PURPOSE: This rule complies with the Missouri Securities Act of 2003 and prescribes the qualifications for the exemption under the Missouri Securities Act of 2003 for securities issued by and representing an interest in a Missouri agricultural cooperative.

1. (1) Definition. An “agricultural cooperative” shall be defined as a cooperative corporation organized under the Missouri Nonprofit Cooperative Marketing Law, in which farmers act together—

   1. (A) In processing, preparing for market, handling, and/or marketing the farm products of person so engaged; or

   2. (B) In purchasing, testing, grading, processing, distributing and/or furnishing farm supplies and/or farm business services; provided, however, that such cooperative corporations are operated for the mutual benefit of the members thereof as such producers or purchasers and conform to one (1) or both of the following requirements:

      1. 1. No member of the cooperative corpo-

ration is allowed more than one (1) vote because of the amount of stock or membership capital s/he may own therein;

1. 2. The cooperative corporation does not

pay dividends on stock or membership capital in excess of eight percent (8%) per year; and

1. 3. The cooperative corporation does not

deal in farm products, farm supplies, and farm business services with or for nonmembers in an amount greater in value than the total amount of such business transacted by it with or for members; further, all business transacted by any such cooperative corporation for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the volume of member and nonmember business transacted by such agricultural cooperative corporation.

1. (2) Securities Exemption. The commissioner, pursuant to the provisions of section 409.2-203, RSMo, exempts from the registration requirements of section 409.3-301, RSMo securities issued by and representing an interest in an agricultural cooperative if:

   1. (A) A notice filing by the agricultural cooperative is made with the commissioner that consists of the following:

      1. 1. A completed Form SE-2, Statement

of Claim for the Exemption of Securities of a Missouri Agricultural Cooperative;

1. 2. A completed Form U-2, Consent to

Service of Process;

1. 3. A completed Form U-2A, Uniform

Form of Corporate Resolution;

1. 4. A copy of the prospectus or offering

document that shall have a disclosure of material facts consisting of the following:

1. A. The name and address of the

issuer;

1. B. The type of security being issued;
2. C. The total amount of securities

being issued;

1. D. Summary information, which pro-

vides a brief overview of key aspects of the offering;

1. E. A risk factors section, which dis-

closes general risk factors related to suitability and the failure to diversify, and any factors that make the offering speculative or risky, including, but not limited to: lack of recent profits from operations, poor financial position, lack of market for cooperative’s securities, inexperience of management, factors related to the cooperative’s business, and/or the dependency of the cooperative on retaining a particular customer or group of customers;

1. F. A description of the business or

proposed business;

1. G. An itemized use of proceeds;
2. H. A description of directors, officers

and other principal management, including a summary of compensation;

1. I. A plan of distribution section;
2. J. A summary of capitalization;
3. K. A description of any material

pending legal proceedings other than ordinary routine litigation incidental to its business; and

1. L. Historical financial statements of

the issuer for the past three (3) fiscal years or since the issuer’s inception, whichever is shorter, that are in conformity with generally accepted accounting principles (GAAP) and have been audited by a certified public accountant. If the balance sheet in the above financial statements is more than one hundred twenty (120) days old on the date of making the notice filing, or if the issuer has not completed its first fiscal year, reviewed financial statements not more than one hundred twenty (120) days old shall be included and in conformity with GAAP;

1. 5. A copy of the bylaws, operating

agreement or similar document;

1. 6. A copy of any advertising materials

or any summaries of the offering document to be used in the offer or sale of the securities in Missouri;

1. 7. A copy of any underwriting or selling

agreements;

1. 8. The names, business addresses, and a

brief description of employment responsibilities for each of the agents who will represent the agricultural cooperative in the offer or sale of the securities in Missouri;

1. 9. A copy of the subscription agreement;

and

1. 10. A filing fee of one hundred dollars

($100).

1. (3) The securities of the agricultural cooperative qualifying for the exemption under this regulation are exempt when ordered by the commissioner.
2. (4) Effective Period. The exemption under this regulation for the securities issued by or representing an interest in an agricultural cooperative is effective for one (1) year from the date that the securities were ordered to be exempt by the commissioner.
3. (5) Amendments. The agricultural cooperative shall file all amendments with the division in which there has been a material change to documents previously filed with the division. The agricultural cooperative shall file with the division all advertising materials to be used in the offer or sale of the securities exempt under this regulation.
4. (6) Renewal. If the securities offering is not completed during the effective period, an issuer can renew the exemption by submitting to the commissioner a written request for renewal that includes any amendments to any documents filed with the notice filing and a fee of one hundred dollars ($100). The renewal needs to be received by the commissioner within thirty (30) days before the end of the one (1) year effective date.
5. (7) Agent Exemption. Agents of the agricultural cooperative may be exempt from agent registration under 15 CSR 30-51.180.
6. (8) Any agricultural cooperative that meets the qualifications of the exemption under section 409.2-201(8), RSMo can rely on the exemption of section 409.2-201(8), RSMo and need not qualify for the exemption under this regulation.

AUTHORITY: sections 409.2-203 and 409.6- 605, RSMo Supp. 2004.* Original rule filed May 26, 2004, effective Nov. 30, 2004. Amended: Filed Dec. 10, 2004, effective June 30, 2005.

*Original authority: 409.2-203, RSMo 2003 and 409.6- 605, RSMo 2003.