1. (a) The exemption contained in section 202(c) of the act (70 P.S. § 1-202(c)) is available for any security which is a Federally covered security by reason of being an exempt security under section 3(a)(3) of the Securities Act of 1933 (15 U.S.C.A. § 77c(a)(3)) as interpreted by Release 33-4412 (26 FR 9158 (September 20, 1961)) issued by the Securities and Exchange Commission which provides that:

   1. (1) The commercial paper is prime quality of a type not ordinarily purchased by the general public.
   2. (2) The commercial paper is of a type eligible for discounting by banks which are members of the Federal Reserve System.
   3. (3) The commercial paper is not payable on demand and does not contain a provision for an automatic “rollover.”
   4. (4) The commercial paper is issued to facilitate current operational business requirements.

   5. (5) The commercial paper proceeds are not used to:

      1. (i) Discharge existing indebtedness unless the indebtedness is itself exempt under section 3(a)(3) of the Securities Act of 1933.
      2. (ii) Purchase or construct a plant facility.
      3. (iii) Purchase durable machinery or equipment.
      4. (iv) Fund commercial real estate development or financing.
      5. (v) Purchase real estate mortgages or other securities.
      6. (vi) Finance mobile homes or home improvements.
      7. (vii) Purchase or establish a business enterprise.

2. (b) If commercial paper is being issued by a holding company for a bank, as that term is defined in section 102(d) of the act (70 P.S. § 1-102(d)), the commercial paper must bear a prominent legend in bold face type of at least 12 points in size indicating that the commercial paper:

   1. (1) Has not been issued by the bank for which the issuer is the holding company.
   2. (2) Is not a deposit of the bank covered by Federal deposit insurance.
3. (c) General solicitation through public media advertisement, mass mailing, the Internet or other means in connection with soliciting offers or sales of commercial paper is prohibited; provided that this section does not limit mailings to institutional investors or broker-dealers, as those terms are defined in the act and this subpart.

Authority

The provisions of this § 202.030 amended under sections 202(a), (c), (e) and (i) and 609(a) of the Pennsylvania Securities Act of 1972 (70 P.S. § § 1-202(a), (c), (e) and (i) and 1-609(a)); section 202.C of the Department of Banking and Securities Code (71 P.S. § 733-202.C); and section 9(b) of the Takeover Disclosure Law (70 P.S. § 79(b)).

Source

The provisions of this § 202.030 amended July 11, 2003, effective July 12, 2003, 33 Pa.B. 3365; transferred and renumbered from 64 Pa. Code § 202.030, December 14, 2012, effective December 15, 2012, 42 Pa.B. 7533; amended January 12, 2018, effective January 13, 2018, 48 Pa.B. 389. Immediately preceding text appears at serial pages (364662) to (364663).