Mont. Admin. r. 6.10.301 - MONTANA LIMITED OFFERING EXEMPTION
(1) By the
authority delegated to the commissioner in
30-10-105, MCA, an offer or sale
of securities offered or sold in compliance with Securities Act of 1933,
Regulation D, Rules 230.501 through 230.503 and 230.505 (
17 CFR
230.501,
230.502,
230.503 and
230.505 (1998)), is exempt from
the registration requirements of
30-10-202, MCA.
(2) Each person who offers or sells
securities in this state to nonaccredited and/or accredited investors, as
defined in Securities Act of 1933, Regulation D, Rule 230.501(a)(5) through
230.501(a)(7), shall be registered in accordance with
30-10-201, MCA.
(3) An exemption under this rule is not
available for the securities of an issuer if any of the parties described in
Securities Act of 1933, Regulation A, Rule 230.262:
(a) has filed a registration statement that
is the subject of a currently effective registration stop order entered
pursuant to a state's securities law within five years prior to the filing of
the notice required under this exemption;
(b) has been convicted within five years
prior to the filing if the notice required under this exemption of a felony or
misdemeanor in connection with the offer, purchase, or sale of a security or a
felony involving fraud or deceit, including but not limited to forgery,
embezzlement, obtaining money under false pretenses, larceny, or conspiracy to
defraud;
(c) is currently subject
to a 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 a 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;
(d) is subject to a
state's administrative enforcement order or judgment that prohibits, denies, or
revokes the use of an exemption from registration in connection with the offer,
purchase, or sale of securities; or
(e) is currently subject to an order,
judgment, or decree of a court of competent jurisdiction temporarily or
preliminarily restraining or enjoining, or is subject to an order, judgment, or
decree of a court of competent jurisdiction, permanently restraining or
enjoining the party from engaging in or continuing any conduct or practice in
connection with the purchase or sale of a security or involving the making of a
false filing with the state entered within five years prior to the filing of
the notice required under this exemption.
(4) The prohibitions of (3)(a) through (3)(c)
and (3)(e) do not apply if the person subject to the disqualification is
licensed or registered to conduct securities-related business in the state in
which the administrative order or judgment was entered against the person, or
if the person subject to the disqualification is registered to conduct
securities-related business by the Securities and Exchange Commission and the
order or judgment was entered against the person by the Securities and Exchange
Commission, or if the broker-dealer employing the person is registered in this
state and the form BD as adopted by the North American Securities
Administrators Association, Inc., and filed with this state discloses the
order, conviction, judgment, or decree relating to the person. A person
disqualified under this rule may not act in a capacity other than that for
which the person is registered.
(5)
A disqualification caused by this rule is automatically waived if the
Securities and Exchange Commission, 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 to deny the exemption under the
circumstances.
(6) The issuer shall
file with the commissioner
(a) a notice on an
original, manually signed form D (
17 CFR
239.500) at least ten days prior to an offer
or sale being made to a person in this state, annually until completion and
upon completion of the offer or sale, and at all such other times and in the
form required under Securities Act of 1933, Regulation D, Rule 230.503, to be
filed with the Securities and Exchange Commission. The notice must contain an
undertaking by the issuer to furnish to the commissioner, upon written request,
the information furnished by the issuer to offerees, unless the commissioner,
by order, requires that the information be filed at the time with the filing of
the notice.
(b) a consent to
service of process included with or in the initial notice;
(c) the filing fee prescribed, for the
initial registration of securities, in
30-10-209, MCA; and
(d) the name and address of each person who
will offer or sell, in this state, a security under this rule.
(7) In all sales to nonaccredited
investors in this state, the issuer and each person acting on its behalf shall
have reasonable grounds to believe, and after making reasonable inquiry shall
believe, that one of the following conditions is satisfied:
(a) the investment is suitable for the
purchaser upon the basis of the facts, if any, disclosed by the purchaser as to
the purchaser's other securities holdings, financial situation, and needs. For
the purpose of this condition only, it may be presumed that, if the investment
does not exceed 10% of the investor's net worth, it is suitable.
(b) the purchaser either alone or with the
purchaser's representative has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
prospective investment.
(8) A transaction that is exempt under this
rule may not be combined with an offer and sale exempt under any other rule
implementing or a section of the Securities Act of Montana. However, nothing in
this limitation acts as an election. If the offer and sale fail to comply with
all of the conditions for this exemption, the issuer may claim the availability
of any other applicable exemption.
(9) The commissioner may, by order, increase
the number of purchasers or waive any other conditions of this
exemption.
(10) In the case of
offerings of direct participation programs as defined in section 2810 of
Financial Industry Regulatory Authority, Inc., (FINRA) conduct rules, each
person who offers or sells securities in this state under this rule shall
deliver a disclosure document containing the information required by Securities
Act of 1933, Regulation D, Rule 230.502(b), to individuals covered by
Securities Act of 1933, Regulation D, Rules 230.502(a)(5), 230.502(a)(6), and
230.502(a)(7).
(11) The
commissioner may by order revoke, deny, or further condition the use of this
exemption with respect to a particular offering when the commissioner finds
that such an order is necessary to protect the investor or a person engaged in
securities transactions and is in the public interest.
(12) An issuer using the Montana limited
offering exemption shall file such other information as the commissioner may
require.
Notes
30-10-105, 30-10-107, MCA; IMP, 30-10-104, 30-10-202, 30-10-211, MCA;
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