§ 502.202

502.202 Exempt transactions. 17 C.F.R. §230.165 . b. A stop order of which the offeror is aware has not been issued against the offeror by the administrator or the securities and exchange commission, and an audit, inspection, or proceeding that is public and that may culminate in a stop order is not known by the offeror to be pending. 17. Offerings when registration has been filed, but is not effective under this chapter and exempt from the Securities Act of 1933. An offer to sell, but not a sale, of a security exempt from registration under the Securities Act of 1933 if all of the following apply: a. A registration statement has been filed under this chapter, but is not effective. b. A solicitation of interest is provided in a record to offerees in compliance with a rule adopted by the administrator under this chapter. c. A stop order of which the offeror is aware has not been issued by the administrator under this chapter and an audit, inspection, or proceeding that may culminate in a stop order is not known by the offeror to be pending. 18. Control transactions. A transaction involving the distribution of the securities of an issuer to the security holders of another person in

a stop order is not known by the offeror to be pending. 18. Control transactions. A transaction involving the distribution of the securities of an issuer to the security holders of another person in connection with a merger, consolidation, exchange of securities, sale of assets, or other reorganization to which the issuer, or its parent or subsidiary and the other person, or its parent or subsidiary, are parties. 19. Rescission offers. A rescission offer, sale, or purchase under section 502.510. 20. Out-of-state offers or sales. An offer or sale of a security to a person not a resident of this state and not present in this state if the offer or sale does not constitute a violation of the laws of the state or foreign jurisdiction in which the offeree or purchaser is present and is not part of an unlawful plan or scheme to evade this chapter. 21. Employee benefit plans. Employees’ stock purchase, savings, option, profit-sharing, pension, or similar employees’ benefit plan, including any securities, plan interests, and guarantees issued under a compensatory benefit plan or compensation contract, contained in a record, established by the issuer, its parents, its majority-owned

ing any securities, plan interests, and guarantees issued under a compensatory benefit plan or compensation contract, contained in a record, established by the issuer, its parents, its majority-owned subsidiaries, or the majority-owned subsidiaries of the issuer’s parent for the participation of their employees including offers or sales of such securities to any of the following: a. Directors; general partners; trustees, if the issuer is a business trust; officers; consultants; and advisers. b. Family members who acquire such securities from those persons through gifts or domestic relations orders. c. Former employees, directors, general partners, trustees, officers, consultants, and advisers if those individuals were employed by or providing services to the issuer when the securities were offered. d. Insurance agents who are exclusive insurance agents of the issuer, or the issuer’s subsidiaries or parents, or who derive more than fifty percent of their annual income from those organizations. 22. Specified dividends and tender offers and judicially recognized reorganizations. A transaction involving any of the following: a.

an fifty percent of their annual income from those organizations. 22. Specified dividends and tender offers and judicially recognized reorganizations. A transaction involving any of the following: a. A stock dividend or equivalent equity distribution, whether the corporation or other business organization distributing the dividend or equivalent equity distribution is the issuer or not, if nothing of value is given by stockholders or other equity holders for the dividend or equivalent equity distribution other than the surrender of a right to a cash or property dividend if each stockholder or other equity holder may elect to take the dividend or equivalent equity distribution in cash, property, or stock. b. An act incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims, or property interests, or partly in such exchange and partly for cash. c. The solicitation of tenders of securities by an offeror in a tender offer in compliance with rule 162 adopted under the Securities Act of 1933, 17 C.F.R. §230.162 . 23.

change and partly for cash. c. The solicitation of tenders of securities by an offeror in a tender offer in compliance with rule 162 adopted under the Securities Act of 1933, 17 C.F.R. §230.162 . 23. Nonissuer transactions involving specified foreign issuer securities traded on designated security exchanges. A nonissuer transaction in an outstanding security by or through a broker-dealer registered or exempt from registration under this chapter, if the issuer is a reporting issuer in a foreign jurisdiction designated by this subsection or by rule adopted or order issued under this chapter; has been subject to continuous reporting requirements in the foreign jurisdiction for not less than one hundred eighty days before the transaction; and the security is listed on the foreign jurisdiction’s securities exchange that has been designated by this subsection or by rule adopted or order issued under this chapter, or is a security of the same issuer that is of senior or substantially equal rank to the listed security or is a warrant or right to purchase or subscribe to any of the foregoing. For purposes of this subsection, Canada, together with its provinces and territories, is a

equal rank to the listed security or is a warrant or right to purchase or subscribe to any of the foregoing. For purposes of this subsection, Canada, together with its provinces and territories, is a designated foreign jurisdiction and the Toronto stock exchange, inc., is a designated securities exchange. After an administrative hearing in compliance with chapter 17A, the administrator, by rule adopted or order issued under this chapter, may revoke the designation of a securities exchange under this subsection, if the administrator finds that revocation is necessary or appropriate in the public interest and for the protection of investors. 24. Intrastate crowdfunding. a. Definitions. As used in this subsection, unless the context otherwise requires: (1) 'Intermediary' means any of the following: (a) A broker-dealer that is subject to the registration requirements of section 502.401 and that facilitates the offer and sale of securities by issuers to investors through an internet-based system that is open to and accessible by the general public. (b) A business entity that is all of the following: (i) A funding portal that is registered with the securities and exchange commission

ed system that is open to and accessible by the general public. (b) A business entity that is all of the following: (i) A funding portal that is registered with the securities and exchange commission pursuant to the Securities Act of 1933, including as provided in 15 U.S.C. §77d-1. (ii) A member of the financial industry regulatory authority, inc. pursuant to the Securities Exchange Act of 1934, including as provided in 15 U.S.C. §§78c and 78o-3, and 17 C.F.R. §227.400 . (c) A business entity that qualifies as an Iowa crowdfunding portal by meeting all of the following requirements: (i) Is registered with the administrator as required by the administrator. (ii) Is engaged in intrastate crowdfunding offers and sales of exempt securities in this state through an internet site. (iii) Does not operate or facilitate a secondary market in securities. (2) 'Intrastate crowdfunding' means the offer or sale of a security by an issuer in a transaction that is available for purchase only by an Iowa resident or a business entity having its principal place of business in this state. b. Exemption not available.

