WSR 15-19-092 PERMANENT RULES DEPARTMENT OF FINANCIAL INSTITUTIONS (Securities Division) [Filed September 16, 2015, 3:52 p.m., effective October 17, 2015] Effective Date of Rule: Thirty-one days after filing.
Purpose: The securities division is hereby adopting a rule to preserve filing requirements in connection with offerings of securities made under Tier 2 of the Securities and Exchange Commission's newly adopted rules for Regulation A offerings. The final rule will be codified at WAC 460-18A-200. On March 25, 2015, the Securities and Exchange Commission adopted final rules providing for a federal exemption from registration for offerings of securities of up to $50 million as authorized by the JOBS Act of 2012. See Amendments to Regulation A, Securities Act Release Nos. 33-9741, 34-74578, 39-2501, available at http://www.sec.gov/rules/final/2015/33-9741.pdf. These rules adopted a definition of "qualified purchaser" pursuant to Sec. 18(b)(3) of the Securities Act of 1933 that extends to "any person to whom securities are offered or sold" in offerings of up to $50 million in a Tier 2 offering under federal Regulation A. While the effect of defining a "qualified purchaser" in this manner is to preempt the states from requiring registration of these smaller and less regulated offerings, states retain the authority to require the filing of offering materials, a consent to service of process, and fees that would otherwise be required in the absence of preemption. The securities division is now adopting a rule to require the filing of a notice filing form, a consent to service of process, and the fees that would otherwise be required in connection with the registration of these securities offerings but for preemption by the Securities and Exchange Commission.
Adopted under notice filed as WSR 15-15-038 on July 8, 2015.
Changes Other than Editing from Proposed to Adopted Version: In response to comments received in response to the notice of proposed rule making, the text of the proposed rule was revised to move the deadline by which the required notice filing must be submitted from a date "prior to the initial offer in this state" to a date that is "at least twenty-one calendar days prior to the initial sale in this state."
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 1, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: September 16, 2015.
Scott Jarvis
Director
NEW SECTION
WAC 460-18A-200 Filing requirements—Regulation A Tier 2 offerings.
The following provisions apply to offerings made under Tier 2 of federal Regulation A:
(1) Initial filing. An issuer planning to offer and sell securities in this state in an offering exempt under Tier 2 of federal Regulation A shall submit the following at least twenty-one calendar days prior to the initial sale in this state:
(a) A completed Regulation A – Tier 2 Offering Notice Filing Form or other document identifying the filing;
(b) A consent to service of process on Form U-2 if not provided in the Regulation A – Tier 2 Offering Notice Filing Form; and
(c) The filing fee prescribed by RCW 21.20.340 (3)(a).
The initial notice filing is effective for twelve months.
(2) Renewal. For each additional twelve-month period in which the same offering is continued, an issuer conducting a Tier 2 offering under federal Regulation A may renew the unsold portion of its notice filing by filing the following on or before the expiration of the notice filing:
(a) The Regulation A – Tier 2 Offering Notice Filing Form marked "renewal" and/or a cover letter or other document requesting renewal;
(b) The renewal fee prescribed by RCW 21.20.340 (3)(a) to renew the unsold portion of securities for which a filing fee has previously been paid; and
(c) If the amount of securities subject to the notice filing is being increased, the fee prescribed by RCW 21.20.340 (3)(a) to cover the increase in the amount of securities to be offered.
(3) Amendment. An issuer may increase the amount of securities offered in this state by submitting a Regulation A – Tier 2 Offering Notice Filing Form or other document describing the transaction and a fee calculated pursuant to RCW 21.20.340 (3)(a) to cover the increase in the amount of securities being offered.
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