[Federal Register: July 10, 2008 (Volume 73, Number 133)]
[Notices]
[Page 39764-39765]
[DOCID:fr10jy08-119]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58096; File No. SR-NYSE-2008-54]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Extend the Operative Date of the NYSE Rule 2 Requirement That NYSE-
Only Member Organizations Apply for and Be Approved as Members of the
Financial Industry Regulatory Authority, Inc.

July 3, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 30, 2008, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been substantially prepared by the
Exchange. The Exchange has designated the proposed rule change as a
change concerned solely with the administration of the Exchange
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(3)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(3).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to extend to December 31, 2008, the operative
date of the NYSE Rule 2 requirement that NYSE-only member organizations
apply for and be approved as members of the Financial Industry
Regulatory Authority, Inc. (``FINRA''). The text of the proposed rule
change is available at NYSE, the Commission's Public Reference Room,
and http://www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to extend to December 31, 2008, the grace
period for NYSE-only member organizations to apply for and be approved
as FINRA members, as required by NYSE Rule 2.
    In connection with the consolidation of NASD and NYSE Regulation,
Inc. member firm regulation operations into FINRA, which closed on July
30, 2007, the Exchange amended NYSE Rule 2 to require NYSE member
organizations to also be FINRA members.\5\ In connection with that rule
change, the Commission approved a 60-day grace period within which
NYSE-only member organizations must apply for and be approved for FINRA
membership. In that rule filing, NYSE-only member organizations were
defined as those member organizations that were not NASD members as of
the date of the closing of the FINRA transaction. This grace period
began on October 12, 2007, the date of Commission approval of the
Exchange's rule filing. In furtherance of the consolidation, FINRA
adopted NASD IM-1013-1 to enable eligible NYSE member organizations to
become FINRA members though an expedited process (the ``FINRA Waive-in
application process'').\6\
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    \5\ See Securities Exchange Act Release No. 34-56654 (October
12, 2007), 72 FR 59129 (October 18, 2007) (SR-NYSE-2007-67).
    \6\ See Securities Exchange Act Release No. 56653 (October 12,
2007), 72 FR 59127 (October 18, 2007) (SR-NASD-2007-56).
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    At the close of the 60-day grace period, all but two of the former
NYSE-only member organizations had applied for and been approved as
FINRA members. On December 12, 2007, the Exchange filed for an
extension of the grace period to June 30, 2008 for those two firms.\7\
In that filing, the Exchange noted that those two firms had unique
member qualification issues and were ineligible to participate in the
FINRA Waive-in application process. As of June 30, 2008, these two
firms have not yet been approved as FINRA firms, but are being
considered for FINRA membership. Accordingly, the NYSE proposes to
extend the grace period to December 31, 2008 for these two firms,

to provide time for those issues to be resolved, including time for the
firms to apply for and be approved as FINRA members through FINRA's
regular member approval process.
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    \7\ See Securities Exchange Act Release No. 56953 (December 12,
2007), 72 FR 71990 (December 19, 2007) (SR-NYSE-2007-115).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \8\ that an Exchange have rules that
are designed to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system and, in general, to protect
investors and the public interest.
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    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change is concerned solely with
the administration of the Exchange, it is effective upon filing
pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-
4(f)(3) \10\ thereunder. At any time within 60 days of the filing of
the proposed rule change, the Commission may summarily abrogate such
rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(3).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2008-54 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2008-54. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, on official business
days between the hours of 10 a.m. and 3 p.m. Copies of the filing also
will be available for inspection and copying at the principal office of
the Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number. SR-
NYSE-2008-54 and should be submitted on or before July 31, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Florence E. Harmon,
Acting Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-15697 Filed 7-9-08; 8:45 am]

BILLING CODE 8010-01-P


format by means of EDGAR in accordance with the EDGAR rules set forth
in Regulation S-T (17 CFR Part 232).
    (g) Qualification. An offering statement and any amendment thereto
can be qualified only by order of the Commission.
    (h) Amendments. (1)(i) Amendments to an offering statement must be
signed and filed in the same manner as the initial filing. The
amendment must be filed with the Commission in the manner set forth in
paragraph (e) of this rule. Amendments to an offering statement must be
filed under cover of Form 1-A and must be numbered consecutively in the
order in which filed.
    (ii) Every amendment that includes audited financial statements
must include the consent of the certifying accountant to the use of
such accountant's certificate in connection with the amended financial
statements in the offering statement or offering circular and to being
named as having audited such financial statements.
    (iii) Amendments solely relating to Part III of Form 1-A must
comply with

the requirements of paragraph (h)(1)(i) of this rule, except that such
amendments may be limited to the Part I of Form 1-A, an explanatory
note, and all of the information required by Part III of Form 1-A.
    (2) Post-qualification amendments must be filed in the following
circumstances for ongoing offerings:
    (i) At least every 12 months after the qualification date to
include the financial statements that would be required by Form 1-A as
of such date; or
    (ii) To reflect any facts or events arising after the qualification
date of the offering statement (or the most recent post-qualification
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the offering
statement.

Sec.  230.253  Offering circular.

