Okla. Admin. Code § 660:11-9-32

Current through Vol. 41, No. 19, June 17, 2024

Section 660:11-9-32 - Impound agreements

(a)General requirements. In any instance where impoundment of the proceeds of sale of securities is determined to be in the public interest and necessary for the protection of investors, as a condition of registration the Administrator may require that the registrant deposit a specific percentage or amount of the proceeds from the sale of the registrant's securities in an acceptable depository pursuant to a written agreement between the registrant issuer and the depository. The proceeds shall be retained therein until a specific sum has been accumulated and the terms and conditions of the agreement have been performed.

(b)Filing requirement. Each impound agreement shall be negotiated between the depositor and the depository and an executed copy filed with the Administrator.

(c)Required provisions. Each such impound agreement shall substantially comply with the following guidelines and shall contain the following terms or information:

(1) the date of the agreement;

(2) the names and addresses of the depositor and the depository;

(3) the specified percentage or amount of gross proceeds from the sale of the securities involved to be deposited;

(4) the aggregate sum to be accumulated;

(5) the date on or before which such accumulation shall be completed;

(6) the conditions under which the impounded funds are to be released to the depositor, or are to be refunded to the persons entitled thereto, and by whom and in what manner such refunding is to be effected;

(7) a provision that interest and other earnings, if any, from the impounded funds shall be distributed to the public investors if the impounded offering proceeds are refunded;

(8) a statement that neither release nor refunding of the impounded funds is to be effected unless and until the depositor has given the Administrator and/or Commission ten (10) days written notice of the action to be taken. To be complete, such notice shall contain a sworn affidavit from the applicant that all the terms of the escrow agreement have been properly fulfilled.

(d)Prohibited provisions. An impound agreement will not be acceptable, except upon unusual circumstances with prior approval of the Department, if the agreement:

(1) provides for the depositor to make any levy or assessment or to apply any lien on or against the impounded funds. It is the intent and purpose hereof that all charges, fees, and costs incurred in respect to the impound agreement and its performance be charged to and be borne by the depositor;

(2) provides for or permits credit towards or inclusion in the specific sum to be accumulated of any monies deposited in the account, including interest or other earnings directly attributable to the impounded funds, if such monies constitute proceeds of any transaction or were derived from sources other than sales of the depositor's securities;

(3) provides for any rights of the depositor to require release of, or obligation on the part of the depository to release all or any part of the impounded funds, except after accumulation in the fund of a specific sum on or before the date fixed by the impound agreement for the accumulation to be completed.

Okla. Admin. Code § 660:11-9-32

Added at 21 Ok Reg 2532, eff 7-1-04