An Act
ENROLLED SENATE
BILL NO. 568 By: Montgomery of the Senate
and
Hilbert of the House
An Act relating to securities; amending 71 O.S. 2011,
Section 1-202, which relates to exempt transactions;
modifying statutory references ; exempting certain
securities offerings; requiring certain federal
exemption for intrastate offerings; limiting certain
aggregate amount; setting value amount per person;
excepting certain invertors from stated value amount;
prohibiting renumeration to nonregistered broker-
dealers; requiring purchases for investment;
directing distribution of a disclosure document;
providing for certain notice to be filed within
certain time; requiring quarterly and fiscal year -end
reports; stating content to certain repor ts;
providing for escrow accounts for certain purpose;
directing use of escrow funds; prohibiting offer ing
of securities under certain conditions; stating
conditions; prohibiting certain acts within certain
time of offering; construing general solicitation and
advertising; authorizing the Administrator to further
condition the exemption; directing rules be
promulgated within certain time; providing for
noncodification; and declaring an emergency.
SUBJECT: Securities
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 71 O.S. 2011, Section 1-202, is
amended to read as follows:
ENR. S. B. NO. 568 Page 2
Section 1-202. The following transactions are exempt from t he
requirements of Sections 10 and 32 of this act 1-301 and 1-504 of
the Oklahoma Uniform Securities Act of 2004:
1. An isolated nonissuer transaction, whether or not effected
by or through a broker-dealer or not;
2. A nonissuer transaction by or through a broker-dealer
registered, or exempt from registration under this act the Oklahoma
Uniform Securities Act of 2004, and a resale transac tion by a
sponsor of a unit investment trust registered under the Investment
Company Act of 1940, in a security of a class that has been
outstanding in the hands of the public for at least ninety (90)
days, if, at the date of the transaction:
a. the issuer of the security is engaged in business, the
issuer is not in the organizational stage o r in
bankruptcy or receivership, a nd the issuer is not a
blank check, blind pool, or shell company that has no
specific business plan or purpose or has indicated
that its primary business plan is to engage in a
merger or combination of the business with, o r an
acquisition of, an unidentifi ed person,
b. the security is sold at a price reasonably related to
its current market price,
c. the security does not constitute the whole or part of
an unsold allotment to, or a subscription or
participation by, the brok er-dealer as an underwriter
of the security or a redistribution , and
d. a nationally recognized securities manual or its
electronic equivalent designated by rule adopte d or
order issued under this act or a record filed with the
Securities and Exchange Comm ission that is publicly
available contains:
(1) a description of the business and operations of
the issuer,
ENR. S. B. NO. 568 Page 3
(2) the names of the issuer’s executive officers and
the names of the issuer’s directors, if any,
(3) an audited balance sheet of the issuer as of a
date within eighteen (18) months before the date
of the transaction or, in the case of a
reorganization or merger w hen the parties to the
reorganization or merger each had an audited
balance sheet, a pro forma balance sheet for the
combined organization , and
(4) an audited income statemen t for each of the
issuer’s two (2) immediately previous fiscal
years or for the period of existence of the
issuer, whichever is shorter, or, in the case of
a reorganization or merger when each party to the
reorganization or merger had audited income
statements, a pro forma income statemen t, or
e. the issuer of the security has a class of equity
securities listed on a national securities exchange
registered under the Securities Exchange Act of 1934
or designated for trading on the National Association
of Securities Dealers Automated Quotati on System,
unless the issuer of the security is a unit investment
trust registered under the Investme nt Company Act of
1940; or the issuer of the security, including its
predecessors, has been engaged in continuous business
for at least three (3) years; or the issuer of the
security has total assets of at least Two Million
Dollars ($2,000,000.00) based on an audited balance
sheet as of a date within eighteen (18) months before
the date of the transaction or, in the case of a
reorganization or merger when th e parties to the
reorganization or merger each had the audited balance
sheet, a pro forma balance she et for the combined
organization;
