99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB3091

 

Introduced , by Rep. Tom Demmer

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Securities Law of 1953. Creates an exemption from certain filing and registration requirements under the Act for intrastate securities offerings that meet certain conditions, including that (1) the offering meets all of the requirements of the federal exemption for intrastate offerings provided under the Securities Exchange Act of 1933; (2) the aggregate purchase price of all securities sold by an issuer within any 12-month period does not exceed certain monetary limitations; and (3) the aggregate amount sold to any purchaser in an offering of securities made within any consecutive 12-month period does not exceed certain monetary limitations. Provides that an issuer may make an offering or sale of securities through the use of one or more qualified Internet portals, subject to certain requirements, including that (i) the Internet portal shall at all times be owned by a corporation or other legal entity which is either organized under the laws of, or is otherwise qualified to do business in, this State; (ii) the Internet portal shall establish and maintain commercially reasonable measures to limit access to any information concerning an offering or sale of the subject securities to residents of this State; and (iii) the Internet portal shall establish and maintain a secure method of communication through the Internet portal itself that will permit potential investors to communicate with one another and with representatives of the issuer about the offering. Requires the Secretary of State to collect a $100 fee for securities offered or sold under the exemption created under this amendatory Act; and a $300 fee for the registration and renewal of a qualified Internet portal.


LRB099 05991 JLS 26043 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3091LRB099 05991 JLS 26043 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Securities Law of 1953 is amended
5by changing Sections 4, 11a, and 18.1 and by adding Sections
62.34, 2.35, 2.36, 2.37, and 8d as follows:
 
7    (815 ILCS 5/2.34 new)
8    Sec. 2.34. Accredited investor. "Accredited investor" has
9the meaning given to that term in 17 CFR 230.501(a), as amended
10and in effect from time to time.
 
11    (815 ILCS 5/2.35 new)
12    Sec. 2.35. Qualified escrowee. "Qualified escrowee" means
13a person, firm, partnership, association, corporation, or
14other legal entity who: (a) falls under the definition of
15"title insurance company" under, and pursuant to the terms and
16requirements of, the Title Insurance Act; or (b) is certified
17as an independent escrowee under, and pursuant to the terms and
18requirements of, the Title Insurance Act.
 
19    (815 ILCS 5/2.36 new)
20    Sec. 2.36. Qualified Internet portal. "Qualified Internet
21portal" means an Internet portal maintained by a corporation or

 

 

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1other legal entity that is being used to offer or sell
2securities and that meets the requirements of Section 8d of
3this Act.
 
4    (815 ILCS 5/2.37 new)
5    Sec. 2.37. Experienced investor. "Experienced investor"
6means:
7        (a) a natural person whose individual income exceeded
8    $150,000, or joint income with that person's spouse
9    exceeded $200,000, in each of the 2 most recent years, and
10    such person has a reasonable expectation of reaching the
11    same income level in the current year;
12        (b) a natural person whose individual net worth exceeds
13    $500,000, or joint net worth with that person's spouse,
14    exceeds $750,000, provided that net worth for purposes of
15    this subsection shall be calculated in the same manner as
16    provided in 17 CFR 230.501(a);
17        (c) a natural person who has passed the Series 7 and
18    the Series 63 licensing exams, or the Series 66 licensing
19    exam, or who is otherwise licensed in the State to practice
20    as an accountant or financial planner;
21        (d) a natural person who has received an advanced
22    degree (a master's degree or higher) in finance or
23    accounting from an accredited educational institution or
24    has completed a State recognized securities investment
25    training program;

 

 

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1        (e) a natural person who has worked at least 3 years
2    (consecutively or non-consecutively) out of the then most
3    recent consecutive 10-year period in a position materially
4    focused on analyzing, accounting for, drafting material
5    documentation in connection with (including legal
6    documentation), or otherwise advising issuers or
7    purchasers with respect to, transactions involving the
8    offer or sale of publicly sold or privately placed
9    securities;
10        (f) any entity (including, without limitation, any
11    trust) in which at least 90% of the equity interest is
12    owned by (or with respect to any trust, the primary
13    beneficiaries are) persons who meet one or more of the
14    criteria in items (a) through (e) of this Section;
15        (g) with respect to participating in an offering of a
16    particular issuer, a natural person serving as an officer,
17    director, partner, trustee of, or otherwise occupying
18    similar status or performing similar functions with
19    respect to, such issuer; or
20        (h) with respect to participating in an offering of a
21    particular issuer, a natural person or entity who owns 10%
22    or more of the then aggregate outstanding voting capital
23    securities of such issuer.
24    In 2019 and every 5th year thereafter, the Secretary of
25State shall cumulatively adjust the dollar limitations in items
26(a) and (b) to reflect the change in the Consumer Price Index

 

 

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1for all Urban Consumers published by the United States
2Department of Labor, Bureau of Labor Statistics, rounding each
3dollar limitation to the nearest $10,000.
 
4    (815 ILCS 5/4)  (from Ch. 121 1/2, par. 137.4)
5    Sec. 4. Exempt transactions. The provisions of Sections 2a,
65, 6 and 7 of this Act shall not apply to any of the following
7transactions, except where otherwise specified in this Section
84:
9    A. Any offer or sale, whether through a dealer or
10otherwise, of securities by a person who is not an issuer,
11underwriter, dealer or controlling person in respect of such
12securities, and who, being the bona fide owner of such
13securities, disposes thereof for his or her own account;
14provided, that such offer or sale is not made directly or
15indirectly for the benefit of the issuer or of an underwriter
16or controlling person.
17    B. Any offer, sale, issuance or exchange of securities of
18the issuer to or with security holders of the issuer except to
19or with persons who are security holders solely by reason of
20holding transferable warrants, transferable options, or
21similar transferable rights of the issuer, if no commission or
22other remuneration is paid or given directly or indirectly for
23or on account of the procuring or soliciting of such sale or
24exchange (other than a fee paid to underwriters based on their
25undertaking to purchase any securities not purchased by

 

 

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1security holders in connection with such sale or exchange).
2    C. Any offer, sale or issuance of securities to any
3corporation, bank, savings bank, savings institution, savings
4and loan association, trust company, insurance company,
5building and loan association, or dealer; to a pension fund,
6pension trust, or employees' profit sharing trust, other
7financial institution or institutional investor, any
8government or political subdivision or instrumentality
9thereof, whether the purchaser is acting for itself or in some
10fiduciary capacity; to any partnership or other association
11engaged as a substantial part of its business or operations in
12purchasing or holding securities; to any trust in respect of
13which a bank or trust company is trustee or co-trustee; to any
14entity in which at least 90% of the equity is owned by persons
15described under subsection C, H, or S of this Section 4; to any
16employee benefit plan within the meaning of Title I of the
17Federal ERISA Act if (i) the investment decision is made by a
18plan fiduciary as defined in Section 3(21) of the Federal ERISA
19Act and such plan fiduciary is either a bank, savings and loan
20association, insurance company, registered investment adviser
21or an investment adviser registered under the Federal 1940
22Investment Advisers Act, or (ii) the plan has total assets in
23excess of $5,000,000, or (iii) in the case of a self-directed
24plan, investment decisions are made solely by persons that are
25described under subsection C, D, H or S of this Section 4; to
26any plan established and maintained by, and for the benefit of

