State Securities Registration Procedures

Question 1

5 requirements for Filing the Registration Statement

Answer 1

State Administrators require every issuer to supply the following information on their applications:

1. Amount of securities to be issued in the state
2. States in which the security is to be offered, but not the amounts offered in those other states.
3. Any adverse order or judgment concerning the offering by regulatory authorities, court, or the SEC
4. Anticipated effective date
5. Anticipated use of the proceeds(why are we raising this money?)
   * Applicant can use documents filed with the Administrator within the last 5 years if the info is current and accurate

The rating of the security will NOT be found in the registration statment

Question 2

Who can file the Registration Statement?

Answer 2

It’s usually filed by the issuer but it CAN also be filed by any selling stockholder, such as an insider making a large block sale, or by a broker-dealer

Question 3

Filing Fee

Answer 3

Filing fees are often based on a percentage of the total offering price but it’s ultimately determined by the Administrator

If a stop order is filed by the Administrator before the registration is effective the Administrator may retain a portion of the fee and refund the remainder to the applicant.

Question 4

Ongoing Reportsq

Answer 4

Can be required by the Administrator to keep info current.

Can NOT be required more often than quarterly

Question 5

Escrow

Answer 5

As a condition of registration under coordination or qualification, the Admin may require that a security be placed in escrow if the security is issued:

1. within the past 3 years
2. to a promoter at a price substantially different than the offering price.
3. to any person for a consideration other than cash

The purpose of this is because of instances where companies were unable to raise their targeted goal and just took the money and ran. This lessens the likelihood that this will happen

Question 6

Special Subscription Form

Answer 6

The Administrator may also require, as a condition of registration, that the issue be sold only on a form specified by the Administrator and that a copy of the form or subscription contract be filed with the Administrator or preserved for up to 3 years

Question 7

SECURITIES register by Coordination, NOT securities professionals…

Answer 7

SECURITIES register by Coordination, NOT securities professionals…