Chapter 376 2003 -- H 6174 SUBSTITUTE A AS AMENDED Enacted 07/15/03 A N A C T RELATING TO MAKING APPROPRIATIONS FOR THE SUPPORT OF THE STATE FOR THE FISCAL YEAR ENDING JUNE 30, 2004 ARTICLE 24 Relating To Securities Registration fees SECTION 1. Sections 7-11-305, 7-11-307, and 7-11-401 of the General Laws in Chapter 7-11 entitled "Rhode Island Uniform Securities Act" are hereby amended to read as follows: 7-11-305. Provisions applicable to registration generally. -- (a) A registration statement may be filed by the issuer, any other person on whose behalf the offering is to be made, or a registered broker dealer. (b) Except as provided in subsection (b)(2), a A person filing a registration statement pays shall pay a nonrefundable fee of one-tenth of one percent (0.1%) of the maximum aggregate offering price at which the registered securities are to be offered in this state, but not less than three hundred dollars ($300) or more than one thousand dollars ($1,000). (2) An open end management company, a face amount certificate company, or a unit investment trust, as defined in the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq., may register an indefinite amount of securities under a registration statement. At the time of filing, the registrant pays a nonrefundable fee of three hundred dollars ($300) and within sixty (60) days after the registrant's fiscal year during which its registration statement is effective, pays a non refundable fee of three hundred dollars ($300) or files a report on a form the director, by rule, adopts, specifying its sale of securities to persons in this state during the fiscal year and pays a fee of one-tenth of one percent (0.1%) of the aggregate sales price of the securities sold to persons in this state, but the latter fee is not less than three hundred dollars ($300) or more than one thousand dollars ($1,000). (c) Except as permitted otherwise by subsection (b)(2), a A registration statement must specify the amount of securities to be offered in this state and the states in which a registration statement or similar document in connection with the offering has been or is to be filed and any adverse order, judgment, or decree entered by the securities agency or administrator in any state or by a court or the securities and exchange commission in connection with the offering. (d) A document filed under this chapter or a predecessor act within five (5) years before the filing of a registration statement may be incorporated by reference in the registration statement if the document is currently accurate. (e) The director may permit by rule or order the omission of any item of information or document from a registration statement. (f) In the case of a nonissuer offering, the director may not require information under subsection (m) or 7-11-304 unless it is known to the person filing the registration statement or
to the person on whose behalf the offering is to be made, or can be furnished by the person without unreasonable effort or expense. (g) In the case of a registration under 7-11-303 or 7-11-304 by an issuer who has no public market for its shares or no significant earnings from continuing operations during the last five (5) years, or any shorter period of its existence, the director may require by rule or order as a condition of registration that the following securities be deposited in escrow for not more than three (3) years: (1) Securities issued to a promoter within the three (3) years immediately before the offering or to be issued to a promoter for a consideration substantially less than the offering price; and (2) Securities issued to a promoter for a consideration other than cash, unless the registrant demonstrates that the value of the non-cash consideration received in exchange for the securities is substantially equal to the offering price for the securities. (h) The director may determine by rule or order the conditions of an escrow required under subsection (g), but the director may not reject a depository solely because of location in another state. (i) The director may require by rule or order as a condition of registration under 7-11- 303 or 7-11-304 that the proceeds from the sale of the registered securities in this state be impounded until the issuer receives a specified amount from the sale of the securities. The director may by rule or order determine the conditions of an impound arrangement required under this subsection, but the director may not reject a depository solely because of location in another state. (j) If securities are registered under 7-11-302 or 7-11-303, the prospectus filed under the Securities Act of 1933 15 U.S.C. 77a et seq. must be delivered to each purchaser in accordance with the prospectus delivery requirements of the Securities Act of 1933, 15 U.S.C. 77a et seq. (k) If securities are registered under 7-11-304, an offering document containing information the director designates by rule or order must be delivered to each purchaser with or before the earliest of: (1) The first written offer to sell made to the purchaser by or for the account of the issuer or another person on whose behalf the offering is being made, or by an underwriter or broker dealer who is offering part of an unsold allotment or subscription taken by it as a participant in the distribution; (2) Confirmation of a sale made by or for the account of a person named in subsection (1); (3) Payment pursuant to a sale; or (4) Delivery pursuant to a sale. (l) A registration statement remains effective for one year after its effective date unless the director extends the period of effectiveness by rule or order. All outstanding securities of the same class as the registered securities are considered to be registered for the purpose of a nonissuer transaction while the registration statement is effective, unless the director, by rule or order, provides otherwise. A registration statement may not be withdrawn after its effective date if any of the securities registered have been sold in this state, unless the director, by rule or order, provides otherwise. No registration statement is effective while a stop order is in effect under 7-11-306(a).
