950 CMR, § 14.402 - Exemptions
(A)(1) For the purposes of M.G.L. c. 110A,
§ 402(a)(1) only, the term "other instrumentality" shall include any
political subdivision of any state other than the Commonwealth.
(A)(2) through (7): (Reserved)
(A)(8) The Secretary specifies that a
security listed or approved for listing upon notice of issuance on the
following exchanges or markets qualifies for the exemption provided under
M.G.L. c. 110A, § 402(a)(8): the New York Stock Exchange; the NYSE
American LLC; National Market System of the Nasdaq Stock Market ("Nasdaq/NGM");
Tier I of the NYSE Arca, Inc.; Tier I of the NASDAQ PHLX LLC; the Chicago Board
Options Exchange, Incorporated; the Nasdaq Capital Market; Tier I and Tier II
of Bats BZX Exchange, Inc.; Investors Exchange LLC.; as well as options listed
on Nasdaq ISE, LLC.
(A)(9):
(Reserved)
(A)(10) To coordinate
the interpretation and administration of M.G.L. c. 110A with related federal
regulations, "commercial paper", a5s used in M.G.L. c. 110A, § 402(a)(10),
includes prime quality negotiable commercial paper of a type not ordinarily
purchased by the general public, that is, paper used to facilitate well
recognized types of current operational business requirements and a type
eligible for discounting by Federal Reserve Banks, as set forth in SEC Release
No. 33-4412.
(A)(11)
(a) No notice pursuant to M.G.L. c. 110A,
§ 402(a)(11) need be given for the following:
1. an employees' benefit plan qualified under
Section 401 of the Internal Revenue Code of 1986, as amended from time to time,
or which does not permit voluntary contributions by participating
employees;
2. Blue Cross, group
life, wage continuation, medical reimbursement, or any other plan whose primary
purpose is to insure employees against a specified risk or loss; or,
3. an investment contract otherwise exempt
under M.G.L. c. 110A or 950 CMR 14.400.
(b) The notice that M.G.L. c. 110A, §
402(a)(11) requires is hereby waived.
(Note: The Secretary has also adopted an exemption for employee compensatory arrangements under 950 CMR 14.402(B)(13)(a).)
(A)(12)
(Reserved)
(B)(1)
(a)
Isolated, as
used in M.G.L. c. 110A, § 402(b)(1), means not in the course of repeated
and successive transactions of like character. Two consecutive sales of
securities made within such a period of time and in such circumstances as to
indicate that they involve the same plan of financing or disposition are not
isolated.
(b)
Non-Issuer Transaction or Distribution, as used in
M.G.L. c. 110A, § 402(b)(1) through (3), shall exclude:
1. a transaction or distribution by an
officer, director or controlling person of the issuer if such transaction or
distribution, when aggregated with others by such person during the preceding
three months, exceeds the amount permitted to be sold under
17
CFR 230.144(e)(1);
or
2. a transaction or distribution
by a broker-dealer, acting either as principal or market-maker, in the
security:
(i) for a period of six months
following the issuer's initial public distribution of the security involved in
the transaction or distribution; or
(ii) until the security becomes a federal
covered security under section 18(b)(4)(A) of the Securities Act of 1933, as
amended.
B(2)
(a)
Recognized Securities Manual, as used in M.G.L. c.
110A, § 402(b)(2)(A), includes all manuals published by Standard &
Poor's and Moody's, exclusively.
The issuer must have at a minimum a profit and loss statement covering a full year of operations thus excluding start-up companies with less than 12 months of operations. Anyone claiming an exemption under 950 CMR 14.402(B)(2)(a) shall bear the burden of showing that the financial statements meet the requirements of 950 CMR 14.402(B)(2)(a) and M.G.L. c. 110A.
(b)
Registered under the Securities Exchange Act of 1934
shall exclude for purposes of M.G.L. c. 110A, § 402(b)(2)(C) any security
made exempt from registration by 17 CFR 240.12g3-2(b)-(c).
B(3) If the confirmation required by 950 CMR
14.402(B)(3) is conspicuously marked "Unsolicited Order," the customer need not
acknowledge that the sale of a security exempt under M.G.L. c. 110A, §
402(b)(3) was unsolicited. Otherwise, the customer purchasing such a security
shall acknowledge in writing that the sale was unsolicited. A broker-dealer
shall preserve such acknowledgement in accordance with the record-keeping
requirements of 950 CMR 12.200. A registered broker-dealer will not be deemed
to have solicited an order or offer to buy a security purchased by or through
him, merely by reason of the publication of bid and offer quotations for that
security in an inter-dealer quotation service or in the financial columns of
newspapers.
(B)(4) through (8)
(Reserved)
(B)(9)
(a) In applying the exemption allowed under
M.G.L. c. 110A, § 402(b)(9), only offers which are part of the same
offering will be aggregated for purposes of calculating the limitations
thereunder. Offers which are exempt pursuant to 950 CMR 14.402(B)(13)(a) are
deemed to be not part of the same offering for purposes of 950 CMR
14.402(B)(9)(a). Note 1: The following factors should be considered in
determining if an offer is part of the same offering:
1. whether the offers are part of a single
plan of financing;
2. whether the
offers involve issuance of the same class of securities;
3. whether the offers have been made at or
about the same time;
4. whether the
same type of consideration is received; and
5. whether the offers are made for the same
general purpose.
Note 2: Offers, other than those exempt under M.G.L. c. 110A, § 402(b)(8), which are part of the same offering, are aggregated to calculate the limitations contained in 950 CMR 14.402(B)(9)(a) even if such offers are exempt under other subsections of M.G.L. c. 110A, § 402(b).
(b) If an
offer is directed to more persons in The Commonwealth than permitted under
M.G.L. c. 110A or 950 CMR 14.402(B)(9) during any period of twelve consecutive
months, the exemption is not available as to all or any part of the offering or
any transaction with respect thereto, unless the Director has before or after
the offering is commenced, by order, increased the number of permitted
offerees.
(c) The exemption allowed
under M.G.L. c. 110A, § 402(b)(9) shall not be available for any issuer
transaction involving the following:
1. a
security registered under the Securities Act of 1933, as amended; or
2. the public distribution of a security
registered under the laws of another state.
(d) A person offering or selling a security
or effecting a transaction which is exempt from registration under M.G.L. c.
110A, § 402(a)(11), M.G.L. c. 110A, § 402(b)(9), or M.G.L. c. 110A,
§ 402(b)(11), shall preserve for three years following the completion of
the offer and/or sale these records:
1. a
copy of any required notice filed with the Secretary and all exhibits
thereto;
2. a copy of all
literature the issuer used to disclose the terms of the offer to
offerees;
3. originals of all
writings the issuer received and copies of all writings it sent relating to the
offer, sale or transfer of the securities, including but not limited to
purchase agreements and confirmations; and
4. a list of the names and addresses of
persons to whom the securities were offered, setting forth next to each name
the type and amount of such securities offered to each, the consideration paid
or promised, the method of payment (cash, check, property, services, note,
etc.), and the name of each person or persons representing the issuer in
effecting the sale. A registered broker-dealer who represented the person in
the offer or sale of a security or in effecting a transaction which M.G.L. c.