    (a) Contents. An offering circular must include the information
required by Form 1-A for offering circulars.
    (b) Notwithstanding paragraph (a) of this section, the offering
circular may omit information with respect to the public offering
price, underwriting syndicate (including any material relationships
between the issuer or selling securityholders and the unnamed
underwriters, brokers or dealers), underwriting discounts or
commissions, discounts or commissions to dealers, amount of proceeds,
conversion rates, call prices and other items dependent upon the
offering price, delivery dates, and terms of the securities dependent
upon the offering date; provided, that the following conditions are
met:
    (1) The securities to be qualified are offered for cash.
    (2) The outside front cover page of the offering circular includes
a bona fide estimate of the range of the maximum offering price and the
maximum number of shares or other units of securities to be offered or
a bona fide estimate of the principal amount of debt securities
offered, subject to the following conditions:
    (i) The range must not exceed $2 for offerings where the upper end
of the range is $10 or less and 20% if the upper end of the price range
is over $10; and
    (ii) The upper end of the range must be used in determining the
aggregate offering price under Rule 251(a) (Sec.  230.251(a)).
    (3) The offering statement does not relate to securities to be
offered by competitive bidding.
    (4) The volume of securities (the number of equity securities or
aggregate principal amount of debt securities) to be offered may not be
omitted in reliance on this paragraph (b).

    Note: A decrease in the volume of securities offered or a change
in the bona fide estimate of the offering price range from that
indicated in the offering circular filed as part of a qualified
offering statement may be disclosed in the offering circular filed
with the Commission pursuant to Rule 253(g) (Sec.  230.253(g)), so
long as the decrease in the volume of securities offered or change
in the price range would not materially change the disclosure
contained in the offering statement at qualification.
Notwithstanding the foregoing, any decrease in the volume of
securities offered and any deviation from the low or high end of the
price range may be reflected in the offering circular supplement
filed with the Commission pursuant to Rule 253(g)(1) (Sec.
230.253(g)(1)) if, in the aggregate, the decrease in volume and/or
change in price represent no more than a 20% change from the maximum
aggregate offering price calculable using the information in the
qualified offering statement. In no circumstances may this paragraph
be used to offer securities where the maximum aggregate offering
price would result in the offering exceeding the limit set forth in
Rule 251(a) (Sec.  230.251(a)) for offerings under Regulation A or
if the change would result in a Tier 1 offering becoming a Tier 2
offering. An offering circular supplement may not be used to
increase the volume of securities being offered. Additional
securities may only be offered pursuant to a new offering statement
or post-qualification amendment qualified by the Commission.

    (c) The information omitted from the offering circular in reliance
upon paragraph (b) of this rule must be contained in an offering
circular filed with the Commission pursuant to Rule 252(e) (Sec.
230.252(e)) and paragraph (g) of this rule; except that if such
offering circular is not so filed by the later of 15 business days
after the qualification date of the offering statement or 15 business
days after the qualification of a post-qualification amendment thereto
that contains an offering circular, the information omitted in reliance
upon paragraph (b) of this rule must be contained in a qualified post-
qualification amendment to the offering statement.
    (d) Presentation of information.
    (1) Information in the offering circular must be presented in a
clear, concise and understandable manner and in a type size that is
easily readable. Repetition of information should be avoided; cross-
referencing of information within the document is permitted.
    (2) Where an offering circular is distributed through an electronic
medium, issuers may satisfy legibility requirements applicable to
printed documents by presenting all required information in a format
readily communicated to investors.
    (e) Date. An offering circular must be dated approximately as of
the date it was filed with the Commission.
    (f) Cover page legend. The cover page of every offering circular
must display the following statement highlighted by prominent type or
in another manner:
    The United States Securities and Exchange Commission does not pass
upon the merits of or give its approval to any securities offered or
the terms of the offering, nor does it pass upon the accuracy or
completeness of any offering circular or other solicitation materials.
These securities are offered pursuant to an exemption from registration
with the Commission; however, the Commission has not made an
independent determination that the securities offered are exempt from
registration.
    (g) Offering circular supplements.
    (1) An offering circular that discloses information previously
omitted from the offering circular in reliance upon Rule 253(b) (Sec.
230.253(b)) must be filed with the Commission no later than two
business days following the earlier of the date of determination of the
offering price or the date such offering circular is first used after
qualification in connection with a public offering or sale.
    (2) An offering circular that reflects information other than that
covered in paragraph (g)(1) of this rule that constitutes a substantive
change from or addition to the information set forth in the last
offering circular filed with the Commission must be filed with the
Commission no later than five business days after the date it is first
used after qualification in connection with a public offering or sales.
If an offering circular filed pursuant to this paragraph (g)(2)
consists of an offering circular supplement attached to an offering
circular that (i) previously had been filed or (ii) was not required to
be filed pursuant to paragraph (g) of this rule because it did not
contain substantive changes from an offering circular that previously
was filed, only the offering circular supplement need be filed under
paragraph (g) of this rule, provided that the cover page of the
offering circular supplement includes a cross reference to the date(s)
of the related offering circular and any offering circular supplements
thereto that together constitute the offering circular with respect to
the securities currently being offered or sold.
    (3) An offering circular that discloses information, facts or
events covered in both paragraphs (g)(1) and (2) must be filed with the
Commission no later than

two business days following the earlier of the date of the
determination of the offering price or the date it is first used after
qualification in connection with a public offering or sales.
    (4) An offering circular required to be filed pursuant to paragraph
(g) of this rule that is not filed within the time frames specified in
paragraph (g) must be filed pursuant to this paragraph (4) as soon as
practicable after the discovery of such failure to file.
    (5) Each offering circular must be filed with the Commission in
electronic format by means of EDGAR in accordance with the EDGAR rules
set forth in Regulation S-T (17 CFR Part 232).
    (6) Each offering circular filed under this rule must contain in
the upper right corner of the cover page the paragraph and subparagraph
of this rule under which the filing is made, and the file number of the
offering statement to which the offering circular relates.

