Arkansas 2025 Regular Session

Arkansas Senate Bill SB220 Compare Versions

OldNewDifferences
11 Stricken language would be deleted from and underlined language would be added to present law.
2-Act 236 of the Regular Session
32 *ANS121* 02/12/2025 2:39:07 PM ANS121
43 State of Arkansas 1
54 95th General Assembly A Bill 2
65 Regular Session, 2025 SENATE BILL 220 3
76 4
87 By: Senator J. Boyd 5
98 By: Representative Achor 6
109 7
1110 For An Act To Be Entitled 8
1211 AN ACT TO AMEND THE ARKANSAS SECURITIES ACT; TO 9
1312 CLARIFY EXEMPT TRANSACTIONS UNDER THE ARKANSAS 10
1413 SECURITIES ACT; AND FOR OTHER PURPOSES. 11
1514 12
1615 13
1716 Subtitle 14
1817 TO AMEND THE ARKANSAS SECURITIES ACT; 15
1918 AND TO CLARIFY EXEMPT TRANSACTIONS UNDER 16
2019 THE ARKANSAS SECURITIES ACT. 17
2120 18
2221 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 19
2322 20
2423 SECTION 1. DO NOT CODIFY. This act shall be known and may be cited as 21
2524 the "Invest Arkansas Exemption Act". 22
2625 23
2726 SECTION 2. Arkansas Code § 23 -42-504(a)(12), concerning an exempt 24
2827 transaction that is an offer or sale of a security by an issuer under the 25
2928 Arkansas Securities Act, is amended to read as follows: 26
3029 (12) An offer or sale of a security by an issuer if the offer or 27
3130 sale of the security is conducted according to the following : 28
3231 (A) Either of the following applies: 29
3332 (i) The issuer of the security is a corporation or 30
3433 other business entity organized and operating for-profit business entity 31
3534 formed under the laws of this state and has its principal place of business 32
3635 in Arkansas and is registered with the Secretary of State; 33
3736 (B) the The transaction meets the requirements of the 34
3837 federal exemption for intrastate offerings in either: 35
3938 (i) section Section 3(a)(11) of the Securities Act 36 SB220
4039
4140 2 02/12/2025 2:39:07 PM ANS121
4241 of 1933, 15 U.S.C. § 77c(a)(11), as it existed on January 1, 2017 January 1, 1
4342 2025, and Rule 147 of the United States Securities and Exchange Commission, 2
4443 17 C.F.R. § 230.147, as it existed on January 1, 2017, and as such, the 3
4544 securities shall be offered to and sold only to persons who are residents of 4
4645 this state at the time of purchase January 1, 2025; or 5
4746 (ii) The issuer of the security is a corporation or 6
4847 other business entity with its principal place of business in Arkansas and 7
4948 the transaction meets the requirements of the federal exemption for 8
5049 intrastate offerings in section 28 of the Securities Exchange Act of 1933, 15 9
5150 U.S.C. § 77z-3, as it existed on January 1, 2017, and Rule 147A of the United 10
5251 States Securities and Exchange Commission, 17 C.F.R. § 230.147A, as it 11
5352 existed on January 1, 2017, and as such, the securities shall be sold only to 12
5453 persons who are residents of this state at the time of purchase January 1, 13
5554 2025; 14
5655 (B)(C) The sum of all cash and other consideration to be 15
5756 received for all sales of the security in reliance upon the exemption 16
5857 described in this subdivision (a)(12) shall not exceed one million dollars 17
5958 ($1,000,000) ten million dollars ($10,000,000) , less the aggregate amount 18
6059 received for all sales of securities by the issuer within six (6) months 19
6160 after the completion of the offering twelve (12) months before the first 20
6261 offer or sale made in reliance upon this exemption ; 21
6362 (C)(D)(i) The issuer shall not accept more than five 22
6463 thousand dollars ($5,000) one hundred thousand dollars ($100,000) from any 23
6564 single purchaser unless the purchaser is an accredited investor as defined by 24
6665 Rule 501 of United States Securities and Exchange Commission Regulation D, 17 25
6766 C.F.R. § 230.501, as it existed on January 1, 2017 January 1, 2025. 26
6867 (ii) Two (2) or more individual purchasers residing 27
6968 at the same primary residence who are not accredited investors and have a 28
7069 close family relationship shall be treated as a single purchaser for purposes 29
7170 of the monetary limit under subdivision (a)(12)(D)(i) of this section ; 30
7271 (D) The issuer should reasonably believe that all 31
7372 purchasers of securities are purchasing for investment and not for sale in 32
7473 connection with a distribution of the security; 33
7574 (E) A commission or remuneration shall not be paid or 34
7675 given, directly or indirectly, for a person's participation in the offer or 35
7776 sale of securities for the issuer unless the person is registered as a 36 SB220
7877
7978 3 02/12/2025 2:39:07 PM ANS121
8079 broker-dealer or agent under this chapter All funds received from investors 1
8180 shall: 2
8281 (i) Be deposited into a bank as defined in § 23 -45-3
8382 102(a)(5)(A) authorized to do business in this state; and 4
8483 (ii) Used according to the representations made to 5
8584 investors; 6
8685 (F)(i) The commissioner may by rule or order, as to any 7
8786 security or transaction or any type of security or transaction, withdraw or 8
8887 further condition the exemption under this subdivision (a)(12) The issuer 9