110A, § 402(a)(11), M.G.L. c. 110A, § 402(b)(9), or M.G.L. c. 110A,
§ 402(b)(11) exempts may, in lieu of such person, preserve copies of the
notice, as required hereby.
(e) The exemption allowed under M.G.L. c.
110A, § 402(b)(9) shall not be available if the issuer or any person
acting on its behalf offers or sells the securities by any form of general
advertising, including, but not limited to, the following:
1. any advertisement, article, notice or
other communication published in any newspaper, magazine, or similar media or
broadcast over television or radio; and
2. any seminar or meeting whose attendees
have been invited by any general advertising.
(f) The exemption allowed under M.G.L. c.
110A, § 402(b)(9) shall not be available if the issuer or sponsor of the
securities, any of its directors, executive officers, general partners or
beneficial owners of ten percent or more of any class of its equity securities,
any of its promoters currently connected with it in any capacity, any
affiliates, or any person (other than a broker-dealer or agent currently
registered under M.G.L. c. 110A, § 201) who has been or will be paid any
commission, discount, fee or other remuneration, directly or indirectly, for
soliciting any prospective purchaser of any security of the issuer or sponsor
offered or sold to residents in The Commonwealth:
1. has filed a registration statement which
is the subject of a currently effective registration stop order entered
pursuant to any state's securities law within five years prior to the filing of
the notice required under this exemption;
2. has been convicted within five years prior
to the filing of the notice required under this exemption of any felony or
misdemeanor in connection with the offer, purchase or sale of any security or
any felony involving fraud or deceit, including but not limited to forgery,
embezzlement, obtaining money under false pretenses, larceny or conspiracy to
defraud;
3. is currently subject to
any state administrative enforcement order or judgment entered by that state's
securities administrator within five years prior to the filing of the notice
required under this exemption or is subject to any state's administrative
enforcement order or judgment in which fraud or deceit, including but not
limited to making untrue statements of material facts and omitting to state
material facts, was found and the order or judgment was entered within five
years prior to the filing of the notice required under this
exemption;
4. is subject to any
state's administrative enforcement order or judgment which prohibits, denies or
revokes the use of any exemption from registration in connection with the
offer, purchase or sale of securities;
5. is currently subject to any order,
judgment, or decree of any court of competent jurisdiction temporarily or
preliminarily restraining or enjoining, or is subject to any order, judgment or
decree of any court of competent jurisdiction, permanently restraining or
enjoining such party from engaging in or continuing any conduct or practice in
connection with the purchase or sale of any security or involving the making of
any false filing with the state entered within five years prior to the filing
of the notice required under this exemption; or
6. is disqualified from utilizing the
exemption available under Regulation A of the SEC from registration under the
Securities Act of 1933, as amended.
7. The prohibition of 950 CMR
14.402(B)(9)(f)1., 2., 3., 4. and 5. shall not apply if the person subject to
the disqualification is duly licensed or registered to conduct securities
related business in the state in which the administrative order or judgment was
entered against such person or if the broker-dealer employing such party is
licensed or registered in the Commonwealth and the Form BD filed with the
Commonwealth discloses the order, conviction, judgment or decree relating to
such person. No person disqualified under 950 CMR 14.402(B)(9)(f) may act in a
capacity other than that for which the person is licensed or
registered.
8. Any disqualification
caused by 950 CMR 14.402(B)(9)(f) is automatically waived if the SEC, the state
securities administrator or agency of the state which created the basis for
disqualification, determines upon a showing of good cause that it is not
necessary under the circumstances that the exemption be denied.
(g) The notice required to be
filed pursuant to M.G.L. c. 110A, § 402(b)(9)(B) shall contain the
following information and documentation:
1.
the issuer's or sponsor's name, form of organization, address and telephone
number;
2. the identity of the
person(s) who will be selling the securities in the Commonwealth (and in the
case of such persons other than the issuer and its officers, partners and
employees, describing their relationship with the issuer in connection with the
transaction and the basis of their compliance with or exemption from the
requirements of M.G.L. c. 110A, § 201) and describing any commissions,
discounts, fees or other remuneration to be paid, directly or indirectly, to
such person(s);
3. a description of
the securities to be sold;
4. the
anticipated aggregate dollar amount of the offering;
5. the anticipated required minimum
investment, if any, by each purchaser of the securities to be
offered;
6. a list of the states in
which the securities are proposed to be sold;
7. a statement by the offer or that, after
reasonable inquiry, it believes that it is in compliance with 950 CMR
14.402(B)(9)(f);
8. a copy of any
written document or materials used or proposed to be used in connection with
the offer and sale of the securities;
9. if the issuer is not a corporation
organized under the laws of the Commonwealth, a consent to service of process
naming the Massachusetts Secretary of State as service agent using the Uniform
Consent to Service of Process (Form U-2) signed by the issuer and acknowledged
before a notary public or other similar officer and accompanied by a properly
executed Corporate Resolution (Form U-2A), if applicable;
10. a non-refundable filing fee in the
following amount:
|
Total Amount of Offering |
Filing Fee |
|
0-$500,000 |
$150 |
|
Over $500,000-$2,000,000 |
$250 |
|
Over $2,000,000-$7,500,000 |
$500 |
|
Over $7,500,000 |
$750 |
11.
additional information or documents which the Director may request.
Any notice which is in compliance with 950 CMR 14.402(B)(9)(g)1. through 11. for which a Form D has been filed will also be deemed to be a notice in compliance with 950 CMR 14.402(B)(13)(i)3. and will be deemed filed as of the date filed under 950 CMR 14.402(B)(9), if so requested by the offer or. A notice on SEC Form D may be substituted for 950 CMR 14.402(B)(9)(g)1. through 7. if so requested by the offer or.
(h) It shall be grounds for the
Director to enter an order denying or revoking the exemption provided under 950
CMR 14.402(B)(13)(i) for a particular offering if a non-corporate issuer
purports to exculpate, exonerate or indemnify against loss, its general
partner(s), trustee(s) or other persons performing similar functions, any
affiliate of the foregoing, or any broker-dealer selling the securities of such
issuer, for violations of federal or state securities laws, or any other
intentional or criminal wrongdoing.
