Homefor Investorsfor Industry
fillerComplaintsCorporate FinanceLicensingEnforcementSecurities Libraryfiller
Corporate Finance For more information
61-1-14(2)(j) – Existing Securities Holders Transactional Exemption call the Division at (801) 530-6600

Exemption:

(2) The following transactions are exempted from Sections 61-1-7 and 61-1-15:

* * *

(j) subject to Subsection (6), a transaction pursuant to an offer by an issuer of its securities to its existing securities holders, if:

(i) 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; and

(ii) the transaction constitutes:
(A) the conversion of convertible securities;
(B) the exercise of nontransferable rights or warrants;
(C) the exercise of transferable rights or warrants if the rights or warrants are exercisable not more than 90 days after their issuance;
(D) the purchase of securities under a preemptive right; or
(E) a transaction other than one specified in Subsections (2)(j)(ii)(A) through (D) if:
(I) the division is furnished with:
(Aa) a general description of the transaction;
(Bb) the disclosure materials to be furnished to the issuer's securities holders in the transaction; and
(Cc) a non-refundable fee; and
(II) the division does not, by order, deny or revoke the exemption within 20 working days after the day on which the filing required by Subsection (2)(j)(ii)(E)(I) is complete;

Division Interpretive Commentary:

Issuers should note that, pursuant to section 61-1-14(6), the exemption created by Subsection (2)(j) is not available for an offer or sale of a security to an existing securities holder who has acquired the holder's security from the issuer in a transaction in violation of Section 61-1-7.