a security by an issuer in a transaction that is available for purchase only by an Iowa resident or a business entity having its principal place of business in this state. b. Exemption not available. The exemption in this subsection is not available to any of the following: (1) A foreign issuer. (2) An investment company, as defined in section 3 of the federal Investment Company Act of 1940. (3) A development stage company that either has no specific business plan or purpose or has indicated that the company’s business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person. (4) A company with a class of securities registered under the federal Securities Exchange Act of 1934. (5) Any person who is subject to a disqualifying event as described in the regulations adopted in accordance with section 926 of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, or in rules adopted by the administrator pursuant to chapter 17A. c. Aggregate sales limit. The aggregate amount of securities sold to all investors by the issuer during the twelve-month period preceding the date of the offer or sale,

rator pursuant to chapter 17A. c. Aggregate sales limit. The aggregate amount of securities sold to all investors by the issuer during the twelve-month period preceding the date of the offer or sale, including any amount sold in reliance upon the exemption in this subsection, shall not exceed five million dollars other than either of the following: (1) Securities sold to Iowa resident institutional investors. (2) Securities sold to the Iowa resident issuer’s management. d. Individual sales limit. The aggregate amount of securities sold to an investor by the issuer during the twelve-month period preceding the date of the offer or sale, including any amount sold in reliance upon the exemption in this subsection, shall not exceed five thousand dollars unless the investor is an accredited investor who resides in Iowa. For purposes of this individual sales limit, the following investors shall be treated as one investor: (1) A relative, spouse, or relative of the spouse of an investor who has the same principal residence as the investor. (2) A trust or estate in which an investor and any related person collectively have more than fifty percent of the beneficial interest, excluding

who has the same principal residence as the investor. (2) A trust or estate in which an investor and any related person collectively have more than fifty percent of the beneficial interest, excluding contingent interests. (3) A corporation or other organization of which an investor and any related person collectively are beneficial owners of more than fifty percent of the equity securities, excluding directors’ qualifying shares, or equity interests. e. Use of an intermediary. All offers and sales of securities made in reliance upon the exemption in this subsection shall be made through an intermediary’s internet site. f. Notice to administrator. Prior to the offer of any security in this state made in reliance upon the exemption in this subsection, the issuer shall file a notice with the administrator in a form and format approved by the administrator, and including the filing fee specified by rule, if any. g. Rulemaking. The administrator shall adopt all rules necessary to implement the exemption in this subsection including but not limited to all of the following: (1) Mandatory disclosures. (2) Restrictions on advertising and communications.

opt all rules necessary to implement the exemption in this subsection including but not limited to all of the following: (1) Mandatory disclosures. (2) Restrictions on advertising and communications. (3) Target amount, offering period, and escrow requirements. (4) Use and compensation of promoters. (5) Restrictions on the sale of securities purchased under the exemption in this subsection. (6) Sales reports. (7) Limitations on the offering price. (8) Duties of an intermediary which shall include providing the administrator with continuous investor-level access to the intermediary’s internet site. (9) Records maintenance. (10) Duties and registration requirements for internet site operators. [SS15, §1920-u1; C24, 27, §8526; C31, 35, §8581-c4; C39, §8581.04; C46, 50, 54, 58, 62, §502.4; C66, 71, 73, 75, §496B.18, 502.4; C77, 79, §496B.18, 502.202; C81, §502.202] 83 Acts, ch 95, §1, 2; 83 Acts, ch 169, §3; 87 Acts, ch 181, §2; 88 Acts, ch 1020, §1; 91 Acts, ch 40, §6 – 9; 91 Acts, ch 230, §6, 7; 96 Acts, ch 1025, §2, 3; 97 Acts, ch 114, §6; 98 Acts, ch 1119, §2; 99 Acts, ch 134, §4; 99 Acts, ch 166, §1; 2000 Acts, ch 1147, §34; 2003 Acts, ch 44, §90; 2004 Acts, ch 1161, §6, 68; 2008

, §6, 7; 96 Acts, ch 1025, §2, 3; 97 Acts, ch 114, §6; 98 Acts, ch 1119, §2; 99 Acts, ch 134, §4; 99 Acts, ch 166, §1; 2000 Acts, ch 1147, §34; 2003 Acts, ch 44, §90; 2004 Acts, ch 1161, §6, 68; 2008 Acts, ch 1123, §2; 2015 Acts, ch 128, §3, 49; 2017 Acts, ch 54, §76; 2018 Acts, ch 1074, §1 – 3; 2019 Acts, ch 59, §175 Referred to in §502.203, 502.204, 502.301, 502.302, 502.304, 502.402, 502.504