(i) For purposes of M.G.L. c. 110A, §
402(b)(9), if the number of offerees in Massachusetts in an offering exceeds
25, the number of offerees (other than those designated in M.G.L. c. 110A,
§ 402(b)(8)) permitted is hereby increased to the number to whom the
offering is actually made by the offer or, provided the following conditions
are met:
1. the number of persons within the
Commonwealth (other than those designated in M.G.L. c. 110A, § 402(b)(8))
to whom the securities are sold does not exceed ten;
2. no commission, discount fee or other
remuneration is paid directly or indirectly to any person for soliciting any
purchaser in the Commonwealth (other than those designated in M.G.L. c. 110A,
§ 402(b)(8)) unless the person receiving such payment is appropriately
registered as a broker-dealer or an agent; and
3. neither the issuer nor any person acting
on its behalf offers or sells the securities by any form of general
solicitation.
(j) For
purposes of M.G.L. c. 110A, § 402(b)(9) and M.G.L. c. 110A, §
402(b)(11), Commission or Other Remuneration includes,
but is not limited to, the following:
1. any
consideration received by any person other than a director, officer or
employee, including any fee, discount, or commission, the total amount of which
is based directly or indirectly on the number or size of transactions
effected;
2. any promotional
interest (which is defined as any equity interest with a purchase price of less
than 75% of the purchase price of the security being offered) in excess of 10%
of the total of all securities of the issuer received either at the time of the
sale of the interest being offered or in the preceding six month period;
provided, however, that any such promotional interest which is subordinated to
the return of the offeree's investment does not constitute a commission or
other remuneration;
3. any payment
for goods or services (other than compensation paid for performing the duties
of an officer, director or employee) anticipated to be received within the
following 12 months which would exceed 10% of the total amount of the
offering;
4. any anticipated fee
for goods or services which materially exceeds the expected fair market value
of such goods or services when rendered;
5. any salary or other compensation paid to a
director, officer or employee who has as a principal part of his duties the
solicitation of purchasers for the issuer's securities; provided, however, that
any salary or other compensation paid to a director, officer or employee of the
issuer for solicitation which is only an incidental function of such person's
regular duties and for which such person receives no additional compensation,
does not constitute a commission or other remuneration; and
6. any fee paid to a person for finding or
referring a prospective offeree.
7.
Nothing contained herein shall preclude the offer or claiming this exemption
from establishing that the remuneration listed above was wholly unrelated to
soliciting sales within the Commonwealth.
(k) The requirement that the notice be filed
at least five full business days before the initial offer in the Commonwealth
as set forth in subsection (B) of M.G.L. c.110A, § 402(b)(9), is hereby
waived for all types of securities. The exemption allowed by M.G.L. c. 110A,
§ 402(b)(9) for offers in which payment of a commission or other
remuneration is made, is not available unless a notice (as set forth in 950 CMR
14.402(B)(9)(g)) is filed with the Division no later than ten calendar days
prior to the receipt of any consideration from, or the delivery of a
subscription agreement by any purchaser which results from such
offers.
(l) Any offer or sale of a
security which is part of an offering or plan of financing which is in
compliance with M.G.L. c. 110A, § 402(b)(9) and 950 CMR 14.402(B)(9) as in
effect immediately prior to the date on which this Section takes effect, is
exempt hereunder, provided that any such offer or sale is made within one year
of such effective date.
(m) Any
condition of M.G.L. c. 110A, § 402(b)(9) or any provision or condition in
950 CMR 14.402(B)(9) with respect to such Section may be waived by the Director
upon a showing of cause.
(B)(10) (Reserved)
(B)(11)
(a)
The notice required to be filed pursuant to M.G.L. c. 110A, § 402(b)(11)
shall contain the following information and documentation:
1. the issuer's or sponsor's name, form of
organization, address and telephone number;
2. the identity of the person(s) who will be
selling the securities in this state (and in the case of such person(s) other
than the issuer and its officers, partners and employees, describing their
relationship with the issuer in connection with the transaction and the basis
of their compliance with or exemption from the requirements of M.G.L. c. 110A,
§ 201) and describing any commissions, discounts, fees, or other
remuneration to be paid, directly or indirectly, to such person(s);
3. a description of the securities to be
sold;
4. the anticipated aggregate
dollar amount of the offering;
5.
the anticipated required minimum investment, if any, by each purchaser of the
securities to be offered;
6. a list
of the states in which the securities are proposed to be sold;
7. a copy of any written document or
materials used or proposed to be used in connection with the offer and sale of
the securities;
8. a consent to
service of process naming the Massachusetts Secretary of State as service agent
using the Uniform Consent to Service of Process (Form U-2) signed by the issuer
and acknowledged before a notary public or other similar officer and
accompanied by a properly executed Corporate Resolution (Form U-2A), if
applicable; and
9. a non-refundable
filing fee in the amount of $100, payable to the Commonwealth of
Massachusetts.
(b)
Transferable warrants exercisable within not more than 90 days of
their issuance refers solely to such warrants which become
exercisable and expire during such 90-day period.
(B)(12)
(Reserved)
(B)(13) Pursuant to
M.G.L. c. 110A, § 402(b)(13), the Secretary finds that registration of the
following is not necessary or appropriate in the public interest or for the
protection of investors:
(a)
Compensatory Arrangements. An offer or sale of a
security issued in connection with a stock purchase, savings, option,
profit-sharing, pension or similar employee benefit plan, provided the offer or
is in compliance with the following conditions:
1. The issuer, parent corporation or any of
its majority-owned subsidiaries offers or sells the security pursuant to a
written benefit plan and/or written agreement relating to the compensation of
the buyer; and
2. The offer or sale
is in compliance with any applicable federal securities law.
For purposes of 950 CMR 14.402(B)(13)(a) the term "employee" shall include an officer, director, trustee, independent contractors and consultants.
(Note: There is also an exemption for the issuance of securities in connection with an employee benefit plan under M.G.L. c. 110A, § 402(a)(11).)
(b)
Put or Call
Contracts. An offer or sale of a put or call contract, provided
that the put or call contract is:
1. endorsed
and its performance guaranteed by a broker-dealer registered with the SEC; or
issued by the Options Clearing Corporation (OCC) pursuant to a registration
statement filed by the OCC with the SEC; and
2. the put or call contract is listed or
quoted on the NASDAQ Global Market; or the underlying security to which it
relates is exempt under M.G.L. c. 110A, § 402(a)(8); or the underlying
security to which it relates is registered under Section 12(g) of the
Securities Exchange Act of 1934.
