California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2 - Corporate Securities
Article 4 - Standards for the Exercise of the Commissioner's Authority
Subarticle 10 - Real Estate Programs
Suitability of the Participant
Section 260.140.112.2 - Sales to Appropriate Persons

The sponsor and each person selling program interests on behalf of the sponsor or program shall make every reasonable effort to assure that the persons being offered or sold program interests, by reason of their educational, business, or financial experience, can be reasonably assumed to have the capacity to understand the fundamental aspects of the program and meet the suitability standards imposed. The sponsor or its representatives shall ascertain that the investor can bear the economic risk of an investment in the program and that the program interests are appropriate for the investor's investment objectives, portfolio structure, and financial situation.

1. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
2. Renumbering of former section 260.140.112.2 to section 260.140.112.3 and new section filed 5-18-92; operative 6-17-92 (Register 92, No. 22).

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.