3. A nonissuer transaction by or through a broker -dealer
registered or exempt from regi stration under this act in a secu rity
of a foreign issuer that is a margin secu rity defined in regulations
ENR. S. B. NO. 568 Page 4
or rules adopted by the Boa rd of Governors of the Fede ral Reserve
System;
4. A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this act the Oklahoma
Uniform Securities Act of 20 04 in an outstanding security if the
guarantor of the security files reports with t he Securities and
Exchange Commission under the reporting requirements of Section 13
or 15(d) of the Secu rities Exchange Act of 1934 (15 U. S.C. 78m or
78o(d));
5. A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this act the Oklahoma
Uniform Securities Act of 2004 in a security that:
a. is rated at the time of the transaction by a
nationally recognized statistical rating or ganization
in one of its four highest rating categories, or
b. has a fixed maturity o r a fixed interest or dividend,
if:
(1) a default has not occurred during the current
fiscal year or within the three (3) previous
fiscal years or during the existence o f the
issuer and any predecessor if less than three (3)
fiscal years, in the payment of principal,
interest, or dividends on the security , and
(2) the issuer is engaged in business, is not in the
organizational stage or in bankruptcy or
receivership, and is not and has not been within
the previous twelve (12) months a blank check,
blind pool, or shell company that has no specific
business plan or purpose or has indicated that
its primary business plan is to engage in a
merger or combination of the business with, or an
acquisition of, an unidentified person;
6. A nonissuer transaction by or through a broker-dealer
registered or exempt from registration under this act the Oklahoma
ENR. S. B. NO. 568 Page 5
Uniform Securities Act of 2004 effecting an unsolicited order or
offer to purchase;
7. A nonissuer transaction executed by a bona fide pledgee
without the purpose of evading this act the Oklahoma Uniform
Securities Act of 2004 ;
8. A nonissuer transaction by a federal covered investment
adviser with investments under management in excess of One Hundred
Million Dollars ($100,000,000.00) acting in the exercise of
discretionary authority in a signed record for the acc ount of
others;
9. A transaction in a security, whether or not the security or
transaction is otherwise exempt, in exchange for one or more bona
fide outstanding securities, claims , or property interests, or
partly in such exchange and partly for cash, if the terms and
conditions of the issuance and exchange or the delivery and exchange
and the fairness of the terms an d conditions have been approved by
the Administrator after a hear ing;
10. A transaction between the issuer or other person on whose
behalf the offering is made and an underwriter, or among
underwriters;
11. A transaction in a note, bond, debenture, or other evidence
of indebtedness secured by a mortgage or other secur ity agreement
if:
a. the note, bond, debenture, or other evidence of
indebtedness is offered and sold with the mortgage or
other security agreement as a unit ,
b. a general solicitation or general advertisement of the
transaction is not made, and
c. a commission or other remuneration is not paid or
given, directly or indirectly, t o a person not
registered under this act the Oklahoma Uniform
Securities Act of 2004 as a broker-dealer or as an
agent;
ENR. S. B. NO. 568 Page 6
12. A transaction by an executor, administrator of an estate ,
sheriff, marshal, receive r, trustee in bankruptcy, guardian, or
conservator;
13. A sale or offer to sell to:
a. an institutional investor ,
b. a federal covered investment adviser , or
c. any other person exempted by rule adopted or order
issued under this act the Oklahoma Uniform Securities
Act of 2004;
14. A sale or an offer to sell securities by an issuer, if the
transaction is part of a single issue in which:
a. not more than twenty-five purchasers during any twelve
(12) consecutive months, other than those designated
in paragraph 13 of this section,
b. a general solicitation or general advertis ing is not
made in connection with the offer to sell or sale of
the securities,
c. a commission or other remu neration is not paid or
given, directly or indirect ly, to a person other than
a broker-dealer registered under this act the Oklahoma
Uniform Securities Act of 2004 or an agent registered
under this act the Oklahoma Uniform Securities Act of
2004 for soliciting a prospective purchaser in this
state, and
d. the issuer reasonably belie ves that all the purchasers
in this state, other than those designated in
paragraph 13 of this section, are purchasing for
