808 KAR 10:080. Guidelines for issuers.

 

      RELATES TO: KRS 292.370, 292.390(1)(f)

      STATUTORY AUTHORITY: KRS 292.500(3)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 292.500(3) authorizes the commissioner to promulgate administrative regulations necessary to carry out the provisions of KRS Chapter 292. KRS 292.390(1)(f) authorizes the commissioner to issue a stop order on a registration statement if he finds that the order is in the public interest and that an offering was made with unreasonable amounts of promoters' profits or participation. This administrative regulation establishes requirements governing the offering of a security registered pursuant to KRS 292.370 by a promotional company.

 

      Section 1. An offering of securities to be registered pursuant to KRS 292.370 by a promotional company shall meet the following conditions:

      (1) There shall exist a reasonable relationship between:

      (a) The consideration paid by the promoters and the public offering price;

      (b) The number of shares issued and the total amount of securities to be outstanding upon completion of the offering; and

      (c) The percentage of the promoters' equity and the amount and term of their investment.

      (2)(a) Except as provided in paragraph (b) of this subsection, the sale of the securities at the proposed public offering price shall not cause a dilution of the public purchaser's investment greater than sixty-six and two-thirds (66 2/3) percent.

      (b) The commissioner may, upon application for good cause shown, authorize the sale of a security that does not comply with the percentage established in paragraph (a) of this subsection if the action is necessary or appropriate in the public interest, or for the protection of an investor. (SR 390(1)(f)-1; 1 Ky.R. 1095; eff. 6-11-1975; Am. 24 Ky.R. 2177; 25 Ky.R. 86; eff. 6-25-1998; TAm eff. 11-7-2012.)