Florida Senate - 2024 COMMITTEE AMENDMENT
Bill No. CS for SB 532
Ì793480/Î793480
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
02/16/2024 .
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The Committee on Fiscal Policy (Brodeur) recommended the
following:
1 Senate Amendment
2
3 Delete lines 349 - 1905
4 and insert:
5 following securities; however, such transactions are subject to
6 s. 517.301:
7 (1) A security issued or guaranteed by the United States or
8 any territory or insular possession of the United States, by the
9 District of Columbia, or by any state of the United States or by
10 any political subdivision or agency or other instrumentality
11 thereof.; provided that
12 (a) Except as provided in paragraph (b), no person shall
13 directly or indirectly offer or sell securities, other than
14 general obligation bonds, described under this subsection if the
15 issuer or guarantor is in default or has been in default any
16 time after December 31, 1975, as to principal or interest:
17 1.(a) With respect to an obligation issued by the issuer or
18 successor of the issuer; or
19 2.(b) With respect to an obligation guaranteed by the
20 guarantor or successor of the guarantor,
21
22 except by an offering circular containing a full and fair
23 disclosure as prescribed by rule of the commission.
24 (b) Paragraph (a) applies to a security that is an
25 industrial or commercial development bond unless payments are
26 made or unconditionally guaranteed by a person whose securities
27 are exempt from registration under s. 18(b)(1) of the Securities
28 Act of 1933, as amended.
29 (3) A security issued by and which represents or will
30 represent an interest in or a direct obligation of, or be
31 guaranteed by, any of the following:
32 (a) An international bank of which the United States is a
33 member.
34 (b) A bank organized under the laws of the United States.
35 (c) A member bank of the Federal Reserve System.
36 (d) A depository institution, when a substantial portion of
37 its business consists of or will consist of receiving deposits
38 or share accounts that are insured to the maximum amount
39 authorized by statute by the Federal Deposit Insurance
40 Corporation or the National Credit Union Share Insurance Fund or
41 guaranteed by:
42 (a) A national bank, a federally chartered savings and loan
43 association, or a federally chartered savings bank, or the
44 initial subscription for equity securities in such national
45 bank, federally chartered savings and loan association, or
46 federally chartered savings bank;
47 (b) Any federal land bank, joint-stock land bank, or
48 national farm loan association under the provisions of the
49 Federal Farm Loan Act of July 17, 1916;
50 (c) An international bank of which the United States is a
51 member; or
52 (d) A corporation created and acting as an instrumentality
53 of the government of the United States.
54 (4) A security issued or guaranteed, as to principal,
55 interest, or dividend, by a business entity corporation owning
56 or operating a railroad, another common carrier, or any other
57 public service utility; provided that such business entity
58 corporation is subject to regulation or supervision whether as
59 to its rates and charges or as to the issue of its own
60 securities by a public commission, board, or officer of the
61 government of the United States, of any state, territory, or
62 insular possession of the United States, of any municipality
63 located therein, of the District of Columbia, or of the Dominion
64 of Canada or of any province thereof; also equipment securities
65 based on chattel mortgages, leases, or agreements for
66 conditional sale of cars, motive power, or other rolling stock
67 mortgaged, leased, or sold to or furnished for the use of or
68 upon such railroad or other public service utility corporation
69 or where the ownership or title of such equipment is pledged or
70 retained in accordance with the provisions of the laws of the
71 United States or of any state or of the Dominion of Canada to
72 secure the payment of such equipment securities; and also bonds,
73 notes, or other evidences of indebtedness issued by a holding
74 corporation and secured by collateral consisting of any
75 securities hereinabove described; provided, further, that the
76 collateral securities equal in fair value at least 125 percent
77 of the par value of the bonds, notes, or other evidences of
78 indebtedness so secured.
79 (8) Shares or other equity interests of a business entity
80 which represent ownership or entitle the holders of such shares
81 or other equity interests to possession and occupancy of
82 specific apartment units in property owned by such business
83 entity and organized and operated on a cooperative basis, solely
84 for residential purposes A note, draft, bill of exchange, or
85 banker’s acceptance having a unit amount of $25,000 or more
86 which arises out of a current transaction, or the proceeds of
87 which have been or are to be used for current transactions, and
88 which has a maturity period at the time of issuance not
89 exceeding 9 months exclusive of days of grace, or any renewal
90 thereof which has a maturity period likewise limited. This
91 subsection applies only to prime quality negotiable commercial
92 paper of a type not ordinarily purchased by the general public;
93 that is, paper issued to facilitate well-recognized types of
94 current operational business requirements and of a type eligible
95 for discounting by Federal Reserve banks.
96 (9) A member’s or owner’s interest in, or a retention
97 certificate or like security given in lieu of a cash patronage
98 dividend issued by, a not-for-profit membership entity operated
99 either as a cooperative under the cooperative laws of a state or
100 in accordance with the cooperative provisions of subchapter T of
101 chapter 1 of subtitle A of the United States Internal Revenue
102 Code, as amended, but not a member’s or owner’s interest,
103 retention certificate, or like security sold or transferred to a
104 person other than:
105 (a) A bona fide member of the not-for-profit membership
106 entity; or
107 (b) A person who becomes a bona fide member of the not-for
108 profit membership entity at the time of or in connection with
109 the sale or transfer.
110 (10)(9) A security issued by a business entity corporation
111 organized and operated exclusively for religious, educational,
112 benevolent, fraternal, charitable, or reformatory purposes and
113 not for pecuniary profit, no part of the net earnings of which
114 corporation inures to the benefit of any private stockholder or
115 individual, or any security of a fund that is excluded from the
116 definition of an investment company under s. 3(c)(10)(B) of the
117 Investment Company Act of 1940, as amended; provided that a no
118 person may not shall directly or indirectly offer or sell
119 securities under this subsection except by an offering circular
120 containing full and fair disclosure, as prescribed by the rules
121 of the commission, of all material information, including, but
122 not limited to, a description of the securities offered and
123 terms of the offering, a description of the nature of the
124 issuer’s business, a statement of the purpose of the offering
125 and the intended application by the issuer of the proceeds
126 thereof, and financial statements of the issuer prepared in
127 conformance with United States generally accepted accounting
128 principles. Section 6(c) of the Philanthropy Protection Act of
129 1995, Pub. L. No. 104-62, does shall not preempt any provision
130 of this chapter.
131 (11)(10) Any insurance or endowment policy or annuity
132 contract or optional annuity contract or self-insurance
133 agreement issued by a business entity corporation, insurance
134 company, reciprocal insurer, or risk retention group subject to
135 the supervision of the insurance regulator or bank regulator, or
136 any agency or officer performing like functions, of any state or
137 territory of the United States or the District of Columbia.
138 Section 3. Section 517.061, Florida Statutes, is amended to
139 read:
140 (Substantial rewording of section. See
141 s. 517.061, F.S., for present text.)
142 517.061 Exempt transactions.—Except as otherwise provided
143 in subsection (11), the exemptions provided herein from the
144 registration requirements of s. 517.07 are self-executing and do
145 not require any filing with the office before being claimed. Any
146 person who claims entitlement to an exemption under this section
147 bears the burden of proving such entitlement in any proceeding
148 brought under this chapter. The registration provisions of s.
149 517.07 do not apply to any of the following transactions;
150 however, such transactions are subject to s. 517.301:
151 (1)(a) Any judicial sale or any sale by an executor, an
152 administrator, a guardian, or a conservator; any sale by a
153 receiver or trustee in insolvency or bankruptcy; any sale by an
154 assignee as defined in s. 727.103, with respect to an assignment
155 as defined in that section; or any transaction incident to a
156 judicially approved reorganization in which a security is issued
157 in exchange for one or more outstanding securities, claims, or
158 property interests.
159 (b) Except for a security exchanged in a case brought under
160 Title 11 of the United States Code, a security issued in
161 exchange for one or more bona fide outstanding securities,
162 claims, or property interests, or partly in such exchange and
163 partly for cash, if the terms and conditions of such issuance
164 and exchange are approved:
165 1. By a court, an official or agency of the United States,
166 a banking or insurance commission of a state or territory of the
167 United States, or another governmental authority expressly
168 authorized by law to grant such approval.
169 2. After a hearing upon the fairness of such terms and
170 conditions and at which all persons to whom issuance of
171 securities in such exchange is proposed have the right to
172 appear.
173 (2) The issuance of notes or bonds in connection with the
174 acquisition of real property or renewals thereof, if such notes
175 or bonds are issued to the sellers of, and are secured by all or
176 part of, the real property so acquired.
177 (3) A transaction involving a stock dividend or equivalent
178 equity distribution, regardless of whether the business entity
179 distributing the dividend or equivalent equity distribution is
180 the issuer, if nothing of value is given by stockholders or
181 other equity holders for the dividend or equivalent equity
182 distribution other than the surrender of a right to a cash or
183 property dividend in the event that each stockholder or other
184 equity holder may elect to take the dividend or equivalent
185 equity distribution in cash, property, or stock.
186 (4) A transaction under an offer to existing security
187 holders of the issuer, including persons that at the date of the
188 transaction are holders of convertible securities, options, or
189 warrants, if a commission or other remuneration is not paid or
190 given, directly or indirectly, for soliciting a security holder
191 in this state.