Sec.  230.254  Preliminary offering circulars.

    Before qualification of the required offering statement, but after
its filing, a written offer of securities may be made if it meets the
following requirements:
    (a) The outside front cover page of the material bears the caption
Preliminary Offering Circular, the date of issuance, and the following
legend, which must be highlighted by prominent type or in another
manner:
    An offering statement pursuant to Regulation A relating to these
securities has been filed with the Securities and Exchange Commission.
Information contained in this Preliminary Offering Circular is subject
to completion or amendment. These securities may not be sold nor may
offers to buy be accepted before the offering statement filed with the
Commission is qualified. This Preliminary Offering Circular shall not
constitute an offer to sell or the solicitation of an offer to buy nor
may there be any sales of these securities in any state in which such
offer, solicitation or sale would be unlawful before registration or
qualification under the laws of any such state. We may elect to satisfy
our obligation to deliver a Final Offering Circular by sending you a
notice within two business days after the completion of our sale to you
that contains the URL where the Final Offering Circular or the offering
statement in which such Final Offering Circular was filed may be
obtained.
    (b) The Preliminary Offering Circular contains substantially the
information required in an offering circular by Form 1-A (Sec.  239.90
of this chapter), except that information that may be omitted under
Rule 253(b) (Sec.  230.253(b)) may be omitted if the conditions set
forth in Rule 253(b) are met.
    (c) The Preliminary Offering Circular is filed as a part of the
offering statement.

Sec.  230.255  Solicitation of interest communications.

    (a) At any time before the qualification of an offering statement,
including before the non-public submission or public filing of such
offering statement, an issuer or any person authorized to act on behalf
of an issuer may communicate orally or in writing to determine whether
there is any interest in a contemplated securities offering. Such
communications are deemed to be an offer of a security for sale for
purposes of the antifraud provisions of the federal securities laws. No
solicitation or acceptance of money or other consideration, nor of any
commitment, binding or otherwise, from any person is permitted until
qualification of the offering statement.
    (b) The communications must:
    (1) State that no money or other consideration is being solicited,
and if sent in response, will not be accepted;
    (2) State that no offer to buy the securities can be accepted and
no part of the purchase price can be received until the offering
statement is qualified, and any such offer may be withdrawn or revoked,
without obligation or commitment of any kind, at any time before notice
of its acceptance given after the qualification date;
    (3) State that a person's indication of interest involves no
obligation or commitment of any kind; and
    (4) After the public filing of the offering statement:
    (i) State from whom a copy of the most recent version of the
Preliminary Offering Circular may be obtained, including a phone number
and address of such person;
    (ii) Provide the URL where such Preliminary Offering Circular or to
the offering statement in which such Preliminary Offering Circular was
filed may be obtained; or
    (iii) Include a complete copy of the Preliminary Offering Circular.
    (c) Any written communication under this rule may include a means
by which a person may indicate to the issuer that such person is
interested in a potential offering. This issuer may require the name,
address, telephone number, and/or email address in any response form
included pursuant to this paragraph (c).
    (d) If solicitation of interest materials are used after the public
filing of the offering statement and such solicitation of interest
materials contain information that is inaccurate or inadequate in any
material respect, revised solicitation of interest materials must be
redistributed in a manner substantially similar to the manner in which
such materials were originally distributed. Notwithstanding the
foregoing in this paragraph (d), if the only information that is
inaccurate or inadequate is contained in a Preliminary Offering
Circular provided with the solicitation of interest materials pursuant
to paragraphs (b)(4)(i) or (b)(4)(ii) of this rule, no such
redistribution is required in the following circumstances:
    (1) in the case of paragraph (b)(4)(i) of this rule, the revised
Preliminary Offering Circular will be provided to any persons making
new inquiries and will be recirculated to any persons making any
previous inquiries; or
    (2) in the case of paragraph (b)(4)(ii) of this rule, the URL
continues to link directly to the most recent Preliminary Offering
Circular or to the offering statement in which such revised Preliminary
Offering Circular was filed.
    (e) Where an issuer decides to register an offering under the
Securities Act after soliciting interest in a contemplated, but
abandoned, Regulation A offering, the Regulation A exemption for offers
would not be subject to integration with the registered offering,
unless the issuer engaged in solicitations of interest pursuant to this
rule to persons other than qualified institutional buyers and
institutional accredited investors permitted by Section 5(d) of the
Securities Act. In such circumstances, the issuer (and any underwriter,
broker, dealer, or agent used by the issuer in connection with the
proposed offering) must wait at least 30 calendar days between the last
such solicitation of interest in the Regulation A offering and the
filing of the registration statement with the Commission.

Sec.  230.256  Definition of ``qualified purchaser.''