(m) During the period that an offering is being made pursuant to an effective registration statement, the director may require by rule or order the person who filed the registration statement to file reports not more often than quarterly to keep reasonably current the information contained in the registration statement and to disclose the progress of the offering. (n) A registration statement filed under 7-11-302 or 7-11-303 may be amended after its effective date to increase the securities specified being offered and sold. The amendment becomes effective upon filing of the amendment and payment of an additional filing fee, calculated in the manner specified in subsection (b), with respect to the additional securities to be offered and sold. The effectiveness of the amendment relates back to the date of sale of the additional securities being registered. (o) A registration statement filed under 7-11-304 may be amended after its effective date to increase the securities specified to be offered and sold, if the public offering price and underwriters' discounts and commissions are not changed from the respective amounts of which the director was informed. The amendment becomes effective when the director so orders and relates back to the date of sale of the additional securities being registered. A person filing an amendment pays an additional filing fee equal to two (2) times the fee otherwise payable, calculated in the manner specified in subsection (b), regarding the additional securities to be offered and sold. 7-11-307. Federal covered securities. -- (a) The director may require by rule or order the filing of any or all of the following documents with respect to a covered security under 18(b)(2) of the Securities Act of 1933, 15 U.S.C. 77r(b)(2): (1) Prior to the initial offer of a federal covered security in this state, all documents that are part of a current federal registration statement filed with the U.S. Securities and Exchange Commission under the Securities Act of 1933, 15 U.S.C. 77a et seq. or, in lieu of filing the registration statement, a notice as prescribed by the director by rule or otherwise, together with a consent to service of process signed by the issuer and with a nonrefundable fee of one-tenth of one percent (0.1%) of the maximum aggregate offering price at which the federal covered securities are to be offered in this state, but not less than three hundred dollars ($300) or more than one thousand dollars ($1,000). (2) An open end management company, a face amount certificate company, or a unit investment trust, as defined in the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq., may file a notice for an indefinite amount of securities. The issuer, at the time of filing, pays shall pay a nonrefundable fee of three hundred dollars ($300) and within sixty (60) days after the issuer's fiscal year, during which its federal registration statement is effective, pays a nonrefundable fee of three hundred dollars ($300) or files a report on a form the director adopts by rule, specifying its sale of securities to persons in this state during the fiscal year and pays a fee of one-tenth of one percent (0.1%) of the aggregate sales price of the securities sold to persons in this state. The latter fee shall not be less than three hundred dollars ($300) or more than one thousand dollars ($1,000). (3) After the initial offer of the federal covered security in this state, all documents that are part of an amendment to a current federal registration statement filed with the U.S. Securities and Exchange Commission under the Securities Act of 1933, are filed concurrently with the director. (4) Unless otherwise extended by the director, an initial notice filing under this subsection is effective for one year commencing upon the date the notice or registration
statement, as applicable, is received by the director unless a later date is indicated by the issuer. A notice filing may be renewed by filing a renewal notice as prescribed by the director and paying a renewal fee of one-tenth of one percent (0.1%) of the aggregate sales price of the securities sold to persons in this state. The latter fee shall not be less than three hundred dollars ($300) or more than one thousand dollars ($1,000). (b) Regarding any security that is a covered security under 18(b)(4)(D) of the Securities Act of 1933, 15 U.S.C. 77r(b)(4)(D), the director may by rule or otherwise require the issuer to file a notice on SEC Form D and a consent to service of process signed by the issuer no later than fifteen (15) days after the first sale of the federal covered security in this state, together with Form U-2, Form D and a nonrefundable fee of three hundred dollars ($300). (c) The director may by rule or otherwise require the filing of any document filed with the U.S. Securities and Exchange Commission under the Securities Act of 1933, 15 U.S.C. 77a et seq., with respect to a covered security under 18(b)(3) or (4) of the Securities Act of 1933, 15 U.S.C. 77r(b)(3) or (4), together with a notice and fees as defined in subparagraph (a)(1). (d) The director may issue a stop order suspending the offer and sale of a federal covered security, except a covered security under 18(b)(1) of the Securities Act of 1933, 15 U.S.C. 77r(b)(1), if the director finds that (1) the order is in the public interest and (2) there is a failure to comply with any condition established under this section. (e) Notwithstanding the provisions of this section, until October 11, 1999, the director may require the registration of any federal covered security for which the fees required by this section have not been paid promptly following written notification from the director to the issuer of the nonpayment or underpayment of the fees. An issuer is considered to have promptly paid the fees if they are remitted to the director within fifteen (15) days following the person's receipt of written notification from the director. (f) The director may by rule or order waive any or all of the provisions of this section. 7-11-401. Exempt securities. -- The following securities are exempt from 7-11-301 and 7-11-404: (1) A security, including a revenue obligation, issued, insured, or guaranteed by the United States, an agency or corporate or other instrumentality of the United States, an international agency or corporate or other instrumentality of which the United States and one or more foreign governments are members, a state, a political subdivision of a state, or an agency or corporate or other instrumentality of one or more states or their political subdivisions; or a certificate of deposit for any of the foregoing, but this exemption does not include a security payable solely from revenues to be received from a nongovernmental industrial or commercial enterprise unless the payments are insured or guaranteed by a person described as the issuer, insurer or guarantor of securities under subdivision (2), (3), (4), (5), (7), or (8) of this section, or unless the revenues from which the payments are to be made are a direct obligation of a person; (2) A security issued, insured, or guaranteed by Canada, a Canadian province or territory, a political subdivision of Canada or a Canadian province or territory, an agency or corporation or other instrumentality of one or more of the foregoing, or any other foreign government or governmental combination or entity with which the United States maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer, insurer, or guarantor; (3) A security issued by and representing an interest in or a direct obligation of, or guaranteed by, a depository institution if the deposit or share accounts of the depository institution are insured by the federal deposit insurance corporation, the federal savings and loan
