Person

Hensbarrow Securities is opening four files and must decide which account holder is a person as the Uniform Securities Act defines that term. The candidates are the Borden County Water Authority, a political subdivision of State J; Alonso Ferrier, who died in January; Nell Ferrier, who is fifteen years old; and Gideon Ferrier, whom a court adjudicated mentally incompetent in 2024. Which one is a person?

1. A.Alonso FerrierA deceased individual is not a person under the Act. His estate is handled through the executor, who is a person in his or her own right.
2. B.Nell FerrierA minor is not a person under the Act. That is why custodial account structures exist, with an adult custodian standing in the minor position.
3. C.Gideon FerrierAn individual adjudicated mentally incompetent is not a person under the Act, because the adjudication removes the capacity to contract.
4. D.The Borden County Water AuthorityCorrect. Governments and political subdivisions of governments are listed inside the definition of person.

Why: The Act defines person broadly to include individuals, corporations, partnerships, associations, joint-stock companies, unincorporated organizations, trusts whose beneficial interests are evidenced by a security, governments and political subdivisions of governments. A county water authority is a political subdivision and therefore squarely a person. Three categories are outside the term because they cannot contract for themselves: a deceased individual, a minor, and an individual adjudicated mentally incompetent.

Quillingford Introductions LLC contracts with Barrowdene Securities, a registered broker-dealer. Under the contract Quillingford, acting through its own staff, solicits retail customers, takes their orders and transmits them to Barrowdene, which executes and clears everything. Quillingford is paid a share of the resulting commissions and holds no customer funds. Under the Uniform Securities Act, Quillingford is:

1. A.a broker-dealer that must register as such, because only an individual can be an agentCorrect. The agent definition is limited to individuals, so an entity performing that role is a broker-dealer.
2. B.an agent of Barrowdene Securities, whose registration covers the arrangementAn entity cannot be an agent. The agent definition applies only to individuals.
3. C.exempt from registration, because it never holds customer funds or securitiesCustody of funds is not part of the broker-dealer definition. Effecting transactions for others is.
4. D.an issuer, because it sells only securities executed by another firmAn issuer is a person that issues or proposes to issue its own securities. Quillingford issues nothing.

Why: Only an individual can be an agent under the Act, because the definition of agent begins with the word individual. Quillingford is a limited liability company, so whatever its staff do it cannot itself be an agent of Barrowdene. Because it is engaged in the business of effecting securities transactions for the accounts of others and fits none of the broker-dealer exclusions, it is a broker-dealer and must register as one. Its individual solicitors are separately agents.