 

 

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1the employees of, any state or political subdivision or agency
2or instrumentality thereof if such plan has total assets in
3excess of $5,000,000; or to any organization described in
4Section 501(c)(3) of the Internal Revenue Code of 1986, any
5Massachusetts or similar business trust, or any partnership, if
6such organization, trust, or partnership has total assets in
7excess of $5,000,000.
8    D. The Secretary of State is granted authority to create by
9rule or regulation a limited offering transactional exemption
10that furthers the objectives of compatibility with federal
11exemptions and uniformity among the states. The Secretary of
12State shall prescribe by rule or regulation the amount of the
13fee for filing any report required under this subsection, but
14the fee shall not be less than the minimum amount nor more than
15the maximum amount established under Section 11a of this Act
16and shall not be returnable in any event.
17    E. Any offer or sale of securities by an executor,
18administrator, guardian, receiver or trustee in insolvency or
19bankruptcy, or at any judicial sale, or at a public sale by
20auction held at an advertised time and place, or the offer or
21sale of securities in good faith and not for the purpose of
22avoiding the provisions of this Act by a pledgee of securities
23pledged for a bona fide debt.
24    F. Any offer or sale by a registered dealer, either as
25principal or agent, of any securities (except face amount
26certificate contracts and investment fund shares) at a price

 

 

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1reasonably related to the current market price of such
2securities, provided:
3        (1) (a) the securities are issued and outstanding;
4            (b) the issuer is required to file reports pursuant
5        to Section 13 or Section 15(d) of the Federal 1934 Act
6        and has been subject to such requirements during the 90
7        day period immediately preceding the date of the offer
8        or sale, or is an issuer of a security covered by
9        Section 12(g)(2)(B) or (G) of the Federal 1934 Act;
10            (c) the dealer has a reasonable basis for believing
11        that the issuer is current in filing the reports
12        required to be filed at regular intervals pursuant to
13        the provisions of Section 13 or Section 15(d), as the
14        case may be, of the Federal 1934 Act, or in the case of
15        insurance companies exempted from Section 12(g) of the
16        Federal 1934 Act by subparagraph 12(g)(2)(G) thereof,
17        the annual statement referred to in Section
18        12(g)(2)(G)(i) of the Federal 1934 Act; and
19            (d) the dealer has in its records, and makes
20        reasonably available upon request to any person
21        expressing an interest in a proposed transaction in the
22        securities, the issuer's most recent annual report
23        filed pursuant to Section 13 or 15(d), as the case may
24        be, of the Federal 1934 Act or the annual statement in
25        the case of an insurance company exempted from Section
26        12(g) of the Federal 1934 Act by subparagraph

 

 

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1        12(g)(2)(G) thereof, together with any other reports
2        required to be filed at regular intervals under the
3        Federal 1934 Act by the issuer after such annual report
4        or annual statement; provided that the making
5        available of such reports pursuant to this
6        subparagraph, unless otherwise represented, shall not
7        constitute a representation by the dealer that the
8        information is true and correct, but shall constitute a
9        representation by the dealer that the information is
10        reasonably current; or
11        (2) (a) prior to any offer or sale, an application for
12        the authorization thereof and a report as set forth
13        under sub-paragraph (d) of this paragraph (2) has been
14        filed by any registered dealer with and approved by the
15        Secretary of State pursuant to such rules and
16        regulations as the Secretary of State may prescribe;
17            (b) the Secretary of State shall have the power by
18        order to refuse to approve any application or report
19        filed pursuant to this paragraph (2) if
20                (i) the application or report does not comply
21            with the provisions of this paragraph (2), or
22                (ii) the offer or sale of such securities would
23            work or tend to work a fraud or deceit, or
24                (iii) the issuer or the applicant has violated
25            any of the provisions of this Act;
26            (c) each application and report filed pursuant to

 

 

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1        this paragraph (2) shall be accompanied by a filing fee
2        and an examination fee in the amount established
3        pursuant to Section 11a of this Act, which shall not be
4        returnable in any event;
5            (d) there shall be submitted to the Secretary of
6        State no later than 120 days following the end of the
7        issuer's fiscal year, each year during the period of
8        the authorization, one copy of a report which shall
9        contain a balance sheet and income statement prepared
10        as of the issuer's most recent fiscal year end
11        certified by an independent certified public
12        accountant, together with such current information
13        concerning the securities and the issuer thereof as the
14        Secretary of State may prescribe by rule or regulation
15        or order;
16            (e) prior to any offer or sale of securities under
17        the provisions of this paragraph (2), each registered
18        dealer participating in the offer or sale of such
19        securities shall provide upon request of prospective
20        purchasers of such securities a copy of the most recent
21        report required under the provisions of sub-paragraph
22        (d) of this paragraph (2);
23            (f) approval of an application filed pursuant to
24        this paragraph (2) of subsection F shall expire 5 years
25        after the date of the granting of the approval, unless
26        said approval is sooner terminated by (1) suspension or

 

 

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1        revocation by the Secretary of State in the same manner
2        as is provided for in subsections E, F and G of Section
3        11 of this Act, or (2) the applicant filing with the
4        Secretary of State an affidavit to the effect that (i)
5        the subject securities have become exempt under
6        Section 3 of this Act or (ii) the applicant no longer
7        is capable of acting as the applicant and stating the
8        reasons therefor or (iii) the applicant no longer
9        desires to act as the applicant. In the event of the
10        filing of an affidavit under either preceding
11        sub-division (ii) or (iii) the Secretary of State may
12        authorize a substitution of applicant upon the new
13        applicant executing the application as originally
14        filed. However, the aforementioned substituted
15        execution shall have no effect upon the previously
16        determined date of expiration of approval of the
17        application. Notwithstanding the provisions of this
18        subparagraph (f), approvals granted under this
19        paragraph (2) of subsection F prior to the effective
20        date of this Act shall be governed by the provisions of
21        this Act in effect on such date of approval; and
22            (g) no person shall be considered to have violated
23        Section 5 of this Act by reason of any offer or sale
24        effected in reliance upon an approval granted under
25        this paragraph (2) after a termination thereof under
26        the foregoing subparagraph (f) if official notice of

 

 

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1        such termination has not been circulated generally to
2        dealers by the Secretary of State and if such person
3        sustains the burden of proof that he or she did not
4        know, and in the exercise of reasonable care, could not
5        have known, of the termination; or
6        (3) the securities, or securities of the same class,
7    are the subject of an existing registration under Section 5
8    of this Act.
9    The exemption provided in this subsection F shall apply
10only if the offer or sale is made in good faith and not for the
11purpose of avoiding any of the provisions of this Act, and only
12if the offer or sale is not made for the direct or indirect
13benefit of the issuer of the securities, or the controlling
14person in respect of such issuer.
15    G. (1) Any offer, sale or issuance of a security, whether
16    to residents or to non-residents of this State, where:
17            (a) all sales of such security to residents of this
18        State (including the most recent such sale) within the
19        immediately preceding 12-month period have been made
20        to not more than 35 persons or have involved an
21        aggregate sales price of not more than $1,000,000;
22            (b) such security is not offered or sold by means
23        of any general advertising or general solicitation in
24        this State; and
25            (c) no commission, discount, or other remuneration
26        exceeding 20% of the sale price of such security, if

