Md. Code Regs. 02.02.04.09

Current through Register Vol. 51, No. 22, November 1, 2024

Section 02.02.04.09 - Maryland Limited Offering Exemption (MLOE): Scope and Definitions

A. Scope.

(1) The Maryland Limited Offering Exemption (MLOE) creates under the Maryland Securities Act, Corporations and Associations Article, §11-602(9), Annotated Code of Maryland, two exemptions from the registration requirements of the Maryland Securities Act, Corporations and Associations Article, §11-501, Annotated Code of Maryland.

(2) Regulation .10 sets forth conditions that apply to both a local issuer exemption under Regulation .11 and a general transactional exemption under Regulation .12.

(3) Regulation .11 sets forth additional conditions that apply to the local issuer exemption.

(4) Regulation .12 sets forth additional conditions that apply to the general transactional exemption.

(5) Regulation .13 provides that the MLOE exemption will remain available in the event of certain insignificant deviations from the conditions set forth in Regulations .10-.12.

(6) The MLOE and the Maryland Securities Act, Corporations and Associations Article, §11-602(9), Annotated Code of Maryland, do not provide an exemption from the antifraud provisions of the Maryland Securities Act, Corporations and Associations Article, Subtitles 3 and 7, Annotated Code of Maryland.

(7) The MLOE and the Maryland Securities Act, Corporations and Associations Article, §11-602(9), Annotated Code of Maryland, do not exempt from registration the offer or sale of securities:

(a) For which a registration statement or Regulation A notification has been filed with the SEC under the Securities Act of 1933; or

(b) Exempt from registration with the SEC under 17 CFR § 230.505 (SEC Rule 505, Exemption for Limited Offers and Sales of Securities Not Exceeding $5,000,000) or 17 CFR § 230.506 (SEC Rule 506, Exemption for Limited Offers and Sales Without Regard to Dollar Amount of Offering).

B. Definitions. For purposes of MLOE and the Maryland Securities Act, Corporations and Associations Article, §11-602(9), Annotated Code of Maryland, the following terms have the meanings indicated:

(1) Accredited Investor.

(a) "Accredited investor" has the meaning stated in 17 CFR § 230.501(a) (1994) (SEC Rule 501, Definitions and Terms Used in Regulation D), which is incorporated by reference.

(b) "Accredited investor" includes a relative, spouse, or relative of the spouse of an individual described in 17 CFR § 230.501(a)(4) (SEC Rule 501, Definitions and Terms Used in Regulation D), who has the same principal residence as the individual.

(2) "Affiliate" has the meaning stated in 17 CFR § 230.501 (1994) (SEC Rule 501, Definitions and Terms Used in Regulation D), which is incorporated by reference.

(3) "Aggregate offering price" has the meaning stated in 17 CFR § 230.501 (1994) (SEC Rule 501, Definitions and Terms Used in Regulation D).

(4) "Beneficial owner" has the meaning stated in 17 CFR § 240.13 d- 3(1994) (SEC Rule 13d-3, Determination of Beneficial Owner), which is incorporated by reference, except that all references to § 13(d) or 13(g) of the Securities Exchange Act of 1934 shall refer, instead, to this regulation, and further, that Rule 13d-3(d)(ii) is not incorporated by reference.

(5) "Executive officer" has the meaning stated in 17 CFR § 230.501 (SEC Rule 501, Definitions and Terms Used in Regulation D).

(6) "MLOE" means the Maryland Limited Offering Exemption created by Regulations .09-.13 of this chapter.

(7) Promoter.

(a) "Promoter" means a person that:

(i) Acting alone or together with one or more persons, directly or indirectly founds or organizes the business or enterprise of an issuer; or

(ii) In connection with founding or organizing the business or enterprise of an issuer, directly or indirectly receives in consideration of services, property, or both services and property, 10 percent or more of a class of securities of the issuer, or 10 percent or more of the proceeds from the sale of a class of securities of the issuer.

(b) "Promoter" does not include a person that receives 10 percent or more of a class of securities of the issuer or 10 percent or more of the proceeds from the sale of a class of securities of the issuer, either solely as brokerage commissions or solely in consideration of property, if the person does not directly or indirectly found or organize the business or enterprise of the issuer.

(8) "Purchaser representative" has the meaning stated in 17 CFR § 230.501 (SEC Rule 501, Definitions and Terms Used in Regulation D).

Md. Code Regs. 02.02.04.09