Administrative Code

Virginia Administrative Code
7/3/2022

Chapter 30. Securities Registration

21VAC5-30-10. Definitions.

As used in this chapter, forms instructions and orders relating to the securities registration, the following meanings shall apply:

"Certified financial statements" shall be defined as those financial statements prepared in accordance with generally accepted accounting standards, that are examined and reported upon with an opinion expressed by an independent accountant and shall include at least the following information:

1. Date of report, manual signature, city and state where issued and identification without detailed enumeration of the financial statements and schedules covered by the report;

2. Representations as to whether the audit was made in accordance with generally accepted auditing standards and designation of any auditing standards and designation of any auditing procedures deemed necessary by the accountant under the circumstances of the particular case which may have been omitted, and the reason for their omission; nothing in this regulation however shall be construed to imply authority for the omission of any procedure which independent accountants would ordinarily employ in the course of an audit for the purpose of expressing the opinions required under the regulation;

3. Statement of the opinion of the accountant in respect to the financial statements and schedules covered by the report and the accounting principles and practices reflected therein and as to the consistency of the application of the accounting principles, or as to any changes in such principles which would have a material effect on the financial statements;

4. Any matters to which the accountant takes exception shall be clearly identified, the exception thereto specifically and clearly stated, and, to the extent practicable, the effect of such exception on the related financial statements given.

"Financial statements" shall be defined as those reports, schedules and statements, prepared in accordance with generally accepted accounting principles, which contain at least the following information unless the context otherwise dictates:

1. Balance Sheet;

2. Statement of Income or Operations;

3. Statement of Shareholders' Equity or Members' Equity; and

4. Statement of Cash Flows.

"Independent accountant" shall be defined as any certified public accountant in good standing and entitled to practice as such under the laws of his principal place of business or residence, and who is, in fact, not controlled by or under common control with the entity or person being audited; for the purposes of this definition an accountant will be considered not independent with respect to any person or any of its parents, its subsidiaries, or other affiliates (i) in which, during the period of the accountant's professional engagement to examine the financial statements being reported on or at the date of the accountant's report, the accountant or the accountant's firm or a member thereof, had, or was committed to acquire, any direct financial interest or any material indirect financial interest; (ii) with which, during the period of the accountant's professional engagement to examine the financial statements being reported on, at the date of the accountant's report during the period covered by the financial statements, the accountant or the accountant's firm or a member thereof was connected as a promoter, underwriter, voting trustee, director, officer, or employee, except that a firm will not be deemed not independent in regard to a particular person if a former officer or employee of such person is employed by the firm and such individual has completely disassociated himself from the person and its affiliates covering any period of his employment by the person. For the purposes of this chapter, the term "member" means all partners in the firm and all professional employees participating in the audit or located in an office of the firm participating in a significant portion of the audit; and in determining whether an accountant may in fact be not independent with respect to a particular person, the Commission will give appropriate consideration to all relevant circumstances, including evidence bearing on all relationships between the accountant and that person or any affiliates thereof and will not confine itself to the relationships existing in connection with the filing of reports with the Commission.

"Unaudited financial statements" shall be defined as those financial statements prepared in accordance with generally accepted accounting principles, not accompanied by the statements and representations as set forth in subdivisions 2, 3, and 4 of the first definition of this section.

Statutory Authority

§§ 12.1-13 and 13.1-523.1 of the Code of Virginia.

Historical Notes

Derived from Rule 400, Case No. SEC810005, eff. July 1, 1981; amended by Case No. SEC890040, eff. July 1, 1989; Virginia Register Volume 19, Issue 23, eff. July 1, 2003.

21VAC5-30-20. Requirements for registrations filed pursuant to § 13.1-509 of the Act.

A. Every registration statement filed under § 13.1-509 of the Act shall contain in the prospectus such financial statements as are required by the Securities Act of 1933 and any regulations promulgated thereunder.

B. Every registration statement filed under § 13.1-509 of the Act that is governed by any regulation, promulgated pursuant to § 13.1-523 of the Act shall also contain such financial information as required by such regulations.

Statutory Authority

§§ 12.1-13 and 13.1-523 of the Code of Virginia.

Historical Notes

Derived from Rule 401, Case No. SEC810005, eff. July 1, 1981; amended by Case No. SEC910057, eff. July 1, 1991; Virginia Register Volume 14, Issue 22, eff. July 1, 1998.

21VAC5-30-30. (Repealed.)

Historical Notes

Derived from Rule 401.1, Case No. SEC900034, eff. July 1, 1990; repealed, Virginia Register Volume 17, Issue 20, eff. July 1, 2001.

