In addition to the opening up of the company in the registration statement, it will have to file 10ks and 10qs at – least once a year. Consequence many of the offerings in the US are made a – transaction exemption not public offering. – Exempt securities The securities exempt from registration are specific securities or categories of securities, which are never required to be registered under § 5 largely due – to the intrinsic nature of the issuer itself. Examples: Commercial Securities issued by fed gov’t company contracts or municipalities annuities charitable organization May be resold free of registration burdens Still subject (to varying degrees) to the antifraud provisions of both Acts Intrastate Offering Exemption: § 3(a)(11) of the Securities Act: ’33 security is a part of an issue offered and sold only to persons resident “Any within a single State or Territory, where the issuer of such security is a person resident and doing business within, or if a corporation, incorporated by and doing business within, such State or Territory….” Is exempt. Even though § 3 says securities” this is a transactional exemption: “exempt – functions like §4 exemptions no registration, but anti-fraud provisions still apply resales need own exemption The entire issue of securities must be to residents of the offered and sold exclusively state in question. No monetary ceiling on how much you can raise through this exemption. Policy reasons: Typically dealing with small companies that couldn’t afford costs of registration and it’s less of a concern on a national level The character the idea that the residents probably have more familiarity – with local businesses States are well-equipped to handle intrastate offerings Questionable if this is still true today: Vastness of the certain states intrastate offerings are no longer necessarily – small. Communication reality of investing is that you get hooked on interstate – commerce time you use the cell phone. This satisfies the interstate commerce component Issues: issue” “Whole The must be offered exclusively to residents of the state in question. whole issue Whether it is part of an issue, that is, whether it is an integrated part of an offering previously made or proposed to be made, is a question of fact and depends essentially upon whether the offerings are a related part of a plan or program.
In addition to the opening up of the company in the registration statement, it will have to file 10ks and 10qs – at least once a year. Consequence – many of the offerings in the US are made a transaction exemption – not public offering. Exempt securities The securities exempt from registration are specific securities or categories of securities, which are never required to be registered under § 5 – largely due to the intrinsic nature of the issuer itself. Examples: Commercial Securities issued by fed gov’t company contracts or municipalities annuities charitable organization May be resold free of registration burdens Still subject (to varying degrees) to the antifraud provisions of both Acts Intrastate Offering Exemption: § 3(a)(11) of the ’33 Securities Act: “Any security is a part of an issue offered and sold only to persons resident within a single State or Territory, where the issuer of such security is a person resident and doing business within, or if a corporation, incorporated by and doing business within, such State or Territory….” Is exempt. Even though § 3 says “exempt securities” – this is a transactional exemption: functions like §4 exemptions no registration, but anti-fraud provisions still apply resales need own exemption The entire issue of securities must be offered and sold exclusively to residents of the state in question. No monetary ceiling on how much you can raise through this exemption. Policy reasons: Typically dealing with small companies that couldn’t afford costs of registration and it’s less of a concern on a national level The character – the idea that the residents probably have more familiarity with local businesses States are well-equipped to handle intrastate offerings Questionable if this is still true today: Vastness of the certain states – intrastate offerings are no longer necessarily small. Communication – reality of investing is that you get hooked on interstate commerce time you use the cell phone. This satisfies the interstate commerce component Issues: “Whole issue” The whole issue must be offered exclusively to residents of the state in question. Whether it is part of an issue, that is, whether it is an integrated part of an offering previously made or proposed to be made, is a question of fact and depends essentially upon whether the offerings are a related part of a plan or program.
Securities-Regulation_Nagy_Spring-2010.docx