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10 Pa. Code § 203.188. Cooperative Business Associations Exemption.

§ 203.188. Cooperative Business Associations Exemption.

 (a)  Under section 203(r) of the act (70 P.S. §  1-203(r)), the Department finds that it is not in the public interest or necessary for the protection of investors to require registration of securities transactions under section 201 of the act (70 P.S. §  1-201) if all of the following conditions are met:

   (1)  The issuance, offer and sale of securities of a cooperative business association is made only to persons who are members of the cooperative business association or, on the purchase of the security offered, will become members of a cooperative business association.

   (2)  The transfer of the securities for value is restricted to the cooperative business association, members of the cooperative business association or a successor in interest of a transferor who qualifies for membership, as may be further limited by the articles of incorporation of the cooperative business association, if certificates evidencing the securities bear a legend setting forth the restrictions.

   (3)  A person does not receive a commission or other compensation directly or indirectly as a result of or based on the sale of securities of a cooperative business association other than in connection with the solicitation of nonmembers for membership.

 (b)  Section 209.010(b) (relating to required records; report on sales of securities and use of proceeds) does not apply to the offer and sale of securities without registration under this section.


   The provisions of this §  203.188 issued under section 203(r) of the Pennsylvania Securities Act of 1972 (70 P.S. §  1-203(r)); amended under section 202.C of the Department of Banking and Securities Code (71 P.S. §  733-202.C); section 609(a) of the Pennsylvania Securities Act of 1972 (70 P.S. §  1-609(a)); and section 9(b) of the Takeover Disclosure Law (70 P.S. §  79(b)).


   The provisions of this §  203.188 adopted January 30, 1987, effective January 31, 1987, 17 Pa.B. 561; transferred and renumbered from 64 Pa. Code §  203.188, 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 (364691) to (364692).

Cross References

   This section cited in 10 Pa. Code §  102.021 (relating to definitions).

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