192 (5) The issuance of securities to such equity security
193 holders or creditors of a business entity in the process of a
194 reorganization of such business entity, made in good faith and
195 not for the purpose of evading this chapter, either in exchange
196 for the securities of such equity security holders or claims of
197 such creditors or partly for cash and partly in exchange for the
198 securities or claims of such equity security holders or
199 creditors.
200 (6) A transaction involving the distribution of the
201 securities of an issuer to the security holders of another
202 person in connection with a merger, consolidation, exchange of
203 securities, sale of assets, or other reorganization to which the
204 issuer, or the issuer’s parent or subsidiary, and the other
205 person, or the person’s parent or subsidiary, are parties.
206 (7) The offer or sale of securities, solely in connection
207 with the transfer of ownership of an eligible privately held
208 company, through a merger and acquisition broker in accordance
209 with s. 517.12(21).
210 (8) The offer or sale of securities under a bona fide
211 employee stock purchase, savings, option, profit-sharing,
212 pension, or similar employee benefit plan, including any
213 securities, plan interests, and guarantees issued under a
214 compensatory benefit plan or compensation contract, contained in
215 a record, established by the issuer, its parents, its majority
216 owned subsidiaries, or the majority-owned subsidiaries of the
217 issuer’s parent for the participation of the issuer’s employees,
218 directors, managers, managing members, general partners,
219 trustees, officers, consultants, or advisors, and their family
220 members who acquire such securities from such persons through
221 gifts or domestic relations orders. This includes offers or
222 sales of such securities to all of the following persons:
223 (a) Former employees, directors, managers, managing
224 members, general partners, trustees, officers, consultants, or
225 advisors, provided that the securities are issued to such
226 persons in connection with their prior employment by or services
227 provided to the issuer.
228 (b) Insurance agents who are exclusive insurance agents of
229 the issuer, or of the issuer’s parents or subsidiaries, or who
230 derive more than 50 percent of their annual income from such
231 persons.
232 (9) The offer or sale of securities to a bank, trust
233 company, savings institution, insurance company, dealer,
234 investment company as defined in the Investment Company Act of
235 1940, 15 U.S.C. s. 80a-3, as amended, pension or profit-sharing
236 trust, or qualified institutional buyer, whether any of such
237 entities is acting in its individual or fiduciary capacity.
238 (10)(a) The offer or sale, by or on behalf of an issuer, of
239 its own securities if the offer or sale is part of an offering
240 made in accordance with all of the following conditions:
241 1. There are no more than 35 purchasers, or the issuer
242 reasonably believes that there are no more than 35 purchasers,
243 of the securities of the issuer in this state during an offering
244 made in reliance upon this subsection or, if such offering
245 continues for a period in excess of 12 months, in any
246 consecutive 12-month period.
247 2. Neither the issuer nor any person acting on behalf of
248 the issuer offers or sells securities pursuant to this
249 subsection by means of any form of general solicitation or
250 general advertising in this state.
251 3. Before the sale, each purchaser or the purchaser’s
252 representative, if any, is provided with, or given reasonable
253 access to, full and fair disclosure of all material information,
254 which must include written notification of a purchaser’s right
255 to void the sale under subparagraph 4.
256 4. Any sale made pursuant to this subsection is voidable by
257 the purchaser within 3 days after the first tender of
258 consideration is made by such purchaser to the issuer by
259 notifying the issuer that the purchaser expressly voids the
260 purchase. The purchaser’s notice to the issuer must be sent by
261 e-mail to the issuer’s e-mail address set forth in the
262 disclosure document provided to the purchaser or purchaser’s
263 representative or by hand delivery, courier service, or other
264 method by which written proof of delivery to the issuer of the
265 purchaser’s election to rescind the purchase is evidenced.
266 (b) The following purchasers are excluded from the
267 calculation of the number of purchasers under subparagraph
268 (a)1.:
269 1. Any spouse or child of the purchaser or any related
270 family member who has the same principal residence as such
271 purchaser.
272 2. A trust or estate in which a purchaser, any of the
273 persons related to such purchaser specified in subparagraph 1.,
274 and any business entity specified in subparagraph 3.,
275 collectively, have more than 50 percent of the beneficial
276 interest, excluding any contingent interest.
277 3. A business entity in which a purchaser, any of the
278 persons related to such purchaser specified in subparagraph 1.,
279 and any trust or estate specified in subparagraph 2.,
280 collectively, are beneficial owners of more than 50 percent of
281 the equity securities or equity interest.
282 4. An accredited investor.
283
284 A business entity must be counted as one purchaser. However, if
285 the business entity is organized for the specific purpose of
286 acquiring the securities offered and is not an accredited
287 investor, each beneficial owner of equity securities or equity
288 interests in the business entity must be counted as a separate
289 purchaser. A noncontributory employee benefit plan within the
290 meaning of Title I of the Employee Retirement Income Security
291 Act of 1974 must be counted as one purchaser if the trustee
292 makes all investment decisions for the plan.
293 (11) Offers or sales of securities by an issuer in a
294 transaction that meets all of the following conditions:
295 (a) The offers or sales of securities are made only to
296 persons who are, or who the issuer reasonably believes are,
297 accredited investors.
298 (b) The issuer is not a business entity that has an
299 undefined business operation, lacks a business plan, lacks a
300 stated investment goal for the funds being raised, or plans to
301 engage in a merger or acquisition with an unspecified business
302 entity.
303 (c) The issuer reasonably believes that all purchasers are
304 purchasing for investment and not with the view to or for sale
305 in connection with a distribution of the security. Any resale of
306 a security sold in reliance on this exemption within 12 months
307 after sale is presumed to be with a view to distribution and not
308 for investment, except a resale pursuant to a registration
309 statement effective under this chapter or pursuant to an
310 exemption available under this chapter, the Securities Act of
311 1933, as amended, or the rules and regulations adopted
312 thereunder.
313 (d)1. A general announcement of the proposed offering, made
314 by any means, includes only the following information:
315 a. The name, address, and telephone number of the issuer of
316 the securities.
317 b. The name, a brief description, and price, if known, of
318 any security to be issued.
319 c. A brief description of the business.
320 d. The type, number, and aggregate amount of securities
321 being offered.
322 e. The name, address, and telephone number of the person to
323 contact for additional information.
324 f. A statement that:
325 (I) Sales will be made only to accredited investors;
326 (II) Money or other consideration is not being solicited
327 and will not be accepted by way of this general announcement;
328 and
329 (III) The securities have not been registered with or
330 approved by any state securities agency or the Securities and
331 Exchange Commission and are being offered and sold pursuant to
332 an exemption from registration.
333 2. The issuer may, in connection with an offer, provide
334 information in addition to the information provided in the
335 general announcement as specified in subparagraph 1. if such
336 information is delivered:
337 a. Through an electronic database that is restricted to
338 persons who have been prequalified as accredited investors; or
339 b. After the issuer reasonably believes that the
340 prospective purchaser is an accredited investor.
341 (e) The issuer does not use telephone solicitation unless,
342 before placing the call, the issuer reasonably believes that the
343 prospective purchaser to be solicited is an accredited investor.
344 (f) The issuer files with the office a notice of
345 transaction, a consent to service of process, and a copy of the
346 general announcement within 15 days after the first sale is made
347 in this state. The commission may adopt by rule procedures for
348 filing documents by electronic means.
349 (g) Dissemination of the general announcement of the
350 proposed offering to persons who are not accredited investors
351 does not disqualify the issuer from claiming the exemption under
352 this subsection.
353 (12) The isolated sale or offer for sale of securities when
354 made by or on behalf of a bona fide owner, not the issuer or
355 underwriter, of the securities, who disposes of such securities
356 for the owner’s own account, and such sale is not made directly
357 or indirectly for the benefit of the issuer or an underwriter of
358 such securities or for the direct or indirect promotion of any
359 scheme or enterprise with the intent of violating or evading
360 this chapter. For purposes of this subsection, isolated offers
361 or sales include, but are not limited to, an isolated offer or
362 sale made by or on behalf of a bona fide owner, rather than the
363 issuer or underwriter, of the securities if:
364 (a) The offer or sale of securities is in a transaction
365 satisfying all of the conditions specified in paragraphs (10)(a)
366 and (b); or
367 (b) The offer or sale of securities is in a transaction
368 exempt under s. 4(a)(1) of the Securities Act of 1933, as
369 amended, or under Securities and Exchange Commission rules or
370 regulations.
371 (13) By or for the account of a pledgeholder, a secured
372 party as defined in s. 679.1021(1)(ttt), or a mortgagee selling
373 or offering for sale or delivery in the ordinary course of
374 business and not for the purposes of avoiding the provisions of
375 this chapter, to liquidate a bona fide debt, a security pledged
376 in good faith as security for such debt.
377 (14) An unsolicited purchase or sale of securities on order
378 of, and as the agent for, another solely and exclusively by a
379 dealer registered pursuant to s. 517.12; provided that this
380 exemption applies solely and exclusively to such registered
381 dealers and does not authorize or permit the purchase or sale of
382 securities at the direction of, and as agent for, another by any
383 person other than a dealer so registered; and provided further
384 that such purchase or sale may not be directly or indirectly for
385 the benefit of the issuer or an underwriter of such securities
386 or for the direct or indirect promotion of any scheme or
387 enterprise with the intent of violating or evading this chapter.
388 (15) A nonissuer transaction with a federal covered adviser
389 with investments under management in excess of $100 million
390 acting in the exercise of discretionary authority in a signed
391 record for the account of others.
