PURPOSE: This rule prescribes policies and procedures applicable to the availability to the issuer of securities of the transactional exemption in which no more than fifteen transactions may be effected during a twelvemonth period, the buyer takes for investment and so acknowledges in writing and no commission and the like is paid.

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) Only Missouri transactions (as set forth in section 409.415(a)–(e) of the Missouri Uniform Securities Act (the Act)) are counted toward the number of prior transactions permitted by clause (b)(10)(A). No notification is required under section 409.402(b)(10) of the Act if the transaction(s) concerned will not involve an increase in the number of prior transactions permitted by clause (b)(10)(A) or waiver of the conditions in clause (b)(10)(B) or (C) of section 409.402 of the Act. Provided, however, that no notification is required to obtain a waiver of clause (b)(10)(C) in order to pay a registered broker-dealer a commission on a transaction that is equal to or less than ten percent (10%) of the amount of the transaction.
2. (2) If waiver of clause (A), (B) or (C) of 409.402(b)(10) of the Act is requested, the issuer shall notify the commissioner, in writing, prior to effecting any transaction except as provided in section (1).

3. (3) The notification required by section (2) shall include:

   1. (A) Except in the instances of securities described in paragraphs (3)(A)1.–3. of this rule, the total number of all persons who are known to the issuer to have any direct or indirect record or beneficial interest in any securities of the issuer (see 15 CSR 30-54.130(2)) and the total number or amount, value and type of securities; and the name and address of those persons of the total number who were sold the securities in Missouri, the date of each sale, the number or amount and type of securities, the consideration furnished or to be furnished by each buyer, and the name of the seller (issuer or holder) and of the person(s) who represented the seller in effecting each transaction.

      1. 1. Securities of the same class as the

securities involved in the proposed transactions which have been registered for sale under the laws of Missouri regulating the sale of securities (sections 409.301–409.306 of the Act).

1. 2. Securities of the same class as the

securities involved in the proposed transactions which have been lawfully sold in Missouri as a security exempt from registration (section 409.402(a) of the Act).

1. 3. Securities of the same class as the

securities involved in the proposed transactions which have been registered with the Securities and Exchange Commission (SEC) under Section 12 of the Securities Exchange Act of 1934 and the issuer files reports with the SEC pursuant to Section 13 of the Securities Exchange Act;

1. (B) The number of transactions effected by the issuer during the twelve (12)-month period ending with the date of the notification, if any, pursuant to paragraph (10), section 409.402(b) of the Act;
2. (C) The number of transactions proposed to be effected in Missouri, the name and address of each person with whom it is contemplated the transactions will be effected, if known, or the class(es) of persons intended as offerees, the type, number and price of the securities to be offered and statement of the specific use(s) to be made of the proceeds to be derived from the proposed transaction;
3. (D) A copy of the document by which full disclosure of material facts will be made to each offeree (sections 409.101 and 409.411(a)(2) of the Act). Submission of a prospectus, pamphlet, circular or similar literature making this disclosure normally will suffice for this purpose;
4. (E) Financial statements of the issuer prepared for the periods specified in section 409.304(b)(16) of the Act and, if not certified, verified by the person who prepared the financial statements that they were prepared in accordance with generally accepted accounting practices (section 409.413(c), RSMo) the verification showing the capacity or relationship of that person to the issuer. With respect to partnership securities, the balance sheet of the general partner(s) must be filed as well as financial statements of the partnership;
5. (F) Consent to service of process (Form S- B or U-2) executed by the issuer (section 409.415(g) of the Act);
6. (G) In the event of any request for an increase in the number of prior transactions permitted by clause (b)(10)(A) or for a waiver of the conditions in clause (b)(10)(B) or (b)(10)(C), section 409.402(b)(10) of the Act, justification for the increase or waiver. In the instance of clause (C), the justification shall include a copy of all agreements, executed and proposed, providing for the commission or other remuneration;
7. (H) If applicable, a copy of the investment letter proposed for use under clause (B), section 409.402(b)(10) of the Act. A suggested form is in 15 CSR 30-54.150;
8. (I) If applicable, an assurance that no commission or other remuneration has been or is to be paid or given to anyone for procuring or soliciting the proposed sale (clause (C), section 409.422(b)(10) of the Act);
9. (J) If applicable, an assurance of the issuer that certificates or other evidence of ownership representing the securities to be sold in Missouri will not be issued in multiple form and that each certificate or other evidence of ownership will bear on its face the following legend or other legend as the commissioner may require: These securities are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act of 1933 and the applicable state securities laws, pursuant to registration or exemption from registration. Investors should be aware that they will be required to bear the financial risks of this investment for an indefinite period of time;
10. (K) Assurance of the issuer that stop-transfer instructions will be issued to any transfer agent in accordance with the assurance of subsection (3)(J);
11. (L) Assurance of the issuer that no public advertising or solicitation will be employed in effecting the proposed transactions (section (5));
12. (M) Assurance of the issuer that the proposed transactions will not be effected until receipt of a statement from the commissioner expressing no objection to reliance upon the exemption; and
13. (N) Assurance of the issuer that upon conclusion of the proposed transactions, the commissioner will receive a report of sales effected in Missouri. The report should include the name and address of the purchaser and the number of securities and dollar amount purchased.

1. (4) The notification shall be accompanied by the fee prescribed in 15 CSR 30- 50.030(2)(E).
2. (5) Public advertising or solicitation, including the forms and types set forth in 15 CSR 30-53.010(3), of securities being offered for sale in transactions exempted by section 409.402(b)(10) of the Act, is prohibited.

AUTHORITY: sections 409.402(b)(10) and 409.413(a), RSMo 1986.* 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 March 21, 1974, effective April 1, 1974. Amended: Filed Nov. 15, 1974, effective Nov. 25, 1974. Amended: Filed Dec. 19, 1975, effective Dec. 31, 1975. Amended: Filed Aug. 11, 1978, effective Feb. 11, 1979. Amended: Filed Oct. 16, 1986, effective Feb. 12, 1987. Amended: Filed Oct. 15, 1987, effective Jan. 29, 1988.

*Original authority: 409.402(b)(10), RSMo 1967, amended 1977, 1978, 1986 and 409.413(a), RSMo 1967.