Special Adoption and Proposed Regulation – Bureau of Securities
NEWARK – The New Jersey Bureau of Securities has adopted amendments and new rules for issuers offering a security pursuant to the intrastate offering (crowdfunding) exemption and applicants wishing to register as an Internet site operator in the State. Concurrently, the provisions of these special adopted amendments and new rules are proposed for re-adoption.
On November 9, 2015, P.L. 2015, c. 128 was enacted, amending and supplementing the Uniform Securities Law, P.L. 1967, c. 93 (N.J.S.A. 49:3-47 et seq.). The law establishes a new transaction exemption, to be known as the intrastate offering (crowdfunding) exemption, for offerings that meet the requirements of N.J.S.A. 49:3-50(b)(14). Crowdfunding is a common term for the practice of raising money, typically in small amounts, from a large number of people in order to fund a company, venture, or an idea. Prior to the passage of P.L. 2015, c. 128, equity crowdfunding, the exchange of money for equity in a company, would not be permitted because it would constitute the sale of securities. In accordance with the Uniform Securities Law, it is unlawful for any security to be offered or sold in New Jersey unless the security is: exempt from regulation, registered with the Bureau of Securities, or is a federally covered security.
P.L. 2015, c.128 authorized the Bureau to specially adopt regulations, making the regulations effective upon filing with the Office of Administrative Law. These regulations, while effective, are subject to public comment as part of the concurrent proposal for readoption.
The specially adopted and proposed for readoption new rules set forth the requirements for issuers to avail themselves of the intrastate offering (crowdfunding) exemption established pursuant to N.J.SA. 49:3-50(b)(14), including the offering conditions to qualify for the exemption, disqualifying criteria, exemption filing requirements, Internet site operator registration requirements and disqualifying criteria, the requirements and duties of the issuers and Internet site operators, recordkeeping requirements, inspection, and advertising provisions.
The proposed readoption of the specially adopted amendments and new rules, and information on how to submit a comment by November 18, 2016, can be viewed here.
The Bureau of Securities can assist investors in determining whether those selling securities, as well as securities offered for sale, are registered or are exempt from registration. The Bureau can be contacted toll-free within New Jersey at
1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at
973-504-3600. The Bureau's website is
www.njsecurities.gov.
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