 

 

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1        sold to a resident of this State, is paid or given
2        directly or indirectly for or on account of such sales.
3        (2) In computing the number of resident purchasers or
4    the aggregate sales price under paragraph (1) (a) above,
5    there shall be excluded any purchaser or dollar amount of
6    sales price, as the case may be, with respect to any
7    security which at the time of its sale was exempt under
8    Section 3 or was registered under Section 5, 6 or 7 or was
9    sold in a transaction exempt under other subsections of
10    this Section 4.
11        (3) A prospectus or preliminary prospectus with
12    respect to a security for which a registration statement is
13    pending or effective under the Federal 1933 Act shall not
14    be deemed to constitute general advertising or general
15    solicitation in this State as such terms are used in
16    paragraph (1) (b) above, provided that such prospectus or
17    preliminary prospectus has not been sent or otherwise
18    delivered to more than 150 residents of this State.
19        (4) The Secretary of State shall by rule or regulation
20    require the filing of a report or reports of sales made in
21    reliance upon the exemption provided by this subsection G
22    and prescribe the form of such report and the time within
23    which such report shall be filed. Such report shall set
24    forth the name and address of the issuer and of the
25    controlling person, if the sale was for the direct or
26    indirect benefit of such person, and any other information

 

 

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1    deemed necessary by the Secretary of State to enforce
2    compliance with this subsection G. The Secretary of State
3    shall prescribe by rule or regulation the amount of the fee
4    for filing any such report, established pursuant to Section
5    11a of this Act, which shall not be returnable in any
6    event. The Secretary of State may impose, in such cases as
7    he or she may deem appropriate, a penalty for failure to
8    file any such report in a timely manner, but no such
9    penalty shall exceed an amount equal to five times the
10    filing fee. The contents of any such report or portion
11    thereof may be deemed confidential by the Secretary of
12    State by rule or order and if so deemed shall not be
13    disclosed to the public except by order of court or in
14    court proceedings. The failure to file any such report
15    shall not affect the availability of such exemption, but
16    such failure to file any such report shall constitute a
17    violation of subsection D of Section 12 of this Act,
18    subject to the penalties enumerated in Section 14 of this
19    Act. The civil remedies provided for in subsection A of
20    Section 13 of this Act and the civil remedies of rescission
21    and appointment of a receiver, conservator, ancillary
22    receiver or ancillary conservator provided for in
23    subsection F of Section 13 of this Act shall not be
24    available against any person by reason of the failure to
25    file any such report or on account of the contents of any
26    such report.

 

 

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1    H. Any offer, sale or issuance of a security to an
2accredited investor, whether made through a qualified Internet
3portal or otherwise, if no commission or other remuneration is
4paid or given directly or indirectly for soliciting any person
5in this State, except to broker-dealers and agents licensed in
6this State. (1) any natural person who has, or is reasonably
7believed by the person relying upon this subsection H to have,
8a net worth or joint net worth with that person's spouse, at
9the time of the offer, sale or issuance, in excess of
10$1,000,000 excluding the value of a principal residence, or (2)
11any natural person who had, or is reasonably believed by the
12person relying upon this subsection H to have had, an income or
13joint income with that person's spouse, in excess of $200,000
14in each of the two most recent years and who reasonably
15expects, or is reasonably expected to have, an income in excess
16of $200,000 in the current year, or (3) any person that is not
17a natural person and in which at least 90% of the equity
18interest is owned by persons who meet either of the tests set
19forth in clauses (1) or (2) of this subsection H; provided that
20such security is not offered or sold by means of any general
21advertising or general solicitation in this State.
22    I. Any offer, sale or issuance of securities to or for the
23benefit of security holders of any person incident to a vote by
24such security holders pursuant to such person's organizational
25document or any applicable statute of the jurisdiction of such
26person's organization, on a merger, consolidation,

 

 

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1reclassification of securities, or sale or transfer of assets
2in consideration of or exchange for securities of the same or
3another person.
4    J. Any offer, sale or issuance of securities in exchange
5for one or more outstanding securities, claims or property
6interests, or partly in such exchange and partly for cash,
7where such offer, sale or issuance is incident to a
8reorganization, recapitalization, readjustment, composition or
9settlement of a claim, as approved by a court of competent
10jurisdiction of the United States, or any state.
11    K. Any offer, sale or issuance of securities for patronage,
12or as patronage refunds, or in connection with marketing
13agreements by cooperative associations organized exclusively
14for agricultural, producer, marketing, purchasing, or consumer
15purposes; and the sale of subscriptions for or shares of stock
16of cooperative associations organized exclusively for
17agricultural, producer, marketing, purchasing, or consumer
18purposes, if no commission or other remuneration is paid or
19given directly or indirectly for or on account of such
20subscription, sale or resale, and if any person does not own
21beneficially more than 5% of the aggregate amount of issued and
22outstanding capital stock of such cooperative association.
23    L. Offers for sale or solicitations of offers to buy (but
24not the acceptance thereof), of securities which are the
25subject of a pending registration statement filed under the
26Federal 1933 Act and which are the subject of a pending

 

 

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1application for registration under this Act.
2    M. Any offer or sale of preorganization subscriptions for
3any securities prior to the incorporation, organization or
4formation of any issuer under the laws of the United States, or
5any state, or the issuance by such issuer, after its
6incorporation, organization or formation, of securities
7pursuant to such preorganization subscriptions, provided the
8number of subscribers does not exceed 25 and either (1) no
9commission or other remuneration is paid or given directly or
10indirectly for or on account of such sale or sales or issuance,
11or (2) if any commission or other remuneration is paid or given
12directly or indirectly for or on account of such sale or sales
13or issuance, the securities are not offered or sold by any
14means of general advertising or general solicitation in this
15State.
16    N. The execution of orders for purchase of securities by a
17registered salesperson and dealer, provided such persons act as
18agent for the purchaser, have made no solicitation of the order
19to purchase the securities, have no direct interest in the sale
20or distribution of the securities ordered, receive no
21commission, profit, or other compensation other than the
22commissions involved in the purchase and sale of the securities
23and deliver to the purchaser written confirmation of the order
24which clearly identifies the commissions paid to the registered
25dealer.
26    O. Any offer, sale or issuance of securities, other than

 

 

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1fractional undivided interests in an oil, gas or other mineral
2lease, right or royalty, for the direct or indirect benefit of
3the issuer thereof, or of a controlling person, whether through
4a dealer (acting either as principal or agent) or otherwise, if
5the securities sold, immediately following the sale or sales,
6together with securities already owned by the purchaser, would
7constitute 50% or more of the equity interest of any one
8issuer, provided that the number of purchasers is not more than
95 and provided further that no commission, discount or other
10remuneration exceeding 15% of the aggregate sale price of the
11securities is paid or given directly or indirectly for or on
12account of the sale or sales.
13    P. Any offer, sale or issuance of securities (except face
14amount certificate contracts and investment fund shares)
15issued by and representing an interest in an issuer which is a
16business corporation incorporated under the laws of this State,
17the purposes of which are to provide capital and supervision
18solely for the redevelopment of blighted urban areas located in
19a municipality in this State and whose assets are located
20entirely within that municipality, provided: (1) no
21commission, discount or other remuneration is paid or given
22directly or indirectly for or on account of the sale or sales
23of such securities; (2) the aggregate amount of any securities
24of the issuer owned of record or beneficially by any one person
25will not exceed the lesser of $5,000 or 4% of the equity
26capitalization of the issuer; (3) the officers and directors of

