NASAA Statements of Policy

PURPOSE: This rule promotes uniformity with other states and prescribes the guidelines to be applied to securities registrations in order to determine if the offering is fair, just, and equitable. PUBLISHER’S NOTE: The secretary of state has determined that the publication of the entire text of the material which is incorporated by reference as a portion of this rule would be unduly cumbersome or expensive. This material as incorporated by reference in this rule shall be maintained by the agency at its headquarters and shall be made available to the public for inspection and copying at no more than the actual cost of reproduction. This note applies only to the reference material. The entire text of the rule is printed here. (1) The Securities Division will apply the applicable statement of policy adopted by North American Securities Administrators Association, Inc. (NASAA) when conducting a merit review to determine whether an offering is fair, just, and equitable. (A) The following statements of policy are hereby incorporated by reference and made a part of this rule as published by NASAA, 750 First Street, NE, Suite 1140, Washington, DC 20002, and available at http://www.nasaa.org/regulatory-activity/statements-of-policy/. This rule does not incorporate any subsequent amendments or additions: 1. Corporate Securities Definitions, as amended by NASAA on March 31, 2008; 2. Loans and Other Material Affiliated Transactions, as amended by NASAA on March 31, 2008; 3. Options and Warrants, as amended by NASAA on March 31, 2008; 4. Preferred Stock, as amended by NASAA on March 31, 2008; 5. Promoter’s Equity Investment, as amended by NASAA on March 31, 2008; 6. Promotional Shares, as amended by NASAA on March 31, 2008; 7. Risk Disclosure Guidelines, as adopted by NASAA on September 9, 2001; 8. Specificity in Use of Proceeds, as amended by NASAA on March 31, 2008; 9. Underwriting Expenses, Underwriter’s Warrants, Selling Expenses and Selling Security Holders, as amended by NASAA on March 31, 2008; 10. Unsound Financial Condition, as amended by NASAA on March 31, 2008; 11. Unequal Voting Rights, as amended by NASAA on March 31, 2008; 12. Registration of Asset-Backed Securities, as amended by NASAA on May 7, 2007; 13. Mortgage Program Guidelines, as amended by NASAA on May 7, 2007; 14. Real Estate Programs, as revised by NASAA on May 7, 2007; 15. Real Estate Investment Trusts, as revised by NASAA on May 7, 2007; 16. Registration of Oil and Gas Programs, as amended by NASAA on May 7, 2007; 17. Equipment Programs, as amended by NASAA on May 7, 2007; 18. Commodity Pool Programs, as amended by NASAA on May 7, 2007; 19. Cattle-Feeding Programs, as adopted by NASAA on September 17, 1980; 20. Omnibus Guidelines, as amended by NASAA on May 7, 2007; and 21. Viatical Investment Guidelines, as adopted by NASAA on October 1, 2002. (B) The Omnibus Guidelines shall be applied to limited partnerships programs or other entities in which more specific statements of policy have not been adopted by NASAA. (2) Cross-Reference Sheet. If requested by the Securities Division, a registration statement to register securities shall include a cross-reference table to indicate compliance with, or deviation from, the various sections of the applicable statement of policy. (3) Suitability for Direct Participation Programs. (A) In establishing standards of fairness and equity, the Securities Division has established the following investor suitability guidelines for direct participation programs registered under the Act: 1. A gross income of seventy thousand dollars ($70,000) and a net worth of seventy thousand dollars ($70,000) (exclusive of home, home furnishings and automobiles); or 2. A net worth of two hundred fifty thousand dollars ($250,000) (exclusive of home, home furnishings and automobiles); and 3. No more than ten percent (10%) of any one (1) Missouri investor’s liquid net worth shall be invested in the securities being registered with the Securities Division. (B) The suitability standard in subsection (3)(A) is a guideline. Higher or lower suitability standards may be established or may be required by the Securities Division as a condition of registration. (C) The suitability standards must be disclosed in the prospectus. AUTHORITY: sections 409.3-303, 409.3304, 409.3-305, 409.3-306, 409.3-307, 409.5-501, 409.6-605, and 409.6-608, RSMo Supp. 2013.* Original rule filed June 25, 1968, effective Aug. 1, 1968. Amended: Filed May 21, 1969, effective Aug. 1, 1969. Amended: Filed July 21, 1972, effective Aug. 1, 1972. Amended: Filed Nov. 15, 1974, effective Nov. 25, 1974. Rescinded and readopted: Filed Aug. 30, 2002, effective Feb. 28, 2003. Emergency amendment filed Aug. 25, 2003, effective Sept. 12, 2003, expired March 9, 2004. Amended: Filed Aug. 25, 2003, effective Feb. 29, 2004. Amended: Filed June 14, 2007, effective Jan. 30, 2008. Amended: Filed Nov. 7, 2007, effective May 30, 2008. Amended: Filed Dec. 3, 2013, effective July 30, 2014. *Original authority: 409.3-303, RSMo 2003; 409.3-304, RSMo 2003; 409.3-305, RSMo 2003; 409.3-306, RSMo 2003; 409.3-307, RSMo 2003; 409.5-501, RSMo 2003; 409.6-605, RSMo 2003; and 409.6-608, RSMo 2003.