21VAC5-30-40. Requirements for registrations filed pursuant to §§ 13.1-508 and 13.1-510 of the Code of Virginia.

A. Except as provided in subdivision 9 of 21VAC5-30-80, the balance sheet required by §§ 13.1-508 and 13.1-510 of the Act must be examined and reported upon with an opinion expressed by an independent accountant and shall include the information described in 21VAC5-30-10 in the definition of "certified financial statements." (See subsections B and C of this section.)

B. In lieu of the financial information required by §§ 13.1-508 and 13.1-510 of the Act, the registration statement may contain certified financial statements for the issuer's and/or any predecessor's three most recent fiscal or calendar years preceding the date of filing the registration statement. If the issuer's or any predecessor's existence is less than three years, then the registration statement may contain certified financial statements for the issuer's or any predecessor's most recent fiscal year preceding the date of filing the registration statement.

C. If the certified financial statements described in subsection B of this section are as of a date in excess of four months prior to the filing of the registration statement, then an unaudited balance sheet (as of a date within four months prior to the filing of the registration statement together with a profit and loss statement and analysis of surplus for the period between the close of the latest fiscal year and the date of the balance sheet) must be filed in addition to the certified financial statements.

Statutory Authority

§§ 12.1-13 and 13.1-523.1 of the Code of Virginia.

Historical Notes

Derived from Rule 402, Case No. SEC810005, eff. July 1, 1981; amended by Case No. 810010, eff. August 15, 1981; Virginia Register Volume 15, Issue 22, eff. July 1, 1999; Volume 19, Issue 23, eff. July 1, 2003.

21VAC5-30-50. Requirements for registration statements relating to nonissuer distributions.

A. The requirements for a registration statement filed pursuant to § 13.1-508 of the Act relating to securities to be offered and sold pursuant to a nonissuer distribution (i.e., "secondary trading") are:

1. a. The registration statement shall contain the issuer's most recent 10-K Annual Report and 10-Q Quarterly Report filed with the SEC pursuant to § 13 or § 15(d) of the Securities Exchange Act of 1934 (15 USC § 78m or o(d)).

b. The registration statement pertaining to the securities of a Canadian issuer which have been registered pursuant to the Multijurisdictional Disclosure System described by the SEC in Release No. 33-6841 shall contain the issuer's most recent Annual Information Form (plus the issuer's latest audited fiscal year-end financial statements) and Quarterly Report as filed with the appropriate Canadian regulatory authority.

2. If within 12 months of the date of filing the registration statement any 8-K Current Report has been filed with the SEC pursuant to § 13 or § 15(d) of the Securities Exchange Act of 1934, then a copy of each such report shall be filed with the registration statement.

3. If within 12 months of the date of filing the registration statement any Form 10 general form for registration of securities has been filed with the SEC pursuant to § 12(d) or (g) of the Securities Exchange Act of 1934, then a copy of each such form shall be filed with the registration statement.

4. If within 12 months of the date of filing the registration statement a registration statement has been filed with the SEC pursuant to § 6 of the Securities Act of 1933 (15 USC § 77f), then a copy of each such registration statement shall be filed with this registration statement.

B. For purposes of this section, the word "registered" as used in § 13.1-508 A 2 (i) of the Act shall mean registered pursuant to this Act, the Securities Act of 1933 or the Securities Exchange Act of 1934.

C. The requirement for delivery of a prospectus under § 13.1-508 D of the Act, with respect to securities registered pursuant to this section, shall be met by compliance with 21VAC5-20-280 A 10.

D. A registration statement filed pursuant to this section need not comply with 21VAC5-30-40.

Statutory Authority

§§ 12.1-13 and 13.1-523 of the Code of Virginia.

Historical Notes

Derived from Rule 403, Case No. SEC810010, eff. August 15, 1981; amended by Case No. SEC890040, eff. July 1, 1989; Virginia Register Volume 14, Issue 22, eff. July 1, 1998; Volume 29, Issue 20, eff. June 3, 2013.

21VAC5-30-60. (Repealed.)

Historical Notes

Derived from Rule 404, Case No. SEC810005, eff. July 1, 1981; amended by Case No. SEC910057, eff. July 1, 1991; Case No. SEC940048, Virginia Register Volume 10, Issue 24, eff. August 1, 1994; Virginia Register Volume 14, Issue 22, eff. July 1, 1998; repealed, Virginia Register Volume 17, Issue 20, eff. July 1, 2001.

21VAC5-30-70. (Repealed.)

Historical Notes

Derived from Virginia Register Volume 13, Issue 25, eff. September 1, 1997; amended, Virginia Register Volume 14, Issue 22, eff. July 1, 1998; repealed, Virginia Register Volume 19, Issue 23, eff. July 1, 2003.

