808 KAR 10:370. Securities offered on the Internet but not sold in Kentucky

Link to law: http://www.lrc.ky.gov/kar/808/010/370.htm
Published: 2015

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      808 KAR 10:370.

Securities offered on the Internet but not sold in Kentucky.

 

      RELATES TO: KRS

292.410(1)(q)

      STATUTORY

AUTHORITY: KRS 292.500(3)

      NECESSITY,

FUNCTION, AND CONFORMITY: KRS

292.500(3) authorizes the commissioner

to

promulgate administrative regulations necessary to carry out the provisions of

KRS Chapter 292. KRS 292.340 requires registration for a nonexempt security.

KRS 292.410(1)(q) authorizes the commissioner to create exemptions from the

registration requirements established in KRS 292.340. This administrative

regulation establishes requirements for determining if the transmission of

information via the Internet concerning a security offering requires registration

pursuant to KRS 292.340.

 

      Section 1. An

attempt to offer or dispose of, or a solicitation of an offer to purchase, a

security, or an interest in a security for value, made via the Internet,

including a communication on a proprietary or "common carrier"

electronic delivery system, the World Wide Web or the Internet, shall be considered

an "offer" of a security under KRS Chapter 292.

 

      Section 2.

Registration shall not be required for a security that will be:

      (1) Offered by

an issuer on the Internet; and

      (2) Not sold in

Kentucky.

 

      Section 3. A

security offered by an issuer on the Internet shall be exempt from the

registration requirements established in KRS 292.340 through 292.390 if:

      (1) The offer

indicates, directly or indirectly, that the security shall not be sold to a

person in Kentucky;

      (2) The offer is

not otherwise specifically directed to a person in Kentucky by, or on behalf

of, the issuer; and

      (3) A sale of

the issuer's security shall not be made in Kentucky as a result of the offer

until:

      (a)1. The

offering has been registered and declared effective; and

      2. The final

prospectus or Form U-7 has been delivered to the investor prior to the sale; or

      (b) The sale is

exempt from registration.

 

      Section 4.

Reliance on the exemption from registration established under this

administrative regulation shall not preclude an issuer from relying on another

exemption available under KRS Chapter 292.

 

      Section 5. Incorporation by

Reference. (1) Form U-7, "Small Corporate Offerings Registration",

April 1989, North American Securities Administrators Association, Inc, is

incorporated by reference.

      (2) It may be inspected, copied, or

obtained at the Department of Financial Institutions, 1025 Capital Center

Drive, Suite 200, Frankfort, Kentucky, 40601, Monday through Friday, 8 a.m. to

4:30 p.m.

      (3) A copy may also be obtained from

the National Association of Securities Dealers (NASD), 1735 K Street, N.W.,

Washington, D.C., 20006, or a regional NASD office. (24 Ky.R. 2270; Am. 25

Ky.R. 98; eff. 6-25-1998;

TAm eff. 11-7-2012.)