Section 710 IAC 4-2-1 - Nonpublic offering exemptionAuthority: IC 23-19-6-5
Affected: IC 23-19-2-2
Sec. 1.
(a) For purposes of calculating the number of purchasers under IC 23-19-2-2(14), the following rules shall apply:(1) The following purchasers shall be excluded:(A) Any relative, spouse, or relative of the spouse of a purchaser who has the same principal residence as the purchaser.(B) Any trust or estate in which a purchaser and any of the persons related to the purchaser (as specified in clause (A) or (C)) collectively have more than fifty percent (50%) of the beneficial interest (excluding contingent interests).(C) Any corporation or other organization of which a purchaser and any of the persons related to the purchaser (as specified in clause (A) or (B)) collectively are beneficial owners of more than fifty percent (50%) of the equity securities (excluding directors' qualifying shares) or equity interest.(2) A corporation, partnership, or other entity shall be counted as one (1) purchaser. If, however, that entity is organized for the specific purpose of acquiring the securities offered and is not an accredited investor, then each beneficial owner of equity securities or equity interests in the entity shall count as a separate purchaser for all provisions of IC 23-19-2-2(14).(b) The issuer must satisfy all necessary provisions of IC 23-19-2-2(14) for all purchasers whether or not they are included in calculating the number of purchasers. Clients of an investment adviser or customers of a broker-dealer shall be considered the purchasers under IC 23-19-2-2(14) regardless of the amount of discretion given to the investment adviser or broker-dealer to act on behalf of the client or customer.(c) In all offerings and sales under IC 23-19-2-2(14), the issuer shall make available to each purchaser and to his or her purchaser representatives, if any, at a reasonable time prior to his or her purchase of securities, the opportunity to: (1) ask questions and receive answers concerning the terms and conditions of the offering;(2) inspect and copy all material documents relating to the offering; and(3) obtain any additional information that the issuer possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished under IC 23-19-2-2(14).(d) Offers and sales that are exempt under IC 23-19-2-2(14) may not be combined with offers and sales exempt under any other section or provision of IC 23-19, provided, however, that this limitation shall not require an issuer to make an election and an issuer failing to satisfy IC 23-19-2-2(14) may claim the availability of any other applicable exemption. In any proceeding involving the availability of an exemption under IC 23-19-2-2(14), the burden of proving compliance with the conditions of the exemption is upon the person claiming it. In view of the: (1) objectives of IC 23-19-2-2(14); and(2) purposes and policies underlying IC 23-19; the exemption under IC 23-19-2-2(14) is not available to any issuer with respect to any transaction that, although in compliance with this exemption, is part of a plan or scheme to evade registration or the conditions or limitations explicitly stated in IC 23-19-2-2(14).
Securities Division; 710 IAC 4-2-1; filed Jun 28, 2010, 2:36 p.m.: 20100728-IR-710100044FRAReadopted filed 5/12/2016, 1:47 p.m.: 20160608-IR-710160136RFAReadopted filed 11/30/2022, 4:01 p.m.: 20221228-IR-710220301RFA