392 (16) The sale by or through a registered dealer of any
393 securities option if, at the time of the sale of the option:
394 (a) The performance of the terms of the option is
395 guaranteed by any dealer registered under the Securities
396 Exchange Act of 1934, as amended, which guaranty and dealer are
397 in compliance with such requirements or rules as may be approved
398 or adopted by the commission; or
399 (b)1. Such options transactions are cleared by the Options
400 Clearing Corporation or any other clearinghouse recognized by
401 commission rule;
402 2. The option is not sold by or for the benefit of the
403 issuer of the underlying security; and
404 3. The underlying security may be purchased or sold on a
405 recognized securities exchange registered under the Securities
406 Exchange Act of 1934, as amended.
407 (17)(a) The offer or sale of securities, as agent or
408 principal, by a dealer registered pursuant to s. 517.12, when
409 such securities are offered or sold at a price reasonably
410 related to the current market price of such securities, provided
411 that such securities are:
412 1. Securities of an issuer for which reports are required
413 to be filed by s. 13 or s. 15(d) of the Securities Exchange Act
414 of 1934, as amended;
415 2. Securities of a company registered under the Investment
416 Company Act of 1940, as amended;
417 3. Securities of an insurance company, as that term is
418 defined in s. 2(a)(17) of the Investment Company Act of 1940, as
419 amended; or
420 4. Securities, other than any security that is a federal
421 covered security and is not subject to any registration or
422 filing requirements under this chapter, that have been listed or
423 approved for listing upon notice of issuance by a securities
424 exchange registered under the Securities Exchange Act of 1934,
425 as amended; and all securities senior to any securities so
426 listed or approved for listing upon notice of issuance, or
427 represented by subscription rights which have been so listed or
428 approved for listing upon notice of issuance, or evidences of
429 indebtedness guaranteed by an issuer with a class of securities
430 listed or approved for listing upon notice of issuance by such
431 securities exchange, such securities to be exempt only so long
432 as such listings or approvals remain in effect. The exemption
433 provided in this subparagraph does not apply when the securities
434 are suspended from listing approval for listing or trading.
435 (b) The exemption provided in this subsection does not
436 apply if the sale is made for the direct or indirect benefit of
437 an issuer or a control person of such issuer or if such
438 securities constitute the whole or part of an unsold allotment
439 to, or subscription or participation by, a dealer as an
440 underwriter of such securities.
441 (c) The exemption provided in this subsection is not
442 available for any securities that have been denied registration
443 pursuant to s. 517.111. Additionally, the office may deny this
444 exemption with reference to any particular security, other than
445 a federal covered security, by order published in such manner as
446 the office finds proper.
447 (18) Any nonissuer transaction by a registered dealer, and
448 any resale transaction by a sponsor of a unit investment trust
449 registered under the Investment Company Act of 1940, as amended,
450 in a security of a class that has been outstanding in the hands
451 of the public for at least 90 days; provided that, at the time
452 of the transaction, the following conditions in paragraphs (a),
453 (b), and (c) and either paragraph (d) or paragraph (e) are met:
454 (a) The issuer of the security is actually engaged in
455 business and is not in the organizational stage or in bankruptcy
456 or receivership and is not a blank check, blind pool, or shell
457 company whose primary plan of business is to engage in a merger
458 or combination of the business with, or an acquisition of, an
459 unidentified person.
460 (b) The security is sold at a price reasonably related to
461 the current market price of the security.
462 (c) The security does not constitute the whole or part of
463 an unsold allotment to, or a subscription or participation by,
464 the dealer as an underwriter of the security.
465 (d) The security is listed in a nationally recognized
466 securities manual designated by rule of the commission or a
467 document filed with and publicly viewable through the Securities
468 and Exchange Commission electronic data gathering and retrieval
469 system and contains:
470 1. A description of the business and operations of the
471 issuer;
472 2. The names of the issuer’s officers and directors, if
473 any, or, in the case of an issuer not domiciled in the United
474 States, the corporate equivalents of such persons in the
475 issuer’s country of domicile;
476 3. An audited balance sheet of the issuer as of a date
477 within 18 months before such transaction or, in the case of a
478 reorganization or merger in which parties to the reorganization
479 or merger had such audited balance sheet, a pro forma balance
480 sheet; and
481 4. An audited income statement for each of the issuer’s
482 immediately preceding 2 fiscal years, or for the period of
483 existence of the issuer, if in existence for less than 2 years
484 or, in the case of a reorganization or merger in which the
485 parties to the reorganization or merger had such audited income
486 statement, a pro forma income statement.
487 (e)1. The issuer of the security has a class of equity
488 securities listed on a national securities exchange registered
489 under the Securities Exchange Act of 1934, as amended;
490 2. The class of security is quoted, offered, purchased, or
491 sold through an alternative trading system registered under
492 Securities and Exchange Commission Regulation ATS, 17 C.F.R. s.
493 242.301, as amended, and the issuer of the security has made
494 current information publicly available in accordance with
495 Securities and Exchange Commission Rule 15c2-11, 17 C.F.R. s.
496 240.15c2-11, as amended;
497 3. The issuer of the security is a unit investment trust
498 registered under the Investment Company Act of 1940, as amended;
499 4. The issuer of the security has been engaged in
500 continuous business, including predecessors, for at least 3
501 years; or
502 5. The issuer of the security has total assets of at least
503 $2 million based on an audited balance sheet as of a date within
504 18 months before such transaction or, in the case of a
505 reorganization or merger in which parties to the reorganization
506 or merger had such audited balance sheet, a pro forma balance
507 sheet.
508 (19) The offer or sale of any security effected by or
509 through a person in compliance with s. 517.12(16).
510 (20) A nonissuer transaction in an outstanding security by
511 or through a dealer registered or exempt from registration under
512 this chapter, if all of the following are true:
513 (a) The issuer is a reporting issuer in a foreign
514 jurisdiction designated by this subsection or by commission
515 rule, and the issuer has been subject to continuous reporting
516 requirements in such foreign jurisdiction for not less than 180
517 days before the transaction.
518 (b) The security is listed on the securities exchange
519 designated by this subsection or by commission rule, is a
520 security of the same issuer which is of senior or substantially
521 equal rank to the listed security, or is a warrant or right to
522 purchase or subscribe to any such security.
523
524 For purposes of this subsection, Canada, together with its
525 provinces and territories, is designated as a foreign
526 jurisdiction, and The Toronto Stock Exchange, Inc., is
527 designated as a securities exchange. If, after an administrative
528 hearing in compliance with ss. 120.569 and 120.57, the office
529 finds that revocation is necessary or appropriate in furtherance
530 of the public interest and for the protection of investors, it
531 may revoke the designation of a securities exchange under this
532 subsection.
533 (21) Other transactions exempted by commission rule upon a
534 finding by the office that the application of s. 517.07 to a
535 particular transaction is not necessary or appropriate in
536 furtherance of the public interest and for the protection of
537 investors due to the small dollar amount of the securities
538 involved or the limited character of the offering. In
539 conjunction with its adoption by rule of such exemptions, the
540 commission may exempt persons selling or offering for sale
541 securities in such a transaction from the registration
542 requirements of s. 517.12. A rule adopted by the commission
543 under this subsection may not have the effect of narrowing or
544 limiting any exemption specified in this section.
545 Section 4. Section 517.0611, Florida Statutes, is amended
546 to read:
547 517.0611 The Florida Limited Offering Exemption Intrastate
548 crowdfunding.—
549 (1) This section may be cited as the “The Florida Limited
550 Offering Intrastate Crowdfunding Exemption.”
551 (2) The registration provisions of s. 517.07 do not apply
552 to a securities transaction conducted in accordance with this
553 section; however, such transaction is subject to s. 517.301
554 Notwithstanding any other provision of this chapter, an offer or
555 sale of a security by an issuer is an exempt transaction under
556 s. 517.061 if the offer or sale is conducted in accordance with
557 this section. The exemption provided in this section may not be
558 used in conjunction with any other exemption under s. 517.051 or
559 s. 517.061.
560 (3) The offer or sale of securities under this section must
561 be conducted in accordance with the requirements of the federal
562 exemption for intrastate offerings in s. 3(a)(11) of the
563 Securities Act of 1933, 15 U.S.C. s. 77c(a)(11), as amended, and
564 United States Securities and Exchange Commission Rule 147, 17
565 C.F.R. s. 230.147, as amended, or Securities and Exchange
566 Commission Rule 147A, 17. C.F.R. s. 230.147A, as amended adopted
567 pursuant to the Securities Act of 1933.
568 (4) An issuer must:
569 (a) Must be a for-profit business entity that maintains
570 formed under the laws of the state, be registered with the
571 Secretary of State, maintain its principal place of business in
572 the state, and derives derive its revenues primarily from
573 operations in this the state.
574 (b) Must conduct transactions for an the offering of $2.5
575 million or more through a dealer registered with the office or
576 an intermediary registered under s. 517.12 s. 517.12(19). For an
577 offering of less than $2.5 million, the issuer may, but is not
578 required to, use such a dealer or intermediary.
579 (c) May not be, either before or as a result of the
580 offering, an investment company as defined in s. 3 of the
581 Investment Company Act of 1940, 15 U.S.C. s. 80a-3, as amended,
582 or subject to the reporting requirements of s. 13 or s. 15(d) of
583 the Securities Exchange Act of 1934, 15 U.S.C. s. 78m or s.
