  as an investment adviser representative must
be reported to the Secretary of State within 10 business days
after the occurrence of the change.  If the  activities  that
rendered  an  individual an investment adviser representative
for the investment adviser  are  terminated,  the  investment
adviser shall notify the Secretary of State in writing (which
may  be  by  electronic or facsimile transmission), within 30
days of the investment adviser representative's  termination,
using   the   appropriate  termination  notice  form  as  the
Secretary of State may prescribe by rule or order.
    A  registered  investment  adviser   representative   may
transfer his or her registration under this Section 8 for the
unexpired  term  of  the  registration  from  one  registered
investment  adviser to another by the giving of notice of the
transfer by the new investment adviser to  the  Secretary  of
State  in  the  form  and  subject  to  the conditions as the
Secretary of State  shall  prescribe.    The  new  registered
investment  adviser  shall  promptly  file an application for
registration of  the  investment  adviser  representative  as
provided  in  this  subsection, accompanied by the Securities
Audit and Enforcement Fund fee prescribed by paragraph (7) of
this subsection D-5.

    E. (1)  Subject to the  provisions  of  subsection  F  of
Section 11 of this Act, the registration of a dealer, limited
Canadian  dealer,  salesperson,  or  investment  adviser,  or
investment adviser representative may be denied, suspended or
revoked  if  the  Secretary  of  State finds that the dealer,
limited Canadian dealer, salesperson, or investment  adviser,
or   investment   adviser  representative  or  any  principal
officer, director, partner, member, trustee, manager  or  any
person who performs a similar function of the dealer, limited
Canadian dealer, or investment adviser:
         (a)  Has  been convicted of any felony during the 10
    year  period  preceding  the  date  of  filing   of   any
    application  for  registration or at any time thereafter,
    or of any misdemeanor of  which  fraud  is  an  essential
    element;
         (b)  Has  engaged in any inequitable practice in the
    offer or sale of securities or in any fraudulent business
    practice;
         (c)  Has  failed  to  account  for  any   money   or
    property,  or  has failed to deliver any security, to any
    person entitled thereto when due or within  a  reasonable
    time thereafter;
         (d)  In  the  case  of  a  dealer,  limited Canadian
    dealer, or investment adviser, is insolvent;
         (e)  In the case of a  dealer  or  limited  Canadian
    dealer,  (i)  has  failed  reasonably  to  supervise  the
    securities  activities of any of its salespersons and the
    failure has  permitted  or  facilitated  a  violation  of
    Section  12 of this Act or (ii) is offering or selling or
    has offered or sold securities in this  State  through  a
    salesperson  other  than a registered salesperson, or, in
    the case  of  a  salesperson,  is  selling  or  has  sold
    securities  in  this State for a dealer, limited Canadian
    dealer, issuer or controlling person with knowledge  that
    the   dealer,   limited   Canadian   dealer,   issuer  or
    controlling person has not complied with  the  provisions
    of this Act;
         (f)  In  the  case  of  an  investment  adviser, has
    failed reasonably to supervise the advisory activities of
    any  of  its  investment   adviser   representatives   or
    employees  and the failure has permitted or facilitated a
    violation of Section 12 of this Act;
         (g)  Has violated any of the provisions of this Act;
         (h)  Has made any material misrepresentation to  the
    Secretary  of  State  in  connection with any information
    deemed necessary by the Secretary of State to determine a
    dealer's,  limited  Canadian  dealer's,   or   investment
    adviser's financial responsibility or a dealer's, limited
    Canadian     dealer's,     investment    adviser's,    or
    salesperson's,  or  investment  adviser  representative's
    business repute or  qualifications,  or  has  refused  to
    furnish  any  such information requested by the Secretary
    of State;
         (i)  Has had a license  or  registration  under  any
    Federal  or  State  law  regulating  the offer or sale of
    securities  or  commodity  futures  contracts,   refused,
    cancelled, suspended or withdrawn;
         (j)  Has  been suspended or expelled from or refused
    membership in or  association  with  or  limited  in  any
    capacity  by  any self-regulatory organization registered
    under the Federal  1934  Act  or  the  Federal  1974  Act
    arising  from  any  fraudulent  or  deceptive  act  or  a
    practice in violation of any rule, regulation or standard
    duly promulgated by the self-regulatory organization;
         (k)  Has  had  any  order  entered  against it after
    notice and opportunity for hearing by a securities agency
    of any state, any foreign government or  agency  thereof,
    the  Securities  and  Exchange Commission, or the Federal
    Commodities Futures Trading Commission arising  from  any
    fraudulent or deceptive act or a practice in violation of
    any   statute,   rule   or   regulation  administered  or
    promulgated by the agency or commission;
         (l)  In the case of a  dealer  or  limited  Canadian
    dealer,  fails  to  maintain  a minimum net capital in an
    amount which the  Secretary  of  State  may  by  rule  or
    regulation require;
         (m)  Has conducted a continuing course of dealing of
    such  nature  as  to demonstrate an inability to properly
    conduct the business  of  the  dealer,  limited  Canadian
    dealer, salesperson, or investment adviser, or investment
    adviser representative;
         (n)  Has  had,  after  notice  and  opportunity  for
    hearing,  any  injunction  or order entered against it or
    license or registration  refused,  cancelled,  suspended,
    revoked,  withdrawn  or  limited  by any state or federal
    body, agency or commission regulating banking, insurance,
    finance or small loan companies, real estate or  mortgage
    brokers or companies, if the action resulted from any act
    found   by  the  body,  agency  or  commission  to  be  a
    fraudulent or deceptive act or practice in  violation  of
    any statute, rule or regulation registration administered
    or promulgated by the body, agency or commission;
         (o)  Has failed to file a return, or to pay the tax,
    penalty  or  interest  shown in a filed return, or to pay
    any final assessment of  tax,  penalty  or  interest,  as
    required  by  any  tax  Act  administered by the Illinois
    Department  of  Revenue,   until   such   time   as   the
    requirements of that tax Act are satisfied;
         (p)  In  the  case  of  a  natural  person  who is a
    dealer,  limited   Canadian   dealer,   salesperson,   or
    investment adviser, or investment adviser representative,
    has  defaulted  on  an educational loan guaranteed by the
    Illinois Student Assistance Commission, until the natural
    person has established a satisfactory repayment record as
    determined by the Illinois Student Assistance Commission;
         (q)  Has failed to maintain the  books  and  records
    required   under   this   Act  or  rules  or  regulations
    promulgated under this Act within a reasonable time after
    receiving notice of any deficiency;
         (r)  Has  refused  to  allow  or  otherwise  impeded
    designees of the Secretary of State  from  conducting  an
    audit, examination, inspection, or investigation provided
    for under Section 8 or 11 of this Act;
         (s)  Has  failed to maintain any minimum net capital
    or bond requirement set forth in this Act or any rule  or
    regulation promulgated under this Act;
         (t)  Has  refused  the  Secretary of State or his or
    her designee access to any office or location  within  an
    office  to  conduct an investigation, audit, examination,
    or inspection.
    (2)  If the Secretary of State finds that any  registrant
or  applicant  for  registration is no longer in existence or
has ceased to do  business  as  a  dealer,  limited  Canadian
dealer,  salesperson,  or  investment  adviser, or investment
adviser representative, or is subject to an adjudication as a
person  under  legal  disability  or  to  the  control  of  a
guardian, or cannot be located after  reasonable  search,  or
has  failed  after  written notice to pay to the Secretary of
State any  additional  fee  prescribed  by  this  Section  or
specified  by rule or regulation, or if a natural person, has
defaulted on an educational loan guaranteed by  the  Illinois
Student  Assistance Commission, the Secretary of State may by
order cancel the registration or application.
    (3)  Withdrawal of an  application  for  registration  or
withdrawal  from  registration  as a dealer, limited Canadian
dealer, salesperson, or  investment  adviser,  or  investment
adviser   representative  becomes  effective  30  days  after
receipt of an application to withdraw or within such  shorter
period  of  time  as  the  Secretary  of State may determine,
unless any proceeding is pending under Section 11 of this Act
when the application is filed or a proceeding  is  instituted
within  30  days  after  the  application  is  filed.   If  a
proceeding  is  pending  or  instituted,  withdrawal  becomes
effective  at  such  time  and  upon  such  conditions as the
Secretary of State by order determines.  If no proceeding  is
pending  or  instituted  and withdrawal automatically becomes
effective, the Secretary of State may nevertheless  institute
a  revocation  or suspension proceeding within one year after
withdrawal  became  effective  and  enter  a  revocation   or
suspension  order  as  of the last date on which registration
was effective.
    F.  The Secretary of  State  shall  make  available  upon
request  the  date  that  each dealer, investment adviser, or
salesperson, or investment adviser representative was granted
registration, together with  the  name  and  address  of  the
dealer,  limited  Canadian  dealer, or issuer on whose behalf
the  salesperson  is  registered,  and  all  orders  of   the
Secretary  of  State denying or abandoning an application, or
suspending  or  revoking  registration,  or   censuring   the
persons.    The  Secretary  of  State  may designate by rule,
regulation or order the statements,  information  or  reports
submitted  to  or  filed  with  him  or  her pursuant to this
Section 8 which the Secretary of State determines  are  of  a
sensitive  nature  and therefore should be exempt from public
disclosure.  Any such statement, information or report  shall
be  deemed  confidential  and  shall  not be disclosed to the
public except upon  the  consent  of  the  person  filing  or
submitting  the  statement, information or report or by order
of court or in court proceedings.
    G.  The registration or re-registration of  a  dealer  or
limited  Canadian  dealer  and of all salespersons registered
upon application of the dealer  or  limited  Canadian  dealer
shall  expire  on the next succeeding anniversary date of the
registration  or  re-registration  of  the  dealer;  and  the
registration or re-registration of an investment adviser  and
of  all  investment  adviser  representatives registered upon
application of the investment adviser  shall  expire  on  the
next  succeeding  anniversary date of the registration of the
investment adviser; provided, that the Secretary of State may
by rule or regulation prescribe an alternate date  which  any
dealer  registered  under the Federal 1934 Act or a member of
any self-regulatory association approved pursuant thereto,  a
member of a self-regulatory organization or stock exchange in
Canada,  or  any  investment  adviser  registered  under  the
Federal  1940  Investment  Advisers  Act  may  elect  as  the
expiration  date of its dealer or limited Canadian dealer and
salesperson registrations, or  the  expiration  date  of  its
investment  adviser  registration,  as  the  case  may be.  A
registration of a salesperson registered upon application  of
an  issuer  or  controlling  person  shall expire on the next
succeeding anniversary date  of  the  registration,  or  upon
termination   or   expiration  of  the  registration  of  the
securities, if any, designated in the application for his  or
her registration or the alternative date as the Secretary may
prescribe by rule or regulation.  Subject to paragraph (9) of
subsection  C of this Section 8, a salesperson's registration
also shall terminate upon cessation of his or her employment,
or termination of his or her appointment or authorization, in
each case by the person who  applied  for  the  salesperson's
registration,  provided  that  the  Secretary of State may by
rule or  regulation  prescribe  an  alternate  date  for  the
expiration of the registration.
    H.  Applications  for re-registration of dealers, limited
Canadian dealers, salespersons, and investment advisers,  and
investment  adviser  representatives  shall be filed with the
Secretary of State prior to not less than  7  days  preceding
the  expiration  of  the  then current registration and shall
contain such information as may be required by the  Secretary
of   State   upon  initial  application  with  such  omission
therefrom or addition thereto as the Secretary of  State  may
authorize or prescribe.  Each application for re-registration
of  a  dealer, limited Canadian dealer, or investment adviser
shall be accompanied by a filing fee,  and  each  application
for  re-registration as a salesperson shall be accompanied by
a filing fee and a Securities Audit and Enforcement Fund  fee
established  pursuant  to  Section  11a of this Act, and each
application for  re-registration  as  an  investment  adviser
representative shall be accompanied by a Securities Audit and
Enforcement  Fund  fee  established under Section 11a of this
Act,  which  shall  not   be   returnable   in   any   event.
Notwithstanding   the   foregoing,   (1)   applications   for
re-registration  of  dealers  and  investment advisers may be
filed within the 6 days next preceding the expiration of  the
then  current  registration  provided that the applicant pays
the annual registration fee for  the  year  with  respect  to
which  the  re-registration  is  applicable  together with an
additional amount equal to the annual registration  fee;  and
(2)  applications  for  re-registration  of  dealers, limited
Canadian dealers, and investment advisers may be filed within
30 days following the expiration of the registration provided
that the applicant pays the annual registration fee  together
with  an  additional  amount  equal  to  2  times  the annual
registration fee and files any other information or documents
that  the  Secretary  of  State  may  prescribe  by  rule  or
regulation or order.  Any application filed  within  30  days
following   the  expiration  of  the  registration  shall  be
automatically  effective  as  of  the  time  of  the  earlier
expiration provided that the proper fee has been paid to  the
Secretary of State.
    Each  registered  dealer,  limited  Canadian  dealer,  or
investment  adviser  shall  continue  to be registered if the
registrant changes his, her,  or  its  form  of  organization
provided  that  the  dealer  or  investment  adviser files an
amendment to his, her, or its application not later  than  30
days  following  the  occurrence  of  the change and pays the
Secretary of State a fee  in  the  amount  established  under
Section 11a of this Act.
    I. (1)  Every registered dealer, limited Canadian dealer,
and  investment adviser shall make and keep for such periods,
such accounts, correspondence, memoranda, papers,  books  and
records  as  the Secretary of State may by rule or regulation
prescribe.  All records so required shall be preserved for  3
years  unless  the  Secretary of State by rule, regulation or
order prescribes otherwise for particular types of records.
    (2)  Every registered dealer,  limited  Canadian  dealer,
and  investment  adviser shall file such financial reports as
the Secretary of State may by rule or regulation prescribe.
    (3)  All the books and records referred to  in  paragraph
(1) of this subsection I are subject at any time or from time
to time to such reasonable periodic, special or other audits,
examinations,   or  inspections  by  representatives  of  the
Secretary of State, within or  without  this  State,  as  the
Secretary  of  State  deems  necessary  or appropriate in the
public interest or for the protection of investors.
    (4)  At the time of an audit, examination, or inspection,
the Secretary of State, by his or her designees, may  conduct
an  interview  of  any  person  employed  or  appointed by or
affiliated with a registered dealer, limited Canadian dealer,
or investment advisor,  provided  that  the  dealer,  limited
Canadian   dealer,  or  investment  advisor  shall  be  given
reasonable notice of the time and place  for  the  interview.
At  the  option  of  the  dealer, limited Canadian dealer, or
investment  advisor,  a  representative  of  the  dealer   or
investment  advisor  with supervisory responsibility over the
individual being interviewed may be present at the interview.
    J.  The  Secretary  of  State  may  require  by  rule  or
regulation the payment of an additional fee for the filing of
information or documents required to be filed by this Section
which have not been filed in a timely manner.  The  Secretary
of  State  may also require by rule or regulation the payment
of an examination fee for administering any examination which
it may conduct pursuant to subsection B, C, or D, or  D-5  of
this Section 8.
    K.  The  Secretary  of  State may declare any application
for registration or limited registration under this Section 8
abandoned by order if the applicant fails to pay any  fee  or
file  any information or document required under this Section
8 or by rule or regulation for more than 30  days  after  the
required  payment or filing date.  The applicant may petition
the Secretary of State for a hearing within 15 days after the
applicant's receipt of the  order  of  abandonment,  provided
that  the  petition  sets  forth  the  grounds upon which the
applicant seeks a hearing.
    L.  Any document being filed pursuant to this  Section  8
shall  be  deemed  filed,  and any fee being paid pursuant to
this Section 8 shall be deemed paid, upon the date of  actual
receipt  thereof  by  the  Secretary  of  State or his or her
designee.
    M.  The Secretary of State shall provide to the  Illinois
Student  Assistance Commission annually or at mutually agreed
periodic intervals the names and social security  numbers  of
natural persons registered under subsections B, C, D, and D-5
E   of   this   Section.   The  Illinois  Student  Assistance
Commission shall determine if any student loan  defaulter  is
registered as a dealer, limited Canadian dealer, salesperson,
or   investment   adviser  under  this  Act  and  report  its
determination to  the  Secretary  of  State  or  his  or  her
designee.
(Source:  P.A.  88-494;  89-209,  eff.  1-1-96;  89-626, eff.
8-9-96.)

    (815 ILCS 5/9) (from Ch. 121 1/2, par. 137.9)
    Sec. 9. Advertising.  The Secretary of State may by  rule
or  regulation  require  the  filing  with  him or her of any
prospectus, pamphlet, circular, form letter, advertisement or
other sales literature or advertising communication addressed
or intended for distribution or dissemination in  this  State
to  prospective  investors,  including clients or prospective
clients of an investment  adviser;  provided,  that  no  such
filing may be required with respect to:
    (1)  securities  exempt from registration pursuant to the
provisions of Section  3  of  this  Act  or  sold  solely  in
transactions  of  the  nature  set forth in Section 4 of this
Act;
    (2)  securities registered under both  the  Federal  1933
Act  and  subsection A or B of Section 5, 6 or 7 of this Act;
or
    (2.5)  federal covered securities; or
    (3)  advertisements appearing in newspapers, magazines or
periodicals  of  regular  publication  and  established  paid
circulation, other than an advertisement which constitutes an
offer of securities which  is  not  covered  by  any  of  the
exemptions  set  forth  in  Section  4 of this Act, and which
securities are not exempt from registration pursuant  to  the
provisions of Section 3 of this Act.
(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96.)

