Chapter 18 NCAC 06A

18 NCAC 06A .2009 SIGNING FORM NCE The issuer shall sign the Form NCE. The Form NCE shall be legibly signed: (1) by a person authorized to sign pursuant to G.S. 55-1-20 for a domestic or foreign corporation; (2) by a person authorized to sign pursuant to G.S. 55A-1-20 for a domes…

18 NCAC 06A .2010 CONTENT OF DISCLOSURE DOCUMENT An issuer shall prepare and sign a disclosure document with all facts material to a reasonable investor's decision as to whether to invest in the issuer's securities offering. In addition, the disclosure document shall include: (1)…

18 NCAC 06A .2011 REQUIRED STATEMENTS TO INCLUDE IN ISSUER DISCLOSURE DOCUMENT (a) An issuer shall include the legend required by G.S. 78A-17.1(a)(7) in its disclosure document as specified by this Rule. (b) The text of the legend shall be separated into these paragraphs: (1) "In…

18 NCAC 06A .2012 CIRCUMSTANCES WHEN ADDITIONAL DISCLOSURE DOCUMENT CONTENT REQUIRED (a) If the issuer has chosen a target offering amount that exceeds one million dollars ($1,000,000) and is no more than two million dollars ($2,000,000), the issuer shall include in its disclosur…

18 NCAC 06A .2013 ISSUER TO CEASE OFFERING AND AMEND THE DISCLOSURE DOCUMENT (a) The issuer shall immediately cease the offer or sale of the securities and amend the disclosure document if: (1) there is any material change in the securities or securities offering; (2) the disclos…

18 NCAC 06A .2014 FACTORS CONSIDERED WHEN reviewING THE CLAIM OF EXEMPTION (a) When determining whether the securities offering complies with the conditions of the Exemption, the Administrator may consider the following factors and any reported material changes: (1) whether all f…

18 NCAC 06A .2015 ADMINISTRATOR'S NOTICE OF COMPLIANCE After review of the relevant information, the Administrator may issue a notice of compliance: (1) with the filing requirements of Rule .2007 of this Section; or (2) with Rule .2013(b)(1) of this Section with regard to any mat…

18 NCAC 06A .2016 DENIAL OR REVOCATION OF THE EXEMPTION The Administrator may by order, deny or revoke the Exemption pursuant to G.S. 78A-18(a) if: (1) the issuer fails to comply with the Exemption requirements after receiving a notice of deficiency; (2) the issuer fails to furni…

18 NCAC 06A .2017 ESCROW ACCOUNT (a) An issuer shall be responsible for the establishment and maintenance of an escrow account for investor fund deposits. (b) The escrow account shall: (1) be administered by an escrow agent; (2) be a segregated account for each securities offerin…

18 NCAC 06A .2018 ISSUER TO PROVIDE INFORMATION TO THE ESCROW AGENT An issuer shall provide accurate and timely information to the escrow agent in order to establish and maintain the escrow account and escrow agreement, including the minimum offering amount and the target date se…

18 NCAC 06A .2019 TERMS OF ESCROW AGREEMENT The escrow agreement shall include: (1) the identity of the escrow agent including the name, address where notices may be directed, telephone number, website of the agent, and the name of the person responsible for responding to inquiri…

18 NCAC 06A .2020 review of the Escrow Agreement (a) The Administrator may consider the following factors when reviewing an issuer's escrow agreement to determine whether to approve it: (1) the contents of the escrow agreement; (2) the contents of any contracts with the escrow ag…

18 NCAC 06A .2021 ADMINISTRATOR'S REJECTION OF ESCROW AGREEMENT The Administrator may reject the issuer's escrow agreement if the Administrator determines that: (1) the escrow agreement does not comply with the rules of this Section; (2) one or more of the factors listed in Rule …

18 NCAC 06A .2022 ADMINISTRATOR NOTICE OF APPROVAL OR REJECTION OF ESCROW AGREEMENT The Administrator shall not issue a notice of compliance pursuant to Rule .2015(1) of this Section unless the escrow agreement has been approved by the Administrator. History Note: Authority G.S. …

