PURPOSE: This rule promotes uniformity with other states and prescribes procedures for impounding proceeds that are obtained from the sale of registered securities.

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) The Securities Division hereby incorporates by reference the North American Securities Administrators Association, Inc. (NASAA) Statement of Policy Regarding the Impoundment of Proceeds, as amended by NASAA on September 28, 1999.

1. (2) The Securities Division will apply the NASAA Statement of Policy Regarding the Impoundment of Proceeds when conducting its merit review to determine whether an offering is fair, just and equitable.

2. (3) As a condition of registration, the minimum amount of proceeds needed to implement the business plan shall be impounded when:

   1. (A) The registration is sought by a promotional or developmental stage company that is financing an initial or proposed business;
   2. (B) The registration is sought by a company in poor financial condition; or
   3. (C) The offering is not firmly underwritten.
3. (4) The applicant shall set a minimum amount of proceeds that is reasonably sufficient to implement the business plan so as to accomplish the purpose of the offering.
4. (5) The applicant shall use the Missouri form SR-4, Impoundment of Funds Agreement, as the agreement for the impoundment of proceeds, unless the Securities Division permits another similar form to be used (the form SR- 4 is available from the Securities Division upon request).

AUTHORITY: sections 409.3-305(f), 409.3- 306 and 409.6-605, 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 Rescinded and readopted: Filed Aug. 30, 2002, effective Feb. 28, 2003.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. 19, 2003, effective Sept. 12, 2003, expired March 9, 2004. Amended: Filed Aug. 22, 2003, effective Feb. 29, 2004.

*Original authority: 409.3-305, RSMo 2003; 409.3-306, RSMo 2003; 409.6-605, RSMo 2003.