Montana Administrative Register Notice 6-218 No. 14   07/30/2015    
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In the matter of the amendment of ARM 6.10.209 and 6.10.210 pertaining to Offerings







TO: All Concerned Persons


1. On August 20, 2015, at 9:00 a.m., the Commissioner of Securities and Insurance (CSI), Montana State Auditor, will hold a public hearing in the 2nd floor conference room, at the office of the CSI, 840 Helena Ave., Helena, Montana, to consider the proposed amendment of the above-stated rules.


2. The CSI will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing, or need an alternative accessible format of this notice. If you require an accommodation, contact the CSI no later than 5:00 p.m., August 13, 2015, to advise us of the nature of the accommodation that you need. Please contact Darla Sautter, CSI, 840 Helena Avenue, Helena, Montana, 59601; telephone (406) 444-2726; TDD (406) 444-3246; fax (406) 444-3499; or e-mail dsautter@mt.gov.


3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:



          (1) Except as provided in (3), a A notice filing for a security that is a federal covered security under 18(b)(3) of or (4) of the Securities Act of 1933 shall consist of:

          (a) a letter explaining that the security is a federal covered security pursuant to 18(b)(3) of or (4) of the Securities Act of 1933;

          (b) through (2) remain the same.

          (3) The notice filing requirements for an issuer offering a security that is a covered security under 18(b)(4)(D) of the Securities Act of 1933 are contained in ARM 6.10.210.


          AUTH: 30-10-107, MCA

          IMP: 30-10-107, 30-10-201, MCA



          (1) An issuer offering a security that is a covered security under 18(b)(4)(D) of the Securities Act of 1933 shall file a notice on Form D (17 CFR 239.500), a consent to service of process on a form prescribed by the commissioner, and pay the fee required by 30-10-209(1)(a) and (1)(c), MCA, no later than 15 days after the first sale of the security in this state. An issuer shall file a renewal for each succeeding year that a security is offered in this state, and pay the fee required by 30-10-209(1)(b), MCA.

          (2) remains the same.

          (3) Any Form D filing or renewal required under (1) must be submitted to the commissioner through the Electronic Filing Depository (EFD) operated by the North American Securities Administrators Association, Inc., and must comply with the following:

          (a) All filing or renewal fees shall likewise be submitted through the EFD;

          (b) A person duly authorized by the issuer shall affix his or her electronic signature to the Form D filing by typing his or her name in the appropriate fields and submitting the filing through the EFD, which shall constitute irrefutable evidence of legal signature by the individual whose name is typed on the filing; and

          (c) Any documents or fees required under (1) to be filed with the commissioner that are not permitted to be filed with, or cannot be accepted by, the EFD must be filed directly with the commissioner, and must be accompanied by a statement from the issuer providing the date the filing was attempted through the EFD.


          AUTH: 30-10-107, MCA

          IMP: 30-10-202, 30-10-211, MCA


          4. STATEMENT OF REASONABLE NECESSITY: The Commissioner of Securities and Insurance, Montana State Auditor, Monica J. Lindeen, (commissioner) is the statewide elected official responsible for administering the Montana Insurance Code and regulating the business of securities and insurance.


The commissioner is a member of the North American Securities Administrators Association (NASAA). The NASAA is the oldest international organization of securities regulators from the 50 states, the District of Columbia, the U.S. territories, Canada, and Mexico. The NASAA provides a forum for the development of uniform policy and regulation when uniformity is appropriate.


The NASAA created an online Electronic Filing Depository (EFD) in 2014. The EFD provides national uniformity for filing securities offerings among multiple jurisdictions, and allows issuers to file notices in multiple jurisdictions at one time.


The legislature enacted 30-10-211, MCA, in 1997, which provides discretion to the commissioner over whether to require notice filing of federal covered securities, and if so, the form of that notice. The commissioner has determined that these amendments to ARM 6.10.209 and 6.10.210 will streamline the notice process for both the issuers and CSI personnel.


The amendments to ARM 6.10.209 are reasonably necessary to remove any confusion over the process for filing certain notices.  The proposed changes are not substantive. 


The amendments to ARM 6.10.210 are reasonably necessary to streamline the notice filing process for Rule 506 offerings. Filing through the EFD should make it easier for national issuers to file notice with multiple states at once, and it will reduce the amount of hardcopy paperwork CSI personnel must process.


          5. Concerned persons may submit their data, views, or arguments concerning the proposed actions either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to Michael Kakuk, Attorney, Office of the Commissioner of Securities and Insurance, Montana State Auditor, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2040; fax (406) 444-5223; or e-mail mkakuk@mt.gov, and must be received no later than 5:00 p.m., August 28, 2015.


          6. Michael Kakuk, Staff Attorney, has been designated to preside over and conduct this hearing.


          7. The CSI maintains a list of concerned persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to Darla Sautter using the contact information in paragraph two, or may be made by completing a request form at any rules hearing held by the CSI.


          8. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.


          9. The bill sponsor contact requirements of 2-4-302, MCA, do not apply. 


          10. With regard to the requirements of 2-4-111, MCA, they apply to these proposed rule amendments. The CSI has determined there will be little economic impact on businesses, because the filing fees are not being modified. Small businesses have the same level of access to the EFD as large businesses, so they will not be adversely or disproportionately impacted.



          /s/ Lynne Egan                                      /s/ Jesse Laslovich                    

          Lynne Egan                                          Jesse Laslovich

          Rule Reviewer                                       Chief Legal Counsel


          Certified to the Secretary of State July 20, 2015.


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