Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
292.330,
292.411,
292.412
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
292.500(3) authorizes the
commissioner to promulgate administrative regulations necessary to carry out
the provisions of KRS Chapter 292.
KRS
292.411(1)(f) and (s)
require the commissioner to prescribe the notice filing form to be used, the
filing fee to be paid, and the records to be kept by an issuer.
KRS
292.412(2) requires the
commissioner to prescribe the filing procedure and form to be used by
registered broker-dealers operating an Internet Web site pursuant
KRS
292.411(1)(r).
KRS
292.412(3), (5), (6), (7), and
(8) require the commissioner to prescribe
filing procedures and forms for applications and renewal applications, the
filing fees to be paid, the records to be kept, and the examination fees for
Internet Web site operators. This administrative regulation establishes the
required forms, fees, filing procedures, and recordkeeping requirements for
persons operating pursuant to
KRS
292.411 and
KRS
292.412, the Kentucky Intrastate
Crowd-funding Exemption.
Section 1.
Definitions.
(1) "Commissioner" is defined by
KRS
292.310(4).
(2) "Completion of an offering" means the
occurrence of one (1) of the following:
(a)
The date upon which the offering deadline expires;
(b) The date upon which the transaction
becomes void pursuant to
KRS
292.411(1)(i); or
(c) If the offering is closed prior to the
offering deadline pursuant to
KRS
292.411(k), the date of
early closing.
(3)
"Internet Web site operator" means a person registered as an Internet Web site
operator pursuant to
KRS
292.412.
Section 2. Issuer Notice Filings. An issuer
making a notice filing pursuant to
KRS
292.411(1)(f) shall complete
and submit the following:
(1) Form CF 1,
Kentucky Intrastate Crowdfunding Exemption Issuer Notice Filing Form with all
required attachments;
(2) Form CF
2, Final Report of Sales Form no later than thirty (30) days after the
completion of an offering conducted pursuant to
KRS
292.411; and
(3) A filing fee of $500.
Section 3. Registration of
Internet Web site operators.
(1) A person
applying for registration as an Internet Web site operator shall complete and
submit the following:
(a) Form CF 3, Internet
Web Site Operator Registration Form with all required attachments;
(b) Form CF 4, Internet Web Site Operator
Surety Bond Form; and
(c) A filing
fee of $250.
(2) An
Internet Web site operator applying to renew its registration pursuant to
KRS
292.412(6) shall complete
and submit the following between December 1 and December 15:
(a) Form CF 3, Internet Web Site Operator
Registration Form with all required attachments; and
(b) A renewal fee of $250.
(3) Except as provided in
subsection (4) of this section, a registration shall be effective until
December 31 of the year in which the registration is approved by the
commissioner.
(4) A renewal
registration shall be effective for the calendar year designated by the
commissioner.
Section 4.
Broker-dealer Notice Filings.
(1) Form CF 5,
Broker-Dealer Internet Web Site Operator Notice Filing Form shall be completed
by a broker-dealer making a notice filing pursuant to
KRS
292.412(2).
(2) A notice filing shall be filed before the
broker-dealer operates an Internet Web site pursuant to
KRS
292.411(1)(r).
(3) Except as provided in subsection (4) of
this section, a notice filing made pursuant to this section shall be effective
until December 31 of the year in which the filing is made.
(4) A notice filing made between December 1
and December 31 of the year in which a previous notice filing expires shall be
effective for the subsequent calendar year.
Section 5. Recordkeeping requirements.
(1) An issuer shall accurately make and keep
the following books and records relating to any offer or sale made pursuant to
KRS
292.411:
(a)
All forms and documents that are required by
KRS
292.411 or this administrative regulation to
be filed with the commissioner;
(b)
Evidence of residency from each purchaser in any offering made by the issuer as
required by
KRS
292.411(1)(o);
(c) Evidence of accredited investor status
for each purchaser making an investment exceeding $10,000 as required by
KRS
292.411(1)(e) and
(o);
(d) Evidence reflecting all offers made by
the issuer;
(e) Evidence reflecting
all sales made by the issuer;
(f)
Manually or electronically signed copies of all purchaser certifications as
required by
KRS
292.411(1)(n);
(g) All limited notices distributed in
accordance with
KRS
292.411(1)(r) 7.;
(h) All notices of cancellation of commitment
to invest pursuant to
KRS
292.411(1)(j);
(i) All notices of closing of an offering
prior to the offering deadline delivered pursuant to
KRS
292.411(1)(k);
(j) Quarterly reports made pursuant to
KRS
292.411(1)(t); and
(k) All other communications with purchasers
in the offering.
(2) An
Internet Web site operator shall accurately make and keep the following books
and records:
(a) Records of fees received
pursuant to
KRS
292.412(4)(a);
(b) All agreements with issuers offering
securities through the Internet Web site operator's Web site;
(c) All information provided to the Internet
Web site operator by an issuer to establish that the issuer is organized under
the laws of Kentucky and authorized to do business in Kentucky as required by
KRS
292.411(1)(r) 1.;
(d) Evidence reflecting the limitation of Web
site access as required by
KRS
292.411(1)(r) 3.;
(e) All correspondence or other
communications with issuers, prospective purchasers, or purchasers;
(f) All information made available through
the Internet Web site relating to an offering; and
(g) Any other information provided by or
through the Internet Web site operator to issuers, prospective purchasers, or
purchasers.
Section
6. Kentucky intrastate crowdfunding examination fees. The fee for
a routine examination of an Internet Web site operator shall be fifty (50)
dollars per working hour. A fee shall not be charged for examination work by an
examiner-trainee.
Section 7.
Incorporation by reference.
(1) The following
material is incorporated by reference:
(a)
"Form CF 1, Kentucky Intrastate Crowdfunding Exemption Issuer Notice Filing
Form", December, 2019;
(b) "Form CF
2, Final Report of Sales Form", December, 2019;
(c) "Form CF 3, Internet Web Site Operator
Registration Form", December, 2019;
(d) "Form CF 4, Internet Web Site Operator
Surety Bond Form", December, 2019; and
(e) "Form CF 5, Broker-Dealer Internet Web
Site Operator Notice Filing Form", December, 2019.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Department of
Financial Institutions, 500 Mero St 2SW19, Frankfort, Kentucky 40601, Monday
through Friday, 8 a.m. to 4:30 p.m. This material may also be obtained at
www.kfi.ky.gov.
STATUTORY AUTHORITY:
KRS
292.500(3)