(c)
Cooperative
Associations. An offer or sale of a security, including a
patronage refund certificate, issued by EITHER:
1. a cooperative association as defined in
the Agricultural Marketing Act (1929), 12 USC § 114j (1982); or a
federation of such cooperative associations that possesses no greater powers or
purposes than cooperative associations as defined in the Agricultural Marketing
Act (1929), 12 U.S.C. § 113j (1982), if:
a. the security qualifies its holder for
membership in the cooperative association or federation (or in the case of a
patronage refund certificate is issuable only to members); and
b. the security is transferable only to the
issuer, or a successor in interest of the transferor that qualifies for
membership in the cooperative association or federation; or
2. a mutual or cooperative
organization that deals in commodities, or supplies related services in
transactions primarily with and for the benefit of its members, if:
a. the security is part of a class issuable
only to persons who deal in commodities with, or obtain services from, the
issuers; and
b. the security is
transferable only to the issuer or a successor in interest of the transferor;
and
c. no dividends, other than
patronage refunds are payable to holders of the security, except on a complete
or partial liquidation; or
3. a cooperative housing corporation
described in Section 216(b)(1) of the Internal Revenue Code of 1986, if its
activities are limited to the ownership, leasing, management or construction of
residential properties of its members and activities incidental thereto.
(d) (Reserved)
(e)
Bankruptcy. An
offer or sale of a security specifically exempt from state securities laws
under USC Title 11.
(f)
Pooled Income Funds. An offer or sale of an interest
in a trust that Section 642(c)(5) of the Internal Revenue Code of 1986, defines
as a "pooled income fund." The issuer of such an interest includes the fund
itself and the public charity which establishes and maintains it.
(g)
Commodity
Contracts. An offer or sale of commodity contracts, provided this
exemption does not include an offer or sale of options to buy or sell commodity
contracts which confer on the purchaser, in return for a cash payment, the
right, within a stated period of time, to purchase or sell a stated contract in
a particular commodity, except to the extent that Section 2(a)(1) of the
Commodity Exchange Act grants to the Commodity Futures Trading Commission
exclusive jurisdiction with respect to such options.
(h)
NASDAQ Global
Market. An offer or sale of a security designated or approved for
designation upon notice of issuance on the NASDAQ Global Market, or any other
security of the same issuer which is of senior or substantially equal rank, any
security called for by subscription rights or warrants so designated or
approved, or any warrant or right to purchase or subscribe to any of the
foregoing.
(i)
Massachusetts Uniform Limited Offering Exemption.
(Reserved)
(j)
MJDS. Any
non-issuer transaction, whether or not effected through a broker-dealer,
involving any class of an issuer's security where the issuer has filed a
registration statement with the U.S. Securities and Exchange Commission (SEC)
on Form F-8, F-9 or F-10 which has been declared effective by the
SEC.
(k)
Solicitations
of Interest Prior to the Filing of the Registration Statement.
1. An offer, but not a sale, of a security
made by or on behalf of an issuer for the sole purpose of soliciting an
indication of interest in receiving a prospectus (or its equivalent) for such
security is exempt from M.G.L. c. 110A, § 301 if all of the following
conditions are satisfied:
a. The issuer is or
will be a business entity organized under the laws of one of the states or
possessions of the United States or one of the provinces or territories of
Canada, is engaged in or proposes to engage in a business other than petroleum
exploration or production or mining or other extractive industries and is not a
"blind pool" offering or other offering for which the specific business or
properties cannot now be described.
b. The offerer intends to register the
security in the Commonwealth, or offer the security pursuant to the exemption
from registration available under M.G.L. c. 110A, § 402(a)(8).
c. Ten business days prior to the initial
solicitation of interest under 950 CMR 14.402(B)(13)(k), the offerer files with
the Director a Solicitation of Interest Form along with any other materials to
be used to conduct solicitations of interest, including, but not limited to,
the script of any broadcast to be made and a copy of any notice to be
published.
d. Five business days
prior to usage, the offerer files with the Director any amendments to the
foregoing materials or additional materials to be used to conduct solicitations
of interest, except for materials provided to a particular offeree pursuant to
a request by that offeree.
e. No
Solicitation of Interest Form, script, advertisement or other material which
the offerer has been notified by the Director not to distribute is used to
solicit indications of interest.
f.
Except for scripted broadcasts and published notices, the offerer does not
communicate with any offeree about the contemplated offering unless the offeree
is provided with the most current Solicitation of Interest Form at or before
the time of the communication or within five days from the
communication.
g. During the
solicitation of interest period, the offerer does not solicit or accept money
or a commitment to purchase securities.
h. No sale is made until seven days after
delivery to the purchaser of a final prospectus, or in those instances in which
delivery of a preliminary prospectus is allowed hereunder, a preliminary
prospectus.
i. The offerer does not
know, and in the exercise of reasonable care, could not know that the issuer or
any of the issuer's officers, directors, 10% shareholders or promoters:
i. Has filed a registration statement which
is the subject of a currently effective registration stop order entered
pursuant to any federal or state securities law within five years prior to the
filing of the Solicitation of Interest Form.
ii. Has been convicted within five years
prior to the filing of the Solicitation of Interest Form of any felony or
misdemeanor in connection with the offer, purchase or sale of any security or
any felony involving fraud or deceit, including, but not limited to, forgery,
embezzlement, obtaining money under false pretenses, larceny, or conspiracy to
defraud.
iii. Is currently subject
to any federal or state administrative enforcement order or judgment entered by
any state securities administrator or the Securities and Exchange Commission
within five years prior to the filing of the Solicitation of Interest Form or
is subject to any federal or state administrative enforcement order or judgment
entered within five years prior to the filing of the Solicitation of Interest
Form in which fraud or deceit, including, but not limited to, making untrue
statements of material facts and omitting to state material facts, was
found.
iv. Is subject to any
federal or state administrative enforcement order or judgment which prohibits,
denies, or revokes the use of any exemption from registration in connection
with the offer, purchase or sale of securities.
v. Is currently subject to any order,
judgment, or decree of any court of competent jurisdiction temporarily or
preliminarily restraining or enjoining, or is subject to any order, judgment or
decree of any court of competent jurisdiction, permanently restraining or
enjoining, such party from engaging in or continuing any conduct or practice in
connection with the purchase or sale of any security or involving the making of
any false filing with the state entered within five years prior to the filing
of the Solicitation of Interest Form.
The prohibitions listed above shall not apply if the person subject to the disqualification is duly licensed or registered to conduct securities related business in the state in which the administrative order or judgment was entered against such person or if the broker/dealer employing such party is licensed or registered in this state and the Form B-D filed with this state discloses the order, conviction, judgment or decree relating to such person. No person disqualified under this subsection may act in a capacity other than that for which the person is licensed or registered. Any disqualification caused by this section is automatically waived if the agency which created the basis for disqualification determines upon a showing of good cause that it is not necessary under the circumstances that the exemption be denied.
2. A failure to comply with any condition of
950 CMR 14.402(B)(13)(k)1. will not result in the loss of the exemption from
the requirements of M.G.L. c. 110A, § 301 for any offer to a particular
individual or entity if the offerer shows:
a.
the failure to comply did not pertain to a condition directly intended to
protect that particular individual or entity; and
b. the failure to comply was insignificant
with respect to the offering as a whole; and
c. a good faith and reasonable attempt was
made to comply with all applicable conditions of 950 CMR 14.402(B)(13)(k)1..
