Section 0780-04-02-.03 - SECURITIES REGISTRATION GENERALLY(1) Review Procedures for Registrations. (a) At the time an application to register securities that is subject to review under either paragraph (3) of Rule 0780-04-02-.01 or paragraph (4) of Rule 0780-04-02-.02 is filed and the proper fee is received, the Division may in its sole discretion make a preliminary review of the application to determine which of the following review procedures will be employed in connection with the filing: 1. Deferred Review. If the Division staff has determined after an initial analysis that the application is so deficient or presents problems so serious that the Division could not justify spending more time in reviewing the application, review will be deferred and the applicant will be promptly notified. Detailed comments will not be prepared or issued and it will be the responsibility of the applicant to consider whether to withdraw or amend the application.2. Summary Review. This category of review involves notification to an applicant that the Division staff has made only a summary review of the application and only such comments as may arise from such review will be made. In such cases, applicants may be required to furnish as supplemental information certain representations on behalf of the issuer, including representations that the issuer is aware that the Division staff has made only a summary rather than a detailed full review of the application.3. Full Review. In the final category of review, applications will receive a more complete accounting, financial, and legal review. The Division staff will undertake to provide timely comments regarding the application for registration, which may include requirements for additional exhibits or supplemental data. Upon satisfactory compliance with any comments, the Division shall declare the application effective or conditionally clear the application pending notice of SEC effectiveness without a receipt of representation letters from the persons mentioned in the preceding part (1)(a)2.(b) Notwithstanding the type of review performed, the burden of compliance with the Act and these Rules remains with the issuer and as a matter of law cannot be shifted to the Division's staff.(2) Post Effective Reports. (a) The assistant commissioner may as a condition to registration require the person who filed the application for registration to file specified current financial information on a periodic basis. The assistant commissioner may also as a condition to registration require the filing of periodic reports on the use of proceeds. Such information may be submitted in letter form or by filing a copy of any form containing the required information that the issuer has filed with the SEC or any state securities agency.(b) The person who filed the application for registration shall file a final sales report of the dollar amount and number of securities sold in this state, provided, however, that no final sales report shall be due with respect to any twelve (12) month period covering an initial registration or a renewal pursuant to which the maximum filing fee was paid pursuant to T.C.A. § 48-1-107(b). Unless an extension is granted by the assistant commissioner, such report shall be filed within thirty (30) days after the expiration of the effectiveness of the registration statement or the termination or completion of the offering of the securities covered by the registration statement, whichever is earlier. The report may be submitted in letter form or by filing a copy of any form containing the required information that the issuer has filed with the SEC or any state securities agency.(3) Legend Requirement. (a) Offering documents for securities to be registered in this state and registered or to be registered with the SEC under the 1933 Act shall contain on the cover page substantially the following legend in capital letters and, if printed, in boldface roman type at least as high as ten (10) point modern type: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
(b) Offering documents for securities to be registered in this state that will not be registered with the SEC under the 1933 Act shall contain on the cover page substantially the following legend in capital letters and, if printed, in boldface roman type at least as high as ten (10) point modern type: THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION SET FORTH IN THE SECURITIES ACT OF 1933. THESE SECURITIES HAVE BEEN REGISTERED WITH THE TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE. SUCH REGISTRATION DOES NOT CONSTITUTE A RECOMMENDATION OR ENDORSEMENT OF ANY SECURITY, NOR HAS THE TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS OFFERING DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
(4) Prospectuses. (a) Preliminary Prospectuses. The publication and distribution of preliminary prospectuses in connection with proposed offerings to Tennessee residents shall be permitted if such preliminary prospectuses: 1. Are used for the purpose of obtaining indications of interest (as distinguished from firm commitments to purchase) in the proposed securities;2. Are filed with the Division no later than the date of first use in this state; and3. Contain the legend required by the SEC, if applicable, or substantially the following legend in capital letters and, if printed, in at least as high as ten (10) point modern boldface roman type on the cover: AN APPLICATION TO REGISTER THESE SECURITIES HAS BEEN FILED WITH THE TENNESSEE COMMISSIONER OF COMMERCE AND INSURANCE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION BECOMES EFFECTIVE.
