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COMMONWEALTH OF PENNSYLVANIA

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10 Pa. Code § 609.012. Computing the number of offerees, purchasers and clients.

§ 609.012. Computing the number of offerees, purchasers and clients.

 (a)  Under section 609(a) of the act (70 P.S. §  1-609(a)), the Department, to provide a consistent method of computing the number of offerees, purchasers and clients under relevant provisions of the act and regulations promulgated thereunder, has determined that all of the following apply:

   (1)  A person who is offered or purchases securities or becomes a client is counted as a separate offeree, purchaser or client, unless the person is otherwise specifically excluded under this section.

   (2)  If more than one person, related by blood or marriage, are offerees, purchasers or clients, the persons are counted as one offeree, purchaser or client if they either:

     (i)   Reside in the same household.

     (ii)   Are under 18 years of age.

   (3)  An entity is counted as one person, and a direct or beneficial owner of equity interests or equity securities in the entity is not counted as an offeree, purchaser or client, unless one of the following applies:

     (i)   With respect to computing offerees and purchasers, the entity was organized to specifically acquire the securities being offered or purchased.

     (ii)   With respect to computing clients, if the services provided by the person effecting transactions in securities for the account of the entity or providing investment advice to the entity are based on the investment decisions of the direct or beneficial owners rather than on the investment objectives of the entity.

   (4)  Notwithstanding the provisions of paragraph (3)(i):

     (i)   In the case of a trust, if the settlor and the beneficiaries are related by blood or marriage, the trust and the trustee, when acting on behalf of the trust or simultaneously on his own behalf, is counted only as one offeree, purchaser or client.

     (ii)   Multiple trusts are counted as one offeree, purchaser or client if all of the beneficiaries are related by blood or marriage.

   (5)  Notwithstanding the provisions of paragraph (3)(i) in an entity in which all owners of equity interests or equity securities, excluding contingent interests and director’s qualifying shares, are persons related by blood or marriage residing in the same household, the following apply:

     (i)   The entity is counted as one person.

     (ii)   The owners of the interests or securities in the entity are not counted as offerees, purchasers and clients.

 (b)  This section does not apply if a section of the act or a regulation promulgated thereunder sets forth another method of computing offerees, purchasers or clients.

Authority

   The provisions of this §  609.012 issued under section 609(a) of the Pennsylvania Securities Act of 1972 (70 P.S. §  1-609(a)); 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)).

Source

   The provisions of this §  609.012 adopted March 27, 1987, effective March 28, 1987, 17 Pa.B. 1304; transferred and renumbered from 64 Pa. Code §  609.012, 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 (364843) to (364844).

Cross References

   This section cited in 10 Pa. Code §  102.021 (relating to definitions); 10 Pa. Code §  203.187 (relating to small issuer exemption); and 10 Pa. Code §  203.189 (relating to isolated exemption).



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