ALABAMA SECURITIES COMMISSION
POLICY STATEMENT CONCERNING
LIMITED OFFERING EXEMPTION
FILINGS MADE PURSUANT TO SEC
RULES 504, 505 AND 506
OF REGULATION D
Rule 506
The National Securities Markets
Improvement Act of 1996 (“NSMIA”) included securities sold pursuant to
Regulation D, Rule 506 in the classification of a “Covered Security”,
preempting the states rights to register these types
of offerings beyond requiring a basic notice filing, not to exceed any standards
required by the SEC for similar filings.
The Commission staff will require the following information for the
purpose of complying with the notice requirements of NSMIA for any Rule 506
offering in the State of Alabama.
1. A filing fee in the amount of $300.00, made
payable to the Alabama Securities Commission.
2. A Consent to
Service of Process. The Consent must
name the Secretary of State, State of Alabama (Form U-2 is acceptable).
3. A manually executed Form D.
4. One copy of all documents to be distributed
to offerees.
This requirement (number 4) is not mandatory, but is requested strictly
for informational purposes. The
Commission staff will not review or make comment on such offering documents.
No commission, finders
fee or other remuneration shall be paid or given, directly or indirectly, to
any person for soliciting any prospective purchaser in this state, unless the
broker-dealer agent is registered in this state pursuant to Code of Ala.
1975 §8-6-3. In order to determine
compliance with this provision, all broker-dealers who will participate in the
offering of an issuer’s securities in this state shall be identified on page 3
of the Form D.
All of
the above must be submitted within fifteen days of the first sale in
this state.
The Commission staff requests a notice to be filed upon the termination
of the offering.
Rule 505
NSIMIA does not impact the existing
Alabama rules and regulations concerning Regulation D, Rule 505 offerings. All offerings made pursuant to rule 505
alone, shall comply with Commission Rule 830-X-6-.11. A brief summary of the requirements follow:
1. A filing fee in the amount of $300.00, made
payable to the Alabama Securities Commission.
2. A Consent to Service
of Process. The Consent must name the
Secretary of State, State of Alabama (Form U-2 is acceptable).
3. A manually executed Form D.
4. One copy of all documents to be distributed
to offerees.
Unlike Rule 506, this requirement (number 4) is mandatory. The Commission staff will perform a
disclosure review and make appropriate comments on such offering documents.
No commission, finders
fee or other remuneration shall be paid or given, directly or indirectly, to
any person for soliciting any prospective purchaser in this state, unless the
broker-dealer agent is registered in this state pursuant to Code of Ala.
1975 §8-6-3. In order to determine
compliance with this provision, all broker-dealers who will participate in the
offering of an issuer’s securities in this state shall be identified on page 3
of the Form D.
All of the above must be submitted at least five
full business days before the first offer in this state.
Code of Ala. 1975 §8-6-2(8)
defines sale and offer as follows:
“Sale” and “sell” includes every contract of sale of, contract to sell or
disposition of a security or interest in a security for value. “Offer” or “offer to sell” includes every
attempt to offer or dispose of, or solicitation of an offer to buy, a security
or interest in a security for value.
Rule
504
Alabama does not currently recognize
Rule 504 filings. Therefore, all
offerings relying on Rule 504, on a federal level, must either: 1) Register in
Alabama pursuant to Qualification or, 2) Qualify for some other exemption
contained at Code of Ala. 1975 §§8-6-10, 8-6-11. Expansion Order requests are common for these
types of filings.
DATED this the 6th day of
June, 1998.
