Methods of state registration
- notice filing
- coordination
- qualification
Notice Filing
- the National Securities Markets Improvement Act of 1966 NSMIA made certain securities federal covered-not subject to states
- to sell federal covered security-1) need to have license as B/D or agent and 2) comply with anti fraud laws
- state can collect revenue as filing fee
Administrator notice filing documents
- documents filed along with their registration statements filed with the SEC
- documents filed as amendments to the initial federal registration statement
- a report as to the value of such securities offered in the state
- consent to service of process
Facts
- Administrator may make rule or order to require 1)filing of documents that are part of federal registration statement filed with the US Securities and Exchange Commission under the Securities Act of 1933
- can be EXEMPT from notice filing but still need to represent offer accurately in state
registration by coordination
- most common form of registration for securities that are not federal covered
- securities traded on OTC Bulletin Board or OTC Link
- most sensible way to register a multi state offering
Administrator coordination documents
- copies of the latest form of the prospectus filed under the Securities Act of 1933, if the Administrator requires it
- Copy of articles of incorporation and bylaws, a copy of the underwriting agreement, or a specimen copy of the security
- If the Administrator requests, copies of any other information filed by the issuer under the Securities Act of 1933
- Each amendment to the federal prospectus promptly after it is filed with the SEC
Effective date
- registration by coordination is effective at same time federal registration becomes effective
- no stop orders and no proceedings started by Administrator against issuer
- the registration has been on file for min. days between 10-20 days based on state laws
- a statement of the maximum and minimum offering prices and underwriting discounts have been on file for two business days
Registration by qualification
- any security can be registered by qualification
- supply information state Securities Administrator requires
- last resort of registration
- issuer must supply a consent to service of process
- name, address, form of organization, description of property, and nature of business
- information on directors and officers and every owner of 10% or more of the issuers securities and the remuneration paid to owners in the last 12 months
- description of the issuers' capitalization and long-term debt
- estimated proceeds and the use to which the proceeds will be put
- type and amount of securities offered, offering price, and selling and underwriting costs
- stock options to be created in connection with the offering
- copy of any prospectus, pamphlet, circular, or sales literature to be used in the offering
- specimen copy of the security along with opinion of counsel as to the legality of the security being offered
- audited balance sheet current within four months of the offering with an income statement for three years before the balance sheet date
- the Administrator may require additional information by rule or order
- the Administrator may require that a prospectus be sent to purchasers before the sale
- Administrator may require newly established companies register their securities for the first time in the state by qualification
Facts
- if a person filed consent to service of process, don't need a new consent later
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