18 NCAC 06A .2023 ESCROW AGENT Duties, Responsibilities, and STANDARDS OF CONDUCT An escrow agent and all persons associated with it shall: (1) observe high standards of commercial honor and just and equitable principles of trade in the conduct of its business; (2) give particula…

18 NCAC 06A .2024 NOTICE TO ADMINISTRATOR minimum OFFERING amount REACHED, FUNDS RELEASED FROM The ESCROW Account, AND TERMINATION OF ESCROW AGREEMENT (a) An escrow agent shall file a written notice to the Administrator within 10 days: (1) after reaching the minimum offering amou…

18 NCAC 06A .2025 CONTENT OF NOTICE OF RELEASE OF FUNDS FROM ESCROW ACCOUNT The notice provided pursuant to Rule .2024 of this Section shall include the following: (1) the aggregate amount of securities sold during the offering, expressed as: (a) numbers of units of securities so…

18 NCAC 06A .2026 REgistered Dealer ACTING AS AN ESCROW AGENT A registered dealer that acts as an escrow agent for the issuer's securities offering shall: (1) be registered with the SEC and the State of North Carolina to offer and sell the intrastate securities offering; (2) depo…

18 NCAC 06A .2027 ESCROW AGENT REQUIREMENTS Pursuant to the escrow agreement consistent with Rules .2017 through .2028 of this Section, an escrow agent for the issuer's securities offering, including a lawyer, shall: (1) collect at least the following information from the issuer …

18 NCAC 06A .2028 TREATMENT OF INFORMATION Information that is received or transmitted directly or indirectly from a bank or depository institution to the Administrator pursuant to G.S. 78A-17.1(a)(10) shall be designated as confidential and trade secrets while in the possession …

18 NCAC 06A .2029 RESERVED FOR FUTURE CODIFICATION

18 NCAC 06A .2030 FUNDING PORTAL REGISTRATION (a) A funding portal shall apply for registration as a North Carolina Intrastate Funding Portal by filing with the Administrator a Form North Carolina Intrastate Funding Portal (Form NCFP) at least 10 business days before it intends t…

18 NCAC 06A .2031 CONTENTS OF FORM NCFP The Form NCFP shall include: (1) all information that the funding portal is required to provide under G.S. 78A-17.1(a)(9)c, including: (a) the funding portal's legal identity; (b) the funding portal's physical location; (c) the name and add…

18 NCAC 06A .2032 REQUIRED FUNDING PORTAL ATTESTATIONS A funding portal shall attest in the Form NCFP that it: (1) is registered with the Secretary of State and has North Carolina as its principal place of business; (2) is being used to offer and sell securities under G.S. 78A-17…

18 NCAC 06A .2033 review OF THE FUNDING PORTAL REGISTRATION (a) When determining whether a registration is effective, the Administrator may consider: (1) the contents of Form NCFP and any amendments; (2) the contents of any contracts provided with the Form NCFP; (3) the escrow ag…

18 NCAC 06A .2034 ADMINISTRATOR DENIAL OR REVOCATION OF FUNDING PORTAL REGISTRATION The Administrator may deny or revoke registration of a funding portal if the Administrator determines that: (1) the funding portal has not complied with the rules in this Section; (2) the funding …

18 NCAC 06A .2035 ADMINISTRATOR NOTICE OF effective FUNDING PORTAL REGISTRATION After the Administrator considers the Form NCFP and the factors in Rules .2033 and .2034, the Administrator shall either provide the funding portal with written notice of effectiveness or denial of th…

18 NCAC 06A .2036 FUNDING PORTAL NOTICE TO ADMINISTRATOR OF changes (a) Within 30 days of any changes to information on the Form NCFP, a funding portal shall file an amended Form NCFP with the Administrator. A funding portal shall comply with Rule .2030(d) if there is a change in…

18 NCAC 06A .2037 FUNDING PORTAL FINANCIAL INTEREST IN ISSUER A funding portal shall not have a financial interest in an issuer that is offering or selling securities on its platform unless: (1) the funding portal receives the financial interest as compensation for the services p…

18 NCAC 06A .2038 FUNDING PORTAL DENIAL OF ACCESS (a) A funding portal shall exercise due diligence in determining whether an issuer's securities offering presents the potential for fraud or other investor protection concerns. (b) A funding portal shall deny access to its platfor…

