Section 203.041. Limited offerings

(a) The notice required by section 203(d) of the act (70 P. S. § 1-203(d)) shall be filed with the Commission within the time period specified by that section on the form, designated by the Commission as Form E in accordance with the General Instructions thereto.

(b) The Commission will not consider that the requirement of section 203(d)(i) of the act is met unless the following steps have been taken by the issuer:

(1) A written agreement is entered into whereby the purchaser agrees not to sell the securities purchased under the exemption within 12 months after the date of purchase, except in accordance with § 204.011 (relating to waivers of the 12-month holding period), and a copy of the agreement to be signed has been filed with the Commission.

(2) A legend is placed on the security restricting its transferability for 12 months after the date of purchase except in accordance with § 204.011.

(3) The issuer instructs its transfer agent, if any, that no transfer of the securities shall be permitted except in accordance with section 203(d) of the act, § 204.011 and this section.

(c) Except where the promoters, as defined in section 102(o) of the act (70 P. S. § 1-102(o)), are registered under section 301 of the act (70 P. S. § 1-301), the condition contained in section 203(d)(iii) of the act shall be deemed to be met only if a promoter receives no underwriting, selling or finder’s fee or commission or other remuneration directly or indirectly for the sale of securities under the exemption. A promoter shall be deemed to have received indirect remuneration if money or property is paid to an affiliate of a promoter as compensation for the sale of securities. The fact that the value of a promoter’s investment in the issuer is increased as a result of the offering or that the promoter will receive remuneration from the issuer for services rendered to the issuer in the ordinary course of its business or for the sale of property to it does not, of itself, preclude the availability of the exemption.

(d) During the period of the offering, the issuer shall take steps necessary to ensure that the material information contained in its notice remains current and accurate in all material respects. If a material statement made in the notice, or an attachment thereto, becomes materially incorrect or inaccurate, the issuer shall file with the Commission in accordance with § 609.011 (relating to amendments to filings with Commission) within 5 business days of the occurrence of the event which required the filing of the amendment.

The provisions of this § 203.041 adopted May 10, 1974, effective May 11, 1974, 4 Pa.B. 916; amended April 4, 1975, effective April 5, 1975, 5 Pa.B. 722; amended May 6, 1988, effective May 7, 1988, 18 Pa.B. 2117; amended September 22, 1995, effective September 23, 1995, 25 Pa.B. 3994; amended December 30, 1999, effective January 1, 2000, 30 Pa.B. 18; amended July 11, 2003, effective July 12, 2003, 33 Pa.B. 3365; amended December 8, 2006, effective December 9, 2006, 36 Pa.B. 7456; transferred and renumbered from 64 Pa. Code § 203.041, December 14, 2012, effective December 15, 2012, 42 Pa.B. 7533. Immediately preceding text appears at serial pages (324408) to (324409).

Notation

Authority

The provisions of this § 203.041 amended under sections 202(a), (c), (e) and (i), 203(d), (o) and (p), 205, 206, 301, 303, 504, 603(a) and 609 of the Pennsylvania Securities Act of 1972 (70 P. S. § § 1-202(a), (c), (e) and (i), 1-203(d), (o) and (p), 1-205, 1-206, 1-301, 1-303, 1-504, 1-603(a) and 1-609); and the Takeover Disclosure Law (70 P. S. § 74).

Cross References

This section cited in 10 Pa. Code § 203.191 (relating to SEC Rule 505 offerings); 10 Pa. Code § 203.201 (relating to accredited investor exemption); and 10 Pa. Code § 204.011 (relating to waivers of the 12-month holding period).