584 78o(d), as amended.
585 (d) May not be a business entity that has company with an
586 undefined business operation, a company that lacks a business
587 plan, a company that lacks a stated investment goal for the
588 funds being raised, or a company that plans to engage in a
589 merger or acquisition with an unspecified business entity.
590 (e) May not be subject to a disqualification established by
591 the commission or office or a disqualification described in s.
592 517.0616 or s. 517.1611 or United States Securities and Exchange
593 Commission Rule 506(d), 17 C.F.R. 230.506(d), adopted pursuant
594 to the Securities Act of 1933. Each director, officer, manager,
595 managing member, or general partner, or person occupying a
596 similar status or performing a similar function, or person
597 holding more than 20 percent of the equity interest shares of
598 the issuer, is subject to this paragraph requirement.
599 (f) Must deposit all funds received from investors in an
600 account in Execute an escrow agreement with a federally insured
601 financial institution authorized to do business in this the
602 state and maintain all such funds in the account until the
603 target offering amount has been reached or the offering has been
604 terminated or has expired. If the target offering amount has not
605 been reached within the period specified by the issuer in the
606 disclosure statement provided to investors, or if the offering
607 is terminated or expires, the issuer must refund invested funds
608 to all investors within 10 business days after such occurrence
609 for the deposit of investor funds, and ensure that all offering
610 proceeds are provided to the issuer only when the aggregate
611 capital raised from all investors is equal to or greater than
612 the target offering amount.
613 (g) Must use all funds in accordance with the use of
614 proceeds as disclosed to prospective investors Allow investors
615 to cancel a commitment to invest within 3 business days before
616 the offering deadline, as stated in the disclosure statement,
617 and issue refunds to all investors if the target offering amount
618 is not reached by the offering deadline.
619 (5) The issuer must file a notice of the offering with the
620 office, in writing or in electronic form, in a format prescribed
621 by commission rule, together with a nonrefundable filing fee of
622 $200. The filing fee must shall be deposited into the Regulatory
623 Trust Fund of the office. The commission may adopt rules
624 establishing procedures for the deposit of fees and the filing
625 of documents by electronic means if the procedures provide the
626 office with the information and data required by this section. A
627 notice is effective upon receipt, by the office, of the
628 completed form, filing fee, and an irrevocable written consent
629 to service of civil process, similar to that provided for in s.
630 517.101. The notice may be terminated by filing with the office
631 a notice of termination. The notice and offering expire 12
632 months after filing the notice with the office and are not
633 eligible for renewal. The notice must:
634 (a) Be filed with the office at least 10 days before the
635 issuer commences an offering of securities or the offering is
636 displayed on a website of an intermediary in reliance upon the
637 exemption provided by this section.
638 (b) Indicate that the issuer is conducting an offering in
639 reliance upon the exemption provided by this section.
640 (c) Contain the name and contact information, including an
641 e-mail address, of the issuer.
642 (d) Identify any predecessors, owners, officers, directors,
643 general partners, managers, managing members, and control
644 persons or any person occupying a similar status or performing a
645 similar function of the issuer, including that person’s title,
646 his or her status as a partner, trustee, or sole proprietor or a
647 similar role, and his or her ownership percentage.
648 (e) Identify the federally insured financial institution
649 into, authorized to do business in the state, in which investor
650 funds will be deposited, in accordance with the escrow
651 agreement.
652 (f) Require an attestation under oath that the issuer, its
653 predecessors, affiliated issuers, directors, officers, and
654 control persons, or any other person occupying a similar status
655 or performing a similar function, are not currently and have not
656 been within the past 10 years the subject of regulatory or
657 criminal actions involving fraud or deceit.
658 (g) Include documentation verifying that the issuer is
659 organized under the laws of the state and authorized to do
660 business in the state.
661 (h) If applicable, include the intermediary’s website
662 address where the issuer’s securities will be offered.
663 (g)(i) State Include the target offering amount and the
664 date, not to exceed 365 days, by which the target amount must be
665 reached in order to avoid termination of the offering.
666 (6) The issuer must amend the notice form within 10
667 business 30 days after any material information contained in the
668 notice becomes inaccurate for any reason. The commission may
669 require, by rule, an issuer who has filed a notice under this
670 section to file amendments with the office.
671 (7) The issuer may engage in general advertising and
672 general solicitation of the offering to prospective investors.
673 Any oral or written statements in advertising or solicitation of
674 the offering which contain a material misstatement, or which
675 fail to disclose material information, are subject to
676 enforcement under this chapter. Any general advertising or other
677 general announcement must state that the offering is limited and
678 open only to residents of this state.
679 (8) The issuer must provide a disclosure statement to
680 investors and the dealer or intermediary, along with a copy to
681 the office at the time that the notice is filed, and make
682 available to potential investors through the dealer or
683 intermediary, as applicable; to the office at the time that the
684 notice is filed; and to each prospective investor at least 3
685 days before the investor’s commitment to purchase or payment of
686 any consideration. The, a disclosure statement must contain
687 containing material information about the issuer and the
688 offering, including all of the following:
689 (a) The name, legal status, physical address, e-mail
690 address, and website address of the issuer.
691 (b) The names of the directors, officers, managers,
692 managing members, and general partners and any person occupying
693 a similar status or performing a similar function, and the name
694 and ownership percentage of each person holding more than 20
695 percent of the issuer’s equity interests shares of the issuer.
696 (c) A description of the current business of the issuer and
697 the anticipated business plan of the issuer.
698 (d) A description of the stated purpose and intended use of
699 the proceeds of the offering.
700 (e) The target offering amount and, the deadline to reach
701 the target offering amount, and regular updates regarding the
702 progress of the issuer in meeting the target offering amount.
703 (f) The price to the public of the securities or the method
704 for determining the price. However, before the sale, each
705 investor must receive in writing the final price and all
706 required disclosures and have an opportunity to rescind the
707 commitment to purchase the securities.
708 (g) A description of the ownership and capital structure of
709 the issuer, including:
710 1. Terms of the securities being offered and each class of
711 security of the issuer, including how those terms may be
712 modified, and a summary of the differences between such
713 securities, including how the rights of the securities being
714 offered may be materially limited, diluted, or qualified by
715 rights of any other class of security of the issuer.
716 2. A description of how the exercise of the rights held by
717 the principal equity holders shareholders of the issuer could
718 negatively impact the purchasers of the securities being
719 offered.
720 3. The name and ownership level of each existing
721 shareholder who owns more than 20 percent of any class of the
722 securities of the issuer.
723 4. How the securities being offered are being valued, and
724 examples of methods of how such securities may be valued by the
725 issuer in the future, including during subsequent corporate
726 actions.
727 5. The risks to purchasers of the securities relating to
728 minority ownership in the issuer, the risks associated with
729 corporate action, including additional issuances of shares, a
730 sale of the issuer or of assets of the issuer, or transactions
731 with related parties.
732 (h) A statement that the security being offered is not
733 registered under federal or state securities laws and that the
734 securities are subject to the limitation on resale contained in
735 Securities and Exchange Commission Rule 147 or Rule 147A.
736 (i) Any issuer plans, formal or informal, to offer
737 additional securities in the future.
738 (j) The risks to purchasers of the securities relating to
739 minority ownership in the issuer.
740 (k)(h) A description of the financial condition of the
741 issuer.
742 1. For offerings that, in combination with all other
743 offerings of the issuer within the preceding 12-month period,
744 have target offering amounts of $500,000 $100,000 or less, the
745 financial statements of the issuer may be, but are not required
746 to be, included description must include the most recent income
747 tax return filed by the issuer, if any, and a financial
748 statement that must be certified by the principal executive
749 officer of the issuer as true and complete in all material
750 respects.
751 2. For offerings that, in combination with all other
752 offerings of the issuer within the preceding 12-month period,
753 have target offering amounts of more than $500,000 $100,000, but
754 not more than $2.5 million $500,000, the description must
755 include financial statements prepared in accordance with
756 generally accepted accounting principles and reviewed by a
757 certified public accountant, as defined in s. 473.302, who is
758 independent of the issuer, using professional standards and
759 procedures for such review or standards and procedures
760 established by commission the office, by rule, for such purpose.
761 3. For offerings that, in combination with all other
762 offerings of the issuer within the preceding 12-month period,
763 have target offering amounts of more than $2.5 million $500,000,
764 the description must include audited financial statements
765 prepared in accordance with generally accepted accounting
766 principles by a certified public accountant, as defined in s.
767 473.302, who is independent of the issuer, and other
768 requirements as the commission may establish by rule.
769 (l)(i) The following statement in boldface, conspicuous
770 type on the front page of the disclosure statement:
771
772 Neither the Securities and Exchange Commission nor any
773 state securities commission has approved or
774 disapproved these securities or determined if this
775 disclosure statement is truthful or complete. Any
776 representation to the contrary is a criminal offense.
777
778 These securities are offered under, and will be sold
779 in reliance upon, an exemption from the registration
780 requirements of federal and Florida securities laws.
781 Consequently, Neither the Federal Government nor the
782 State of Florida has reviewed the accuracy or
783 completeness of any offering materials. In making an
784 investment decision, investors must rely on their own
785 examination of the issuer and the terms of the
786 offering, including the merits and risks involved.
787 These securities are subject to restrictions on
788 transferability and resale and may not be transferred
789 or resold except as specifically authorized by
790 applicable federal and state securities laws.
