Registration for Resale, or Dealing and Trading
(1)Eligibility. A licensed broker-dealer may register securities for resale, or dealing and trading purposes if:
(a)The securities are outstanding in the hands of the public; and either:
(A)The issuer is organized under the laws of the United States or any state, as defined in ORS 174.100 (Definitions); or
(B)There are at least 300 beneficial owners of the security domiciled in the United States.
(b)The issuer has not made an offer of the same class of securities for six months except to employees;
(c)The securities were acquired in the ordinary and usual course of business by the seller and are not part of an unsold allotment or an attempt to evade the Oregon Securities Law;
(d)The securities are sold at prices reasonably related to the current market price at the time of sale if a market exists;
(e)Any commissions collected by the broker-dealer on account of the sale are not in excess of the usual and customary commissions collected with respect to securities and transactions having comparable characteristics; and
(f)The issuer agrees or is required to provide an audited balance sheet, statement of income or operations, and statement of cash flows annually to the holders of the class of security to be registered.
(2)Disqualification. Registration for resale, or dealing and trading may be denied if at the time of application the issuer is insolvent or if, within the five years preceding the filing of the application, the issuer or any executive officer, director, or general partner of the issuer:
(a)Has been subject to an administrative order issued by the Director for violation of any provision of the Oregon Securities Law or any rule or order of the Director;
(b)Has been or is engaged in dishonest or fraudulent conduct with regard to the securities;
(c)Has been convicted of a misdemeanor, an essential element of which is fraud, or a felony;
(d)Has made or caused to be made to the Director any false representation of a material fact or has suppressed or withheld from the Director any material information;
(e)Has refused to permit an examination to be made by the Director or failed to file any report including any financial report or furnish any information required by the Director in connection with the Oregon Securities Law;
(f)Has been subject to any order entered by an governmental agency or self-regulatory organization prohibiting or suspending the person from engaging in or continuing any conduct or practice involving any aspect of the securities business; or
(g)Has been subject to any judgment or decree of any court of competent jurisdiction which is based on either securities violations or fraud.
(3)Conditions of registration:
(a)The registration shall not be effective for sales which occur within 90 days after any public offering of the same class of securities which is not registered with the Securities and Exchange Commission under the Securities Act of 1933;
(b)The security shall not be sold pursuant to exemption under ORS 59.035 (Transactions exempt from registration)(8), (9), or (10) when the registration is ineffective under subsection (3)(a) of this rule. This condition shall not apply to sales for which the broker-dealer places in its records reasonably sufficient evidence to document that the securities sold were issued and outstanding prior to the public offer, or are not part of the new issue.
(4)Application. An applicant for registration for resale, or dealing and trading shall apply on a form approved by the Director. The application must be accompanied by the following information:
(a)The information required under subsection (5)(b) of this rule;
(c)The annual report of the issuer for the most recent fiscal year including audited financial statements;
(d)Interim financial statements of the issuer not over 135 days old (unless annual statements are current); and
(e)If the issuer is not a United States organization, a signed opinion of counsel duly licensed in any of the United States that the securities are qualified for sale in the United States or evidence that the securities are registered with the Securities and Exchange Commission.
(5)Recordkeeping and notice to purchasers:
(a)The applicant and any other broker-dealer relying upon the registration must:
(A)Maintain the information required in subsection (5)(b) of this rule in its records and keep the information reasonably current for each sale;
(B)Notify any proposed purchaser prior to the time of sale that the information is in its records; and
(C)Make the information reasonably available upon request to any person expressing an interest in a proposed transaction in the security with the broker-dealer.
(b)The applicant must maintain in its records at the time of sale and for two years after any sale the information listed in this section. The broker-dealer must have obtained the information from sources which it has a reasonable basis for believing are reliable. Forms filed by the issuer with the Securities and Exchange Commission are deemed a reliable source:
(A)The exact name of the issuer and its predecessor (if any);
(B)The address of its principal executive offices;
(C)The date and state, province, or nation of organization and type of organization;
(D)The exact title and class of the security;
(E)The par or stated value of the security;
(F)The number of shares or total amount of the securities outstanding as of the end of the issuer’s most recent fiscal year;
(G)The name and address of the transfer agent;
(H)The nature of the issuer’s business;
(I)The nature of products or services offered;
(J)The nature and extent of the issuer’s facilities;
(K)The name of the chief executive officer and members of the board of directors;
(L)The issuer’s most recent balance sheet and statement of income or operations and cash flows, which must be audited;
(M)Similar financial information, which may be unaudited, for such part of the two fiscal years preceding the audited balance sheet and statements as the issuer or its predecessor has been in existence;
(N)Whether the broker-dealer or any associated person is affiliated directly or indirectly with the issuer;
(O)Whether the registration is submitted directly or indirectly for the benefit of any other broker-dealer, and, if so, the name of such broker-dealer; and
(P)Whether the registration is being submitted directly or indirectly on behalf of the issuer, or any director, controlling person, officer, or any person, directly or indirectly the beneficial owner of more than ten percent of the outstanding units or shares of any equity security of the issuer and, if so, the name of such person and the basis for any exemption under the federal securities laws for any sales of such securities on behalf of such person.
(c)When the information described in subsection (5)(b) of this rule is made available to others upon request pursuant to this rule, such delivery, unless otherwise represented, shall not constitute a representation by such broker-dealer that such information is true and correct, but shall constitute a representation by such broker-dealer that the information is reasonably current in relation to the day the information is submitted, that the broker-dealer has no reasonable basis for believing the information is not true and correct, and that the information was obtained from sources which the broker-dealer has a reasonable basis for believing are reliable.
Rule 441-065-0040 — Registration for Resale, or Dealing and Trading,