815 ILCS 5/5

Current through Public Act 103-1052

Section 815 ILCS 5/5 - Registration of Securities

All securities except those set forth under Section 2a of this Act, or those exempt under Section 3 of this Act, or those offered or sold in transactions exempt under Section 4 of this Act, or face amount certificate contracts required to be registered under Section 6 of this Act, or investment fund shares required to be registered under Section 7 of this Act, shall be registered either by coordination or by qualification, as hereinafter in this Section provided, prior to their offer or sale in this State.

A.Registration by Coordination.

(1) Securities which are being or have been registered under the Federal 1933 Act may be registered by coordination in the manner provided in this subsection A, if the effective date of the registration under the Federal 1933 Act is not more than 30 days before the filing with the Secretary of State.

(2) Securities may be registered by coordination by the filing with the Secretary of State by the issuer, by a controlling person or by a registered dealer of:

(a) One copy of the registration statement (without exhibits) descriptive of the securities on file with the Securities and Exchange Commission in its most recent form as of the date of the initial filing under this subsection A.;

(b) An application, in such form and executed, verified, or authenticated by such person as the Secretary of State shall by rule or regulation prescribe, setting forth the title and the total amount of securities to be offered, the amount of securities and the proposed maximum aggregate price thereof to be offered in this State under this subsection A and, if the applicant is electing the date of effectiveness of a post-effective amendment as its effective date as provided in Section 2.13 of this Act, specifying such date as the effective date for purposes of registration under this subsection A;

(c) An undertaking to forward to the Secretary of State, in writing (which may be by electronic or facsimile transmission), any and all subsequent amendments of and supplements to the registration statement not later than the 7th day after the forwarding thereof to the Securities and Exchange Commission, or such longer period as the Secretary of State may permit by rule, regulation or order; and

(d) If the applicant is not a registered dealer, the name of at least one registered dealer for the securities being registered under this subsection A (except that, in the case of securities being offered and sold on a delayed or continuous basis pursuant to Rule 415 under the Federal 1933 Act, 17 C.F.R. Section 230.415, or any similar or successor rule thereto as may be designated by the Secretary of State by rule or regulation, the name of the registered dealer may be furnished no later than the close of business on the second business day following the commencement of sales of the registered securities in this State) or a written statement setting forth the method of offer and sale in this State of the securities being registered in compliance with Section 8 of this Act.

(3) Registration of securities by coordination shall take effect automatically as of the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, provided that on the effective date, the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A have been on file with the Secretary of State for at least 10 business days, or such shorter period as the Secretary of State may permit by rule, regulation or order. If, however, the time period referred to in the preceding sentence shall not have expired on the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, registration of such securities by coordination shall, upon the expiration of such time period, take effect automatically as of the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act.

(4) If the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A are not filed with the Secretary of State prior to the effective date of the registration statement (or post-effective amendment) filed under the Federal 1933 Act, any registration of securities by coordination under this subsection A shall take effect automatically as soon as all of the following conditions have been satisfied:

(a) the information required by sub-paragraphs (a), (b), and (d) and the undertaking required by sub-paragraph (c) of paragraph (2) of this subsection A have been on file with the Secretary of State for 10 business days, or for such shorter period as the Secretary of State may permit by rule, regulation or order;

(b) the registration statement or post-effective amendment filed under the Federal 1933 Act is then in effect; and

(c) the prospectus then on file with the Secretary of State satisfies the requirements of Section 10(a)(3) of the Federal 1933 Act.

(5) The applicant shall furnish to the Secretary of State written notice (which may be by electronic or facsimile transmission) confirming the date of effectiveness and the title of the securities registered under the Federal 1933 Act, final pricing information, the total amount of securities registered under the Federal 1933 Act, and the amount registered in this State if different than the amounts then on file with the Secretary of State, no later than the close of business on the second business day following the date on which the registration statement becomes effective under the Federal 1933 Act.

(6) No action by the Secretary of State shall be necessary to evidence the effectiveness of the registration by coordination under this subsection A. The Secretary of State may, at his or her discretion, provide a statement attesting to such registration, which statement shall be in such form as the Secretary of State may deem appropriate.

(7) Notwithstanding the foregoing, the issuer, controlling person or registered dealer who filed the application set forth in subparagraph (b) of paragraph (2) of this subsection A may request, in writing (which may be by electronic or facsimile transmission) prior to or upon notice of effectiveness under the Federal 1933 Act, a waiver of automatic effectiveness of the registration of securities and the Secretary of State may, at his or her discretion, grant such waiver of automatic effectiveness. Upon the grant by the Secretary of State of the request of waiver of automatic effectiveness, such registration of securities shall become effective automatically on the date that the issuer, controlling person or registered dealer who filed the application set forth in subparagraph (b) of paragraph (2) of this subsection A notifies the Secretary of State in writing.

