(1)
Overview of national
models. In cooperation with the securities administrators of other
states and with a view to effectuating a policy to achieve maximum uniformity
of regulations regarding the registration of securities, registration and
business practices of securities industry and investment advisory registrants,
and enforcement of antifraud laws, and in the interest of streamlining the
rules contained in Chapter 50, the
administrator incorporates by reference the
following guidelines and statements of policy promulgated by
NASAA. This rule
does not include any later amendments or editions of the incorporated matter.
The NASAA Web site allows access to statements of policy,
comment letters, model rules, NASAA proposals published for comment, and state
rule proposals and may be found at www.nasaa.org, under "regulatory & legal
activity".
(2)
Registration of oil and gas programs. All oil and gas programs
filing for registration by coordination or qualification shall substantially
comply, as determined by the administrator, with the NASAA Guidelines for
Registration of Oil and Gas Programs, which were initially adopted by the NASAA
membership on September 22, 1976, as amended on October 12, 1977; October 31,
1979; April 23, 1983; July 1, 1984; September 3, 1987; September 14, 1989;
October 24, 1991; May 7, 2007; and May 6, 2012; and published in CCH NASAA
Reports at paragraph 2621.
(3)
Uniform disclosure guidelines-legend. All
registrations of securities filing for registration by coordination or
qualification shall substantially comply, as determined by the administrator,
with the NASAA Guidelines for Cover Legends as adopted by the NASAA membership
on October 2,2004, and published in CCH NASAA Reports at paragraph
1351.
(4)
Omnibus
guidelines. All registrations of limited or general partnerships,
joint ventures, unincorporated associations, or similar organizations, other
than a corporation formed and operated for the primary purpose of investment in
and the operation of or gain from and interest in the assets to be acquired by
such entity for which statements of policy have not been adopted by the NASAA
membership, filing for registration by coordination or qualification shall
substantially comply, as determined by the administrator, with the NASAA
Omnibus Guidelines as adopted by the NASAA membership on March 29, 1992, as
amended on May 7, 2007; and published in CCH NASAA Reports at paragraph
2321.
(5)
Registration of
commodity pool programs. All registrations of securities filing for
registration by coordination or qualification shall substantially comply, as
determined by the administrator, with the NASAA Guidelines for Registration of
Commodity Pool Programs as adopted by the NASAA membership on September 21,
1983, effective January 1, 1984, amended August 30, 1990, amended May 7, 2007,
amended May 6, 2012, and published in CCH NASAA Reports at paragraph
1201.
(6)
Registration of
equipment programs. All registrations of securities filing for
registration by coordination or qualification shall substantially comply, as
determined by the administrator, with the NASAA Guidelines for Equipment
Programs as adopted by the NASAA membership on November 20, 1986, effective
January 1, 1987, amended April 22, 1988, October 24, 1991, May 7, 2007, and May
6, 2012, and published in CCH NASAA Reports at paragraph 1601.
(7)
Registration of real estate
programs. All registrations of securities filing for registration by
coordination or qualification shall substantially comply, as determined by the
administrator, with the NASAA Guidelines for Real Estate Programs as adopted by
the NASAA membership on September 29, 1993, last revised, May 7, 2007, and
published in CCH NASAA Reports at paragraph 3601.
(8)
Registration of mortgage
programs. All registrations of securities filing for registration by
coordination or qualification shall substantially comply, as determined by the
administrator, with the NASAA Guidelines for Mortgage Programs as adopted by
the NASAA membership on September 10, 1996, amended May 2007, and published in
CCH NASAA Reports, paragraph 701.
(9)
Real estate investment
trusts. The registration of a real estate investment trust may be
disallowed if it does not substantially comply, as determined by the
administrator, with the NASAA Statement of Policy Regarding Real Estate
Investment Trusts as revised and adopted by the NASAA membership on September
29,1993, as revised on May 7, 2007, and published in CCH NASAA Reports at
paragraph 3401.
(10)
Corporate securities definitions. For securities registration
purposes, the administrator adopts the various definitions set out in the NASAA
Statement of Policy Regarding Corporate Securities Definitions as adopted by
the NASAA membership on April 27, 1997, and as amended September 28, 1999, and
March 31, 2008, and published in CCH NASAA Reports at paragraph 3812.
(11)
Impoundment of
proceeds. When an impoundment of proceeds is necessary, it shall
substantially comply, as determined by the administrator, with the NASAA
Statement of Policy Regarding the Impoundment of Proceeds as adopted by the
NASAA membership on April 27, 1997, and as amended September 28, 1999, and
March 31, 2008, and published in CCH NASAA Reports at paragraph 2151.
