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Corporate Finance - Exemptions and Notice Filings

Notice Filings for Securities Offerings

In 1996, Congress passed the National Securities Markets Improvement Act ("NSMIA").  NSMIA preempted the states from registering offering of securities issued by investment companies registered under the federal Investment Company Act of 1940.  The District does require a notice filing and related fee for offerings of the securities of investment companies (See DC Municipal Regulation section 26-B240) and for certain other types of securities offerings.

Notice Filings for Mutual Funds (Investment Companies)

Issuers of securities that are covered by Section 18(b) of the Securities Act of 1933 shall file with the District of Columbia Form NF and Form U-2 and the applicable filing fee prior to the offering of the security in the District. Form NF may be filed electronically. For more information about filing Form NF electronically, please contact the Corporate Finance Division at corpfin.disb@dc.gov.

Fees for Notice Filings of Mutual Funds

If a filing is required, a nonrefundable $400 fee is due at the time of the notice filing, and an additional amount per class for the period covered by the notice filing is due at the time of the renewal or a final filing. At the expiration of the notice filing period the issuer has the option of paying either: (1) a flat fee of $1,300 or (2) an additional fee of 1/10 of 1% of gross sales in the District less the initial $400 fee. If option (2) is elected, a sales report must be filed, stating the dollar amount sold in the District for each class of securities covered by the notice filing. (Section 26-B249.4 of the D.C. Municipal Regulation and D.C. Register)

Unit Investment Trusts

For a Unit Investment Trust offering, the issuer may elect to pay a onetime 18 month additional fee of $200 in addition to the standard $400 fee for a total $600. At the expiration of the notice filing the issuer has the option of paying either (1) a flat fee of $1,950 or (2) and additional fee of 1/10 of 1% of gross sales in the District less the initial $600 fee. If electing option (2) a sales report illustrating the dollar amount for all District residents and each class of securities purchased. (Section 26-B249.5 of the D.C. Municipal Regulation and D.C. Register.

Other Notice Filings

Persons making offerings of the following types of securities are required to file a notice and pay the filing fee pursuant to District of Columbia Municipal Regulations section 26-B243. Options  issued by a clearing agency (See DC Code Section31-560 4.01 (7))

  • Securities of a nonprofit corporate entity, engaged exclusively in religious, educational, benevolent, charitable, fraternal, social, athletic or reformatory purposes or as a chamber of commerce or trade association and no part of the earnings benefit any private shareholder or individual (See DC Code Section 31-5604.01 (8));

  • Any security issued in connection with: a written compensation plan, including a stock purchase, savings, option, bonus, stock appreciation, profit sharing, thrift, incentive, pension, or similar employees’ stock benefit plan, and in any plan created for the participants of their employees, directors, general partners trustees if a business trust, or for any officer, consultant or advisor. If a written plan is for consultant or advisors the services rendered by these professionals may not be in connection of the offering or sales of securities. (See DC Code Section 31-5604.01 (10));
  • A membership interest or like security issued by a nonprofit membership  cooperative (See DC Code Section 31-5604.01 (12));

  • A transaction pursuant to an offer directed by the offeror to not more than 10 persons during any period over 12 consecutive months, and no commission is paid for soliciting prospective purchaser in the District except to a licensed broker dealer of agent. s (See DC Code Section 31-5604.02 (12));
  • A transaction involving an offer to sell, but not a sale, of a security if: A registration statement or offering statement or similar document as required under the Securities Act of 1933 has been filed with the Securities and Exchange Commission, but is not effective; A registration statement, if required, has been filed under section 302, but is not effective (See DC Code Section 31-5604.02 (16));

  • A transaction involving an offer to sell , but not a sale  of a security  for an offering for which an registration statement pursuant to a Registration by Qualification has been filed but is not yet effective and no stop order has been placed on the offering. (See DC Code Section 31-5604.02 (18)); and
  • A transaction that involves a recapitalization, reorganization, quasi-reorganization, stock split, reverse stock split, merger, triangular merger, consolidation, sale of assets, or exchange of securities. (See DC Code Section 31-5604.02 (19))

If the security or transaction in question is within one of the above categories and not subject to the Notice Filing requirements, it is incumbent upon the issuer to file if necessary. Please contact the Corporate Finance Division for any questions.