791 Investing in these securities involves a speculative
792 risk, and investors should be able to bear the loss of
793 their entire investment.
794
795 (8) The issuer shall provide to the office a copy of the
796 escrow agreement with a financial institution authorized to
797 conduct business in this state. All investor funds must be
798 deposited in the escrow account. The escrow agreement must
799 require that all offering proceeds be released to the issuer
800 only when the aggregate capital raised from all investors is
801 equal to or greater than the minimum target offering amount
802 specified in the disclosure statement as necessary to implement
803 the business plan, and that all investors will receive a full
804 return of their investment commitment if that target offering
805 amount is not raised by the date stated in the disclosure
806 statement.
807 (9) The sum of all cash and other consideration received
808 for sales of a security under this section may not exceed $5 $1
809 million, less the aggregate amount received for all sales of
810 securities by the issuer within the 12 months preceding the
811 first offer or sale made in reliance upon this exemption. Offers
812 or sales to a person owning 20 percent or more of the
813 outstanding equity interests shares of any class or classes of
814 securities or to an officer, director, manager, managing member,
815 general partner, or trustee, or a person occupying a similar
816 status, do not count toward this limitation.
817 (10) Unless the investor is an accredited investor, or the
818 issuer reasonably believes that the investor is an accredited
819 investor as defined by Rule 501 of Regulation D, adopted
820 pursuant to the Securities Act of 1933, the aggregate amount of
821 securities sold by an issuer to an investor in transactions
822 exempt from registration requirements under this subsection in a
823 12-month period may not exceed $10,000:
824 (a) The greater of $2,000 or 5 percent of the annual income
825 or net worth of such investor, if the annual income or the net
826 worth of the investor is less than $100,000.
827 (b) Ten percent of the annual income or net worth of such
828 investor, not to exceed a maximum aggregate amount sold of
829 $100,000, if either the annual income or net worth of the
830 investor is equal to or exceeds $100,000.
831 (11) The issuer shall file with the office and provide to
832 investors free of charge an annual report of the results of
833 operations and financial statements of the issuer within 45 days
834 after the end of its fiscal year, until no securities under this
835 offering are outstanding. The annual reports must meet the
836 following requirements:
837 (a) Include an analysis by management of the issuer of the
838 business operations and the financial condition of the issuer,
839 and disclose the compensation received by each director,
840 executive officer, and person having an ownership interest of 20
841 percent or more of the issuer, including cash compensation
842 earned since the previous report and on an annual basis, and any
843 bonuses, stock options, other rights to receive securities of
844 the issuer, or any affiliate of the issuer, or other
845 compensation received.
846 (b) Disclose any material change to information contained
847 in the disclosure statements which was not disclosed in a
848 previous report.
849 (11)(12)(a) A notice-filing under this section must shall
850 be summarily suspended by the office if:
851 (a) The payment for the filing is dishonored by the
852 financial institution upon which the funds are drawn. For
853 purposes of s. 120.60(6), failure to pay the required notice
854 filing fee constitutes an immediate and serious danger to the
855 public health, safety, and welfare. The office shall enter a
856 final order revoking a notice-filing in which the payment for
857 the filing is dishonored by the financial institution upon which
858 the funds are drawn; or.
859 (b) A notice-filing under this section shall be summarily
860 suspended by the office if The issuer made a material false
861 statement in the issuer’s notice-filing. The summary suspension
862 remains shall remain in effect until a final order is entered by
863 the office. For purposes of s. 120.60(6), a material false
864 statement made in the issuer’s notice-filing constitutes an
865 immediate and serious danger to the public health, safety, and
866 welfare. If an issuer made a material false statement in the
867 issuer’s notice-filing, the office must shall enter a final
868 order revoking the notice-filing, issue a fine as prescribed by
869 s. 517.191(9) s. 517.221(3), and issue permanent bars under s.
870 517.191(10) s. 517.221(4) to the issuer and all owners,
871 officers, directors, managers, managing members, general
872 partners, and control persons, or any person occupying a similar
873 status or performing a similar function of the issuer, including
874 title; status as a partner, trustee, sole proprietor, or similar
875 role; and ownership percentage.
876 (12)(13) If the issuer employs the services of an
877 intermediary, the An intermediary must:
878 (a) Take measures, as established by commission rule, to
879 reduce the risk of fraud with respect to the transactions,
880 including verifying that the issuer is in compliance with the
881 requirements of this section and, if necessary, denying an
882 issuer access to its platform if the intermediary believes it is
883 unable to adequately assess the risk of fraud of the issuer or
884 its potential offering.
885 (b) Provide basic information on its website regarding the
886 high risk of investment in and limitation on the resale of
887 exempt securities and the potential for loss of an entire
888 investment. The basic information must include, but need not be
889 limited to, all of the following:
890 1. A description of the financial institution into which
891 investor funds will be deposited escrow agreement that the
892 issuer has executed and the conditions for the use release of
893 such funds by to the issuer in accordance with the agreement and
894 subsection (4).
895 2. A description of whether financial information provided
896 by the issuer has been audited by an independent certified
897 public accountant, as defined in s. 473.302.
898 (c) Obtain from each prospective investor a zip code or
899 residence address, a copy of a driver license, and any other
900 proof of residency in order for the issuer or intermediary to
901 reasonably believe that the potential investor is a resident of
902 this state. The commission may adopt rules authorizing
903 additional forms of identification and prescribing the process
904 for verifying any identification presented by the prospective
905 investor.
906 (d) Obtain information sufficient for the issuer or
907 intermediary to reasonably believe that a particular prospective
908 investor is an accredited investor
909 (c) Obtain a zip code or residence address from each
910 potential investor who seeks to view information regarding
911 specific investment opportunities, in order to confirm that the
912 potential investor is a resident of the state.
913 (d) Obtain and verify a valid Florida driver license number
914 or Florida identification card number from each investor before
915 purchase of a security to confirm that the investor is a
916 resident of the state. The commission may adopt rules
917 authorizing additional forms of identification and prescribing
918 the process for verifying any identification presented by the
919 investor.
920 (e) Obtain an affidavit from each investor stating that the
921 investment being made by the investor is consistent with the
922 income requirements of subsection (10).
923 (f) Direct the release of investor funds in escrow in
924 accordance with subsection (4).
925 (g) Direct investors to transmit funds directly to the
926 financial institution designated in the escrow agreement to hold
927 the funds for the benefit of the investor.
928 (e)(h) Provide a monthly update for each offering, after
929 the first full month after the date of the offering. The update
930 must be accessible on the intermediary’s website and must
931 display the date and amount of each sale of securities, and each
932 cancellation of commitment to invest, in the previous calendar
933 month.
934 (i) Require each investor to certify in writing, including
935 as part of such certification his or her signature and his or
936 her initials next to each paragraph of the certification, as
937 follows:
938 I understand and acknowledge that:
939 I am investing in a high-risk, speculative business
940 venture. I may lose all of my investment, and I can afford the
941 loss of my investment.
942 This offering has not been reviewed or approved by any
943 state or federal securities commission or other regulatory
944 authority and no regulatory authority has confirmed the accuracy
945 or determined the adequacy of any disclosure made to me relating
946 to this offering.
947 The securities I am acquiring in this offering are illiquid
948 and are subject to possible dilution. There is no ready market
949 for the sale of the securities. It may be difficult or
950 impossible for me to sell or otherwise dispose of the
951 securities, and I may be required to hold the securities
952 indefinitely.
953 I may be subject to tax on my share of the taxable income
954 and losses of the issuer, whether or not I have sold or
955 otherwise disposed of my investment or received any dividends or
956 other distributions from the issuer.
957 By entering into this transaction with the issuer, I am
958 affirmatively representing myself as being a Florida resident at
959 the time this contract is formed, and if this representation is
960 subsequently shown to be false, the contract is void.
961 If I resell any of the securities I am acquiring in this
962 offering to a person that is not a Florida resident within 9
963 months after the closing of the offering, my contract with the
964 issuer for the purchase of these securities is void.
965 (j) Require each investor to answer questions demonstrating
966 an understanding of the level of risk generally applicable to
967 investments in startups, emerging businesses, and small issuers,
968 and an understanding of the risk of illiquidity.
969 (f)(k) Take reasonable steps to protect personal
970 information collected from investors, as required by s. 501.171.
971 (g)(l) Prohibit its directors, and officers, managers,
972 managing members, general partners, employees, and agents from
973 having any financial interest in the issuer using its services.
974 (m) Implement written policies and procedures that are
975 reasonably designed to achieve compliance with federal and state
976 securities laws; comply with the anti-money laundering
977 requirements of 31 C.F.R. chapter X applicable to registered
978 brokers; and comply with the privacy requirements of 17 C.F.R.
979 part 248 relating to brokers.
980 (13)(14) An intermediary not registered as a dealer under
981 s. 517.12(5) may not:
982 (a) Offer investment advice or recommendations. A refusal
983 by an intermediary to post an offering that it deems not
984 credible or that represents a potential for fraud may not be
985 construed as an offer of investment advice or recommendation.
986 (b) Solicit purchases, sales, or offers to buy securities
987 offered or displayed on its website.
988 (c) Compensate employees, agents, or other persons for the
989 solicitation of, or based on the sale of, securities offered or
990 displayed on its website.
991 (d) Hold, manage, possess, or otherwise handle investor
992 funds or securities.
