SB44 Alabama 2014 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2014

Title

Securities Commission, exemption to Secs. 8-6-3 to 8-6-9, inclusive, limited to offerings of securities conducted in state to residents of the state only, new parameters for the investments established, Sec. 8-6-11 am'd.

Summary

SB44 creates a new intrastate securities exemption for Alabama residents and updates existing exemptions, with specific limits and disclosure requirements for offerings conducted in Alabama.

What This Bill Does

It amends Section 8-6-11 to establish an intrastate exemption (a)(14) that allows offerings to Alabama residents only, under strict conditions. It sets a $1,000,000 cap on the total offering (adjusted for prior sales), a $5,000 per-purchaser limit (unless the purchaser is accredited), residency verification, and requires that most of the proceeds and assets be tied to Alabama. It requires detailed disclosure documents, prohibits general solicitation, mandates deposit of funds in Alabama banks, and imposes filing and notice requirements with the Alabama Securities Commission, along with disqualification rules for certain past activities. The act also preserves other exemptions and gives the Commission authority to adjust exemptions or deny them in specific cases.

Who It Affects

• Alabama residents and investors who would buy securities under the new intrastate exemption, with residency verification, investment limits, and resale restrictions.
• Alabama issuers and brokers/dealers seeking to use the intrastate exemption, who must provide disclosures, file forms, comply with use-of-proceeds rules, avoid certain entities (like investment companies or advisers), and adhere to anti-fraud provisions.

Key Provisions

• Creates an intrastate exemption for offerings conducted solely in Alabama to Alabama residents (a)(14).
• caps: total offering not to exceed $1,000,000 (less prior sales), and no more than $5,000 from any single purchaser unless the purchaser is an accredited investor.
• Requires residency verification of purchasers and prohibits general solicitation; sets conditions on how the offering can be conducted and who may solicit.
• Requires a detailed disclosure document covering issuer information, risks, use of proceeds, management, financial statements, and a bold outside-cover notice that the securities are exempt from registration and not endorsed by the Commission.
• Funds must be deposited in a Alabama-authorized bank and used as represented to investors; at least 80% of assets and proceeds must be connected to Alabama operations for certain entities.
• Imposes notice and filing requirements with the Securities Commission (Form CF1, Form D filings, and related notices) and imposes $150 filing fees for exemptions; allows the Commission to modify or withdraw the exemption.
• Prohibits investment companies and certain investment advisers from using this exemption; includes disqualification provisions for past felonies, fraud orders, or other disqualifying events, with possible waivers for good cause.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Securities Commission