 

 

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1the corporation have been bona fide residents of the
2municipality not less than 3 years immediately preceding the
3effectiveness of the offering sheet for the securities under
4this subsection P; and (4) the issuer files with the Secretary
5of State an offering sheet descriptive of the securities
6setting forth:
7        (a) the name and address of the issuer;
8        (b) the title and total amount of securities to be
9    offered;
10        (c) the price at which the securities are to be
11    offered; and
12        (d) such additional information as the Secretary of
13    State may prescribe by rule and regulation.
14    The Secretary of State shall within a reasonable time
15examine the offering sheet so filed and, unless the Secretary
16of State shall make a determination that the offering sheet so
17filed does not conform to the requirements of this subsection
18P, shall declare the offering sheet to be effective, which
19offering sheet shall continue effective for a period of 12
20months from the date it becomes effective. The fee for
21examining the offering sheet shall be as established pursuant
22to Section 11a of this Act, and shall not be returnable in any
23event. The Secretary of State shall by rule or regulation
24require the filing of a report or reports of sales made to
25residents of this State in reliance upon the exemption provided
26by this subsection P and prescribe the form of such report and

 

 

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1the time within which such report shall be filed. The Secretary
2of State shall prescribe by rule or regulation the amount of
3the fee for filing any such report, but such fee shall not be
4less than the minimum amount nor more than the maximum amount
5established pursuant to Section 11a of this Act, and shall not
6be returnable in any event. The Secretary of State may impose,
7in such cases as he or she may deem appropriate, a penalty for
8failure to file any such report in a timely manner, but no such
9penalty shall exceed an amount equal to five times the filing
10fee. The contents of any such report shall be deemed
11confidential and shall not be disclosed to the public except by
12order of court or in court proceedings. The failure to file any
13such report shall not affect the availability of such
14exemption, but such failure to file any such report shall
15constitute a violation of subsection D of Section 12 of this
16Act, subject to the penalties enumerated in Section 14 of this
17Act. The civil remedies provided for in subsection A of Section
1813 of this Act and the civil remedies of rescission and
19appointment of a receiver, conservator, ancillary receiver or
20ancillary conservator provided for in subsection F of Section
2113 of this Act shall not be available against any person by
22reason of the failure to file any such report or on account of
23the contents of any such report.
24    Q. Any isolated transaction, whether effected by a dealer
25or not.
26    R. Any offer, sale or issuance of a security to any person

 

 

HB3091- 20 -LRB099 05991 JLS 26043 b

1who purchases at least $150,000 of the securities being
2offered, where the purchaser's total purchase price does not,
3or it is reasonably believed by the person relying upon this
4subsection R that said purchase price does not, exceed 20
5percent of the purchaser's net worth at the time of sale, or if
6a natural person a joint net worth with that person's spouse,
7for one or any combination of the following: (i) cash, (ii)
8securities for which market quotations are readily available,
9(iii) an unconditional obligation to pay cash or securities for
10which quotations are readily available, which obligation is to
11be discharged within five years of the sale of the securities
12to the purchaser, or (iv) the cancellation of any indebtedness
13owed by the issuer to the purchaser; provided that such
14security is not offered or sold by means of any general
15advertising or general solicitation in this State.
16    S. Any offer, sale or issuance of a security to any person
17who is, or who is reasonably believed by the person relying
18upon this subsection S to be, a director, executive officer, or
19general partner of the issuer of the securities being offered
20or sold, or any director, executive officer, or general partner
21of a general partner of that issuer. For purposes of this
22subsection S, "executive officer" shall mean the president, any
23vice president in charge of a principal business unit, division
24or function (such as sales, administration or finance), any
25other officer who performs a policy making function, or any
26other person who performs similar policy making functions for

 

 

HB3091- 21 -LRB099 05991 JLS 26043 b

1the issuer. Executive officers of subsidiaries may be deemed
2executive officers of the issuer if they perform such policy
3making functions for the issuer.
4    A document being filed pursuant to this Section 4 shall be
5deemed filed, and any fee paid pursuant to this Section 4 shall
6be deemed paid, upon the date of actual receipt thereof by the
7Secretary of State.
8    T. An offer or sale of a security by an issuer that is
9organized and, as of the time of the offer or sale, in good
10standing under the laws of the State of Illinois, provided:
11        (1) The offering meets all of the requirements of the
12    federal exemption for intrastate offerings provided in
13    Section 3(a)(11) of the Securities Act of 1933 (15 U.S.C.
14    77c(a)(11)) and Rule 147 adopted under the Securities Act
15    of 1933 (17 CFR 230.147).
16        (2) The aggregate purchase price of all securities sold
17    by an issuer in reliance on the exemption under this
18    subsection, within any 12-month period, does not exceed
19    $20,000,000; unless the issuer has been in business for
20    more than one full consecutive calendar year period and has
21    made available (directly, or through a qualified Internet
22    portal) to each prospective purchaser and the Secretary of
23    State, copies of its most recent annual financial
24    statements which have been audited by an independent
25    auditor and certified by such auditor, and by one or more
26    senior officers of the issuer, as fairly, completely and

 

 

HB3091- 22 -LRB099 05991 JLS 26043 b

1    accurately presenting the financial condition of the
2    issuer, in all material respects, as of the dates indicated
3    therein. In 2019 and every 5th year thereafter, the
4    Secretary of State shall cumulatively adjust the dollar
5    limitations in this paragraph (2) to reflect the change in
6    the Consumer Price Index for all Urban Consumers published
7    by the United States Department of Labor, Bureau of Labor
8    Statistics, rounding each dollar limitation to the nearest
9    $500,000.
10        (3) The aggregate amount sold by an issuer to any
11    purchaser (other than an accredited investor or an
12    experienced investor) in an offering of securities made in
13    reliance on the exemption provided in this subsection,
14    within any consecutive 12-month period, does not exceed the
15    greater of $10,000 or 10% of the purchaser's expected
16    annual income in the year of sale. With respect to whether
17    a purchaser has, or has not, exceeded the maximum purchase
18    limitation provided in this paragraph (3) during the
19    applicable 12-month period, an issuer may rely on the
20    written self-representation of the purchaser, provided
21    that the issuer has no knowledge, or other reason to
22    believe, that such limitation has been exceeded by the
23    purchaser.
24        With respect to satisfaction of the foregoing, an
25    issuer may rely on the written self-representation of a
26    purchaser as to whether such purchaser has, or has not,

 

 

