The Securities Division has noted the growing use of zero coupon bonds as incentives in the sales of furniture, cars, tires and houses.  Although certain bonds may be exempt under A.R.S. § 44-1843, the use of non-exempt zero coupon bonds as incentives may constitute a “sale” within the meaning of the Arizona Securities Act.  Section 44-1801.12, which defines “sale”, states that “a security given or delivered with, or as a bonus on account of, a purchase of securities or other thing, shall be conclusively presumed to constitute a part of the subject of the purchase and to have been sold for value.”  Further, as Section 44-1842 of the Act provides, it is unlawful to offer or sell securities unless the offeror/seller is registered pursuant to Article 9 of the Act.  In conclusion a merchant who uses zero coupon bonds as a sales incentive may have to be registered as a securities dealer or salesman unless he has a proper exemption.  Rule 104 requires sellers of bonds issued by state governments to register as a dealer.

Securities Bulletin, Spring 1985.