    For purposes of Section 18(b)(3) of the Securities Act [15 U.S.C.
77r(b)(3)], a ``qualified purchaser'' of a security offered or sold
pursuant to Regulation A means any offeree of such security and, in a
Tier 2 offering, any purchaser of such security.

Sec.  230.257  Periodic and current reporting; exit report.

    (a) Tier 1: Exit report. Each issuer that has filed an offering
statement for a Tier 1 offering that has been qualified pursuant to
this Regulation A must file an exit report on Form 1-Z (Sec.  239.94)
not later than 30 calendar days after the termination or completion of
the offering.

    (b) Tier 2: Periodic and current reporting. Each issuer that has
filed an offering statement for a Tier 2 offering that has been
qualified pursuant to this Regulation A must file with the Commission
the following periodic and current reports in electronic format by
means of EDGAR in accordance with the EDGAR rules set forth in
Regulation S-T (17 CFR Part 232):
    (1) Annual reports. An annual report on Form 1-K (Sec.  239.91) for
the fiscal year in which the offering statement became qualified and
for any fiscal year thereafter, unless the issuer's obligation to file
such annual report is suspended under paragraph (d) of this rule.
Annual reports must be filed within the period specified in Form 1-K.
    (2) Special financial report. (i) A special financial report if the
offering statement did not contain the following:
    (A) audited financial statements for the issuer's last full fiscal
year (or for the life of the issuer if less than a full fiscal year)
preceding the fiscal year in which the issuer's offering statement
became qualified; or
    (B) financial statements covering the first half of the issuer's
current fiscal year if the offering statement was qualified during the
second half of that fiscal year.
    (ii) The special financial report described in paragraph
(a)(2)(i)(A) of this rule must be filed under cover of Form 1-K within
120 calendar days after the qualification date of the offering
statement and must include audited financial statements for such last
full fiscal year or other period, as the case may be. The special
financial report described in paragraph (a)(2)(i)(B) of this rule must
be filed under cover of Form 1-SA within 90 calendar days after the
qualification date of the offering statement and must include the
semiannual financial statements for the first half of the issuer's
fiscal year, which may be unaudited.
    (iii) A special financial report must be signed in accordance with
the requirements of the form on which it is filed.
    (3) Semiannual report. A semiannual report on Form 1-SA (Sec.
239.92) within the period specified in Form 1-SA. Semiannual reports
must cover the first half of each fiscal year of the issuer, commencing
with the first half of the fiscal year following the most recent fiscal
year for which full financial statements were included in the offering
statement, or, if the offering statement included financial statements
for the first half of the fiscal year following the most recent full
fiscal year, for the first half of the following fiscal year.
    (4) Current reports. Current reports on Form 1-U (Sec.  239.93)
with respect to the matters and within the period specified in that
form, unless substantially the same information has been previously
reported to the Commission by the issuer under cover of Form 1-K or 1-
SA.
    (5) Reporting by successor issuers. Where in connection with a
succession by merger, consolidation, exchange of securities,
acquisition of assets or otherwise, securities of any issuer that is
not required to file reports pursuant to paragraph (b) of this rule are
issued to the holders of any class of securities of another issuer that
is required to file such reports, the duty to file reports pursuant to
paragraph (b) of this rule shall be deemed to have been assumed by the
issuer of the class of securities so issued. The successor issuer must,
after the consummation of the succession, file reports in accordance
with paragraph (b) of this rule, unless that issuer is exempt from
filing such reports or the duty to file such reports is suspended under
paragraph (d).
    (c) Amendments. All amendments to the reports described in
paragraphs (a) and (b) of this rule must be filed under cover of the
form amended, marked with the letter ``A'' to designate the document as
an amendment, e.g., ``1-K/A,'' and in compliance with pertinent
requirements applicable to such reports. Amendments filed pursuant to
this paragraph (c) must set forth the complete text of each item as
amended, but need not include any items that were not amended.
Amendments must be numbered sequentially and be filed separately for
each report amended. Amendments must be signed on behalf of the issuer
by a duly authorized representative of the issuer. An amendment to any
report required to include certifications as specified in the
applicable form must include new certifications by the appropriate
persons.
    (d) Termination or suspension of duty to file reports. (1) The duty
to file reports under this rule shall be automatically suspended if and
so long as the issuer is subject to the duty to file reports required
by section 13 or 15(d) of the Exchange Act (15 U.S.C. 78m or 15 U.S.C.
78o).
    (2) The duty to file reports under paragraph (b) of this rule with
respect to a class of securities held of record (as defined in Rule
12g5-1 (Sec.  240.12g5-1)) by less than 300 persons shall be suspended
for such class of securities immediately upon filing with the
Commission an exit report on Form 1-Z (Sec.  239.94) if the issuer of
such class has filed all reports due pursuant to this rule before the
date of such Form 1-Z filing for the shorter of (i) the period since
the issuer became subject to such reporting obligation, or (ii) its
most recent three fiscal years and the portion of the current year
preceding the date of filing Form 1-Z. For the purposes of this
subsection, the term ``class'' shall be construed to include all
securities of an issuer that are of substantially similar character and
the holders of which enjoy substantially similar rights and privileges.
If the Form 1-Z is subsequently withdrawn or denied, the issuer must,
within 60 days, file with the Commission all reports which would have
been required if such exit report had not been filed. If the suspension
resulted from the issuer's merger into, or consolidation with, another
issuer or issuers, the notice must be filed by the successor issuer.
    (3) The ability to suspend reporting, as described in paragraph
(d)(2) of this rule, is not available for any class of securities if
(i) during that fiscal year an offering statement was qualified or (ii)
at the time of filing of Form 1-Z, offers or sales of securities of
that class are being made pursuant to Regulation A.
    (e) Termination of suspension of duty to file reports. If the duty
to file reports is suspended pursuant to paragraph (d)(1) of this rule
and such suspension ends because the issuer is no longer subject to the
duty to file reports under the Exchange Act, the issuer's obligation to
file reports under paragraph (b) of this rule shall:
    (1) automatically terminate if the issuer is eligible to suspend
its duty to file reports under paragraph (d)(2)-(3); or
    (2) recommence with the report covering any financial period after
that included in any registration statement or Exchange Act report.