HB3091- 23 -LRB099 05991 JLS 26043 b

1    exceeded such applicable maximum purchase limitation
2    during the applicable 12-month period, provided the issuer
3    has no knowledge, or other reason to believe, that such
4    limitation has been exceeded by the purchaser.
5        (4) The issuer:
6            (a) establishes a minimum and a maximum amount of
7        securities to be sold and a deadline for selling (or
8        otherwise getting commitments for the purchase of) the
9        established minimum amount of securities;
10            (b) conspicuously discloses the information
11        required pursuant to subparagraph (a) in any agreement
12        evidencing a purchaser's subscription to purchase
13        securities of the issuer and that the purchaser may
14        cancel such commitment at any time upon notice to the
15        issuer and without penalty, if the minimum target
16        offering amount is not raised on or before the proposed
17        deadline; and
18            (c) enters into an escrow agreement with a
19        qualified escrowee providing that, at a minimum:
20                (i) all funds to be received in connection with
21            the proposed offering shall be delivered to, and
22            held by, the qualified escrowee pursuant to the
23            terms of the escrow agreement; and
24                (ii) the issuer shall not have access to the
25            escrow funds, or any portion thereof, until the
26            aggregate funds received by the qualified escrowee

 

 

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1            in connection with the proposed offering equals or
2            exceeds the minimum amount of securities to be sold
3            as established by the issuer.
4        (5) The issuer shall have made available to each
5    prospective purchaser and the Secretary of State, copies of
6    its most recent financial statements personally certified
7    by one or more senior officers of the issuer as fairly,
8    completely and accurately presenting the financial
9    condition of the issuer, in all material respects, as of
10    the dates indicated therein.
11        (6) No commission or other remuneration is paid or
12    given directly or indirectly to any person or entity
13    (including, without limitation, any qualified Internet
14    portal) for soliciting any person in this State, except to
15    broker-dealers and agents licensed in this State.
16        (7) Not less than 5 days before the earlier of the
17    first sale of securities made in reliance on the exemption
18    provided in this subsection T, or the use of any general
19    solicitation with respect thereto (other than a general
20    announcement made by (or on behalf of) an issuer in
21    accordance with paragraph (13) of this subsection T), the
22    issuer:
23            (a) files a notice with the Secretary of State, in
24        a written or electronic form as prescribed by the
25        Secretary of State (which form the Secretary of State
26        shall make available on the Secretary of State's

 

 

HB3091- 25 -LRB099 05991 JLS 26043 b

1        Internet website), which specifies that the issuer
2        intends to make an offering of securities in reliance
3        on the exemption provided in this subsection T and
4        which includes the names and addresses of: (i) the
5        issuer; (ii) all persons or qualified Internet portals
6        that will sell or offer to sell the security on behalf
7        of the issuer; and (iii) the qualified escrowee engaged
8        to escrow the funds from the subject offering; further,
9        for so long as the offering remains open, the issuer
10        shall file a new notice with the Secretary of State
11        (without additional charge, provided such notice is
12        identified as an amendment to a previously filed
13        notice) if any information previously provided has
14        changed or has since become erroneous, false, or
15        materially misleading;
16            (b) delivers a fully executed copy of the escrow
17        agreement required pursuant to subparagraph (c) of
18        paragraph (4); further, for so long as the offering
19        remains open, the issuer shall promptly deliver to the
20        Secretary of State a fully executed copy of all
21        amendments to the escrow agreement; the information
22        provided pursuant to this subparagraph (b) shall not be
23        a public record and shall not be available for public
24        inspection; and
25            (c) pays the notification filing fee established
26        under Section 11a of this Act.

 

 

HB3091- 26 -LRB099 05991 JLS 26043 b

1        The Secretary of State shall, within a reasonable time,
2    examine the materials filed pursuant to this paragraph (7)
3    and, unless the Secretary of State notifies the issuer (or
4    the qualified Internet portal, to the extent used), on or
5    before the initial commencement date of the offering, of
6    his or her determination that any one or more of the filed
7    materials fails to conform to the requirements of this
8    subsection T, the proposed offering shall be deemed
9    permitted.
10        The Secretary of State shall prescribe by rule the
11    amount of the fee for filing the notice required in
12    subparagraph (a), established pursuant to Section 11a of
13    this Act, which shall not be returnable in any event. The
14    Secretary of State may impose, in such cases as he or she
15    may deem appropriate, a penalty for failure to file any
16    such notice in a timely manner, but no such penalty shall
17    exceed an amount equal to 5 times the filing fee. The
18    contents of any such notice or portion thereof may be
19    deemed confidential by the Secretary of State by rule or
20    order and if so deemed shall not be disclosed to the public
21    except by order of court or in court proceedings. The
22    failure to file any such notice does not affect the
23    availability of such exemption, but such failure to file
24    any such report constitutes a violation of subsection D of
25    Section 12 of this Act, subject to the penalties in Section
26    14 of this Act. The civil remedies provided in subsection A

 

 

HB3091- 27 -LRB099 05991 JLS 26043 b

1    of Section 13 of this Act and the civil remedies of
2    rescission and appointment of a receiver, conservator,
3    ancillary receiver, or ancillary conservator provided in
4    subsection F of Section 13 of this Act are not available
5    against any person by reason of the failure to file any
6    such report or on account of the contents of any such
7    report.
8        (8) The issuer provides a copy of the escrow agreement,
9    the disclosure document, and all other documents or
10    information then provided to the Secretary of State under
11    subparagraph (a) or (b) of paragraph (7) to each
12    prospective purchaser at the time the offer of securities
13    is made. Further, for so long as the offering remains open,
14    the issuer is required to promptly provide a copy to each
15    prospective and completed purchaser of all replacements,
16    modifications, attachments, updates, or other information
17    provided to the Secretary of State pursuant to subparagraph
18    (a) or (b) of paragraph (7). An issuer may satisfy the
19    reporting requirement of this paragraph (8) by making the
20    information available, in a printable format, on its own
21    website or through a qualified Internet portal provided
22    such information is promptly made available by the issuer
23    and the issuer promptly alerts each prospective purchaser
24    or completed purchaser of the availability of the
25    information.
26        (9) All payments for purchase of securities offered

 

 

HB3091- 28 -LRB099 05991 JLS 26043 b

1    pursuant to the exemption provided under this subsection T
2    are made directly to, and held by, the qualified escrowee
3    identified in the escrow agreement required pursuant to
4    subparagraph (c) of paragraph (4).
5        (10) The issuer includes (and, to the extent a
6    qualified Internet portal is used, the qualified Internet
7    portal includes) the following legend conspicuously on the
8    cover page of any disclosure document delivered to a
9    prospective purchaser or to which a prospective purchaser
10    has been granted electronic access:
11            IN MAKING AN INVESTMENT DECISION, INVESTORS MUST
12        RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE
13        TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
14        INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED
15        BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
16        DIVISION OR OTHER REGULATORY AUTHORITY. FURTHERMORE,
17        THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
18        ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT.
19        ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
20        OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
21        ON TRANSFERABILITY AND RESALE AND MAY NOT BE
22        TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
23        SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE
24        STATE SECURITIES LAWS, OR PURSUANT TO REGISTRATION OR
25        EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
26        THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF

 

 

