By Jay Fishman, J.D.
The Nebraska Department of Banking and Finance has amended its broker-dealer agent written exam requirement, along with its intrastate crowdfunding, domestic issuer, agriculture cooperative and exchange listed exemptions. The changes took effect November 25, 2018.
Broker-Dealer Agents.
Broker-dealer agent written examinations. Broker-dealer agents need to take and pass the Uniform Securities Agent State Law Examination (Series 63), along with FINRA Rule 1220-required exams. The Uniform Combined State Law Examination (Series 66) may be taken instead of the Series 63 by an agent who also takes and passes the General Securities Representative Examination (Series 7). The Series 6, 22, and 79 were eliminated from the list of possible exams to take.
Exempt Securities.
Exchange listed exemption. Stock exchanges approved for Nebraska’s exchange listed exemption are securities exchanges specified by federal Securities Act, Section 18(b)(1) and SEC Rule 230.146, as well as the Chicago Stock Exchange. The “notice filing” and “cure order” provisions were eliminated.
Exempt Transactions.
Cooperative exemption. An agricultural cooperative transaction exemption was re-titled to broaden its coverage to cooperatives and cooperatives under the Limited Cooperative Association.
Domestic issuer exemption. Information rule requirements. Previously, a Nebraska issuer could claim the statutory exemption at Section 8-1111(23) for a nonpublic offering made exclusively to Nebraska residents, provided: (1) the issuer’s total sale proceeds in any two-year period does not exceed $250,000 [now $750,000], and at least 80 percent of those proceeds are used in Nebraska; (2) no commissions or other remuneration are paid directly or indirectly to any person for soliciting prospective purchasers, except if paid to a Nebraska registered broker-dealer or agent; (3) the issuer or its affiliates are not subject to the statutory exemption’s disqualification provisions; (4) the issuer files a notice with the Department of Banking and Finance no later than 15 business days before any sales are made under this exemption; (5) the issuer sends the Director a statement showing the number of investors, total dollar amount raised and use of proceeds, within 30 days after the offering completes; and (6) the offering complies with SEC Rule 147 [ and as amended: or SEC Rule 147A].
Effectiveness. Previously, a filed exemption notice remains effective until the earliest of the following events to occur: (1) $250,000 [now $750,000] in proceeds is raised; (2) two years from the first sale date; or (3) the issuer sends the Director a statement showing the number of investors, total dollar amount raised and use of proceeds, within 30 days after the offering completes.
Intrastate crowdfunding exemption. Advertising. Previously, for the statutory intrastate crowdfunding exemption at Section 8-1111(24), an issuer’s or funding portal’s general announcement about the issuer’s offering being made under the exemption will not be considered a securities offer, provided the following are included with the general announcement: (1) a statement that the issuer is conducting an offering, the name of the portal operator conducting the offering and a link directing potential investors to the funding portal; (2) the maximum offering amount; and (3) factual information about the issuer’s legal identity and business location, limited to the issuer’s name and address, and a brief description of its business. Additionally, any general announcement about the issuer’s offering must contain a statement clearly declaring that the offering is directed only to Nebraska residents [now deleted: and may only be distributed within Nebraska. An issuer may post this general announcement on its website provided the issuer obtains an affirmative representation that a person is a Nebraska resident before allowing that person to view the general announcement].