Oregon Administrative Rules
Chapter 441 - DEPARTMENT OF CONSUMER AND BUSINESS SERVICES, FINANCE AND SECURITIES REGULATION
Division 65 - REGISTRATION OF SECURITIES
Section 441-065-0150 - Escrow of Proceeds

Universal Citation: OR Admin Rules 441-065-0150

Current through Register Vol. 63, No. 9, September 1, 2024

(1) An escrow, or similar arrangement, must be established where, because of the nature of the intended use of the funds or the nature of the project or business plan, a minimum amount must be raised within or outside this state in order for the project to get underway with a reasonable chance of success even if no additional capital is raised.

(2) When an escrow is required:

(a) The escrow agent shall be an institution licensed to conduct banking, savings and loan, trust or other escrow activities or a licensed professional whose requirements of licensure requires the segregation of funds of others into fiduciary trust accounts; but it cannot be the issuer, a promoter of an issuer to be formed, or an affiliate of such issuer or promoter;

(b) The escrow terms shall include instructions that the funds placed into escrow shall be held in trust for the benefit of the investors and shall not be released to the issuer until the minimum amount of funds set forth in the application for registration has been raised; and

(c) The provisions of this section may be satisfied by the holding of the funds without formal escrow arrangement by a person described in subsection (3)(a) of this rule, until the minimum amount of funds has been received for the account of the purchasers.

(3) The requirements of this rule may be waived by the Director upon a showing that an escrow is not necessary and that investor rights are adequately protected.

Statutory/Other Authority: ORS 59.085 & 59.285

Statutes/Other Implemented: ORS 59.085 & 59.065

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