993 (e) Compensate promoters, finders, or lead generators for
994 providing the intermediary with the personal identifying
995 information of any prospective potential investor.
996 (f) Engage in any other activities set forth by commission
997 rule.
998 (14) If the issuer does not employ a dealer or an
999 intermediary for an offering pursuant to the exemption created
1000 under this section, the issuer must fulfill each of the
1001 obligations specified in paragraphs (12)(c)-(f).
1002 (15) Any sale made pursuant to the exemption created under
1003 this section is voidable by the purchaser within 3 days after
1004 the first tender of consideration is made by such purchaser to
1005 the issuer by notifying the issuer that the purchaser expressly
1006 voids the purchase. The purchaser’s notice to the issuer must be
1007 sent by e-mail to the issuer’s e-mail address set forth in the
1008 disclosure statement that is provided to the purchaser or
1009 purchaser’s representative or by certified mail or overnight
1010 delivery service with proof of delivery to the mailing address
1011 set forth in the disclosure statement All funds received from
1012 investors must be directed to the financial institution
1013 designated in the escrow agreement to hold the funds and must be
1014 used in accordance with representations made to investors by the
1015 intermediary. If an investor cancels a commitment to invest, the
1016 intermediary must direct the financial institution designated to
1017 hold the funds to promptly refund the funds of the investor.
1018 Section 5. Section 517.0612, Florida Statutes, is created
1019 to read:
1020 517.0612 Florida Invest Local Exemption.—
1021 (1) This section may be cited as the “Florida Invest Local
1022 Exemption.”
1023 (2) The registration provisions of s. 517.07 do not apply
1024 to a securities transaction conducted in accordance with this
1025 section; however, such transaction is subject to s. 517.301.
1026 (3) The offer or sale of securities under this section must
1027 meet the requirements of the federal exemption for intrastate
1028 offerings in s. 3(a)(11) of the Securities Act of 1933,
1029 Securities and Exchange Commission Rule 147, or Securities and
1030 Exchange Commission Rule 147A, as amended.
1031 (4) The issuer must be a for-profit business entity
1032 registered with the Department of State which has its principal
1033 place of business in this state. The issuer may not be, before
1034 or as a result of the offering:
1035 (a) An investment company as defined in the Investment
1036 Company Act of 1940, as amended;
1037 (b) Subject to the reporting requirements of the Securities
1038 and Exchange Act of 1934, as amended;
1039 (c) A business entity that has an undefined business
1040 operation, lacks a business plan, lacks a stated investment goal
1041 for the funds being raised, or plans to engage in a merger or an
1042 acquisition with an unspecified business entity; or
1043 (d) Subject to a disqualification as provided in s.
1044 517.0616.
1045 (5) The sum of all cash and other consideration received
1046 from all sales of the securities in reliance upon the exemption
1047 under this section may not exceed $500,000, less the aggregate
1048 amount received for all sales of securities by the issuer within
1049 the 12 months before the first offer or sale made in reliance on
1050 this exemption.
1051 (6)(a) The issuer may not accept more than $10,000 from any
1052 single purchaser unless any of the following apply:
1053 1. The issuer reasonably believes that the purchaser is an
1054 accredited investor.
1055 2. The purchaser is an officer, director, partner, or
1056 trustee, or an individual occupying a similar status or
1057 performing similar functions, of the issuer.
1058 3. The purchaser is an owner of 10 percent or more of the
1059 issuer’s outstanding equity.
1060 (b) For purposes of this subsection, the following persons
1061 must be treated collectively as a single purchaser:
1062 1. Any spouse or child of the purchaser or any related
1063 family member who has the same primary residence as the
1064 purchaser.
1065 2. Any business entity of which the purchaser and any
1066 person related to the purchaser as provided in subparagraph 1.
1067 collectively own more than 50 percent of the equity interest.
1068 (7) The issuer may engage in general advertising and
1069 general solicitation of the offering. Any general advertising or
1070 other general announcement must state that the offer is limited
1071 and open only to residents of this state. Any oral or written
1072 statements in advertising or solicitation of the offer which
1073 contain a material misstatement, or which fail to disclose
1074 material information, are subject to enforcement under this
1075 chapter.
1076 (8) A purchaser must receive, at least 3 business days
1077 before any binding commitment to purchase or consideration paid,
1078 a disclosure statement that provides material information
1079 regarding the issuer, including, but not limited to, all of the
1080 following information:
1081 (a) The issuer’s name, type of entity, and contact
1082 information.
1083 (b) The name and contact information of each director,
1084 officer, or other manager of the issuer.
1085 (c) A description of the issuer’s business.
1086 (d) A description of the security being offered.
1087 (e) The total amount of the offering.
1088 (f) The intended use of proceeds from the sale of the
1089 securities.
1090 (g) The target offering amount.
1091 (h) A statement that if the target offering amount is not
1092 obtained in cash or in the value of other tangible consideration
1093 received on a date that is no more than 180 days after the
1094 commencement of the offering, the offering will be terminated,
1095 and any funds or other consideration received from purchasers
1096 must be promptly returned.
1097 (i) A statement that the security being offered is not
1098 registered under federal or state securities laws and that the
1099 securities are subject to the limitation on resale contained in
1100 Securities and Exchange Commission Rule 147 or Rule 147A.
1101 (j) The names and addresses of all persons who will be
1102 involved in the offer and sale of securities on behalf of the
1103 issuer.
1104 (k) The name of the bank or other depository institution
1105 into which investor funds will be deposited.
1106 (l) The following statement in boldface, conspicuous type:
1107
1108 Neither the Securities and Exchange Commission nor any
1109 state securities commission has approved or
1110 disapproved these securities or determined that this
1111 disclosure statement is truthful or complete. Any
1112 representation to the contrary is a criminal offense.
1113
1114 (9) All funds received from investors must be deposited
1115 into a bank or depository institution authorized to do business
1116 in this state. The issuer may not withdraw any amount of the
1117 offering proceeds unless the target offering amount has been
1118 received.
1119 (10) The issuer must file a notice of the offering with the
1120 office, in writing or in electronic form, in a format prescribed
1121 by commission rule, no less than 5 business days before the
1122 offering commences, along with the disclosure statement
1123 described in subsection (8). If there are any material changes
1124 to the information previously submitted, the issuer must, within
1125 3 business days after such material change, file an amended
1126 notice.
1127 (11) An individual, entity, or entity employee who acts as
1128 an agent for the issuer in the offer or sale of securities and
1129 is not registered as a dealer under this chapter may not do
1130 either of the following:
1131 (a) Receive compensation based upon the solicitation of
1132 purchases, sales, or offers to purchase the securities.
1133 (b) Take custody of investor funds or securities.
1134 (12) Any sale made pursuant to the exemption created under
1135 this section is voidable by the purchaser within 3 days after
1136 the first tender of consideration is made by such purchaser to
1137 the issuer by notifying the issuer that the purchaser expressly
1138 voids the purchase. The purchaser’s notice to the issuer must be
1139 sent by e-mail to the issuer’s e-mail address set forth in the
1140 disclosure statement that is provided to a purchaser or the
1141 purchaser’s representative or by hand delivery, courier service,
1142 or other method by which written proof of delivery to the issuer
1143 of the purchaser’s election to rescind the purchase is
1144 evidenced.
1145 Section 6. Section 517.0613, Florida Statutes, is created
1146 to read:
1147 517.0613 Failure to comply with a securities registration
1148 exemption.—
1149 (1) Failure to meet the requirements for any exemption from
1150 securities registration does not preclude the issuer from
1151 claiming the availability of any other applicable state or
1152 federal exemption.
1153 (2) The exemptions created under ss. 517.061, 517.0611, and
1154 517.0612 are not available to an issuer for any transaction or
1155 series of transactions that, although in technical compliance
1156 with the applicable provisions, is part of a plan or scheme to
1157 evade the registration provisions of s. 517.07, and registration
1158 under s. 517.07 is required in connection with such
1159 transactions.
1160 Section 7. Section 517.0614, Florida Statutes, is created
1161 to read:
1162 517.0614 Integration of offerings.—
1163 (1) If the safe harbors in subsection (2) do not apply in
1164 determining whether two or more offerings are to be treated as
1165 one for the purpose of registration or qualifying for an
1166 exemption from registration under this chapter, offers and sales
1167 may not be integrated if, based on the particular facts and
1168 circumstances, the issuer can establish either that each
1169 offering complies with the registration requirements of this
1170 chapter, or that an exemption from registration is available for
1171 the particular offering, provided that any transaction or series
1172 of transactions that, although in technical compliance with this
1173 chapter, is part of a plan or scheme to evade the registration
1174 requirements of this chapter will not have the effect of
1175 avoiding integration. In making this determination:
1176 (a) For an exempt offering prohibiting general
1177 solicitation, the issuer must have a reasonable belief, based on
1178 the facts and circumstances, with respect to each purchaser in
1179 the exempt offering prohibiting general solicitation, that the
1180 issuer or any person acting on the issuer’s behalf:
1181 1. Did not solicit such purchaser through the use of
1182 general solicitation; or
1183 2. Established a substantive relationship with such
1184 purchaser before the commencement of the exempt offering
1185 prohibiting general solicitation, provided that a purchaser
1186 previously solicited through the use of general solicitation is
1187 not deemed to have been solicited through the use of general
1188 solicitation in the current offering if, during the 45 calendar
1189 days following such previous general solicitation:
1190 a. No offer or sale of the same or similar class of
1191 securities has been made by or on behalf of the issuer,
1192 including to such purchaser; and
1193 b. The issuer or any person acting on the issuer’s behalf
1194 has not solicited such purchaser through the use of general
1195 solicitation for any other security.