Sec.  230.258  Suspension of the exemption.

    (a) The Commission may at any time enter an order temporarily
suspending a Regulation A exemption if it has reason to believe that:
    (1) No exemption is available or any of the terms, conditions or
requirements of Regulation A have not been complied with;
    (2) The offering statement, any sales or solicitation of interest
material, or any report filed pursuant to Rule 257 (Sec.  230.257)
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements made, in light
of the circumstances under which they are made, not misleading;
    (3) The offering is being made or would be made in violation of
section 17 of the Securities Act;

    (4) An event has occurred after the filing of the offering
statement that would have rendered the exemption hereunder unavailable
if it had occurred before such filing;
    (5) Any person specified in Rule 262(a) (Sec.  230.262(a)) has been
indicted for any crime or offense of the character specified in Rule
262(a)(1) (Sec.  230.262(a)(1)), or any proceeding has been initiated
for the purpose of enjoining any such person from engaging in or
continuing any conduct or practice of the character specified in Rule
262(a)(2) (Sec.  230.262(a)(2)), or any proceeding has been initiated
for the purposes of Rule 262(a)(3)-(8) (Sec.  230.262(a)(3)-(8)); or
    (6) The issuer or any promoter, officer, director or underwriter
has failed to cooperate, or has obstructed or refused to permit the
making of an investigation by the Commission in connection with any
offering made or proposed to be made in reliance on Regulation A.
    (b) Upon the entry of an order under paragraph (a) of this rule,
the Commission will promptly give notice to the issuer, any underwriter
and any selling securityholder:
    (1) That such order has been entered, together with a brief
statement of the reasons for the entry of the order; and
    (2) That the Commission, upon receipt of a written request within
30 calendar days after the entry of the order, will within 20 calendar
days after receiving the request, order a hearing at a place to be
designated by the Commission.
    (c) If no hearing is requested and none is ordered by the
Commission, an order entered under paragraph (a) of this rule shall
become permanent on the 30th calendar day after its entry and shall
remain in effect unless or until it is modified or vacated by the
Commission. Where a hearing is requested or is ordered by the
Commission, the Commission will, after notice of and opportunity for
such hearing, either vacate the order or enter an order permanently
suspending the exemption.
    (d) The Commission may, at any time after notice of and opportunity
for hearing, enter an order permanently suspending the exemption for
any reason upon which it could have entered a temporary suspension
order under paragraph (a) of this rule. Any such order shall remain in
effect until vacated by the Commission.
    (e) All notices required by this rule must be given by personal
service, registered or certified mail to the addresses given by the
issuer, any underwriter and any selling securityholder in the offering
statement.

Sec.  230.259  Withdrawal or abandonment of offering statements.

    (a) If none of the securities that are the subject of an offering
statement have been sold and such offering statement is not the subject
of a proceeding under Rule 258 (Sec.  230.258), the offering statement
may be withdrawn with the Commission's consent. The application for
withdrawal must state the reason the offering statement is to be
withdrawn, must be signed by an authorized representative of the issuer
and must be filed with the Commission in electronic format by means of
EDGAR in accordance with the EDGAR rules set forth in Regulation S-T
(17 CFR Part 232). Any withdrawn document will remain in the
Commission's files, as well as the related request for withdrawal.
    (b) When an offering statement has been on file with the Commission
for nine months without amendment and has not become qualified, the
Commission may, in its discretion, declare the offering statement
abandoned. If the offering statement has been amended, the nine-month
period shall be computed from the date of the latest amendment.

Sec.  230.260  Insignificant deviations from a term, condition or
requirement of Regulation A.

    (a) A failure to comply with a term, condition or requirement of
Regulation A will not result in the loss of the exemption from the
requirements of section 5 of the Securities Act for any offer or sale
to a particular individual or entity, if the person relying on the
exemption establishes that:
    (1) The failure to comply did not pertain to a term, condition or
requirement directly intended to protect that particular individual or
entity;
    (2) The failure to comply was insignificant with respect to the
offering as a whole, provided that any failure to comply with
paragraphs (a), (b), (d)(1) and (3) of Rule 251 (Sec.  230.251) shall
be deemed to be significant to the offering as a whole; and
    (3) A good faith and reasonable attempt was made to comply with all
applicable terms, conditions and requirements of Regulation A.
    (b) A transaction made in reliance upon Regulation A must comply
with all applicable terms, conditions and requirements of the
regulation. Where an exemption is established only through reliance
upon paragraph (a) of this rule, the failure to comply shall
nonetheless be actionable by the Commission under section 20 of the
Securities Act.
    (c) This provision provides no relief or protection from a
proceeding under Rule 258 (Sec.  230.258).