Where an exemption is established only through reliance upon 950 CMR 14.402(B)(13)(k)2., the failure to comply shall nonetheless be actionable as a violation of M.G.L. c. 110A by the Secretary under M.G.L. c. 110A, §§ 407A and 408 and constitute grounds for denying or revoking the exemption as to a specific security or transaction.
3. The offerer shall comply with
the requirements set forth in 950 CMR 14.402(B)(13)(k)3.. Failure to comply
will not result in the loss of the exemption from the requirements of M.G.L. c.
110A, § 301, but shall be a violation of M.G.L. c. 110A, be actionable by
the Secretary under M.G.L. c. 110A, §§ 407A and 408, and constitute
grounds for denying or revoking the exemption as to a specific security or
transaction.
a. Any published notice or
script for broadcast must contain at least the identity of the chief executive
officer of the issuer, a brief and general description of its business and
products, and the following legends:
i. NO
MONEY OR OTHER CONSIDERATION IS BEING SOLICITED AND NONE WILL BE
ACCEPTED;
ii. NO SALES OF THE
SECURITIES WILL BE MADE OR COMMITMENT TO PURCHASE ACCEPTED UNTIL DELIVERY OF AN
OFFERING CIRCULAR THAT INCLUDES COMPLETE INFORMATION ABOUT THE ISSUER AND THE
OFFERING;
iii. AN INDICATION OF
INTEREST MADE BY A PROSPECTIVE INVESTOR INVOLVES NO OBLIGATION OR COMMITMENT OF
ANY KIND; and
iv. THIS OFFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE FEDERAL AND
STATE SECURITIES LAWS. NO SALE MAY BE MADE UNTIL THE OFFERING STATEMENT IS
QUALIFIED BY THE SEC AND IS REGISTERED IN THIS STATE.
b. All communications with prospective
investors made in reliance on 950 CMR 14.402(B)(13)(k) must cease after a
registration statement is filed in this state, and no sale may be made until at
least 20 calendar days after the last communication made in reliance on 950 CMR
14.402(B)(13)(k).
c. A preliminary
prospectus (or its equivalent) may only be used in connection with an offering
for which indications of interest have been solicited under 950 CMR
14.402(B)(13)(k) if the offering is conducted by a registered
brokerdealer.
4. The
Director may waive any condition of the exemption in 950 CMR 14.402(B)(13)(k)
in writing, upon application by the offerer and cause having been shown.
Neither compliance nor attempted compliance with 950 CMR 14.402(B)(13)(k), nor
the absence of any objection or order by the Director with respect to any offer
of securities undertaken pursuant to 950 CMR 14.402(B)(13)(k), shall be deemed
to be a waiver of any condition of the rule or deemed to be a confirmation by
the Director of the availability of 950 CMR 14.402(B)(13)(k).
5. Offers made in reliance on 950 CMR
14.402(B)(13)(k) will not result in a violation of M.G.L. c. 110A, § 301
by virtue of being integrated with subsequent offers or sales of securities
unless such subsequent offers and sales would be integrated under federal
securities laws.
6. Issuers on
whose behalf indications of interest are solicited under 950 CMR
14.402(B)(13)(k) may not make offers or sales in reliance on M.G.L. c. 110A,
§ 402(b)(9) or 950 CMR 14.402(B)(13)(i) until six months after the last
communication with a prospective investor made pursuant to 950 CMR
14.402(B)(13)(k).
COMMENTS:
1. All
communications made in reliance on 950 CMR 14.402(B)(13)(k) are subject to the
anti-fraud provisions of M.G.L. c. 110A.
2. The Division may or may not review the
materials filed pursuant to 950 CMR 14.402(B)(13)(k). Materials filed, if
reviewed, will be judged under anti-fraud principles. Any discussion in the
offering documents of the potential rewards of the investment must be balanced
by a discussion of possible risks.
3. Any offer effected in violation of 950 CMR
14.402(B)(13)(k) may constitute an unlawful offer of an unregistered security
for which civil liability attaches under M.G.L. c. 110A, § 410. Likewise
any misrepresentation or omission may give rise to civil liability. Under
M.G.L. c. 110A, the Uniform Securities Act, a subsequent registration of the
security for the sale of the security does not "cure" the previous unlawful
offer. Only a rescission offer made in accordance with the provisions of M.G.L.
c. 110A can accomplish such a "cure". See commentary under
M.G.L. c. 410, § 410.
-----------------------------------------------------
Form to be used when using the exemption found in 950 CMR 14.402(B)(13)(k):
NOTE TO USERS: The following form sets forth the minimum informational requirement for soliciting indications of interest under federal and state securities laws. You may include additional information if you think it necessary or desirable. Remember that any discussion in this document is subject to the anti-fraud provisions of the federal and state securities laws and must thereby be complete. Also, any discussion of potential rewards of the proposed investment must be balanced by a discussion of possible risks. You may alter the graphic presentation of the form in any way as long as the minimum information is clearly presented.
SOLICITATION OF INTEREST FORM
NAME OF COMPANY
Street Address of Principal Office:
Company Telephone Number:
Date of Organization:
Amount of the Proposed Offering:
Name of Chief Executive Officer:
THIS IS A SOLICITATION OF INTEREST ONLY. NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED AND NONE WILL BE ACCEPTED.
NO SALES OF THE SECURITIES WILL BE MADE OR COMMITMENT TO PURCHASE ACCEPTED UNTIL THE DELIVERY OF A FINAL OFFERING CIRCULAR THAT INCLUDES COMPLETE INFORMATION ABOUT THE ISSUER AND THE OFFERING.
AN INDICATION OF INTEREST MADE BY A PROSPECTIVE INVESTOR INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND.
THIS OFFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE FEDERAL AND STATE SECURITIES LAWS. NO SALE MAY BE MADE UNTIL THE OFFERING STATEMENT IS QUALIFIED BY THE SEC AND IS REGISTERED IN THIS STATE.
This Company:
() Has never conducted business operations.
() Is in the development stage.
() Is currently conducting operations.
() Has shown a profit for the last fiscal year.
() Other (specify) ___________________________.
BUSINESS:
1. Describe
in general what business the company does or proposes to do, including what
products or goods are or will be produced or services that are or will be
rendered.
2. Describe in general
how these products or services are to be produced or rendered and how and when
the company intends to carry out its activities.
OFFERING PROCEEDS:
3. Describe in general how the company
intends to use the proceeds of the proposed offering.
KEY PERSONNEL OF THE COMPANY:
4. Provide the following information for all
officers and directors or persons occupying similar positions:
Name, Title, Office Street Address, Telephone Number, Employment History (Employers, titles and dates of positions held during the past five years), and Education (degrees, schools and dates).
