Current through Bulletin 2024-18, September 15, 2024
A. Preliminary Notes
(1)R164-11-7 b applies only to public
offerings which are registered by qualification pursuant to Section 10 of the
Utah Uniform Securities Act (the "Act") and the rules thereunder.
(2) This R164-11-7b and
R164-10-2 both require certain documents to be filed and provide that failure to comply
with these requirements is cause for denial, suspension or revocation of the
effectiveness of a registration statement.
(3) This rule R164-11-7 b is a statement of
what has been the position of the Utah Securities Division (the "Division") in
the past under Rule A67-03-12 and applies to all registration statements which
become effective on or after May 10, 1983.
B. Term of Impound
(1) The applicant for registration by
qualification under Section 10 of the Act and the rules thereunder may choose a
term of not less than one month and not more than one year from the effective
date of the registration statement.
(2) The term of the impound shall be
expressed by the number of months and shall not be expressed by the number of
days.
C. Amount to be
Impounded
(1) The amount to be impounded
shall be the greater of:
(a) Twenty-five
percent of the aggregate offering price of the securities to be registered plus
offering expenses; OR
(b) The
minimum amount required to sustain the business proposed by the registrant for
one full year from the release of the impound; OR
(c) The minimum amount proposed to be sold by
the applicant pursuant to the registration statement.
D. Where Funds are to be Impounded
Funds may be impounded at any federal or state bank or
savings institution.
E.
Conditions of Impound
(1) The applicant shall
file a completed FORM 11-7b with the Division as part of the registration
statement.
(2) The conditions of
impound are stated on FORM 11-7b and are herein incorporated as requirements of
this R164-11-7 b.
F.
Release of Impounded Funds
(1) The impounded
funds shall be released only by an ORDER OF THE DIVISION.
(2) The impounded funds shall be released to
the registrant where:
(a) All registration
requirements which, pursuant to the rules of the Division needed to be met by
such date, have been met;
(b) The
registrant requests the release in writing; and
(c) The Division receives written
confirmation from the financial institution impounding the funds of the amount
which has been deposited into the impound.
G. Certain Registrants
Where the registrant in a registration by qualification is a
security holder who is not conducting a public offering for or on behalf of the
issuer of the securities which are to be sold in the offering, no fund impound
is required by this R164-11-7b; provided, however, that where an offering has a
"minimum" required to be sold in order to consummate the transaction, a fund
impound is required.
