Wyo. Code R. 002-0017-6
Effective Date: 07/01/1997 to 10/27/2017
Rule Type: Superceded Rules & Regulations
Reference Number: 002.0017.6.07011997
Section 1. Exempt Securities. The following rules correspond with provisions of W.S. §17-4-114(a) and are provided as further clarification. Requests for confirmation of compliance with any section may be requested in writing from the Secretary of State.
(a) Credit enhancements such as 'put options' and 'letters of credit' attached to an otherwise exempt issue of securities under W.S. §17-4-114(a)(i) and (ii) having no investment value separate and apart from the exempt issue are considered an integral part of the otherwise exempt security and require no separate registration or exemption.
(b) Commercial paper as used in W.S. §17-4-114 (a)(ix) refers to the type instruments listed in 17 CFR 231.4412.
(c) W.S. §17-4-114 (a)(x) exempts the investment contract issued in connection with any employee stock purchase plan or similar benefit plan. Issuance of the securities underlying the plan may be made in conjunction with other exemptions found in W.S. §17-4-114.
(d) Nothing in these rules requires an investment company to make any filings with or pay any fees to the Secretary of State if the investment company may avail itself of exemptions available to other issuers of securities found in W.S. §17-4-114, unless that exemption so requires.
Section 2. Exempt Transactions. The following rules correspond with provisions of W.S. §17-4-114 (b) and are provided as further clarification. Requests for confirmation of compliance with any section on a case-by-case basis may be requested in writing from the Secretary of State.
(a) Isolated nonissuer transaction as used in W.S. §17-4-114 (b)(i) shall mean a single transaction involving one buyer and one seller.
(b) Standard and Poors, Moodys, Fitch or Value Line publications containing information specified by the statutory exemption are recognized manuals for the purpose of claiming exemption under W.S. §17-4-114 (b) (ii).
(c) By the authority granted the Secretary of State in W.S. §17-4-114 (b)(ix) the following transaction is determined to be exempt from the registration provisions of this act:
(i) Any offer or sale of securities offered or sold in compliance with Securities Act of 1933, Regulation D, Rules 230.505 including an offer or sale made exempted by application of rule 508 (a), as made effective in SEC Release No. 33-6389 and as amended in SEC Release Numbers 33-6437, 33-6663, 33-6758 and 33-6825, and which satisfies the following further conditions and limitations:
(A) No commission, fee or other remuneration shall be paid or given, directly or indirectly, to any person for soliciting any prospective purchaser in this state unless such person is appropriately registered in this state. It is a defense to a violation of this subsection if the issuer sustains the burden of proof to establish that he or she did not know and in the exercise of reasonable care could not have known that the person who received a commission, fee or other remuneration was not appropriately registered in this state.
(B) No exemption under this rule shall be available for the securities of any issuer if any of the parties described in the Securities Act of 1933, Regulation A, Rule § 230.262 sections (a), (b) and (c):
(I) Has filed a registration statement which is the subject of a currently effective registration stop order entered pursuant to any state's securities laws within five years prior to the filing of the notice required under this exemption.
(II) Has been convicted within five years prior to the filing of the notice required under this exemption of any felony or misdemeanor in connection with the offer, purchase or sale of any security or of any felony involving fraud or deceit, including but not limited to forgery, embezzlement, obtaining money under false pretenses, larceny, conspiracy to defraud, money laundering or tax evasion.
(III) Is currently subject to any state or provincial administrative enforcement order or judgment entered by that state or provinces securities administrator within five years prior to the filing or the notice required under this exemption or is subject to any state or provincial administrative enforcement order or judgment in which fraud or deceit, including but not limited to making untrue statements or material facts and omitting to state material facts, was found and the order or judgment was entered within five years prior to the filing of the notice required under this exemption.
(IV) Is subject to any state or provincial administrative enforcement order or judgment which prohibits, denies or revokes the use of any exemption from registration in connection with the offer, purchase or sale of securities.
(V) Is currently subject to any order, judgment, or decree of any court of competent jurisdiction temporarily, preliminarily permanently restrain or enjoin, such party from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or involving the making of any false filing with the state or province entered within five years prior to the filing of the notice required under this exemption.