    (815 ILCS 5/10) (from Ch. 121 1/2, par. 137.10)
    Sec. 10.  Service of process.
    A.  A  consent to service of process shall be in the form
prescribed by the Secretary of State, shall  be  irrevocable,
and shall provide that actions arising out of or founded upon
the  offer  or sale of any securities in alleged violation of
this Act may be commenced against the  person  executing  the
consent  in  any  circuit  court  within  this  State, by the
service of process upon the Secretary of State.
    Service of any process or pleading in any action  against
a person who has filed under this Act a consent to service of
process  upon  the  Secretary  of State shall, if made on the
Secretary of State, be by  duplicate  copies,  one  of  which
shall  be  filed  in the office of the Secretary of State and
the other immediately forwarded by the Secretary of State  by
registered  mail or certified mail, return receipt requested,
to the person at his or her latest address  on  file  in  the
office  of the Secretary of State. The filing fee for service
of process under this subsection A shall  be  as  established
pursuant  to  Section  11a  of  this  Act,  and  shall not be
returnable in any event.
    B. (1)  The filing of a notice filing under Section 2a of
this Act or of an application for registration under  Section
5,  6, 7, or 8 of this Act, or the offer, sale or delivery of
securities  in  this  State,  whether  effected  by  mail  or
otherwise, by any person (unless the  securities  are  exempt
from  registration  under  subsection  A or B of Section 3 of
this Act) shall be equivalent  to  and  shall  constitute  an
appointment  of  the  Secretary  of  State,  or  his  or  her
successors  in  office,  by  the person and the issuer of the
securities to be the true and lawful attorney for the  person
upon  whom  may be served all lawful process in any action or
proceeding against the person, arising out of  the  offer  or
sale of the securities.
    (2)  Service  of process under this subsection B shall be
made by serving a copy upon the Secretary  of  State  or  any
employee  in his or her office designated by the Secretary of
State to accept such service for him or her, provided  notice
of  such  and  a  copy  of  the  process  are, within 10 days
thereafter, sent by registered mail or certified mail, return
receipt requested, by the plaintiff to the defendant, at  the
last  known  address  of  the  defendant.  The filing fee for
service of process  under  this  subsection  B  shall  be  as
established  pursuant  to  Section 11a of this Act, and shall
not be returnable in any event.  The Secretary of State shall
keep a record of all such processes which shall show the  day
of the service.
    C.  Notwithstanding  the  foregoing,  the  filing  of  an
application  by  an issuer, controlling person, or registered
dealer, or limited Canadian dealer for the registration of  a
salesperson  shall  also  constitute  the  appointment by the
salesperson of the issuer, controlling person, or  registered
dealer,  or limited Canadian dealer to be the true and lawful
attorney for the person upon whom may be  served  all  lawful
process  against  the  person,  arising under subsection J of
Section 8 or Section 11 of this Act.  Following  any  service
in  the  foregoing  manner,  the Secretary of State shall, as
soon thereafter as reasonably practical, serve a copy of  the
lawful  process to the person by registered mail or certified
mail, return receipt requested, at his, or her, or  its  last
known address.
(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96.)
    (815 ILCS 5/11) (from Ch. 121 1/2, par. 137.11)
    Sec. 11.  Duties and powers of the Secretary of State.
    A. (1)  The  administration  of this Act is vested in the
Secretary of State, who may from time to time make, amend and
rescind such rules and regulations as  may  be  necessary  to
carry out this Act, including rules and regulations governing
procedures  of  registration,  statements,  applications  and
reports  for  various  classes  of  securities,  persons  and
matters  within  his  or  her  jurisdiction  and defining any
terms, whether or not  used  in  this  Act,  insofar  as  the
definitions  are  not  inconsistent with this Act.  The rules
and regulations adopted by the Secretary of State under  this
Act  shall  be  effective  in  the manner provided for in the
Illinois Administrative Procedure Act.
    (2)  Among other things, the  Secretary  of  State  shall
have  authority,  for  the purposes of this Act, to prescribe
the form or forms in which required information shall be  set
forth, accounting practices, the items or details to be shown
in  balance sheets and earning statements, and the methods to
be followed in the preparation of accounts, in the  appraisal
or  valuation of assets and liabilities, in the determination
of depreciation and  depletion,  in  the  differentiation  of
recurring and non-recurring income, in the differentiation of
investment  and  operating  income, and in the preparation of
consolidated balance sheets or income accounts of any person,
directly or indirectly,  controlling  or  controlled  by  the
issuer, or any person under direct or indirect common control
with the issuer.
    (3)  No  provision  of  this  Act  imposing any liability
shall apply to any act done  or  omitted  in  good  faith  in
conformity  with  any  rule or regulation of the Secretary of
State under  this  Act,  notwithstanding  that  the  rule  or
regulation  may,  after  the  act  or omission, be amended or
rescinded or be determined by judicial or other authority  to
be invalid for any reason.
    (4)  The  Securities  Department  of  the  Office  of the
Secretary of State shall be deemed a criminal justice  agency
for  purposes  of  all federal and state laws and regulations
and, in that capacity, shall be entitled  to  access  to  any
information available to criminal justice agencies.
    (5)  The  Secretary  of State, by rule, may conditionally
or  unconditionally   exempt   any   person,   security,   or
transaction,  or any class or classes of persons, securities,
or transactions from any provision of Section 5, 6, 7, 8, 8a,
or 9 of this Act or  of  any  rule  promulgated  under  these
Sections,  to  the extent that such exemption is necessary or
appropriate in the public interest, and  is  consistent  with
the protection of investors.
    B.  The  Secretary  of State may, anything in this Act to
the contrary notwithstanding,  require  financial  statements
and reports of the issuer, dealer, salesperson, or investment
adviser  as often as circumstances may warrant.  In addition,
the Secretary of State may secure information  or  books  and
records  from  or  through others and may make or cause to be
made investigations respecting  the  business,  affairs,  and
property  of the issuer of securities, any person involved in
the sale or offer for sale, purchase or offer to purchase  of
any  mineral  investment  contract, mineral deferred delivery
contract, or  security  and  of  dealers,  salespersons,  and
investment advisers that are registered or are the subject of
an application for registration under this Act.  The costs of
an  investigation  shall  be  borne  by the registrant or the
applicant, provided that the registrant  or  applicant  shall
not  be  obligated  to  pay the costs without his, her or its
consent in advance.
    C.  Whenever it shall appear to the Secretary  of  State,
either  upon  complaint  or  otherwise, that this Act, or any
rule or regulation prescribed under  authority  thereof,  has
been or is about to be violated, he or she may, in his or her
discretion, do one or both of the following:
         (1)  require  or  permit the person to file with the
    Secretary of State a statement in writing under oath,  or
    otherwise,   as   to  all  the  facts  and  circumstances
    concerning the subject  matter  which  the  Secretary  of
    State   believes   to   be  in  the  public  interest  to
    investigate, audit, examine, or inspect; and
         (2)  conduct an investigation,  audit,  examination,
    or   inspection    as  necessary  or  advisable  for  the
    protection of the interests of the public.
    D. (1)  For the purpose of  all  investigations,  audits,
examinations,  or  inspections  which  in  the opinion of the
Secretary  of  State  are  necessary  and  proper   for   the
enforcement  of  this Act, the Secretary of State or a person
designated by him or her is empowered to administer oaths and
affirmations, subpoena witnesses, take evidence, and  require
the  production  of  any  books and records, papers, or other
documents which the Secretary of State or a person designated
by him or her deems relevant or material to the inquiry.
    (2)  The Secretary of State or a person designated by him
or  her  is  further  empowered  to  administer   oaths   and
affirmations,  subpoena witnesses, take evidence, and require
the production of any books and  records,  papers,  or  other
documents in this State at the request of a securities agency
of  another state, if the activities constituting the alleged
violation for which the information is  sought  would  be  in
violation  of  Section  12  of this Act if the activities had
occurred in this State.
    (3)  The Circuit Court of any County of this State,  upon
application  of the Secretary of State or a person designated
by him or her may order  the  attendance  of  witnesses,  the
production   of  books  and  records,  papers,  accounts  and
documents and the giving of testimony before the Secretary of
State or a person designated by him or her; and  any  failure
to  obey  the order may be punished by the Circuit Court as a
contempt thereof.
    (4)  The fees of subpoenaed witnesses under this Act  for
attendance  and travel shall be the same as fees of witnesses
before the Circuit Courts of this State, to be paid when  the
witness  is  excused  from  further attendance, provided, the
witness is subpoenaed at the instance  of  the  Secretary  of
State;  and  payment of the fees shall be made and audited in
the same manner as other expenses of the Secretary of State.
    (5)  Whenever a subpoena is issued at the  request  of  a
complainant  or  respondent as the case may be, the Secretary
of State may require that the cost of service and the fee  of
the witness shall be borne by the party at whose instance the
witness is summoned.
    (6)  The  Secretary  of  State shall have power at his or
her discretion, to require a deposit to cover the cost of the
service and witness fees and the payment of the legal witness
fee and mileage to the witness served with subpoena.
    (7)  A subpoena issued under this Act shall be served  in
the same manner as a subpoena issued out of a circuit court.
    (8)  The  Secretary  of  State  may in any investigation,
audits, examinations, or  inspections  cause  the  taking  of
depositions  of persons residing within or without this State
in the manner provided in civil actions  under  the  laws  of
this State.
    E.  Anything in this Act to the contrary notwithstanding:
         (1)  If  the  Secretary of State shall find that the
    offer or sale or proposed offer  or  sale  or  method  of
    offer  or  sale  of any securities by any person, whether
    exempt or not, except the offer or sale of securities  as
    defined  in  subsection A of Section 3, in this State, is
    fraudulent, or would work or tend  to  work  a  fraud  or
    deceit,  or  is  being  offered  or  sold in violation of
    Section 12, or there has been a  failure  or  refusal  to
    submit any notification filing or fee required under this
    Act, the Secretary of State may by written order prohibit
    or suspend the offer or sale of securities by that person
    or  deny  or revoke the registration of the securities or
    the exemption from registration for the securities.
         (2)  If the Secretary of State shall find  that  any
    person has violated subsection C, D, E, F, G, H, I, J, or
    K  of  Section 12 of this Act, the Secretary of State may
    by written order temporarily or permanently  prohibit  or
    suspend   the   person   from  offering  or  selling  any
    securities,  any  mineral  investment  contract,  or  any
    mineral  deferred  delivery  contract  in   this   State,
    provided  that  any person who is the subject of an order
    of permanent prohibition may petition  the  Secretary  of
    State for a hearing to present evidence of rehabilitation
    or  change  in  circumstances justifying the amendment or
    termination of the order of permanent prohibition.
         (3)  If the Secretary of State shall find  that  any
    person  is  engaging  or  has  engaged in the business of
    selling or offering for sale securities as  a  dealer  or
    salesperson  or  is  acting or has acted as an investment
    adviser or federal covered  investment  adviser,  without
    prior  thereto  and  at  the time thereof having complied
    with the registration or notice  filing  requirements  of
    this  Act,  the  Secretary  of State may by written order
    prohibit or suspend  the  person  from  engaging  in  the
    business  of  selling or offering for sale securities, or
    acting  as  an  investment  adviser  or  federal  covered
    investment adviser, in this State.
         (4)  In addition to any  other  sanction  or  remedy
    contained  in  this subsection E, the Secretary of State,
    after finding that any provision of  this  Act  has  been
    violated,   may  impose  a  fine  as  provided  by  rule,
    regulation or order against the violator  not  to  exceed
    $10,000  for each violation of this Act, and may issue an
    order of public censure against the violator.
    F. (1)  The Secretary of State shall not deny, suspend or
revoke the registration of securities, suspend or revoke  the
registration  of a dealer, salesperson or investment adviser,
prohibit or suspend the offer  or  sale  of  any  securities,
prohibit  or  suspend any person from offering or selling any
securities in this State, prohibit or  suspend  a  dealer  or
salesperson  from  engaging  in  the  business  of selling or
offering for sale securities, prohibit or  suspend  a  person
from  acting  as  an  investment  adviser  or federal covered
investment adviser, impose any fine  for  violation  of  this
Act,  issue  an  order  of  public  censure, or enter into an
agreed settlement except after  an  opportunity  for  hearing
upon  not  less than 10 days notice given by personal service
or   registered  mail  or  certified  mail,  return   receipt
requested,  to  the person or persons concerned.  Such notice
shall state the date and time and place of  the  hearing  and
shall contain a brief statement of the proposed action of the
Secretary  of  State and the grounds for the proposed action.
A failure to appear at the hearing or  otherwise  respond  to
the  allegations  set  forth  in  the notice of hearing shall
constitute an admission of  any  facts  alleged  therein  and
shall constitute sufficient basis to enter an order.
    (2)  Anything    herein   contained   to   the   contrary
notwithstanding,  the  Secretary  of  State  may  temporarily
prohibit or suspend, for a maximum period of 60 days,  by  an
order   effective   immediately,   the   offer   or  sale  or
registration of securities, the  registration  of  a  dealer,
salesperson  or  investment  adviser, or the offer or sale of
securities by  any  person,  or  the  business  of  rendering
investment  advice,  without  the notice and prior hearing in
this subsection prescribed, if the Secretary of  State  shall
in  his  or  her opinion, based on credible evidence, deem it
necessary to prevent an imminent violation of this Act or  to
prevent  losses  to  investors  which  the Secretary of State
reasonably believes  will  occur  as  a  result  of  a  prior
violation  of  this  Act.   Immediately  after  taking action
without such notice and hearing, the Secretary of State shall
deliver a copy of the temporary order to the respondent named
therein by personal service or registered mail  or  certified
mail,  return  receipt  requested.  The temporary order shall
set forth the grounds for the action and  shall  advise  that
the  respondent  may  request a hearing as soon as reasonably
practicable, that the request for a hearing will not stop the
effectiveness of the temporary order  and  that  respondent's
failure to request a hearing within 30 days after the date of
the   entry  of  the  temporary  order  shall  constitute  an
admission of any facts alleged therein and  shall  constitute
sufficient  basis  to  make  the  temporary order final.  Any
provision   of   this   paragraph   (2)   to   the   contrary
notwithstanding, the Secretary of State may not  pursuant  to
the provisions of this paragraph (2) suspend the registration
of   a  dealer,  limited  Canadian  dealer,  salesperson,  or
investment  adviser,  or  investment  adviser  representative
based upon sub-paragraph (n) of paragraph (l) of subsection E
of Section 8 of  this  Act  or  revoke  the  registration  of
securities  or  revoke  the  registration  of  any  a dealer,
salesperson, investment adviser representative, or investment
adviser.
    (3)  The Secretary of State may issue a  temporary  order
suspending  or delaying the effectiveness of any registration
of securities under subsection A or B of Section 5, 6 or 7 of
this Act subsequent to and upon the basis of the issuance  of
any  stop,  suspension or similar order by the Securities and
Exchange Commission with respect to the securities which  are
the  subject  of  the registration under subsection A or B of
Section 5, 6 or 7 of this Act, and  the  order  shall  become
effective  as  of  the  date and time of effectiveness of the
Securities and Exchange Commission order and shall be vacated
automatically at such time as the order of the Securities and
Exchange Commission is no longer in effect.
    (4)  When  the  Secretary  of   State   finds   that   an
application  for  registration  as  a  dealer, salesperson or
investment adviser should be denied, the Secretary  of  State
may  enter  an  order  denying the registration.  Immediately
after taking  such  action,  the  Secretary  of  State  shall
deliver  a  copy of the order to the respondent named therein
by personal service or registered  mail  or  certified  mail,
return  receipt requested.  The order shall state the grounds
for the action and that the matter will be  set  for  hearing
upon written request filed with the Secretary of State within
30  days  after the receipt of the request by the respondent.
The respondent's failure to request a hearing within 30  days
after  receipt  of the order shall constitute an admission of
any facts alleged therein and shall make the order final.  If
a hearing is held,  the  Secretary  of  State  shall  affirm,
vacate, or modify the order.
    (5)  The  findings and decision of the Secretary of State
upon the conclusion of each final hearing  held  pursuant  to
this  subsection shall be set forth in a written order signed
on behalf of the Secretary of State by his  or  her  designee
and shall be filed as a public record.  All hearings shall be
held  before  a  person designated by the Secretary of State,
and appropriate records thereof shall be kept.
    (6)  Notwithstanding  the  foregoing,  the  Secretary  of
State, after notice and opportunity for hearing, may  at  his
or   her   discretion   enter   into  an  agreed  settlement,
stipulation or consent order with a respondent in  accordance
with  the provisions of the Illinois Administrative Procedure
Act.  The provisions of the agreed settlement, stipulation or
consent order shall have the full  force  and  effect  of  an
order issued by the Secretary of State.
    (7)  Anything    in    this    Act    to   the   contrary
notwithstanding, whenever the Secretary of State finds that a
person is currently expelled from, refused membership  in  or
association  with,  or  limited in any material capacity by a
self-regulatory organization  registered  under  the  Federal
1934  Act  or the Federal 1974 Act because of a fraudulent or
deceptive  act  or  a  practice  in  violation  of  a   rule,
regulation,    or    standard   duly   promulgated   by   the
self-regulatory organization, the Secretary of State may,  at
his  or her discretion, enter a Summary Order of Prohibition,
which shall prohibit the offer or  sale  of  any  securities,
mineral  investment  contract,  or  mineral deferred delivery
contract by the person in this State.  The order  shall  take
effect  immediately upon its entry.  Immediately after taking
the action the Secretary of State shall deliver a copy of the
order  to  the  named  Respondent  by  personal  service   or
registered  mail or certified mail, return receipt requested.
A person who is the subject of an Order  of  Prohibition  may
petition  the  Secretary  of  State  for a hearing to present
evidence  of  rehabilitation  or  change   in   circumstances
justifying  the  amendment  or  termination  of  the Order of
Prohibition.
    G.  No administrative action  shall  be  brought  by  the
Secretary  of  State  for  relief  under  this Act or upon or
because of any of the matters for which relief is granted  by
this  Act  after the earlier to occur of (i) 3 years from the
date upon which the Secretary of State had  notice  of  facts
which  in  the exercise of reasonable diligence would lead to
actual knowledge of the alleged violation of the Act, or (ii)
5  years  from  the  date  on  which  the  alleged  violation
occurred.
    H.  The action of the  Secretary  of  State  in  denying,
suspending, or revoking the registration of a dealer, limited
Canadian  dealer,  salesperson,  or  investment  adviser,  or
investment  adviser representative, in prohibiting any person
from  engaging  in  the  business  of  offering  or   selling
securities   as   a   dealer,  limited  Canadian  dealer,  or
salesperson, in prohibiting or suspending the offer  or  sale
of  securities  by  any  person, in prohibiting a person from
acting as an investment adviser, federal  covered  investment
adviser,  or  investment  adviser representative, in denying,
suspending, or revoking the registration  of  securities,  in
prohibiting or suspending the offer or sale or proposed offer
or  sale of securities, in imposing any fine for violation of
this Act, or  in  issuing  any  order  shall  be  subject  to
judicial  review  in  the Circuit Court of any county in this
State.  The Administrative Review  Law  shall  apply  to  and
govern  every action for the judicial review of final actions
or decisions of the Secretary of State under this Act.
    I.  Notwithstanding any other provisions of this  Act  to
the  contrary,  whenever  it shall appear to the Secretary of
State that any person is engaged or about to  engage  in  any
acts  or  practices  which  constitute  or  will constitute a
violation of this Act or of any rule or regulation prescribed
under authority of this Act, the Secretary of  State  may  at
his or her discretion, through the Attorney General:
         (1)  file  a  complaint  and  apply  for a temporary
    restraining order  without  notice,  and  upon  a  proper
    showing the court may enter a temporary restraining order
    without bond, to enforce this Act; and
         (2)  file a complaint and apply for a preliminary or
    permanent injunction, and, after notice and a hearing and
    upon  a proper showing, the court may grant a preliminary
    or permanent injunction and may order  the  defendant  to
    make  an offer of rescission with respect to any sales or
    purchases of securities, mineral investment contracts, or
    mineral deferred delivery  contracts  determined  by  the
    court to be unlawful under this Act.
    The  court shall further have jurisdiction and authority,
in addition to the penalties and other remedies in  this  Act
provided,  to enter an order for the appointment of the court
or a person as a receiver, conservator, ancillary receiver or
ancillary conservator for the defendant  or  the  defendant's
assets  located  in  this  State,  or to require restitution,
damages or disgorgement of profits on behalf of the person or
persons injured by  the  act  or  practice  constituting  the
subject  matter  of  the action, and may assess costs against
the defendant for the use of the  State;  provided,  however,
that  the  civil  remedies of rescission and appointment of a
receiver,  conservator,  ancillary  receiver   or   ancillary
conservator  shall  not  be  available  against any person by
reason of the failure to file with the Secretary of State, or
on account of the contents of, any report  of  sale  provided
for  in  subsection  G  or  P  of Section 4, paragraph (2) of
subsection D of  Sections  5  and  6,  or  paragraph  (2)  of
subsection  F  of Section 7 of this Act. Appeals may be taken
as in other civil cases.
    J.  In no case shall the Secretary of State,  or  any  of
his or her employees or agents, in the administration of this
Act,  incur any official or personal liability by instituting
an injunction or other proceeding or by  denying,  suspending
or  revoking  the registration of a dealer or salesperson, or
by  denying,  suspending  or  revoking  the  registration  of
securities or prohibiting the offer or sale of securities, or
by suspending or prohibiting any  person  from  acting  as  a
dealer,  limited  Canadian dealer, salesperson, or investment
adviser,  or  investment  adviser  representative   or   from
offering or selling securities.
    K.  No  provision  of  this  Act  shall  be  construed to
require or to authorize the Secretary of State to require any
investment adviser  or  federal  covered  investment  adviser
engaged  in  rendering  investment  supervisory  services  to
disclose  the identity, investments, or affairs of any client
of the  investment  adviser  or  federal  covered  investment
adviser, except insofar as the disclosure may be necessary or
appropriate  in  a  particular  proceeding  or  investigation
having as its object the enforcement of this Act.
    L.  Whenever,  after  an  examination,  investigation  or
hearing,  the  Secretary of State deems it of public interest
or advantage, he or she may certify a record to  the  State's
Attorney  of  the  county  in  which  the  act complained of,
examined or investigated occurred.  The State's  Attorney  of
that  county within 90 days after receipt of the record shall
file a written statement at the Office of  the  Secretary  of
State,  which statement shall set forth the action taken upon
the record, or if no action has been taken  upon  the  record
that  fact,  together  with  the  reasons  therefor, shall be
stated.
    M.  The Secretary of State may initiate, take, pursue, or
prosecute any action authorized or permitted under Section 6d
of the Federal 1974 1936 Act.
    N. (1)  Notwithstanding any provision of this Act to  the
contrary,     to     encourage     uniform    interpretation,
administration, and enforcement of  the  provisions  of  this
Act, the Secretary of State may cooperate with the securities
agencies  or  administrators  of one or more states, Canadian
provinces or territories, or another country, the  Securities
and   Exchange  Commission,  the  Commodity  Futures  Trading
Commission, the Securities Investor  Protection  Corporation,
any  self-regulatory  organization,  and any governmental law
enforcement or regulatory agency.
    (2)  The cooperation authorized by paragraph (1) of  this
subsection includes, but is not limited to, the following:
         (a)  establishing  or  participating  in  a  central
    depository  or  depositories  for registration under this
    Act and for documents or records required under this Act;
         (b)  making a joint audit, inspection,  examination,
    or investigation;
         (c)  holding a joint administrative hearing;
         (d)  filing   and   prosecuting  a  joint  civil  or
    criminal proceeding;
         (e)  sharing and exchanging personnel;
         (f)  sharing   and   exchanging   information    and
    documents; or
         (g)  issuing any joint statement or policy.
(Source:  P.A.  88-279;  89-209,  eff.  1-1-96;  89-626, eff.
8-9-96.)

