§ 230.505Exemption for limited offers and sales of securities not exceeding
(a)Exemption. Offers and sales of securities that satisfy the
conditions in paragraph (b) of this section
by an issuer that is not an investment company shall be exempt from the provisions of
section 5 of the Act under section 3(b) of the
(b)Conditions to be met—(1) General conditions. To qualify for exemption
under this section, offers and sales must satisfy the terms and conditions of §§ 230.501 and
(2)Specific conditions—(i) Limitation on aggregate
offering price. The aggregate
offering price for an offering of securities under this § 230.505, as defined in § 203.501(c), shall not exceed $5,000,000, less the aggregate offering price for all securities sold within the twelve
months before the start of and during the offering of securities under this section in reliance on
any exemption under section 3(b) of the
Act or in violation of section 5(a) of the Act.
The calculation of the aggregate offering price is illustrated as follows:
Example 1: If an issuer sold $2,000,000 of its securities on June 1, 1982
under this § 230.505 and an additional $1,000,000 on September 1, 1982, the issuer would be permitted to sell only $2,000,000 more
under this § 230.505 until June 1, 1983. Until that date the issuer must count both prior sales towards the $5,000,000
limit. However, if the issuer made its third sale on June 1, 1983, the
issuer could then sell $4,000,000 of its
securities because the June 1, 1982 sale would not be within the preceding
Example 2: If an issuer sold $500,000 of its securities on June 1, 1982
under § 230.504 and an additional $4,500,000 on December 1, 1982 under this section,
then the issuer could not sell any of its securities under this
section until June 1, 1983. At that time it could sell an additional
$500,000 of its securities.
(ii)Limitation on number of purchasers. There are no more than or
the issuer reasonably believes that there are no
more than 35 purchasers of securities from the issuer in any offering under this section.
(iii)Disqualifications. No exemption under this section shall be
available for the securities of any issuer described in §
230.262 of Regulation A, except that for purposes of this section
(B) The term “underwriter” as used in § 230.262 (b) and
(c) shall mean a person that has been or will be paid directly or
indirectly remuneration for solicitation of purchasers in connection with
sales of securities under this section; and
(C) Paragraph (b)(2)(iii) of this section shall not apply to any issuer if the Commission determines, upon a showing of good cause, that
it is not necessary under the circumstances that the exemption be denied.
Any such determination shall be without prejudice to any other action by the
Commission in any other proceeding or matter
with respect to the issuer or any other person.
[47 FR 11262, Mar. 16, 1982, as amended at 54 FR 11373, Mar. 20, 1989; 57 FR
36473, Aug. 13, 1992]
Title 17 published on 2015-04-01.
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