(l)
Transactions Under Rule 506 - Filing Requirements. Any
offer or sale of a security offered or sold in compliance with the Securities
Act of 1933, Regulation D, Rule 506 (17
CFR 230.506) , and that satisfies the
following further conditions:
1. Within
15-calendar days after the first sale in the Commonwealth, a notice on SEC Form
D (17
CFR 239.500) is filed with the Division,
together with;
2. A consent to
service of process on Form U-2 (with Form U-2A, if applicable) naming the
Secretary; and
3. A non-refundable
filing fee, payable to The Commonwealth of Massachusetts, in the amount as
follows:
|
Total Amount of Offering |
Filing Fee |
|
0 - $2,000,000 |
$250 |
|
Over $2,000,000 - $7,500,000 |
$500 |
|
Over $7,500,000 |
$750. |
(m)
Internet Offers.
An offer, but not a sale, of a security communicated through proprietary or
"common carrier" electronic delivery systems, Internet and the World Wide Web
or a similar medium; provided that such offers are not directed specifically
toward any investor or group of investors in the Commonwealth and no sales are
made in the Commonwealth unless the securities are registered or exempt from
registration under M.G.L. c. 110A and 950 CMR 14.400. If an offer made
hereunder contains indications that the offer is not being made in
jurisdictions where it is not registered or appropriately exempted, then it
will be presumed that this offer is not being specifically directed to
prospective investors in the Commonwealth.
(n)
Certain Canadian
Securities. An offer or sale of a security in a transaction
effected by a person located in Canada who is excluded from the definition of
broker-dealer under
950 CMR
14.401(C)(4).
(o)
Massachusetts Crowd funding
Exemption. An offer or sale of a security meeting the following
requirements:
1. The issuer is a business
entity:
a. Formed under the laws of the
Commonwealth;
b. Having its
principal place of business in the Commonwealth; and
c. Authorized to do business in the
Commonwealth.
2. The
offering is sold only to residents of the Commonwealth in compliance with the
requirements of § 3(a)(11) of the Securities Act of 1933 (15 U.S.C. §
77c(a)(11)) or SEC Rule 147
or 147A (17 C.F.R.
230.147 or
230.147A)
;
3. The securities offered and
sold pursuant to 950 CMR 14.402(B)(13)(o) are equity or debt securities of the
issuer.
4. The sum of all cash and
other consideration to be received for all securities sold in reliance upon the
exemption provided under 950 CMR 14.402(B)(13)(o) shall not exceed:
a. $1,000,000, if the issuer has not
undergone and made available to each prospective investor and the Secretary the
documentation resulting from a financial audit with respect to its most
recently completed fiscal year and meeting generally accepted accounting
principles; or
b. $2,000,000, if
the issuer has undergone and made available to each prospective investor and
the Secretary the documentation resulting from a financial audit with respect
to its most recently completed fiscal year and meeting generally accepted
accounting principles.
An offer or sale to an officer, director, partner, trustee, person owning 10% or more of outstanding shares of the issuer or a person occupying similar status with respect to the issuer shall not be subject to the limitation in 950 CMR 14.402(B)(13)(o)4.
5. The aggregate amount of securities sold to
any investor by an issuer in reliance on 950 CMR 14.402(B)(13)(o) shall not
exceed the greater of:
a. $2,000 or 5% of
annual income or net worth of the investor, whichever is greater, if both the
annual income and net worth are less than $100,000; and
b. 10% of annual income or net worth of the
investor, whichever is greater (not to exceed an amount sold of $100,000) if
either the annual income or net worth of the investor is equal to or more than
$100,000;
Note: To determine the investment limit for a natural person, the person's annual income and net worth shall be calculated as those values are calculated for purposes of determining accredited investor status in accordance with Rule 501 of SEC Regulation D, 17 CFR 230.501. The person's annual income or net worth shall come within the levels described in 950 CMR 14.402(B)(13)(o)5. or the issuer shall reasonably believe that such person's annual income or net worth comes within such levels; the issuer shall take reasonable steps to verify such information. The person's annual income and net worth may be calculated jointly with the annual income and net worth of the person's spouse.
6. The
issuer shall not, before or as a result of the offering, be:
a. An investment company as defined by
15 U.S.C. §
80a-3;
b. A hedge fund, commodity pool, or similar
investment vehicle;
c. Subject to
the reporting requirements of the Securities Exchange Act of 1934;
d. A development stage company without a
specific business plan or purpose, or which has indicated that its business is
to engage in a merger or acquisition with an unidentified company or companies,
or other unidentified entities or persons, or without an allocation of proceeds
to sufficiently identifiable properties or objectives (i.e.,
"blind pool" or "blank check" offerings); or
e. A business involving petroleum exploration
or production, mining, or other extractive industries.
7. No commission, fee, or other remuneration
shall be paid or given, directly or indirectly, to any person for soliciting
any prospective purchaser for a transaction in reliance upon the exemption
provided by 950 CMR 14.402(B)(13)(o) unless such person is registered as a
broker-dealer or agent under Securities Exchange Act of 1934.
8. The issuer shall establish a minimum
offering amount, which shall be set at a level that the issuer's board or other
governing body reasonably believes is sufficient to implement the plan of
business disclosed in the offering materials. Such minimum offering amount
shall be no less than 30% of the maximum offering amount set by the issuer and
disclosed in the offering materials.
9. The issuer shall place all funds received
from investors in an escrow account at an insured bank or depository
institution authorized to do business in the Commonwealth. Such funds shall be
released from escrow when the minimum offering amount is met. If the minimum
offering amount is not met within one year of the earlier of the commencement
of the offering or the first posting of the offering on the internet, the
issuer shall return all funds to investors.
10.
a.
