Section 26-B243. NOTICE FILING REQUIREMENT FOR ISSUERS CLAIMING AN EXEMPTION UNDER THE ACT

 

243.1Issuers relying upon the exemptions from registration found in §§ 401(7), (8), (10), (12); or §§ 402 (12), (16), (18), or (19) of the Act (D.C. Offical Code § 31-564.01)shall comply with the notice filing and fee requirements of this section. The burden of proving a claim to an exemption or an exception from a definition is upon the person claiming it.

 

243.2Except for the exemptions found in the sections referenced in § 243.1, issuers relying upon the exemptions from registration found in §§ 401 and 402 of the Act (D.C. Offical Code §§ 31-5604.01 and 31.5604.02) shall not file any notice, or pay any fee to the Department.

 

243.3An issuer relying upon an exemption found in §§ 401(8) or 401(12) of the Act (D.C. Offical Code § § 31-5604.01(8) and 31.5604.01(12))shall file a written notice with the Commissioner at least ten (10) days prior to the first offering of sale pursuant to the exemption. The notice filing under this subsection shall contain the following information:

 

(a)The identity of the issuer;

 

(b)The amount and type of securities to be sold pursuant to the exemption;

 

(c)A description of the use of proceeds of the securities;

 

(d)The person or persons by whom offers and sales will be made;

 

(e)An affirmation that a commission or remuneration for soliciting any prospective buyer will not be paid except to a broker-dealer or issuer's agent registered in the District; and

 

(f)An affirmation that all prospective buyers will receive, before any sale, a disclosure document containing the material terms of the proposed offering.

 

243.4The notice filed with the Commissioner pursuant to § 243.3 shall be accompanied by the following:

 

(a)Offering document, containing material terms of the proposed sale; copies of any sales and advertising literature to be used to sell the securities;

 

(b)Certified copies of articles of incorporation and bylaws, or documents that serve those purposes;

 

(c)Evidence of tax exempt status; and, audited financial statements for the most recent fiscal year or calendar year;

 

(d)Form U-2, Uniform Consent to Service of Process; and

 

(e)A fee required by § 249.11.

 

243.5An issuer relying upon an exemption from registration found in §§ 401(7), (10); or §§ 402(16), (18), or (19) of the Act (D.C. Official Code § 31-5604.01)shall file a written notice with the Commissioner at least twenty (20) days prior to the first offering of sale pursuant to such claim. The notice filing under this subsection shall contain the following information:

 

(a)The identity of the issuer;

 

(b)The amount and type of securities to be sold pursuant to the exemption;

 

(c)A description of the use of proceeds of the securities;

 

(d)The person or persons by whom offers and sales will be made;

 

(e)An affirmation that a commission or remuneration or soliciting any prospective buyer will not be paid except to a broker-dealer or issuer's agent registered in the District; and

 

(f)An affirmation that all prospective buyers will receive, before any sale, a disclosure document containing the material terms of the proposed offering.

 

243.6The notice filed with the Commissioner pursuant to § 243.5 shall be accompanied by the following:

 

(a)Offering document, containing material terms of the proposed sale; copies of any sales and advertising literature to be used to sell the securities;

 

(b)Form U-2, Uniform Consent to Service of Process; and

 

(c)A fee required by § 249.11.

 

243.7The exemption from registration found in § 402(12)(A) of the Act (D.C. Offical Code § 31-5604.02)shall only be available to issuers that would otherwise be required to file a prospectus with the Department.

 

243.8An issuer offering securities pursuant to rule 504 of SEC Regulation D, 17 C.F.R. § 230.504, may use the exemption found in § 402(12)(A) of the Act. Such issuers shall be prohibited from making offers to more than ten (10) persons, during any period of twelve (12) consecutive months. For purposes of calculating the number of persons pursuant to this subsection, the issuer should refer to the definition of "person" found in § 101(23) of the Act.

 

243.9An issuer relying upon an exemption found in § 402(12)(A) of the Act (D.C. Official Code § 31-5604.02)shall file a written notice with the Commissioner at least twenty (20) days prior to the first offering of sale pursuant to such claim. The notice filing under this subsection shall contain the following information:

 

(a)The identity of the issuer;

 

(b)The amount and type of securities to be sold pursuant to the exemption;

 

(c)A description of the use of proceeds of the securities;

 

(d)The person or persons by whom offers and sales will be made;

 

(e)An affirmation that a commission or remuneration for soliciting any prospective buyer will not be paid except to a broker-dealer or issuer's agent registered in the District; and

 

(f)An affirmation that all prospective buyers will receive, before any sale, a disclosure document containing the material terms of the proposed offering.

 

243.10The notice filed with the Commissioner pursuant to this § 243.9 shall be accompanied by the following:

 

(a)Offering document, containing material terms of the proposed sale; copies of any sales and advertising literature to be used to sell the securities;

 

(b)Form U-2, Uniform Consent to Service of Process; and

 

(c)A fee required by § 249.11.

 

243.11Issuers relying on an exemption covered by this section shall not pay any commission or remuneration for soliciting any prospective buyer, except to a broker-dealer or issuer's agent registered in the District.

 

243.12Issuers relying on an exemption covered by this section shall provide, prior to any sale, all prospective buyers with a disclosure document containing the material terms of the proposed offering.

 

243.13An exemption for an offering made pursuant to this section shall be effective for 1 year from the date that the notification filing is accepted by the Commissioner. An exemption may be extended for successive 1-year periods by complying with the applicable notice filing and fee provisions of this section.

 

243.14If an exemption covered by this section is disallowed by the Commissioner, the offering must be registered under Section 302, 303 or 304 of the Act, unless another exemption is available.

 

243.15The Commissioner retains the right to take action under the Act against an issuer or other person that fails to comply with the requirements of this section.

 

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Amended by Emergency Rulemaking published at 47 DCR 9910 (December 15, 2000) [EXPIRED]; as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Emergency and Proposed Rulemaking published at 48 DCR 3952 (May 4, 2001) [EXPIRED]; as amended by Emergency and Proposed Rulemaking published at 48 DCR 9177 (October 5, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 10879 (November 30, 2001).