    (815 ILCS 5/11a) (from Ch. 121 1/2, par. 137.11a)
    Sec. 11a.  Fees.
    (1)  The Secretary of State shall by rule  or  regulation
impose  and  shall  collect reasonable fees necessary for the
administration of this Act including,  but  not  limited  to,
fees for the following purposes:
         (a)  Filing an application pursuant to paragraph (2)
    of subsection F of Section 4 of this Act;
         (b)  Examining an application and report pursuant to
    paragraph (2) of subsection F of Section 4 of this Act;
         (c)  Filing  a  report  pursuant  to subsection G of
    Section 4 of this  Act,  determined  in  accordance  with
    paragraph (4) of subsection G of Section 4 of this Act;
         (d)  Examining   an   offering   sheet  pursuant  to
    subsection P of Section 4 of this Act;
         (e)  Filing a report pursuant  to  subsection  P  of
    Section  4, determined in accordance with subsection P of
    Section 4 of this Act;
         (f)  Examining an application to register securities
    under subsection B of Section 5 of this Act;
         (g)  Examining an amended or supplemental prospectus
    filed   pursuant   to   the   undertaking   required   by
    sub-paragraph (i) of paragraph (2)  of  subsection  B  of
    Section 5 of this Act;
         (h)  Registering   or   renewing   registration   of
    securities under Section 5, determined in accordance with
    subsection C of Section 5 of this Act;
         (i)  Registering  securities in excess of the amount
    initially  registered,  determined  in  accordance   with
    paragraph (2) of subsection C of Section 5 of this Act;
         (j)  Failure  to  file  timely  an  application  for
    renewal under subsection E of Section 5 of this Act;
         (k)  Failure   to   file   timely  any  document  or
    information required under Section 5 of this Act;
         (l)  Examining  an  application  to  register   face
    amount   certificate  contracts  under  subsection  B  of
    Section 6 of this Act;
         (m)  Examining an amended or supplemental prospectus
    filed   pursuant   to   the   undertaking   required   by
    sub-paragraph (f) of paragraph (2)  of  subsection  B  of
    Section 6 of this Act;
         (n)  Registering  or  renewing  registration of face
    amount certificate contracts under Section 6 of this Act;
         (o)  Amending  a   registration   of   face   amount
    certificate contracts pursuant to subsection E of Section
    6 of this Act to add any additional series, type or class
    of contract;
         (p)  Failure  to  file  timely  an  application  for
    renewal under subsection F of Section 6 of this Act;
         (q)  Adding  to  or  withdrawing  from deposits with
    respect to face amount certificate contracts pursuant  to
    subsection  H  of Section 6, a transaction charge payable
    at the times and in the manner specified in subsection  H
    of  Section  6  (which  transaction  charge  shall  be in
    addition to the annual fee called for by subsection H  of
    Section 6 of this Act);
         (r)  Failure   to   file   timely  any  document  or
    information required under Section 6 of this Act;
         (s)  Examining an application to register investment
    fund shares under subsection B of Section 7 of this Act;
         (t)  Examining an amended or supplemental prospectus
    filed   pursuant   to   the   undertaking   required   by
    sub-paragraph (f) of paragraph (2)  of  subsection  B  of
    Section 7 of this Act;
         (u)  Registering   or   renewing   registration   of
    investment fund shares under Section 7 of this Act;
         (v)  Amending  a  registration  of  investment  fund
    shares  pursuant to subsection D of Section 7 of this Act
    to register an additional class or classes of  investment
    fund shares;
         (w)  Failure  to  file  timely  an  application  for
    renewal  under paragraph (l) of subsection G of Section 7
    of this Act;
         (x)  Examining  an  application   for   renewal   of
    registration  of  investment  fund shares under paragraph
    (2) of subsection G of Section 7 of this Act;
         (y)  Failure  to  file  timely   any   document   or
    information required under Section 7 of this Act;
         (z)  Filing   an  application  for  registration  or
    re-registration of a dealer or  limited  Canadian  dealer
    under  Section  8  of  this  Act  for each office in this
    State;
         (aa)  In connection  with  an  application  for  the
    registration  or  re-registration  of a salesperson under
    Section 8 or this Act, for the following purposes:
              (i)  filing an application; and
              (ii)  a Securities Audit and  Enforcement  Fund
         fee; and
              (iii)  a notification filing of federal covered
         investment advisers.
         (bb)  In  connection  with  an  application  for the
    registration or re-registration of an investment  adviser
    under Section 8 of this Act;, for the following purposes:
              (i)  filing an application;
              (ii)  for    reporting    investment    adviser
         representatives; and
              (iii)  a fee for each office in this State;
         (cc)  Failure   to   file  timely  any  document  or
    information required under Section 8 of this Act;
         (dd)  Filing a consent to service of  process  under
    Section 10 of this Act;
         (ee)  Issuing a certificate pursuant to subsection B
    of Section 15 of this Act;
         (ff)  Issuing   a   certified   copy   pursuant   to
    subsection C of Section 15 of this Act;
         (gg)  Issuing  a  non-binding  statement pursuant to
    Section 15a of this Act.
         (hh)  Filings by Notification under Section 2a;
         (ii)  Notification filing of federal  Regulation  D,
    Section 506 offering under the  Federal 1933 Act;
         (jj)  Notification    filing   of   securities   and
    closed-end investment company  securities;
         (kk)  Notification filing of face amount certificate
    contracts;
         (ll)  Notification  filing  of  open-end  investment
    company securities;
         (mm)  Filing a report pursuant to  subsection  D  of
    Section 4 of this Act;
         (nn)  In   connection   with   the   filing   of  an
    application for registration  or  re-registration  of  an
    investment  adviser  representative under subsection D of
    Section 8 of this Act;
    (2)  The Secretary of State may, by rule  or  regulation,
raise  or  lower  any  fee imposed by, and which he or she is
authorized by law to collect under, this Act.
(Source: P.A. 87-463.)

    (815 ILCS 5/12) (from Ch. 121 1/2, par. 137.12)
    Sec. 12.  Violation.  It shall  be  a  violation  of  the
provisions of this Act for any person:
    A.   To  offer  or sell any security except in accordance
with the provisions of this Act.
    B.  To deliver to a purchaser any security required to be
registered under Section 5, Section 6  or  Section  7  hereof
unless accompanied or preceded by a prospectus that meets the
requirements  of  the pertinent subsection of Section 5 or of
Section 6 or of Section 7.
    C.  To act as a dealer, salesperson or investment adviser
unless  registered  as  such,  where  such  registration   is
required, under the provisions of this Act.
    D.   To  fail  to  file  with  the Secretary of State any
application, report or document required to  be  filed  under
the  provisions of this Act or any rule or regulation made by
the Secretary of State pursuant to this Act  or  to  fail  to
comply  with the terms of any order of the Secretary of State
issued pursuant to Section 11 hereof.
    E.  To make, or cause to be made, (1) in any application,
report or document filed  under  this  Act  or  any  rule  or
regulation  made  by  the Secretary of State pursuant to this
Act, any statement which was false or misleading with respect
to any material fact or (2) any statement to the effect  that
a  security  (other  than  a  security issued by the State of
Illinois) has been in any way endorsed  or  approved  by  the
Secretary of State or the State of Illinois.
    F.  To  engage  in any transaction, practice or course of
business  in  connection  with  the  sale  or   purchase   of
securities  which  works  or  tends to work a fraud or deceit
upon the purchaser or seller thereof.
    G.  To obtain money  or  property  through  the  sale  of
securities  by  means  of  any untrue statement of a material
fact or any omission to state a material  fact  necessary  in
order  to  make  the  statements  made,  in  the light of the
circumstances under which they were made, not misleading.
    H.  To sign or circulate any  statement,  prospectus,  or
other paper or document required by any provision of this Act
knowing  or  having  reasonable  grounds to know any material
representation therein contained to be false or untrue.
    I.  To employ any device, scheme or artifice  to  defraud
in  connection  with  the  sale  or purchase of any security,
directly or indirectly.
    J.  When acting  as  an  investment  adviser,  investment
adviser   representative,   or   federal  covered  investment
adviser,  by  any  means  or  instrumentality,  directly   or
indirectly:
         (1)  To  employ  any  device,  scheme or artifice to
    defraud any client or prospective client;
         (2)  To engage  in  any  transaction,  practice,  or
    course  of  business  which operates as a fraud or deceit
    upon any client or prospective client; or
         (3)  To engage in any act, practice,  or  course  of
    business  which is fraudulent, deceptive or manipulative.
    The Secretary of State shall for  the  purposes  of  this
    paragraph  (3),  by  rules  and  regulations,  define and
    prescribe means reasonably designed to prevent such acts,
    practices, and courses of  business  as  are  fraudulent,
    deceptive, or manipulative.
    K.  When  offering  or  selling  any  mineral  investment
contract or mineral deferred delivery contract:
         (1)  To  employ  any  device, scheme, or artifice to
    defraud any customer, prospective customer, or offeree;
         (2)  To engage  in  any  transaction,  practice,  or
    course  of  business  that  operates as a fraud or deceit
    upon any customer, prospective customer, or offeree; or
         (3)  To engage in any act, practice,  or  course  of
    business  that is fraudulent, deceptive, or manipulative.
    The Secretary of State shall for  the  purposes  of  this
    paragraph  (3),  by  rules  and  regulations,  define and
    prescribe means  reasonably  designed  to  prevent  acts,
    practices,  and  courses  of  business as are fraudulent,
    deceptive, or manipulative.
(Source: P.A. 87-463.)

    (815 ILCS 5/13) (from Ch. 121 1/2, par. 137.13)
    Sec. 13.  Private and other civil remedies; securities.
    A.  Every sale of a security made  in  violation  of  the
provisions  of  this Act shall be voidable at the election of
the purchaser exercised as provided in subsection B  of  this
Section;  and  the  issuer,  controlling person, underwriter,
dealer or other person by or on behalf of whom said sale  was
made,  and  each underwriter, dealer or salesperson who shall
have participated or aided in any way in making the sale, and
in case the issuer, controlling person, underwriter or dealer
is   a   corporation   or   unincorporated   association   or
organization, each of its officers and directors (or  persons
performing  similar functions) who shall have participated or
aided in making the sale,  shall  be  jointly  and  severally
liable to the purchaser as follows:
         (1)  for   the   full  amount  paid,  together  with
    interest from the date of payment for the securities sold
    at the rate of the interest or dividend stipulated in the
    securities sold (or if no rate is stipulated, then at the
    rate of 10% per annum) less any income or  other  amounts
    received  by  the purchaser on the securities, upon offer
    to tender to the seller  or  tender  into  court  of  the
    securities   sold  or,  where  the  securities  were  not
    received, of any contract made in respect of the sale; or
         (2)  if the purchaser no longer owns the securities,
    for  the  amounts  set  forth  in  clause  (1)  of   this
    subsection  A  less any amounts received by the purchaser
    for or on account of the disposition of the securities.
    If the purchaser shall prevail in any action  brought  to
enforce  any of the remedies provided in this subsection, the
court shall assess costs together with  the  reasonable  fees
and   expenses   of  the  purchaser's  attorney  against  the
defendant. Any provision of this subsection A to the contrary
notwithstanding,  the  civil  remedies   provided   in   this
subsection  A  shall  not  be available against any person by
reason of the failure to file with the Secretary of State, or
on account of the content of, any report of sale provided for
in  subsection  G  or  P  of  Section  4,  paragraph  (2)  of
subsection D of  Sections  5  and  6,  or  paragraph  (2)  of
subsection F of Section 7 of this Act.
    B.  Notice  of  any election provided for in subsection A
of this Section shall be given  by  the  purchaser  within  6
months after the purchaser shall have knowledge that the sale
of  the  securities to him or her is voidable, to each person
from whom recovery will be  sought,  by  registered  mail  or
certified  mail,  return  receipt requested, addressed to the
person to be notified at his or her last known  address  with
proper postage affixed, or by personal service.
    C.  No  purchaser  shall  have  any right or remedy under
this Section who shall fail, within 15 days from the date  of
receipt  thereof,  to  accept  an  offer  to  repurchase  the
securities  purchased  by him or her for a price equal to the
full amount paid therefor plus interest thereon and less  any
income  thereon as set forth in subsection A of this Section.
Every offer of repurchase provided  for  in  this  subsection
shall  be  in writing, shall be delivered to the purchaser or
sent by  registered mail or certified  mail,  return  receipt
requested,  addressed  to  the  purchaser  at his or her last
known address, and shall offer to repurchase  the  securities
sold  for a price equal to the full amount paid therefor plus
interest thereon and less any income thereon as set forth  in
subsection  A  of this Section.  Such offer shall continue in
force for 15 days from the date on which it was  received  by
the  purchaser,  shall  advise  the  purchaser  of his or her
rights and the period of time limited for acceptance thereof,
and shall contain such further information, if  any,  as  the
Secretary  of  State  may  prescribe.   Any  agreement not to
accept or refusing or waiving any such offer made  during  or
prior to said 15 days shall be void.
    D.  No  action  shall  be  brought  for relief under this
Section or upon or because of any of the  matters  for  which
relief is granted by this Section after 3 years from the date
of  sale;  provided,  that  if  the party bringing the action
neither knew nor in  the  exercise  of  reasonable  diligence
should  have  known of any alleged violation of subsection E,
F, G, H, I or J of Section 12 of this Act which is the  basis
for the action, the 3 year period provided herein shall begin
to run upon the earlier of:
         (1)  the  date  upon  which  the  party bringing the
    action has actual knowledge of the  alleged violation  of
    this Act; or
         (2)  the  date  upon  which  the  party bringing the
    action has notice of  facts  which  in  the  exercise  of
    reasonable  diligence  would  lead to actual knowledge of
    the alleged violation of this Act; but in no event  shall
    the  period  of  limitation  so  extended be more  than 2
    years  beyond  the  expiration  of  the  3  year   period
    otherwise applicable.
    E.  The  term  purchaser  as  used  in this Section shall
include the personal representative or representatives of the
purchaser.
    F.  Anything in this Act to the contrary  notwithstanding
and in addition to all other remedies, the Secretary of State
through  the  Office  of  the  Attorney  General may bring an
action in any circuit court of the State of Illinois  in  the
name  and  on  behalf  of  the  State of Illinois against any
person or persons participating in or about to participate in
a violation of this Act  to  enjoin  those  persons  who  are
continuing  or  doing  any act in violation of this Act or to
enforce compliance with this Act.  Upon a proper showing  the
court  may  grant  a  permanent  or preliminary injunction or
temporary restraining order without bond, and may  order  the
defendant  to  make  an  offer  of rescission of any sales or
purchases  of  securities  determined  by  the  court  to  be
unlawful  under  this  Act.  The  court  shall  further  have
jurisdiction  and  authority,  in  addition  to   the   other
penalties  and  remedies  in  this  Act  provided,  to act or
appoint another person as a receiver, conservator,  ancillary
receiver  or  ancillary  conservator for the defendant or the
defendant's assets located in this State and may assess costs
against the defendant for the use of the State.
    G. (1)  Whenever any person has engaged or  is  about  to
engage  in  any  act  or practice constituting a violation of
this Act, any party in interest may bring an  action  in  the
circuit  court  of  the county in which the party in interest
resides, or where the person has his, her  or  its  principal
office  or  registered  office  or  where  any  part  of  the
transaction  has  or  will  take place, to enjoin that person
from continuing or doing  any  act  in  violation  of  or  to
enforce compliance with this Act.  Upon a proper showing, the
court  shall  grant  a permanent or preliminary injunction or
temporary restraining order or rescission  of  any  sales  or
purchases  of securities determined to be unlawful under this
Act, and may assess costs  of  the  proceedings  against  the
defendant.
    (2)  A  copy  of  the  complaint shall be served upon the
Secretary of State within one business day of filing  in  the
form  and manner prescribed by the Secretary of State by rule
or regulation; provided, that the failure to comply with this
provision shall  not  invalidate  the  action  which  is  the
subject of the complaint.
    H.  Any  provision  of  this  Section  13 to the contrary
notwithstanding,  neither  the  civil  remedies  provided  in
subsection  A  of  this  Section  13  nor  the  remedies   of
rescission   and  appointment  of  a  receiver,  conservator,
ancillary  receiver  or  ancillary  conservator  provided  in
subsection I of Section 11 of this Act and in  subsections  F
and  G  of  this  Section  13 of this Act nor the remedies of
restitution, damages or disgorgement of profits  provided  in
subsection  I  of  Section  11 of this Act shall be available
against any person by reason of the failure to file with  the
Secretary  of  State,  or  on account of the contents of, any
notice filing under Section 2a of this Act or subsection  C-5
of  Section  8 of this Act or any report of sale provided for
in  subsection  G  or  P  of  Section  4,  paragraph  (2)  of
subsection D of  Sections  5  and  6,  or  paragraph  (2)  of
subsection F of Section 7 of this Act.
(Source: P.A. 89-209, eff. 1-1-96; 89-626, eff. 8-9-96.)