B.Registration by Qualification. Securities may be registered by qualification in the manner provided in this subsection B.

(1) An application for registration by qualification shall be made by the issuer, by a controlling person or by a registered dealer together with the examination fee established pursuant to Section 11a of this Act, which is not returnable in any event. Such application shall be executed, verified, or authenticated by the applicant and filed with the Secretary of State. The application shall set forth:

(a) The name and address of the issuer;

(b) The title and total amount of the securities to be offered;

(c) The amount of the securities to be offered in this State;

(d) The price at which the securities are to be offered, or the method by which such price is to be determined, provided that such price or method may be furnished by written notice (which may be by electronic or facsimile transmission) to the Secretary of State subsequent to the filing of the application but prior to registration of the securities under this Law; and

(e) The aggregate underwriting commissions, remuneration or discount.

(2) If the issuer, dealer, or controlling person has not filed a registration statement that is then in effect under the Federal 1933 Act, there shall be filed with the application:

(a) (Blank);

(b) (Blank);

(c) A copy of the indenture or other instrument, if any, under which the securities are to be or have been issued;

(d) A specimen copy of the securities or a copy of the form of the instrument to evidence the securities;

(e) An opinion of counsel as to the legality of the securities;

(f) A copy of the underwriting and selling agreements, if any;

(g) An undertaking to file promptly (no later than 2 business days after the occurrence of any event which requires a material change in the prospectus) with the Secretary of State all amendments of and supplements to the prospectus as theretofore filed under this subsection B, together with any additional information, document or undertaking which the Secretary of State, at his or her discretion, deems material, accompanied by the amendment filing fee established pursuant to Section 11a of this Act or, in lieu thereof, a notification in writing that all offers and sales of the securities have been suspended pending the filing with the Secretary of State of such amendment of or supplement to the prospectus; and

(h) A written statement setting forth the name of at least one registered dealer for the securities being registered under this subsection B, or an application for registration of a salesperson or a written statement setting forth the method of offer and sale in this State of the securities being registered in compliance with Section 8 of this Act.

(3) In addition, there shall be filed with the application such additional information and material in such form as the Secretary of State may by rule, regulation or order prescribe and a prospectus which contains but is not limited to the following:

(a) The date and form of organization of the issuer;

(b) A brief description of the business conducted and intended to be conducted by the issuer and by its subsidiaries and the general development of such business during the past 5 years or such shorter period as the issuer and such subsidiaries may have been in existence;

(c) The location and general character of the physical properties of the issuer and of its subsidiaries;

(d) The authorized and issued capitalization of the issuer and a description of the securities being registered and of all authorized securities;

(e) The proposed method of sale of the securities, the price thereof to the public or the method by which such price is to be computed, and the underwriting and selling discounts and commissions;

(f) The intended use by the issuer of the proceeds of the securities;

(g) The names and addresses of all of the issuer's officers and directors, or persons performing similar functions, their business experience during the preceding 5 years and the remuneration paid to each by the issuer and its subsidiaries during the fiscal year last past and proposed to be paid for the then current fiscal year;

(h) The names and addresses of all persons owning of record, and of all persons owning beneficially, to the extent known to the applicant, 10% or more of any class of equity securities of the issuer, and the percentage owned by each;

(i) A brief description of any pending material legal proceeding, and of any material legal proceeding known to be contemplated by governmental authorities, involving the issuer or its subsidiaries;

(j) The following financial statements of the issuer:

(i) A balance sheet as of a date within 135 days prior to the date of submitting the application. If such balance sheet is not certified by an independent certified public accountant, the prospectus shall also contain a balance sheet certified by an independent certified public accountant as of the close of the issuer's last fiscal year, unless such fiscal year ended within 135 days prior to the time of filing the application, in which case the certified balance sheet may be as of the end of the preceding fiscal year.

(ii) An income statement for each of the issuer's 3 fiscal years (or for the period of existence of the issuer if less than 3 years) next preceding the date of the certified balance sheet and for the period, if any, between the date of the certified balance sheet and the date of the most recent balance sheet. Such statement shall be certified by an independent certified public accountant for the periods ending with the date of the certified balance sheet.

