Do anti-fraud provisions apply?All securities transactions, even exempt transactions, are subject to the antifraud provisions of the federal securities laws. This means that you and your company will be responsible for false or misleading statements that you or others on your behalf make regarding your company, the securities offered, or the offering. You and your company are responsible for any such statements, whether made by your company or on behalf of the company, and regardless of whether they are made orally or in writing. Show
The government enforces the federal securities laws through criminal, civil and administrative proceedings. Private parties also can bring actions under certain securities laws. Also, if all conditions of the exemptions are not met, purchasers may be able to return their securities and obtain a refund of their purchase price. What is an accredited investor?Certain securities offerings that are exempt from registration may only be offered to, or purchased by, persons who are “accredited investors.” An “accredited investor” is:
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Do state law requirements apply?While the SEC regulates and enforces the federal securities laws, each state has its own securities regulator who enforces what are known as “blue sky” laws. If a company is selling securities, it must comply with both federal regulations and state securities laws and regulations in the states where securities are offered and sold (typically, the states where offerees and investors are based). Under the Securities Act, if a company’s offering qualifies for certain exemptions from registration, that offering is not required to be registered or qualified by state securities regulators. Even if the offering is made under one of those exemptions, the states still have authority to investigate and bring enforcement actions for fraud, impose state notice filing requirements, and collect state fees. The failure to file, or pay filing fees regarding, any such materials may cause state securities regulators to suspend the offer or sale of securities within their jurisdiction. Companies should contact state securities regulators in the states in which they intend to offer or sell securities for further guidance on compliance with state law requirements. The following table illustrates which offerings are potentially subject to state registration or qualification under the Securities Act.
For the offerings that are potentially subject to state registration or qualification, each state’s securities laws have their own separate registration requirements and exemptions to registration requirements. Even if the offering is not subject to state registration or qualification, there may still be state notice filing requirements and fees. To locate a state securities regulator and learn more about a particular state’s securities laws, please visit the North American Securities Administrators Association (NASAA) website. What are restricted securities?“Restricted securities” are previously-issued securities held by security holders that are not freely tradable. Securities Act Rule 144(a)(3) identifies what offerings produce restricted securities. After such a transaction, the security holders can only resell the securities into the market by using an effective registration statement under the Securities Act or a valid exemption from registration for the resale, such as Rule 144. Rule 144 is a "safe harbor" under Section 4(a)(1) providing objective standards that a security holder can rely on to meet the requirements of that exemption. Rule 144 permits the resale of restricted securities if a number of conditions are met, including holding the securities for six months or one year, depending on whether the issuer has been filing reports under the Exchange Act. Rule 144 may limit the amount of securities that can be sold at one time and may restrict the manner of sale, depending on whether the security holder is an affiliate. An affiliate of a company is a person that, directly, or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the company. How can an investor resell non-restricted securities?An investor that is not affiliated with the issuer and wishes to sell securities that are not restricted must either register the transaction or have an exemption for the transaction. An exemption commonly relied upon for the resale of the securities is Section 4(a)(1) of the Securities Act which is available to any person other than an issuer, underwriter or dealer. Please be aware that several exemptions, including the exemptions under Regulation D, are only available for offers and sales by an issuer of securities to initial purchasers and are not available to any affiliate of the issuer or to any person for resales of the securities. What is the process for requesting a waiver of “bad actor” disqualification?The Office of Enforcement Liaison in the Division of Corporation Finance handles applications for waivers from the disqualifications imposed by Rule 262 of Regulation A, Rule 504(b)(3) of Regulation D, Rule 506(d) of Regulation D and Rule 503 of Regulation Crowdfunding. Disqualification ProvisionsThe disqualification provisions provide that the Regulation A, Regulation D, and Regulation Crowdfunding exemptions from registration are not available for an offering if, among other things, the issuer or other “covered persons” have experienced a disqualifying event, such as being convicted of or subject to court or administrative sanctions for certain securities fraud or other violations of specified laws. The substance of each of these requirements is consistent across the rules. For a discussion of the covered persons and disqualifying events, please see the Small Business Compliance Guides for Regulation A, Rule 504 and Rule 506 of Regulation D and Regulation Crowdfunding. Under Regulation D and Regulation Crowdfunding, disqualification will not arise as a result of disqualifying events relating to any conviction, order, judgment, decree, suspension, expulsion or bar that occurred before the effective date of the rule or “bad actor” amendment. Matters that existed before the effective date of the rule or “bad actor” amendment, are still within the relevant look-back period, and would otherwise be disqualifying are, however, required to be disclosed. The table below provides the effective dates for each of these rules.
For offerings under Regulation A, please see the Small Business Compliance Guide to determine whether or not an event is considered to be a disqualifying event. WaiversThe Commission may waive Regulation A, Regulation D and Regulation Crowdfunding disqualifications upon a showing of good cause that the disqualification is not necessary under the circumstances. The Commission has delegated authority to grant waivers of this kind to the Director of its Division of Corporation Finance, and the authority has been subdelegated to certain officials of the Division. The Commission itself retains authority to grant these waivers. Granted waivers are made publicly available at the Division of Corporation Finance’s website page on No-Action letters. The Division of Corporation Finance issued a policy statement describing the factors it considered in waiver requests. In Release No. 33-9414 (July 10, 2013), the Commission also identified a number of circumstances (such as change of control, change of supervisory personnel, absence of notice and opportunity for hearing, and relief from a permanent bar for a person who does not intend to apply to reassociate with a regulated entity) that could be relevant to an evaluation of a Rule 506 waiver request. Submitting Your Waiver RequestSpecify Grounds for Granting Waiver Draft Requests If you wish to receive Commission staff feedback on your application before a disqualifying event has occurred, you may submit it in advance in draft form. For example, if you are negotiating a settlement of a Commission enforcement action and want your waiver to be effective at the same time as the injunction or administrative order settling the matter is issued, you should contact Commission staff as soon as practicable beforehand to discuss your timing requirements, and submit the application in draft form. Your contact point should be the Office of Enforcement Liaison at (202) 551-3420. Final Requests In the context of settlement of an enforcement action, you may submit a dated manually signed application on the day your injunction or order is issued. Requesting Confidential Treatment of Your RequestIf you wish to seek confidential treatment of information contained in your waiver submission (such as information relating to an ongoing investigation), you should request confidential treatment in accordance with the Commission’s confidential treatment procedures in 17 C.F.R. § 200.83. These types of applications should be submitted under cover of another letter explaining the circumstances of the request. Additional Information
Which of the following are exempt securities under the Uniform Securities Act?Exempt Security - Common types of exempt securities are government securities, bank securities, high-quality debt instruments, non-profit securities, and insurance contracts.
Which of the following securities are exempt under the Uniform Securities Act quizlet?Which of the following securities is/are EXEMPT under the Uniform Securities Act? Exempt securities under the Act include securities issued by Savings and Loans; municipal bonds, including industrial revenue bonds; and the securities of companies listed on stock exchanges (a "blue chip" exemption).
Which of the following securities are exempt from the registration requirements of the Uniform Securities Act?All government and municipal securities are exempt from registration requirements under the Uniform Securities Act as are insurance company securities if the company is authorized to do business in this state.
What is an exempt issuer?Exempt Issuance means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non- ...
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