(12)
Loans and other material
affiliated transactions. When there have been or will be loans or
other material affiliated transactions, the transactions shall substantially
comply, as determined by the administrator, with the NASAA Statement of Policy
Regarding Loans and Other Material Affiliated Transactions as amended by the
NASAA membership on April 27, 1997, and March 31, 2008, and published in CCH
NASAA Reports at paragraph 374.
(13)
Options and warrants.
The issuance of options and warrants may be allowed by the administrator if the
issuance is in substantial compliance, as determined by the administrator, with
the NASAA Statement of Policy Regarding Options and Warrants as adopted by the
NASAA membership on November 17, 1997, and as amended September 28, 1999, and
as amended March 31, 2008, and published in CCH NASAA Reports at paragraph
2801.
(15)
Promotional shares. The
registration of a security may include promotional shares if it substantially
complies, as determined by the administrator, with the NASAA Statement of
Policy Regarding Promotional Shares as adopted by the NASAA membership on April
27, 1997, and as amended September 28, 1999, and March 31, 2008, and published
in CCH NASAA Reports at paragraph 3201.
(16)
Risk disclosure. All
registrations of securities filing for registration by coordination or
qualification shall substantially comply, as determined by the administrator,
with the NASAA Guidelines for Risk Disclosure as adopted by the NASAA
membership on September 8,2001, and published in CCH NASAA Reports at paragraph
1362.
(17)
Unsound
financial condition. An issuer may be deemed to be in an unsound
financial condition if it substantially meets, as determined by the
administrator, the conditions provided within the NASAA Statement of Policy
Regarding Unsound Financial Condition as adopted by the NASAA membership on
April 27,1997, and as amended September 28,1999, and March 31,2008, and
published in CCH NASAA Reports at paragraph 3821.
(19)
Registration of asset-backed
securities. All registrations of securities filing for registration by
coordination or qualification shall substantially comply, as determined by the
administrator, with the NASAA Guidelines for Registration of Asset-Backed
Securities as adopted by the NASAA membership on October 25, 1995, amended May
7, 2007, and May 6, 2012, and published in CCH NASAA Reports at paragraph
501.
(22)
Use of electronic offering
documents and electronic signatures.
a.
Definitions. For purposes
of this subrule, the following definitions apply.
"Offering documents" means documents that
include, but are not limited to, the registration statement, prospectus,
applicable agreements, charter, bylaws, opinion of counsel and other opinions,
specimen, indenture, consent to service of process and associated resolution,
sales materials, subscription agreement, and applicable exhibits.
"Sales materials" means materials that
include only those materials to be used in connection with the solicitation of
purchasers of the securities approved as sales literature or other related
materials by the SEC, FINRA, and the states, as applicable.
"Security breach" means the unauthorized
accessing, acquisition, or disclosure of any data that compromises the security
or confidentiality of confidential personal information maintained by the
person or business; provided, however, that for this purpose a "security
breach" shall relate only to a system, technology, or process that is used in
connection with or is introduced into a securities offering in order to
implement the use of electronic offering documents or electronic
signatures.
b.
Use
of electronic offering documents and subscription agreements.
(1) An issuer of securities or agent acting
on behalf of the issuer may deliver offering documents over the Internet or by
other electronic means, or in machine-readable format, provided all of the
following requirements are met:
1. Each
offering document:
* Is prepared, updated, and delivered in a manner consistent
and in compliance with state and federal securities laws;
* Satisfies the formatting requirements applicable to printed
documents, such as font size and typeface, and is identical in content to the
printed version (other than electronic instructions or procedures as may be
displayed and nonsubstantive updates to daily net asset value which can be
updated more efficiently in the electronic version);
* Is delivered as a single, integrated document or file; when
delivering multiple offering documents, the documents must be delivered
together as a single package or list;
* Where the offering documents include a hyperlink to
external documents or content, provides notice to investors or prospective
investors that the document or content being accessed by the hyperlink is
provided by an external source; and
* Is delivered in an electronic format that intrinsically
enables the recipient to store, retrieve, and print the documents;
2. The issuer or agent acting on
behalf of the issuer:
* Obtains informed consent from the investor or prospective
investor to receive offering documents electronically;
* Ensures that the investor or prospective investor receives
timely, adequate, and direct notice when an electronic offering document has
been delivered;
* Employs safeguards to ensure that delivery of offering
documents occurred at or before the time required by law in relation to the
time of sale; and
* Maintains evidence of delivery by keeping records of its
electronic delivery of offering documents and makes those records available on
demand by the securities administrator.
(2) Subscription agreements may be provided
electronically by an issuer or agent acting on behalf of the issuer for the
prospective investor to review and complete, provided the subscription process
is administered in a manner that is similar to the administration of
subscription agreements in paper form, as follows:
1. Before completion of any subscription
agreement, the issuer or agent acting on behalf of the issuer shall review with
the prospective investor all appropriate documentation related to the
prospective investment including documents and instructions on how to complete
the subscription agreement;
2.
