Pennsylvania Code & Bulletin
COMMONWEALTH OF PENNSYLVANIA

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10 Pa. Code § 203.161. Debt securities of nonprofit organizations.

§ 203.161. Debt securities of nonprofit organizations.

 (a)  A person proposing to offer debt securities under section 203(p) of the act (70 P.S. §  1-203(p)) shall:

   (1)  Complete and file with the Department two copies of Form 203-P in accordance with the General Instructions.

   (2)  File Form 203-P no later than 5 business days before the earlier of either the issuer receiving from any person:

     (i)   An executed subscription agreement or other contract to purchase the securities being offered.

     (ii)   Consideration for the subscription agreement or other contract to purchase the securities being offered.

 (b)  Except if the delivery of an offering document is not required by the Department, every offering of debt securities under section 203(p) of the act shall be made by an offering document containing all material information about the securities being offered and the issuer.

   (1)  An offering document will be considered to meet the requirements of this section if it includes the information that is elicited by Part VII of the Statement of Policy Regarding Church Bonds adopted April 14, 2002, by NASAA and any successor policy thereto (NASAA Guidelines) and is in the format set forth therein.

   (2)  A copy of the offering document and any offering literature to be used in connection with the offer or sale of securities under section 203(p) of the act shall be filed with the Department at the same time the notice required under subsection (a) shall be filed.

 (c)  The offering document required under subsection (b) must meet all of the following conditions:

   (1)  Contain a notice of a right to withdraw that complies with §  207.130 (relating to notice to purchasers under section 207(m)).

   (2)  Contain financial statements of the issuer that comply with §  609.034(b) (relating to financial statements).

   (3)  Demonstrate compliance with the trust indenture standards and trustee qualification standards and associated disclosure requirements as set forth in Parts V and VI of the NASAA Guidelines if the total amount of securities to be offered exceeds $250,000.

   (4)  Include whatever data may be necessary to establish all of the following:

     (i)   The investors will receive a first lien on real estate of the issuer.

     (ii)   The issuer has not defaulted on prior obligations.

     (iii)   The total amount of securities offered does not exceed 75% of the current fair market value of the real property covered by the securities.

Authority

   The provisions of this §  203.161 amended under sections 203(d), (i.1), (j) and (n)—(t) 205, 206, 301, 303, 504, 603(a) and 609 of the Pennsylvania Securities Act of 1972 (70 P.S. § §  1-203(d), (i.1), (j) and (n)—(t) 1-205, 1-206, 1-301, 1-303, 1-504, 1-603(a) and 1-609); sections 4 and 9(b) of the Takeover Disclosure Law (70 P.S. § §  74 and 79(b)); and section 202.C of the Department of Banking and Securities Code (71 P.S. §  733-202.C).

Source

   The provisions of this §  203.161 adopted October 11, 1974, effective October 12, 1974, 4 Pa.B. 2174; amended April 4, 1975, effective April 5, 1975, 5 Pa.B. 722; amended December 30, 1999, effective January 1, 2000, 30 Pa.B. 18; amended July 11, 2003, effective July 12, 2003, 33 Pa.B. 3365; amended December 8, 2006, effective December 9, 2006, 36 Pa.B. 7456; transferred and renumbered from 64 Pa. Code §  203.161, December 14, 2012, effective December 15, 2012, 42 Pa.B. 7533; amended January 12, 2018, effective January 13, 2018, 48 Pa.B. 389. Immediately preceding text appears at serial pages (364682) to (364683).



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