To provide an exemption from securities registration requirements for single-share stock certificates offered or sold as gifts.

DEPARTMENT OF FINANCIAL SERVICES
Securities

RULE NO: RULE TITLE
69W-500.018: Exemption for the offer or sale of a single-share stock certificate as a gift
PURPOSE AND EFFECT: To provide an exemption from securities registration requirements for single-share stock certificates offered or sold as gifts.
SUBJECT AREA TO BE ADDRESSED: Exemption from Securities Registration Requirements
SPECIFIC AUTHORITY: 517.03(1), 517.061(19) FS.
LAW IMPLEMENTED: 517.061(19) FS.
IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE NOTICED IN THE NEXT AVAILABLE FLORIDA ADMINISTRATIVE WEEKLY.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Andrea Moreland, Office of Financial Regulation, The Fletcher Building, Suite 118, 200 E. Gaines Street, Tallahassee, FL 32399-0370, [phone]

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

69W-500.018 Exemption for the Offer or Sale of a Single-share Stock Certificate as a Gift.

(1) In accordance with Section 517.061(19), Florida Statutes, the Office of Financial Regulation has determined that it is not in the public interest to subject transactions involving the offer or sale of single-share stock certificates to the registration requirements of Sections 517.07 and 517.12(1), Florida Statutes, when the certificates are mounted, matted, or framed, and sold as gifts, decorations, or novelty items at prices significantly higher than the market value of the stock. These transactions fall within the purview of the exemption criteria of Section 517.061(19), Florida Statutes, due to the small dollar amount of the securities involved and the limited character of the offering. These transactions are more analogous to the sale of retail goods than investment products. As a result, the public interest would not be served by the application of Sections 517.07 and 517.12(1), Florida Statutes to this type of transaction.  In order for a transaction to qualify for an exemption from the registration requirements of Sections 517.07 and 517.12(1), Florida Statutes, under this rule, the offer or sale of the stock certificate must comport with all the following requirements:

(a) Such offer and sale of a single-share stock certificate by a framer is marketed as a gift, decoration, or novelty item,

(b) The single-share stock certificate is mounted, matted, or framed and sells for at least twice the purchase price of the underlying share of the stock at the time it was purchased by the single-share stock certificate retailer;

(c) The single-share stock certificate is not offered for investment purposes by the single-share stock certificate retailer;

(d) Such single-share stock certificate retailer does not offer investment advice, or directly or indirectly promote itself as a dealer, and is not paid compensation solely for single-share purchase transaction by the single-share stock certificate retailer;

(e) Such single-share purchase transaction by the single-share stock certificate retailer is made and intended, directly or indirectly, for the purpose of the sale of the stock certificate as a gift, decoration, or novelty item to the purchaser;

(f) The single-share purchase transaction by the single-share stock certificate retailer and the transfer of ownership of the single-share certificate to the purchaser must be completed within sixty (60) days after the purchase of the stock by the single-share stock certificate retailer; and

(g) Such offer and sale by a single-share stock certificate retailer is not made for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading any provision of Chapter 517, Florida Statutes.

(2) For purposes of this rule, the term “single-share stock certificate retailer” means a person or business entity engaged in the business of framing or mounting single-share stock certificates for retail sale to purchasers as gifts, decorations, or novelty items in accordance with the requirements of this rule. The term “single-share stock certificate retailer” also includes the employees of the person or business entity.

Specific Authority 517.03(1), 517.061(19) FS. Law Implemented 517.061(19) FS. History–New_________.