HB3091- 29 -LRB099 05991 JLS 26043 b

1        THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
2        (11) The issuer (directly or through a qualified
3    Internet portal) requires each purchaser to certify, in
4    writing or electronically, as follows:
5            I UNDERSTAND AND ACKNOWLEDGE THAT:
6            I am a resident of the State of Illinois.
7            I am investing in a high-risk, speculative
8        business venture. I may lose all of my investment and I
9        can afford the loss of my investment.
10            This offering has not been reviewed or approved by
11        any State or federal securities commission or division
12        or other regulatory authority and no such person or
13        authority has confirmed the accuracy or determined the
14        adequacy of any disclosure made to me relating to this
15        offering.
16            The securities I am acquiring in this offering are
17        illiquid, there is no ready market for the sale of such
18        securities, it may be difficult or impossible for me to
19        sell or otherwise dispose of this investment, and,
20        accordingly, I may be required to hold this investment
21        indefinitely.
22            I may be subject to tax on my share of the taxable
23        income and losses of the company, whether or not I have
24        sold or otherwise disposed of my investment or received
25        any dividends or other distributions from the company.
26            ........ (Signature)

 

 

HB3091- 30 -LRB099 05991 JLS 26043 b

1        (12) The issuer (directly or through a qualified
2    Internet portal) obtains from each purchaser of a security
3    offered under this subsection T evidence that the purchaser
4    is a resident of this State and, if applicable, is an
5    experienced investor or accredited investor. Without
6    limiting the generality of the foregoing, and not to the
7    exclusion of other reasonable methods which may be used by
8    the issuer in connection with the foregoing, an issuer may
9    rely:
10            (a) on a copy of a valid driver's license (or
11        third-party verification based on a purchaser's valid
12        driver's license information), or verification
13        (independently or by a third-party) of the state of
14        origination of the purchaser's Internet Protocol (IP)
15        address, for purposes of establishing an individual
16        purchaser's residence, provided the issuer has no
17        knowledge, or other reason to believe, that the
18        individual purchaser is not a resident of the State;
19        and
20            (b) on representations signed, in writing or
21        electronically, by a purchaser for purposes of
22        establishing such purchaser's status as an experienced
23        investor and identifying each of the requirements of
24        Section 2.37 which apply to such purchaser (and, with
25        respect to subsections (c), (d), (e), or (g) of Section
26        2.37, as applicable, a description of the applicable

 

 

HB3091- 31 -LRB099 05991 JLS 26043 b

1        license, advanced degree, or job position), provided
2        the issuer has no knowledge, or other reason to
3        believe, that such representations are, or may be,
4        false in whole or in part; and
5            (c) on representations signed, in writing or
6        electronically, by a purchaser for purposes of
7        establishing such purchaser's status as an accredited
8        investor, provided the issuer has no knowledge, or
9        other reason to believe, that such representations
10        are, or may be, false in whole or in part.
11        (13) The issuer (and to the extent a qualified Internet
12    portal is used, such qualified Internet portal) takes
13    commercially reasonable measures to limit access to any
14    information concerning the offer or sale of the subject
15    securities to residents of this State. Notwithstanding the
16    foregoing, an issuer is permitted to disseminate (and is
17    not deemed in violation of this paragraph (13) for
18    disseminating) through a qualified Internet portal or
19    otherwise a general announcement regarding the issuer's
20    intent to make an offer in reliance on the exemption under
21    this subsection T, so long as such general announcement
22    contains a statement making it clear that the offering is
23    directed only to residents of this State and the
24    information provided in such general announcement is
25    limited only to one or more of the following:
26            (a) a statement that the issuer is conducting an

 

 

HB3091- 32 -LRB099 05991 JLS 26043 b

1        offering in reliance on the exemption under this
2        subsection T;
3            (b) the name and web address of a qualified
4        Internet portal (if any) conducting the offering;
5            (c) the minimum and maximum amount of the offering;
6        or
7            (d) factual information about the legal identity
8        and business location of the issuer, limited to: the
9        name of the issuer; the address, phone number, and
10        website (if any) of the issuer; a one sentence
11        description of the business of the issuer; or the
12        contact information of a representative of the issuer.
13        (14) The issuer (and to the extent a qualified Internet
14    portal is used, the entity maintaining such qualified
15    Internet portal) reasonably believes that all purchasers
16    are purchasing for investment and not for sale in
17    connection with a distribution of the security.
18        (15) Until no securities issued under this exemption
19    are outstanding, the issuer shall provide quarterly to each
20    purchaser, free of charge, internally or accountant
21    prepared quarterly financial statements of the issuer,
22    certified by a senior officer of the issuer as fairly,
23    completely and accurately presenting the financial
24    condition of the issuer, in all material respects, as of
25    the dates indicated therein. An issuer may satisfy the
26    reporting requirement of this paragraph (15) by making the

 

 

HB3091- 33 -LRB099 05991 JLS 26043 b

1    information available on its own website or through a
2    qualified Internet portal if the information is made
3    available within 45 days after the end of each fiscal
4    quarter, the information remains available until the
5    succeeding quarterly report is issued, and the issuer
6    promptly alerts each purchaser of the availability of the
7    information.
8        (16) The issuer (and to the extent a qualified Internet
9    portal is used, such qualified Internet portal) maintains
10    records of all offers and sales of securities made pursuant
11    to the exemption granted by this subsection T and provides
12    ready access to such records to the Secretary of State,
13    upon reasonable prior written request.
14        (17) The issuer is not, either before or as a result of
15    the offering:
16            (a) an investment company, as defined in Section 3
17        of the Investment Company Act of 1940 (15 U.S.C.
18        80a-3), as amended and in effect (unless the issuer
19        qualifies for exclusion from such definition pursuant
20        to one or more of the exceptions provided in Section
21        3(c) of the Investment Company Act of 1940, any other
22        provision of the Investment Company Act of 1940, or any
23        administrative rule or regulation promulgated with
24        respect to the Investment Company Act of 1940 or in
25        connection therewith); or
26            (b) subject to the reporting requirements of

 

 

HB3091- 34 -LRB099 05991 JLS 26043 b

1        Section 13 or 15(d) of the Securities Exchange Act of
2        1934 (15 U.S.C. 78m or 15 U.S.C. 78o(d).
3        (18) Neither the issuer, nor any person affiliated with
4    the issuer (either before or as a result of the offering),
5    nor the offering itself, nor the qualified Internet portal
6    (to the extent used) is subject to disqualification
7    established by the Secretary of State by rule or contained
8    in the Securities Act of 1933 (15 U.S.C. 77c(a)(11)) and
9    Rule 147 adopted under the Securities Act of 1933 (17 CFR
10    230.147), unless both of the following are met:
11            (a) on a showing of good cause and without
12        prejudice to any other action by the Secretary of
13        State, the Secretary of State determines that it is not
14        necessary under the circumstances that an exemption is
15        denied; and
16            (b) the issuer establishes that it made a factual
17        inquiry into whether any disqualification existed
18        under this paragraph (18), but did not know, and in the
19        exercise of reasonable care could not have known, that
20        a disqualification existed under this paragraph (18);
21        the nature and scope of the requisite inquiry will vary
22        based on the circumstances of the issuer and the other
23        offering participants.
24(Source: P.A. 90-70, eff. 7-8-97; 91-809, eff. 1-1-01.)
 