    Section  10.   The  Illinois  Loan Brokers Act of 1995 is
amended by changing  Sections  15-15,  15-30,  15-35,  15-40,
15-45,  15-55,  15-60,  and  15-80,  and  by  adding Sections
15-5.03, 15-30.5, and 15-100 as follows:

    (815 ILCS 175/15-5.03 new)
    Sec. 15-5.03. Borrower.  "Borrower" means any person  who
has signed an  agreement with a loan broker that provides for
the services described in Section 15-5.15, for compensation.
    (815 ILCS 175/15-15)
    Sec.  15-15.   Application  for  registration,  contents,
bond,  issuance,  effective date, and consent to Secretary of
State as process agent.
    (a)  In order to be registered  under  this  Act  a  loan
broker  shall  file  an application for registration with the
Secretary of State.  The application for  registration  shall
contain:
         (1)  The    disclosure   document   required   under
    subsection (b) of Section 15-30 of this Act and the  form
    of  disclosure  statement  proposed to be used under item
    (1) of subsection (b) of Section 15-30 of this Act.
         (2)  Consent to service of process under  subsection
    (e) of this Section;
         (3)  Evidence of the bond required in subsection (b)
    of this Section;
         (4)  A  fee in the amount as specified in subsection
    (a) of Section 15-25  of  this  Act,  and  shall  not  be
    returnable in any event.
    (b)  A  loan  broker  who  engages  in any loan brokerage
transactions   where   the   loan   is   subject    to    the
Truth-in-Lending Act must maintain a bond satisfactory to the
Secretary  of  State in the amount of $25,000, which shall be
in favor of the State.
    (c)  Whenever  the  provisions  of  this  Law  have  been
complied  with,  the  Secretary  of  State  shall   issue   a
certificate of registration to the applicant, authorizing the
applicant to engage in the business of loan brokering.
    (d)  An application for registration becomes effective 30
days  after it is filed, unless a certificate an order of the
Secretary of State establishes  an  earlier  effective  date.
Every  registration  is effective until January 1 of the year
after it goes into effect.
    (e)  Every applicant for registration shall file with the
Secretary of State, in such form as the  Secretary  of  State
may  prescribe  by rule or regulation, an irrevocable consent
appointing the Secretary of State to be the applicant's agent
to receive service of any lawful process in  any  noncriminal
suit, action or proceeding against the applicant arising from
the violation of any provision of this Act.
    (f)  An  application  shall  be considered filed when all
required documentation and fees are received by the Office of
the Secretary of State.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-30)
    Sec. 15-30.  Disclosure document to be provided  by  loan
broker.
    (a)  At  least  7 days before the time any person signs a
contract for the services of a loan broker, or at the time  7
days  before  the loan broker receives any consideration upon
the contract, whichever occurs first, the  loan  broker  must
provide  to  the  contracting  person  a  written  disclosure
document  that meets the requirements set forth in subsection
(b) of this Section.
    (b)  A written disclosure  statement  shall  contain  the
following information:
         (1)  A disclosure statement which shall be the cover
    sheet and shall be entitled in at least 10-point boldface
    capital  letters  "DISCLOSURES  REQUIRED  BY LAW".  Under
    this  title  shall  appear  the  statement  in  at  least
    10-point type  that  "THE  SECRETARY  OF  STATE  HAS  NOT
    REVIEWED  AND  DOES  NOT  APPROVE,  RECOMMEND, ENDORSE OR
    SPONSOR ANY LOAN  BROKERAGE  CONTRACT.   THE  INFORMATION
    CONTAINED IN THIS DISCLOSURE HAS NOT BEEN VERIFIED BY THE
    SECRETARY  OF  STATE.  IF  YOU  HAVE ANY QUESTIONS SEE AN
    ATTORNEY  BEFORE  YOU  SIGN  A  CONTRACT  OR  AGREEMENT."
    Nothing except the title and the required statement shall

    appear on the cover sheet.
         (2)  The  name  and  form  of  organization  of  the
    broker, the names under which the  broker  has  done,  is
    doing,  or  intends  to  do business, and the name of any
    parent organization or affiliate of the broker.
         (3)  The names, addresses and titles of the broker's
    officers, directors, trustees, general partners,  general
    managers,  principal  executives  and  any  other  person
    performing similar duties.
         (4)  The  length  of  time  the broker has conducted
    business as a loan broker.
         (5)  A full and detailed description of  the  actual
    services  that  the loan broker undertakes to perform for
    the prospective borrower.
         (6)  A specific statement of the circumstances under
    which the broker will be entitled  to  obtain  or  retain
    consideration   from  the  party  with  whom  the  broker
    contracts.
         (7)  Any other information the  Secretary  of  State
    may require by rule or regulation.
    (b-5)  The  information  in subdivisions b(5) and b(6) of
this Section need not be set out on the  disclosure  document
if the loan broker's contract is provided with the disclosure
document.
    (c)  A  loan  broker  shall amend the disclosure document
required by subsection (b) of this Section whenever necessary
to  prevent  it  from  containing  any  false  or  misleading
statement of a material fact and shall deliver a copy of  the
amended  disclosure  document to the Secretary of State on or
before the date of the amendment.
    (d)  A loan  broker  shall  deliver  to  any  person  who
proposes   to  become  obligated  for  a  loan  an  estimated
disclosure document if the creditor is would be  required  to
deliver  to  the  person  a  disclosure  document  under  the
Truth-in-Lending   Law,   15   U.S.C.   1601-1667e,  for  the
transaction.  The estimated disclosure document shall:
         (1)  Be delivered to the person  before  the  person
    becomes contractually obligated on the loan; or
         (2)  Be  delivered  or  placed  in  the  mail to the
    person not later than 3 business days  after  the  person
    enters  into  an agreement with the loan broker whichever
    occurs first.  The  estimated  disclosure  document  must
    contain  all  the information and be in the form required
    by the Truth-in-Lending Law, 15  U.S.C.  1601-1667e,  and
    regulations   under   that   Law.   However,  the  annual
    percentage rate, finance charge, total  of  payments  and
    other matters required under the Truth-in-Lending Law, 15
    U.S.C.  1601-1667e,  shall  be  adjusted  to  reflect the
    amount of all fees and charges of the  loan  broker  that
    the  creditor  could exclude from an estimated disclosure
    document.  The estimated disclosure document  must  state
    at  the top in at least 10 point type:  "THE FOLLOWING IS
    AN  ESTIMATED  DISCLOSURE  DOCUMENT  SHOWING  YOUR   LOAN
    TRANSACTION  AS IF THE FEES AND CHARGES YOU ARE SCHEDULED
    TO PAY US WERE CHARGED TO YOU DIRECTLY BY THE  CREDITOR."
    After  the  estimated disclosure document is delivered to
    any person, the loan broker shall deliver to  the  person
    an  additional  statement  redisclosing  all items if the
    actual annual percentage rate will vary from  the  annual
    percentage  rate  contained  in  the  original  estimated
    disclosure  document  by  more than 0.125%.  Any required
    additional disclosure  document  shall  be  delivered  or
    placed  in the mail before consummation of the loan or no
    later than 3 days from when the information that requires
    redisclosure becomes available, whichever occurs first.
    (e)  If none of the exemptions in Section 10-30.5  apply,
then for a period of 7 days after the time the borrower signs
a  contract  for  the  services,  the borrower shall have the
right to rescind the contract  for  services  with  the  loan
broker  and receive all fees actually paid thereon; provided,
however, that the client who has rescinded the  contract  may
not   use   or   disclose   any  confidential  or  non-public
information provided to the client by the loan broker.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-30.5 new)
    Sec. 15-30.5.   Exemption  from  disclosure  requirement.
The  disclosure  requirement of Section 15-30 shall not apply
where the borrower to be represented by the loan broker:
    (a)  Is a  natural  person  who  has,  or  is  reasonably
believed  by  the  loan  broker  relying upon this Section to
have, a net worth or  joint  net  worth  with  that  person's
spouse  in  excess of $1,000,000 at the time of the execution
of the loan broker agreement;
    (b)  Is a  natural  person  who  has,  or  is  reasonably
believed  by  the  loan  broker  relying upon this Section to
have, an income or joint income with that person's spouse  in
excess of $200,000 in the most recent applicable fiscal year;
    (c)  Is  a person who is not a natural person who has, or
is reasonably believed by the loan broker relying  upon  this
Section  to  have,  total assets having a value of $1,000,000
and has been in existence for at least nine  months  and  was
not formed for the purposes of the transaction;
    (d)  Is  a person who is not a natural person who has, or
is reasonably believed by the loan broker relying  upon  this
Section  to  have, gross revenue in excess of $200,000 in the
most recent applicable fiscal year and has been in  existence
for  at least nine months and was not formed for the purposes
of this transaction;
    (e)  Is a person who is not a natural person in which  at
least  90%  of the equity interest is owned, or is reasonably
believed by the loan broker relying upon this Section  to  be
owned, by persons who meet any of the tests set forth in this
subsection; or
    (f)  Has   had  an  attorney  review  the  loan  broker's
contract.
A loan broker  may  rely  upon  a  statement  signed  by  the
borrower   that  such  borrower  is  any  of  the  categories
enumerated above.

    (815 ILCS 175/15-35)
    Sec.  15-35.   Contracts  required  to  be  in   writing;
retention  of  copy  by  borrowing party.  To be enforceable,
every contract for the services of a loan broker shall be  in
writing and signed by all contracting parties.  The borrowing
party  and  loan  broker  shall  retain  a copy of the signed
contract at the time it is signed.   The  loan  broker  shall
retain a copy of the contract for a period of 6 years.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-40)
    Sec.   15-40.    Denial,   suspension  or  revocation  of
registration; orders and hearing.
    (a)  The Secretary of State may deny, suspend  or  revoke
the registration of a loan broker if the loan broker:
         (1)  Fails  to  maintain  the  bond  required  under
    subsection (b) of Section 15-15 of this Act.
         (2)  Is insolvent.
         (3)  Has violated any provision of this Act.
         (4)  Has  filed  with  the  Secretary  of  State any
    document or statement containing any false representation
    of a material fact or omitting to state a material fact.
         (5)  Has been convicted, within 10 years before  the
    date  of the application, renewal or review, of any crime
    involving fraud or deceit.
    (b)  The Secretary of State may not enter a  final  order
denying,  suspending  or  revoking the registration of a loan
broker  without  prior  notice  to  all  interested  parties,
opportunity for a hearing and written findings  of  fact  and
conclusions  of  law.   The Secretary of State may by summary
order deny, suspend or revoke a  registration  pending  final
determination of any proceeding under this Section.  Upon the
entry  of  a  summary  order,  the  Secretary  of State shall
promptly notify all  interested  parties  that  it  has  been
entered,  of the reasons for the summary order and, that upon
receipt by the Secretary of State of a written request from a
party, the matter will be set  for  hearing  which  shall  be
conducted  in  accordance with the provisions of the Illinois
Administrative Procedure Act.  If  no  hearing  is  requested
within  30 days of the entry of the order and none is ordered
by the Secretary of State, the order remains in effect  until
it  is  modified  vacated,  or superseded by a final order. A
final order may be entered by the Secretary of State  against
any  party  who  fails to request a hearing within 30 days of
the entry of the summary order or vacated by the Secretary of
State.  If a hearing is requested or ordered,  the  Secretary
of  State,  after notice of the hearing has been given to all
interested persons and the hearing has been held, may  modify
or  vacate the order, or extend it until final determination,
or issue a final order.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-45)
    Sec. 15-45.  Powers  of  Secretary  of  State;  privilege
against self-incrimination; admissibility into evidence.
    (a)  The Secretary of State may do the following:
         (1)  Adopt  rules  and regulations to implement this
    Act.
         (2)  Make investigations and examinations:
              (A)  In connection  with  any  application  for
         registration  of any loan broker or any registration
         already granted; or
              (B)  Whenever it appears to  the  Secretary  of
         State, upon the basis of a complaint or information,
         that reasonable grounds exist for the belief that an
         investigation   or   examination   is  necessary  or
         advisable for the more complete  protection  of  the
         interests of the public.
         (3)  Charge as costs of investigation or examination
    all  reasonable  expenses,  including a per diem prorated
    upon the salary of any employee and actual traveling  and
    hotel  expenses.   All reasonable expenses are to be paid
    by  the  party  or   parties   under   investigation   or
    examination.
         (4)  Issue  notices  and orders, including cease and
    desist notices and orders, after making an  investigation
    or  examination  under item (2) of subsection (a) of this
    Section.  The Secretary of State may also bring an action
    to prohibit  a  person  from  violating  this  Act.   The
    Secretary  of State shall notify the person that an order
    or notice has been issued, the reasons for it and that  a
    hearing  will be set in accordance with the provisions of
    the  Illinois  Administrative  Procedure  Act  after  the
    Secretary of State receives a written  request  from  the
    person requesting a hearing.
         (5)  Sign   all   orders,  official  certifications,
    documents or papers issued under this Law or delegate the
    authority to sign any  of  those  items  to  his  or  her
    designee.
         (6)  Hold and conduct hearings.
         (7)  Hear evidence.
         (8)  Conduct  inquiries  with  or  without hearings.
    Inquiries shall include oral  and  written  requests  for
    information.  A  failure  to respond to a written request
    for information may be deemed  a violation  of  this  Act
    and  the Secretary of State may issue notices and orders,
    including cease and desist notices  and  orders,  against
    the violators.
         (9)  Receive   reports  of  investigators  or  other
    officers or employees of the State  of  Illinois  or  any
    municipal  corporation or governmental subdivision within
    the State.
         (10)  Administer  oaths  or   cause   them   to   be
    administered.
         (11)  Subpoena  witnesses  and compel them to attend
    and testify.
         (12)  Compel the production of  books,  records  and
    other documents.
         (13)  Order  depositions  to be taken of any witness
    residing within or without the  State.   The  depositions
    shall  be  taken  in  the  manner  prescribed  by law for
    depositions in civil actions and made returnable  to  the
    Secretary of State.
    (b)  If  any  person  refuses  to  obey a subpoena issued
under this Act, the Secretary of State may  make  application
to any court of competent jurisdiction to order the person to
appear  before the Secretary of State and produce documentary
evidence or give evidence as directed in the  subpoena.   The
failure  to  obey  the order of the court shall be subject to
punishment by the court as contempt of court.
    (c)  No person shall be excused  from  complying  with  a
subpoena  on  the  ground  that  the  testimony  or  evidence
required  may  tend  to incriminate the person or subject the
person to a penalty or  forfeiture.   No  individual  may  be
prosecuted  or subject to any penalty or forfeiture for or on
account  of  any  transaction,  matter  or  thing  which  the
individual is compelled to testify or produce evidence, after
claiming the privilege against self-incrimination.   However,
the  individual  so  testifying  shall  not  be  exempt  from
prosecution  and  punishment  for  perjury  committed  in  so
testifying.
    (d)  In any prosecution, action, suit or proceeding based
upon  or  arising out of this Act, the Secretary of State may
sign a certificate showing compliance or non-compliance  with
this  Act  by  any  loan broker.  This shall constitute prima
facie evidence of compliance or non-compliance with this  Act
and shall be admissible in evidence in any court.
    (e)  Whenever  it  shall appear to the Secretary of State
that any person is engaged or about to engage in any acts  or
practices  which constitute or will constitute a violation of
this Act, or of  any  rule  or  regulation  prescribed  under
authority  of  this Act, the Secretary of State may at his or
her discretion, through the Attorney General:
         (1)  File a complaint  and  apply  for  a  temporary
    restraining  order  without  notice,  and  upon  a proper
    showing the court may enter a temporary restraining order
    without a bond, to enforce this Act.
         (2)  File a complaint and apply for a preliminary or
    permanent injunction, and, after notice and  hearing  and
    upon  a proper showing, the court may grant a preliminary
    or permanent injunction and may order  the  defendant  to
    make  an offer of rescission with respect to any contract
    for loan brokerage services determined by the court to be
    unlawful under this Act.
    (f)  The  court  shall  further  have  jurisdiction   and
authority, in addition to the penalties and other remedies in
this  Act  provided, to enter an order for the appointment of
the court or a person as a receiver,  conservator,  ancillary
receiver  or  ancillary  conservator for the defendant or the
defendant's assets located  in  this  State,  or  to  require
restitution,  damages or disgorgement of profits on behalf of
the  person  or  persons  injured  by  the  act  or  practice
constituting the subject matter of the action, and may assess
costs and attorneys fees against the defendant for the use of
the State.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-55)
    Sec.    15-55.    Violations;    administrative    fines;
enforcement.
    (a)  If the Secretary of State determines,  after  notice
and  opportunity  for  a  hearing, that a person has violated
this Act, the Secretary of State may in addition to all other
remedies, impose an administrative fine upon the person in an
amount not to exceed $10,000 for each violation.
    (b)  The Secretary of State may bring an  action  in  the
circuit  court  of Sangamon or Cook county to enforce payment
of fines imposed under this Section.
    (c)  If the Secretary of State shall find that any person
has violated any provision of  this  Act,  the  Secretary  of
State  may,  by  written  order  temporarily  or  permanently
prohibit or suspend such person from acting as a loan broker.
    (d)  If the Secretary of State shall find that any person
is acting or has acted as a loan broker as defined in Section
15-5.15  15-5.10 of this Act, without prior thereto or at the
time  thereof   having   complied   with   the   registration
requirements  of  this  Act,  the  Secretary  of State may by
written order prohibit such person  from  acting  as  a  loan
broker in this State.
    (e)  Anything    herein   contained   to   the   contrary
notwithstanding,  the  Secretary  of  State  may  temporarily
prohibit or suspend, for a maximum period of 90 days,  by  an
order  effective immediately, any individual or entity acting
as a loan broker or engaging in the registration  of  a  loan
broker  or the business of providing loan brokerage services,
without notice and prior hearing, if the Secretary  of  State
shall  in  his  or her opinion, based upon credible evidence,
deems it necessary to prevent an imminent violation  of  this
Act  or  to  prevent losses to clients which the Secretary of
State reasonably believes will occur as a result of  a  prior
violation  of  this  Act.  Immediately  after  taking  action
without such notice and hearing, the Secretary of State shall
deliver a copy of the temporary order to the respondent named
therein  by  personal service or registered mail or certified
mail, return receipt requested.  The  temporary  order  shall
set  forth  the  grounds for the action and shall advise that
the respondent may request a hearing to be held  as  soon  as
reasonably  practicable,  that the request for a hearing will
not stop the effectiveness of the temporary  order  and  that
respondent's  failure  to  request  a  hearing within 30 days
after the date of the entry of  the  temporary  order,  shall
constitute  an  admission  of  any  facts alleged therein and
shall constitute sufficient basis to make the temporary order
final.
    (f)  The Secretary of State may issue a  temporary  order
suspending  or delaying the effectiveness of any registration
of a loan broker under this Act subsequent to  and  upon  the
basis  of  the  issuance  of  any stop, suspension or similar
order by any agency of  the  United  States  regulating  loan
brokers  or  any  state or federal courts with respect to the
person who is the subject of the registration under this Act,
and such order shall become effective as of the date and time
of effectiveness of the agency or court order  and  shall  be
vacated automatically at such time as the order of the agency
or court order is no longer in effect.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-60)
    Sec.  15-60.  Violations;  liability  of  loan  broker to
damaged parties; rights of prospective  borrower.   A  person
who  violates this Act, in connection with a contract for the
services of a loan broker, is liable to any person damaged by
the violation, for the amount of the actual damages suffered,
interest at the legal rate, and attorney  fees.   If  a  loan
broker  violates  any  provision  of  this Act, in connection
with a contract for loan brokering services, the contract  is
void,  and  the  prospective  borrower is entitled to receive
from the loan broker all sums paid to the loan  broker,  with
interest  and  any  attorney's  fee  required to enforce this
Section. Any  provision  of  this  Section  to  the  contrary
notwithstanding, the civil remedies of this Section shall not
be  available  against  any  person  by  reason of failure to
comply with the requirements of Section 15-75 of this Act.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-80)
    Sec. 15-80. Persons exempt from  registration  and  other
duties; burden of proof thereof.
    (a)  The   following   persons   are   exempt   from  the
registration and bonding requirements of this Act:
         (1)  Any attorney while engaging in the practice  of
    law.
         (2)  Any  certified  public  accountant  licensed to
    practice in Illinois, while  engaged  in  practice  as  a
    certified public accountant and whose service in relation
    to  procurement  of  a  loan  is incidental to his or her
    practice.
         (3)  Any person licensed to engage in business as  a
    real  estate  broker  or  salesperson  in  Illinois while
    rendering  services  in  the   ordinary   course   of   a
    transaction in which a license as a real estate broker or
    salesperson is required.
         (4)  Any  dealer,  salesperson or investment adviser
    registered under the Illinois Securities Law of 1953,  or
    an  investment advisor, representative, or any person who
    is regularly engaged  in  the  business  of  offering  or
    selling   securities  in  a  transaction  exempted  under
    subsection C, H, M, R, Q,  or  S  of  Section  4  of  the
    Illinois  Securities  Law  of  1953  or  subsection  G of
    Section 4 of the Illinois Securities Law of 1953 provided
    that  such  person  is  registered  under   the   federal
    securities law.
         (4.1)  An associated person described in subdivision
    (h)(2) of Section 15 of the Federal 1934 Act.
         (4.2)  An  investment adviser registered pursuant to
    Section 203 of the Federal 1940 Investment Advisors Act.
         (4.3)  A person described in subdivision (a)(11)  of
    Section 202 of the Federal 1940 Investment Advisors Act.
         (5)  Any  person  whose  fee is wholly contingent on
    the successful procurement of a loan from a  third  party
    and  to  whom  no fee, other than a bona fide third party
    fee, is paid before the procurement.
         (6)  Any person who is a creditor, or proposed to be
    a creditor, for any loan.
         (7)  (Blank).   Any  person  authorized  to  conduct
    business under the Residential Mortgage  License  Act  of
    1987.
         (8)  Any  person  regulated  by  the  Department  of
    Financial  Institutions  or  the Office of Banks and Real
    Estate, or any insurance producer or  company  authorized
    to  do business in this State, any dealer, salesperson or
    investment  adviser   registered   under   the   Illinois
    Securities   Law  of  1953,  or  any  investment  adviser
    representative, or any person who is regularly engaged in
    the business of  offering  or  selling  securities  in  a
    transaction exempted under subsection C, H, M, R, Q, or S
    of  Section  4  of the Illinois Securities Law of 1953 or
    subsection G of Section 4 of the Illinois Securities  Law
    of 1953 provided that such person is registered under the
    federal securities law.
    (b)  As used in this Section, "bona fide third party fee"
includes fees for:
         (1)  Credit reports, appraisals and investigations.
         (2)  If  the loan is to be secured by real property,
    title  examinations,  an   abstract   of   title,   title
    insurance, a property survey and similar purposes.
    (c)  As  used in this Section, "successful procurement of
a loan" means that a binding commitment from  a  creditor  to
advance money has been received and accepted by the borrower.
    (d)  The  burden  of  proof  of any exemption provided in
this Act shall be on the party claiming the exemption.
(Source: P.A. 89-209, eff. 1-1-96; 89-508, eff. 7-3-96.)