18 NCAC 06A .2039 FUNDING PORTAL STANDARDS OF CONDUCT (a) A funding portal and all persons associated with it shall: (1) observe high standards of commercial honor and just and equitable principles of trade in the conduct of its business; and (2) give particular attention to any …

18 NCAC 06A .2040 RESERVED FOR FUTURE CODIFICATION

18 NCAC 06A .2041 limitations on general solicitation and advertising An issuer relying on the Exemption and persons acting on behalf of the issuer may not engage in general solicitation or advertising, except as permitted by Rules .2043 and .2044 of this Section. History Note: A…

18 NCAC 06A .2042 MEDIA COVERAGE OF A SECURITIES OFFERING USING THE EXEMPTION Media coverage of a securities offering that has been prepared, authorized, approved, paid for, or provided other consideration for, by or on behalf of the issuer shall be deemed general solicitation or…

18 NCAC 06A .2043 Mandatory CONTENT requirement in permitted ADVERTISING NOTICE An advertising notice may advertise the issuer's securities offering only if the notice: (1) directs prospective investors to the platform (or website, if any) where the disclosure document is posted.…

18 NCAC 06A .2044 OTHER REQUIREMENTS FOR PERMITTED ADVERTISING NOTICES In addition to the content required by Rule .2043 of this Section, an advertising notice may include one or more of the following statements: (1) a statement that the issuer is conducting the securities offeri…

18 NCAC 06A .2045 ESTABLISHING A PLATFORM (a) A single public platform shall be established for every securities offering that shall: (1) provide a communication channel that facilitates the public sharing of information related to terms of the offering through a communication ch…

18 NCAC 06A .2046 INDIVIDUALS NOT SUBJECT TO DEALER REGISTRATION Officers, employees, associated independent contractors, and other persons of an issuer involved in the sale of the issuer's securities shall not be subject to registration as a dealer or salesman if they comply wit…

18 NCAC 06A .2047 RETENTION OF PLATFORM COMMUNICATIONS All communications through a communication channel on a platform shall be preserved for a period of six years after the filing of the Form NCE. History Note: Authority G.S. 78A-17.1(a)(5); 78A-17.1(f); 78A-49(a); 78A-49(d); 7…

18 NCAC 06A .2048 ADMINISTRATION OF PLATFORM COMMUNICATION CHANNELS (a) An issuer, funding portal or registered dealer administering a platform shall: (1) establish and enforce guidelines for communication using the communication channels; and (2) remove abusive or potentially fr…

18 NCAC 06A .2049 additional communication channel requirements An issuer and persons acting on behalf of the issuer may communicate with prospective investors and investors about the terms of the securities offering if: (1) effected through communication channels provided by the…

18 NCAC 06A .2050 RESERVED FOR FUTURE CODIFICATION

18 NCAC 06A .2051 PROVIDING Documents TO PROSPECTIVE INVESTORS AND INVESTORS The issuer shall provide a prospective investor or investor with the disclosure document that it filed with the Administrator at the time it makes an offer or sale of a security. History Note: Authority …

18 NCAC 06A .2052 MANNER OF PROVIDING DISCLOSURE AND OTHER DOCUMENTS TO A PROSPECTIVE INVESTOR OR AN INVESTOR (a) An individual or entity providing a disclosure document, notice, or other information to a prospective investor or investor pursuant to G.S. 78A-17.1 or this Section …

18 NCAC 06A .2053 ISSUER SHALL REQUIRE INVESTOR ACTIONS (a) Before selling a security to an investor, an issuer relying on the Exemption shall require the investor to provide the issuer with: (1) a signed, dated document identifying the investor and containing the certifications …

18 NCAC 06A .2054 INVESTOR CANCELLATION OF INVESTMENT COMMITMENT (a) Before an issuer has raised the minimum offering amount an investor may: (1) cancel the commitment to invest in the securities offering; and (2) request that the investor's funds be returned to the investor. (b)…

18 NCAC 06A .2055 RELEASE OF FUNDS IN ESCROW ACCOUNT (a) An escrow agent shall only release funds in the escrow account: (1) to the issuer if the minimum offering amount has been reached by the target date and the funds have been deposited in the escrow account; or (2) to an inve…