25    (815 ILCS 5/8d new)

 

 

HB3091- 35 -LRB099 05991 JLS 26043 b

1    Sec. 8d. Offerings made through qualified Internet
2portals. An issuer may make an offering or sale of securities
3pursuant to subsection T of Section 4 of this Act through the
4use of one or more qualified Internet portals, subject to the
5following:
6        (a) The Internet portal shall at all times be owned by
7    a corporation or other legal entity which is either
8    organized under the laws of, or is otherwise qualified to
9    do business in, this State and the entity shall be in good
10    standing in this State as of the date of the proposed
11    offering of securities.
12        (b) The Internet portal shall establish and maintain
13    commercially reasonable measures to limit access to any
14    information concerning an offer or sale of the subject
15    securities (other than information permitted of the type
16    permitted in connection with a general announcement by the
17    issuer pursuant to paragraph (13) of subsection T of
18    Section 4) to only residents of this State. Without
19    limiting the generality of the foregoing, and not to the
20    exclusion of other reasonable methods which may be utilized
21    by the Internet portal in connection with the foregoing, an
22    Internet portal may rely:
23            (i) for purposes of access to offering materials in
24        connection with a proposed offering, a representation
25        signed, in writing or electronically, by an individual
26        prospective purchaser, or verification (independently

 

 

HB3091- 36 -LRB099 05991 JLS 26043 b

1        or by a third-party) of the state of origination of the
2        purchaser's Internet Protocol (IP) address, for
3        purposes of establishing such purchaser's residence,
4        provided the entity maintaining the Internet portal
5        has no knowledge, or other reason to believe, that the
6        individual purchaser is not a resident of the State;
7        and
8            (ii) in connection with an actual purchase and sale
9        of a security pursuant to a proposed offering, on a
10        copy of a valid driver's license (or third-party
11        verification based on a purchaser's valid driver's
12        license information), or verification (independently
13        or by a third-party) of the state of origination of the
14        purchaser's Internet Protocol (IP) address, for
15        purposes of establishing an individual purchaser's
16        residence, provided the entity maintaining the
17        Internet portal has no knowledge, or other reason to
18        believe, that the individual purchaser is not a
19        resident of the State.
20        (c) The Internet portal shall establish and maintain
21    (during the time the offering appears on the Internet
22    portal) a secure method of communication through the
23    Internet portal itself that will permit potential
24    investors to communicate with one another and with
25    representatives of the issuer about the offering. Further,
26    the foregoing communications must be made visible and

 

 

HB3091- 37 -LRB099 05991 JLS 26043 b

1    accessible (at all times during the time the offering
2    appears on the Internet portal) to all those with access to
3    the offering materials of issuer.
4        (d) The Internet portal shall establish and maintain a
5    secure method of communication through the Internet portal
6    itself that will permit the issuer and purchasers to
7    communicate with one another.
8        (e) The Internet portal:
9            (1) shall be a registered broker-dealer under the
10        Securities Exchange Act of 1934 (15 U.S.C. 78o);
11            (2) shall be a funding portal registered under the
12        Securities Act of 1933 (15 U.S.C. 77d-1) and the
13        Securities and Exchange Commission has adopted rules
14        under authority of Section 3(h) of the Securities
15        Exchange Act of 1934 (15 U.S.C. 78c) and Section 304 of
16        the Jumpstart Our Business Startups Act (P.L. 112-106)
17        governing funding portals;
18            (3) shall be a dealer or an investment advisor
19        registered and in good standing under this Act as of
20        the date of any offer or sale of securities made
21        through the Internet portal; or
22            (4) shall, to the extent it meets the
23        qualifications for exemption from registration
24        pursuant to subsection (g) of this Section:
25                (A) file, not later than 30 days before the
26            date of the first offer or sale of securities made

 

 

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1            within this State, an application for
2            qualification (or renewal of qualification, as
3            applicable) as a qualified Internet portal with
4            the Secretary of State, in writing or in electronic
5            form as prescribed by the Secretary of State, which
6            the Secretary of State shall make available as an
7            electronic document on the Secretary of State's
8            Internet website, containing such information and
9            required deliveries as specified therein; and
10                (B) pay the application filing fee established
11            under Section 11a of this Act; the Secretary of
12            State shall, within a reasonable time, examine the
13            filed application and other materials filed and,
14            unless the Secretary of State notifies the
15            Internet portal of the rejection of such
16            application (or renewal application, as
17            applicable) on or before the initial commencement
18            date of the offering, the Internet portal shall be
19            deemed to be a qualified Internet portal for
20            purposes of this Act.
21        (f) If any change occurs in the information submitted
22    by, or on behalf of, an Internet portal to the Secretary of
23    State, an Internet portal shall notify the Secretary of
24    State within 30 days after such change occurs and shall
25    provide the Secretary of State with such additional
26    information (if any) requested by the Secretary of State in

 

 

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1    connection therewith.
2        (g) Notwithstanding anything contained in this Act to
3    the contrary, neither an Internet portal nor its owning or
4    operating entity is required to register as a dealer or an
5    investment advisor under this Act if each of the following
6    applies with respect to the Internet portal and its owning
7    or operating entity:
8            (1) It does not solicit purchases, sales, or offers
9        to buy the securities offered or displayed on the
10        Internet portal.
11            (2) It does not collect or hold funds in connection
12        with any purchase, sale, or offer to buy any securities
13        offered or displayed on the Internet portal.
14            (3) It does not compensate employees, agents, or
15        other persons for the solicitation or based on the sale
16        of securities displayed or referenced on the Internet
17        portal.
18            (4) It is not compensated based on the amount of
19        securities sold.
20            (5) The fee it charges an issuer for an offering of
21        securities on the Internet portal is a fixed amount for
22        each offering, a variable amount based on the length of
23        time that the securities are offered on the Internet
24        portal, a variable amount based on the total proposed
25        offering amount, or any combination of such fixed and
26        variable amounts.

 

 

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1            (6) It does not offer investment advice or
2        recommendations; however, an Internet portal is not
3        deemed to be offering investment advice or
4        recommendations simply by virtue of:
5                (A) selecting transactions in which the
6            Internet portal shall serve as an intermediary;
7                (B) establishing reasonable selection criteria
8            for an issuer to meet in order to establish an
9            offer or sale of securities through the Internet
10            portal;
11                (C) establishing reasonable selection criteria
12            for a potential purchaser to meet in order to
13            participate in an offer or sale of securities made
14            through the Internet portal; or
15                (D) terminating an issuer transaction at any
16            time before the first sale of the securities of
17            such issuer if the Internet portal determines such
18            action is appropriate, after reasonable due
19            diligence, to protect potential purchasers and the
20            Internet portal is able to direct the qualified
21            escrowee to return all funds then provided by
22            potential purchasers, if any.
23            (7) It does not engage in such other activities as
24        the Secretary of State, by rule, determines are
25        prohibited of such an Internet portal.
 

