The purpose and effect is to implement Chapter 2024-168, Laws of Florida, to consolidate rules concerning the terms of certain offerings into one rule, for clarity, and to update cross-references.

 

DEPARTMENT OF FINANCIAL SERVICES

Securities

RULE NOS.:RULE TITLES:

69W-500.001Integration of Section 517.061, F.S.; Offers and Sales

69W-500.004Computation of Number of Purchasers for Purposes of Section 517.061(11), F.S

69W-500.005Disclosure Requirements of Section 517.061(11)(a)3., F.S

69W-500.006Commissions and Compensation Payable in Connection with an Offering Exempted Pursuant to Section 517.061(11), F.S

69W-500.007General Solicitation or General Advertising in Connection with an Offering Exempted Under Section 517.061(11), F.S

69W-500.008Unsolicited Purchase or Sale of Securities Pursuant to Section 517.061(13), F.S

69W-500.011Registration of Issuer Under Section 517.061(11), F.S., as Dealer

69W-500.013Exemption/Mobile Home Parks/Limited Purpose Stock Offering

69W-500.014Court Approved Transactions

69W-500.017Compensatory Benefit Plan Exemption

69W-500.019Accredited Investor Exemption

69W-500.020Florida Invest Local Exemption

PURPOSE AND EFFECT: The purpose and effect is to implement Chapter 2024-168, Laws of Florida, to consolidate rules concerning the terms of certain offerings into one rule, for clarity, and to update cross-references.

SUMMARY: The rules are amended to consolidate rules concerning the terms of certain offerings into one rule, for clarity, to update cross-references, and to conform the rules to Chapter 2024-168, Laws of Florida, in the following ways: removing integration provisions; removing exemptions for court approved transactions and compensatory benefit plans; creating rules to implement the Accredited Investor Exemption and the Florida Invest Local Exemption.

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: The Agency expressly relies on an analysis of potential economic impact conducted by persons with subject matter knowledge of these rules.

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, 517.061, 517.0612, FS.

LAW IMPLEMENTED: 517.061(10), 517.0612(10), 517.12(1), FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ryann White, Office of General Counsel [phone], [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69W-500.001 Offers and Sales Under Integration of Section 517.061(10), F.S.; Offers and Sales.

(1) Generally, an offer or sale pursuant to an exemption provided by Section 517.061, F.S., shall not be integrated with any other offer or sale which is exempt under any other exemption provided by Section 517.061, F.S., for the purposes of determining the availability of either such exemption. However, the determination as to whether sales of securities, made in reliance upon an exemption under Section 517.061(11), F.S., are a part of a larger or single offering which would be required to be integrated with such sales, the following factors shall be considered:

(a) Whether the offers or sales are part of a single plan of financing;

(b) Whether the offers or sales involve issuance of the same class of security;

(c) Whether the offers or sales are made at or about the same time;

(d) Whether the same type of consideration is to be received;

(e) Whether the offers or sales are made for the same general purpose; and,

(f) Whether the offers or sales are made as part of a scheme or device to violate or evade any of the provisions of this act.

(2) Offers or sales made pursuant to Section 517.061(11), F.S., shall not be integrated with offers or sales made by the issuer or on the issuer’s behalf pursuant to a subsequent offering under Section 517.081, F.S., or sold pursuant to a registration statement effective under the Securities Act of 1933, provided the issuer has terminated all offers or sales made pursuant to Section 517.061(11), F.S., prior to the submission of the application for registration. Offers or sales made pursuant to Section 517.061(11), F.S., following an offering registered under Section 517.081, F.S., may or may not be integrated with such an offering registered under Section 517.081, F.S., or sold pursuant to a registration statement effective under the Securities Act of 1933, depending upon the facts and circumstances in each case.

(3) Securities registered with another jurisdiction may be sold in Florida pursuant to Section 517.061(10) 517.061(11), F.S., provided all requirements of Section 517.061(10) 517.061(11), F.S., and rules thereunder are complied with.

