Section 260.140.112.3 - Presumptive Suitability Standards(a) Investors shall have a minimum annual gross income of $30,000 and a net worth of $30,000 or, in the alternative, a minimum net worth of $75,000. For programs offering mandatory deferred payments on account of the purchase price of program interests, investors shall ordinarily have a minimum annual gross income of $60,000 and a net worth of $60,000 or, in the alternative, a net worth of $225,000. In high-risk or principally tax-oriented offerings, higher suitability standards may be required. In low-risk or non-tax-oriented offerings, lower suitability standards may be allowed.(b) The Commissioner may approve any offering on a basis other than that permitted in these rules where the investor has a minimum net worth of up to $250,000 and had during the last tax year, or estimates that the investor will have during the current tax year, gross income of $65,000 or, in the alternative, a minimum net worth of up to $500,000. In the case of such offerings, the Commissioner may require a statement signed by the investor acknowledging the manner in which the program varies from these rules.(c) Net worth shall be determined exclusive of home, home furnishings and automobiles. Assets included in the computation of net worth may be valued at fair market value.(d) In the case of sales to fiduciary accounts, the suitability standards shall be met by each beneficiary of the account. Where the fiduciary is the donor of the funds for investment in the program the fiduciary may meet the suitability standards. If the only beneficiaries of the fiduciary account are the donor's ancestors, descendants or spouse, the suitability standards may be met by the donor to the account.Cal. Code Regs. Tit. 10, § 260.140.112.3
1. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
2. Renumbering and amendment of former section 260.140.112.2 to section 260.140.112.3 and renumbering of former section 260.140.112.3 to section 260.140.112.4 filed 5-18-92; operative 6-17-92 (Register 92, No. 22). Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.
1. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
2. Renumbering and amendment of former section 260.140.112.2 to section 260.140.112.3 and renumbering of former section 260.140.112.3 to section 260.140.112.4 filed 5-18-92; operative 6-17-92 (Register 92, No. 22).