investment;
15. A transaction under an offer to existi ng security holders
of the issuer, including persons that at the date of the t ransaction
are holders of convertible securities, options, or warrants, if:
ENR. S. B. NO. 568 Page 7
a. no commission or other remuneration, other than a
standby commission, is paid or given, directly or
indirectly, for soliciting a security holder in this
state, or
b. the issuer first files a notice specifying the terms
of the offer and the Administrator, by order, does not
disallow the exemption within the next ten (10) f ull
business days;
16. A sale from or in this state to not more than thirty-two
persons of a unit consisting of interests in oil, gas or mining
titles or leases or any certificate of interest or participation, or
conveyance in any form of an interest the rein, or in payments out of
production pursuant to such titles or leases, whether or not offered
in conjunction with, or as an incident to, an operating agreement or
other contract to drill oil or gas wells or otherwise exploit the
minerals on the particul ar leases, whether or not the sel ler or any
buyers are then present in this state, if:
a. the seller reasonably believes that all buyers are
purchasing for investment ,
b. no commission is paid or given directly or indirectly
for the solicitation of any s uch sale excluding any
commission paid or given by and between parties each
of whom is engaged in the business of exploring for or
producing oil and gas or other valuable minerals ,
c. no public advertising or public solicitation is used
in any such solicitation or sale, and
d. sales are effected only to persons the seller has
reasonable cause to believe are capable o f evaluating
the risk of the prospective investment and able to
bear the economic risk of the investment; but the
Administrator, by rule or o rder, as to any specific
transaction, may withdraw or further condition this
exemption or decrease the number of sa les permitted or
waive the conditions in subparagraphs a , b and c of
this paragraph, with or without substitution of a
limitation on remunera tion.
ENR. S. B. NO. 568 Page 8
For purposes of this subsection , no units of the issuer shall be
integrated; however, this exemption cannot b e combined or used in
conjunction with any other transactional exemption.
17. An offer to sell, but not a sale, of a security not exempt
from registration under the Securities A ct of 1933 if:
a. a registration or offering statement or similar record
as required under the Securities Act of 1933 has been
filed, but is not effective, or the offer is made in
compliance with Rule 165 adopted und er the Securities
Act of 1933 (17 C.F.R . 230.165), and
b. no stop order of which the offeror is aware has been
issued against the offeror by the Administrator or the
Securities and Exchange Commission, and an audit,
inspection, or proceeding that is publi c and that may
culminate in a stop order is not known by the offeror
to be pending;
18. An offer to sell, but not a sa le, of a security exempt from
registration under the Securities Act of 1933 if:
a. a registration statement has been filed under this
act, but is not effecti ve,
b. a solicitation of interest is provided in a record to
offerees in compliance with a rule ado pted by the
Administrator under this act the Oklahoma Uniform
Securities Act of 2004 , and
c. a stop order of which the offeror is awa re has not
been issued by the Administrator u nder this act the
Oklahoma Uniform Securities Act of 2004 and an audit,
inspection, or proceeding that may culminate in a stop
order is not known by the offeror to be pending;
19. A transaction involving the d istribution of the securities
of an issuer to the security holders of another person in connection
with a merger, consolidation, exchange of securities, sale of
assets, or other reorganization to which the issuer, or its parent
ENR. S. B. NO. 568 Page 9
or subsidiary and the other person, or its parent or subsidiary, are
parties if:
a. the securities to be distributed are regi stered under
the Securities Act of 1933 before the vote by security
holders on the transaction, or
b. the securities to be distributed are not required to
be registered under the Securities Act of 1933,
written notice of the transaction and a copy of the
materials, if any, by which approval of the
transaction will be solicited from such security
holders is given to the Administrator at least ten
(10) full business days before the vote by security
holders on the transaction and the Administrator does
not commence a proceeding to deny the exemption within
the next ten (10) full business day s; however, such
notice shall not be required if the sole purpose of
