DISB's Corporation Finance Division
In the area of securities offerings, the Corporation Finance Division of the Securities Bureau reviews the required disclosures and other registration materials of securities offerings that are registered with the Bureau to ensure that they make the required disclosures of material information about their company. CorpFin also receives notice filings for mutual funds and certain other offerings exempt from registration under District law or preempted from state registration by federal law. To support economic activity in the District, CorpFin seeks to facilitate issuers' capital raising efforts by conducting an effective and timely examination of the registration statements it receives for review. To accomplish this goal, CorpFin's staff informs an issuer in writing when a filing appears to be incomplete or inaccurate. This affords the issuer an opportunity to file correcting or clarifying amendments, which allows the registration to be declared effective within the statutory time frame, thus enhancing the issuer's ability to bring the offering to the District's investors in a timely manner.
Most of the registration statements reviewed by CorpFin are filed by small to mid-size companies engaging in an Initial Public Offering (IPO), with the majority involving Direct Participation Programs (DPPs). Direct Participation Programs, typically consisting of Real Estate Investment Trusts, Oil and Gas partnerships, and Equipment Leasing joint ventures, are designed to enable investors to participate in a business venture's cash flow and tax benefits. CorpFin also receives notice filings regarding exempt offerings and offerings preempted by federal law. Most of the notice filings involve mutual funds (Form NF) and private offerings (Form D). As one of the nation's first state securities regulators to accept electronic filings, the Securities Bureau continues to process more than 85 percent of the Form NF. it receives electronically.
Fees
All fees are assessed pursuant to Section 26-B249 of the DC Municipal Regulation and DC Register.
Payment, Filing, and Mailing Instructions
Filings With Payments Via Courier Service
DC Department of Insurance, Securities And Banking
Lockbox Services: 92660
DISB Securities Bureau
2005 Market Street, 5th Floor
Philadelphia, PA 19103-7042
Filings With Payments Via US Mail
All fillings and other correspondence containing payments that are sent via regular U.S. Mail Service or US. Postal Service Express Mail must be sent to:
DC Department of Insurance, Securities And Banking
DISB Securities Bureau
P.O. Box 712661
Philadelphia, Pa 19171-2661
Filings That Do Not Contain Payments:
DC Department of Insurance, Securities And Banking Securities Bureau
1050 First Street NE, Suite 801
Washington, DC 20002
Electronic Filings and Payments:
Account Name: Government of the District of Columbia – Insurance Administration DISB Lockbox
Account Number: 200004-3154898
Account Type: Checking
ACH Routing Number: 1210-00248
Wire Routing Number: 1210-00248
Bank Name and Address: Wells Fargo Bank, 420 Montgomery Street, San Francisco, CA 94104
Payment Method: ACH and Wires
Special Note: To make tracking of payments to filings as seamless as possible, issuers and their representatives are advised to place enough description on the Wire/ACH addendum about (a) issuer's name, and (b) purpose of payment. Further, issuers are advised to furnish the Securities Bureau staff evidence to substantiate that payment of fees has been initiated electronically.
NASAA Payments:
Except for mutual fund filings, required securities offerings registrations and notice filings (e.g., Registration by Coordination, Regulation D, Rule 506, Regulation A, Unit Investment Trust, and exemption notices filed pursuant to Title III and Title IV of the DC through the North American Securities Association's online Electronic Filing Depository (EFD) System.
For additional information, please visit our website at disb.dc.gov or contact J. "Mike" McManus, Assistant Director, Securities Bureau, Division of Corporation Finance, by phone at (202) 442-7826, or by email at [email protected].
Securities Offerings -- Registration
Title III § 31-5603.0(301) of the District of Columbia Code provides:" no person shall offer or sell a security in the District unless the security is registered under this act, the security or transaction is exempt under § 31-5604.0(401) or § 31-5604.02(402), or the security is a federal covered security."
Provisions Applicable to Registration Generally
Requirements applicable generally to registration are set forth in § 31-563.06(306) of the DC Act.
