Missouri Revised Statutes
Chapter 409
Regulation of Securities
←409.02-201
Section 409.2-202.1
409.02-203→
August 28, 2015
Exempt transactions.
409.2-202. The following transactions are exempt from the requirements
of sections 409.3-301 to 409.3-306 and 409.5-504:
(1) An isolated nonissuer transaction, whether effected by or through a
broker-dealer or not;
(2) A nonissuer transaction by or through a broker-dealer registered,
or exempt from registration under this act, and a resale transaction by a
sponsor of a unit investment trust registered under the Investment Company
Act of 1940, in a security of a class that has been outstanding in the hands
of the public for at least ninety days, if, at the date of the transaction:
(A) The issuer of the security is engaged in business, the issuer is not
in the organizational stage or in bankruptcy or receivership, and the issuer
is not a blank check, blind pool, or shell company that has no specific
business plan or purpose or has indicated that its primary business plan is to
engage in a merger or combination of the business with, or an acquisition of,
an unidentified person;
(B) The security is sold at a price reasonably related to its current
market price;
(C) The security does not constitute the whole or part of an unsold
allotment to, or a subscription or participation by, the broker-dealer as an
underwriter of the security or a redistribution; and
(D) A nationally recognized securities manual or its electronic
equivalent designated by rule adopted or order issued under this act or a
record filed with the Securities and Exchange Commission that is publicly
available contains:
(i) A description of the business and operations of the issuer;
(ii) The names of the issuer's executive officers and the names of the
issuer's directors, if any;
(iii) An audited balance sheet of the issuer as of a date within eighteen
months before the date of the transaction or, in the case of a reorganization
or merger when the parties to the reorganization or merger each had an audited
balance sheet, a pro forma balance sheet for the combined organization; and
(iv) An audited income statement for each of the issuer's two immediately
previous fiscal years or for the period of existence of the issuer, whichever
is shorter, or, in the case of a reorganization or merger when each party to
the reorganization or merger had audited income statements, a pro forma
income statement; or
(E) The issuer of the security has a class of equity securities listed
on a national securities exchange registered under the Securities Exchange
Act of 1934 or designated for trading on the National Association of
Securities Dealers Automated Quotation System, unless the issuer of the
security is a unit investment trust registered under the Investment Company
Act of 1940; or the issuer of the security, including its predecessors, has
been engaged in continuous business for at least three years; or the issuer
of the security has total assets of at least two million dollars based on an
audited balance sheet as of a date within eighteen months before the date of
the transaction or, in the case of a reorganization or merger when the
parties to the reorganization or merger each had the audited balance sheet, a
pro forma balance sheet for the combined organization;
(3) A nonissuer transaction by or through a broker-dealer registered or
exempt from registration under this act in a security of a foreign issuer
that is a margin security defined in regulations or rules adopted by the
Board of Governors of the Federal Reserve System;
(4) A nonissuer transaction by or through a broker-dealer registered or
exempt from registration under this act in an outstanding security if the
guarantor of the security files reports with the Securities and Exchange
Commission under the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));
(5) A nonissuer transaction by or through a broker-dealer registered or
exempt from registration under this act in a security that:
(A) Is rated at the time of the transaction by a nationally recognized
statistical rating organization in one of its four highest rating categories;
or
(B) Has a fixed maturity or a fixed interest or dividend, if:
(i) A default has not occurred during the current fiscal year or within
the three previous fiscal years or during the existence of the issuer and any
predecessor if less than three fiscal years, in the payment of principal,
interest, or dividends on the security; and
(ii) The issuer is engaged in business, is not in the organizational
stage or in bankruptcy or receivership, and is not and has not been within
the previous twelve months a blank check, blind pool, or shell company that
has no specific business plan or purpose or has indicated that its primary
business plan is to engage in a merger or combination of the business with,
or an acquisition of, an unidentified person;
(6) A nonissuer transaction by or through a broker-dealer registered or
exempt from registration under this act effecting an unsolicited order or
offer to purchase;
(7) A nonissuer transaction executed by a bona fide pledgee without the
purpose of evading this act;
(8) A nonissuer transaction by a federal covered investment adviser with
investments under management in excess of one hundred million dollars acting
