Ariz. Admin. Code § R14-4-144 - Suitability Standards Pursuant to A.R.S. Section 44-1845
A. Any issuer applying for registration under
A.R.S. Title 44, Chapter 12, Article 7, and engaging in a transaction of a type
specified in A.R.S. §
44-1845(B)(1)
may apply for a special registration.
Pursuant to A.R.S. §
44-1845(C),
the special registration will impose the suitability standards of subsections
(B) or (C) on the transaction in lieu of the conditions and standards
prescribed under A.R.S. §§
44-1876,
44-1877,
44-1878,
44-1921(1),
(3), and (4), and the rules under those
Sections, except when the sale of securities works or would tend to work a
fraud or deceit upon the investors.
B. For all offerings listed on the Nasdaq
SmallCapSM Market, the dealer, or the issuer if engaging in the sale of its
securities, must have a reasonable belief that the potential investor satisfies
any of the following conditions:
1. Minimum
of $100,000, or $150,000 when combined with spouse, in gross income during the
prior year and a reasonable expectation that the investor will have such income
in the current year; or
2. Minimum
net worth of $250,000, or $300,000 when combined with spouse, exclusive of
home, home furnishings and automobiles, with the investment not exceeding 10%
of the net worth of the investor, together with spouse, if
applicable.
C. For
offerings not listed on the Nasdaq SmallCapSM Market, the dealer, or the issuer
if engaging in the sale of its securities, must have a reasonable belief that
the potential investor satisfies any of the following conditions:
1. Minimum of $150,000, or $200,000 when
combined with spouse, in gross income during the prior year and a reasonable
expectation that the investor will have such income in the current year;
or
2. Minimum net worth of
$350,000, or $400,000 when combined with spouse, exclusive of home, home
furnishings and automobiles, with the investment not exceeding 10% of the net
worth of the investor, together with spouse, if applicable.
D. The suitability standards
specified in this Section are not available for direct participation programs,
including real estate programs, real estate investment trusts, commodity pools,
oil and gas programs, equipment leasing programs, and other similar programs
that let investors participate directly in the cash flow and tax benefits of
the underlying investments.
E. The
issuer, or any of its predecessors, affiliates, directors, officers, general
partners or beneficial owners of 10% or more of any class of its equity
securities, or any underwriter of the securities shall not fall within any of
the disqualification provisions of A.R.S. §
44-1901(G)(1)
though (6).
F. The Commission may, at its discretion,
waive any disqualification caused by subsection (E).
G. Any disqualification caused by subsection
(E) shall cease to exist if any of the following occurs:
1. The basis for the disqualification has
been removed by the jurisdiction creating it.
2. The jurisdiction in which the
disqualifying event occurred issues a written waiver of the
disqualification.
3. The
jurisdiction in which the disqualifying event occurred declines in writing to
enforce the disqualification.
H. Adherence to a suitability standard
imposed in connection with an offering subject to this Section, by condition or
otherwise, shall not relieve a dealer from compliance with
R14-4-130(A)(4).
I. Any offering
document used in connection with an offering in which suitability standards are
imposed under this Section shall prominently and conspicuously include a
description of the applicable suitability standards.
Notes
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