California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 2 - Exemptions from Qualification › Section 260.105.11 - Securities of Foreign Issuers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) There is hereby exempted from the
				  provisions of Section
				  25130 of the Code as not being
				  comprehended within the purposes of the Corporate Securities Law of 1968 and
				  the qualification of which is not necessary or appropriate in the public
				  interest or for the protection of investors, any offer or sale of a security
				  issued by any corporation organized under the laws of a foreign country or of a
				  certificate of deposit, receipt or other evidence relating to such a security,
				  provided one of the following conditions is met:
(1) The issuer is currently required to file
				  with the Securities and Exchange Commission information and reports pursuant to
				  Section 15(d) of the
				  Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.] and is not
				  delinquent in such filing.
(2)
(i) The security appears on the most recent
				  Federal Reserve Board List of Foreign Margin Stocks or
(ii) the security is deemed by the Securities
				  and Exchange Commission to have a "ready market" for purposes of Securities and
				  Exchange Commission Rule 15c3-1 (17 C.F.R. 240.15c3-1). A
				  broker-dealer may rely on written "no action" or interpretive letters issued by
				  the Securities and Exchange Commission or its staff regarding the Securities
				  and Exchange Commission's "ready market" criteria.
(3) The issuer is not subject to the
				  reporting requirements of Section
				  13 or
				  15(d) of the
				  Securities Exchange Act of 1934 and all of the following conditions are met:
(A) The issuer, including any predecessors,
				  has been in continuous operation for at least 5 years and is a going concern
				  actually engaged in business and neither in the organization stage nor in
				  bankruptcy or receivership.
(B) The
				  number of shares outstanding is at least 2.5 million worldwide and the number
				  of shareholders is at least 5,000 worldwide.
(C) The market value of the outstanding
				  shares, other than debt securities and preferred stock, is at least US$100
				  million worldwide.
(D) The issuer,
				  as of the date of its most recent financial statements, which may not be more
				  than 18 months old and which have been audited in accordance with the generally
				  accepted accounting principles of its country of domicile, has net tangible
				  assets of at least US$100 million worldwide.
(E) The issuer has net income after all
				  charges, including taxes and extraordinary losses, and excluding extraordinary
				  gains, or either:
1. At least US$50 million in
				  total for its last 3 fiscal years; or
2. At least US$20 million in each of its last
				  2 fiscal years.
(F) If
				  the security is a debt security or preferred stock, the issuer has not, during
				  the past five years or during the period of its existence if shorter, defaulted
				  in the payment of any dividend, principal, interest or sinking fund installment
				  thereon.