Ohio Administrative Code
Title 1301:6 - Division of Securities
Chapter 1301:6-3 - Registration of Securities; Licensing
Section 1301:6-3-14 - Exceptions to dealer license and securities and exchange commission registration requirements
Universal Citation: OH Admin Code 1301:6-3-14
Current through all regulations passed and filed through September 16, 2024
(A) A dealer's license shall be required of a person who acts as a dealer, as defined in division (E) of section 1707.01 of the Revised Code subject, to the provisions of division (A)(1) of section 1707.14 of the Revised Code, and to the following exceptions:
(1) Without a
license, a person may sell the promissory notes or commercial paper of its
subsidiary, provided such securities are not offered for sale, directly or
indirectly, to the public, as that term is defined in paragraph (D) of rule
1301:6-3-02 of
the Administrative Code.
(2)
Without a license, a person which is organized not for profit and whose net
earnings do not inure to the benefit of any person, may sell its subsidiaries'
securities which do not constitute evidence of indebtedness or a promise to pay
money, provided the total cost of sale does not exceed two per cent of their
aggregate sale price, plus five hundred dollars.
(3) Without a license, a person may sell any
securities of its subsidiary, which have been issued under an approved plan of
reorganization, recapitalization or refinancing pursuant to section
1707.04 of the Revised Code.
(4) Without a license, a person
may sell the securities of its subsidiary in the transactions specified in
section 1707.06 of the Revised Code.
(5) Without a license, a person
may distribute information on available products and services on or through the
internet or similar electronic medium provided that:
(a) The distribution of information is not
specifically directed to any person in this state;
(b) The distribution of information consists
solely of the dissemination of general information regarding products and
services;
(c) The distribution of
information contains a legend which clearly states that:
(i) The person may only act as a dealer or
salesperson in this state if the person is first licensed by the division or
properly excepted from licensure; and
(ii) Follow-up individualized responses by
the person in this state that involve acting as a dealer or salesperson will
not be made unless the person is first licensed by the division or properly
excepted from licensure;
(d) The distribution of information contains
a mechanism, including but not limited to, a technical "firewall" or other
implemented policies and procedures, designed to reasonably ensure that prior
to any direct communication resulting from the distribution of information, the
person is first licensed by the division or properly excepted from licensure;
(e) In the case of distribution of
information by a person who would qualify as a "salesman" as defined in
division (F) of section
1707.01 of the Revised Code, in
addition to the foregoing:
(i) The dealer
with whom the person is associated is prominently disclosed in the distribution
of information;
(ii) The dealer
with whom the person is associated retains responsibility for reviewing and
approving the content of the distribution of information;
(iii) The dealer with whom the person is
associated first authorizes the distribution of information; and
(iv) The distribution of information is
within the scope of authority granted to the person by the dealer with whom the
person is associated.
(6) Without a license, a bank may sell
securities to an institutional investor.
(B) In accordance with division (D) of section 1707.14 of the Revised Code, the division may, by division order, exempt a dealer from the requirement of being registered with the securities and exchange commission set out in division (B) of section 1707.14 of the Revised Code where the division determines that all of the following have been met:
(1) The dealer has been continuously licensed
by the Ohio division of securities since October 11, 1994;
(2) The dealer, alone or with any other
dealer with which it is affiliated, does not employ more than five securities
salespersons at any time;
(3) No
less than eighty per cent of the securities bought and sold by the dealer, as
determined by the aggregate price of all securities bought and sold by the
dealer, are securities of banks, as the term "bank" is defined in division (O)
of section 1707.01 of the Revised Code,
which have their principal place of business in Ohio;
(4) The dealer enters into an undertaking
with the division whereby the dealer agrees that it will immediately surrender
any exemption from the requirement of being registered with the securities and
exchange commission in the event that it fails to disclose in writing to any
person to whom it sells securities its compensation, however that compensation
is characterized, for the sale of the securities; and
(5) The dealer enters into an undertaking
with the division whereby the dealer agrees that it will immediately surrender
any exemption from the requirement of being registered with the securities and
exchange commission in the event that it no longer meets the standards set
forth in paragraphs (B)(1), (B)(2) and (B)(3) of this rule.
Five Year Review (FYR) Dates:
06/08/2015 and
06/08/2020
Promulgated
Under: 119.03
Statutory
Authority: 1707.20
Rule
Amplifies: 1707.14
Prior
Effective Dates: 12-31-75; 11-30-94; 1-21-96; 8-10-98; 7-29-99; 11-27-00;
5-21-01; 5-23-03
Disclaimer: These regulations may not be the most recent version. Ohio may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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