PURPOSE: This rule promotes uniformity with other states and prescribes the guidelines to be applied to securities registrations in order to determine if the offering is fair, just and equitable.

PUBLISHER’S NOTE: The secretary of state has determined that the publication of the entire text of the material which is incorporated by reference as a portion of this rule would be unduly cumbersome or expensive. Therefore, the material which is so incorporated is on file with the agency who filed this rule, and with the Office of the Secretary of State. Any interested person may view this material at either agency’s headquarters or the same will be made available at the Office of the Secretary of State at a cost not to exceed actual cost of copy reproduction. The entire text of the rule is printed here. This note refers only to the incorporated by reference material.

1. (1) The Securities Division will apply the applicable statement of policy adopted by North American Securities Administrators Association, Inc. (NASAA) when conducting a merit review to determine whether an offering is fair, just and equitable.

   1. (A) The following statements of policy are hereby incorporated by reference:

      1. 1. Corporate Securities Definitions, as

amended by NASAA on September 28, 1999;

1. 2. Loans and Other Material Affiliated

Transactions, as amended by NASAA on November 18, 1997;

1. 3. Options and Warrants, as amended by

NASAA on September 28, 1999;

1. 4. Preferred Stock, as amended by

NASAA on April 27, 1997;

1. 5. Promoter’s Equity Investment, as

adopted by NASAA on April 27, 1997;

1. 6. Promotional Shares, as amended by

NASAA on September 28, 1999;

1. 7. Risk Disclosure Guidelines, as adopt-

ed by NASAA on September 9, 2001;

1. 8. Specificity in Use of Proceeds, as

amended by NASAA on September 28, 1999;

1. 9. Underwriting Expenses, Underwrit-

er’s Warrants, Selling Expenses and Selling Security Holders, as adopted by NASAA on September 28, 1999;

1. 10. Unsound Financial Condition, as

adopted by NASAA on September 28, 1999;

1. 11. Unequal Voting Rights, as adopted

by NASAA on October 24, 1991;

1. 12. Registration of Asset-Backed Securi-

ties, as adopted by NASAA on October 25, 1995;

1. 13. Mortgage Program Guidelines, as

adopted by NASAA on September 10, 1996;

1. 14. Real Estate Programs, as amended

by NASAA on September 29, 1993;

1. 15. Real Estate Investment Trusts, as

revised by NASAA on September 29, 1993;

1. 16. Registration of Oil and Gas Pro-

grams, as amended by NASAA on October 24, 1991;

1. 17. Equipment Programs, as amended

by NASAA on October 24, 1991;

1. 18. Commodity Pool Programs, as

amended by NASAA on August 30, 1990;

1. 19. Cattle-Feeding Programs, as adopt-

ed by NASAA on September 17, 1980;

1. 20. Omnibus Guidelines, as adopted by

NASAA on March 29, 1992; and

1. 21. Viatical Investment Guidelines, as

adopted by NASAA on October 1, 2002.

1. (B) The Omnibus Guidelines shall be applied to limited partnerships programs or other entities in which more specific statements of policy have not been adopted by NASAA.

1. (2) Cross-Reference Sheet. If requested by the Securities Division, a registration statement to register securities shall include a cross-reference table to indicate compliance with, or deviation from, the various sections of the applicable statement of policy.

2. (3) Suitability for Direct Participation Programs.

   1. (A) In establishing standards of fairness and equity, the Securities Division has established the following investor suitability guidelines for direct participation programs registered under the Act:

      1. 1. A gross income of forty-five thousand

dollars ($45,000) and a net worth of fortyfive thousand dollars ($45,000) (exclusive of home, home furnishings and automobiles); or

1. 2. A net worth of one hundred fifty

thousand dollars ($150,000) (exclusive of home, home furnishings and automobiles); and

1. 3. No more than ten percent (10%) of

any one (1) Missouri investor’s liquid net worth shall be invested in the securities being registered with the Securities Division.

1. (B) The suitability standard in subsection (3)(A) is a guideline. Higher or lower suitability standards may be established or may be required by the Securities Division as a condition of registration.
2. (C) The suitability standards must be disclosed in the prospectus.

AUTHORITY: sections 409.3-303, 409.3- 304, 409.3-305, 409.3-306, 409.3-307, 409.5-501, 409.6-605 and 409.6-608, RSMo Supp. 2003.* Original rule filed June 25, 1968, effective Aug. 1, 1968. Amended: Filed May 21, 1969, effective Aug. 1, 1969. Amended: Filed July 21, 1972, effective Aug. 1, 1972. Amended: Filed Nov. 15, 1974, effective Nov. 25, 1974. Rescinded and readopted: Filed Aug. 30, 2002, effective Feb. 28, 2003. Emergency amendment filed Aug. 25, 2003, effective Sept. 12, 2003, expired March 9, 2004. Amended: Filed Aug. 25, 2003, effective Feb. 29, 2004.

*Original authority: 409.3-303, RSMo 2003; 409.3-304, RSMo 2003; 409.3-305, RSMo 2003, 409.3-306, RSMo 2003; 3-307, RSMo 2003; 409.5-501, RSMo 2003, 409.6- 605, RSMo 2003; 409.6-608, RSMo 2003.