Sec.  230.261  Definitions.

    As used in this Regulation A, all terms have the same meanings as
in Rule 405 (Sec.  230.405), except that all references to registrant
in those definitions shall refer to the issuer of the securities to be
offered and sold under Regulation A. In addition, these terms have the
following meanings:
    (a) Business day. Any day except Saturdays, Sundays or United
States federal holidays.
    (b) Eligible securities. Equity securities, debt securities, and
debt securities convertible or exchangeable to equity interests,
including any guarantees of such securities, but not including asset-
backed securities as such term is defined in Item 1101(c) of Regulation
AB.
    (c) Final offering circular. The more recent of (1) the current
offering circular contained in a qualified offering statement and (2)
the offering circular filed pursuant to Rule 253(g) (Sec.  230.253(g)),
or if the issuer is relying on Rule 253(b), the Final Offering Circular
is the offering circular filed pursuant to Rule 253(g)(1) or (3) (Sec.
230.253(g)(1) or (3)).
    (d) Preliminary offering circular. The offering circular described
in Rule 254 (Sec.  230.254).

Sec.  230.262  Disqualification provisions.

    (a) No exemption under this Regulation A shall be available for a
sale of securities if the issuer; any predecessor of the issuer; any
affiliated issuer; any director, executive officer, other officer
participating in the offering, general partner or managing member of
the issuer; any beneficial owner of 20% or more of the issuer's
outstanding voting equity securities, calculated on the basis of voting
power; any promoter connected with the issuer in any capacity at the
time of filing, any offer after qualification, or such sale; any person
that has been or will be paid (directly or indirectly) remuneration for
solicitation of purchasers in connection with such sale of securities;
any general partner or managing member of any such solicitor; or any
director, executive officer or other officer participating in the
offering of any such solicitor or general partner or managing member of
such solicitor:
    (1) Has been convicted, within ten years before the filing of the
offering statement (or five years, in the case of issuers, their
predecessors and affiliated issuers), of any felony or misdemeanor:

    (i) In connection with the purchase or sale of any security;
    (ii) Involving the making of any false filing with the Commission;
or
    (iii) Arising out of the conduct of the business of an underwriter,
broker, dealer, municipal securities dealer, investment adviser or paid
solicitor of purchasers of securities;
    (2) Is subject to any order, judgment or decree of any court of
competent jurisdiction, entered within five years before the filing of
the offering statement, that, at the time of such filing, restrains or
enjoins such person from engaging or continuing to engage in any
conduct or practice:
    (i) In connection with the purchase or sale of any security;
    (ii) Involving the making of any false filing with the Commission;
or
    (iii) Arising out of the conduct of the business of an underwriter,
broker, dealer, municipal securities dealer, investment adviser or paid
solicitor of purchasers of securities;
    (3) Is subject to a final order of a state securities commission
(or an agency or officer of a state performing like functions); a state
authority that supervises or examines banks, savings associations, or
credit unions; a state insurance commission (or an agency or officer of
a state performing like functions); an appropriate federal banking
agency; the U.S. Commodity Futures Trading Commission; or the National
Credit Union Administration that:
    (i) At the time of the filing of the offering statement, bars the
person from:
    (A) Association with an entity regulated by such commission,
authority, agency, or officer;
    (B) Engaging in the business of securities, insurance or banking;
or
    (C) Engaging in savings association or credit union activities; or
    (ii) Constitutes a final order based on a violation of any law or
regulation that prohibits fraudulent, manipulative, or deceptive
conduct entered within ten years before such sale;
    (4) Is subject to an order of the Commission entered pursuant to
section 15(b) or 15B(c) of the Securities Exchange Act of 1934 (15
U.S.C. 78 o (b) or 78 o -4(c)) or section 203(e) or (f) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-3(e) or (f)) that, at
the time of the filing of the offering statement:
    (i) Suspends or revokes such person's registration as a broker,
dealer, municipal securities dealer or investment adviser;
    (ii) Places limitations on the activities, functions or operations
of such person; or
    (iii) Bars such person from being associated with any entity or
from participating in the offering of any penny stock;
    (5) Is subject to any order of the Commission entered within five
years before the filing of the offering statement that, at the time of
such filing, orders the person to cease and desist from committing or
causing a violation or future violation of:
    (i) Any scienter-based anti-fraud provision of the federal
securities laws, including without limitation section 17(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77q(a)(1)), section 10(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j(b)) and 17 CFR 240.10b-
5, section 15(c)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78 o (c)(1)) and section 206(1) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-6(1)), or any other rule or regulation thereunder; or
    (ii) Section 5 of the Securities Act of 1933 (15 U.S.C. 77e).
    (6) Is suspended or expelled from membership in, or suspended or
barred from association with a member of, a registered national
securities exchange or a registered national or affiliated securities
association for any act or omission to act constituting conduct
inconsistent with just and equitable principles of trade;
    (7) Has filed (as a registrant or issuer), or was or was named as
an underwriter in, any registration statement or Regulation A offering
statement filed with the Commission that, within five years before the
filing of the offering statement, was the subject of a refusal order,
stop order, or order suspending the Regulation A exemption, or is, at
the time of such filing, the subject of an investigation or proceeding
to determine whether a stop order or suspension order should be issued;
or
    (8) Is subject to a United States Postal Service false
representation order entered within five years before the filing of the
offering statement, or is, at the time of such filing, subject to a
temporary restraining order or preliminary injunction with respect to
conduct alleged by the United States Postal Service to constitute a
scheme or device for obtaining money or property through the mail by
means of false representations.
    (b) Paragraph (a) of this rule shall not apply:
    (1) With respect to any order under Sec.  230.262(a)(3) or (a)(5)
that occurred or was issued before [effective date of rule];
    (2) Upon a showing of good cause and without prejudice to any other
action by the Commission, if the Commission determines that it is not
necessary under the circumstances that an exemption be denied;
    (3) If, before the filing of the offering statement, the court or
regulatory authority that entered the relevant order, judgment or
decree advises in writing (whether contained in the relevant judgment,
order or decree or separately to the Commission or its staff) that
disqualification under paragraph (a) of this rule should not arise as a
consequence of such order, judgment or decree; or
    (4) If the issuer establishes that it did not know and, in the
exercise of reasonable care, could not have known that a
disqualification existed under paragraph (a) of this rule.
    Instruction to paragraph (b)(4). An issuer will not be able to
establish that it has exercised reasonable care unless it has made, in
light of the circumstances, factual inquiry into whether any
disqualifications exist. The nature and scope of the factual inquiry
will vary based on the facts and circumstances concerning, among other
things, the issuer and the other offering participants.
    (c) For purposes of paragraph (a) of this rule, events relating to
any affiliated issuer that occurred before the affiliation arose will
be not considered disqualifying if the affiliated entity is not:
    (1) In control of the issuer; or
    (2) Under common control with the issuer by a third party that was
in control of the affiliated entity at the time of such events.
    (d) Disclosure of prior ``bad actor'' events. The issuer must
include in the offering circular a description of any matters that
would have triggered disqualification under paragraph (a) of this rule
but occurred before [effective date]. The failure to provide such
information shall not prevent an issuer from relying on Regulation A if
the issuer establishes that it did not know and, in the exercise of
reasonable care, could not have known of the existence of the
undisclosed matter or matters.