1196 (b) For two or more concurrent exempt offerings permitting
1197 general solicitation, in addition to satisfying the requirements
1198 of the particular exemption relied on, general solicitation
1199 offering materials for one offering that includes information
1200 about the material terms of a concurrent offering under another
1201 exemption may constitute an offer of securities in such other
1202 offering, and therefore the offer must comply with all the
1203 requirements for, and restrictions on, offers under the
1204 exemption being relied on for such other offering, including any
1205 legend requirements and communications restrictions.
1206 (2) The integration analysis required by subsection (1) is
1207 not required if any of the following nonexclusive safe harbors
1208 apply:
1209 (a) An offering commenced more than 30 calendar days before
1210 the commencement of any other offering, or more than 30 calendar
1211 days after the termination or completion of any other offering,
1212 may not be integrated with such other offering, provided that
1213 for an exempt offering for which general solicitation is not
1214 permitted which follows by 30 calendar days or more an offering
1215 that allows general solicitation, paragraph (1)(a) applies.
1216 (b) Offers and sales made in compliance with any of the
1217 following provisions are not subject to integration with other
1218 offerings:
1219 1. Section 517.051 or s. 517.061, except s. 517.061(9),
1220 (10), or (11).
1221 2. Section 517.0611 or s. 517.0612.
1222 Section 8. Section 517.0615, Florida Statutes, is created
1223 to read:
1224 517.0615 Solicitations of interest.—
1225 (1) A communication will not be deemed to constitute
1226 general solicitation or general advertising if the communication
1227 is made in connection with a seminar or meeting in which more
1228 than one issuer participates and which is sponsored by a
1229 college, a university, or another institution of higher
1230 education; a state or local government or an instrumentality
1231 thereof; a nonprofit chamber of commerce or other nonprofit
1232 organization; or an angel investor group, incubator, or
1233 accelerator, if all of the following apply:
1234 (a) Advertising for the seminar or meeting does not
1235 reference a specific offering of securities by the issuer.
1236 (b) The sponsor of the seminar or meeting does not do any
1237 of the following:
1238 1. Make investment recommendations or provide investment
1239 advice to attendees of the seminar or meeting.
1240 2. Engage in any investment negotiations between the issuer
1241 and investors attending the seminar or meeting.
1242 3. Charge attendees of the seminar or meeting any fees,
1243 other than reasonable administrative fees.
1244 4. Receive any compensation for making introductions
1245 between seminar or meeting attendees and issuers or for
1246 investment negotiations between such parties.
1247 5. Receive any compensation with respect to the seminar or
1248 meeting, which compensation would require registration or
1249 notice-filing under this chapter, the Securities Exchange Act of
1250 1934, 15 U.S.C. ss. 78a et seq., as amended, or the Investment
1251 Advisers Act of 1940, 15 U.S.C. ss. 80b-1 et seq., as amended.
1252 The sponsorship or participation in the seminar or meeting does
1253 not by itself require registration or notice-filing under this
1254 chapter.
1255 (c) The type of information regarding an offering of
1256 securities by the issuer which is communicated or distributed by
1257 or on behalf of the issuer in connection with the seminar or
1258 meeting is limited to a notification that the issuer is in the
1259 process of offering or planning to offer securities, the type
1260 and amount of securities being offered, the intended use of
1261 proceeds of the offering, and the unsubscribed amount in an
1262 offering.
1263 (d) If the event allows attendees to participate virtually,
1264 rather than in person, online participation in the event is
1265 limited to:
1266 1. Individuals that are members of, or otherwise associated
1267 with, the sponsor organization;
1268 2. Individuals that the sponsor reasonably believes are
1269 accredited investors; or
1270 3. Individuals that have been invited to the event by the
1271 sponsor based on industry or investment-related experience
1272 reasonably selected by the sponsor in good faith and disclosed
1273 in the public communications about the event.
1274 (2) Before any offers or sales are made in connection with
1275 an offering, communications by an issuer or any person
1276 authorized to act on behalf of the issuer are not deemed to
1277 constitute general solicitation or general advertising if the
1278 communication is solely for the purpose of determining whether
1279 there is any interest in a contemplated securities offering.
1280 Requirements imposed under this chapter on written or oral
1281 statements made in the course of such communication may be
1282 enforced as provided in this chapter. The solicitation or
1283 acceptance of money or other consideration or of any commitment,
1284 binding or otherwise, from any person is prohibited.
1285 (a) The communication must state all of the following:
1286 1. Money or other consideration is not being solicited and,
1287 if sent in response, will not be accepted.
1288 2. Any offer to buy the securities will not be accepted,
1289 and no part of the purchase price will be accepted.
1290 3. A person’s indication of interest does not involve
1291 obligation or commitment of any kind.
1292 (b) Any written communication under this subsection may
1293 include a means by which a person may indicate to the issuer
1294 that the person is interested in a potential offering. The
1295 issuer may require the name, address, telephone number, or e
1296 mail address in any response form included in the written
1297 communication under this paragraph.
1298 (c) A communication in accordance with this subsection is
1299 not subject to s. 501.059, regarding telephone solicitations.
1300 Section 9. Section 517.0616, Florida Statutes, is created
1301 to read:
1302 517.0616 Disqualification.—A registration exemption under
1303 s. 517.061(9), (10), and (11), s. 517.0611, or s. 517.0612 is
1304 not available to an issuer that would be disqualified under
1305 Securities and Exchange Commission Rule 506(d), 17 C.F.R. s.
1306 230.506(d), as amended, at the time the issuer makes an offer
1307 for the sale of a security.
1308 Section 10. Present subsections (4) through (8) of section
1309 517.081, Florida Statutes, are redesignated as subsections (6)
1310 through (10), respectively, new subsections (4) and (5) are
1311 added to that section, and subsection (2), paragraph (g) of
1312 subsection (3), and present subsection (7) of that section are
1313 amended, to read:
1314 517.081 Registration procedure.—
1315 (2) The office shall receive and act upon applications for
1316 the registration of to have securities registered, and the
1317 commission may prescribe forms on which it may require such
1318 applications to be submitted. Applications must shall be duly
1319 signed by the applicant, sworn to by any person having knowledge
1320 of the facts, and filed with the office. The commission may
1321 establish, by rule, procedures for depositing fees and filing
1322 documents by electronic means provided such procedures provide
1323 the office with the information and data required by this
1324 section. An application may be made either by the issuer of the
1325 securities for which registration is applied or by any
1326 registered dealer desiring to sell such securities the same
1327 within the state.
1328 (3) The office may require the applicant to submit to the
1329 office the following information concerning the issuer and such
1330 other relevant information as the office may in its judgment
1331 deem necessary to enable it to ascertain whether such securities
1332 shall be registered pursuant to the provisions of this section:
1333 (g)1. A specimen copy of the securities certificate, if
1334 applicable, and a copy of any circular, prospectus,
1335 advertisement, or other description of such securities.
1336 2. The commission shall adopt a form for a simplified
1337 offering circular to register, under this section, securities
1338 that are sold in offerings in which the aggregate offering price
1339 in any consecutive 12-month period does not exceed the amount
1340 provided in s. 3(b) of the Securities Act of 1933, as amended.
1341 The following issuers shall not be eligible to submit a
1342 simplified offering circular adopted pursuant to this
1343 subparagraph:
1344 a. An issuer seeking to register securities for resale by
1345 persons other than the issuer.
1346 b. An issuer that is subject to any of the
1347 disqualifications described in 17 C.F.R. s. 230.262, adopted
1348 pursuant to the Securities Act of 1933, as amended, or that has
1349 been or is engaged or is about to engage in an activity that
1350 would be grounds for denial, revocation, or suspension under s.
1351 517.111. For purposes of this subparagraph, an issuer includes
1352 an issuer’s director, officer, general partner, manager or
1353 managing member, trustee, or equity owner who owns at least 10
1354 percent of the ownership interests of the issuer, promoter, or
1355 selling agent of the securities to be offered or any officer,
1356 director, partner, or manager or managing member of such selling
1357 agent.
1358 c. An issuer that is a development-stage company that
1359 either has no specific business plan or purpose or has indicated
1360 that its business plan is to merge with an unidentified company
1361 or companies.
1362 d. An issuer of offerings in which the specific business or
1363 properties cannot be described.
1364 e. Any issuer the office determines is ineligible because
1365 the form does not provide full and fair disclosure of material
1366 information for the type of offering to be registered by the
1367 issuer.
1368 f. Any issuer that has failed to provide the office the
1369 reports required for a previous offering registered pursuant to
1370 this subparagraph.
1371
1372 As a condition precedent to qualifying for use of the simplified
1373 offering circular, an issuer shall agree to provide the office
1374 with an annual financial report containing a balance sheet as of
1375 the end of the issuer’s fiscal year and a statement of income
1376 for such year, prepared in accordance with United States
1377 generally accepted accounting principles and accompanied by an
1378 independent accountant’s report. If the issuer has more than 100
1379 security holders at the end of a fiscal year, the financial
1380 statements must be audited. Annual financial reports must be
1381 filed with the office within 90 days after the close of the
1382 issuer’s fiscal year for each of the first 5 years following the
1383 effective date of the registration.
