Section 032-523-7 - ImpoundmentAs a condition of registration, the issuer must set aside in a separate account held by a depository institution all funds raised as part of the offering. The impoundment of funds is subject to the following conditions:
(1) All funds from purchasers shall be delivered to the depository institution within three (3) business days after receipt by the issuer, the selling agent or their respective agents.(2) All funds set aside shall be held in the depository until the earliest of the following: (i) The total amount deposited reaches at least the minimum offering amount;(ii) The Administrator has, by order, suspended or revoked the registration; or(iii) Twelve months have expired from the effective date of the offering without the minimum offering amount having been received by the depository.(3) If the minimum offering amount is not deposited within the twelve-month impoundment period, the issuer shall refund to the investors the full amount of their respective investment amounts. Such refunds shall be made not more than 30 days after the expiration of the twelve-month impoundment period.(4) Until such time as the minimum offering amount is met and funds are accessed by the issuer, the issuer may not issue any securities to purchasers pursuant to the offering.(5) For purposes of this rule, the minimum offering amount shall be no less than 50% of the maximum offering amount set by the issuer and disclosed in the registration statement.02-032 C.M.R. ch. 523, § 7