    Note: An issuer will not be able to establish that it has
exercised reasonable care unless it has made, in light of the
circumstances, factual inquiry into whether any disqualifications
exist. The nature and scope of the factual inquiry will vary based
on the facts and circumstances concerning, among other things, the
issuer and the other offering participants.

Sec.  230.263  Consent to service of process.

    (a) If the issuer is not organized under the laws of any of the
states of or the United States of America, it shall at the time of
filing the offering statement required by Rule 252 (Sec.  230.252),

furnish to the Commission a written irrevocable consent and power of
attorney on Form F-X (Sec.  239.42 of this chapter).
    (b) Any change to the name or address of the agent for service of
the issuer shall be communicated promptly to the Commission through
amendment of the requisite form and referencing the file number of the
relevant offering statement.
* * * * *
0
5. Sec.  230.505(b)(2)(iii)(A) and (B) are revised, in part, to read as
follows:

Sec.  230.505  Exemption for limited offers and sales of securities not
exceeding $5,000,000.

* * * * *
    (b) * * *
    (2) * * *
    (iii) * * *
    (A) The term ``filing of the offering statement'' as used in Sec.
230.262 shall mean the first sale of securities under this section;
    (B) The term ``underwriter'' as used in Sec.  230.262(a) shall mean
a person that has been or will be paid directly or indirectly
remuneration for solicitation of purchasers in connection with sales of
securities under this section; and
* * * * *

PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR
ELECTRONIC FILINGS

0
6. The authority citation for part 232 is revised to read in part as
follows:

    Authority:  15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3,
77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c),
80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; 18 U.S.C. 1350; and
Pub. L. 112-106, Sec.  401, 126 Stat. 313 (2012), unless otherwise
noted.
* * * * *
0
7. Sec.  232.101 is amended by:
0
a. Revising paragraph (a)(1)(vii) and (c)(6);
0
b. Adding paragraph (a)(1)(xvii); and
0
c. Reserving paragraph (b)(8).
    The revisions, additions and reservations read as follows:

Sec.  232.101  Mandated electronic submissions and exceptions.

    (a) * * *
    (1) * * *
    (vii) Form F-X (Sec.  239.42 of this chapter) when filed in
connection with a Form CB (Sec. Sec.  239.800 and 249.480 of this
chapter) or a Form 1-A (Sec.  239.90);
* * * * *
    (xvii) Filings made pursuant to Regulation A (Sec. Sec.  230.251-
230.263 of this chapter).
* * * * *
    (b) * * *
    (8) [Reserved]
* * * * *
    (c) * * *
    (6) Filings on Form 144 (Sec.  239.144 of this chapter) where the
issuer of the securities is not subject to the reporting requirements
of section 13 or 15(d) of the Exchange Act (15 U.S.C. 78m or 78o(d),
respectively).
* * * * *

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

0
8. The authority citation for Part 239 is revised to read, in part, as
follows:

    Authority:  15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-
3, 77sss, 78c, 78l, 78m, 78n, 78o(d), 78o-7 note, 78u-5, 78w(a),
78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24,
80a-26, 80a-29, 80a-30, and 80a-37, and Pub. L. 112-106, Sec.  401,
126 Stat. 313 (2012), unless otherwise noted.
* * * * *
0
9. Amend Form 1-A (referenced in Sec.  239.90) by revising it to read
as follows:
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0
10. Revise Sec.  239.91 to read as follows:

Sec.  239.91  Form 1-K

    This form shall be used for filing annual reports under Regulation
A (Sec. Sec.  230.251-230.263 of this chapter).