(VI) The prohibitions of paragraphs 1-3 and 5 above shall not apply if the person subject to the disqualification is duly licensed or registered to conduct securities related business in the state or province in which the administrative order or judgment was entered against such person or if the broker-dealer employing such party is licensed or registered in this state and the Form BD filed with this state discloses the order, conviction, judgment or decree relating to such person. No person disqualified under this subsection shall act in a capacity other than that for which the person is licensed or registered.
(VII) Any disqualification caused by this section is automatically waived if the state or provinces securities administrator or agency of the state or province which created the basis for disqualification determines upon a showing of good cause that it is not necessary under the circumstances that the exemption be denied.
It is a defense to a violation of this subsection if the issuer sustains the burden of proof to establish that he or she did not know and in the exercise of reasonable care could not have known that a disqualification under this subsection existed.
(C) The issuer shall file with the Secretary of State a notice on Form D (17 CFR 239.500):
(I) No later than 15 days after the first sale of securities or the receipt of a completed subscription agreement by an investor in this state which results from an offer being made in reliance upon this exemption and at such other times and in the form required under Regulation D, Rule 230.503 to be filed with the Securities and Exchange Commission.
(II) The notice shall contain an original signature on the State Signature page of the Form D.
(III) The notice shall contain an undertaking by the issuer to furnish the Secretary of State, upon written request, the information furnished by the issuer to offerees;
(IV) Unless otherwise available, included with or in the initial notice shall be a consent to service of process (Form U-2);
(V) Every person filing the initial notice provided for in (I) above shall pay a filing fee as required in W.S. 17-4-114(b)(ix).
(D) In all sales to nonaccredited investors in this state one of the following conditions must be satisfied for the issuer and any person acting on its behalf shall after making reasonable inquiry believe that one of the following conditions is satisfied:
(I) The investment is suitable for the purchaser upon the basis of the facts, if any, disclosed by the purchaser as to the purchaser's other security holdings, financial situation and needs. For the purpose of this condition only, it may be presumed that if the investment does not exceed 10% of the investor's net worth, it is suitable.
(II) The purchaser either alone or with his/her purchaser representative(s) has such knowledge and experience in financial and business matters that he/she is or they are capable of evaluating the merits and risks of the prospective investment.
(ii) A failure to comply with a term, condition or requirement of sections (i) (A), (C), and (D) of this rule will not result in loss of the exemption from the requirement of W.S. §17-4-107 for any offer or sale to a particular individual or entity if the person relying on the exemption shows:
(A) The failure to comply did not pertain to a term, condition or requirement directly intended to protect that particular individual or entity; and
(B) The failure to comply was insignificant with respect to the offering as a whole; and
(C) A good faith and reasonable attempt was made to comply with all applicable terms, conditions, and requirements of sections (i) (A), (C), and (D).
(iii) Where an exemption is established only through reliance upon section (ii) of this rule, the failure to comply shall nonetheless be actionable by the Secretary of State under W.S. §17-4-120.
(iv) Transactions which are exempt under this rule may not be combined with offers and sales exempt under any other rule or section of this act; however, nothing in this limitation shall act as an election. Should for any reason the offer and sale fail to comply with all of the conditions for this exemption, the issuer may claim the availability of any other applicable exemption.
(v) The administrator may increase the number of purchasers or waive any other conditions of this exemption.
(vi) The exemption authorized by this rule shall be known and may be cited as the 'Uniform Limited Offering Exemption (ULOE).'
(d) The Secretary of State deems the wording of W.S. §17-4-114 (b) (xi) to be illustrative of certain types of existing securities holders and not restrictive to persons who are holders of convertible securities, nontransferable warrants or transferable warrants exercisable within not more than ninety (90) days of their issuance.
(e) W.S. §17-4-114 (b) (xii) allows dissemination of a preliminary prospectus.
Any dissemination, other than a preliminary prospectus for a covered security or transaction, shall be made in accordance with the 1957 NASAA Report on Policy entitled Publication or Distribution of Preliminary Prospectuses and Preliminary Summary Prospectuses as published in the Commerce Clearing House NASAA Reporter.