in the exercise of discretionary authority in a signed record for the account
of others;
(9) A transaction in a security, whether or not the security or
transaction is otherwise exempt, in exchange for one or more bona fide
outstanding securities, claims, or property interests, or partly in such
exchange and partly for cash, if the terms and conditions of the issuance and
exchange or the delivery and exchange and the fairness of the terms and
conditions have been approved by the commissioner after a hearing;
(10) A transaction between the issuer or other person on whose behalf the
offering is made and an underwriter, or among underwriters;
(11) A transaction in a note, bond, debenture, or other evidence of
indebtedness secured by a mortgage or other security agreement if:
(A) The note, bond, debenture, or other evidence of indebtedness is
offered and sold with the mortgage or other security agreement as a unit;
(B) A general solicitation or general advertisement of the transaction
is not made; and
(C) A commission or other remuneration is not paid or given, directly or
indirectly, to a person not registered under this act as a broker-dealer or
as an agent;
(12) A transaction by an executor, commissioner of an estate, sheriff,
marshal, receiver, trustee in bankruptcy, guardian, or conservator;
(13) A sale or offer to sell to:
(A) An institutional investor;
(B) A federal covered investment adviser; or
(C) Any other person exempted by rule adopted or order issued under this
act;
(14) A sale or an offer to sell securities of an issuer, if part of a
single issue in which:
(A) Not more than twenty-five purchasers are present in this state
during any twelve consecutive months, other than those designated in
paragraph (13);
(B) A general solicitation or general advertising is not made in
connection with the offer to sell or sale of the securities;
(C) A commission or other remuneration is not paid or given, directly or
indirectly, to a person other than a broker-dealer registered under this act
or an agent registered under this act for soliciting a prospective purchaser
in this state; and
(D) The issuer reasonably believes that all the purchasers in this
state, other than those designated in paragraph (13), are purchasing for
investment;
(15) A transaction under an offer to existing security holders of the
issuer, including persons that at the date of the transaction are holders of
convertible securities, options, or warrants, if a commission or other
remuneration, other than a standby commission, is not paid or given, directly
or indirectly, for soliciting a security holder in this state;
(16) An offer to sell, but not a sale, of a security not exempt from
registration under the Securities Act of 1933 if:
(A) A registration or offering statement or similar record as required
under the Securities Act of 1933 has been filed, but is not effective, or the
offer is made in compliance with Rule 165 adopted under the Securities Act of
1933 (17 C.F.R. 230.165); and
(B) A stop order of which the offeror is aware has not been issued
against the offeror by the commissioner or the Securities and Exchange
Commission, and an audit, inspection, or proceeding that is public and that
may culminate in a stop order is not known by the offeror to be pending;
(17) An offer to sell, but not a sale, of a security exempt from
registration under the Securities Act of 1933 if:
(A) A registration statement has been filed under this act, but is not
effective;
(B) A solicitation of interest is provided in a record to offerees in
compliance with a rule adopted by the commissioner under this act; and
(C) A stop order of which the offeror is aware has not been issued by
the commissioner under this act and an audit, inspection, or proceeding that
may culminate in a stop order is not known by the offeror to be pending;
(18) A transaction involving the distribution of the securities of an
issuer to the security holders of another person in connection with a merger,
consolidation, exchange of securities, sale of assets, or other
reorganization to which the issuer, or its parent or subsidiary and the other
person, or its parent or subsidiary, are parties;
(19) A rescission offer, sale, or purchase under section 409.5-510;
(20) An offer or sale of a security to a person not a resident of this
state and not present in this state if the offer or sale does not constitute
a violation of the laws of the state or foreign jurisdiction in which the
offeree or purchaser is present and is not part of an unlawful plan or scheme
to evade this act;
(21) Employees' stock purchase, savings, option, profit-sharing, pension,
or similar employees' benefit plan, including any securities, plan interests,
and guarantees issued under a compensatory benefit plan or compensation
contract, contained in a record, established by the issuer, its parents, its
majority-owned subsidiaries, or the majority-owned subsidiaries of the
issuer's parent for the participation of their employees including offers or
sales of such securities to:
(A) Directors; general partners; trustees, if the issuer is a business
trust; officers; consultants; and advisors;
(B) Family members who acquire such securities from those persons
through gifts or domestic relations orders;