21VAC5-30-80. Adoption of North American Securities Administration Association, Inc. statements of policy.

The commission adopts the following North American Securities Administration Association, Inc. (NASAA) statements of policy that shall apply to the registration of securities in the Commonwealth. It will be considered a basis for denial of an application if an offering fails to comply with an applicable statement of policy. While applications not conforming to a statement of policy shall be looked upon with disfavor, where good cause is shown, certain provisions may be modified or waived by the commission.

1. Options and Warrants, as amended March 31, 2008.

2. Underwriting Expenses, Underwriter's Warrants, Selling Expenses and Selling Security Holders, as amended May 6, 2018.

3. Real Estate Programs, as amended May 7, 2007.

4. Oil and Gas Programs, as amended May 6, 2012.

5. Cattle-Feeding Programs, as adopted September 17, 1980.

6. Unsound Financial Condition, as amended May 6, 2018.

7. Real Estate Investment Trusts, as amended May 7, 2007.

8. Church Bonds, as adopted April 29, 1981.

9. Small Company Offering Registrations, as adopted April 28, 1996.

10. NASAA Guidelines Regarding Viatical Investment, as adopted October 1, 2002.

11. Corporate Securities Definitions, as amended May 6, 2018.

12. Church Extension Fund Securities, as amended April 18, 2004.

13. Promotional Shares, as amended March 31, 2008.

14. Loans and Other Material Transactions, as amended May 6, 2018.

15. Impoundment of Proceeds, as amended March 31, 2008.

16. Electronic Offering Documents and Electronic Signatures, as adopted May 8, 2017.

Statutory Authority

§§ 12.1-13 and 13.1-523 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 13, Issue 25, eff. September 1, 1997; amended, Virginia Register Volume 14, Issue 22, eff. July 1, 1998; Volume 17, Issue 20, eff. July 1, 2001; Volume 19, Issue 23, eff. July 1, 2003; Volume 25, Issue 22, eff. July 1, 2009; Volume 29, Issue 20, eff. June 3, 2013; Volume 34, Issue 9, eff. December 1, 2017; amended, Virginia Register Volume 36, Issue 2, eff. September 16, 2019.

21VAC5-30-90. (Repealed.)

Historical Notes

Derived from Virginia Register Volume 15, Issue 22, eff. July 1, 1999; amended, Virginia Register Volume 17, Issue 20, eff. July 1, 2001; repealed, Virginia Register Volume 19, Issue 23, eff. July 1, 2003.

FORMS (21VAC5-30).

Form U–1, Uniform Application to Register Securities (undated, filed 10/2017)

Form U–2, Uniform Consent to Service of Process (rev. 6/2016)

Form U–2A, Uniform Form of Corporate Resolution (rev. 6/2016)

Form S.A. 4, Registration by Notification - Original Issue (rev. 11/1996)

Form S.A. 5, Registration by Notification - Non-Issuer Distribution (rev. 11/1996)

Form S.A. 6, Registration by Notification - Non-Issuer Distribution "Secondary Trading" (1989)

Form S.A. 8, Registration by Qualification (rev. 7/1991)

Form S.A. 12, Escrow Agreement (1971)

Form S.A. 13, Impounding Agreement (rev. 7/1999)

Forms (21VAC5-30-9999)

Statement of Policy Regarding Church Extension Fund Securities as amended April 18, 2004, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Options and Warrants, as amended March 31, 2008, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Underwriting Expenses, Underwriter's Warrants, Selling Expenses and Selling Security Holders, as amended May 6, 2018, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Unsound Financial Condition, as amended May 6, 2018, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Real Estate Investment Trusts, as amended May 7, 2007, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Real Estate Programs, as amended May 7, 2007, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Oil and Gas Programs, as amended May 6, 2012, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Church Bonds, as adopted April 29, 1981, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Small Company Offering Registrations, as adopted April 28, 1996, North American Securities Administrators Association, Inc.

NASAA Guidelines Regarding Viatical Investment, as adopted October 1, 2002, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Corporate Securities Definitions, as amended May 6, 2018, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Promotional Shares, as amended March 31, 2008, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Loans and Other Material Transactions, as amended May 6, 2018, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Impoundment of Proceeds, as amended March 31, 2008, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Electronic Offering Documents and Electronic Signatures, as adopted May 8, 2017, North American Securities Administrators Association, Inc.

Statement of Policy Regarding Cattle-Feeding Programs, as adopted September 17, 1980, North American Securities Administrators Association, Inc.

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