The exemption under 950 CMR 14.402(B)(13)(o) shall not be available if the issuer; any predecessor of the issuer; any affiliated issuer; any director, executive officer, other officer participating in the offering, general partner, or managing member of the issuer; any beneficial owner of 20% or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power; any promoter connected with the issuer in any capacity at the time of making an exemption filing under 950 CMR 14.402(B)(13)(o); any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the offering of securities; or any director, executive officer or other officer participating in the offering of any such solicitor, general partner, or managing member of such solicitor:
i. Has been convicted,
within ten years before making an exemption filing under 950 CMR
14.402(B)(13)(o) or five years, in the case of issuers, their predecessors, and
affiliated issuers, of any felony or misdemeanor:
(i) In connection with the purchase or sale
of any security;
(ii) Involving the
making of any false filing with the Securities and Exchange Commission or a
state securities commission (or an agency or officer of a state performing like
functions); or
(iii) Arising out of
the conduct of the business of an underwriter, broker, dealer, municipal
securities dealer, investment adviser, or paid solicitor of purchasers of
securities;
b. Is subject to any order, judgment or
decree of any court of competent jurisdiction, entered within five years before
making an exemption filing under 950 CMR 14.402(B)(13)(o), that, at the time of
filing, restrains or enjoins such person from engaging or continuing to engage
in any conduct or practice:
i. In connection
with the purchase or sale of any security;
ii. Involving the making of any false filing
with the Securities and Exchange Commission or a state securities commission
(or an agency or officer of a state performing like functions); or
iii. Arising out of the conduct of the
business of an underwriter, broker, dealer, municipal securities dealer,
investment adviser, or paid solicitor of purchasers of securities;
c. Is subject to a final order of
a state securities commission (or an agency or officer of a state performing
like functions); a state authority that supervises or examines banks, savings
associations, or credit unions; a state insurance commission (or an agency or
officer of a state performing like functions); an appropriate federal banking
agency; the U.S. Commodity Futures Trading Commission; or the National Credit
Union Administration that:
i. At the time of
making an exemption filing under 950 CMR 14.402(B)(13)(o), bars the person
from:
(i) Association with an entity
regulated by such commission, authority, agency, or officer;
(ii) Engaging in the business of securities,
insurance or banking; or
(iii)
Engaging in savings association or credit union activities; or
ii. Constitutes a final order
based on a violation of any law or regulation that prohibits fraudulent,
manipulative, or deceptive conduct entered within ten years before making an
exemption filing under 950 CMR 14.402(B)(13)(o);
d. Has filed a registration statement which
is the subject of a currently effective registration stop order entered
pursuant to the Massachusetts Uniform Securities Act, M.G.L. c.110A, or any
other state's securities law, within five years prior to making an exemption
filing for an offering under 950 CMR 14.402(B)(13)(o);
e. Is currently subject to any state
administrative enforcement order or judgment entered by the Secretary or any
other state's securities administrator within five years prior to making an
exemption filing for an offering under 950 CMR 14.402(B)(13)(o) or is subject
to any state's administrative enforcement order or judgment in which fraud or
deceit including, but not limited to, making untrue statements of material
facts and omitting to state material facts, was found and the order or judgment
was entered within five years prior to making an exemption filing for an
offering under 950 CMR 14.402(B)(13)(o);
f. Is subject to an order of the Securities
and Exchange Commission entered pursuant to § 15(b) or 15B(c) of the
Securities Exchange Act of 1934 (15
U.S.C. 78o(b) or
78o-4(c))
or § 203(e) or (f) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-3(e)
or (f)) that, at the time of making an
exemption filing under 950 CMR 14.402(B)(13)(o):
i. Suspends or revokes such person's
registration as a broker, dealer, municipal securities dealer or investment
adviser;
ii. Places limitations on
the activities, functions or operations of such person; or
iii. Bars such person from being associated
with any entity or from participating in the offering of any penny
stock;
g. Is subject to
any order of the Securities and Exchange Commission entered within five years
before making an exemption filing under 950 CMR 14.402(B)(13)(o) that, at the
time of filing, orders the person to cease and desist from committing or
causing a violation or future violation of:
i.
Any scienter-based anti-fraud provision of the federal securities laws,
including without limitation § 17(a)(1) of the Securities Act of 1933
(15 U.S.C.
77q(a)(1)) , § 10(b) of
the Securities Exchange Act of 1934 (15 U.S.C.
78j(b)) and 17 C.F.R.
240.10b-5, § 15(c)(1) of the Securities Exchange Act of 1934
(15 U.S.C.
78o(c)(1)) and § 206(1)
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-6(1))
, or any other rule or regulation thereunder; or
ii.
§ 5 of the Securities Act of 1933
(15
U.S.C. 77e) .
h. Is suspended or expelled from membership
in, or suspended or barred from association with a member of, a registered
national securities exchange or a registered national or affiliated securities
association for any act or omission to act constituting conduct inconsistent
with just and equitable principles of trade;
i. Has filed (as a registrant or issuer), or
was named as an underwriter in, any registration statement or Regulation A
offering statement filed with the Securities and Exchange Commission that,
within five years before such sale, was the subject of a refusal order, stop
order, or order suspending the Regulation A exemption, or is, at the time of
such sale, the subject of an investigation or proceeding to determine whether a
stop order or suspension order should be issued; or
j. Is subject to a United States Postal
Service false representation order entered within five years before the making
of an exemption filing under 950 CMR 14.402(B)(13)(o), or is, at the time of
such filing, subject to a temporary restraining order or preliminary injunction
with respect to conduct alleged by the United States Postal Service to
constitute a scheme or device for obtaining money or property through the mail
by means of false representations.
k. For purposes of 950 CMR
14.402(B)(13)(o)10.a., "final order" shall mean a written directive or
declaratory statement issued by a federal or state agency described in 950 CMR
14.402(B)(13)(o)10.c. under applicable statutory authority that provides for
notice and an opportunity for hearing, which constitutes a final disposition or
action by that federal or state agency.
l.950 CMR 14.402(B)(13)(o)10.a. shall not
apply:
i. Upon a showing of good cause and
without prejudice to any other action by the Secretary, if the Secretary
determines that it is not necessary under the circumstances that an exemption
be denied;
ii. If, before the
relevant filing, the court or regulatory authority that entered the relevant
order, judgment or decree advises in writing (whether contained in the relevant
judgment, order or decree or separately to the Secretary or his staff) that
disqualification under 950 CMR 14.402(B)(13)(o)10.a. should not arise as a
consequence of such order, judgment, or decree; or
iii. If the issuer establishes that it did
not know and, in the exercise of reasonable care, could not have known that a
disqualification existed under 950 CMR 14.402(B)(13)(o)10.a. An issuer will not
be able to establish that it has exercised reasonable care unless it has made,
in light of the circumstances, factual inquiry into whether any
disqualifications exist. The nature and scope of the factual inquiry will vary
based on the facts and circumstances concerning, among other things, the issuer
and the other offering participants.
m. For purposes of 950 CMR
14.402(B)(13)(o)10.a., events relating to any affiliated issuer that occurred
before the affiliation arose will be not considered disqualifying if the
affiliated entity is not:
i. In control of
the issuer; or
ii. Under common
control with the issuer by a third party that was in control of the affiliated
entity at the time of such event.
11. The issuer shall disclose to each
prospective purchaser all of the following:
a.
