2007 Minnesota Statutes

80A.50 SECTION 302; FEDERAL COVERED SECURITIES; SMALL CORPORATE
OFFERING REGISTRATION.
    (a) Federal covered securities.
    (1) Required filing of records. With respect to a federal covered security, as defined in
Section 18(b)(2) of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(2)), that is not otherwise
exempt under sections 80A.45 through 80A.47, a rule adopted or order issued under this chapter
may require the filing of any or all of the following records:
    (A) before the initial offer of a federal covered security in this state, all records that are part
of a federal registration statement filed with the Securities and Exchange Commission under
the Securities Act of 1933 and a consent to service of process complying with section 80A.88
signed by the issuer;
    (B) after the initial offer of the federal covered security in this state, all records that are
part of an amendment to a federal registration statement filed with the Securities and Exchange
Commission under the Securities Act of 1933; and
    (C) to the extent necessary or appropriate to compute fees, a report of the value of the federal
covered securities sold or offered to persons present in this state, if the sales data are not included
in records filed with the Securities and Exchange Commission.
    (2) Notice filing effectiveness and renewal. A notice filing under subsection (a) is effective
for one year commencing on the later of the notice filing or the effectiveness of the offering filed
with the Securities and Exchange Commission. On or before expiration, the issuer may renew a
notice filing by filing a copy of those records filed by the issuer with the Securities and Exchange
Commission that are required by rule or order under this chapter to be filed. A previously filed
consent to service of process complying with section 80A.88 may be incorporated by reference
in a renewal. A renewed notice filing becomes effective upon the expiration of the filing being
renewed.
    (3) Notice filings for federal covered securities under section 18(b)(4)(D). With respect to
a security that is a federal covered security under Section 18(b)(4)(D) of the Securities Act of
1933 (15 U.S.C. Section 77r(b)(4)(D)), a rule under this chapter may require a notice filing by
or on behalf of an issuer to include a copy of Form D, including the Appendix, as promulgated
by the Securities and Exchange Commission, and a consent to service of process complying
with section 80A.88 signed by the issuer not later than 15 days after the first sale of the federal
covered security in this state.
    (4) Stop orders. Except with respect to a federal security under Section 18(b)(1) of the
Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)), if the administrator finds that there is a
failure to comply with a notice or fee requirement of this section, the administrator may issue a
stop order suspending the offer and sale of a federal covered security in this state. If the deficiency
is corrected, the stop order is void as of the time of its issuance and no penalty may be imposed
by the administrator.
    (b) Small corporation offering registration.
    (1) Registration required. A security meeting the conditions set forth in this section may be
registered as set forth in this section.
    (2) Availability. Registration under this section is available only to the issuer of securities
and not to an affiliate of the issuer or to any other person for resale of the issuer's securities. The
issuer must be organized under the laws of one of the states or possessions of the United States.
The securities offered must be exempt from registration under the Securities Act of 1933 pursuant
to Rule 504 of Regulation D (15 U.S.C. Section 77c).
    (3) Disqualification. Registration under this section is not available to any of the following
issuers:
    (A) an issuer subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934;
    (B) an investment company;
    (C) a development stage company that either has no specific business plan or purpose or
has indicated that its business plan is to engage in a merger or acquisition with an unidentified
company or companies or other entity or person;
    (D) an issuer if the issuer or any of its predecessors, officers, directors, governors, partners,
ten percent stock or equity holders, promoters, or any selling agents of the securities to be offered,
or any officer, director, governor, or partner of the selling agent:
    (i) has filed a registration statement that is the subject of a currently effective registration
stop order entered under a federal or state securities law within five years before the filing of the
small corporate offering registration application;
    (ii) has been convicted within five years before the filing of the small corporate offering
registration application of a felony or misdemeanor in connection with the offer, purchase, or
sale of a security or a felony involving fraud or deceit, including, but not limited to, forgery,
embezzlement, obtaining money under false pretenses, larceny, or conspiracy to defraud;
    (iii) is currently subject to a state administrative enforcement order or judgment entered by
a state securities administrator or the Securities and Exchange Commission within five years
before the filing of the small corporate offering registration application, or is subject to a federal
or state administrative enforcement order or judgment in which fraud or deceit, including, but
not limited to, making untrue statements of material facts or omitting to state material facts, was
found and the order or judgment was entered within five years before the filing of the small
corporate offering registration application;
    (iv) is currently subject to an order, judgment, or decree of a court of competent jurisdiction
temporarily restraining or enjoining, or is subject to an order, judgment, or decree of a court
of competent jurisdiction permanently restraining or enjoining the party from engaging in or
continuing any conduct or practice in connection with the purchase or sale of any security
or involving the making of a false filing with a state or with the Securities and Exchange
Commission entered within five years before the filing of the small corporate offering registration
application; or
    (v) is subject to a state's administrative enforcement order, or judgment that prohibits, denies,
or revokes the use of an exemption for registration in connection with the offer, purchase,
or sale of securities,
    (I) except that clauses (i) to (iv) do not apply if the person subject to the disqualification
is duly licensed or registered to conduct securities-related business in the state in which the
administrative order or judgment was entered against the person or if the dealer employing the
party is licensed or registered in this state and the form BD filed in this state discloses the order,
conviction, judgment, or decree relating to the person, and
    (II) except that the disqualification under this subdivision is automatically waived if the state
securities administrator or federal agency that created the basis for disqualification determines
upon a showing of good cause that it is not necessary under the circumstances to deny the
registration.
    (4) Filing and effectiveness of registration statement. A small corporate offering
registration statement must be filed with the administrator. If no stop order is in effect and no
proceeding is pending under section 80A.54, such registration statement shall become effective
automatically at the close of business on the 20th day after filing of the registration statement or
the last amendment of the registration statement or at such earlier time as the administrator may
designate by rule or order.
    (5) Contents of registration statement. A small corporate offering registration statement
under this section shall be on Form U-7, including exhibits required by the instructions thereto, as
adopted by the North American Securities Administrators Association, or such alternative form as
may be designated by the administrator by rule or order and must include:
    (A) a consent to service of process complying with section 80A.88;
    (B) a statement of the type and amount of securities to be offered and the amount of securities
to be offered in this state;
    (C) a specimen or copy of the security being registered, unless the security is uncertificated,
a copy of the issuer's articles of incorporation and bylaws or their substantial equivalents in effect,
and a copy of any indenture or other instrument covering the security to be registered;
    (D) a signed or conformed copy of an opinion of counsel concerning the legality of the
securities being registered which states whether the securities, when sold, will be validly issued,
fully paid, and nonassessable and, if debt securities, binding obligations of the issuer;
    (E) the states (i) in which the securities are proposed to be offered; (ii) in which a registration
statement or similar filing has been made in connection with the offering including information as
to effectiveness of each such filing; and (iii) in which a stop order or similar proceeding has been
entered or in which proceedings or actions seeking such an order are pending;
    (F) a copy of the offering document proposed to be delivered to offerees; and
    (G) a copy of any other pamphlet, circular, form letter, advertisement, or other sales literature
intended as of the effective date to be used in connection with the offering and any solicitation of
interest used in compliance with section 80A.46(17)(B).
    (6) Copy to purchaser. A copy of the offering document as filed with the administrator must
be delivered to each person purchasing the securities prior to sale of the securities to such person.
History: 2006 c 196 art 1 s 11
NOTE: This section, as added by Laws 2006, chapter 196, article 1, section 11, is effective
August 1, 2007. Laws 2006, chapter 196, article 1, section 52.