DAR File No. 41470
This rule was published in the May 1, 2017, issue (Vol. 2017, No. 9) of the Utah State Bulletin.
Notice Filings for Offerings Made Under Federal Crowdfunding Provisions
Notice of Proposed Rule
DAR File No.: 41470
Filed: 04/12/2017 09:14:33 AM
Purpose of the rule or reason for the change:
In the federal "Jumpstart Our Business Startups Act" of 2012 (JOBS Act), Congress directed the Securities and Exchange Commission (SEC) to promulgate rules supporting the creation of offering platforms for crowdfunded securities offerings. The JOBS Act and the final rules issued by the SEC (see 17 C.F.R. Sec. 227 and Sections 4(a)(6) and 18(b)(4)(C) of the Securities Act of 1933) permit state securities regulators to require the filing of notice when a crowdfunding issuer has its principal place of business in this state or when sales of its securities to residents of this state meet a certain threshold. This new section effectuates the creation of such filings.
Summary of the rule or change:
Pursuant to the authority granted to the Utah Division of Securities (Division) by Subsection 61-1-15.5(3), the Division adds this section to effectuate the receiving of notice filings for securities offerings made by issuing entities with their principal place of business in this state or who sell fifty percent (50%) or greater of the aggregate amount of the offering to residents of this state. This section establishes the filing requirement and enumerates the required documents and fees that constitute a complete filing.
Statutory or constitutional authorization for this rule:
- Section 61-1-24
- Subsection 61-1-15.5(3)
Anticipated cost or savings to:
the state budget:
The state will incur no additional costs to its budget. Each filing will be accompanied by a filing fee of either $100 or $500. The Division anticipates that additional revenue from these fees will not exceed $5,000 during the first full fiscal year of receipt. Currently, the Division anticipates it can process the filings with existing personnel resources.
Local governments will not receive or process these filings.
Small businesses will be required to pay a filing fee of either $100 or $500.
persons other than small businesses, businesses, or local governmental entities:
Other entities seeking to avail themselves of the federal crowdfunding provisions will pay filings fees identical to those for small businesses above.
Compliance costs for affected persons:
The compliance costs for affected persons will be the payment of a filing fee of $100 for filings made within the deadline periods specified in the rule and $500 for filings made after the expiration of any applicable deadline.
Comments by the department head on the fiscal impact the rule may have on businesses:
The crowdfunding provisions of the JOBS Act have the potential to provide Utah-based startup and other small businesses with a new avenue for capital raising on a nationwide scale. As this new marketplace takes shape, the Division wishes to discharge its duty to protect investors by obtaining key information about the offering, the issuing company, and those who manage its operations. The notice filings contemplated under this rule will provide this information at a minimal regulatory cost to business. As required by law, the Utah Securities Commission has reviewed the proposed rule and has approved it by a unanimous vote.
Francine Giani, Executive Director
The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:Commerce
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316
Direct questions regarding this rule to:
- Benjamin Johnson at the above address, by phone at 801-530-6134, by FAX at 801-530-6980, or by Internet E-mail at email@example.com
Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:
This rule may become effective on:
Keith Woodwell, Director
R164. Commerce, Securities.
R164-15. Federal Covered Securities.
KEY: mutual funds, securities, securities regulation
Date of Enactment or Last Substantive Amendment: [
June 29, 2016]
Notice of Continuation: July 25, 2012
Authorizing, and Implemented or Interpreted Law: 61-1-15.5; 61-1-24
More information about a Notice of Proposed Rule is available online.
The Portable Document Format (PDF) version of the Bulletin is the official version. The PDF version of this issue is available at https://rules.utah.gov/publicat/bull_pdf/2017/b20170501.pdf. The HTML edition of the Bulletin is a convenience copy. Any discrepancy between the PDF version and HTML version is resolved in favor of the PDF version.
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For questions regarding the content or application of this rule, please contact Benjamin Johnson at the above address, by phone at 801-530-6134, by FAX at 801-530-6980, or by Internet E-mail at firstname.lastname@example.org. For questions about the rulemaking process, please contact the Office of Administrative Rules.