Registration by Coordination and Qualification
How to file Registration by Coordination
Registration by Coordination may only be used if an offering is also being registered with the Securities and Exchange Commission (SEC) under the Securities Act of 1933 and not exempt UNDER THE ACT or preempted by the National Securities Markets Improvement Act of 1996 (NSMIA). Registration by Coordination is governed by § 31-563.03(303) of the DC Act and Chapter: 26-B2 DC Municipal Regulation and DC Register (DCMR).
The following items must be submitted to the DISB Corporate Finance Division:
- A completed application Form U-1, Uniform Application to Register Securities, and a statement specifying the amount of securities sold in the District;
- One copy of the latest prospectus or offering circular filed under the Securities Act of 1933;
- An irrevocable consent appointing the Commissioner agent for service of process, executed by the applicant on Form U-2, Uniform Consent to Service of Process;
- A filing fee as provided in DCMR § 249.1: A check made payable to the DC Treasurer for 1/10 of 1% of the maximum aggregate offering price with a minimum of $500 and maximum of $1500; and
- Any other document or information requested by the Commissioner before the effective date of the offering.
Registration will become effective upon the date the registration becomes effective with the SEC, if the following conditions have been met:
- DISB has received all required documents;
- The registration materials have been on file with DISB for a least ten (10) business days; and
- A statement covering the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions has been filed for at least two full business days;
If the above conditions have not been met by the federal effective date, then the offering in question will be approved upon successful completion of the review process.
Any amendments and addendums to the registration statement filed with the SEC shall also be filed promptly with the Department. No fee is required for amendments, except for amendments that increase the number of shares or dollar amount that was originally reported.
How to File Registration by Qualification
Registration by Qualification is used when the offering is exempt from SEC registration under Regulation A Tier 1, Regulation D, Section 504 offering to more than ten District Residents through the intrastate "safe harbor clause." Registration by Qualification is governed by §31-563.04 (304) of the DC Act and Chapter: 26-B2 DC Municipal Regulation and DC Register (DCMR). The following documents need to be submitted for this filing:
- Form U-1, Uniform Application to Register Securities (together with all exhibits, which shall include all information required under §§ 304 and 306 of the DC Act);
- Copy of the requisite SEC registration form (i.e., Form S-1, S-3. etc.) or Form U-7 Small Corporate Offering Registration Form; Certified Copies of the Articles of Incorporation;
- Form U-2 Uniform Consent to Service of Process and accompanied by Form U-2A, Uniform Corporate Resolution; U-2A;
- One (1) copy of any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature intended, as of the effective date, to be used in connection with the offering; and
- A filing fee as provided in DCMR § 249.1; Check made payable to the DC Treasurer for 1/10 of one percent of the maximum aggregate offering price of securities to be offered in the District of Columbia. The minimum amount is $500, and the maximum amount is $1,500, and
- One (1) copy of the prospectus, pamphlet, circular, form letter, advertisement, or any other sales literature used in the offering.
An application for registration by Qualification shall become effective in the District when so ordered by the Commissioner.
Please note that additional documentation may be required. Please contact the Corporate Finance Division for any questions at [email protected].
Federal Covered Securities (Issuers of securities that are described as covered securities in section 18(b)(3) and in section 18(b)(4)(D) of the securities act of 1933
Notice Filings under Regulation D (Rule 506)
For initial filings and issuance of securities that are covered by Section 18(b) (4) (D) of the Securities Act of 1933, the issuer shall file with the District of Columbia a notice on Form D as adopted by the Securities and Exchange Commission.
