0780-04-02-.12 - NOTICE FILINGS FOR COVERED SECURITIES

0780-04-02-.12. NOTICE FILINGS FOR COVERED SECURITIES

(1) Initial notice filings.

(a) Covered securities under T.C.A. § 48-1-125(a)(1)(A)

1. An initial notice filing for any covered security under T.C.A. § 48-1-125(a)(1)(A), intended for sale in this state, must contain:

(i) A copy of the issuer's prospectus and statement of additional information;

(ii) Either (a) a completed and properly executed notice filing form, designated under 0780-04-01-.04(4), as applicable; or (b) a copy of the issuer's federal registration statement as filed with the SEC;

(iii) A completed and properly executed consent to service of process on Form U-2, or in such other format acceptable to the Division, as provided under T.C.A. § 48-1-124(e), which may be included in the notice filing form;

(iv) A completed and properly executed Form U-2A, if applicable; and

(v) The filing fee as provided under T.C.A. § 48-1-125(a)(1)(A)(ii).

2. An issuer of a covered security under this subparagraph (1)(a) must make an initial notice filing with the Division prior to the sale of such security in this state.

3. Notice filings for any covered security under this subparagraph (1)(a) are effective for one (1) year commencing on the later of the date the filing with the Division is completed or the SEC effective date.

4. A notice filing under this subparagraph (1)(a) may be filed with the Division by complying with the requirements for electronic filing under paragraph (7) of this Rule.

(b) Covered securities under T.C.A. § 48-1-125(a)(1)(B)

1. An initial notice filing for a covered security which the issuer plans to offer pursuant to Tier 2 of Regulation A (17 C.F.R. §§ 230.251et seq.) must contain:

(i) Either (a) a completed and properly executed Uniform Notice Filing of Regulation A - Tier 2 Offering form; or (b) copies of all documents filed with the SEC;

(ii) A completed and properly executed consent to service of process on Form U-2, or in such other format acceptable to the Division, as provided under T.C.A. § 48-1-124(e), which may be included in the Uniform Notice Filing of Regulation A - Tier 2 Offering form;

(iii) A completed and properly executed Form U-2A, if applicable; and

(iv) The filing fee as provided under T.C.A. § 48-1-125(a)(1)(B)(iii).

2. An issuer planning to offer and sell securities under this subparagraph (1)(b) must make an initial notice filing with the Division no later than twenty-one (21) calendar days prior to the initial sale in this state.

3. Notice filings for any covered security under this subparagraph (1)(b) are effective for one (1) year commencing on the date the filing with the Division is completed.

4. A notice filing under this subparagraph (1)(b) may be filed with the Division by complying with the requirements for electronic filing under paragraph (7) of this Rule.

(c) Covered securities under T.C.A. § 48-1-125(a)(1)(C)

1. An initial notice filing for a covered security exempted from federal registration under § 18(b)(4)(C) of the 1933 Act must contain:

(i) Either (a) a completed and properly executed Form U-CF; or (b) copies of all documents filed with the SEC;

(ii) A completed and properly executed consent to service of process on Form U-2, or in such other format acceptable to the Division, as provided under T.C.A. § 48-1-124(e), which may be included in the Form U-CF;

(iii) A completed and properly executed Form U-2A, if applicable; and

(iv) The filing fee as provided under T.C.A. § 48-1-125(a)(1)(C)(i)(c).

2. If the issuer of a covered security under this subparagraph (1)(c) has its principal place of business in this state, the issuer must make an initial filing with the Division concurrently when the issuer files its initial Form C with the SEC.

3. If the issuer of a covered security under this subparagraph (1)(c) has its principal place of business outside this state, but residents of this state have purchased fifty percent (50%) or greater of the aggregate amount of the offering, the issuer must make an initial notice filing with the Division upon learning that such purchases have met the fifty percent (50%) threshold, and, in any event, no later than thirty (30) days from the date of completion of the offering.

4. Notice filings for any covered security under this subparagraph (1)(c) are effective for one (1) year commencing on the date the filing with the Division is completed.

5. A notice filing under this subparagraph (1)(c) may be filed with the Division by complying with the requirements for electronic filing under paragraph (7) of this Rule.

(d) Covered securities under T.C.A. § 48-1-125(a)(1)(D)

1. An initial notice filing for a covered security exempt from federal registration pursuant to Rule 506 of Regulation D (17 C.F.R. § 230.506) must contain:

(i) A copy of the completed and properly executed Form D as filed with the SEC;

(ii) A completed and properly executed Form U-2A, if applicable;

(iii) A statement specifying the date of first sale in this state; and

(iv) The filing fee as provided under T.C.A. § 48-1-125(a)(1)(D)(ii).

2. An issuer of a covered security under this subparagraph (1)(d) must make an initial notice filing with the Division no later than fifteen (15) days after the first sale of such security in this state.

3. Notice filings for covered securities under this subparagraph (1)(d) are effective for one (1) year, commencing on the date the filing with the Division is completed, unless the issuer conducts a continuous offering as provided under T.C.A. § 48-1-125(b)(4) and subparagraph (3)(d) of this Rule.