the transaction is to change an issuer ’s domicile
solely within the United States;
20. A rescission offer, sale, or purchase under Section 38 of
this act the Oklahoma Uniform Securities Act of 2004 ;
21. An offer or sale of a secu rity through a broker -dealer
registered under this act the Oklahoma Uniform Securities Act of
2004 to a person not a resident of this state and not present in
this state if the offer or sale does not constitute a violation of
the laws of the state or foreign jurisdic tion in which the offeree
or purchaser is present and is not part o f an unlawful plan or
scheme to evade the Oklahoma Uniform Securities Act of 2004this
act;
22. Employees’ stock purchase, savings, option, profit -sharing,
pension, or similar employees ’ benefit plan, including any
securities, plan interests, and guarante es issued under a
compensatory benefit plan or comp ensation contract, containe d in a
record, established by the issuer, its parents, its majority -owned
subsidiaries, or the majority -owned subsidiaries of the issuer’s
parent for the participation of their e mployees including offers or
sales of such securiti es to:
ENR. S. B. NO. 568 Page 10
a. directors; general partners; trustees, if the issuer
is a business trust; and officers,
b. family members who acquire such securities from those
persons through gifts or do mestic relations orders ,
c. former employees, directors, general partners,
trustees, and officers if those individuals were
employed by or providing services to the issuer when
the securities were offered , and
d. insurance agents who are exclusive insuranc e agents of
the issuer, or the issuer’s subsidiaries or parents,
or who derive more than fifty percent (50%) of their
annual income from those organizations;
23. A transaction involving:
a. a stock dividend or equivalent equity distribution,
whether the corporation or other bus iness organization
distributing the dividend or equivalent equity
distribution is the issuer or not, if nothing of value
is given by stockholders or other equity holders for
the dividend or equivalen t equity distribution other
than the surrender of a right to a cash or property
dividend if each stockholder or other equity holder
may elect to take the dividend or equivalent equity
distribution in cash, property, or stock ,
b. an act incident to a judic ially approved
reorganization in wh ich a security is issue d in
exchange for one or more outstanding securitie s,
claims, or property inte rests, or partly in such
exchange and partly for cash , or
c. the solicitation of tenders of securities by an
offeror in a tender offer in compliance with R ule 162
adopted under the Securities Act of 1933 (17 C.F.R.
230.162); or
24. A nonissuer transaction in an outstanding security by or
through a broker-dealer registered or exempt from registration under
ENR. S. B. NO. 568 Page 11
this act, if the issuer is a reporting issuer in a f oreign
jurisdiction designated by this paragraph or by rule adopted or
order issued under this act the Oklahoma Uniform Securities Act of
2004; has been subject to continuous reporting requirements in the
foreign jurisdiction for not less than one hundred eighty (18 0) days
before the transaction; and the security is listed on th e foreign
jurisdiction’s securities exchange that has been designated by this
paragraph or by rule adopted or order issued under this act the
Oklahoma Uniform Securities Act of 2004 , or is a security of th e
same issuer that is of senior or substantially equal rank to the
listed security or is a warrant or right to purchase or subscribe to
any of the foregoing. For purposes of this paragraph, Canad a,
together with its provinces and territories, is a designa ted foreign
jurisdiction and The Toronto Stock Exch ange, Inc., is a designated
securities exchange. After an administrative hearing in compliance
with the Administrative Procedures Act, the Admin istrator, by rule
adopted or order issued under this act the Oklahoma Uniform
Securities Act of 2004, may revoke the designation of a securities
exchange under this paragraph, if the Administrator finds that
revocation is necessary or appropriate in the pu blic interest and
for the protection of investors ; or
25. A sale or offer to sell a security by an issuer if:
a. the issuer is a corporat ion or other business entity
residing in and doing business in this state and the
transaction meets the requirement s of the federal
exemption for intrastate offer ings in Section 3(a)(11)
of the Securities Act of 1933, 15 U.S.C. 77c(a)(11)
and Rule 147A adopted under the Securities Act of 1933
(17 C.F.R. 230.147A) and as such the securities shall
be sold only to persons who are residents of this