What to File
- Paper or Electronic copy of SEC Form D
- The filing fee is $250.00. All checks shall be made payable to the DC Treasurer
- U-2 Consent to Service Process not required. The consent form incorporated into the Form D is acceptable
- Cover letter denoting: the date of first in the District of Columbia; and number of accredited and non-accredited investors in the District of Columbia; and aggregate offering price of securities sold (respectively) to the District of Columbia accredited and non-accredited investors
- The filing is due 15 days after the first sale in the District of Columbia. Failure to fill out the forms accurately and completely may place the status of the offering in question. Please contact our Corporate Finance Division for any questions
Filings may be submitted electronically via NASAA EFD
Notice Filings under Regulation A (Tier 2)
For initial filings and issuance of securities under Tier 2 of Regulation A of the Securities Act of 1933 the issuer shall file a notice on Form 1 A with the District of Columbia as adopted by the Securities and Exchange Commission.
What to File
Paper or Electronic: A completed Regulation A – Tier 2 notice filing form Regulation A – Tier 2 Offering Notice Filing Form, or copies of all documents filed with the Securities and Exchange Commission Form U-2 Consent to Service Process required if not filing on the Regulation A – Tier 2 notice filing form: and
- Filing fee $250.00. All checks shall be made payable to the DC Treasurer.
Filings may be submitted electronically via NASAA EFD
Information for Small Businesses
Small Corporate Offering Registration (SCOR)
Overview
The Small Company Offering Registration (SCOR) is a unique means by which a company needing capital may make a public offering of securities without the often costly and time-consuming process of an SEC registration. The program enables corporations and limited liability companies to raise up to $1,000,000 in any 12-month period through the sales of securities to the public.
The core of the SCOR registration is the Form SCOR Disclosure Document, Form U-7, which is presented in an easily understandable question and answer format. The Form is designed for use by small and emerging businesses whose principals may prepare the Form themselves without the expertise of attorneys and accountants experienced in securities laws. The questions presented in the Form are designed to elicit specific information of particular relevance to small businesses.
Who Is Eligible to Use SCOR?
To be eligible to register securities under this section, the issuer shall satisfy the following conditions:
- The issuer must be a corporation or LLC organized under the laws of the United States or Canada;
- The issuer is not engaged in petroleum exploration, mining, or any other extractive industries;
- The issuer is not an investment company subject to the Investment Act of 1940;
- The issuer is not subject to the reporting requirements of the Securities Exchange Act of 1934;
- The offering is not for a "blind pool";
- If the securities are common stock, the offer price must exceed $1.00 per share; and
- The company, any of the company's management, or 10% or greater stockholders, have not had certain regulatory problems in the past.
How and What to File
A filing fee as provided in DCMR §26-B 249.3: A check made payable to the DC Treasurer for 1/10 of 1% of the maximum aggregate offering price of securities to be offered in the District of Columbia. The minimum of $250 and a maximum of $1000. The fee is not charged for amendments, exceptions to amendments that increase the initially reported shares. The registrant must complete Form U-1, Uniform Application, and Form U-7 Small, Corporate Offering Registration Form (A Form U-7 Manual ─ instruction manual is available at the link below).
District of Columbia Equity Crowdfunding for Small Businesses
On October 10, 2014, the Department of Insurance, Securities, and Banking (DISB), adopted final rules pursuant to Section 403 of the Securities Act of 2000 DC Official Code § 31-5604.03. The rules, known as the "District of Columbia-Only Securities Offerings Exemption," are in 26-B DCMR §§ 250 – 256. They provide an exemption from the registration requirements of the Securities Act of 2000, for issuers located in the District of Columbia who offer such securities exclusively in the District of Columbia to District residents.
The purpose of the Rule is: (a) to facilitate capital formation of small and local businesses in the District of Columbia; and (b) to facilitate investment opportunities for District of Columbia residents.
For information on what companies are eligible, offering limits, investment limits, what to file, how to file, when to file, or questions regarding the District of Columbia Equity Crowdfunding, contact J. "Mike" McManus, Assistant Director, Corporation Finance Division, by email at: [email protected] or by phone at: (202) 442-7826.
NASAA Uniform Forms
U-1 Application to Register Securities
U-2 Consent to Service of Process
U-2A, Uniform Corporate Resolution
U-7 Small Company Offering Registration Disclosure Document
Form U-7 Issuer' Manual
