N.Y. Comp. Codes R. & Regs. tit. 11 § 7.2

Current through Register Vol. 46, No. 50, December 11, 2024

Section 7.2 - Exemptions

(a) Pursuant to section 1204, the application of section 1204 with respect to the following securities and transactions is determined not to be necessary for the protection of the public and, accordingly, such securities and transactions are herewith exempted from the provisions of section 1204, except as provided in subdivisions (b) and (c) of this section:

(1) any security listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Exchange, the National Stock Exchange or such other stock exchanges as the superintendent may designate from time to time; any other security of the same issuer which is of senior or substantially equal rank; any security called for by subscription rights or warrants so listed or approved; or any warrant or right to purchase or subscribe to any of the foregoing;

(2) the issuance of securities in connection with a consolidation or other form of corporate reorganization or recapitalization, and the solicitation of proxies from stockholders in connection therewith, provided such solicitation is subject to the requirements of the Securities Exchange Act of 1934, the insurance laws of any State of the United States or any other law or regulation prescribing substantially similar requirements;

(3) the offer of, or proposal to sell, any security for which a registration statement has been filed under the Securities Act of 1933, and the sale of any such security;

(4) any transaction pursuant to an offer to existing security holders of the issuer or a company which controls, is controlled by or is under common control with the issuer, including persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants exercisable within not more than 90 days of their issuance, if no commission or other remuneration (other than a standby commission) is paid or given directly or indirectly for soliciting any security holder in this State, or if the issuer first files a notice specifying the terms of the offer and the superintendent does not by order disallow the exemption within the next five full business days;

(5) any offer or sale to a bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity;

(6) any transaction pursuant to an offer directed by the offeror to not more than 25 persons, exclusive of or in addition to those designated in paragraph (5) of this subdivision, in this State during any period of 12 consecutive months, whether or not the offeror or any of the offerees is then present in this State, if:

(i) the seller reasonably believes that all the buyers in this State are purchasing for investment; and

(ii) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer in this State;

(7) any commercial paper (notes, drafts, bills of exchange or bankers' acceptances) which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which evidences an obligation to pay cash within nine months of the date of issuance, exclusive of days of grace, or any renewal of such paper which is likewise limited, or any guarantee of such paper or of any such renewal;

(8) the offer or sale of any security which is not made directly or indirectly by or for the benefit of the issuer thereof if either:

(i) Moody's, Standard and Poor's, Best's Insurance Reports, or any other recognized securities manual designated by the superintendent contains the names of the issuer's officers and directors, a balance sheet of the issuer as of a date within 18 months, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations; or

(ii) the issuer of such security is required to file reports with the Securities and Exchange Commission pursuant to section 13 of the Securities Exchange Act of 1934 or is exempt from the requirements of section 12(g) of that Act by reason of subsection (2)(G) thereof; and

(9) such other securities or transactions, or types of securities or transactions, as the superintendent may by order exempt on such terms and conditions as he or she deems appropriate to protect the public upon a finding that the application of section 1204 to such securities or transactions will cause unnecessary or unreasonable hardship and is not necessary to protect the public.

(b) The exemptions set forth in paragraphs (a)(1), (3), (4), (5) and (6) of this section shall be inapplicable to the sale to the public in this State by or for the benefit of a domestic insurer of:

(1) shares of its stock or subscription rights or warrants to purchase such stock;

(2) any security convertible into such stock; and

(3) any evidence of indebtedness having a stated maturity in excess of one year from the date of sale.

(c) Within 30 days following the commencement of any exempt offering by an insurer, such insurer shall file with the superintendent, for information purposes, a copy of the principal prospectus or similar offering circular, if any, used for purposes of the offering.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 7.2