[Filed July 20, 1998, 9:40 a.m.]
Preproposal statement of inquiry was filed as WSR 98-07-102.
Title of Rule: WAC 460-44A-050 Isolated nonissuer transaction.
Purpose: To amend WAC 460-44A-050 to address the scope of the term "issuer isolated transaction" in addition to the term "nonissuer isolated transaction" currently defined in the rule.
Statutory Authority for Adoption: RCW 21.20.450.
Statute Being Implemented: Chapter 21.20 RCW.
Summary: This amendment is being proposed to more completely explain the scope of the isolated transaction exemption of RCW 21.20.320(1) relating to both issuer as well as nonissuer transactions. Only nonissuer isolated transactions are currently addressed by the rule.
Reasons Supporting Proposal: To incorporate information relating to isolated issuer transactions addressed in Securities Act Interpretive Statement 08 into a rule addressing isolated nonissuer transactions consistent with RCW 34.05.230.
Name of Agency Personnel Responsible for Drafting: Brad Ferber, 210 11th Avenue S.W., Olympia, WA, (360) 902-8760; Implementation: John L. Bley, 210 11th Avenue S.W., Olympia, WA, (360) 902-8760; and Enforcement: Deborah Bortner, 210 11th Avenue S.W., Olympia, WA, (360) 902-8760.
Name of Proponent: Department of Financial Institutions, Securities Division, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: This amendment is being proposed to more completely explain the scope of the isolated transaction exemption of RCW 21.20.320(1) relating to both issuer as well as nonissuer transactions. Only nonissuer isolated transactions are currently addressed by WAC 460-44A-050. Following review of this rule according to Executive Order 97-02, Securities Division staff has recommended that portions of Securities Act Interpretive Statement 08 relating to isolated issuer transactions be incorporated into the rule. This action is consistent with RCW 34.05.230, which provides that to better inform and involve the public, agencies are encouraged to convert long-standing interpretive and policy statements into rules.
Proposal Changes the Following Existing Rules: WAC 460-44A-050 will be amended to address isolated issuer transactions as well as isolated nonissuer transactions.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposal does not have economic impact on business.
Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. The Department of Financial Institutions is not a listed agency in section 201.
Hearing Location: Department of Financial Institutions, Securities Division, Executive Conference Room, 300 General Administration Building, 210 11th Avenue S.W., Olympia, WA 98504, on August 25, 1998, at 2:00 p.m.
Assistance for Persons with Disabilities: Contact Darlene Christianson by August 21, 1998, TDD (360) 664-8126, or (360) 902-8760.
Submit Written Comments to: Brad Ferber, P.O. Box 9033, Olympia, WA 98507-9033, fax (360) 586-5068, by August 24, 1998.
Date of Intended Adoption: August 26, 1998.
July 17, 1998
John L. Bley
AMENDATORY SECTION (Amending Order SD-130-77, filed 11/23/77)
WAC 460-44A-050 Isolated ((
not involving a public offering. (( A nonissuer)) (1) An
"isolated transaction" within the meaning of RCW 21.20.320(1)
(1))) (a) Subject to the limitation of (b) of this
subsection, any sale of an outstanding security by or on behalf
of a person not in control of the issuer or controlled by the
issuer or under common control with the issuer and not involving
a distribution(( . A transaction is presumed to be "isolated"
(b) Any sale satisfying the requirements of (a) of this subsection that is effected through a broker-dealer, provided that it is one of not more than three such transactions effected by or through the broker-dealer in this state during the prior twelve months;
(2))) (c) Any sale of an outstanding security by or on
behalf of a person in control of the issuer or controlled by the
issuer or under common control with the issuer if the sale is
effected pursuant to:
(i) Brokers' transactions in accordance with section 4(4) of the Securities Act of 1933 and Rule 144 thereunder; or
(ii) Any other transaction not effected through a broker-dealer and not involving a distribution, if the sale, including any other sales of securities of the same class during the prior twelve months inside or outside this state by the person, does not exceed 1% of the outstanding shares or units of that class; or
(d) Any sale of a security by or on behalf of an issuer that is one of not more than three such transactions inside or outside this state during the prior twenty-four months.
An exemption provided by (a), (b), (c), or (d) of this subsection shall not be available for any offering made in a manner inconsistent with the limitations set forth in (a), (b), (c), or (d) of this subsection, respectively.
(2) "Sales not involving a public offering," within the meaning of RCW 21.20.320(1), is interpreted by the director in a manner consistent with section 4(2) of the federal Securities Act of 1933 and Securities and Exchange Commission Securities Act Release No. 4552.
Note: Pursuant to RCW 21.20.320(1), the director has promulgated a rule "establishing a nonpublic offering exemption" at WAC 460-44A-506.
[Order SD-130-77, § 460-44A-050, filed 11/23/77.]