4. A notice filing under this subparagraph (1)(d) may be filed with the Division by complying with the requirements for electronic filing under paragraph (7) of this Rule.

(2) Amendments to notice filings.

(a) After the initial offer of a covered security in this state, all documents that are part of any amendments to a federal registration statement or Form D filed with the SEC must be filed concurrently with the Division.

(b) An issuer filing an amendment to a notice filing for a covered security which changes the name of the offering of securities must pay a processing fee as provided under T.C.A. § 48-1-125(d) upon filing the amendment with the Division.

(3) Renewal of notice filings.

(a) Covered securities under T.C.A. § 48-1-125(a)(1)(A)

1. Pursuant to T.C.A. § 48-1-125(b)(1), a renewal of a notice filing for a covered security under this subparagraph (3)(a) must contain:

(i) A copy of the issuer's prospectus and statement of additional information;

(ii) Either (a) a completed and properly executed notice filing form, designated under 0780-04-01-.04(4), as applicable; or (b) a copy of the issuer's federal registration statement as filed with the SEC;

(iii) A completed and properly executed consent to service of process on Form U-2, or in such other format acceptable to the Division, as provided under T.C.A. § 48-1-124(e), which may be included in the notice filing form;

(iv) A copy of the completed and properly executed Form U-2A submitted as part of the initial notice filing pursuant to subparagraph (1)(a) of this Rule, if applicable; and

(v) The filing fee as provided under T.C.A. § 48-1-125(a)(1)(A).

2. All forms, documents, and fees required for renewal of a notice filing for a covered security under this subparagraph (3)(a) must be filed with the Division no later than the close of business on the tenth (10) business day prior to the date of expiration of the current notice filing.

3. A notice filing renewal under this subparagraph (3)(a) may be filed with the Division by complying with the requirements for electronic filing under paragraph (7) of this Rule.

(b) Covered securities under T.C.A. § 48-1-125(a)(1)(B)

1. Pursuant to T.C.A. § 48-1-125(b)(2), a renewal of a notice filing for a covered security under this subparagraph (3)(b) must contain:

(i) Either (a) a completed and properly executed Uniform Notice Filing of Regulation A - Tier 2 Offering form; or (b) copies of all documents filed with the SEC;

(ii) A completed and properly executed consent to service of process on Form U-2, or in such other format acceptable to the Division, as provided under T.C.A. § 48-1-124(e), which may be included in the Uniform Notice Filing of Regulation A - Tier 2 Offering form;

(iii) A copy of the completed and properly executed Form U-2A submitted as part of the initial notice filing pursuant to subparagraph (1)(b) of this Rule, if applicable; and

(iv) The filing fee as provided under T.C.A. § 48-1-125(b)(2).

2. All forms, documents, and fees required for renewal of a notice filing for a covered security under this subparagraph (3)(b) must be filed with the Division no later than the close of business on the day prior to the date of expiration of the current notice filing.

3. A notice filing renewal under this subparagraph (3)(b) may be filed with the Division by complying with the requirements for electronic filing under paragraph (7) of this Rule.

(c) Covered securities under T.C.A. § 48-1-125(a)(1)(C)

1. Pursuant to T.C.A. § 48-1-125(b)(3), a renewal of a notice filing for a covered security under this subparagraph (3)(c) must contain:

(i) Either (a) a completed and properly executed Form U-CF; or (b) copies of all documents filed with the SEC;

(ii) A completed and properly executed consent to service of process on Form U-2, or in such other format acceptable to the Division, as provided under T.C.A. § 48-1-124(e), which may be included in the Form U-CF;

(iii) A copy of the completed and properly executed Form U-2A submitted as part of the initial notice filing pursuant to subparagraph (1)(c) of this Rule, if applicable; and

(iv) The filing fee as provided under T.C.A. § 48-1-125(b)(3).

2. All forms, documents, and fees required for renewal of a notice filing for a covered security under this subparagraph (3)(c) must be filed with the Division no later than the close of business on the day prior to the date of expiration of the current notice filing.

3. A notice filing renewal under this subparagraph (3)(c) may be filed with the Division by complying with the requirements for electronic filing under paragraph (7) of this Rule.

(d) Covered securities under T.C.A. § 48-1-125(a)(1)(D)

1. Pursuant to T.C.A. § 48-1-125(b)(4), notice filings for covered securities exempt from federal registration pursuant to Rule 506 of Regulation D (17 C.F.R. § 230.506) are effective for one (1) year unless the issuer is conducting a continuous offering, and:

(i) The issuer annually submits to the Division a completed and properly executed amended Form D;

(ii) The issuer annually submits to the Division a copy of the completed and properly executed Form U-2A submitted as part of the initial notice filing pursuant to subparagraph (1)(d) of this Rule, if applicable;

(iii) The issuer submits to the Division all additional amendments concurrent with its filings with the SEC; and

(iv) The issuer annually submits to the Division the filing fee as provided under T.C.A. § 48-1-125(b)(4).