(iii) An analysis of each surplus account of the issuer for each period for which an income statement is filed, certified by an independent certified public accountant for the periods for which certified income statements are filed.

(iv) An analysis (which need not be certified to by independent certified public accountants and which may be in narrative form if desired by the applicant) of all surplus accounts of the issuer for a period beginning on a date not less than 8 years prior to the date of the certified balance sheet required by the above sub-division (i) of this sub-paragraph (j), or from the date of the organization of the issuer, whichever is later, and ending on the day before the first day of the earliest period covered by the analysis of surplus accounts furnished pursuant to the above sub-division (iii) of this sub-paragraph (j); and

(k) If the issuer owns more than 50% of the voting securities of one or more entities, there shall also be included in the prospectus either (i) like financial statements for each such entity, or (ii) like consolidated financial statements for the issuer and such entities;

(l) Anything in sub-paragraphs (j) and (k) of this paragraph (3) to the contrary notwithstanding, the financial statements contained in the prospectus need not be certified by an independent certified public accountant if the securities being registered under this subsection B are covered by a Notification under Regulation A or an Offering Sheet under Regulation D adopted pursuant to the Federal 1933 Act or any other regulation so adopted which the Secretary of State may by rule or regulation or by order determine to have filing or disclosure requirements substantially similar to such Regulation A or Regulation D unless the financial statements furnished pursuant to any such Federal regulation are required to be or are certified by an independent certified public accountant.

(4) If the securities being registered under this subsection B are certificates of deposit, voting trust certificates, collateral-trust certificates, certificates of interest, fractional interests in oil, gas or other mineral rights of unincorporated issuers or like securities, the prospectus may omit such of the foregoing items in sub-paragraphs (a) through (k) of paragraph (3) of this subsection B, but shall include such pertinent information, as the Secretary of State may by rule, regulation or order prescribe; such prospectus shall contain a description of the properties and businesses from which such certificates, shares or interests derive value.

(5) The Secretary of State may, upon written request by the applicant and where consistent with the protection of investors, permit the omission of one or more of the financial statements required by this subsection B or the filing in substitution therefor of appropriate financial statements of comparable character or permit the omission of any of the information required by this subsection B. The Secretary of State may also by written notice require the filing of other financial statements or information in addition to, or in substitution for, the financial statements or information required by this subsection B in any case where such additional financial statements or information is necessary or appropriate for an adequate presentation of the financial condition of any issuer or otherwise required for fair disclosure respecting the business and property of any issuer.

(6) The Secretary of State shall within a reasonable time examine the application and documents filed with him or her, and unless the Secretary of State makes a determination that the application and documents so filed do not conform to the requirements of this subsection B, or there is a proceeding pending under Section 11 of this Act, shall register the securities for offer and sale in this State under this subsection B. If the securities registered shall not have been sold and distributed at the expiration of a period of 6 months following the date of registration, the Secretary of State may require the filing of such current information concerning the securities and the issuer thereof as he or she may by rule, regulation or order prescribe.

(7) The Secretary of State is granted authority to create by rule or regulation a limited offering registration provision that furthers the objectives of compatibility with federal exemptions and uniformity among the states. The Secretary of State shall prescribe by rule or regulation the amount of the fees for examining and filing any documents required under this subparagraph, but each fee shall not be less than the minimum amount nor more than the maximum amount established under Section 11a of this Act and shall not be returnable in any event.

C.Pending Application, Filing Fee and Oversales of Securities.

(1) No application shall be deemed to be filed or pending and no securities covered by such application shall be deemed to be registered under subsection A of this Section 5 unless a filing fee has been paid. No application shall be deemed to be filed or pending and no securities covered by such application shall be deemed to be registered under subsection B of this Section 5 unless the examination fee and filing fee have been paid. The filing fee payable under the provisions of subsections A and B of this Section 5 shall be established by rule or regulation, but in no event shall the fee be less than the minimum amount nor more than the maximum amount of filing fee established pursuant to Section 11a of this Act, and in no case shall such fee be returnable. The "maximum aggregate price" as used in subsection A of this Section 5 and in this subsection C shall be the applicant's bona fide estimate thereof, determined in the manner prescribed by the Secretary of State by rule or regulation.

