Securities

REGULATION D EXEMPT FILINGS

Regulation D Exemptions - Overview

Regulation D is a set of rules promulgated by the U.S. Securities and Exchange Commission (SEC) pursuant to the federal Securities Act of 1933, which provides exemptions from federal securities registration for certain defined offers and sales of securities.

Under Regulation D, three registration exemptions are authorized.  These exemptions are contained in, Rule 504, Rule 505 and Rule 506.  The corresponding exemptions under the Illinois Securities Law of 1953 are Section 4.G (limited offering exemption), Section 4.D (Uniform Limited Offering Exemption [ULOE]) and Section 2a. (Notification Filing for Covered Securities), respectively.

The disclosure document provided to investors must meet specific federal disclosure requirements. Prescribed formats for disclosure documents depend on the offering amount to be raised. All material information must be disclosed to allow prospective investors to make an informed decision.

A company cannot advertise or attempt general solicitation of investors under these exemptions. A company must inform potential investors of any resale restrictions.

NOTE: EFFECTIVE MARCH 16, 2009, THE SEC MANDATED THAT ALL FORM D FILINGS MADE TO THE SEC BE SUBMITTED IN ELECTRONIC FORMAT. PAPER FILINGS OF FORM D ARE NO LONGER ACCEPTED BY THE SEC.

THE ILLINOIS SECURITIES DEPARTMENT ACCEPTS ONLY A COPY OF THE ELECTRONIC VERSION OF FORM D THAT HAS BEEN FILED WITH THE SEC.

For information regarding the Form D electronic filing process available thru the SEC click here and here.

Regulation D Rule 504 – Limited Offering Exemption

Section 4.G of the Illinois Securities Law and Sections 130.440, 130.441 and 130.442 of the Rules and Regulations may be used for a Regulation D Rule 504 limited offering.

The maximum offering amount for a Regulation D Rule 504 offering is $1 million.

The Section 4.G exemption may be used in conjunction with federal Regulation D Rule 504, provided there is no advertising or general solicitation of investors.

Filing Requirements:

• Illinois Form 4G “Report of Sale” or SEC Form D.
• Payment of a filing fee of $100 made payable to the Secretary of State.
  
  Mail to:
  Illinois Securities Department
  Jefferson Terrace, Suite 300A
  300 West Jefferson Street
  Springfield, Illinois 62702

Illinois Form 4G or Form D must be submitted to the Illinois Securities Department no later than twelve months after the date of the first sale to an Illinois resident.

Regulation D Rule 505 - Uniform Limited Offering Exemption (ULOE)

Section 4.D of the Illinois Securities Law and Section 130.420 of the Rules and Regulations set forth the requirements of the Uniform Limited Offering Exemption (ULOE).

The maximum offering amount for a Regulation D 505 or ULOE offering is $5 million.

Offerings under Regulation D Rule 505 can be offered to an unlimited number of accredited investors. However, the offering cannot be sold to more than 35 non-accredited investors, regardless of residency.

This exemption must be used in conjunction with federal Regulation D Rule 505.

Filing Requirements:

• Copy of Form D as filed with the SEC.
• Payment of a filing fee of $200 made payable to the Secretary of State.
  
  Mail to:
  Illinois Securities Department
  Jefferson Terrace, Suite 300A
  300 West Jefferson Street
  Springfield, Illinois 62702

Form D must be submitted to the Illinois Securities Department no later than 15 days after the receipt of consideration or delivery of a subscription agreement.

Form D must also be filed with the SEC as well as the Illinois Securities Department to qualify for the exemption.

Regulation D Rule 506 – Notification Filing

Section 2a. of the Illinois Securities Law and Section 130.293 of the Rules and Regulations set forth the Notification Filing requirements of a Regulation D Rule 506 offering.

There is no maximum offering amount for a Regulation D Rule 506 offering.

Offerings under Regulation D Rule 506 can be offered to an unlimited number of accredited investors. However, the offering cannot be sold to more than 35 non-accredited investors, regardless of residency.

This exemption must be used in conjunction with federal Regulation D Rule 506.

Filing Requirements:

• Copy of Form D as filed with the SEC.
• Payment of a filing fee of $100 made payable to the Secretary of State.
  
  Mail to:
  Illinois Securities Department
  Jefferson Terrace, Suite 300A
  300 West Jefferson Street
  Springfield, Illinois 62702

Form D must be filed with the SEC as well as the Illinois Securities Department to qualify for the exemption.

DISCLAIMER
The Secretary of State, Illinois Securities Department or their information providers shall not be liable regardless of the cause or duration, for any errors, inaccuracies, omissions or untimeliness of the information, or for any delay or interruption in the transmission thereof to the user, or for any claims or losses arising therefrom.