Debt Securities

PURPOSE: This rule promotes uniformity with other states and prescribes standards to be used in connection with the registration of debt securities. 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. Therefore, the material which is so incorporated is on file with the agency who filed this rule, and with the Office of the Secretary of State. Any interested person may view this material at either agency’s headquarters or the same will be made available at the Office of the Secretary of State at a cost not to exceed actual cost of copy reproduction. The entire text of the rule is printed here. This note refers only to the incorporated by reference material. (1) The Securities Division will apply the North American Securities Administrators Association, Inc. (NASAA) Statement of Policy Regarding Debt Securities when conducting a merit review of debt offerings to determine whether an offering is fair, just and equitable. (2) The Securities Division hereby incorporates by reference the NASAA Statement of Policy Regarding Debt Securities, as adopted by NASAA on April 25, 1993. (3) Development Stage Issuers. The issuance of debt securities by an issuer in the promotional or development stage with no substantial net earnings from normal business operations during each of its last three (3) fiscal years will be viewed by the division as being unfair, unjust and inequitable. (4) Suitability. (A) In establishing standards of fairness and equity, the Securities Division has established the following investor suitability guidelines for debt offerings registered under the Act: 1. A gross income of forty-five thousand dollars ($45,000) and a net worth of fortyfive thousand dollars ($45,000) (exclusive of home, home furnishings and automobiles); or 2. A net worth of one hundred fifty thousand dollars ($150,000) (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 (4)(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 409.3-306 and 409.6605, RSMo Supp. 2003.* Original rule 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. 19, 2003, effective Sept. 12, 2003, expired March 9, 2004. Amended: Filed Aug. 22, 2003, effective Feb. 29, 2004. *Original authority: 409.3-306, RSMo 2003; 409.6-605, RSMo 2003.