(2) If after an offering of securities is registered under this Section 5 (except for securities registered under subsection B of this Section 5 wherein the entire offering of securities was registered), the offeror sells or determines that it will sell, prior to the expiration of the period during which the offeror intends the registration of the securities together with any renewals thereof to remain in effect in this State, an amount of that offering in excess of the amount registered, the applicant may amend the registration and register the excess securities by filing an amended application and paying a filing fee equal to the difference between the initial filing fee paid and the filing fee which would have been paid under paragraph (1) of this subsection C for the entire amount registered together with an additional fee established pursuant to Section 11a of this Act. The fees shall not be returnable in any event. With respect to the excess securities being registered, the "maximum aggregate price" shall be the actual sales price of such securities. Upon receipt of such amended application, filing fee, and additional fee by the Secretary of State, registration of the excess securities shall become effective retroactively to the date of the initial registration.

D.Effective Period and Sales Reports.

(1) A registration effected under Section 5 of this Act shall continue effective for a period of one year from the date of registration or renewal of registration unless sooner terminated by (1) suspension or revocation by the Secretary of State; or (2) the applicant filing with the Secretary of State an affidavit evidencing either that (a) the securities have been fully sold and distributed to the public or (b) that it is no longer desired to offer such securities in this State or (c) that such securities have become exempt from the registration requirements under Section 3 or paragraph (1) of subsection F of Section 4 of this Act.

(2) The Secretary of State may, at his or her discretion, require each issuer, controlling person or registered dealer on whose behalf a registration of securities is effected under this Section 5 to file a report, in such form and of such content and for such time period as the Secretary of State may by rule or regulation prescribe, stating the aggregate dollar amount of securities sold to Illinois residents. The civil remedies provided for in subsection A of Section 13 of this Act and the civil remedies of rescission and appointment of a receiver, conservator, ancillary receiver or ancillary conservator provided for in subsection I of Section 11 and in subsection F and G of Section 13 of this Act and the civil remedies of restitution, damages and disgorgement of profits provided for in subsection I of Section 11 of this Act shall not be available against any person by reason of the failure to file any such report or on account of the contents of any such report.

E.Renewal of Registration. A registration of securities in effect under subsection A of this Section 5 or subsection B of this Section 5 if a registration statement or post-effective amendment is then in effect under the Federal 1933 Act may be renewed for the amount of securities which remain unsold under such registration as then in effect, by the issuer, by a controlling person or by a registered dealer by filing an application for renewal with the Secretary of State no later than 10 business days prior to the date (or such lesser period as the Secretary of State may prescribe by rule or regulation) upon which such registration would otherwise expire, in such form and executed, verified, or authenticated by such person as the Secretary of State shall prescribe by rule or regulation. Such application shall be accompanied by a prospectus in its most current form together with a renewal fee equal in amount to a registration fee calculated in accordance with paragraph (1) of subsection C of this Section 5 and based upon the amount of securities initially registered for sale in this State but which remain unsold; except that the "maximum aggregate price" of such securities shall be the applicant's bona fide estimate thereof at the time the application for renewal of registration is filed with the Secretary of State pursuant to this subsection E. A renewal of registration of securities shall take effect as of the date and time that the prior registration under subsection A of this Section 5 or prior renewal under this subsection E would otherwise have expired and thereafter shall be deemed to be a new registration of the amount of unsold securities specified in the application for renewal. The Secretary of State may by rule or regulation prescribe an additional fee for the failure to file timely an application for renewal and limit the number of times that a registration may be renewed.

F.The applicant or registrant shall notify the Secretary of State, by written notice (which may be by electronic or facsimile transmission), within 2 business days after its receipt of any stop order, denial, order to show cause, suspension or revocation order, injunction or restraining order, or similar order entered or issued by any state, federal or other regulatory authority or by any court, concerning the securities which are being or have been registered in this State or any other securities of the issuer currently being or proposed to be offered to the public, if the matter which is the subject of, or the failure to disclose the existence of, such order would in this State constitute a violation of subsection E, F, G, H, I or J of Section 12 of this Act. The obligation contained in this subsection F shall continue until such time as offers and sales of the securities registered under this Section 5 are no longer being made in this State by the applicant or registrant.

G.Any document being filed pursuant to this Section 5 shall be deemed filed, and any fee being paid pursuant to this Section 5 shall be deemed paid, upon the date of actual receipt thereof by the Secretary of State.

H.The Secretary of State may require by rule or regulation the payment of an additional fee for the filing of information or documents required to be filed by this Section 5 which have not been filed in a timely manner. Such fees shall be deposited into the Securities Investors Education Fund, a special fund hereby created in the State treasury. The amounts deposited into such Fund shall be used to promote public awareness of the dangers of securities fraud.

815 ILCS 5/5

P.A. 89-209, eff. 1/1/1996; 89-626, eff. 8/9/1996; 90-70, eff. 7/8/1997.