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12. Revise Sec.  239.92 to read as follows:

Sec.  230.92  Form 1-SA

    This form shall be used for filing semiannual reports under
Regulation A (Sec. Sec.  230.251-230.263 of this chapter).

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13. Revise Sec.  239.93 to read as follows:

Sec.  230.93  Form 1-U

    This form shall be used for filing current reports under Regulation
A (Sec. Sec.  230.251-230.263 of this chapter).

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0
13. Revise Sec.  239.94 to read as follows:

Sec.  230.94  Form 1-Z

    This form shall be used to file an exit report under Regulation A
(Sec. Sec.  230.251-230.263 of this chapter).

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* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

0
14. The authority citation for Part 240 is amended by revising the
sectional authority for Sec.  240.15c2-11 to read as follows:

    Authority:  15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f,
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4,
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78ll, 78mm, 80a-20,
80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 7201 et. seq., and
8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350; and
Pub. L. 111-203, 939A, 124 Stat. 1376, (2010), unless otherwise
noted.
* * * * *
    Section 240.15c2-11 also issued under 15 U.S.C. 78j(b), 78o(c),
78q(a), 78w(a), and Pub. L. 112-106, Sec.  401, 126 Stat. 313
(2012).
* * * * *
0
15. Sec.  240.15c2-11 is amended by revising paragraphs (a)(3) and
(d)(2)(i) to read as follows:

Sec.  240.15c2-11  Initiation or resumption of quotations without
specific information.

* * * * *
    (a) * * *
    (3) A copy of the issuer's most recent annual report filed pursuant
to section 13 or 15(d) of the Act or pursuant to Regulation A
((Sec. Sec.  230.251-230.263 of this chapter), or a copy of the annual
statement referred to in section 12(g)(2)(G)(i) of the Act in the case
of an issuer required to file reports pursuant to section 13 or 15(d)
of the Act or an issuer of a security covered by section 12(g)(2)(B) or
(G) of the Act, together with any semiannual, quarterly and current
reports that have been filed under the provisions of the Act or
Regulation A by the issuer after such annual report or annual
statement; provided, however, that until such issuer has filed its
first annual report pursuant to section 13 or 15(d) of the Act or
pursuant to Regulation A, or annual statement referred to in section
12(g)(2)(G)(i) of the Act, the broker or dealer has in its records a
copy of the prospectus specified by section 10(a) of the Securities Act
of 1933 included in a registration statement filed by the issuer under
the Securities Act of 1933, other than a registration statement on Form
F-6, or a copy of the offering circular specified by Regulation A
included in an offering statement filed by the issuer under Regulation
A, that became effective or was qualified within the prior 16 months,
or a copy of any registration statement filed by the issuer under
section 12 of the Act that became effective within the prior 16 months,
together with any semiannual, quarterly and current reports filed
thereafter under section 13 or 15(d) of the Act or Regulation A; and
provided further, that the broker or dealer has a reasonable basis
under the circumstances for believing that the issuer is current in
filing annual, semiannual, quarterly, and current reports filed
pursuant to section 13 or 15(d) of the Act or Regulation A, or, in the
case of an insurance company exempted from section 12(g) of the Act by
reason of section 12(g)(2)(G) thereof, the annual statement referred to
in section 12(g)(2)(G)(i) of the Act; or
* * * * *
    (d) * * *
    (2) * * *
    (i) A broker-dealer shall be in compliance with the requirement to
obtain current reports filed by the issuer if the broker-dealer obtains
all current reports filed with the Commission by the issuer as of a
date up to five business days in advance of the earlier of the date of
submission of the quotation to the quotation medium and the date of
submission of the paragraph (a) information pursuant to the applicable
rule of the Financial Industry Regulatory Authority, Inc. or its
successor organization; and
* * * * *

PART 260--GENERAL RULES AND REGULATIONS, TRUST INDENTURE ACT OF
1939

0
16. The authority citation for Part 260 is revised to read, in part, as
follows:

    Authority:  15 U.S.C. 77c, 77eee, 77ggg, 77nnn, 77sss, 78 ll
(d), 80b-3, 80b-4, 80b-11 and Pub. L. 112-106, Sec.  401, 126 Stat.
313 (2012), unless otherwise noted.
* * * * *
0
17. Sec.  260.4a-1 is revised to read as follows:

Sec.  260.4a-1  Exempted securities under section 304(a)(8).

    The provisions of the Trust Indenture Act of 1939 shall not apply
to any security that has been or will be issued otherwise than under an
indenture. The same issuer may not claim this exemption within a period
of twelve consecutive months for more than $50,000,000 aggregate
principal amount of any securities.

    Dated: December 18, 2013.
    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-30508 Filed 1-22-14; 8:45 am]
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