8988 shall file a proof of exemption with the commissioner in writing at least ten 10
9089 (10) days before securities are sold. 11
9190 (ii) The proof of exemption under subdivision 12
9291 (a)(12)(F)(i) of this section shall specify that the issuer is conducting an 13
9392 offering in reliance of the exemption under this subdivision (a)(12). 14
9493 (iii) The proof of exemption under subdivision 15
9594 (a)(12)(F)(i) of this section shall contain: 16
9695 (a) The name and address of the issuer; 17
9796 (b) The name and address of all persons who 18
9897 will be involved in the offer or sale of securities on behalf of the issuer; 19
9998 (c) The name and address of the bank as 20
10099 defined in § 23-45-102(a)(5)(A) into which investor funds will be deposited ; 21
101100 and 22
102101 (d) A copy of the offering documents to be 23
103102 provided to each prospective purchaser in connection with the offering. 24
104103 (G)(iv) A The issuer shall pay a filing fee of one 25
105104 hundred dollars ($100) shall be paid to the commissioner for every proof of 26
106105 exemption filed with the commissioner under this subdivision (a)(12) 27
107106 (a)(12)(F)(i) of this section ;. 28
108107 (v) If the information contained in the proof of 29
109108 exemption filed with the commissioner under subdivision (a)(12)(F)(i) of this 30
110109 section becomes inaccurate for any reason, the issuer shall file an amendment 31
111110 in writing with the commissioner within sixty (60) days; 32
112111 (G) The issuer shall inform all purchasers that the 33
113112 securities have not been registered under this chapter and cannot be resold 34
114113 unless the securities are: 35
115114 (i) Registered or qualify for an exemption from 36 SB220
116115
117116 4 02/12/2025 2:39:07 PM ANS121
118117 registration under this section and §§ 23 -42-501 — 503; and 1
119118 (ii) Subject to the limitation on resales contained 2
120119 in either: 3
121120 (a) Subsection (e) of Rule 147 of the United 4
122121 States Securities and Exchange Commission, 17 C.F.R. 230.147(e), as it 5
123122 existed on January 1, 2025, and in the manner described in subsection (f) of 6
124123 Rule 147 of the United States Securities and Exchange Commission, 17 C.F.R. 7
125124 230.147(f), as it existed on January 1, 2025; or 8
126125 (b) Subsection (e) of Rule 147(A) of the 9
127126 United States Securities and Exchange Commission, 17 C.F.R. 230.147A(e), as 10
128127 it existed on January 1, 2025, and in the manner described in subsection (f) 11
129128 of Rule 147A of the United States Securities and Exchange Commission, 17 12
130129 C.F.R. 230.147(A)(f), as it existed on January 1, 2025; 13
131130 (H) A commission or other remuneration shall not be paid 14
132131 or given, directly or indirectly, for any person’s participation in the offer 15
133132 or sale of securities for the issuer unless the person is registered as a 16
134133 broker-dealer or agent under this chapter or a funding portal registered with 17
135134 the Financial Industry Regulatory Authority; 18
136135 (I) The issuer shall not be, either before or as a result 19
137136 of the offering: 20
138137 (i) An investment company as defined in Section 3 of 21
139138 the Investment Company Act of 1940, 15 U.S.C. § 80a -3, as it existed on 22
140139 January 1, 2025; 23
141140 (ii) Subject to the reporting requirements of: 24
142141 (a) Section 13 of the Securities and Exchange 25
143142 Act of 1934, 15 U.S.C. § 78m, as it existed on January 1, 2025; or 26
144143 (b) Section 15(d) of the Securities and 27
145144 Exchange Act of 1934, 15 U.S.C. § 78o(d), as it existed on January 1, 2025; 28
146145 or 29
147146 (iii) Considered a blind pool or a company that has: 30
148147 (a) Not yet defined its business operations; 31
149148 (b) No business plan; 32
150149 (c) No stated investment goal for the funds 33
151150 being raised; or 34
152151 (d) Plans to engage in a merger or acquisition 35
153152 with an unspecified business entity; 36 SB220
154153
155154 5 02/12/2025 2:39:07 PM ANS121
156155 (J) The exemption under this subdivision (a)(12) shall not 1
157156 be used in conjunction with any other exemption under this chapter except 2
158157 for: 3
159158 (i) The exemption to institutional investors under 4
160159 subdivision (a)(8) of this section; and 5
161160 (ii)(a) Offers and sales to controlling persons of 6
162161 the issuer. 7
163162 (b) Sales to controlling persons under 8
164163 subdivision (a)(12)(J)(ii)(a) of this section shall not count toward the 9
165164 limitation under subdivision (a)(12)(D) of this section; and 10
166165 (K) The exemption under this subdivision (a)(12) shall 11
167166 not: 12
168167 (i) Be available if the issuer is subject to an 13
169168 event that would disqualify an issuer under Rule 506(d)(1) of the United 14
170169 States Securities and Exchange Commission Regulation D, 17 C.F.R. § 15
171170 230.506(d)(1), as it existed on January 1, 2025; or 16
172171 (ii) Be construed to alleviate a person from the 17
173172 antifraud provisions under § 23 -42-507. 18
174173 19
175174 20
176-APPROVED: 3/4/25 21
175+ 21
177176 22
178177 23
179178 24
180179 25
181180 26
182181 27
183182 28
184183 29
185184 30
186185 31
187186 32
188187 33
189188 34
190189 35
191190 36