WSR 15-15-038 PROPOSED RULES DEPARTMENT OF FINANCIAL INSTITUTIONS (Securities Division) [Filed July 8, 2015, 11:14 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 15-08-059.
Title of Rule and Other Identifying Information: The securities division is proposing rules 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 proposed rules would be codified at WAC 460-18A-200.
Hearing Location(s): Department of Financial Institutions (DFI), 150 Israel Road S.W., Tumwater, WA 98501, on September 9, 2015, at 10:00 a.m.
Date of Intended Adoption: September 10, 2015.
Submit Written Comments to: Faith L. Anderson, Chief of Registration and Regulatory Affairs, Securities Division, Department of Financial Institutions, P.O. Box 9033, Olympia, WA 98507-9033, e-mail faith.anderson@dfi.wa.gov, fax (360) 704-6480, by September 9, 2015.
Assistance for Persons with Disabilities: Contact Carolyn Hawkey by September 2, 2015, TTY (360) 664-8126 or (360) 902-8760.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: 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 proposing rules 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. The proposed notice filing form is available on the division's web site at http://www.dfi.wa.gov/rulemaking/tier-2-offerings-under-regulation.
Statutory Authority for Adoption: RCW 21.20.327, 21.20.340, 21.20.450.
Statute Being Implemented: Chapter 21.20 RCW.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: DFI, securities division, governmental.
Name of Agency Personnel Responsible for Drafting: Faith L. Anderson, Esq., 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760; Implementation: Scott Jarvis, Director, DFI, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760; and Enforcement: William Beatty, Director, Securities, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760.
No small business economic impact statement has been prepared under chapter 19.85 RCW. A small business economic impact statement is not required under RCW 19.85.025(3) as the proposed rules would adopt, amend, or repeal a filing or related process requirement for applying to an agency for a license or permit.
A cost-benefit analysis is not required under RCW 34.05.328. DFI is not one of the agencies listed in RCW 34.05.328.
July 8, 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 prior to the initial offer 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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