RS 708 - Exempt securities
The provisions of R.S. 51:705 shall not apply to any of the following securities:
(1) Any security, including a revenue obligation or certificate of participation, issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency, authority, public corporation, or other instrumentality of one or more of the foregoing, including any underlying or separate security which secures any of the foregoing securities. Pursuant to the authority granted in Section 106(b) and Section 106(c) of the Secondary Mortgage Market Enhancement Act of 1984, R.S. 51:708(1) shall not be deemed to apply to securities issued by any person, trust, corporation, partnership, association, business trust, or business entity created pursuant to or existing under the laws of the United States or any state which is offering securities pursuant to Section 106(a)(1) or (2) of the Secondary Mortgage Market Enhancement Act of 1984.
(2) Any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any such province, any agency or corporate or other instrumentality of one or more of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor.
(3) Any security issued by or guaranteed by any bank organized under the laws of the United States, or any bank, or savings institution, organized and supervised under the laws of Louisiana, or any bank holding company organized under the laws of Louisiana that controls one or more banks whose principal place of business is in Louisiana and that is under the supervision of the Board of Governors of the Federal Reserve System, including any interest or participation in any common trust fund or similar fund maintained by any such bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as a trustee, executor, administrator, or guardian.
(4) Any security issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association or any building and loan or similar association organized under the laws of Louisiana and authorized to do business in this state.
(5) Any security issued by a bona fide agricultural cooperative.
(6) Any security issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of Louisiana.
(7) Any security issued or guaranteed by any railroad, other common carrier, public utility, or holding company which is:
(a) Subject to the jurisdiction of the Interstate Commerce Commission.
(b) A registered holding company under the Public Utility Holding Company Act of 1935, as now or hereafter amended, or a subsidiary of such a company within the meaning of that act.
(c) Regulated in respect of its rates and charges by a governmental authority of the United States or any state.
(d) Regulated in respect of the issuance or guarantee of the security by a governmental authority of the United States, any state, Canada, or any Canadian province.
(8) Securities listed or approved for listing upon notice of issuance on the New York Stock Exchange or the American Stock Exchange or a security designated or approved for designation as a national market system security by the NASDAQ Stock Market, LLC or any other stock exchange or market system approved by the commissioner as provided in this Paragraph, and all securities senior or equal in rank to any securities so listed, designated, or approved, any security represented by subscription rights which have been so listed, designated, or approved, or any warrant or right to purchase or subscribe to any of the foregoing, provided:
(a) That the commissioner, if he finds that the public interest would be served thereby, may by rule or regulation disqualify some or all securities listed, designated, or approved on such stock exchange or market system from the exemption provided by this Paragraph.
(b) That the commissioner may, by written order, approve any stock exchange or market system in addition to those specified in this Paragraph if he finds that it would be in the public interest for securities listed or designated on such stock exchange or market system to be exempt under this Paragraph.
(c) That the commissioner shall have the power at any time, by written order, to withdraw the approval theretofore so granted.
(9) Promissory notes maturing in not more than nine months from date of issuance, provided that said securities are not offered for sale by means of advertisements publicly disseminated in the news media or through the mails.
(10) Notes issued in connection with the acquisition of real or personal property or renewals thereof, if such notes are issued to the sellers of and are secured by all or part of the real or personal property so acquired.
(11) Any security which meets all of the following conditions:
(a) If the issuer is not organized under the laws of the United States or a state, it has appointed a duly authorized agent in the United States for service of process and has set forth the name and address of such agent in any prospectus offering such securities for sale.
(b) The issuer has a class of securities registered under Section 12 of the Securities Exchange Act of 1934 which has been so registered for the three years immediately preceding the offering date.
(c) Neither the issuer nor a significant subsidiary has had a material default during the last seven years, or during the issuer's existence if less than seven years, in the payment of:
(i) Principal, interest, dividend, or sinking fund installment on preferred stock or indebtedness for borrowed money; or
(ii) Rentals under leases with terms of three years or more.
(d) The issuer has had consolidated net income, before extraordinary items and the cumulative effect of accounting changes, of at least one million dollars in four of its last five fiscal years including its last fiscal year and, if the offering is of interest-bearing securities, has had for its last fiscal year such net income, but before deduction for income taxes and depreciation, of at least one and one-half times the issuer's annual interest expense, giving effect to the proposed offering and the intended use of the proceeds. "Last fiscal year" means the most recent year for which audited financial statements are available, provided that such statements cover a fiscal period ended not more than fifteen months from the commencement of the offering.
(e) If the offering is of stock or shares, other than preferred stock or shares, such securities have voting rights.
(f) If the offering is of stock or shares, other than preferred stock or shares, such securities are owned beneficially or of record, on any date within six months prior to the commencement of the offering, by at least one thousand two hundred persons, and on such date there are at least seven hundred fifty thousand such shares outstanding with an aggregate market value, based on the average bid price for that day, of at least three million seven hundred fifty thousand dollars. In connection with the determination of the number of persons who are beneficial owners of the stock or shares of an issuer, the issuer or broker-dealer may rely in good faith for the purposes of this Section upon written information furnished by the record owners.
(12) Any security issued by any person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes, or as a chamber of commerce or trade or professional association, other than:
(a) A debt security, or
(b) A hybrid security whose terms include significant features common to debt securities and that is found by the commissioner by written order after notice and an opportunity to the issuer or proposed issuer for hearing to be the functional equivalent of a debt security.
Acts 1985, No. 722, §1; Acts 1988, No. 142, §1; Acts 1989, No. 30, §1, eff. June 15, 1989; Acts 2006, No. 544, §1, eff. June 22, 2006; Acts 2010, No. 7, §4, eff. May 19, 2010; Acts 2012, No. 52, §1, eff. May 11, 2012.