(b) Any person filing a registration statement pursuant to T.C.A. § 48-1-105 that is described in paragraph (2) of Rule 0780-04-02-.01 or pursuant to T.C.A. § 48-1-106 shall promptly file with the Division all amendments to each registration statement (other than amendments which merely delay the effective date of the registration statement) and all supplements to each addition or deletion to the offering material made in the amendment.(c) After the effective date of an application to register securities, no prospectus shall be used in this state unless it contains all supplements to the prospectus as of the date of its use.(5) Abandonment. If an application to register securities has been on file with the Division for more than one (1) year without becoming registered, or if no written communication addressing offering terms in response to comments or a substantive amendment is received in connection with the application for a period of six (6) months, the Division may, in its discretion, determine whether the application for registration has been abandoned by the following procedure: (a) Notice will be sent to the correspondent designated on the Form U-1, as amended, by certified mail, return receipt requested, at the correspondent's most recent address designated on the Form U-1. Such notice will inform the correspondent that the application for registration is out of date and must either be updated or withdrawn within thirty (30) days after the date of such notice.(b) If the correspondent fails to respond to such a notice by filing a substantive update or withdrawing the application for registration, the Division may enter an order declaring the application for registration abandoned.(c) If applicable, the applicant may request a return of the refundable portion of the registration fee pursuant to subparagraph (2)(c) of Rule 0780-04-01-.04.(6) Blank-Check Offerings. (a) This paragraph (6) is not intended to apply to offerings to be registered where the type of business or property is identified in the registration statement but the specific property or investment has not been identified. Specifically, this paragraph (6) shall not be applied to non-specified blind-pool offerings with adequate disclosure of investment objectives.(b) An issuer must disclose with specificity, in the registration statement, its business plan and its intended use of net proceeds from an offering to be registered. The description of the issuer's business plan and use of net proceeds must enable offerees to know with reasonable certainty what types of business or industry the issuer will be engaged in, the types of products or services the issuer will manufacture, sell, or provide, and the identity and experience of the principal managers of the business to be acquired or developed.(c) An offering of securities by a development stage company that commits less than seventy-five percent (75%) of the net proceeds of an offering for use in a specific business to be acquired or developed shall be considered a blank-check offering. The commissioner shall deem the registration statement of a blank-check offering to be one that omits to state a necessary material fact under T.C.A. § 48-1-121(a)(2) and the blank-check offering itself as one that would work, or tend to work, a fraud on purchasers, and may take any action authorized by law, including but not limited to the issuance of an order pursuant to T.C.A. §§ 48-1-108 and 48-1-116 denying, suspending, or revoking registration or the use of any exemption, which order may name the issuer, its controlling persons, and any underwriter or seller of the securities.(d) For purposes of this paragraph (6), the terms below shall have the following meanings; 1. "Development stage company" shall mean any issuer devoting substantially all of its efforts to establishing a new business and either: (i) planned principal operations have not commenced; or (ii) planned principal operations have commenced, but there has been no significant revenue therefrom.2. "Net proceeds" shall mean the amount of offering proceeds remaining after payment of selling commissions and expenses and all other expenses paid or payable in connection with the offer and sale of securities, such as printing, legal, accounting, and filing fees.(7) Multiple Securities Under Single Registration Statement. Any issuer filing an initial or renewal application for registration of more than one security pursuant to a single registration statement may file:
(a) A single Form U-1 if that form is completed to clearly enumerate each security and the proposed dollar amount of each security for which the application for registration is being made; and(b) A single check combining the filing fees payable for the securities listed on the Form U-1.Tenn. Comp. R. & Regs. 0780-04-02-.03
Original rule filed January 13, 1983; effective February 14, 1983. Repeal and new rule filed September 28, 1990; effective November 12, 1990. Repeal and new rule filed March 16, 2015; effective 6/14/2015.Authority: T.C.A. §§ 48-1-105, 48-1-106, 48-1-107, 48-1-108, 48-1-115, 48-1-116, and 48-1-121.