insurance corporation, the national credit union share insurance fund, or a successor to the applicable agency authorized by federal law; (4) A security issued by and representing an interest in or a direct obligation of, or insured or guaranteed by, an insurance company organized under the laws of any state and authorized to do business in this state; (5) A security issued or guaranteed by a railroad, other common carrier, public utility, or holding company which is: (i) Subject to the jurisdiction of the interstate commerce commission; (ii) A registered holding company under the Public Utility Holding Company Act of 1935, 15 U.S.C. 79 et seq. or a subsidiary of a registered holding company within the meaning of that act; (iii) Regulated as to its rates and charges by a governmental authority of the United States or a state; or (iv) Regulated as to the issuance or guarantee of the security by a governmental authority of the United States, a state, Canada, or a Canadian province or territory; (6) Equipment trust certificates as to equipment leased or conditionally sold to a person, if securities issued by the person would be exempt under this section; (7) A security listed or approved for listing upon notice of issuance on a national securities exchange registered under 6 of the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq.; any other security of the same issuer which is of senior or substantially equal rank; a security called for by subscription right or warrant so listed or approved; or a warrant or right to purchase or subscribe to any of the securities in this subdivisions; (8) A security designated or approved for designation upon notice of issuance as a national market system security by the national association of securities dealers, inc.; any other security of the same issuer which is of senior or substantially equal rank; a security called for by subscription right or warrant so designated; or a warrant or a right to purchase or subscribe to any of the securities in this subdivision; (9) An option issued by a clearing agency registered under the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq., other than an off exchange futures contract or substantially similar arrangement, if the security, currency, commodity, or other interest underlying the option: (i) Is registered under 7-11-302, 7-11-303, or 7-11-304; (ii) Is exempt under this section; or (iii) Is not otherwise required to be registered under this chapter; (10) A security issued by a person organized and operated not for private profit but exclusively for a religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purpose, or as a chamber of commerce or trade or professional association; (11) A promissory note, draft, bill of exchange, or bankers' acceptance that evidences an obligation to pay cash within nine (9) months after the date of issuance, exclusive of days of grace, is issued in denominations of at least fifty thousand dollars ($50,000) and receives a rating in one of the three (3) highest rating categories from a nationally recognized statistical rating organization; or a renewal of an obligation that is likewise limited, or a guarantee of an obligation or of a renewal; (12) A security issued in connection with an employee's stock purchase, savings, option, profit sharing, pension, or similar employees' benefit plan;
(13) A membership or equity interest in, or a retention certificate or like security given in lieu of a cash patronage dividend issued by, a cooperative organized and operated as a nonprofit membership cooperative under the cooperative laws of any state if not traded to the public; (14) A security issued by an issuer registered as an open end management investment company or unit investment trust pursuant to 8 of the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq. if: (i) The issuer is advised by an investment adviser that is a depository institution exempt from registration under the Investment Advisers Act of 1940, 15 U.S.C. 80b-1 et seq. or that is currently registered as an investment adviser and has been registered, or is affiliated with an adviser that has been registered as an investment adviser under the Investment Advisers Act of 1940, 15 U.S.C. 80b-1 et seq. for at least three (3) years immediately before an offer or sale of a security claimed to be exempt under this subparagraph and has acted, or is affiliated with an investment adviser that has acted, as investment adviser to one or more registered investment companies or unit investment trusts for at least three (3) years immediately before an offer or sale of a security claimed to be exempt under this subparagraph; or (ii) The issuer has a sponsor that has at all times throughout the three (3) years before an offer or sale of a security claimed to be exempt under this subparagraph sponsored one or more registered investment companies or unit investment trusts the aggregate total assets of which have exceeded one hundred million dollars ($100,000,000). (iii) The director has received prior to any sale exempted in this section: (a) A notice of intention to sell which has been executed by the issuer which states the name and address of the issuer and the title of the securities to be offered in this state; and (b) A filing fee of three hundred dollars ($300) one thousand dollars ($1,000). (iv) In the event any offer or sale of an open end management investment company is to be made more than twelve (12) months after the date notice under subdivision (14) (iii) is received by the director, another notice and payment of the applicable fee is required. For the purpose of this subsection an investment adviser is affiliated with another investment adviser if it controls, is controlled by, or is under common control with the other investment adviser. SECTION 2. This article shall take effect as of July 1, 2003.