state at the time of purchase,
b. the sum of all cash and other consideration to be
received for the sale of securities in reliance on
this exemption shall be limited to Five Million
Dollars ($5,000,000.00),
c. the aggregate value of securities sold under this
exemption by an issuer to any o ne person does not
exceed Five Thousand Dollars ($5,000.00) unle ss the
ENR. S. B. NO. 568 Page 12
purchaser is an accredited investor as that term is
defined by Rule 501 of R egulation D of the Securities
Act of 1933 (17 C.F.R. 230.501),
d. a commission or other renumeration is n ot paid or
given, directly or indirectly, to a person not
registered under the Oklahoma Uniform Securities Act
of 2004 as a broker-dealer or as an agent,
e. the issuer reasonably believes that all purchasers are
purchasing for investment and not for sale in
connection with a distribution of the security,
f. the issuer distributes to prospective purchasers a
disclosure document containing the information set
forth by rule adopted under the Oklahoma Uniform
Securities Act of 2004,
g. the issuer, at least ten (10) business days prior to a
sale, files a notice of exemption with the Department
accompanied by the disclosure document requi red by
paragraph f of this subsection, and the filing fee set
forth in the Oklahoma Uniform Securities Act of 2004,
pursuant to Section 1-612 of Title 71 of the Oklahoma
Statutes,
h. the issuer files with the Department, for as long as
the offering is continuing , quarterly and fiscal year-
end reports containing any changes to information that
has become inaccurate or incomplete in any material
respect including, but not limited to, the most recent
financial statements, and
i. the issuer holds funds received from sales made in
reliance on this exemption in an escrow account
established in a bank or depository in stitution
authorized to do business in this state and subject to
regulation under the laws of the United States or
under the laws of this state until the ag gregate funds
raised from all purchases is equal to or greater than
the minimum target offering am ount specified in the
disclosure document. All funds shall be used in
ENR. S. B. NO. 568 Page 13
accordance with the representati ons made by the issuer
in the disclosure document required by subparagraph f
of this paragraph.
Notwithstanding the foregoing provisions of this subsection , an
issuer shall be prohi bited from offering securities under this
subsection if the issuer or any of its princi pals or control
persons:
(1) within the last five (5) years has filed a
registration statement that is the subject of a
currently effective registration stop order
entered by any state securities administrator or
the Securities and Exchange Commission,
(2) within the last five (5) years has been convicted
of any criminal offense in connection with the
offer, purchase, or sale of any security or
involving fraud or deceit,
(3) is currently subject to any state or federal
administrative enforcement order or judgment
entered within the last five (5) years finding
fraud or deceit in connection with the purchase
or sale of any security, or
(4) is currently subject to any order, judgment or
decree of any court of competent jurisdiction
entered within the last five (5) years
temporarily, preliminarily or permanently
restraining or enjoining such party from engaging
in or continuing to engage in any conduct or
practice involving fra ud or deceit in connection
with the purchase or sale of any security.
Nothing in this subsection prohibits the use of general
solicitation or general adverti sing in connection wi th the exemption
under this subsection .
As to a particular offering, the Administrator may by rule or
order withdraw or further condition the exemption under this
subsection.
ENR. S. B. NO. 568 Page 14
SECTION 2. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
The Department shall promulgate rules pursuant to the provisions
of this act within ninety (90) days of the effective date of th is
act.
SECTION 3. It being immediately necessary for the p reservation
of the public peace, health or safety, an emergency is h ereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
ENR. S. B. NO. 568 Page 15
Passed the Senate the 11th day of March, 2021.
Presiding Officer of the Senate
Passed the House of Representatives the 12th day of April, 2021.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _______________________________ __
Approved by the Governor of the State of Oklahoma this _____ ____
day of _________________ __, 20_______, at _______ o'clock _______ M.
_____________________________ ____
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _______________________________ __