(C) Former employees, directors, general partners, trustees, officers,
consultants, and advisors if those individuals were employed by or providing
services to the issuer when the securities were offered;
(D) Insurance agents who are exclusive insurance agents of the issuer,
or the issuer's subsidiaries or parents, or who derive more than fifty
percent of their annual income from those organizations; and
(E) Current employees;
(22) A transaction involving:
(A) A stock dividend or equivalent equity distribution, whether the
corporation or other business organization distributing the dividend or
equivalent equity distribution is the issuer or not, if nothing of value is
given by stockholders or other equity holders for the dividend or equivalent
equity distribution other than the surrender of a right to a cash or property
dividend if each stockholder or other equity holder may elect to take the
dividend or equivalent equity distribution in cash, property, or stock;
(B) An act incident to a judicially approved reorganization in which a
security is issued in exchange for one or more outstanding securities,
claims, or property interests, or partly in such exchange and partly for
cash; or
(C) The solicitation of tenders of securities by an offeror in a tender
offer in compliance with Rule 162 adopted under the Securities Act of 1933
(17 C.F.R. 230.162); or
(23) A nonissuer transaction in an outstanding security by or through a
broker-dealer registered or exempt from registration under this act, if the
issuer is a reporting issuer in a foreign jurisdiction designated by this
paragraph or by rule adopted or order issued under this act; has been subject
to continuous reporting requirements in the foreign jurisdiction for not less
than one hundred eighty days before the transaction; and the security is
listed on the foreign jurisdiction's securities exchange that has been
designated by this paragraph or by rule adopted or order issued under this
act, or is a security of the same issuer that is of senior or substantially
equal rank to the listed security or is a warrant or right to purchase or
subscribe to any of the foregoing. For purposes of this paragraph, Canada,
together with its provinces and territories, is a designated foreign
jurisdiction and The Toronto Stock Exchange, Inc., is a designated securities
exchange. After an administrative hearing in compliance with chapter 536, the
commissioner, by rule adopted or order issued under this act, may revoke the
designation of a securities exchange under this paragraph, if the
commissioner finds that revocation is necessary or appropriate in the public
interest and for the protection of investors.
(L. 2003 H.B. 380, A.L. 2005 H.B. 678)
2003
2003
409.2-202. The following transactions are exempt from the
requirements of sections 409.3-301 to 409.3-306 and 409.5-504:
(1) An isolated nonissuer transaction, whether effected by or through
a broker-dealer or not;
(2) A nonissuer transaction by or through a broker-dealer registered,
or exempt from registration under this act, and a resale transaction by a
sponsor of a unit investment trust registered under the Investment Company
Act of 1940, in a security of a class that has been outstanding in the
hands of the public for at least ninety days, if, at the date of the
transaction:
(A) The issuer of the security is engaged in business, the issuer is
not in the organizational stage or in bankruptcy or receivership, and the
issuer is not a blank check, blind pool, or shell company that has no
specific business plan or purpose or has indicated that its primary
business plan is to engage in a merger or combination of the business with,
or an acquisition of, an unidentified person;
(B) The security is sold at a price reasonably related to its current
market price;
(C) The security does not constitute the whole or part of an unsold
allotment to, or a subscription or participation by, the broker-dealer as
an underwriter of the security or a redistribution; and
(D) A nationally recognized securities manual or its electronic
equivalent designated by rule adopted or order issued under this act or a
record filed with the Securities and Exchange Commission that is publicly
available contains:
(i) A description of the business and operations of the issuer;
(ii) The names of the issuer's executive officers and the names of
the issuer's directors, if any;
(iii) An audited balance sheet of the issuer as of a date within
eighteen months before the date of the transaction or, in the case of a
reorganization or merger when the parties to the reorganization or merger
each had an audited balance sheet, a pro forma balance sheet for the
combined organization; and
(iv) An audited income statement for each of the issuer's two
immediately previous fiscal years or for the period of existence of the
issuer, whichever is shorter, or, in the case of a reorganization or merger
when each party to the reorganization or merger had audited income
statements, a pro forma income statement; or
(E) The issuer of the security has a class of equity securities
listed on a national securities exchange registered under the Securities
Exchange Act of 1934 or designated for trading on the National Association
of Securities Dealers Automated Quotation System, unless the issuer of the
