La. Admin. Code tit. 10 § XIII-705

Current through Register Vol. 50, No. 11, November 20, 2024

Section XIII-705 - Private Offering Exemption

A. By authority delegated to the commissioner in R.S. 51:709(15) to promulgate rules thereunder, a transaction described in Subsection B is determined to be exempt from the registration provisions of R.S. 51:705.

B. Any offer or sale of securities, other than an offer or sale described in §703 B, made in compliance with §4(2) of the Securities Act of 1933 and which satisfies the following further conditions and limitations.

1. The transaction meets the requirements of §703. B 1

2. The transaction meets the requirements of §703. B 2

3. Neither the issuer nor any person acting on its behalf shall offer or sell the securities by any form of general solicitation or general advertising, including, but not limited to, the following:

a. any advertisement, article, notice, or other communications published in any newspaper, magazine or similar media or broadcast over television or radio; and

b. any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

4.

a. Any offer or sale not involving any public offering so long as:

i. the issuer or other seller shall reasonably believe that there are no more than 35 purchasers of securities from the issuer or other seller in any offering during any period of 12 consecutive months; and

ii. the buyers represent that they are buying for investment and not for public distribution or resale.

b. For purposes of calculating the number of purchasers under this Paragraph 4, Rule 501(e) promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, as that rule now exists and as it may hereafter be amended from time-to-time, shall apply.

c. For purposes of determining whether a purchaser is a resident of Louisiana within the meaning of this Paragraph 4, Rule 147(d) promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, as that rule now exists and as it may hereafter be amended from time-to-time, shall apply.

5. The transaction meets the requirements of Rule 502(d) promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, as that rule now exists and as it may hereafter be amended from time-to-time.

C. Without excluding other types of communications which may not constitute general solicitation or general advertising, the following types of communications shall not be deemed to violate the prohibitions of §705. B.3 of this Section:

1. a notice, circular, advertisement, letter, article, or other communication published or transmitted by an issuer, a sponsor, a dealer or an affiliate of an issuer, whether or not such communication is published during the time when an offering (the "current offering") is being made by such issuer, sponsor, dealer, or affiliate, that another offering has been completed, that another program has sold property owned by such program, that another program has been completed, or any similar notice not making any reference to the current offering;

2. generic advertising by a dealer which refers to the types of investments offered by such dealer and which does not make reference to any specific offering sponsored by the dealer or an affiliate of the dealer;

3. a notice, circular, advertisement, letter, article or other communication concerning the business of the issuer, a sponsor or one or more of their affiliates or concerning the industry in which the issuer, a sponsor or one or more of their affiliates is engaged and which communication does not make reference to the offering of securities by the issuer, the sponsor or their affiliates;

4. an article, speech, letter or other communication concerning the issuer, a sponsor, a dealer or one or more of their affiliates which is not paid for by any of such persons, and which is by nature more educational or informative than solicitory, even though such article, speech, letter or other communication makes reference to offerings by such persons in general;

5. an article, speech, letter or other communication concerning the issuer, a sponsor, a dealer or one or more of their affiliates, which is not paid for by any of such persons, which is by nature more educational or informative than solicitory, and which is published by someone other than such issuer, sponsor, dealer or one or more of their affiliates, even though such article, speech, letter or other communication makes references to offerings of such persons in general and to specific offerings of such persons currently being made;

6. a seminar or meeting whose attendees have not been invited by any general solicitation or general advertising.

D.

1. For purposes of this Section, offers and sales that are made more than six months before the start of an offering or are made more than six months after completion of an offering will not be considered part of that offering, so long as during those six-month periods there are no offers or sales of securities by or for the issuer that are of the same or similar class as those offered or sold under the offering, other than those offers or sales of securities under an employee benefit plan as defined in Rule 405 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

2. For purposes of this Section, offers, offers to sell, offers for sale and sales of interests, including preformation interests, in a partnership shall be deemed to constitute a discrete offering not integrable with other offers or sales of interests in other entities involving the same sponsor or an affiliate thereof (a common sponsor), even if other safe harbor provisions provided by rule and administrative or judicial interpretation are not available, if all of the following conditions are met. No presumption shall arise as to whether offerings that do not meet all of the following conditions are integrable with other offerings, and the administrative and judicial interpretations on integration in effect at the time thereof shall apply.

a. Separate Entity. The partnership shall be a separate legal entity with separate books and records, and funds received by or contributed to the partnership shall not be commingled with funds of a common sponsor or any other entity with a common sponsor.

b. Economic Independence. The partnership shall, at the time interests therein are offered and sold, have an independent opportunity to meet its primary investment objectives, i.e., the economic results of its investments shall not be substantially dependent upon the creation, continued existence or economic results of the investments of another entity previously, simultaneously, or subsequently formed with a common sponsor.

c. Application of Proceeds. Whether or not the assets in which the partnership proposes to invest are specifically identified to offerees, no material portion of the gross offering proceeds of the partnership shall be invested in properties in which another entity with a common sponsor shall invest, or shall have invested (and continue to hold invested) a material portion of its gross offering proceeds.

d. If the assets in which the partnership intends to invest at least 50 percent of its gross offering proceeds as its principal business or businesses are not specifically identified to offerees, then:

i. each other entity with a common sponsor previously formed to conduct the same general types of activities shall have invested or committed for investment the major portion of its gross offering proceeds prior to the commencement of the offering of the partnership interests; and

ii. no simultaneous or subsequent offering of interests in another entity with a common sponsor organized for the same general types of activities shall be commenced before the partnership has invested or committed for investment the major portion of its gross offering proceeds, unless the assets in which such other entity intends to invest at least 50 percent of its gross offering proceeds are specifically identified to its offerees.

La. Admin. Code tit. 10, § XIII-705

Promulgated by the Department of Commerce, Office of Financial Institutions, LR 10:742 (October 1984), amended by the Department of Economic Development, Office of Financial Institutions, LR 16:678 (August 1990).

AUTHORITY NOTE: Promulgated in accordance with R.S. 51:709(15).