New Jersey Administrative Code
Title 13 - LAW AND PUBLIC SAFETY
Chapter 47A - BUREAU OF SECURITIES
Subchapter 12 - EXEMPTIONS FOR SECURITIES TRANSACTIONS AND SECURITIES OFFERINGS; EMPLOYEE BENEFIT PLANS; ACCREDITED INVESTORS
Section 13:47A-12.2 - Employee benefit plans
Current through Register Vol. 56, No. 18, September 16, 2024
(a) 49:3-50(a)(11) provides an exemption from registration for "any investment contract issued in connection with an employees' or professional stock purchase, savings, pension, profit-sharing, retirement or similar benefit plan and securities issued pursuant to an employee benefit plan." 49:3-50(a)(11) exempts the agreement between the employer and employee insofar as it may be deemed to be an investment contract. With respect to employee benefit plans which are qualified under Section 401 of the Internal Revenue Code ( 26 U.S.C. § 401) , subject to the provisions of Part 4 of Subtitle B of Title I of ERISA ( 29 U.S.C. §§ 1001 et seq.), or administered by a national or state bank acting in a fiduciary capacity, 49:3-50(a)(11) shall be construed to provide a transactional exemption for all securities underlying the investment contract.
(b) Interests in the plan or securities underlying the investment contract in employee benefit plans which are exempt from Federal securities registration pursuant to SEC Rule 701, promulgated under the Securities Act of 1933 ( 17 CFR 230.701) , shall also be exempt from registration in New Jersey if offered or sold pursuant to 49:3-50(a)(11).
(c) If a plan otherwise exempt under this section contemplates distribution in kind of restricted stock to plan members upon withdrawal of the members from the plan, resale of the underlying securities by the members may require registration of the securities under Federal law. If Federal law requires registration of the securities being resold, State registration may be required, unless the security or transaction is otherwise exempt from State registration.
(d) The definition of "agent" in 49:3-49(b) specifically excludes an individual who represents an issuer in effecting transactions in a security exempted by 49:3-50(a)(11); therefore, no agent registration is required for such an individual to effect transactions with respect to the employee benefit plans or the securities underlying the employee benefit plans described in (a) and (b) above.
(e) The employee benefit plan exemption includes employees, directors, and consultants who provide services to the issuer, so long as the plan qualifies under Rule 701 of the Securities Act of 1933 or is otherwise in compliance with 49:3-50(a)(11) and this section.