2. If the issuer of a covered security under this subparagraph (3)(d) elects to conduct a continuous offering, all forms, documents, and fees must be filed with the Division no later than the close of business on the day prior to the date of expiration of the current notice filing.

3. A notice filing renewal under this subparagraph (3)(d) may be filed with the Division by complying with the requirements for electronic filing under paragraph (7) of this Rule.

(e) Any notice filing, subject to renewal which is not timely renewed, shall expire as provided under T.C.A. § 48-1-125(b)(1)-(4).

(f) A renewal of a notice filing for a covered security shall not stay the expiration of the notice filing if:

1. Such renewal is deficient as determined by the Division; and

2. Such deficiency is not corrected prior to the expiration of the notice filing.

(4) Deficient notice filings.

(a) An issuer who has filed an initial or renewal notice filing for a covered security shall be subject to a stop order of the commissioner suspending the offer or sale of such covered security in this state, as provided under T.C.A. § 48-1-125(c), if:

1. The filing is deficient as determined by the Division by failing to satisfy the document filing requirements of T.C.A. § 48-1-125(a)-(b) and paragraphs (1) through (3) of this Rule; or

2. The filing is deficient as determined by the Division by failing to satisfy the fee requirements of T.C.A. § 48-1-125(a)-(b) and paragraphs (1) through (3) of this Rule; and

3. The deficiency is not corrected within ten (10) business days of the issuer's receipt of notification from the Division, or prior to the expiration of the notice filing in the case of renewals.

(b) In any case where the commissioner may issue a stop order, the issuer may be subject to further orders of the commissioner pursuant to T.C.A. § 48-1-116.

(5) Failure to make notice filings.

(a) Any issuer who fails to make a notice filing for a covered security to be sold in this state as set forth under T.C.A. § 48-1-125 and this Rule shall be subject to a stop order of the commissioner, as provided under T.C.A. § 48-1-125(c), suspending the offer or sale of such securities in this state.

(b) For purposes of T.C.A. § 48-1-125(c)(2) and this paragraph (5), a failure to make a notice filing cannot be promptly remedied:

1. If the security is a covered security other than a covered security exempt from federal registration under § 18(b)(4)(C) of the 1933 Act or Rule 506 of Regulation D (17 C.F.R. § 230.506) and the delay in making the notice filing as required under T.C.A. § 48-1-125(a)(1)(A)-(B) exceeds ten (10) business days from the date of the first sale of such security in this state; or

2. If the security is a covered security exempt from federal registration under § 18(b)(4)(C) of the 1933 Act and:

(i) The delay in making the notice filing as required under T.C.A. § 48-1-125(a)(1)(C)(ii) exceeds ten (10) business days from the date of filing with the SEC; or

(ii) The delay in making the notice filing as required under T.C.A. § 48-1-125(a)(1)(C)(iii) exceeds ten (10) business days from the date upon which the issuer became aware that residents of this state purchased fifty percent (50%) or greater of the aggregate amount of the offering, or, in any event, the notice filing exceeds forty (40) calendar days from the date of the completion of the offering; or

3. If the security is a covered security exempt from federal registration pursuant to Rule 506 of Regulation D (17 C.F.R. § 230.506) and the delay in making the notice filing as required under T.C.A. § 48-1-125(a)(1)(D) exceeds twenty-five (25) calendar days from the date of the first sale of such security in this state.

(6) Refusal to pay notice filing fees.

For purposes of this Rule, an issuer is deemed to refuse to pay the notice filing fee when:

(a) The issuer is subject to a stop order under the provisions of T.C.A. § 48-1-125(c) and part 2. of subparagraph (4)(a) of this Rule; or

(b) The issuer has failed to make a notice filing as defined in subparagraph (5)(b) of this Rule, and includes a failure to pay the appropriate notice filing fee.

(7) Electronic filing.

(a) All forms and documents required under T.C.A. § 48-1-125 and this Rule which have been filed and recorded on the Electronic Data Gathering Access and Retrieval (EDGAR) system, the Interactive Data Electronic Applications (IDEA) system, the Electronic Filing Depository (EFD), or any other electronic data gathering system either maintained by the SEC or approved by the Division, may be utilized in lieu of filing such documents in paper form.

(b) If an issuer making a notice filing in this state elects to file electronically, the issuer making the notice filing must:

1. Provide an accurate filing number or other designation used by the SEC; and

2. Ensure that a printed or electronically stored copy of all required documents and forms is immediately accessible to the Division.

(Original rule filed November 6, 1997; effective January 20, 1998. Amendment filed May 15, 2002; effective July 29, 2002. Amendment filed April 5, 2004; effective June 19, 2004. Repeal and new rule filed March 16, 2015; effective June 14, 2015. Amendments filed February 1, 2018; effective May 2, 2018.)

Authority: T.C.A. §§ 48-1-102(8)(F)(iv), 48-1-102(8), 48-1-108, 48-1-115, 48-1-116, 48-1-121, 48-1-124(e), and 48-1-125; Public Acts of 1997, Chapter 164, § 8; § 18 of the Securities Act of 1933, as amended by the National Securities Markets Improvement Act of 1996; and 17 C.F.R. § 230.487.

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