A description of the issuer and its business, and the address, telephone
number, and website address of its principal office;
b. A description of the intended use of the
offering proceeds;
c. A description
of any current or pending litigation, legal proceedings, or pending regulatory
action involving the issuer or its management;
d. The identity of all persons owning 10% or
more of the ownership interests of any class of securities of the
issuer;
e. The identity of the
executive officers, directors, managing members, and other persons occupying a
similar status or performing functions in the name of and on behalf of the
issuer;
f. The identity of any
person who has been or will be retained by the issuer to assist the issuer in
conducting the offer and sale of securities, including any Internet web site
operator but excluding persons acting solely as accountants or attorneys, and
employees whose primary responsibilities involve the operating business of the
issuer rather than assisting the issuer in raising capital;
g. The names and addresses of each Internet
web site that will be used by the issuer to offer or sell securities under 950
CMR 14.402(B)(13)(o); and
h. Any
additional information material to the offering, including, if appropriate, a
discussion of significant factors that make the offering speculative or of high
risk.
Note: The issuer is required to provide full and fair disclosure to offerees and investors of all material facts relating to the issuer and the securities being offered, in accordance with M.G.L. c.110A, § 101.
12. Among other risk disclosures, the issuer
must provide the substance of the following disclosures to all prospective
purchasers and investors:
a. There is no ready
market for the sale of the securities acquired in this offering; it may be
difficult or impossible for an investor to sell or otherwise dispose of this
investment. An investor may be required to hold and bear the financial risks of
this investment indefinitely.
b.
The securities have not been registered under federal or state securities laws
and, therefore, cannot be resold unless the securities are registered or
qualify for an exemption from registration under federal and state
law.
c. In making an investment
decision, investors must rely on their own examination of the issuer and the
terms of the offering, including the merits and risks involved.
d. No federal or state securities commission
or regulatory authority has confirmed the accuracy or determined the adequacy
of the disclosures provided. Note : Since 950 CMR
14.402(B)(13)(o) requires that the offering be in compliance with SEC Rule 147
or 147A, the issuer must also provide written disclosures concerning the
limitations on resale of the securities contained in SEC Rule 147(e) and (f) or
147A(e) and (f), (17 CFR §
230.147 or
230.147A)
. Additionally, an issuer must place a required legend disclosing such
limitations on resale on the securities certificate or other document
evidencing the securities issued in the offering.
13. The exemption provided under 950 CMR
14.402(B)(13)(o) shall be effective for up to 12 months, subject to annual
renewal.
14. Upon the first to
occur of:
a. the completion of the
offering;
b. the termination of the
offering; or
c. 12 months from the
commencement of the offering, the issuer shall file with the Secretary a sales
report indicating the number and value of securities sold in the offering, and
the number of purchasers in the offering.
15. The issuer shall file with the Secretary
no later than 15 days after the first sale made in reliance upon the exemption
provided under 950 CMR 14.402(B)(13)(o):
a. a
notice specifying that the issuer is conducting an offering in reliance on the
exemption provided under 950 CMR 14,402(B)(13)(o) and providing the names and
addresses of:
i. officers, directors and
control persons of the issuer;
ii.
all persons who will be involved in the offer or sale of securities on behalf
of the issuer;
iii. the bank or
depository institution in which the issuer will deposit investment
funds;
b. a copy of all
materials used in connection with the solicitation, offer, or sale of the
issuer's securities, including the disclosure required in 950 CMR
14.402(B)(13)(o)11. and 12.; and
c.
a consent to service of process on Form U-2.
(p)
Notice Filing Requirement for
Federal Crowd funding Offerings. The following provisions apply to
offerings made under federal Regulation Crowd funding 17 CFR § 227 and
Sections 4(a)(6) and 18(b)(4)(C) of the Securities Act of 1933:
1.
Initial Filing.
a. An issuer that offers and sells securities
in the Commonwealth in an offering exempt under federal Regulation Crowd
funding shall file the following with the Director, subject to the conditions
in 950 CMR 14.402(B)(13)(p)(1)(b):
i. A
Uniform Notice of Federal Crowd funding Offering (Form U-CF);
ii. A consent to service of process on Form
U2 (with Form U-2A, if applicable).
b. If the issuer has its principal place of
business in the Commonwealth, the filing required under 950 CMR
14.402(B)(13)(p)1.a. shall be filed with the Director when the issuer makes its
initial Form C filing concerning the offering with the Securities and Exchange
Commission. If the issuer does not have its principal place of business in the
Commonwealth but residents of the Commonwealth have purchased 50% or greater of
the aggregate amount of the offering, the filing required under 950 CMR
14.402(B)(13)(p)1.a. shall be filed when the issuer becomes aware that such
purchases have met this threshold, and in no event later than 15 days from the
date of completion of the offering.
c. The initial notice filing is effective for
12 months from the date of the filing with the Director.
2.
Renewal Filing.
For each additional 12-month period in which the same offering is continued, an
issuer conducting an offering under federal Regulation Crowd funding may renew
its notice filing by filing the following with the Director on or before the
expiration of the notice filing. A Uniform Notice of Federal Crowd funding
Offering (Form U-CF) designated as "renewal" filing and/or a cover letter or
other document requesting renewal of the initial notice filing pursuant to 950
CMR 14.402(B)(13)(p)1.
(q)
Notice Filing Requirement for
Regulation A - Tier 2 Offerings. The following provisions apply to
offerings made under Tier 2 of federal Regulation A and Section 3(b) of the
Securities Act of 1933 and subject to Section 18(b)(4) of the Securities Act of
1933:
1.
Initial
Filing. An issuer proposing to offer and sell securities in the
Commonwealth in an offering exempt under Tier 2 of federal Regulation A shall
file the following with the Director at least 21 calendar days prior to the
initial sale in the Commonwealth:
a. A
completed Uniform Notice of Regulation A - Tier 2 Offering form or copies of
all documents filed with the Securities and Exchange Commission;
b. A consent to service of process on Form
U-2 if not filing on the Uniform Notice of Regulation A - Tier 2 Offering
form;
c. Form U-2A (if applicable);
and
d. A filing fee of
1/20 of 1% of the aggregate amount of the
offering with a minimum of $300 and a maximum of $1500 annually.
The initial notice filing is effective for 12 months from the date of the filing with the Director.
2.
Renewal. For each
additional 12-month period in which the same offering is continued, an issuer
conducting a Tier 2 offering under federal Regulation A may renew its notice
filing by filing with the Director the following on or before the expiration of
the notice filing:
a. The Uniform Notice of
Regulation A - Tier 2 Offering form marked "renewal" and/or a cover letter or
other document requesting renewal; and
b. A renewal fee of
1/20 of 1% of the aggregate amount of the
offering with a minimum of $300 and a maximum of $1500 annually.
3.
Amendment. An issuer may increase the amount of
securities offered in the Commonwealth by filing a Uniform Notice of Regulation
A - Tier 2 Offering form marked "amendment" or other document describing the
transaction. If the amount of securities subject to the notice filing is being
increased, the issuer shall submit an additional increment of funds under the
formula set out in 950 CMR 14.402(B)(13)(q) 1.d. or 950 CMR
14.402(B)(13)(q)2.b., to cover the increase in the amount of securities to be
offered.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.