security is a unit investment trust registered under the Investment Company
Act of 1940; or the issuer of the security, including its predecessors, has
been engaged in continuous business for at least three years; or the issuer
of the security has total assets of at least two million dollars based on
an audited balance sheet as of a date within eighteen months before the
date of the transaction or, in the case of a reorganization or merger when
the parties to the reorganization or merger each had the audited balance
sheet, a pro forma balance sheet for the combined organization;
(3) A nonissuer transaction by or through a broker-dealer registered
or exempt from registration under this act in a security of a foreign
issuer that is a margin security defined in regulations or rules adopted by
the Board of Governors of the Federal Reserve System;
(4) A nonissuer transaction by or through a broker-dealer registered
or exempt from registration under this act in an outstanding security if
the guarantor of the security files reports with the Securities and
Exchange Commission under the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));
(5) A nonissuer transaction by or through a broker-dealer registered
or exempt from registration under this act in a security that:
(A) Is rated at the time of the transaction by a nationally
recognized statistical rating organization in one of its four highest
rating categories; or
(B) Has a fixed maturity or a fixed interest or dividend, if:
(i) A default has not occurred during the current fiscal year or
within the three previous fiscal years or during the existence of the
issuer and any predecessor if less than three fiscal years, in the payment
of principal, interest, or dividends on the security; and
(ii) The issuer is engaged in business, is not in the organizational
stage or in bankruptcy or receivership, and is not and has not been within
the previous twelve months a blank check, blind pool, or shell company that
has no specific business plan or purpose or has indicated that its primary
business plan is to engage in a merger or combination of the business with,
or an acquisition of, an unidentified person;
(6) A nonissuer transaction by or through a broker-dealer registered
or exempt from registration under this act effecting an unsolicited order
or offer to purchase;
(7) A nonissuer transaction executed by a bona fide pledgee without
the purpose of evading this act;
(8) A nonissuer transaction by a federal covered investment adviser
with investments under management in excess of one hundred million dollars
acting in the exercise of discretionary authority in a signed record for
the account of others;
(9) A transaction in a security, whether or not the security or
transaction is otherwise exempt, in exchange for one or more bona fide
outstanding securities, claims, or property interests, or partly in such
exchange and partly for cash, if the terms and conditions of the issuance
and exchange or the delivery and exchange and the fairness of the terms and
conditions have been approved by the commissioner after a hearing;
(10) A transaction between the issuer or other person on whose behalf
the offering is made and an underwriter, or among underwriters;
(11) A transaction in a note, bond, debenture, or other evidence of
indebtedness secured by a mortgage or other security agreement if:
(A) The note, bond, debenture, or other evidence of indebtedness is
offered and sold with the mortgage or other security agreement as a unit;
(B) A general solicitation or general advertisement of the
transaction is not made; and
(C) A commission or other remuneration is not paid or given, directly
or indirectly, to a person not registered under this act as a broker-dealer
or as an agent;
(12) A transaction by an executor, commissioner of an estate,
sheriff, marshal, receiver, trustee in bankruptcy, guardian, or
conservator;
(13) A sale or offer to sell to:
(A) An institutional investor;
(B) A federal covered investment adviser; or
(C) Any other person exempted by rule adopted or order issued under
this act;
(14) A sale or an offer to sell securities of an issuer, if part of a
single issue in which:
(A) Not more than twenty-five purchasers are present in this state
during any twelve consecutive months, other than those designated in
paragraph (13);
(B) A general solicitation or general advertising is not made in
connection with the offer to sell or sale of the securities;
(C) A commission or other remuneration is not paid or given, directly
or indirectly, to a person other than a broker-dealer registered under this
act or an agent registered under this act for soliciting a prospective
purchaser in this state; and
(D) The issuer reasonably believes that all the purchasers in this
state, other than those designated in paragraph (13), are purchasing for
investment;
(15) A transaction under an offer to existing security holders of the
issuer, including persons that at the date of the transaction are holders
of convertible securities, options, or warrants, if a commission or other
remuneration, other than a standby commission, is not paid or given,
directly or indirectly, for soliciting a security holder in this state;
(16) An offer to sell, but not a sale, of a security not exempt from
