10 Pa. Code § 203.189 - Isolated transaction exemption
(a)
General. Under section
203(r) of the act (70 P.S. §
1-203(r)), the Department
finds that it is not necessary or appropriate for the protection of investors
to require registration under section 201 of the act (70 P.S. §
1-201) for the offer and sale of securities
by an issuer if:
(1) Sales made under this
section do not result in the issuer having made sales of its securities to more
than two persons in this Commonwealth during a period of 12 consecutive months.
Only sales described in subsection (c) will be counted as sales for purposes of
the numerical limitations contained in this paragraph.
(2) Offers made under this section do not
result in the issuer having made offers to sell its securities to more than 90
persons in this Commonwealth during a period of 12 consecutive months. Only
offers described in subsection (c) will be counted as offers for purposes of
the numerical limitations contained in this paragraph.
(3) The issuer either is organized under the
laws of the Commonwealth or has its principal place of business in this
Commonwealth.
(4) The issuer or a
promoter, officer or director of the issuer are not subject to the
disqualifications in §
204.010(b)
(relating to increasing the number of purchasers and offerees).
(5) General solicitation through public media
advertisement, mass mailing, the Internet or other means does not occur in
connection with offers and sales made under this section.
(6) Cash or securities are not given or paid,
directly or indirectly, to a person as compensation in connection with a sale
under this section unless:
(i) The
compensation is given or paid in connection with a sale made by a broker-dealer
who is either:
(A) Registered under section
301 of the act (70 P.S. §
1-301).
(B) Exempt from registration under section
302(a) of the act (70 P.S. §
1-302(a)).
(ii) A person receiving compensation is
either the broker-dealer or an agent of the broker-dealer who is either:
(A) Registered under section 301 of the
act .
(B) Exempt from registration
under section 302(b) of the act .
(b)
Waivers.
(1) Subsection (a)(2), (3) and (5) does not
apply if the following criteria are met:
(i)
The securities to be sold in reliance on this section are registered with the
Securities and Exchange Commission under section 5 of the Securities Act of
1933 (1933 Act ) (15 U.S.C.A.
§
77e) or exempt from registration under
Regulation A adopted under section 3(b) of the 1933 Act (15 U.S.C.A. §
77c(b)).
(ii) The issuer has complied with section
203(h) of the act .
(2)
Subsection (a)(3) does not apply if the following criteria are met:
(i) The offers and sales of securities made
in reliance on this section would qualify for an exemption from registration
under section 5 of the 1933 Act under Rule 505 or Rule 506 of Regulation D
(17 CFR
230.505 or
230.506) (relating to exemption
for limited offers and sales of securities not exceeding $5,000,000; and
exemption for limited offers and sales without regard to dollar amount of
offering) promulgated under section 3(b) of the 1933 Act and section 4(a)(2) of
the 1933 Act (15 U.S.C.A.
§
77d(a)(2)).
(ii) The offers made in this Commonwealth in
reliance on this section are made only to accredited investors as that term is
defined in Rule 501(a) of Regulation D promulgated by the Securities and
Exchange Commission (17 CFR
230.501(a)) (relating to
definitions and terms used in Regulation D).
(iii) The sales made in this Commonwealth in
reliance on this section are made only to accredited investors as that term is
defined in Rule 501(a) of Regulation D promulgated by the Securities and
Exchange Commission (17 CFR
230.501(a)).
(c)
Inclusion of prior offers and
sales. Offers and sales which occurred within the preceding 12 months
from the date of an offer or sale to be made under this section that were made
in reliance on section 203(d), (f) or (s) of the act , §
203.187 (relating to small issuer
exemption), §
204.010(a)(1) and
(2), Rule 506 (17 CFR 230.506) or
this section are counted against the numerical limitations in subsection (a)(1)
and (2).
(d)
Integration.
(1) Offers and
sales made by the issuer under this section are counted as offers and sales
under the applicable numerical limitations in §
204.010(a)(1) and
(2) if offers and sales under §
204.010 occur within 12
consecutive months of an offer or sale made under this section.
(2) Offers and sales made by the issuer under
this section are counted as offers and sales under the applicable numerical
limitations in section 203(s) of the act if offers and sales under section
203(s) of the act occur within 6 consecutive months of an offer or sale made
under this section.
(e)
Counting of offerees and purchasers. Section
609.012 (relating to computing the
number of offerees, purchasers and clients) applies to offers and sales of
securities made under this section.
Notes
The provisions of this § 203.189 amended under sections
203(d), (i.1), (j) and (n)-(t) and 609(a) of the Pennsylvania Securities
This section cited in 10 Pa. Code § 606.031 (relating to advertising literature).
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