The ABA Committee of State Securities Regulation sent a letter on June 27th to Don Saxon, the Ombudsman for the North American Securities Administrators Association (NASAA) and Commissioner of the Florida Office of Financial Regulation, requesting that he speak with the various state securities commissioners about redrafting their compensatory benefit plan exemptions to make them uniform with each other. The particular concern is with the exemptions for securities issued under compensatory arrangements by issuers relying on the registration exemption under Rule 701 of the Securities Act of 1933. Ellen Lieberman, the Chair of the ABA Committee, said that investor protection is not being served by the states' compensatory benefit plan exemptions remaining nonuniform.
The Committee suggested that the specific language from Section 202(21) of the Uniform Securities Act of 2002, endorsed by NASAA, be embraced by the states in their redrafts. Section 202(21) grants an exemption for
an employees' stock purchase, savings, option, profit-sharing, pension, or similar employees' benefit plan, including any securities, plan interests, and guarantees issued under a compensatory benefit plan or compensation contract, contained in a record, established by the issuer, its parents, its majority-owned subsidiaries, or the majority-owned subsidiaries of the issuer's parent for the participation of their employees including offers or sales of such securities to: (A) directors; general partners; trustees, if the issuer is a business trust; officers; consultants; and advisors; (B) family members who acquire such securities from those persons through gifts or domestic relations orders; (C) former employees, directors, general partners, trustees, officers, consultants, and advisors if those individuals were employed by or providing services to the issuer when the securities were offered; and (D) insurance agents who are exclusive insurance agents of the issuer, or the issuer's subsidiaries or parents, or who derive more than 50 percent of their annual income from those organizations.