(2) The following purchasers shall be excluded in computing the number of purchasers for purposes of Section 517.061(10), F.S.:

(a) The issuer, including any promoter of that issuer;

(b) Any general partner of a limited partnership, regardless of the types of interest in the limited partnership purchased or held by the general partner;

(c) Any purchaser with whom the transaction was consummated outside the State of Florida.

(3) An issuer of securities who elects to offer or sell its own securities pursuant to Section 517.061(10), F.S., may register as a dealer pursuant to Section 517.12(1), F.S. The issuer shall comply with the rules of the Financial Services Commission for registration as a dealer as set forth under Rule 69W-600.001, F.A.C., in addition to the following requirements:

(a) The financial statements required for registration as a dealer must be prepared in accordance with the provisions of Rule 69W-600.0151(4), F.A.C.

(b) Since the securities will not be registered, a copy of the disclosure document for each offering must be submitted although no determination will be made as to the merits of the securities.

(c) The outside front page of the disclosure document shall bear the following in bold face type: “THE SECURITIES BEING OFFERED HAVE NOT BEEN REGISTERED WITH THE OFFICE OF FINANCIAL REGULATION. THE FIRM IS REGISTERED AS A DEALER TO SELL ITS OWN SECURITIES.”

Rulemaking Authority 517.03 FS. Law Implemented 517.061(10) 517.061(11) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-500.01, Amended 7-31-91, Formerly 3E-500.001, Amended ____.

 

69W-500.004 Computation of Number of Purchasers for Purposes of Section 517.061(11), F.S.

Rulemaking Authority 517.03 FS. Law Implemented 517.061(11) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-500.04, Amended 7-31-91, Formerly 3E-500.004, Amended 5-15-07, 10-29-12, Repealed           .

 

69W-500.005 Disclosure Requirements of Section 517.061(10)(a)3. 517.061(11)(a)3., F.S.

(1) Transactions by an issuer which do not satisfy all of the conditions of this rule shall not raise any presumption that the exemption exemptions provided by Section 517.061(10) 517.061(11), F.S., is not available for such transactions. Attempted compliance with this rule does not act as an election; the issuer can also claim the availability of Section 517.061(10) 517.061(11), F.S., outside this rule.

(2) The determination as to whether sales of securities are part of a larger offering (i.e., are deemed to be “integrated”) depends on the particular facts and circumstances. In determining whether sales should be regarded as part of a larger offering and thus should be integrated, the facts described in Rule 69W-500.001, F.A.C., should be considered.

(3) Although sales made pursuant to Section 517.061(11), F.S., and in compliance with this rule, are exempt from the registration provisions of this Act, such exemption does not avoid the anti-fraud provisions of Sections 517.301 and 517.311, F.S.

(2) (4) The provisions of this rule shall apply only to transactions which are consummated with persons in the State of Florida.

(3) (5) The requirement of Section 517.061(10)(a)3. 517.061(11)(a)3., F.S., that each purchaser, or his representative be provided with or given reasonable access to full and fair disclosure of all material information shall be deemed to be satisfied if either paragraph (3)(a) (5)(a) or (b), are complied with:

(a) Access to or Furnishing of Information. Reasonable access to, or the furnishing of, material information shall be deemed to have been satisfied if prior to the sale a purchaser is given access to the following information:

1. through 2. No change.

3. An opportunity to question the appropriate executive officers, or partners, managers, or managing members.

(b) Disclosure Document Offering Circular. At the election of the issuer a disclosure document an offering circular containing the following information may be provided to a purchaser prior to the sale:

1. through 26. No change.

27. A statement indicating that the sale shall be voidable by the purchaser within three days of the sale pursuant to Section 517.061(10)(a)4. , as required by Section 517.061(11)(a)5., F.S., and the business e-mail address where a purchaser may notify the issuer that a purchaser voids a sale;

28. No change.

(4) (6) In the case of an issuer that is subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, (15 U.S.C. §78m, 78o(d)), the provisions of paragraph (3)(b) (5)(b) of this rule, shall be deemed satisfied by providing the following:

(a) through (b) No change.

(5) (7) For purposes of this rule Rule 69W-500.005, F.A.C., the term “Issuer” is defined in Rule 69W-200.001, F.A.C.

