S.D. Admin. R. 20:08:07:38 - Entities for economic development

(1) In order to facilitate economic development, a potential issuer may present a business plan at a public meeting prior to the registration of securities if the following conditions are met:

(a) The meeting is called by an entity organized and operated primarily for economic development, and not for pecuniary profit no part of the net earnings of which inures to the benefit of a stockholder or other person;

(b) The entity complies with the finder rules as set forth in § 20:08:03:17; and

(c) The potential issuer makes no offer or sale of a security at a meeting and prior to complying with SDCL chapter 47-31 B and the rules promulgated pursuant to that chapter.

(2) If an entity contracts in writing with a potential issuer prior to a meeting called by the entity, and the contract requires the potential issuer to comply with § 20:08:07:38(c), the entity will not be deemed to have violated § 20:08:07:38 based on a violation of § 20:08:07:38(c) by the potential issuer. This subdivision does not exempt the potential issuer from any liability that may arise from a violation of § 20:08:07:38(c).

(3) The term, potential issuer, means a person who has developed or is in the process of developing a business plan or business idea that may require investor funding through the issuance of securities by the potential issuer to complete the goals of the plan or idea.

Notes

S.D. Admin. R. 20:08:07:38

33 SDR 63, effective October 18, 2006.

General Authority: SDCL 47-31B-605(a)(1) to (3), inclusive.

Law Implemented: SDCL 47-31B-203, 47-31B-301(2).