The following transactions are exempted from sections 502.201 and 502.602:
1. Any isolated nonissuer transaction, whether effected through a broker-dealer or not.
2. Any nonissuer distribution of an outstanding security if:
a. A recognized securities manual approved by the administrator contains the names of the issuer's officers and directors, a balance sheet of the issuer as of a date within eighteen months, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations;
b. The security was issued by an issuer which has a class of securities subject to registration under section 12 of the Securities Exchange Act of 1934, and has been subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 for not less than ninety days before the transaction;
c. The security was issued by an issuer which has had or currently has a class of securities registered under this chapter, or under chapter 502 of the Code as it existed prior to January 1, 1976; or
d. The security was issued by an issuer which is registered under the Investment Company Act of 1940.
3. Any nonissuer transaction effected by or through a registered broker-dealer pursuant to an unsolicited order or offer to buy; but the administrator may by rule require that the customer acknowledge that the sale was unsolicited in accordance with provisions of such rule.
4. Any transaction between the issuer or other person on whose behalf the offering is made and an underwriter, or among underwriters.
5. A sale of bonds or notes directly secured by a real estate mortgage, security interest, deed of trust, or agreement for the sale of real estate or chattels, if the entire mortgage, security interest, deed of trust, or agreement, together with all the bonds or notes secured thereby, is offered and sold as a unit; provided that the entire mortgage, security interest, deed of trust or agreement, together with all of the bonds or notes secured thereby, shall not be deemed to be sold as a unit if:
a. Such bonds or notes are part of a single issue including other bonds or notes secured by interests in real estate or chattels owned or developed by the same person or by persons affiliated with such person; or
b. Such bonds or notes are offered or sold with any right to have substitution by or recourse against, or with guarantee by, the real estate developer or any person other than the person primarily obligated on the bond or note.
6. Any judicial sale or any transaction executed by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, custodian or conservator without any purpose of evading this chapter.
7. Any transaction executed by a bona fide pledgee without any purpose of evading this chapter.
8. An offer or sale to a bank, savings and loan association, credit union, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit sharing trust, or other financial institution or institutional buyer, or to a broker- dealer, whether the purchaser is acting for itself or in a fiduciary capacity. However, the administrator, by rule or order, may grant this exemption to a person or class of persons based upon the factors of financial sophistication, net worth, and the amount of assets under investment.
9. The sale, as part of a single issue, of securities by the issuer of the securities if all of the following conditions are satisfied:
a. Within any period of twelve consecutive months, sales are made to less than thirty-six purchasers in this state, exclusive of purchases by bona fide institutional investors for their own account for investment.
b. Unless permitted by the administrator by rule, or by order issued upon written application showing good cause for the allowance of the sale, the issue is not an issue of:
(1) Fractional undivided interests in oil, gas, or other mineral leases, rights, or royalties.
(2) Interests in a partnership organized under the laws of or having its principal place of business in a foreign jurisdiction.
c. The issuer reasonably believes that all the buyers in this state are purchasing for investment.
d. Commission or other remuneration is not paid or given, directly or indirectly, for the sale, except as may be permitted by the administrator by rule, or by order issued upon written application showing good cause for allowance of commission or other remuneration.
e. The issuer or a person acting on behalf of the issuer does not offer or sell the securities by any form of general solicitation or advertising.
10. Any offer or sale of a preorganization certificate or subscription if:
a. No commission or other remuneration is paid or given directly or indirectly for soliciting any prospective subscriber;
b. The number of subscribers does not exceed ten;
c. No payment is made by any subscriber; and
d. No public advertisement of the offer is made.
11. Any transaction pursuant to an offer to existing security holders of the issuer, including persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants, exercisable within not more than ninety days of their issuance, if:
a. A commission or other remuneration (other than a standby commission) is not paid or given directly or indirectly for soliciting a security holder in this state; or
b. The issuer first files a notice specifying the terms of the offer and the administrator does not by order disallow the exemption within the next ten days.
12. An offer, but not a sale, of a security for which a registration statement has been filed under this chapter or a written notice has been filed pursuant to section 502.202, subsection 1, 9, or 11 if no stop order or suspension or denial order is in effect and no proceeding is pending under this chapter.
13. Any transaction incident to a vote by security holders of a person or incident to a written consent or resolution of some or all security holders of a person, pursuant to the articles of incorporation of such person, or pursuant to the applicable corporate statute or other statute governing such person, or pursuant to such person's partnership agreement, declaration of trust, or trust indenture, or pursuant to any agreement among security holders of such person, on a reclassification of securities, reverse stock split, reorganization involving the exchange of securities, merger, consolidation, or sale of assets, in consideration, in whole or in part, of the issuance of securities of such person or of any other person, if:
a. The securities to be distributed are registered under the Securities Act of 1933 before the consummation of the transaction; or
b. The securities to be distributed are not required to be registered under the Securities Act of 1933, written notice of the transaction, a filing fee of fifty dollars, and a copy of the materials by which approval of the transaction will be solicited, are given to the administrator at least ten days before the consummation of the transaction, and the administrator does not disallow, by order, the exemption within the next ten days.
14. Any transaction incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims or property interests, or partly in such exchange and partly for cash.
15. The distribution of securities as a dividend, where the corporation distributing the dividend is the issuer of the securities distributed, if the only value given by shareholders for the dividend is the surrender of a right to a cash or property dividend when each shareholder may elect to take the dividend.
a. In cash or property, or
b. In such securities.
16. The administrator may create by rule a limited offering transactional exemption which furthers the objectives of compatibility with federal exemptions and uniformity among the states and provides criteria to determine and assure the suitability of investors.
17. The offer or sale of securities by a small business investment company under the federal Small Business Investment Act of 1958 if:
a. The securities are offered or sold in compliance with 17 C.F.R. § 230.601 through 230.610a; and
b. The issuer has filed with the administrator the offering document to be used in connection with the offer and sale of the securities not later than the first use of the offering document in this state, the issuer has filed with the administrator a copy of the notification of form "1-E" required by 17 C.F.R. § 230.604 to be filed with the federal securities and exchange commission, and the issuer has paid the administrator a fee of one hundred dollars.
18. Any other security or transaction or class of securities or transactions exempted, by the administrator by rule, from requirements provided in section 502.201 or 502.602.
[SS15, § 1920-u1, -u13; C24, 27, § 8526, 8554; C31, 35, § 8581-c5; C39, § 8581.05; C46, 50, 54, 58, 62, 66, 71, 73, 75, § 502.5; C77, 79, 81, § 502.203]
83 Acts, ch 169, § 4-7; 91 Acts, ch 40, §10-14; 96 Acts, ch 1025, § 4, 5
Referred to in § 502.102, 502.201, 502.204, 502.602, 502.608, 502.609
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Last update: Mon Jan 22 17:13:42 CST 2001