Md. Code Regs. 02.02.03.08

Current through Register Vol. 51, No. 24, December 2, 2024

Section 02.02.03.08 - Filing of Sales and Advertising Literature

A. Definitions.

(1) "Act" means the Maryland Securities Act.

(2) "Commissioner" means the Securities Commissioner of the State.

(3) "Division" means the Division of Securities of the Office of the Attorney General.

(4) "Regulation" means this regulation.

(5) "Sales and advertising literature" includes any pamphlet, circular, form letter, advertisement or printed advertising communication, films, film strips, television and radio presentations, tape and cassette recordings, and any other public lecture addressed or intended for distribution to and/or delivered to prospective investors including clients or prospective clients of an agent or broker/dealer; provided, however, that "sales and advertising literature" may not include:

(a) Any prospectus used in conjunction with an offer or sale, or both, of securities;

(b) Any individual letter sent to a prospective investor where the issuer has filed a registration statement with the Division relating to the offer or sale, or both, of securities to which the letter relates, provided, however, that the letter shall direct the prospective investor to the prospectus or be accompanied by a copy of the prospectus;

(c) Tombstone advertisements;

(d) Dividend notices, proxy statements and reports to shareholders, the content of which does not pertain to a current offering or sale, or both, of securities of the issuer;

(e) Literature disseminated in connection with the distribution of securities of an investment company registered under § 8 of the Investment Company Act of 1940;

(f) Literature relating to any securities, offer or sale, or both of securities, to which is applicable one or more of the exemptions from registration contained within §§11-601 -11-604 of the Act;

(g) Written or printed material relating to an offer or sale, or both, of securities pursuant to a:

(i) Qualified employee stock, or stock-option plan; or

(ii) Merger, consolidation, exchange offer, reclassification of securities or sale of corporate assets in consideration of the issuance of securities of another issuer;

(h) Written or printed material which is otherwise required to be filed under the registration provisions of the Act.

B. All sales and advertising literature relating to an offering of securities for which a registration statement has been filed with the Division pursuant to §11-502, 11-503, or 11-504 of the Act also shall be filed with the Division and have prominently displayed by legend or printed sticker on the front cover of the sales and advertising literature, in bold-face type, substantially the following statement:

"THIS SALES AND ADVERTISING LITERATURE MUST BE READ IN CONJUNCTION WITH THE PROSPECTUS IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATIONS AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES. A COPY OF THE PROSPECTUS MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING."

C. The Commissioner shall review the sales and advertising literature required to be filed under §B of this regulation, and, if 7 days after the filing of the material, he has not issued a stop-order or other order with respect to it, the material may be used in connection with the offering of securities to which it relates. If a stop-order or other order is issued, then the sales and advertising literature, and the use of it, shall comply in all respects with the order.

D. The Commissioner may, by regulation or order, further modify, condition, withdraw, or waive the conditions of this regulation.

Md. Code Regs. 02.02.03.08

Regulation .08 effective December 1, 1974