    (815 ILCS 175/15-100 new)
    Sec. 15-100.  Immunity for official  acts.   In  no  case
shall  the  Secretary of State or any of his or her employees
or agents, in the  administration  of  this  Act,  incur  any
official  or  personal  liability  while acting in accordance
with their official duties or authority.

    Section 15.  The Illinois Business Brokers Act of 1995 is
amended by changing Sections 10-5.10,  10-10,  10-25,  10-30,
10-35,  10-40,  10-45, 10-55, 10-60, 10-75, 10-80, and 10-85,
and by adding Sections 10-5.16,  10-5.17,  10-5.18,  10-5.25,
10-5.30,  10-30.5,  10-95, 10-100, 10-105, 10-110, and 10-115
as follows:

    (815 ILCS 307/10-5.10)
    Sec. 10-5.10.  Business Broker.  "Business Broker"  means
any person who is required to register under Section 10-10 of
this  Act  and,  in  return  for  a fee, commission, or other
compensation:
         (1)  promises to procure a business for  any  person
    or  assists  any  person in procuring a business from any
    third person;
         (2)  negotiates,  offers,  attempts  or  agrees   to
    negotiate the sale, exchange, or purchase of a business;
         (3)  buys, sells, offers to buy or sell or otherwise
    deals in options on businesses;
         (4)  advertises  or represents himself as a business
    broker;
         (5)  assists  or  directs  in   the   procuring   of
    prospects  intended  to  result in the purchase, sale, or
    exchange of a business;
         (6)  offers, promotes, lists  or  agrees  to  offer,
    promote, or list a business for sale, lease, or exchange.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-5.16 new)
    Sec.  10-5.16.  Client. "Client" means any person who has
signed an agreement  with a business broker that provides for
the services described in Section 10-5.10 for compensation.

    (815 ILCS 307/10-5.17 new)
    Sec.  10-5.17.   Insolvency.   "Insolvency"   means   the
rendering  of a business broker financially unable to perform
any contractual obligations of its business brokering duties.

    (815 ILCS 307/10-5.18 new)
    Sec. 10-5.18. Material. "Material", when used to  qualify
a  requirement  for  the  furnishing of information as to any
subject, limits the information required to those matters  as
to  which there is a substantial likelihood that a reasonable
person would consider important.

    (815 ILCS 307/10-5.25 new)
    Sec. 10-5.25. Purchaser. "Purchaser" means a  person  who
enters  into a contract or agreement for the acquisition of a
business or a person to whom an offer to sell a  business  is
directed.

    (815 ILCS 307/10-5.30 new)
    Sec.  10-5.30.  Seller. "Seller" means a person who sells
or offers to sell a business or any  agent  who  directly  or
indirectly  acts  on  behalf  of  such  person, except that a
person acting as a business broker is neither  a  seller  nor
purchaser.

    (815 ILCS 307/10-10)
    Sec.  10-10.   Registration  of  business brokers.  Every
person engaging in the business of business  brokering  shall
be  registered  with  the  Office  of  the Secretary of State
pursuant to the provisions of  this  Act.  Persons  employed,
contracted  by, or working on behalf of other persons who are
registered under  this  Act  need  not  register  separately;
provided  that  such  non-registered  employed  or contracted
persons working for a business broker have been identified in
the registration submitted and proper fees, if any, are paid.
    (a)  In order to be registered under this Act, a business
broker shall file an application for  registration  with  the
Secretary  of  State.  The application for registration shall
contain, to the extent reasonably available to the applicant:
         (1)  The   disclosure   document   required    under
    subsection  (b) of Section 10-30 of this Act and the form
    of  disclosure  statement  proposed  to  be  used   under
    subsection (b)(1) of Section 10-30 of this Act.
         (2)  Consent  to service of process under subsection
    (d) of this Section;
         (3)  A fee in the amount as provided  for  specified
    in subsection (a) of Section 10-25 of this Act, and shall
    not be returnable in any event; and
         (4)  Any  other  information deemed necessary by the
    Secretary of State as prescribed by rule or regulation.
    (b)  Whenever  the  provisions  of  this  Act  have  been
complied  with,  the  Secretary  of  State  shall   issue   a
certificate of registration to the applicant, authorizing the
applicant to engage in the business of business brokering.
    (c)  An application for registration becomes effective 30
days  after  it is filed, unless an order of the Secretary of
State  establishes  an   earlier   effective   date.    Every
registration  is  effective until January 1 of the year after
it goes into effect.
    (d)  Every applicant for registration shall file with the
Secretary of State, in such form as the  Secretary  of  State
may  prescribe  by rule or regulation, an irrevocable consent
appointing the Secretary of State to be the applicant's agent
to receive service of any process in  any  noncriminal  suit,
action,  or proceeding against the applicant arising from the
violation of any provision of this Act.
    (e)  The Secretary of  State  shall  maintain  a  record,
which  shall  be open for public inspection, upon which shall
be entered the name and address of each business  broker  and
all  orders of the Secretary of State denying, suspending, or
revoking registration.  The Secretary of State may  designate
by  rule  or  order  any  statements, information, or reports
submitted to or filed with him or her pursuant  to  this  Act
which  the  Secretary  of State determines are of a sensitive
nature and therefore should be exempt from public disclosure.
Any statement, information,  or  reports  determined  by  the
Secretary  of  State to be of a sensitive nature shall not be
disclosed to the public except upon  consent  of  the  person
filing  or  submitting the statement, information, or reports
or by order of a court or in court proceedings.
(Source: P.A. 89-209, eff. 1-1-96.)
    (815 ILCS 307/10-25)
    Sec. 10-25.  Fees and funds.  All fees and funds accruing
for the administration of this Act shall be accounted for  by
the  Secretary of State and shall be deposited with the State
Treasurer who shall deposit them in the Securities Audit  and
Enforcement Fund.
    (a)  The Secretary of State shall, by rule or regulation,
impose  and  collect fees necessary for the administration of
this  Act,  including  but  not  limited  to,  fees  for  the
following purposes:
         (1)  Filing an application pursuant to Section 10-10
    of this Act;
         (2)  Examining an application pursuant  to  Sections
    10-10 and 10-20 of this Act;
         (3)  Registering  a  business  broker  under Section
    10-10 of this Act;
         (4)  Renewing  registration  of  a  business  broker
    pursuant to Section 10-20 of this Act;
         (5)  Failure to file or file timely any document  or
    information required under this Act;
         (6)  Filing  a  notice  of  lien pursuant to Section
    10-115 of this Act.
    (b)  The Secretary of State may, by rule  or  regulation,
raise  or  lower  any  fee imposed by, and which he or she is
authorized by law to collect under, this Act.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-30)
    Sec.  10-30.   Disclosure  document  to  be  provided  by
business broker.
    (a)  A business broker must provide a written  disclosure
document  that meets the requirements set forth in subsection
(b) of this Section to a client at the  time  or  before  the
client signs a contract for the services of a business broker
or  at  the  time  or before the business broker receives any
consideration upon the contract.   Any  person  who  signs  a
contract  for  the services of a business broker shall have 7
days from the date of signing of the contract to rescind  the
contract  and  receive a refund of all payments, if any, made
by that person. At least 7 days before the  time  any  person
signs  a contract for the services of a business broker, or 7
days before the business broker  receives  any  consideration
upon  the  contract,  whichever  occurs  first,  the business
broker must provide  to  the  contracting  person  a  written
disclosure  document that meets the requirements set forth in
subsection (b) of this Section.
    (b)  A  written  disclosure  document   statement   shall
contain the following information:
         (1)  A disclosure statement which shall be the cover
    sheet  and  shall  be  entitled,  in  at  least  10-point
    boldface  capital  letters "DISCLOSURES REQUIRED BY LAW".
    Under this title shall appear the statement, in at  least
    10  point  type  that  "THE  SECRETARY  OF  STATE HAS NOT
    REVIEWED AND DOES NOT  APPROVE,  RECOMMEND,  ENDORSE,  OR
    SPONSOR  ANY BUSINESS BROKERAGE CONTRACT. THE INFORMATION
    CONTAINED IN THIS DISCLOSURE HAS NOT BEEN VERIFIED BY THE
    SECRETARY OF STATE.  IF YOU HAVE ANY  QUESTIONS,  SEE  AN
    ATTORNEY  BEFORE  YOU  SIGN  A  CONTRACT  OR  AGREEMENT."
    Nothing except the title and the required statement shall
    appear  on  the  cover sheet, except that the name of the
    business broker,  address,  telephone  number,  facsimile
    number,  and  any  other information as authorized by the
    Secretary of State by rule may appear on the cover sheet.
         (2)  The  name  and  form  of  organization  of  the
    business broker,  the  names  under  which  the  business
    broker  has done or, is doing, or intends to do business,
    and the name of any parent organization or  affiliate  of
    the business broker.
         (3)  The   names,   addresses,  and  titles  of  the
    business broker's officers, directors, trustees,  general
    partners, general managers, principal executives, and any
    other person performing similar duties.
         (4)  A  full  and detailed description of the actual
    services that the business broker undertakes  to  perform
    for the prospective client.
         (5)  A specific statement of the circumstances under
    which  the  business broker will be entitled to obtain or
    retain  consideration  from  the  party  with  whom   the
    business broker contracts.
         (6)  Any  other  information  the Secretary of State
    may require by rule or regulation.
    (c)  A  business  broker  shall  amend   the   disclosure
document  required by subsection (b) of this Section whenever
necessary  to  prevent  it  from  containing  any  false   or
misleading  statement  of a material fact and shall deliver a
copy of the amended disclosure document to the  Secretary  of
State on or before the date of the amendment.
    (d)  The information in subdivisions (b)(4) and (b)(5) of
this  Section  need not be set out on the disclosure document
if the business broker's contract  contains  the  information
required  in  subdivisions  (b)(4) and (b)(5) of this Section
and is provided with the disclosure document.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-30.5 new)
    Sec. 10-30.5. Exemptions  from  disclosure  requirements.
Section 10-30 shall not apply if:
    (a)  the  client to be represented by the business broker
is:
         (1)  a natural person  who  has,  or  is  reasonably
    believed  by  the  business    broker  relying  upon this
    Section to have, a net worth or joint net worth with that
    person's spouse in excess of $1,000,000 at  the  time  of
    the   execution  of  the  business  broker  agreement  or
    contract;
         (2)  a natural person  who  has,  or  is  reasonably
    believed  by  the  business    broker  relying  upon this
    Section to have, an income  or  joint  income  with  that
    person's  spouse in excess of $200,000 in the most recent
    fiscal year;
         (3)  a  company,  business,  or  other   non-natural
    person  that  has,  or  is    reasonably  believed by the
    business broker relying upon  this  Section  to  have,  a
    total asset value in excess of $1,000,000 and has been in
    existence for at least nine months and was not formed for
    the purpose of the subject transaction;
         (4)  a   company,  business,  or  other  non-natural
    person  that  has,  or  is  reasonably  believed  by  the
    business broker relying upon this Section to have,  gross
    revenues or gross sales in excess of $200,000 in the most
    recent fiscal year and has been in existence for at least
    nine  months  and  was not formed for the purposes of the
    subject transaction; or
         (5)  a  company,  business,  or  other   non-natural
    person  in  which  at least 90% of the equity interest is
    owned, or is reasonably believed by the  business  broker
    relying  upon  this  Section  to be owned, by persons who
    meet any of the tests set forth in  subdivisions  (a)(1),
    (a)(2), (a)(3), (a)(4), or (a)(5) of this Section; or
    (b)  the  client to be represented by the business broker
has had an attorney review the business broker's contract for
the client.

