South Carolina Code of Regulations › Chapter 13 - ATTORNEY GENERAL › Article 2 - SECURITIES › Subarticle 2 - EXEMPTIONS FROM SECURITIES › Section 13-206 - Intrastate Offering Exemption

Current through Register Vol. 48, No. 6, June 28, 2024
A.
				The offer or sale of a security by an issuer, conducted solely in this state to
				residents of this state, shall be exempt from the requirements of Sections
				35-1-301
				through
				35-1-306
				and
				35-1-504
				of the Act, if the offer or sale is conducted in accordance with each of the
				following requirements:
(1) The issuer of the
				security shall be a for-profit business entity formed under the laws of the
				state of South Carolina and registered with the Secretary of State.
(2) The transaction shall meet the
				requirements of the federal exemption for intrastate offerings in either:
(a) Section
				3(a)(11) of the Securities
				Act of 1933 (
				15 U.S.C. Section
				77c(a)(11) ), and SEC Rule
				147 (
				17
				C.F.R. 230.147 ); or
(b) Rule 147A (
				17
				C.F.R. 230.147 ).
(3) The sum of all cash and other
				consideration to be received for all sales of the security in reliance upon
				this exemption shall not exceed one million ($1,000,000) dollars, less the
				aggregate amount received for all sales of securities by the issuer within the
				12 months before the first offer or sale made in reliance upon this
				exemption.
(4) The issuer shall not
				accept more than five thousand ($5,000) dollars from any single purchaser
				unless the purchaser is an accredited investor as defined by Rule
				501 of SEC Regulation D (
				17 C.F.R.
				230.501 ).
(5) The issuer must reasonably believe that
				all purchasers of securities are purchasing for investment purposes.
(6) A commission or other remuneration shall
				not be paid or given, directly or indirectly, for any person's participation in
				the offer or sale of securities unless the person is registered as a
				broker-dealer or agent under the Act.
(7) All funds received from investors shall
				be deposited into a bank or depository institution authorized to do business in
				South Carolina, and all of the funds shall be used in accordance with
				representations made to investors.
(8) Not less than five days prior to the use
				of any general solicitation, or within fifteen days after the first sale of the
				security pursuant to this exemption (provided no general solicitation has been
				used prior to such sale), whichever occurs first, the issuer shall provide a
				notice to the Securities Commissioner in writing. The notice shall specify that
				the issuer is conducting an offering in reliance upon this exemption and shall
				contain the names and addresses of the following persons:
(a) The issuer;
(b) Officers, directors, and any control
				person of the issuer;
(c) All
				persons who will be involved in the offer or sale of securities on behalf of
				the issuer; and
(d) The bank or
				other depository institution in which investor funds will be
				deposited.
(9) The
				issuer shall not be, either before or as a result of the offering, an
				investment company as defined in Section 3 of the Investment Company Act of
				1940 (
				15 U.S.C. Section
				80a-3 ), or subject to the reporting
				requirements of Section
				13 or 15(d) of the Securities Exchange Act
				of 1934 (
				15 U.S.C. Section
				78m and
				78o(d)
				).
(10) The issuer shall inform all
				purchasers that the securities have not been registered under the Act and that
				the securities are subject to the limitation on resales contained in either:
(a) Subsection (e) of SEC Rule 147 (
				17
				C.F.R. 230.147(e) ), in the
				manner described in subsection (f) of SEC Rule 147 (
				17
				C.F.R. 230.147(f) );
				or
(b) Subsection (e) of SEC Rule
				147A, (
				17 C.F.R.
				230.147A(e) ), in the manner
				described in subsection (f) of SEC Rule 147A (
				17 C.F.R.
				230.147A(f) ).
(11) This exemption shall not be
				used in conjunction with any other exemption under these Rules or the Act,
				except for offers and sales to officers, directors, partners, or similar
				controlling persons of the issuer. Sales to such controlling persons shall not
				count toward the limitation in subsection A(3) above.
(12) Disqualifications. This exemption shall
				not be available if the issuer, or any of its officers, controlling persons, or
				promoters is subject to a disqualifying event specified in Subsection (d) of
				Rule 506 of SEC Regulation D (
				17
				C.F.R. 230.506(d)
				).
(13) Nothing in this exemption
				is intended to relieve or should be construed as in any way relieving the
				issuers or persons acting on behalf of issuers from the anti-fraud provisions
				of the Act.
(14) Every notice of
				exemption provided for in Subsection A(8) above is effective for one year from
				the date of its filing with the Securities Commissioner and shall be
				accompanied by a non-refundable filing fee of three hundred ($300.00)
				dollars.