registration under the Securities Act of 1933 if:
(A) A registration or offering statement or similar record as
required under the Securities Act of 1933 has been filed, but is not
effective, or the offer is made in compliance with Rule 165 adopted under
the Securities Act of 1933 (17 C.F.R. 230.165); and
(B) A stop order of which the offeror is aware has not been issued
against the offeror by the commissioner or the Securities and Exchange
Commission, and an audit, inspection, or proceeding that is public and that
may culminate in a stop order is not known by the offeror to be pending;
(17) An offer to sell, but not a sale, of a security exempt from
registration under the Securities Act of 1933 if:
(A) A registration statement has been filed under this act, but is
not effective;
(B) A solicitation of interest is provided in a record to offerees in
compliance with a rule adopted by the commissioner under this act; and
(C) A stop order of which the offeror is aware has not been issued by
the commissioner under this act and an audit, inspection, or proceeding
that may culminate in a stop order is not known by the offeror to be
pending;
(18) A transaction involving the distribution of the securities of an
issuer to the security holders of another person in connection with a
merger, consolidation, exchange of securities, sale of assets, or other
reorganization to which the issuer, or its parent or subsidiary and the
other person, or its parent or subsidiary, are parties;
(19) A rescission offer, sale, or purchase under section 409.5-510;
(20) An offer or sale of a security to a person not a resident of
this state and not present in this state if the offer or sale does not
constitute a violation of the laws of the state or foreign jurisdiction in
which the offeree or purchaser is present and is not part of an unlawful
plan or scheme to evade this act;
(21) Employees' stock purchase, savings, option, profit-sharing,
pension, or similar employees' benefit plan, including any securities, plan
interests, and guarantees issued under a compensatory benefit plan or
compensation contract, contained in a record, established by the issuer,
its parents, its majority-owned subsidiaries, or the majority-owned
subsidiaries of the issuer's parent for the participation of their
employees including offers or sales of such securities to:
(A) Directors; general partners; trustees, if the issuer is a
business trust; officers; consultants; and advisors;
(B) Family members who acquire such securities from those persons
through gifts or domestic relations orders;
(C) Former employees, directors, general partners, trustees,
officers, consultants, and advisors if those individuals were employed by
or providing services to the issuer when the securities were offered; and
(D) Insurance agents who are exclusive insurance agents of the
issuer, or the issuer's subsidiaries or parents, or who derive more than
fifty percent of their annual income from those organizations;
(22) A transaction involving:
(A) A stock dividend or equivalent equity distribution, whether the
corporation or other business organization distributing the dividend or
equivalent equity distribution is the issuer or not, if nothing of value is
given by stockholders or other equity holders for the dividend or
equivalent equity distribution other than the surrender of a right to a
cash or property dividend if each stockholder or other equity holder may
elect to take the dividend or equivalent equity distribution in cash,
property, or stock;
(B) An act incident to a judicially approved reorganization in which
a security is issued in exchange for one or more outstanding securities,
claims, or property interests, or partly in such exchange and partly for
cash; or
(C) The solicitation of tenders of securities by an offeror in a
tender offer in compliance with Rule 162 adopted under the Securities Act
of 1933 (17 C.F.R. 230.162); or
(23) A nonissuer transaction in an outstanding security by or through
a broker-dealer registered or exempt from registration under this act, if
the issuer is a reporting issuer in a foreign jurisdiction designated by
this paragraph or by rule adopted or order issued under this act; has been
subject to continuous reporting requirements in the foreign jurisdiction
for not less than one hundred eighty days before the transaction; and the
security is listed on the foreign jurisdiction's securities exchange that
has been designated by this paragraph or by rule adopted or order issued
under this act, or is a security of the same issuer that is of senior or
substantially equal rank to the listed security or is a warrant or right to
purchase or subscribe to any of the foregoing. For purposes of this
paragraph, Canada, together with its provinces and territories, is a
designated foreign jurisdiction and The Toronto Stock Exchange, Inc., is a
designated securities exchange. After an administrative hearing in
compliance with chapter 536, RSMo, the commissioner, by rule adopted or
order issued under this act, may revoke the designation of a securities
exchange under this paragraph, if the commissioner finds that revocation is
necessary or appropriate in the public interest and for the protection of
investors.
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