Regulatory Filings

 
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U.S. Securities & Exchange Commission (SEC)

Regulation D - Rule 506 (c)

Rule 506 of Regulation D provides two distinct exemptions from registration for companies when they offer and sell securities. Companies relying on the Rule 506 exemptions can raise an unlimited amount of money.

Under Rule 506(c), a company can broadly solicit and generally advertise the offering and still be deemed to be in compliance with the exemption’s requirements if:

  • The investors in the offering are all accredited investors; and

  • The company takes reasonable steps to verify that the investors are accredited investors, which could include reviewing documentation, such as W-2s, tax returns, bank and brokerage statements, credit reports and the like.

Purchasers of securities offered pursuant to Rule 506 receive "restricted" securities, meaning that the securities cannot be sold for at least six months or a year without registering them.

Companies that comply with the requirements of Rule 506(b) or (c) do not have to register their offering of securities with the SEC, but they must file what is known as a "Form D" electronically with the SEC after they first sell their securities. Form D is a brief notice that includes the names and addresses of the company’s promoters, executive officers and directors, and some details about the offering, but contains little other information about the company.  You can access the SEC’s EDGAR database to determine whether the company has filed a Form D.

Source: https://www.sec.gov/fast-answers/answers-rule506htm.html 

Eqwity’s Regulation D registration: https://www.sec.gov/cgi-bin/browse-edgar?company=Eqwity&owner=exclude&action=getcompany

 
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European Securities and Market Authority (ESMA)

VII.1 The Prospectus Directive

Scope and exemptions

95. Offers would also be exempt from the obligation if: 

• The offer is addressed only to ‘qualified investors’, which are essentially professional clients under MiFID II [PD Art 3.2(a)]; or 

• The offer is addressed to fewer than 150 natural or legal persons per Member State other than ‘qualified investors’ [PD Art 3.2(b)]; or 

• Investors acquire securities for a total consideration of at least EUR100 000 per investor, for each separate offer [PD Art 3.2(c)]; 

• The denomination per unit amounts to at least EUR100 000 [PD Art 3.2(d)]; or • The total consideration in the Union is less than EUR100 000 which shall be calculated over a period of 12 months [PD Art 3.2(e)44].

Source: https://www.esma.europa.eu/sites/default/files/library/esma50-157-1391_crypto_advice.pdf 

 
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Swiss Financial Market Supervisory Authority (FINMA)

Prospectus (or other main offering document) required

Under Swiss law, an issue prospectus (Emissionsprospekt) is required in the case of a public offering of newly issued shares. Swiss law defines the term "public offering" as an offering which is not addressed to a limited number of persons. The main doctrine is of the view that an offering to up to 100 persons qualifies as a private offering. However, this is subject to the condition that the offering is not made to an indefinite group of people (for example, by way of an advertisement in a newspaper), but to pre-selected investors only. Certain commentators take the view that an offering made to only qualified investors will also qualify as a private placement irrespective of the number of investors involved. Article 652a of the Swiss Code of Obligations requires very limited information to be included in the prospectus, far below the market standard.

Source: https://uk.practicallaw.thomsonreuters.com/8-501-2602?transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1#co_anchor_a176133 

 
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Canadian Securities Administrator (CSA)

National Instrument 45-106 Prospectus and Registration Exemptions

PART 2: PROSPECTUS EXEMPTIONS

Division 1: Capital Raising Exemptions

2.3 Accredited investor 

(1) The prospectus requirement does not apply to a distribution of a security if the purchaser purchases the security as principal and is an accredited investor.

(2) Subject to subsection (3), for the purpose of this section, a trust company or trust corporation described in paragraph (p) of the definition of “accredited investor” in section 1.1 [Definitions] is deemed to be purchasing as principal.

(3) Subsection (2) does not apply to a trust company or trust corporation registered under the laws of Prince Edward Island that is not registered or authorized under the Trust and Loan Companies Act (Canada) or under comparable legislation in another jurisdiction of Canada.

(4) For the purpose of this section, a person described in paragraph (q) of the definition of “accredited investor” in section 1.1 [Definitions] is deemed to be purchasing as principal.

