The purpose of the proposed rule amendments is to repeal Rules 69W-700.018, 69W-700.0024, and 69W-700.028, F.A.C. The Office has identified the rules for repeal as the result of the comprehensive review that it undertook pursuant to Sections 120.74 ...

DEPARTMENT OF FINANCIAL SERVICES
Securities

RULE NO.: RULE TITLE:
69W-700.018: Signing Required - Consents and Consents of Experts
69W-700.024: Submission of Final Documents
69W-700.028: Small Corporate Offering Registration ("SCOR" Offering)
PURPOSE AND EFFECT: The purpose of the proposed rule amendments is to repeal Rules 69W-700.018, 69W-700.0024, and 69W-700.028, F.A.C. The Office has identified the rules for repeal as the result of the comprehensive review that it undertook pursuant to Sections 120.74 and 120.745, F.S. Section 517.081, F.S., sets forth the procedures that must be followed when a person seeks to register a security with the Office. It also sets forth the information that the Office may request as part of the registration process. Rule 69W-700.018, F.A.C., requires information that is not specified in the implementing statute. Accordingly, the rule has been identified for repeal because it enlarges the scope of the statute. Rule 69W-700.024, F.A.C., has been designated for repeal because it may allow an issuer to sell securities in Florida prior to registration, which conflicts Section 517.081(1), F.S. Rule 69W-700.028, F.A.C., has been identified for repeal because it is redundant of statutory requirements. The documents specified in the rule are required by the following statutes: Section 517.081(2), F.S. (application); Section 517.081(3), F.S.; (offering circular/prospectus, allowance for use of a form of simplified offering circular and, filing of exhibits and financial statements and annual financial reports); Section 517.081(6), F.S.; (payment of statutory filing fee); Section 517.101, F.S., (consent to service and corporate resolution), and Section 517.12, F.S.; (registration of issuer as dealer).
SUMMARY: The purpose of the proposed rule amendments is to repeal Rules 69W-700.018, 69W-700.0024, and 69W-700.028, F.A.C. The Office has identified the rules for repeal as the result of the comprehensive review that it undertook pursuant to Sections 120.74 and 120.745, F.S. Section 517.081, F.S., sets forth the procedures that must be followed when a person seeks to register a security with the Office. It also sets forth the information that the Office may request as part of the registration process. Rule 69W-700.018, F.A.C., requires information that is not specified in the implementing statute. Accordingly, the rule has been identified for repeal because it enlarges the scope of the statute. Rule 69W-700.024, F.A.C., has been designated for repeal because it may allow an issuer to sell securities in Florida prior to registration, which conflicts Section 517.081(1), F.S. Rule 69W-700.028 has been identified for repeal because it is redundant of statutory requirements. The documents specified in the rule are required by the following statutes: Section 517.081(2), F.S. (application); Section 517.081(3), F.S.; (offering circular/prospectus, allowance for use of a form of simplified offering circular and, filing of exhibits and financial statements and annual financial reports); Section 517.081(6), F.S.; (payment of statutory filing fee); Section 517.101, F.S., (consent to service and corporate resolution), and Section 517.12, F.S.; (registration of issuer as dealer).
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:
The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.
The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: No requirement for a SERC was triggered under Section 120.541(1) and (2) The rule repeal will not exceed any one of the economic analysis criteria in a SERC, as set forth in Section 120.541(2)(a), F.S.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 517.03 FS.
LAW IMPLEMENTED: 517.03(1), 517.081(3), (7) FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAW.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Rob Vandiver, Chief Counsel, Division of Securities, [phone], [e-mail]

THE FULL TEXT OF THE PROPOSED RULE IS:

69W-700.018 Signing Required – Consents and Consents of Experts.

The following rule shall not apply if the registrant has submitted written consents.

(1) If any portion of the report of an expert is quoted or summarized as such in the offering circular or in a prospectus, the written consent of the expert shall expressly state that the expert consents to such quotation or summarization.