Rulemaking Authority 517.03(1) FS. Law Implemented 517.061(10) 517.061(11) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-500.05, Amended 10-14-90, 7-31-91, Formerly 3E-500.005, Amended 9-22-14,              .

 

69W-500.006 Commissions and Compensation Payable in Connection with an Offering Exempted Pursuant to Section 517.061(10) 517.061(11), F.S.

(1) Commissions and compensation may be paid for the sale of an issuer’s securities to any person who:

(a) Is registered as a dealer in the State of Florida pursuant to Section 517.12, F.S.

(b) Is not located in this State and sells to a person not in this State.

(2) Fees paid to attorneys and accountants and other professionals for professional services rendered in connection with the issuance of securities pursuant to Section 517.061(10), F.S., shall not be deemed to constitute compensation for purposes of Section 517.021(10)(b)7.d. 517.061(11)(a)4., F.S.; however, if fees or compensation are paid for the sale of securities this shall be deemed to constitute compensation for purposes of Section 517.021(10)(b)7.d. 517.061(11)(a)4., F.S., and would require registration of the professional under Section 517.12, F.S.

NOTE: The Office of Financial Regulation is deeply concerned about the payment of fees to persons who are acting as dealers but are not registered as such when securities are offered and sold pursuant to Florida’s private placement section. The practice of disguising or characterizing these fees as something other than a sales commission not only defeats the availability of the exemption, but also produces an enormous contingent liability for the issuer. Because of these ramifications, an issuer availing itself of the private placement section should be cautious about any fees that are paid to persons who may subsequently be deemed dealers, including such professionals as attorneys, accountants, and offeree representatives.

Rulemaking Authority 517.03 FS. Law Implemented 517.061(10), 517.061(11) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-500.06, Amended 7-31-91, Formerly 3E-500.006, Amended 3-21-24,             .

 

69W-500.007 General Solicitation or General Advertising in Connection with an Offering Exempted Under Section 517.061(10) 517.061(11), F.S.

(1) For purposes of Section 517.061(10)(a)2. 517.061(11)(a)2., F.S., the requirement that there be no general solicitation or general advertising in connection with an offering exempted under Section 517.061(10) 517.061(11), F.S., shall be deemed to relate only to offers made in Florida in reliance upon Section 517.061(10) 517.061(11), F.S. General solicitation or general advertising may be made in connection with offers made outside of the State of Florida in reliance upon Section 517.061(10) 517.061(11), F.S., where permitted.

(2) Unless deemed not to constitute general solicitation or general advertising pursuant to Section 517.0615, For purposes of Section 517.061(11)(a)2., F.S., general solicitation or general advertising, shall be deemed to include, but not be limited to, for purposes of Section 517.061(10)(a)2., F.S., the following:

(a) through (b) No change.

(3) No change.

Rulemaking Authority 517.03 FS. Law Implemented 517.061(10) 517.061(11) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-500.07, Amended 7-31-91, Formerly 3E-500.007, Amended 10-29-12,              .

 

69W-500.008 Unsolicited Purchase or Sale of Securities Pursuant to Section 517.061(14) 517.061(13), F.S.

(1) For purposes of Section 517.061(14) 517.061(13), F.S., the offer or sale of securities in a transaction meeting the requirements of SEC Rule 144 (17 C.F.R. §230.144), which is incorporated by reference in Rule 69W-200.002, F.A.C., shall be deemed an unsolicited purchase or sale of securities on order of and as agent for another.

(2) For purposes of Section 517.061(14) 517.061(13), a promoter or affiliate of an issuer shall not be deemed an underwriter of or an issuer of, or to be engaged in a sale directly or indirectly for the benefit of an issuer with respect to, any securities he has owned beneficially for at least one (1) year.

(3) For purposes of this rule Rule 69W-500.008, F.A.C., the term “Issuer” is defined in Rule 69W-200.001, F.A.C.

Rulemaking Authority 517.03(1) FS. Law Implemented 517.061(14) 517.061(13) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-500.08, Amended 10-14-90, Formerly 3E-500.008, Amended 9-30-10, 9-22-14,             .

 

69W-500.011 Registration of Issuer Under Section 517.061(11), F.S., as Dealer.