(5) This section does not apply to a distribution of a security to a person if the person was created, or is used, solely to purchase or hold securities as an accredited investor described in paragraph (m) of the definition of “accredited investor” in section 1.1 [Definitions].

Source: http://www.community.gov.yk.ca/pdf/45_106_national_instrument.pdf 

Applicable across Canada: https://www.securities-administrators.ca/aboutcsa.aspx?id=459&terms=Regulation%2045-106 

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The Central Bank of The Russian Federation (CBR)

Federal Law No. 282-FZ, dated 29 December 2012

3. New Rules on Prospectuses 

a. Mandatory registration of a prospectus

The current legislative regime created a presumption that a registered prospectus would not be required, subject to certain exemptions (i.e., open subscription and closed subscription, provided that the number of subscribers in the closed subscription exceeds 500, including subscribers with pre-emptive rights). Law 282- FZ takes the opposite approach to state that a prospectus is required in all cases when an offering of securities is made in the form of subscription under Russian law (either closed or open), save for a number of exemptions. 

The list of exemptions is quite extensive and generally tends to bring Russian offering rules in compliance with international securities offering standards via private placement. In particular, a prospectus is not required if (i) an offering is made solely to QIs provided that the total number of persons who have preemptive rights in such offering does not exceed 500 (excluding QIs); or (ii) an offering is made to any subscriber, provided that the total number of subscribers does not exceed 150 (excluding QIs and existing shareholders, provided that the total number of existing shareholders does not exceed 500 (excluding QIs)); or (iii) proceeds from the offering (obtained either in one or several tranches) do not exceed 200 million rubles per year (4 billion rubles for credit organizations); or (iv) the offering price to be paid by each of the potential subscribers (other than those exercising pre-emptive rights) is 4 million rubles or more, provided that the total number of persons exercising pre-emptive rights does not exceed 500 (excluding QIs). 

Other exemptions ((v) an offering of shares or securities convertible into shares solely to existing shareholders, provided that the total number of shareholders does not exceed 500 (excluding QIs) and (vi) an offering pursuant to closed subscription, provided that the total number of subscribers does not exceed 500 (excluding QIs)) repeat and further detail the existing rules.

[ENG VERSION] Source: https://www.lw.com/thoughtLeadership/amendments-to-russian-financial-regulatory-regime

 
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United Kingdom’s Financial Conduct Authority (FCA)

PR 1.2 Requirement for a prospectus and exemptions

86. Exempt offers to the public

(1) A person does not contravene section 85(1) if –

(a) the offer is made to or directed at qualified investors only;

(b) the offer is made to or directed at fewer than 150 persons, other than qualified investors, per EEA State;

(c) the minimum consideration which may be paid by any person for transferable securities acquired by him pursuant to the offer is at least 100,000 euros (or an equivalent amount);

(d) the transferable securities being offered are denominated in amounts of at least 100,000 euros (or equivalent amounts);

(e) the total consideration for the transferable securities being offered in the EEA states cannot exceed 100,000 euros (or an equivalent amount)

Source: https://www.handbook.fca.org.uk/handbook/PR/1/2.html

 
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Monetary Authority of Singapore (MAS)

2. APPLICATION OF SECURITIES LAWS ON OFFERS OR ISSUES OF DIGITAL TOKENS IN SINGAPORE

2.7 An Offer may nevertheless be exempt from the Prospectus Requirements and, in the case of units in a CIS, the Authorisation/ Recognition Requirements, where, amongst others – 

2.7.1 the Offer is a small (personal) offer that does not exceed $5 million (or its equivalent in a foreign currency) within any 12-month period, subject to certain conditions; 

2.7.2 the Offer is a private placement offer made to no more than 50 persons within any 12-month period, subject to certain conditions;

2.7.3 the Offer is made to institutional investors21 only; or

2.7.4 the Offer is made to accredited investors, subject to certain conditions.

The exemptions for a small (personal) offer, a private placement offer and an offer made to accredited investors, are respectively subject to certain conditions which includes advertising restrictions.

Source: http://www.mas.gov.sg/~/media/MAS/News%20and%20Publications/Monographs%20and%20Information%20Papers/Guide%20to%20Digital%20Token%20Offerings%20last%20updated%20on%2030%20Nov.pdf

 


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