(2) If it is stated that any information contained in the offering circular or prospectus has been reviewed or passed upon by any person and that such information is set forth in the offering circular or prospectus upon the authority of or in reliance upon such person as an expert, the written consent of such person authorizing or approving such statement shall be filed with the offering circular or prospectus.

(3) If any person who has not signed the offering circular or prospectus is named therein as a director or named as about to become a director, the written consent of such person authorizing or approving such statement shall be filed with the offering circular or prospectus. Any such consent, however, may be omitted if there is filed with the offering circular or prospectus, a statement by the registrant, supported by an affidavit or affidavits, setting forth the reasons for such omission and establishing that the obtaining of such consent is impracticable or involves undue hardship on the registrant.

Rulemaking Specific Authority 517.03 FS. Law Implemented 517.081(3) FS. History–(Formerly 3E-20.16) New 9-20-82, Formerly 3E-700.18, 3E-700.018, Repealed________

 

69W-700.024 Submission of Final Documents.

The Office of Financial Regulation may allow an Issuer to sell its securities in this state prior to furnishing all statements, exhibits and documents required by the Office of Financial Regulation which are supplemental in nature and are not related to the substantive merit standards required by the Office of Financial Regulation. Such final documents, however, must be submitted within 30 days of the effective registration granted by the Office of Financial Regulation or administrative action may be taken by the Office of Financial Regulation.

Rulemaking Specific Authority 517.03 FS. Law Implemented 517.03(1) FS. History–New 9-20-82, Formerly 3E-700.24, 3E-700.024, Repealed_________.

 

69W-700.028 Small Corporate Offering Registration (“SCOR” Offering).

(1) For the purpose of compliance with the registration provisions of Section 517.081(3)(g)2., F.S., the issuer shall file an application on Form OFR-S-12-97, SCOR (Small Corporate Offering Registration) Application to Register Securities, which is incorporated by reference in subsection 69W-301.002(7), F.A.C. The application shall include:

(a) Three (3) copies of Form U-7, Small Corporate Offering Registration Form, which is incorporated by reference in subsection 69W-301.002(7), F.A.C.;

(b) An irrevocable written Uniform Consent to Service of Process, Form U-2 or Form OFR-S-5-91, and Uniform Corporate Resolution, Form U-2A or Form OFR-S-6-91, which are incorporated by reference in subsection 69W-301.002(7), F.A.C., as described in Section 517.101, F.S. It shall be the choice of the applicant to file either the Form U-2 or the Form OFR-S-5-91, either of which are acceptable to the office. It shall also be the choice of the applicant to file either the Form U-2A or Form OFR-S-6-91;

(c) Payment of the statutory fee as required in Section 517.081, F.S.;

(d) Exhibits, where applicable, as prescribed in Part II to Form OFR-S-12-97, SCOR (Small Corporate Offering Registration) Application to Register Securities, which is incorporated by reference in subsection 69W-301.002(7), F.A.C.

(2) Self-underwritten offerings shall be offered and sold by the issuer registered with the Office of Financial Regulation in compliance with Section 517.12, F.S. All offerees shall be furnished with a prospectus approved by the Office of Financial Regulation and a copy of Florida’s Guide to Small Business Investments.

(3) Annual financial reports shall be filed with the Office of Financial Regulation within 90 days after the close of the issuer’s fiscal year for a period of 5 years following the effective date of the registration. In the event the corporation ceases operations, such financial reports shall continue to be furnished to the Office of Financial Regulation unless the corporation is dissolved and all remaining assets distributed, if any. In such an event, the issuer shall furnish documentation to the Office of Financial Regulation to close the file.

Rulemaking Authority 517.03(1) FS. Law Implemented 517.081(3), (7) FS. History–New 11-30-97, Formerly 3E-700.028, Amended 11-22-10, Repealed________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Pam Epting, Director, Division of Securities
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: March 20, 2012