Mechanisms shall be established to ensure a prospective investor reviews all
required disclosures and scrolls through the document in its entirety prior to
initialing or signing; and
3.
Unless otherwise allowed by the securities administrator, a single subscription
agreement shall be used to subscribe a prospective investor in no more than one
offering.
(3) Security
breach.
1. In the event of discovery of a
security breach at any time in any jurisdiction, the issuer or its agents, as
appropriate, shall take prompt action to do all of the following:
* Identify and locate the breach.
* Secure the affected information.
* Suspend the use of the particular device or technology that
has been compromised until information security has been restored.
* Provide notice of the security breach to any investor whose
confidential personal information has been improperly accessed in connection
with the security breach and to the securities administrator of each state in
which an affected investor resides.
2. Compliance with subparagraph
50.66(22)"b" (3) after the discovery of a security breach or
any other breach of personal information shall not substitute or in any way
affect other requirements or obligations, including notification, imposed on an
issuer or its agents pursuant to applicable laws, regulations, or
standards.
(4) Delivery
requires that the offering documents be conveyed to and received by the
investor or prospective investor, or that the storage media in which the
offering documents are stored be physically delivered to the investor or
prospective investor in accordance with numbered paragraph
50.66(22)"b"(1)"1."
(5) Each electronic document shall be
preceded by or presented concurrently with the following notice:"Clarity
of text in this document may be affected by the size of the screen on which it
is displayed."
(6) Informed
consent to receive offering documents electronically pursuant to the first
bulleted paragraph of numbered paragraph 50.66(22)"b"(1)"2"
may be obtained in connection with each new offering or globally, either by the
issuer or by an agent acting on behalf of the issuer. The investor may revoke
this consent at any time by informing the party to whom the consent was given,
or, if such party is no longer available, the issuer. Generally, a consent is
considered to be informed when an investor is apprised that the document to be
provided will be available through a specific electronic medium or source, and
that there may be costs associated with delivery. In addition, for a consent to
be informed an investor must be apprised of the time and scope parameters of
the consent.
(7) Investment
opportunities shall not be conditioned on participation in the electronic
offering documents and subscription agreements initiative.
(8) Investors or prospective investors who
decline to participate in an electronic offering documents and subscription
agreements initiative shall not be subjected to higher costs-other than the
actual direct cost of printing, mailing, processing, and storing offering
documents and subscription agreements-as a result of their lack of
participation in the initiative, and no discount shall be given for
participating in an electronic offering documents and subscription agreements
initiative.
(9) Entities
participating in an electronic initiative shall maintain, and shall require
participating underwriters, dealer-managers, placement agents, broker-dealers,
or other selling agents to maintain, written policies and procedures covering
the use of electronic offering documents and subscription agreements.
(10) Entities and their contractors and
agents having custody and possession of electronic offering documents,
including electronic subscription agreements, shall store them in a
nonrewriteable and nonerasable format.
(11) Subrule 50.66(22) does not change or
waive any other requirement of law concerning registration or presale
disclosure of securities offerings.
c.
Use of electronic
signatures.
(1) An issuer of
securities or agent acting on behalf of the issuer may provide for the use of
electronic signatures if all of the following are true:
1. The process by which electronic signatures
are obtained:
* Shall be implemented in compliance with the Electronic
Signatures in Global and National Commerce Act and the Uniform Electronic
Transactions Act, and, where applicable, shall include required federal
disclosures;
* Shall include an appropriate level of security and
assurances of accuracy;
* Shall employ an authentication process to establish signer
credentials;
* Shall employ security features that protect signed records
from alteration; and
* Shall provide that either the issuer or agent acting on
behalf of the issuer retain, in compliance with applicable laws and
regulations, electronically signed documents;
2. An investor or prospective investor shall
expressly opt in to the electronic signature initiative, and participation may
be terminated at any time; and
3.
Investment opportunities shall not be conditioned on participation in the
electronic signature initiative.
(2) Entities that participate in an
electronic signature initiative shall maintain, and shall require underwriters,
dealer-managers, placement agents, broker-dealers, and other selling agents to
maintain, written policies and procedures covering the use of electronic
signatures.
(3) Documentation of an
investor's election to participate in an electronic signature initiative by
following the requirements of numbered paragraph
50.66(22)
"b"(1)"2" may be obtained in connection with each new
offering, or by an agent acting on behalf of the issuer. The investor may
revoke this consent at any time by informing the party to whom the consent was
given, or, if such party is no longer available, the issuer.
This rule is intended to implement Iowa Code sections
502.305(6) and
502306(1)..