Rulemaking Authority 517.03 FS. Law Implemented 517.061(11), 517.12(1) FS. History–New 9-20-82, Formerly 3E-500.11, Amended 7-31-91, Formerly 3E-500.011, Amended 5-6-15, 11-15-16, 3-21-24, Repealed                 .

 

69W-500.013 Exemption/Mobile Home Parks/Limited Purpose Stock Offering.

Transactions which involve the offer or sale of stock, bonds, or other instruments deemed to be securities as defined in Section 517.021(25) 517.021(23), F.S., offered or sold by or on behalf of a non-profit organization corporation consisting solely of property owners of a singular mobile home park, where the securities evidence interest in the organization shares of the corporation, are hereby exempted from the registration requirements of Section 517.07, F.S., provided that such securities meet and comply with all of the following criteria:

(1) No change.

(2) That the solicitation and subsequent sale of securities is made exclusively by the non-profit organization corporation to persons retaining a property interest in the mobile home park and no form of general solicitation or general advertisement is instituted.

(3) through (4) No change.

Rulemaking Authority 517.03 FS. Law Implemented 517.061(21) 517.061(19) FS. History–New 1-8-86, Amended 7-31-91, Formerly 3E-500.013, Amended 9-30-10, 10-29-12,            .

 

69W-500.014 Court Approved Transactions.

Rulemaking Authority 517.03(1), 517.061(18) FS. Law Implemented 517.061(19) FS. History–New 3-29-92, Formerly 3E-500.014, Repealed            .

 

69W-500.017 Compensatory Benefit Plan Exemption.

Rulemaking Authority 517.03(1), 517.061(19) FS. Law Implemented 517.061(19) FS. History–New 11-25-01, Formerly 3E-500.017, Amended 9-30-10, 9-22-14, Repealed               .

 

69W-500.019 Accredited Investor Exemption

(1) Issuers conducting an offering pursuant to Section 517.061(11), F.S., shall file a notice of transaction, a consent to service of process, and a copy of the general announcement, electronically on the Office of Financial Regulation’s website at https://real.flofr.gov through the Regulatory Enforcement and Licensing (REAL) System within fifteen (15) days after the first sale is made in this state.

(2) A notice of transaction providing the following information will be deemed to satisfy the requirements of subsection (1):

(a) A statement that the issuer is conducting an offering pursuant to Section 517.061(11), F.S.;

(b) The business name of the issuer;

(c) The issuer’s state of incorporation or organization;

(d) The business address of the issuer;

(e) The date of the first sale made in this state; and

(f) Name, phone number, and email address for the person to be contacted about the filing.

(3) A consent to service of civil process, similar to that provided for in Section 517.101, F.S., will be deemed to satisfy the requirements of subsection (1).

Rulemaking Authority 517.03(1), 517.061(11) FS. Law Implemented 516.061(11) FS. History–New                   .

 

69W-500.020 Florida Invest Local Exemption.

(1) An issuer of securities under the Florida Invest Local Exemption, Section 517.0612, F.S., shall file electronically on the Office of Financial Regulation’s website at https://real.flofr.gov through the Regulatory Enforcement and Licensing System (REAL) System no less than five (5) business days before the offering commences, the following:

(a) Notice of Offering Under Florida Invest Local Exemption, Form OFR-FILE (10/24). A sample form is hereby incorporated by reference and available at XXXXX or from the Office at XXXXX.

(b) A copy of the issuer’s disclosure statement required by Section 517.0612(8), F.S.

(2) Amendment. If the information contained in the Form OFR-FILE or the disclosure statement becomes inaccurate for any reason, the issuer shall amend the information by filing an amended Form OFR-FILE or disclosure statement with the Office within three (3) business days of the change. Issuers shall amend information by filing an amended Form OFR-FILE or disclosure statement electronically with the Office through the REAL System. Failure to file amendments shall be considered a violation of Section 517.0612(10), F.S.

Rulemaking Authority 517.03(1), 517.0612(10) FS. Law Implemented 516.0612(10), FS. History–New               .

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Alisa G. Goldberg, Director, Division of Securities

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: June 12, 2024

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: June 20, 2024