    (815 ILCS 307/10-35)
    Sec.  10-35.   Contracts  required  to  be  in   writing;
retention  of  copy  by  client.   To  be  enforceable, every

contract for the services of a business broker  shall  be  in
writing  and  signed  by all contracting parties.  The client
shall have the right to retain a copy of the signed  contract
for  the services of a business broker.  The client's copy of
the contract  shall  be  provided  to  the  client  when  the
contract  is  signed,  if that is reasonably feasible and the
client so requests.  Otherwise, the contract shall be  mailed
or otherwise sent to the client within one week of execution.
No  account  number,  as referred to in Section 10-75 of this
Act, is required on the client's copy of the contract at  the
time it is signed.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-40)
    Sec.   10-40.    Denial,   suspension  or  revocation  of
registration; orders and hearing.
    (a)  The Secretary of State may deny, suspend  or  revoke
the registration of a business broker if the business broker:
         (1)  Is insolvent.
         (2)  Has violated any provision of this Act.
         (3)  Has  filed  with  the  Secretary  of  State any
    document or statement containing any false representation
    of a material fact or omitting to state a material fact.
         (4)  Has been convicted, within 10 years before  the
    date  of the application, renewal or review, of any crime
    involving fraud or deceit.
         (5)  Has been found by any court or  agency,  within
    10  years before the date of the application, renewal, or
    review, to have engaged in any activity  involving  fraud
    or deceit.
    (b)  The  Secretary  of State may not enter a final order
denying,  suspending,  or  revoking  the  registration  of  a
business  broker  without  prior  notice  to  all  interested
parties, opportunity for a hearing and  written  findings  of
fact  and  conclusions of law.  The Secretary of State may by
summary order deny, suspend, or revoke a registration pending
final determination of any  proceeding  under  this  Section.
Upon  the  entry  of  a summary order, the Secretary of State
shall promptly notify all interested parties that it has been
entered, of the reasons for the summary order and, that  upon
receipt by the Secretary of State of a written request from a
party,  the  matter  will  be  set for hearing which shall be
conducted in accordance with the provisions of  the  Illinois
Administrative Procedure Act.  If no hearing is requested and
none  is ordered by the Secretary of State, the order remains
in effect until it is modified or vacated by the Secretary of
State.  If a hearing is requested or ordered,  the  Secretary
of  State,  after notice of the hearing has been given to all
interested persons and the hearing has been held, may  modify
or vacate the order or extend it until final determination.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-45)
    Sec.  10-45.   Powers  of  Secretary  of State; privilege
against self-incrimination; admissibility into evidence.
    (a)  The Secretary of State may do the following:
         (1)  Adopt rules and regulations to  implement  this
    Act.
         (2)  Conduct investigations and examinations:
              (A)  In  connection  with  any  application for
         registration  of  any   business   broker   or   any
         registration already granted; or
              (B)  Whenever  it  appears  to the Secretary of
         State, upon the basis of a complaint or information,
         that reasonable grounds exist for the belief that an
         investigation  or  examination   is   necessary   or
         advisable  for  the  more complete protection of the
         interests of the public.
         (3)  Charge as costs of investigation or examination
    all reasonable expenses, including a  per  diem  prorated
    upon  the salary of any employee and actual traveling and
    hotel expenses.  All reasonable expenses are to  be  paid
    by   the   party   or   parties  under  investigation  or
    examination.
         (4)  Issue notices and orders, including  cease  and
    desist  notices and orders, after making an investigation
    or examination under paragraph (2) of subsection  (a)  of
    this  Section.   The Secretary of State may also bring an
    action to prohibit a person from violating this Act.  The
    Secretary  of State shall notify the person that an order
    or notice has been issued, the reasons for it and that  a
    hearing  will be set in accordance with the provisions of
    the  Illinois  Administrative  Procedure  Act  after  the
    Secretary of State receives a written  request  from  the
    person requesting a hearing.
         (5)  Sign   all   orders,  official  certifications,
    documents or papers issued under this Act or delegate the
    authority to sign any  of  those  items  to  his  or  her
    designee.
         (6)  Hold and conduct hearings.
         (7)  Hear evidence.
         (8)  Conduct inquiries with or without hearings.
         (9)  Receive   reports  of  investigators  or  other
    officers or employees of the State  of  Illinois  or  any
    municipal  corporation or governmental subdivision within
    the State.
         (10)  Administer  oaths  or   cause   them   to   be
    administered.
         (11)  Subpoena  witnesses  and compel them to attend
    and testify.
         (12)  Compel the production of  books,  records  and
    other documents.
         (13)  Order  depositions  to be taken of any witness
    residing within or without the  State.   The  depositions
    shall  be  taken  in  the  manner  prescribed  by law for
    depositions in civil actions and made returnable  to  the
    Secretary of State.
    (b)  If  any  person  refuses  to  obey a subpoena issued
under this Act, the Secretary of State may  make  application
to any court of competent jurisdiction to order the person to
appear  before the Secretary of State and produce documentary
evidence or give evidence as directed in the  subpoena.   The
failure  to  obey  the order of the court shall be subject to
punishment by the court as contempt of court.
    (c)  No person shall be excused  from  complying  with  a
subpoena  on  the  ground  that  the  testimony  or  evidence
required  may  tend  to incriminate the person or subject the
person to a penalty or  forfeiture.   No  individual  may  be
prosecuted  or subject to any penalty or forfeiture for or on
account  of  any  transaction,  matter  or  thing  which  the
individual is compelled to testify or produce evidence, after
claiming the privilege against self-incrimination.   However,
the  individual  so  testifying  shall  not  be  exempt  from
prosecution  and  punishment  for  perjury  committed  in  so
testifying.
    (d)  In any prosecution, action, suit or proceeding based
upon  or  arising out of this Act, the Secretary of State may
sign a certificate showing compliance or non-compliance  with
this Act by any business broker.  This shall constitute prima
facie  evidence of compliance or non-compliance with this Act
and shall be admissible in evidence in any court  to  enforce
this Act.
    (e)  Whenever  it  shall appear to the Secretary of State
that any person is engaged or about to engage in any acts  or
practices  which constitute or will constitute a violation of
this Act, or of  any  rule  or  regulation  prescribed  under
authority  of  this Act, the Secretary of State may at his or
her discretion, through the Attorney General:
         (1)  File a complaint  and  apply  for  a  temporary
    restraining  order  without  notice,  and  upon  a proper
    showing the court may enter a temporary restraining order
    without a bond, to enforce this Act.
         (2)  File a complaint and apply for a preliminary or
    permanent injunction, and, after notice and  hearing  and
    upon  a proper showing, the court may grant a preliminary
    or permanent injunction and may order  the  defendant  to
    make  an offer of rescission with respect to any contract
    for business brokerage services determined by  the  court
    to be unlawful under this Act.
    (f)  The   court  shall  further  have  jurisdiction  and
authority, in addition to the penalties and other remedies in
this Act provided, to enter an order for the  appointment  of
the  court  or a person as a receiver, conservator, ancillary
receiver or ancillary conservator for the  defendant  or  the
defendant's  assets  located  in  this  State,  or to require
restitution or damages on behalf of  the  person  or  persons
injured  by  the  act  or  practice  constituting the subject
matter of the  action,  and  may  assess  costs  against  the
defendant for the use of the State.
    (g)  No  provision  of  this Act imposing liability shall
apply to any act done or omitted in good faith in  conformity
with  any  rule  of  the  Secretary  of State under this Act,
notwithstanding  that  such  rule  may,  after  such  act  or
omission,  be  amended  or  rescinded  or  be  determined  by
judicial or other authority to be invalid for any reason.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-55)
    Sec.    10-55.    Violations;    administrative    fines;
enforcement.
    (a)  If the Secretary of State determines,  after  notice
and  opportunity  for  a  hearing, that a person has violated
this Act, the Secretary of State may in addition to all other
remedies, impose an administrative fine upon the person in an
amount not to exceed $10,000 for each violation.
    (b)  The Secretary of State may bring an  action  in  the
circuit  court  of Sangamon or Cook county to enforce payment
of fines imposed under this Section.
    (c)  If the Secretary of State shall find that any person
has violated any provision of  this  Act,  the  Secretary  of
State  may,  by  written  order  temporarily  or  permanently
prohibit  or  suspend  such  person from acting as a business
broker.
    (d)  If the Secretary of State shall find,  after  notice
and opportunity for hearing, that any person is acting or has
acted  as  a business broker as defined in Section 10-5.10 of
this Act, without prior thereto or at the time thereof having
complied with the registration requirements of this Act,  the
Secretary  of  State may by written order prohibit or suspend
such person from acting as a business broker in this State.
    (e)  Anything   herein   contained   to   the    contrary
notwithstanding,  the  Secretary  of  State  may  temporarily
prohibit  or  suspend, for a maximum period of 90 days, by an
order effective immediately, the registration of  a  business
broker  or  the  business  of  providing  business  brokerage
services,  without notice and prior hearing, if the Secretary
of State shall in his or her  opinion,  based  upon  credible
evidence,  deem it necessary to prevent an imminent violation
of this Act Law or to prevent losses  to  clients  which  the
Secretary of State reasonably believes will occur as a result
of  a  prior  violation of this Act. Immediately after taking
action without such notice  and  hearing,  the  Secretary  of
State  shall  deliver  a  copy  of the temporary order to the
respondent named therein by personal  service  or  registered
mail  or  certified  mail,  return  receipt  requested.   The
temporary  order  shall  set forth the grounds for the action
and shall advise that the respondent may request a hearing as
soon as  reasonably  practicable,  that  the  request  for  a
hearing  will  not  stop  the  effectiveness of the temporary
order and that respondent's  failure  to  request  a  hearing
within  30  days after the date of the entry of the temporary
order, shall constitute an admission  of  any  facts  alleged
therein and shall make the temporary order final.  A business
broker whose registration has been suspended pursuant to this
Section  may  request  the  Secretary  of State permission to
continue to receive payment for any  executory  contracts  at
the  time  of  any  suspension and to continue to perform its
obligation  thereunder.   The  decision  to  grant  or   deny
permission  to receive payment for any executory contracts or
perform any  obligation  thereunder  shall  be  at  the  sole
discretion of the Secretary of State and shall not be subject
to review under the Administrative Review Law.
    (f)  The  Secretary  of State may issue a temporary order
suspending or delaying the effectiveness of any  registration
of  a  business  broker under this Act subsequent to and upon
the basis of the issuance of any stop, suspension or  similar
order  by any agency of the United States regulating business
brokers or any state or federal courts with  respect  to  the
person who is the subject of the registration under this Act,
and such order shall become effective as of the date and time
of  effectiveness  of  the agency or court order and shall be
vacated automatically at such time as the order of the agency
or court order is no longer in effect.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-60)
    Sec. 10-60. Violations; liability of business  broker  to
damaged  parties; rights of prospective client.  A person who
commits  a  material  violation  of  violates  this  Act,  in
connection with a contract for the  services  of  a  business
broker,  is  liable  to  any  client  person  damaged  by the
violation, for the amount of the actual damages suffered, but
not more than the fees actually paid by  the  client  seeking
relief,  together  with  interest  at  the  legal  rate,  and
attorney  fees.   If  a  business  broker  commits a material
violation of Sections 10-10, 10-20, and  10-30  of  this  Act
violates  any  provision  of  this  Act, in connection with a
contract for business brokering  services,  the  contract  is
void,  and the prospective client is entitled to receive from
the business broker all sums paid  to  the  business  broker,
with interest and any attorney's fee required to enforce this
Section.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-75)
    Sec. 10-75. Account numbers; retention and maintenance of
records.
    (a)  Each  business  broker  agreement  shall be given an
account  number  and  all  instruments  executed   taken   in
connection  with that agreement must bear this number, except
as provided in Section 10-35  of  this  Act.   Each  business
broker shall keep and maintain the following records or their
equivalent:
         (1)  A  business agreement register that consists of
    a chronological listing of all business broker agreements
    that have been entered into.  For  each  business  broker
    agreement the register shall contain the following:
              (A)  The account number.
              (B)  The date of the agreement.
              (C)  The  name  of  the  client or any proposed
         client.
              (D)  The amount of any fees charged.
              (E)  The  cost  and  type  of   any   insurance
         required.
         (2)  A  record  file  for  each  client  or proposed
    client shall contain the following:
              (A)  The name and address of the client or  any
         proposed client.
              (B)  A  copy  of  the  signed  business  broker
         agreement.
              (C)  A  copy of any other papers or instruments
         used  in  connection  with   the   business   broker
         agreement  and  signed by the client or any proposed
         client, including a copy of the disclosure  document
         required by Section 10-30 of this Act, that contains
         an   acknowledged  receipt  by  the  client  or  any
         proposed client.
              (D)  The amount of the  business  broker's  fee
         that  the  client  has  paid.  If there is an unpaid
         balance, the status of any collection efforts.
         (3)  All receipts from or for the account of clients
    or any proposed clients and all disbursements to  or  for
    the  account of clients or any proposed clients, recorded
    so that the transactions are readily identifiable.
         (4)  (Blank). A general ledger that shall be  posted
    at  least  monthly,  and a trial balance sheet and profit
    and  loss  statement  prepared  within  30  days  of  the
    Secretary of State's request for the information.
         (5)  A copy of:
              (A)  All advertisements, pamphlets,  circulars,
         letters, articles or communications published in any
         newspaper, magazine or periodical.
              (B)  Scripts   of   any   recording,  radio  or
         television announcement.
              (C)  Any sales kits or literature to be used in
         solicitation of clients.
    (b)  The records listed in subsection (a) of this Section
shall be kept for  a  period  of  6  years  in  the  business
broker's  principal  office  and  must be separate or readily
identifiable from the records of any other business  that  is
conducted  in  the  office  of  the  business broker. After a
period of 2 years, a copy of this information may be retained
on magnetic, digital, or other electronic medium  in  a  form
that may be readily retrieved.
    (c)  The records listed in subsection (a) of this Section
need  not  be  kept  for  a  client  where  no  fee,  expense
reimbursement,  retainer, or other charge was incurred and no
transaction was consummated.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-80)
    Sec. 10-80. Persons exempt from  registration  and  other
duties under law;  burden of proof thereof.
    (a)  The   following   persons   are   exempt   from  the
requirements of this Act:
         (1)  Any attorney who is  licensed  to  practice  in
    this State, while engaged engaging in the practice of law
    and  whose  service  in  relation  to the business broker
    transaction is incidental to the attorney's practice.
         (2)  Any person licensed as a real estate broker  or
    salesperson under the Illinois Real Estate License Act of
    1983  who is primarily engaged in business activities for
    which a license is required under that Act and who, on an
    incidental basis, acts as a business broker.
         (3)  Any dealer, salesperson, or investment  adviser
    registered  pursuant to under the Illinois Securities Law
    of 1953 or any investment adviser representative, or  any
    person  who  is  regularly  engaged  in  the  business of
    offering or selling securities in a transaction  exempted
    under  subsection C, H, M, R, Q, or S of Section 4 of the
    Illinois Securities  Law  of  1953  or  subsection  G  of
    Section 4 of the Illinois Securities Law of 1953 provided
    that  such  person  is  registered  pursuant to under the
    federal securities law.
         (4)  An associated person described  in  subdivision
    (h)(2) of Section 15 of the Federal 1934 Act.
         (5)  An  investment  adviser  registered pursuant to
    Section 203 of the Federal 1940 Investment Advisors Act.
         (6)  A person described in  subdivision  (a)(11)  of
    Section 202 of the Federal 1940 Investment Advisors Act.
         (7)  Any  person  who is selling a business owned or
    operated (in whole or  in part) by that person in  a  one
    time transaction.
    (b)  This Act shall not be deemed to apply in any manner,
directly  or  indirectly,  to:  (i)  a State bank or national
bank, as those terms are defined in the Illinois Banking Act,
or any subsidiary of a State bank or national  bank;  (ii)  a
bank holding company, as that term is defined in the Illinois
Bank Holding Company Act of 1957, or any subsidiary of a bank
holding company; (iii) a foreign banking corporation, as that
term  is  defined  in  the Foreign Banking Office Act, or any
subsidiary  of  a  foreign  banking   corporation;   (iv)   a
representative   office,  as  that  term  is  defined  in the
Foreign Bank  Representative  Office  Act;  (v)  a  corporate
fiduciary, as that term is defined in the Corporate Fiduciary
Act,  or  any  subsidiary  of  a  corporate fiduciary; (vi) a
savings bank organized under  the  Savings  Bank  Act,  or  a
federal  savings  bank  organized  under  federal law, or any
subsidiary of a savings bank or federal savings bank; (vii) a
savings bank holding company organized under the Savings Bank
Act, or any subsidiary of a  savings  bank  holding  company;
(viii)  an association or federal association, as those terms
are defined in the Illinois Savings and Loan Act of 1985,  or
any subsidiary of an association or federal association; (ix)
a  foreign  savings  and  loan association or foreign savings
bank subject to the Illinois Savings and Loan Act of 1985, or
any subsidiary of a foreign savings and loan  association  or
foreign  savings  bank; or (x) a savings and loan association
holding company, as that term  is  defined  in  the  Illinois
Savings  and Loan Act of 1985, or any subsidiary of a savings
and loan association holding company.
    (b-1)  Persons registered under  the  Illinois  Franchise
Disclosure  Act of 1987 (and their employees) are exempt from
the requirements of this Act  as  to:  offers  and  sales  in
connection  with  franchising activities; or assisting any of
their franchisees in the offer or sale of a franchise by  any
such  franchisee  for the franchisee's own account regardless
of whether the sale is effected by or through the  registered
persons.
    (b-2)  Any   certified   public  accountant  licensed  to
practice in Illinois, while engaged  in  the  practice  as  a
certified  public accountant and whose service in relation to
the business broker transaction is incidental to his  or  her
practice, is exempt from the requirements of this Act.
    (b-3)  Any   publisher,   or  regular  employee  of  such
publisher, of a bona fide   newspaper  or  news  magazine  of
regular  and established paid circulation who, in the routine
course of selling advertising, advertises businesses for sale
and in which no other related services are provided is exempt
from the requirements of this Act.
    (c)  The  burden   of   proof   of   any   exemption   or
classification  provided  in  this  Act shall be on the party
claiming the exemption or classification.
(Source: P.A. 89-209, eff. 1-1-96; 89-665, eff. 8-14-96.)

    (815 ILCS 307/10-85)
    Sec. 10-85. Prohibited acts.
    (a)  A business broker shall not, in  connection  with  a
contract  for  the  services  of  a  business  broker, either
directly or indirectly, do any of the following:
         (1) (a)  Employ any device,  scheme  or  article  to
    defraud.
         (2) (b)  Make  any  untrue  statements of a material
    fact or omit to state a material fact necessary in  order
    to   make   the   statements   made,   in  the  light  of
    circumstances under which they are made, not  misleading,
    unless  the  statement  is made in reasonable reliance on
    information provided by the client.
         (3) (c)  Engage in any act, practice  or  course  of
    business  that  operates  or  would operate as a fraud or
    deceit upon any person.
    (b)  A business  broker  shall  not  either  directly  or
indirectly do the following:
         (1)  Engage  in the business of acting as a business
    broker without registration under this Act unless  exempt
    under the Act.
         (2)  Fail  to  file  with the Secretary of State any
    application, report,  document, or answer required to  be
    filed  under the provisions of this Act or any rule  made
    by the Secretary of State pursuant to this Act or fail to
    comply with the terms of any  order  issued  pursuant  to
    this Act or rule or made by the Secretary of State.
         (3)  Fail  to maintain any records as required under
    the provisions of this  Act or any rule made by Secretary
    of State pursuant to this Act.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 307/10-95 new)
    Sec. 10-95. Miscellaneous provisions.
    (a)  The rights  and  remedies  under  this  Act  are  in
addition  to  any  other rights or remedies that may exist at
law or equity.
    (b)  Any condition, stipulation, or provision binding any
client of a business  broker  to  waive  compliance  with  or
relieve a person from any duty or liability imposed by or any
right  provided  by this Act or any rule or order pursuant to
this Act is void.
    (c)  If any provision of this Act or its  application  to
any person or circumstance is held invalid, the invalidity of
that   provision   or   application  does  not  effect  other
provisions or applications of this  Act  that  can  be  given
effect without the invalid provision or application.

    (815 ILCS 307/10-100 new)
    Sec.  10-100.   Immunity  for  official acts.  In no case
shall the Secretary of State, or any of his or her  employees
or  agents,  in  the  administration  of  this Act, incur any
official or personal liability  while  acting  in  accordance
with their official duties or authority or both.

    (815 ILCS 307/10-105 new)
    Sec.  10-105.   Scope  of  the Act.  This Act shall apply
only when the person engaged or sought to be engaged  by  the
business  broker  is  domiciled  in  this  State  or when the
company or business sought to be sold has its principal place
of business in this State.