1384 (4) The commission may, by rule:
1385 (a) Establish criteria relating to the issuance of equity
1386 securities, debt securities, insurance company securities, real
1387 estate investment trusts, oil and gas investments, and other
1388 investments. In establishing these criteria, the commission may
1389 consider the rules and regulations of the Securities and
1390 Exchange Commission and statements of policy by the North
1391 American Securities Administrators Association, Inc., relating
1392 to the registration of securities offerings. The criteria must
1393 include all of the following:
1394 1. The promoter’s equity investment ratio.
1395 2. The financial condition of the issuer.
1396 3. The voting rights of shareholders.
1397 4. The grant of options or warrants to underwriters and
1398 others.
1399 5. Loans and other transactions with affiliates of the
1400 issuer.
1401 6. The use, escrow, or refund of proceeds of the offering.
1402 (b) Prescribe forms requiring applications for the
1403 registration of securities to be submitted to the office,
1404 including a simplified offering circular to register, under this
1405 section, securities that are sold in offerings in which the
1406 aggregate offering price in any consecutive 12-month period does
1407 not exceed the amount provided in s. 3(b) of the Securities Act
1408 of 1933, as amended.
1409 (c) Establish procedures for depositing fees and filing
1410 documents by electronic means, provided that such procedures
1411 provide the office with the information and data required by
1412 this section.
1413 (d) Establish requirements and standards for the filing,
1414 content, and circulation of a preliminary, final, or amended
1415 prospectus, advertisements, and other sales literature. In
1416 establishing such requirements and standards, the commission
1417 shall consider the rules and regulations of the Securities and
1418 Exchange Commission relating to requirements for preliminary,
1419 final, or amended or supplemented prospectuses and the rules of
1420 the Financial Industry Regulatory Authority relating to
1421 advertisements and sales literature.
1422 (5) All of the following issuers are not eligible to submit
1423 a simplified offering circular:
1424 (a) An issuer that is subject to any of the
1425 disqualifications described in Securities and Exchange
1426 Commission Rule 262, 17 C.F.R. s. 230.262, as amended, or that
1427 has been or is engaged or is about to engage in an activity that
1428 would be grounds for denial, revocation, or suspension under s.
1429 517.111. For purposes of this paragraph, an issuer includes an
1430 issuer’s director, officer, general partner, manager or managing
1431 member, trustee, or a person owning at least 10 percent of the
1432 ownership interests of the issuer; a promoter or selling agent
1433 of the securities to be offered; or any officer, director,
1434 partner, or manager or managing member of such selling agent.
1435 (b) An issuer that is a development-stage company that
1436 either has no specific business plan or purpose or has indicated
1437 that its business plan is to merge with an unidentified business
1438 entity or entities.
1439 (c) An issuer of offerings in which the specific business
1440 or properties cannot be described.
1441 (d) An issuer that the office determines is ineligible
1442 because the simplified circular does not provide full and fair
1443 disclosure of material information for the type of offering to
1444 be registered by the issuer.
1445 (9)(a)(7) The office shall record the registration of a
1446 security in the register of securities if, upon examination of
1447 an any application, it finds that all of the following
1448 requirements are met: the office
1449 1. The application is complete.
1450 2. The fee imposed in subsection (8) has been paid.
1451 3. The sale of the security would not be fraudulent and
1452 would not work or tend to work a fraud upon the purchaser.
1453 4. The terms of the sale of such securities would be fair,
1454 just, and equitable.
1455 5. The enterprise or business of the issuer is not based
1456 upon unsound business principles.
1457 (b) Upon registration, the security may be sold by the
1458 issuer or any registered dealer, subject, however, to the
1459 further order of the office shall find that the sale of the
1460 security referred to therein would not be fraudulent and would
1461 not work or tend to work a fraud upon the purchaser, that the
1462 terms of the sale of such securities would be fair, just, and
1463 equitable, and that the enterprise or business of the issuer is
1464 not based upon unsound business principles, it shall record the
1465 registration of such security in the register of securities; and
1466 thereupon such security so registered may be sold by any
1467 registered dealer, subject, however, to the further order of the
1468 office. In order to determine if an offering is fair, just, and
1469 equitable, the commission may by rule establish requirements and
1470 standards for the filing, content, and circulation of any
1471 preliminary, final, or amended prospectus and other sales
1472 literature and may by rule establish merit qualification
1473 criteria relating to the issuance of equity securities, debt
1474 securities, insurance company securities, real estate investment
1475 trusts, and other traditional and nontraditional investments,
1476 including, but not limited to, oil and gas investments. The
1477 criteria may include such elements as the promoter’s equity
1478 investment ratio, the financial condition of the issuer, the
1479 voting rights of shareholders, the grant of options or warrants
1480 to underwriters and others, loans and other affiliated
1481 transaction, the use or refund of proceeds of the offering, and
1482 such other relevant criteria as the office in its judgment may
1483 deem necessary to such determination.
1484 Section 11. Subsection (2) of section 517.101, Florida
1485 Statutes, is amended to read:
1486 517.101 Consent to service.—
1487 (2) Any such action must shall be brought either in the
1488 county of the plaintiff’s residence or in the county in which
1489 the office has its official headquarters. The written consent
1490 must shall be authenticated by the seal of the said issuer, if
1491 it has a seal, and by the acknowledged signature of a director,
1492 manager, managing member, general partner, trustee, or officer
1493 of the issuer member of the copartnership or company, or by the
1494 acknowledged signature of any officer of the incorporated or
1495 unincorporated association, if it be an incorporated or
1496 unincorporated association, duly authorized by resolution of the
1497 board of directors, trustees, or managers of the corporation or
1498 association, and must shall in such case be accompanied by a
1499 duly certified copy of the resolution of the issuer’s board of
1500 directors, trustees, managers, managing members, or general
1501 partners or managers of the corporation or association,
1502 authorizing the signer to execute the consent officers to
1503 execute the same. In case any process or pleadings mentioned in
1504 this chapter are served upon the office, service must it shall
1505 be by duplicate copies, one of which must shall be filed in the
1506 office and the other another immediately forwarded by the office
1507 by registered mail to the principal office of the issuer against
1508 which the said process or pleadings are directed.
1509 Section 12. Section 517.131, Florida Statutes, is amended
1510 to read:
1511 517.131 Securities Guaranty Fund.—
1512 (1) As used in this section, the term “final judgment”
1513 includes an arbitration award confirmed by a court of competent
1514 jurisdiction.
1515 (2)(a) The Chief Financial Officer shall establish a
1516 Securities Guaranty Fund to provide monetary relief to victims
1517 of securities violations under this chapter who are entitled to
1518 monetary damages or restitution and cannot recover the full
1519 amount of such monetary damages or restitution from the
1520 wrongdoer. An amount not exceeding 20 percent of all revenues
1521 received as assessment fees pursuant to s. 517.12(9) and (10)
1522 for dealers and investment advisers or s. 517.1201 for federal
1523 covered advisers and an amount not exceeding 10 percent of all
1524 revenues received as assessment fees pursuant to s. 517.12(9)
1525 and (10) for associated persons must shall be part of the
1526 regular registration license fee and must shall be transferred
1527 to or deposited in the Securities Guaranty Fund.
1528 (b) If the balance in the Securities Guaranty Fund at any
1529 time exceeds $1.5 million, transfer of assessment fees to the
1530 this fund must shall be discontinued at the end of that
1531 registration license year, and transfer of such assessment fees
1532 may shall not resume be resumed unless the fund balance is
1533 reduced below $1 million by disbursement made in accordance with
1534 s. 517.141.
1535 (2) The Securities Guaranty Fund shall be disbursed as
1536 provided in s. 517.141 to a person who is adjudged by a court of
1537 competent jurisdiction to have suffered monetary damages as a
1538 result of any of the following acts committed by a dealer,
1539 investment adviser, or associated person who was licensed under
1540 this chapter at the time the act was committed:
1541 (a) A violation of s. 517.07.
1542 (b) A violation of s. 517.301.
1543 (3) A Any person is eligible for payment to seek recovery
1544 from the Securities Guaranty Fund if the person:
1545 (a)1. Holds an unsatisfied final judgment entered on or
1546 after October 1, 2024, in which a wrongdoer was found to have
1547 violated s. 517.07 or s. 517.301;
1548 2. Has applied any amount recovered from the judgment
1549 debtor or any other source to the damages awarded by the court
1550 or arbitrator; and
1551 3. Is a natural person who was a resident of this state, or
1552 is a business entity that was domiciled in this state, at the
1553 time of the violation of s. 517.07 or s. 517.301; or
1554 (b) Is a receiver appointed pursuant to s. 517.191(2) by a
1555 court of competent jurisdiction for a wrongdoer ordered to pay
1556 restitution under s. 517.191(3) as a result of a violation of s.
1557 517.07 or s. 517.301 which has requested payment from the
1558 Securities Guaranty Fund on behalf of a person eligible for
1559 payment under paragraph (a)
1560
1561 If a person holds an unsatisfied final judgment entered before
1562 October 1, 2024, in which a wrongdoer was found to have violated
1563 s. 517.07 or s. 517.301, such person’s claim for payment from
1564 the Securities Guaranty Fund shall be governed by the terms of
1565 this section and s. 517.141 which were effective on the date of
1566 such final judgment