Utah Administrative Code
Topic - Commerce
Title R164 - Securities
Rule R164-11 - Registration Statement
Section R164-11-2 - Hearings for Certain Exchanges of Securities
Universal Citation: UT Admin Code R 164-11-2
Current through Bulletin 2024-06, March 15, 2024
(A) Authority and purpose.
(1) The Division enacts this rule under
authority granted by Sections
61-1-11.1
and
61-1-24.
(2) This rule sets forth the procedure and
requirements to be met when seeking a fairness hearing for certain exchanges of
securities.
(3) A finding of
fairness under Section
61-1-11.1
does not constitute a registration or exemption except as provided by Paragraph
(H).
(B) Definitions.
(1) "Director" means the Director of the
Division of Securities, Utah Department of Commerce.
(2) "Division" means the Division of
Securities, Utah Department of Commerce.
(3) "Interested person" means any officer,
director or security holder of either party involved in the transaction, or any
other person as the Division may permit.
(C) Parties.
The Division will only consider an application under Section 61-1-11.1 for a transaction where:
(1) Either
party to the transaction is a domestic business entity formed, organized or
incorporated under the laws of Utah;
(2) Either party to the transaction is a
business entity whose headquarters or principal place of business is located in
Utah; or
(3) Thirty percent (30 %)
or more of the persons to whom it is proposed to issue securities or to deliver
other consideration in an exchange under Subsection
61-1-11.1(1)
are persons who are Utah residents.
(D) Application Requirements.
An application may be made to the Division under Subsections 61-1-11.1(1) and 61-1-11.1(5) by filing with the Division:
(1)
Division Form 11--Application for Hearing for Certain Exchanges of
Securities;
(2) NASAA Form U-2,
Uniform Consent to Service of Process;
(3) A fee as specified in the Division's fee
schedule; and
(4) Other documents
as the Division may request.
(E) Notice.
(1) At least twenty (20) calendar days prior
to the hearing, the applicant must provide written notice of the hearing, as
approved by the Division, to any person to whom it is proposed to issue
securities or to deliver other consideration in an exchange under Subsection
61-1-11.1(1).
Such notice shall be effective pursuant to Subsection
16-10a-103(5).
Such notice period may be waived upon the demonstration of good cause by the
applicant.
(2) The notice must
contain the following information:
(a) A
brief statement of the facts that give rise to the hearing, including an
outline of the terms and conditions of the proposed transaction;
(b) A statement of the issues to be
considered at the hearing, together with the relevant statutes and
rules;
(c) The time and place of
the hearing as specified by the Division;
(d) The procedures for participating in the
hearing by telephone or affidavit as approved by the Division; and
(e) Any other information requested by the
Division.
(3) Prior to
or at the hearing, the applicant must file an affidavit with the Division
stating that a notice has been sent, in compliance with Subparagraphs (E)(1)
and (E)(2), to all persons to whom it is proposed to issue securities or to
deliver other consideration in an exchange under Subsection
61-1-11.1(1),
including a description of how and when the notice was
sent.
(F) Hearing.
(1) Within a reasonable time after the
receipt of an application meeting the requirements of Section
61-1-11.1
and this rule, the Division may schedule a hearing to be conducted under
Subsection
61-1-11.1(2).
(2) A hearing under Section
61-1-11.1
shall be conducted by a hearing officer designated by the Director.
(3) Any interested person may attend a
hearing under Section 61-1-11.1.
(4) Any interested person may participate in
the hearing by giving written notice to the Division at least two (2) days
prior to the hearing, indicating such person's intention to appear and
participate in the hearing. Interested persons may participate:
(a) In person;
(b) By telephone; or
(c) By affidavit.
(5) The hearing shall be recorded
electronically and transcribed by the Division. The transcription costs will be
assessed to the Applicant. Upon request, the Division will hire a court
reporter at the requester's expense.
(G) Findings and Order.
Within a reasonable time after completion of the hearing, the Director shall issue an order pursuant to Subsection 61-1-11.1(3).
(H) Exemptions.
The Issuer may request that the Division determine that the transaction is exempt from registration under Subsection 61-1-14(2)(s).
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