    (815 ILCS 307/10-110 new)
    Sec.  10-110.   Previous  and   ongoing   agreements   or
contracts and transactions not affected.  All business broker
agreements  or  contracts and transactions between a business
broker and its clients  or  proposed  clients  which  do  not
comply  with  the  Act,  if  entered into prior to January 1,
1996,  shall  be  deemed  to  be   valid   and   enforceable,
notwithstanding this Act.
    (815 ILCS 307/10-115 new)
    Sec. 10-115. Business broker lien.
    (a)  Any  business  broker  shall  have  a  lien upon the
assets of a business  that  is  the  subject  of  a  business
broker's  contract  and  the  proceeds  from the sale of such
business in the amount that the broker is due.
    (b)  The lien shall be available to the  business  broker
named  in  the  instrument signed by the seller or purchaser.
The lien arising under this Act shall be in addition  to  any
other rights that a business broker may have.
    (c)  The  lien  under  this  Act  shall  attach  upon the
business  broker  being  otherwise  entitled  to  a  fee   or
commission under a written instrument signed by the seller or
purchaser or the seller or purchaser's duly authorized agent,
as applicable.
    (d)  When   payment  to  a  business  broker  is  due  in
installments, a portion  of  which  is  due  only  after  the
conveyance  or  transfer  of the business, any claim for lien
for those payments due after the transfer or  conveyance  may
be filed at any time subsequent to the transfer or conveyance
of the business and prior to the date on which the payment is
due  but  shall  only  be  effective  as  a  lien against the
business or proceeds to the extent moneys are still  owed  to
the transferor by the transferee. The lien shall attach as of
the  filing  of the notice of lien and not relate back to the
date of the written agreement.
    (e)  If a business broker has a written agreement with  a
prospective  purchaser  or seller, then the lien shall attach
upon the prospective purchaser or seller that is  purchasing,
selling,  or  otherwise accepting a conveyance or transfer of
the business and the filing  of  a  notice  of  lien  by  the
business  broker  in  the  Office  of  the Secretary of State
within 90 days after the purchase, sale, or other  conveyance
or  transfer  of  the  business  that  is  the subject of the
written agreement with the business broker.  The  lien  shall
attach  as of the date of the receipt of any consideration by
the seller of the business that is the subject of the written
agreement with the business broker.
    (f)  The business broker  shall,  within  10  days  after
filing its notice of lien, mail a copy of the  notice of lien
to the owner of the business by registered or certified mail,
with  return  receipt  requested, or personally served on the
owner of record or his agent.  If the lien is filed within 10
days prior to closing, the business broker is not required to
mail or personally serve  a  copy  of  the  notice  of  lien.
Mailing  of  the  copy  of the notice of lien is effective if
mailed to the address of the business that is the subject  of
the notice of lien, or to such other address as the seller or
purchaser  has provided to the business broker in writing and
signed by the seller or purchaser.  Mailing of  the  copy  of
the notice of claim for lien is effective when deposited in a
United  States  mailbox  with  postage prepaid.  The broker's
lien shall be unenforceable if mailing of  the  copy  of  the
notice  of  lien does not occur at the time and in the manner
required by this Act.
    (g)  A business broker may bring suit to enforce  a  lien
in  the circuit court in the county where the headquarters of
the business being  sold  is  located,  where  the  purchaser
resides  (or maintains its headquarters) if the lien is being
filed against the purchaser, or where the seller resides  (or
maintains  its headquarters) if the lien is filed against the
seller, by filing a complaint and sworn  affidavit  that  the
lien has been filed.
    (h)  The  person  claiming  a  lien shall, within 2 years
after filing the  lien,  commence  proceedings  by  filing  a
complaint.   Failure  to  commence proceedings within 2 years
after  filing  the  lien  shall  extinguish  the  lien.    No
subsequent notice of lien may be given for the same claim nor
may that claim be asserted in any proceedings under this Act.
    (i)  A complaint under this Section shall contain a brief
statement  of the contract or agreements on which the lien is
founded, the date when the contract or agreement was made,  a
description  of  the  services  performed, the amount due and
unpaid, a  description  of  the  business  that  is,  or  the
proceeds  from  sale  of  which are, subject to the lien, and
other facts necessary for a full understanding of the  rights
of  the  parties.   The  plaintiff  shall make all interested
parties, of whose interest the plaintiff is notified  or  has
knowledge,  defendants  to the action and shall issue summons
and provide service as in  other  civil  actions.   When  any
defendant resides or has gone out of the State, or on inquiry
cannot  be  found,  or is concealed within this State so that
process cannot be served on  that  defendant,  the  plaintiff
shall  cause a notice to be given to that defendant, or cause
a copy of the complaint to be served upon that defendant,  in
the  manner  and  upon  the same conditions as in other civil
actions.  Failure of the plaintiff to provide proper  summons
or notice shall be grounds for judgment against the plaintiff
with prejudice.
    (j)  The   lien  notice  shall  state  the  name  of  the
claimant, the name of the purchaser or seller whose  property
or  assets  are  subject  to  the  lien, a description of the
business upon which or upon the proceeds  from  the  sale  of
which  the  lien  is  being claimed, the amount for which the
lien is claimed, and the registration number of the  business
broker.  The notice of lien shall recite that the information
contained in the notice is true and accurate to the knowledge
of  the signatory.  The notice of lien shall be signed by the
business broker or by a person authorized to sign  on  behalf
of the business broker and shall be verified.
    (k)  Whenever  a  claim  for lien has been filed with the
Office of the Secretary of State and a condition occurs  that
would   preclude   the   business   broker   from   receiving
compensation under the terms of the business broker's written
agreement, the business broker shall provide to the purchaser
of  the business, if the lien is filed against the purchaser,
or the seller of the business, if the lien is  filed  against
the  seller,  within 10 days following demand by the owner of
record, a written release or satisfaction of the lien.
    (l)  Upon written demand of the owner, lienee,  or  other
authorized  agent,  served  on  the  person claiming the lien
requiring suit to be commenced to enforce the lien or  answer
to  be  filed in a pending suit, a suit shall be commenced or
answer filed within 30 days thereafter, or the lien shall  be
extinguished.   Service  may  be  by  registered or certified
mail, return receipt requested, or by personal service.
    (m)  If  a  claim  for  lien  has  been  filed  with  the
Secretary of State and is paid, or if  there  is  failure  to
institute a suit to enforce the lien within the time provided
by   this   Act,   the   business  broker  shall  acknowledge
satisfaction or release of the lien, in writing,  on  written
demand of the purchaser of the business, if the lien is filed
against  the purchaser, or the seller of the business, if the
lien is filed against the seller, within 5 days after payment
or expiration of the time in which to file the lien.
    (n)  The cost of proceedings  asserting  or  defending  a
business   broker's   claim  of  lien,  including  reasonable
attorneys' fees, costs, and prejudgment interests due to  the
prevailing  party,  shall be borne by the nonprevailing party
or parties.  When more than  one  party  is  responsible  for
costs,  fees,  and prejudgment interest, the costs, fees, and
prejudgment interest shall be equitably  apportioned  by  the
court among those responsible parties.
    (o)  Prior   recorded  liens  and  mortgages  shall  have
priority over a broker's lien.  A prior recorded  lien  shall
include,  without  limitation,  (i)  a  valid mechanic's lien
claim that is recorded subsequent to the broker's  notice  of
lien  but which relates back to a date prior to the recording
date of the broker's notice of lien and (ii)  prior  recorded
liens  securing  revolving  credit  and  future  advances  of
construction  loans  as  described  in Section 15-1302 of the
Code of Civil Procedure.

    Section 20.  The Business Opportunity Sales Law  of  1995
is  amended  by  changing  Sections 5-5.10, 5-15, 5-35, 5-45,
5-55, 5-60, 5-65, 5-70,  5-75,  5-95,  5-115,  and  5-130  as
follows:

