Securities Offerings - Registration
Title III Section 31-5603.01 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 Section 31-5604.01 or 31-5604.02, or the security is a federal covered security.”
Provisions Applicable to Registration Generally
Requirements applicable to registration generally are set forth in by Section 31-563.06(306) of the DC Act.
Registration by Notification
Since this provision is rarely used interested issuers should contact the DISB Corporate Finance staff at (202) 442-7826 or email us at [email protected].
Registration by Coordination and Qualification
How to file – Registration by Coordination
This method 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 Section 31-563.03(303) of the DC Act and Chapter: 26-B2 D.C. Municipal Regulation and D.C. 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;
- Two copies 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 $1,500; 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:
- All required documents have been received by DISB;
- The registration materials have been on file with DISB for a least 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, Regulation D, Section 504 and 505, or through the intrastate “safe harbor clause.” Registration by Qualification is governed by Section 31-563.04 (304) of the DC Act and Chapter: 26-B2 D.C. Municipal Regulation and D.C. 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;
- Two (2) copies 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 § 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 two (2) copies of the prospectus, pamphlet, circular, form letter, advertisement or any other sales literature used in the offering.
Please note, additional documentation may be required. Please contact the Corporate Finance Division for any questions at [email protected].
Small Corporate Offering Registration (SCOR)
The SEC, through Regulation A permits unregistered public-offerings of up to $5 million by a small business in a 12-month period. To complement the SEC's Reg. A, the states sought to develop a simplified, streamlined disclosure document for small businesses -- and ultimately, produced SCOR.
How to File
In the District of Columbia there are two methods to file a SCOR. The first option is to file under Regulation D, Rule 504, if using general solicitation or advertising. The second option is a Regulation A filing under the federal securities laws or an intra-state filings (see section 3(a) of the Securities Act of 1933) subject to registration by qualification.
Regardless of which option the registrant decides to pursue, the following steps must be completed for a SCOR:
- Issuer must complete Form U-1, Uniform Application, and Form U-7 Small, Corporate Offering Registration Form ( A Form U-7 Manual ─ instruction manual is also available).
- 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.
To be eligible to register securities under this section, the issuer shall satisfy the following conditions:
- The issuer must be an organized corporation under either the laws of a state, the District or one of the possessions of the United States;
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.
- If the securities are options, warrants, or rights for common stock, the exercise price must equal or exceed $5.00 per share.
If the securities are convertible into common stock, the conversion price must be equal to or exceed $5.00 per share.
If the issuer is going to make a Regulation A offering, the aggregate offer price must be $5,000,000 or less.
Forms U-1, U-2, U-7 and the Form U-7 Manual can be found on the NASAA website.