PURPOSE: This rule exempts the securities of foreign issuers that satisfy certain standards.

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 commissioner, pursuant to the provisions of section 409.402(c), RSMo of the Missouri Uniform Securities Act (the Act), exempts the following transactions from the requirements of sections 409.401 and 409.403, RSMo of the Act:

   1. (A) Any nonissuer transaction by a registered broker-dealer in a security traded on a foreign stock exchange, foreign automated quotation system or an American Depository Receipt; provided:

      1. 1. The security is sold at a price reason-

ably related to the current market price of that security at the time of the transaction;

1. 2. The security does not constitute the

whole or part of an unsold allotment to, or subscription or participation by, the brokerdealer as an underwriter of that security; and either

1. 3. The securities qualify for inclusion on

the list of foreign margin stocks compiled by the United States Federal Reserve Board and meet the requirements of Sections 220:17(c)1–5 of Regulation T under the Securities Exchange Act of 1934; or

1. 4. At the time of the transaction, either

Moody’s Investor Service, Moody’s International Manual or Standard & Poor’s Corporation Records contains a description of the issuer’s business or operations, the names of the issuer’s officers and directors or their corporate equivalents in the issuer’s country of domicile, an audited balance sheet of the issuer as of a date within eighteen (18) months and audited profit and loss statements for each of the issuer’s two (2) fiscal years immediately preceding that date; or

1. 5. The security is senior in rank to the

common stock of the issuer, both as to interest or dividends and upon liquidation, and the security has been outstanding in the hands of the public for at least five (5) years and the issuer has not defaulted during the current fiscal year or within the five (5) preceding years of the payment of principal, interest or dividend on the security;

1. (B) The exemption in subsection (1)(A) of this rule shall not be available for any security unless at the time of the transaction—

   1. 1. The security is a class which has been

outstanding in the hands of the public for at least ninety (90) days;

1. 2. The issuer of the security is a going

concern actually engaged in business and not in the organizational stage or in bankruptcy or receivership;

1. 3. The issuer of the security, including

any predecessors, has been in continuous business or operations for at least five (5) years;

1. 4. The issuer has net tangible assets, as

reflected in the manual, of at least twenty (20) million dollars;

1. 5. The issuer had an average net income

after taxes, as reflected in the manual, of at least one (1) million dollars over the last three (3) years of operation; and

1. 6. There are either two (2) or more

authorized market makers for the issuer’s securities in the United States, or at least one (1) market maker who is registered as a broker-dealer under the Securities Exchange Act of 1934 and has net capital of at least twentyfive (25) million dollars; or

1. (C) Any offer or sale of a security that is listed on a securities exchange or automated quotation system located in a country whose laws have been determined by the commissioner to provide substantially similar protection to investors as is provided by the Securities Exchange Act of 1934 with respect to securities listed on a national securities exchange in the United States. The exchange on which the security is listed shall file with the commissioner an undertaking to supply to him/her copies of public information in its files relating to any particular issuer whose securities are listed on the exchange. The commissioner, pending an appropriate amendment to this rule, by order shall declare that an exchange has qualified for exemption pursuant to this rule. Any exchange approved by the commissioner shall be named in this rule. The commissioner will determine upon application by any interested party whether the laws of any particular country meet the standards of this provision. The commissioner has adopted the securities meeting the standards of the multijurisdiction disclosure system traded in the Toronto Stock Exchange and Montreal Stock Exchange.

AUTHORITY: sections 409.402(c) and 409.413(a), RSMo 1986.* Original rule filed March 27, 1989, effective June 12, 1989. Amended: Filed June 29, 1990, effective Dec. 31, 1990. *Original authority: 409.402(c), RSMo 1967, amended 1977, 1978, 1986 and 409.413(a), RSMo 1967.