    (815 ILCS 602/5-5.10)
    Sec. 5-5.10. Business opportunity.
    (a)  "Business   opportunity"   means   a   contract   or
agreement,   between  a  seller  and  purchaser,  express  or
implied, orally or in writing, wherein it is agreed that  the
seller or a person recommended by the seller shall provide to
the  purchaser  any  product, equipment, supplies or services
enabling the purchaser to start a business when the purchaser
is required to make a payment  to  the  seller  or  a  person
recommended  by  the  seller of more than $500 and the seller
represents directly or  indirectly,  orally  or  in  writing,
that:
         (1)  The  seller  or  a  person  recommended  by the
    seller will provide or assist the  purchaser  in  finding
    locations  for  the use or operation of vending machines,
    racks,  display  cases  or  other  similar  devices,   on
    premises  neither  owned  nor  leased by the purchaser or
    seller;
         (2)  The seller  or  a  person  recommended  by  the
    seller  will  provide  or assist the purchaser in finding
    outlets or  accounts  for  the  purchaser's  products  or
    services;
         (3)  The  seller or a person specified by the seller
    will  purchase  any  or  all  products  made,   produced,
    fabricated, grown, bred or modified by the purchaser;
         (4)  The  seller  guarantees that the purchaser will
    derive income from the business which exceeds  the  price
    paid to the seller;
         (5)  The seller will refund all or part of the price
    paid  to  the  seller, or repurchase any of the products,
    equipment or supplies provided by the seller or a  person
    recommended   by   the   seller,   if  the  purchaser  is
    dissatisfied with the business; or
         (6)  The  seller  will  provide  a  marketing  plan,
    provided that this Law shall not apply to the sale  of  a
    marketing  plan made in conjunction with the licensing of
    a federally registered trademark or federally  registered
    service mark.
    (b)  "Business opportunity" does not include:
         (1)  Any  offer  or  sale  of  an  ongoing  business
    operated by the seller and to be sold in its entirety;
         (2)  Any  offer or sale of a business opportunity to
    an  ongoing  business  where  the  seller  will   provide
    products,  equipment,  supplies  or  services  which  are
    substantially   similar   to   the  products,  equipment,
    supplies or services sold by the purchaser in  connection
    with the purchaser's ongoing business;
         (3)  Any  offer  or  sale  of a business opportunity
    which  is  a  franchise  as  defined  by  the   Franchise
    Disclosure Act of 1987;
         (4)  Any  offer  or  sale  of a business opportunity
    which is registered pursuant to the  Illinois  Securities
    Law of 1953;
         (5)  Any  offer  or  sale  of a business opportunity
    which involves a marketing plan made in conjunction  with
    the  licensing  of  a  federally  registered trademark or
    federally  registered  service  mark  provided  that  the
    seller  had  a  minimum  net  worth  of   $1,000,000   as
    determined  on  the  basis  of  the  seller's most recent
    audited financial statement prepared within 13 months  of
    the   first  offer  in  this  State.  Net  worth  may  be
    determined on a consolidated basis where the seller is at
    least 80% owned by one person and that  person  expressly
    guarantees  the  obligations of the seller with regard to
    the offer or sale of any business opportunity claimed  to
    be excluded under this item; or
         (6)  Any  offer or sale of a business opportunity by
    an executor, administrator, sheriff,  marshal,  receiver,
    trustee  in  bankruptcy,  guardian  or  conservator  or a
    judicial offer or sale, of a business opportunity.
         (7)  Cash payments made by a purchaser not exceeding
    $500 and the payment is made for the not-for-profit  sale
    of sales demonstration equipment, material or samples, or
    the  payment  is  made  for product inventory sold to the
    purchaser at a bona fide wholesale price.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-15)
    Sec. 5-15. Denial or revocation of exemptions.
    (a)  The Secretary of State may by order deny  or  revoke
any  exemption  specified  in  Section  5-10 of this Law with
respect to a particular offering  of  one  or  more  business
opportunities.   No   such   order  may  be  entered  without
appropriate  prior  notice   to   all   interested   parties,
opportunity  for  hearing,  and  written findings of fact and
conclusions of law.
    (b)  If  the  public  interest  or  the   protection   of
purchasers so requires, the Secretary of State may by summary
order  deny or revoke any of the specified exemptions pending
final determination of any proceedings  under  this  Section.
Upon  the  entry  of  the order, the Secretary of State shall
promptly notify all  interested  parties  that  it  has  been
entered  and of the reasons therefor and that the matter will
be set for  hearing  upon  written  request  filed  with  the
Secretary  of State  within 30 days after the receipt of  the
request by the respondent within 15 days of the receipt of  a
written  request  the matter will be set down for hearing. If
no hearing is requested and none is ordered by the  Secretary
of  State,  the  order  will  remain  in  effect  until it is
modified or vacated by the Secretary of State. If  a  hearing
is  requested  and none is ordered by the Secretary of State,
the order will remain in  effect  until  it  is  modified  or
vacated  by the Secretary of State. If a hearing is requested
or ordered, the  Secretary  of  State,  after  notice  of  an
opportunity for hearing to all interested persons, may modify
or vacate the order or extend it until final determination.
    (c)  No    order   under   this   Section   may   operate
retroactively.
    (d)  No person may be considered to have violated Section
5-25 by reason of any offer or sale effected after the  entry
of  an  order under paragraph (1) of Section 5-65 of this Law
if he or she sustains the burden of proof that he or she  did
not  know,  and  in the exercise of reasonable care could not
have known, of the order.
    (e)  Notwithstanding any provision to the contrary,  this
Law  shall  not  apply  to  (i)  any  dealer, salesperson, or
investment adviser registered under the  Illinois  Securities
Law  of 1953 or any investment adviser representative, or any
person who is regularly engaged in the business  of  offering
or   selling  securities  in  a  transaction  exempted  under
subsection C, H, M, R, Q, or S of Section 4 of  the  Illinois
Securities  Law  of  1953 or subsection G of Section 4 of the
Illinois Securities Law of 1953 provided that such person  is
registered   under   the  federal  securities  law,  (ii)  an
associated person described in subdivision (h)(2) of  Section
15  of  the  Federal  1934  Act,  (iii) an investment adviser
registered under Section 203 of the Federal  1940  Investment
Advisors  Act,  or  (iv)  a  person  described in subdivision
(a)(11)  of  Section  202  of  the  Federal  1940  Investment
Advisors Act.
    (f)  This Law shall not be deemed to apply in any manner,
directly or indirectly, to: (i)  a  State  bank  or  national
bank, as those terms are defined in the Illinois Banking Act,
or  any  subsidiary  of a State bank or national bank; (ii) a
bank holding company, as that term is defined in the Illinois
Bank Holding Company Act of 1957, or any subsidiary of a bank
holding company; (iii) a foreign banking corporation, as that
term is defined in the Foreign Banking  Office  Act,  or  any
subsidiary   of   a   foreign  banking  corporation;  (iv)  a
representative  office,  as  that  term  is  defined  in  the
Foreign  Bank  Representative  Office  Act,  (v)  a corporate
fiduciary, as that term is defined in the Corporate Fiduciary
Act, or any subsidiary  of  a  corporate  fiduciary;  (vi)  a
savings  bank  organized  under  the  Savings  Bank Act, or a
federal savings bank organized  under  federal  law,  or  any
subsidiary of a savings bank or federal savings bank; (vii) a
savings bank holding company organized under the Savings Bank
Act,  or  any  subsidiary  of a savings bank holding company;
(viii) an association or federal association, as those  terms
are  defined in the Illinois Savings and Loan Act of 1985, or
any subsidiary of an association or federal association; (ix)
a foreign savings and loan  association  or  foreign  savings
bank subject to the Illinois Savings and Loan Act of 1985, or
any  subsidiary  of a foreign savings and loan association or
foreign savings bank; or (x) a savings and  loan  association
holding  company,  as  that  term  is defined in the Illinois
Savings and Loan Act of 1985, or any subsidiary of a  savings
and loan association holding company.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-35)
    Sec. 5-35. Disclosure requirements.
    (a)  It  shall  be  unlawful  for any person to offer or,
sell any business opportunity required to be registered under
this Law unless a written disclosure document as filed  under
subsection  (a)  of  Section 5-30 of this Law is delivered to
each purchaser  at  least  10  business  days  prior  to  the
execution  by  a  purchaser  of  any  contract  or  agreement
imposing  a  binding legal obligation on the purchaser or the
payment by a purchaser of  any  consideration  in  connection
with the offer or sale of the business opportunity.
    (b)  The  disclosure  document  shall  have a cover sheet
which  is  entitled,  in  at  least   10-point   bold   type,
"DISCLOSURE  REQUIRED  BY  THE  STATE OF ILLINOIS." Under the
title shall appear the statement in at  least  10-point  bold
type that "THE REGISTRATION OF THIS BUSINESS OPPORTUNITY DOES
NOT   CONSTITUTE   APPROVAL,  RECOMMENDATION  OR  ENDORSEMENT
ENFORCEMENT  BY  THE  STATE  OF  ILLINOIS.  THE   INFORMATION
CONTAINED  IN  THIS DISCLOSURE DOCUMENT HAS NOT BEEN VERIFIED
BY THIS STATE. IF YOU HAVE ANY QUESTIONS  OR  CONCERNS  ABOUT
THIS  INVESTMENT,  SEEK PROFESSIONAL ADVICE BEFORE YOU SIGN A
CONTRACT OR MAKE ANY PAYMENT.  YOU  ARE  TO  BE  PROVIDED  10
BUSINESS  DAYS  TO  REVIEW  THIS  DOCUMENT BEFORE SIGNING ANY
CONTRACT OR AGREEMENT OR MAKING ANY PAYMENT TO THE SELLER  OR
THE SELLER'S REPRESENTATIVE". The seller's name and principal
business  address,  along  with  the  date  of the disclosure
document shall also be provided on the cover sheet. No  other
information  shall  appear on the cover sheet. The disclosure
document shall contain the following information  unless  the
seller  uses  a  disclosure document as provided in paragraph
(1) or (2) of subsection (a) of Section 5-30 of this Law:
         (1)  The names and residential  addresses  of  those
    salespersons  who will engage in the offer or sale of the
    business opportunity in this State.
         (2)  The name of the seller, whether the  seller  is
    doing   business   as   an   individual,  partnership  or
    corporation;  the  names  under  which  the  seller   has
    conducted,  is conducting or intends to conduct business;
    and the name of any parent  or  affiliated  company  that
    will  engage  in business transactions with purchasers or
    which will take responsibility for statements made by the
    seller.
         (3)  The names, addresses and titles of the seller's
    officers,   directors,   trustees,   general    managers,
    principal  executives,  agents,  and  any  other  persons
    charged  with  responsibility  for  the seller's business
    activities  relating  to  the  sale   of   the   business
    opportunity.
         (4)  Prior   business   experience   of  the  seller
    relating to business opportunities including:
              (A)  The name, address, and  a  description  of
         any  business  opportunity previously offered by the
         seller;
              (B)  The length of time the seller has  offered
         each such business opportunity; and
              (C)  The   length   of   time  the  seller  has
         conducted the business opportunity  currently  being
         offered to the purchaser.
         (5)  With  respect to persons identified in item (3)
    of this subsection:
              (A)  A description  of  the  persons'  business
         experience  for  the  10  year  period preceding the
         filing  date  of  this  disclosure   document.   The
         description   of   business  experience  shall  list
         principal occupations and employers; and
              (B)  A listing of the persons' educational  and
         professional  backgrounds  including,  the  names of
         schools attended and degrees received, and any other
         information   that   will   demonstrate   sufficient
         knowledge and experience  to  perform  the  services
         proposed.
         (6)  Whether  the seller or any person identified in
    item (3) of this subsection:
              (A)  Has  been  convicted  of  any  felony,  or
         pleaded nolo contendere to a felony charge,  or  has
         been   the   subject   of  any  criminal,  civil  or
         administrative proceedings alleging the violation of
         any  business  opportunity  law,   securities   law,
         commodities  law,  franchise  law,  fraud or deceit,
         embezzlement, fraudulent  conversion,  restraint  of
         trade,     unfair     or     deceptive    practices,
         misappropriation   of   property    or    comparable
         allegations;
              (B)  Has  filed  in  bankruptcy,  been adjudged
         bankrupt, been reorganized due to insolvency, or was
         an owner, principal officer or  general  partner  or
         any  other  person  that  has  so  filed  or  was so
         adjudged or reorganized during or within the last  7
         years.
         (7)  The  name  of the person identified in item (6)
    of this subsection, nature of and parties to  the  action
    or   proceeding,  court  or  other  forum,  date  of  the
    institution of  the  action,  docket  references  to  the
    action, current status of the action or proceeding, terms
    and  conditions  or any order or decree, the penalties or
    damages assessed and terms of settlement.
         (8)  The initial payment required, or when the exact
    amount cannot be determined, a detailed estimate  of  the
    amount of the initial payment to be made to the seller.
         (9)  A  detailed  description of the actual services
    the seller agrees to perform for the purchaser.
         (10)  A detailed description  of  any  training  the
    seller agrees to provide for the purchaser.
         (11)  A  detailed description of services the seller
    agrees  to  perform  preform  in  connection   with   the
    placement   of  equipment,  products  or  supplies  at  a
    location, as well as any agreement necessary in order  to
    locate  or  operate  equipment, products or supplies on a
    premises neither owned nor leased  by  the  purchaser  or
    seller.
         (12)  A  detailed  description  of  any  license  or
    permit  that will be necessary in order for the purchaser
    to engage in or operate the business opportunity.
         (13)  The  business  opportunity  seller   that   is
    required to secure a bond under Section 5-50 of this Law,
    shall  state  in  the disclosure document "As required by
    the State of Illinois, the  seller  has  secured  a  bond
    issued  by (insert name and address of surety company), a
    surety company, authorized to do business in this  State.
    Before  signing  a contract or agreement to purchase this
    business opportunity, you should check  with  the  surety
    company to determine the bond's current status.".
         (14)  Any  representations made by the seller to the
    purchaser concerning sales or earnings that may  be  made
    from   this  business  opportunity,  including,  but  not
    limited to:
              (A)  The bases or assumptions for  any  actual,
         average,  projected  or  forecasted  sales, profits,
         income or earnings;
              (B)  The total number of purchasers who, within
         a period of 3 years of the date  of  the  disclosure
         document, purchased a business opportunity involving
         the  product,  equipment, supplies or services being
         offered to the purchaser; and
              (C)  The total number of purchasers who, within
         3 years of the  date  of  the  disclosure  document,
         purchased   a  business  opportunity  involving  the
         product,  equipment,  supplies  or  services   being
         offered  to  the  purchaser  who,  to  the  seller's
         knowledge,  have  actually  received earnings in the
         amount or range specified.
         (15)  Any  seller  who  makes  a  guarantee   to   a
    purchaser  shall  give  a  detailed  description  of  the
    elements   of   the  guarantee.  Such  description  shall
    include, but shall  not  be  limited  to,  the  duration,
    terms,   scope,   conditions   and   limitations  of  the
    guarantee.
         (16)  A statement of:
              (A)  The total number of business opportunities
         that are the same or similar in nature to those that
         have been sold or organized by the seller;
              (B)  The names and addresses of purchasers  who
         have  requested  a  refund  or  rescission  from the
         seller within the last 12 months and the  number  of
         those  who  have  received the refund or rescission;
         and
              (C)  The total number of business opportunities
         the seller intends to sell in this State within  the
         next 12 months.
         (17)  A   statement   describing   any   contractual
    restrictions,   prohibitions   or   limitations   on  the
    purchaser's  conduct.  Attach  a  copy  of  all  business
    opportunity and other contracts  or  agreements  proposed
    for  use  or  in  use  in  this  State including, without
    limitation, all lease agreements, option agreements,  and
    purchase agreements.
         (18)  The  rights  and obligations of the seller and
    the  purchaser  regarding  termination  of  the  business
    opportunity contract or agreement.
         (19)  A statement accurately describing the  grounds
    upon  which  the  purchaser  may initiate legal action to
    terminate the business opportunity contract or agreement.
         (20)  A copy of the most  recent  audited  financial
    statement of the seller, prepared within 13 months of the
    first  offer  in this State, together with a statement of
    any material changes in the financial  condition  of  the
    seller  from  that date. The Secretary of State may allow
    the seller to submit a limited review in order to satisfy
    the requirements of this subsection.
         (21)  A list of the states in  which  this  business
    opportunity is registered.
         (22)  A  list of the states in which this disclosure
    document is on file.
         (23)  A  list  of  the  states  which  have  denied,
    suspended or revoked the registration  of  this  business
    opportunity.
         (24)  A section entitled "Risk Factors" containing a
    series   of  short  concise  statements  summarizing  the
    principal factors which make this business opportunity  a
    high  risk or one of a speculative nature. Each statement
    shall include a cross-reference  to  the  page  on  which
    further  information  regarding  that  risk factor can be
    found in the disclosure document.
         (25)  Any additional information as the Secretary of
    State may require by rule, regulation, or order.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-45)
    Sec.  5-45.  Denial,   suspension,   or   revocation   of
registration.
    (a)  The  Secretary  of  State may issue an order denying
effectiveness to, or suspending or revoking the effectiveness
of, a registration if the Secretary of State finds  that  the
order is in the public interest and that any of the following
exist:
         (1)  The registration as of its effective date or as
    of  any  earlier  date  in  the  case of an order denying
    effectiveness, or any amendment as of its effective date,
    or any report is incomplete in any  material  respect  or
    contains  any  statement  which  was, in the light of the
    circumstances  under  which  it  was   made,   false   or
    misleading with respect to any material fact.
         (2)  Any   provision   of  this  Law  or  any  rule,
    regulation, order, or condition  lawfully  imposed  under
    this  Law has been willfully violated, in connection with
    the business opportunity:
              (A)  by the person filing the registration; or
              (B)  by the seller, any  partner,  officer,  or
         director  of  the  seller,  any  person  occupying a
         similar status or performing similar  functions,  or
         any  person  directly  or  indirectly controlling or
         controlled by the seller, but  only  if  the  person
         filing  the  registration  is directly or indirectly
         controlled by or acting for the seller.
         (3)  The business opportunity registered  or  sought
    to  be  registered  is  the  subject of an administrative
    order denying, suspending or revoking a registration or a
    permanent or temporary injunction or final order  of  any
    court  of  competent  jurisdiction;  but the Secretary of
    State:
              (A)  may not institute a proceeding against  an
         effective  registration  under  this  paragraph more
         than  one  year  from  the  date  of  the  order  or
         injunction relied on; and
              (B)  may  not  enter  an   order   under   this
         paragraph  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  an  order  under
         this Section.
         (4)  The  seller's enterprise or method of business,
    or that of the business opportunity,  includes  or  would
    include activities which are illegal where performed.
         (5)  The  business  opportunity or the offering of a
    business opportunity has worked or tended to work a fraud
    upon purchasers or would so operate.
         (6)  There has been a failure to file any  documents
    or information required by Section 5-30 of this Law;
         (7)  The  seller has failed to pay the proper filing
    fee but the Secretary of State may enter  only  a  denial
    order  under  this  paragraph  and the Secretary of State
    shall vacate any such order when the deficiency has  been
    corrected.
         (8)  The   seller's  literature  or  advertising  is
    misleading, incorrect, incomplete or deceptive.
    (b)  The  Secretary  of  State  may   not   institute   a
proceeding   under   this   Section   against   an  effective
registration on the basis of a fact or transaction  known  to
the Secretary of State when the registration became effective
unless the proceeding is instituted within the next 30 days.
    (c)  The Secretary of State may by summary order postpone
or  suspend  the  effectiveness  of  the registration pending
final determination of any proceeding  under  this   Section.
Upon  the  entry  of  the order, the Secretary of State shall
promptly notify the seller that the order  has  been  entered
and of the reasons therefor and that within 15 days after the
receipt  of a written request the matter will be set down for
hearing. The written request must be made within 30  days  of
the  entry  of the order. If no hearing is requested and none
is ordered by the Secretary of State, the order  will  remain
in effect until it is modified or vacated by the Secretary of
State. If a hearing is requested or ordered, the Secretary of
State,  after  notice  of  an  opportunity for hearing to the
seller, may modify or vacate the order  or  extend  it  until
final determination.
    (d)  No  summary stop order may be entered under any part
of this Section, except the first sentence of subsection  (c)
of  this  Section,  without  appropriate  prior notice to the
seller, opportunity for hearing, and written findings of fact
and conclusions of law.
    (e)  The Secretary of State may vacate or modify an order
issued under this Section if the  Secretary  of  State  finds
that  the conditions which prompted its entry have changed or
that it is otherwise in the public interest to do so.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-55)
    Sec. 5-55. Administration of this Law.
    (a)  This Law shall be administered by the  Secretary  of
State.
    (b)  It  is unlawful for the Secretary of State or any of
his or her officers or employees to use for personal  benefit
any  information  which  is  filed  with  or  obtained by the
Secretary of State and which is not made public. No provision
of this Law authorizes the Secretary of State or any  of  the
Secretary  of  State's  officers or employees to disclose any
such information except among themselves or when necessary or
appropriate in a proceeding or investigation under this  Law.
No provision of this Law 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 Secretary of State or any of the Secretary of
State's officers or employees.
    (c)   In  no  case shall the Secretary of State or any of
his or her employees or  agents,  in  the  administration  of
this  Law,  incur  any  official  or  personal  liability  by
instituting  an  injunction  or other proceeding, by denying,
suspending, or revoking the   registration  of  any  business
opportunity,   by  prohibiting  the  offer  or  sale  of  any
business opportunity,  or  by  prohibiting  any  person  from
offering or selling business  opportunities.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-60)
    Sec. 5-60. Investigations and subpoenas.
    (a)  The Secretary of State:
         (1)  may  make such public or private investigations
    within or outside of this State as the Secretary of State
    deems necessary  to  determine  whether  any  person  has
    violated or is about to violate any provision of this Law
    or  any  rule, regulation, or order under this Law, or to
    aid in the enforcement of this Law or in the  prescribing
    of rules and forms under this Law;
         (2)  may  require  or  permit  any  person to file a
    statement, under oath or otherwise as  the  Secretary  of
    State  determines,  as to all the facts and circumstances
    concerning the matter to be investigated; and
         (3)  may   publish   information   concerning    any
    violation  of  this Law or any rule, regulation, or order
    under this Law.
    (b)  For the purpose of any investigation  or  proceeding
under this Law, the Secretary of State or his or her designee
may  administer  oaths  and affirmations, subpoena witnesses,
compel  their  attendance,  take  evidence  and  require  the
production of any books, papers,  correspondence,  memoranda,
agreements, or other documents or records which the Secretary
of State deems relevant or material to the inquiry.
    (c)  In  case  of  contumacy  by,  or  refusal  to obey a
subpoena issued to any person,  through  the  Office  of  the
Attorney  General  may  bring  an  appropriate  action in any
circuit court of the State of Illinois  for  the  purpose  of
enforcing the subpoena.
    (d)  It  shall  be  a violation of the provisions of this
Law for any person to fail to  file  with  the  Secretary  of
State any report, document, or statement required to be filed
under  the  provisions  of  this Section or to fail to comply
with the terms of any order of the  Secretary of State issued
pursuant to this Law.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-65)
    Sec. 5-65. Remedies. Whenever it appears to the Secretary
of State that any person has engaged in or is about to engage
in any act  or  practice  constituting  a  violation  of  any
provision of this Law or any rule, regulation, or order under
this Law, the Secretary of State may:
         (1)  Issue  an order, anything contained in this Law
    to the contrary notwithstanding, directing the person  to
    cease and desist from continuing the act or practice. Any
    person  named  in  a cease and desist order issued by the
    Secretary of State may, within 30 15 days after the  date
    receipt of the entry of the order, file a written request
    for  a  hearing  with  the  Secretary  of  State.  If the
    Secretary of State does not receive a written request for
    a hearing within the time specified, the cease and desist
    order will be permanent and the person named in the order
    will be deemed to have waived all  rights to  a  hearing.
    If a hearing is requested, the order will remain in force
    until  it  is modified, vacated, rescinded or expunged by
    the Secretary of State.
         (1.5)  Prohibit or suspend the offer or sale of  any
    business  opportunity,    prohibit  or suspend any person
    from offering or selling  any  business    opportunities,
    impose any fine for violation of this Law, issue an order
    of public  censure, or enter into an agreed settlement or
    stipulation.  No  such  order  may  be    entered without
    appropriate  prior  notice  to  all  interested  parties,
    opportunity for hearing, and written findings of fact and
    conclusions of law.
         (2)  Bring an action in the  circuit  court  of  any
    county  to  enjoin  the  acts or practices and to enforce
    compliance with this Law  or  any  rule,  regulation,  or
    order  under  this Law. Upon a proper showing a permanent
    or temporary injunction, restraining order,  or  writ  of
    mandamus  shall  be granted and a receiver or conservator
    may be appointed for the  defendant  or  the  defendant's
    assets  or  the  court  may order rescission, which shall
    include restitution plus the legal interest rate, for any
    sales of business opportunities determined to be unlawful
    under this Law or any rule, regulation,  or  order  under
    this  Law.  The  court shall not require the Secretary of
    State to post a bond.
         (3)  The Secretary of State may refer such  evidence
    as  may be available concerning violations of this Law or
    any rule, regulation, or order  under  this  Law  to  the
    Attorney General or the appropriate State's Attorney, who
    may,  with  or  without  such  a reference, institute the
    appropriate proceedings under this Section.
         (4)  In addition to any  other  sanction  or  remedy
    contained  in this Section, the Secretary of State, after
    finding that any provision of this Law has been violated,
    may impose a fine as provided by rule  or  order  against
    the  violator  not  to  exceed $10,000 per violation, and
    may issue  an  order  of    public  censure  against  the
    violator.
         (5)  Notwithstanding the foregoing, the Secretary of
    State,  after  notice and opportunity for hearing, may at
    his or her discretion enter into  an  agreed  settlement,
    stipulation,  or  consent  order  with  a  respondent  in
    accordance   with   the   provisions   of   the  Illinois
    Administrative  Procedure  Act.  The  provisions  of  the
    agreed settlement, stipulation, or  consent  order  shall
    have  the full force and effect of an order issued by the
    Secretary of State.
         (6)  The  action  of  the  Secretary  of  State   in
    denying,  suspending,  or  revoking the registration of a
    business opportunity,  in  prohibiting  or  suspending  a
    person  from  offering or selling business opportunities,
    in  prohibiting  or  suspending  the  offer  or  sale  of
    business  opportunities,  in  imposing   any   fine   for
    violation  of  this Law, or in issuing any order shall be
    subject  to  judicial  review  under  the  Administrative
    Review Law which shall apply to and govern  every  action
    for  the judicial review of final actions or decisions of
    the Secretary of State under this Law.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-70)
    Sec. 5-70. Rules, forms, orders and hearings.
    (a)  The Secretary of State may  amend,  modify,  vacate,
and expunge orders and may make, amend and rescind rules and,
forms,   and  orders  as  are  necessary  to  carry  out  the
provisions of this Law including rules  and  forms  governing
disclosure  documents, applications and reports, and defining
any terms, whether or not used in this  Law  insofar  as  the
definitions  are not inconsistent with the provisions of this
Law. For the purpose of rules and  forms,  the  Secretary  of
State  may  classify  business  opportunities,  persons,  and
matters   within  his  or  her  jurisdiction,  and  prescribe
different requirements for different classes.
    (b)  No rule, form, or order may  be  made,  amended,  or
rescinded unless the Secretary of State finds that the action
is necessary or appropriate in the public interest or for the
protection  of  the purchaser. In prescribing rules and forms
the Secretary of State may cooperate with the  administrators
of other jurisdictions with a view to effectuating the policy
of  this  Law  to  achieve maximum uniformity in the form and
content of disclosure statements, applications,  and  reports
whenever practicable.
    (c)  No  provision  of  this  Law  imposing any liability
applies  to  any  act  done  or  omitted  in  good  faith  in
conformity with any rule, form, or order of the Secretary  of
State,  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.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-75)
    Sec. 5-75.  Administrative files and opinions.
    (a)  A document is filed  with the  Secretary  of   State
when all requirements of this Law with respect to filing have
been complied with and the required fee has been paid when it
is received by the Secretary of State.
    (b)  The  Secretary  of  State  shall keep records of all
applications for registration and disclosure documents  which
are  or  have  been  effective  under this Law and all orders
which have been entered under this Law. The register shall be
open for public inspection.
    (c)  Unless otherwise provided by law,  any  registration
statement,  filing,  application,  or  report  filed with the
Secretary of State shall be open for public inspection.
    (d)  The Secretary of State may  honor  written  requests
from  interested  persons  for  non-binding opinions upon the
payment of a fee established pursuant to  subsection  (c)  of
Section  5-30  of  this Law, which shall not be returnable in
any event.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-95)
    Sec. 5-95. Fraudulent practices. It is unlawful  for  any
person,  in connection with the offer or sale of any business
opportunity in this State or any offer or  sale  pursuant  to
the exemptions granted under subdivisions 5-10(a), (c),  (d),
or (h), directly or indirectly:
         (1)  To  employ  any  device,  scheme or artifice to
    defraud;
         (2)  To make 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;
    or
         (3)  To engage in any act,  practice  or  course  of
    business  which  operates  or would operate as a fraud or
    deceit upon any person.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-115)
    Sec. 5-115. Criminal penalties.
    (a)  Any person who  willfully  violates  Sections  5-25,
5-50, 5-95, 5-105,  5-110, subsection (a) of Section 5-35, or
subsection  (a) of Section 5-40, or subsection (d) of Section
5-60 of this Law or who willfully violates any order of which
the person has notice, or who violates Section 5-100 of  this
Law  knowing  that the statement made was false or misleading
in any material respect is guilty of a  Class  3  felony  for
each  offense.  Each of the acts specified shall constitute a
separate offense and a prosecution or conviction for any  one
of  such offenses shall not bar prosecution or conviction for
any other offense.
    (b)  No prosecution for any crime under this Law  may  be
commenced more than 5 years after the alleged violation.
    (c)  Nothing in this Law limits the power of the State to
punish  any  person for any conduct which constitutes a crime
under any other statute.
    (d)  The Secretary of State may refer  such  evidence  as
may  be  available  concerning  violations of this Law or any
rule, regulation, or order under this  Law  to  the  Attorney
General  or  appropriate  State's  attorney, who may, with or
without such a reference, institute the appropriate  criminal
proceedings under this Law.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 602/5-130)
    Sec. 5-130. Miscellaneous provisions.
    (a)  No action shall be maintained under Section 5-120 of
this  Law  unless  commenced  before 3 years after the act or
transaction constituting the violation.
    (a-5)  No administrative action shall be brought  by  the
Secretary  of  State  for  relief  under   this Law after the
earlier to occur of (i) 3 years from the date upon which  the
Secretary  of State had notice of facts which in the exercise
of reasonable diligence  would lead to  actual  knowledge  of
the  alleged  violation of the Act, or (ii) 5 years  from the
date on which the alleged violation occurred.
    (b)  The rights and and remedies under this  Law  are  in
addition  to  any  other rights or remedies that may exist at
law or in equity.
    (c)  Any condition, stipulation or provision binding  any
purchaser  of a business opportunity to waive compliance with
or relieving a person from any duty or liability  imposed  by
or  any right provided by this Law or any rule, regulation or
order issued pursuant to this Law is void.
(Source: P.A. 89-209, eff. 1-1-96.)

    Section 99.  Effective date.  This Act takes effect  July
1, 1997.

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