Corporate & Securities Law

* For Reg. D Rule 504, 505 and 506 offerings, an electronically or manually signed copy of Form D may be filed; the appendix and Form U-2 requirement were eliminated. For 506 offerings, the initial fee remains $250 but any filing made beyond the "15-days after the first sale requirement" subjects issuers to a late filing fee of $25, making the total filing fee $275. Note also that paying the late fee does not prevent civil liability or regulatory action from being taken against the issuer.

* The rule clarifying the statutory 25-purchaser exemption {no more than 25 purchasers present in South Dakota during a 12-month consecutive period not including designated institutional investors/financial institutions} eliminated the sentence that it only covers issuers having a principal place of business in South Dakota. The text goes on to list the types of purchasers, e.g., relatives, spouses, corporations, etc. that are excluded from the count of 25 purchasers, and ends with two tests for determining whether separate securities issuances can be integrated into the offering.

* The statutory isolated nonissuer exemption was further explained by a new rule defining "isolated" as "standing alone, detached, or separate as opposed to repeated or successive," and "nonissuer transaction" as "a transaction or distribution not directly or indirectly for the issuer's benefit."

* Rules registering securities by coordination or qualification eliminated a sentence stating that a broker-dealer registered under the SD Uniform Securities Act may omit Form U-2. Also, quarterly, annual and final sales reports on the State Quarterly Report of Sales Form need to be filed by issuers that have not paid the maximum registration fee. Lastly, the registration rules clarify that any request to extend the offering beyond its one-year effective date must be in writing.

* A new advertising rule indicates that for purposes of securities registration only issuers or selling security holders that publish notice of a proposed to-be-registered offering using any medium will not be considered to have offered the securities for sale through that notice, provided the notice meets the requirements of Reg. 230.135 of the Securities Act of 1933. The advertisement does not need to be filed with the South Dakota Securities Division.

* The broker-dealer/agent rules added a rule prohibiting senior-specific certifications or designations, added a rule for "business brokers," slightly modified the agent exam requirement and substituted the term "FINRA" for "NASD" to reflect the current name of that organization that combines the former NASD and New York Stock Exchange.

* The investment adviser rules were re-ordered with new section numbers and mostly nonsubstantive text amendments.

For more information please see here.

The main number for the Division is (605) 773-5953

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Full post as published by Jim Hamilton's World of Securities Regulation on December 07, 2010 (boomark / email).