(f) Offers but not sales of securities made pursuant to W.S. §17-4-114(b)(xiii) in securities registration pursuant to Chapter 7, Section 3 of these rules:
(i) If made pursuant to the following conditions:
(A) Ten business days prior to the initial solicitation of interest under this rule, the offerer files with the Secretary of State a 'Solicitation of Interest Form' which appears as Appendix B to these rules along with any other materials to be used to conduct solicitations of interest, including, but not limited to, the script of any broadcast to be made, a copy of any video materials intended for broadcast and a copy of any notice to be published.
(B) Five (5) business days prior to usage, the offerer files with the Secretary of State any amendments to the foregoing materials or additional materials to be used to conduct solicitations of interest, except for materials provided to a particular offeree pursuant to a request by that offeree.
(C) No Solicitation of Interest Form, script, advertisement or other material is used to solicit indications of interest which the Secretary of State has notified the offerer not to distribute.
(D) Except for scripted broadcasts and published notices, the offerer must supply the offeree with the most current Solicitation of Interest Form at or before the time of the communication or within five (5) days of the initial communication.
(E) During the solicitation of interest period, the offerer does not solicit or accept money or a commitment to purchase securities.
(F) No sale is made until the offeree has received and had an opportunity to read a currently effective prospectus. No sale may occur based upon the delivery of a preliminary prospectus until a final prospectus is received.
(G) The offeror has exercised reasonable diligence in determining that no person included in Chapter 6, Section 2(c)(B) of these Rules is involved directly or indirectly with transactions pursuant to this exemption.
(H) Any published notice or script for broadcast shall contain at least the identity of the chief executive officer of the issuer, a brief and general description of its business and products, and the following legends:
(I) No money or other consideration is being solicited and none may be accepted;
(II) No sales of the securities shall be made or commitment to purchase accepted until delivery of an offering circular that includes complete information about the issuer and the offering is made;
(III) An indication of interest made by a prospective investor involves no obligation or commitment of any kind; and
(IV) No sale may be made until the offering statement is qualified by the SEC and is registered in this state.
(ii) All communications with prospective investors made in reliance on this rule must cease after a registration statement is filed in this state, and no sale may be made until at least twenty (20) calendar days after the last communication with a prospective investor under this exemption.
(iii) However, a failure to comply with any condition of section (I) of this rule will not result in the loss of the exemption from the registration or literature filing requirements of the Act for any offer to a particular individual or entity if the offerer shows:
(A) the failure to comply did not pertain to a condition directly intended to protect that particular individual or entity; and
(B) the failure to comply was insignificant with respect to the offering as a whole; and
(C) a good faith and reasonable attempt was made to comply with all applicable conditions of this item(s);
(D) Where an exemption is established only through reliance upon this subsection (ii), the failure to comply shall nonetheless be actionable as a violation of the Act by the Secretary of State under W.S. §17-4-120 and constitute grounds for denying or revoking the exemption as to a specific security or transaction.
(iv) The Secretary of State may waive any condition of this exemption in writing, upon application by the offerer and cause having been shown. Neither compliance or attempted compliance with this rule, nor the absence of any objection or order by the Secretary of State with respect to any offer of securities undertaken pursuant to this rule, shall be deemed to be a waiver of any condition of the rule or deemed to be a confirmation by the Secretary of State of the availability of this rule.
(v) Offers made in reliance on this rule will not result in a violation of the registration provisions of the Act by virtue of being integrated with subsequent offers or sales of securities unless such subsequent offers and sales would be integrated under federal securities laws.
(vi) Issuers on whose behalf indications of interest are solicited under this rule may not make offers or sales in reliance on W.S. §17-4-114(b)(ix) until 12 months after the last communication with a prospective investor made under this exemption.
(g) For the purposes of W. S. §17-4-114 (b) (xiv) exempting any offer but not a sale of a security made through the Internet the required indication, directly or indirectly, that the security is not being offered to residents of Wyoming found in subparagraph (A) of that exemption may be satisfied with a statement indicating the jurisdictions (states) where either the securities are registered or an appropriate notice filing has been made and only persons residing in those states are able to purchase the securities. Such securities may not be sold in Wyoming until the securities have been registered or a notice filing has been made in this state.
(h) Nothing in these rules requires an investment company to make any filings with or pay any fees to the Secretary of State if the investment company may avail itself of exemptions available to other issuers of securities found in W.S. §17-4-114, unless that exemption so requires.