Rule 20:08:07:37 Twenty-five purchasers exempt transaction.
purchasers exempt transaction.
(1) Payment of compensation to a finder as set
forth in § 20:08:03:17 is not considered a violation of SDCL 47-31B-202(14)(C).
(2) For calculating the number of purchasers
under SDCL 47-31B-202(14)(A), the following purchasers shall be excluded:
relative, spouse, or relative of the spouse of a purchaser who has the same
principal residence as the purchaser;
trust or estate in which a purchaser and any of the persons related to the
purchaser as specified in § 20:08:07:37(2)(a) or 20:08:07:37(2)(c)
collectively have more than 50 percent of the beneficial interest (excluding
corporation or other organization of which a purchaser and any of the persons
related to the purchaser as specified in subsection 20:08:07:37(2)(a) or
20:08:07:37(2)(b) of this section collectively are beneficial owners of more
than 50 percent of the equity securities (excluding directors' qualifying
shares) or equity interest;
corporation, partnership, or other entity shall be counted as one purchaser.
However, if that entity is organized for the specific purpose of acquiring the
securities offered, then each beneficial owner of equity securities or equity
interests in the entity shall count as a separate purchaser except to the
extent provided in subdivision (a) of this section;
non-contributory employee benefit plan within the meaning of Title 1 of the
Employee Retirement Income Security Act of 1974 shall be counted as one
purchaser where the trustee makes all investment decisions for the plan;
executive officer of the issuer offering and selling securities may not be
counted as a purchaser pursuant to SDCL 47-31B-202(14). "Executive officer" means the president, any vice president in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy function, or any other person who performs similar policy making functions for the issuer. Executive officers of subsidiaries may be deemed executive officers of the issuer if they perform such policy making functions for the issuer.
(3) Integration: Pursuant to SDCL 47-31B-202(14), in reference to the prefatory language, "a single issue" signifies that two or more issues can be integrated and potentially destroy the exemption. There are two general tests for integration.
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 a similar class as those previously offered and sold pursuant to a
transaction exempt under SDCL 47-31B-202(14).
two issues occur within six months, integration may occur depending upon the
the offerings are part of a single plan of financing;
the offerings involve issuance of the same class of securities;
the offerings are made at or about the same time;
the same type of consideration is to be received; and
the offerings are made for the same general purpose.
Source: 33 SDR 63, effective October
18, 2006; 37 SDR 112, effective December 9, 2010.
General Authority: SDCL 47-31B-605(a)(2) and (3).
Law Implemented: SDCL 47-31B-203.
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