 

 

HB3091- 41 -LRB099 05991 JLS 26043 b

1    (815 ILCS 5/11a)  (from Ch. 121 1/2, par. 137.11a)
2    Sec. 11a. Fees.
3    (1) The Secretary of State shall by rule or regulation
4impose and shall collect reasonable fees necessary for the
5administration of this Act including, but not limited to, fees
6for the following purposes:
7        (a) filing an application pursuant to paragraph (2) of
8    subsection F of Section 4 of this Act;
9        (b) examining an application and report pursuant to
10    paragraph (2) of subsection F of Section 4 of this Act;
11        (c) filing a report pursuant to subsection G of Section
12    4 of this Act, determined in accordance with paragraph (4)
13    of subsection G of Section 4 of this Act;
14        (d) examining an offering sheet pursuant to subsection
15    P of Section 4 of this Act;
16        (e) filing a report pursuant to subsection P of Section
17    4, determined in accordance with subsection P of Section 4
18    of this Act;
19        (f) examining an application to register securities
20    under subsection B of Section 5 of this Act;
21        (g) examining an amended or supplemental prospectus
22    filed pursuant to the undertaking required by
23    sub-paragraph (i) of paragraph (2) of subsection B of
24    Section 5 of this Act;
25        (h) registering or renewing registration of securities
26    under Section 5, determined in accordance with subsection C

 

 

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1    of Section 5 of this Act;
2        (i) registering securities in excess of the amount
3    initially registered, determined in accordance with
4    paragraph (2) of subsection C of Section 5 of this Act;
5        (j) failure to file timely an application for renewal
6    under subsection E of Section 5 of this Act;
7        (k) failure to file timely any document or information
8    required under Section 5 of this Act;
9        (l) examining an application to register face amount
10    certificate contracts under subsection B of Section 6 of
11    this Act;
12        (m) examining an amended or supplemental prospectus
13    filed pursuant to the undertaking required by
14    sub-paragraph (f) of paragraph (2) of subsection B of
15    Section 6 of this Act;
16        (n) registering or renewing registration of face
17    amount certificate contracts under Section 6 of this Act;
18        (o) amending a registration of face amount certificate
19    contracts pursuant to subsection E of Section 6 of this Act
20    to add any additional series, type or class of contract;
21        (p) failure to file timely an application for renewal
22    under subsection F of Section 6 of this Act;
23        (q) adding to or withdrawing from deposits with respect
24    to face amount certificate contracts pursuant to
25    subsection H of Section 6, a transaction charge payable at
26    the times and in the manner specified in subsection H of

 

 

HB3091- 43 -LRB099 05991 JLS 26043 b

1    Section 6 (which transaction charge shall be in addition to
2    the annual fee called for by subsection H of Section 6 of
3    this Act);
4        (r) failure to file timely any document or information
5    required under Section 6 of this Act;
6        (s) examining an application to register investment
7    fund shares under subsection B of Section 7 of this Act;
8        (t) examining an amended or supplemental prospectus
9    filed pursuant to the undertaking required by
10    sub-paragraph (f) of paragraph (2) of subsection B of
11    Section 7 of this Act;
12        (u) registering or renewing registration of investment
13    fund shares under Section 7 of this Act;
14        (v) amending a registration of investment fund shares
15    pursuant to subsection D of Section 7 of this Act to
16    register an additional class or classes of investment fund
17    shares;
18        (w) failure to file timely an application for renewal
19    under paragraph (l) of subsection G of Section 7 of this
20    Act;
21        (x) examining an application for renewal of
22    registration of investment fund shares under paragraph (2)
23    of subsection G of Section 7 of this Act;
24        (y) failure to file timely any document or information
25    required under Section 7 of this Act;
26        (z) filing an application for registration or

 

 

HB3091- 44 -LRB099 05991 JLS 26043 b

1    re-registration of a dealer or limited Canadian dealer
2    under Section 8 of this Act for each office in this State;
3        (aa) in connection with an application for the
4    registration or re-registration of a salesperson under
5    Section 8 of or this Act, for the following purposes:
6            (i) filing an application;
7            (ii) a Securities Audit and Enforcement Fund fee;
8        and
9            (iii) a notification filing of federal covered
10        investment advisers;
11        (bb) in connection with an application for the
12    registration or re-registration of an investment adviser
13    under Section 8 of this Act;
14        (cc) failure to file timely any document or information
15    required under Section 8 of this Act;
16        (dd) filing a consent to service of process under
17    Section 10 of this Act;
18        (ee) issuing a certificate pursuant to subsection B of
19    Section 15 of this Act;
20        (ff) issuing a certified copy pursuant to subsection C
21    of Section 15 of this Act;
22        (gg) issuing a non-binding statement pursuant to
23    Section 15a of this Act;
24        (hh) filings by Notification under Section 2a;
25        (ii) notification filing of federal Regulation D,
26    Section 506 offering under the Federal 1933 Act;

 

 

HB3091- 45 -LRB099 05991 JLS 26043 b

1        (jj) notification filing of securities and closed-end
2    investment company securities;
3        (kk) notification filing of face amount certificate
4    contracts;
5        (ll) notification filing of open-end investment
6    company securities;
7        (mm) filing a report pursuant to subsection D of
8    Section 4 of this Act;
9        (nn) in connection with the filing of an application
10    for registration or re-registration of an investment
11    adviser representative under subsection D of Section 8 of
12    this Act; .
13        (oo) filing a notice pursuant to paragraph (6) of
14    subsection T of Section 4 of this Act; and
15        (pp) applying for qualification, or renewing
16    qualification, as a qualified Internet portal pursuant to
17    paragraph (iv) of subsection (b) of Section 8d of this Act.
18    (2) The Secretary of State may, by rule or regulation,
19raise or lower any fee imposed by, and which he or she is
20authorized by law to collect under, this Act.
21(Source: P.A. 90-70, eff. 7-8-97; 91-357, eff. 7-29-99; revised
2212-11-14.)
 
23    (815 ILCS 5/18.1)
24    Sec. 18.1. Additional fees. In addition to any other fee
25that the Secretary of State may impose and collect pursuant to

 

 

HB3091- 46 -LRB099 05991 JLS 26043 b

1the authority contained in Sections 4, 8, and 11a of this Act,
2beginning on July 1, 2003 the Secretary of State shall also
3collect the following additional fees:
 
4Securities offered or sold under the Uniform
5Limited Offering Exemption Pursuant to
6Section 4.D of the Act............................$100
7Securities offered or sold under the Uniform
8Limited Offering Exemption pursuant to subsection
9T of Section 4 of this Act. $100
10Registration and renewal of a dealer..............$300
11Registration and renewal of a qualified Internet
12portal. $300
13Registration and renewal of an investment adviser.$200
14Federal covered investment adviser notification
15filing and annual notification filing.............$200
16Registration and renewal of a salesperson.........$75
17Registration and renewal of an investment adviser
18representative and a federal covered
19investment adviser representative.................$75
20    Investment fund shares notification filing and annual
21notification filing: $800 plus $80 for each series, class, or
22portfolio.
23    All fees collected by the Secretary of State pursuant to
24this amendatory Act of the 93rd General Assembly shall be
25deposited into the General Revenue Fund in the State treasury.

 

 

HB3091- 47 -LRB099 05991 JLS 26043 b

1(Source: P.A. 93-32, eff. 7-1-03.)

 

 

HB3091- 48 -LRB099 05991 JLS 26043 b

1 INDEX
2 Statutes amended in order of appearance
3    815 ILCS 5/2.34 new
4    815 ILCS 5/2.35 new
5    815 ILCS 5/2.36 new
6    815 ILCS 5/2.37 new
7    815 ILCS 5/4from Ch. 121 1/2, par. 137.4
8    815 ILCS 5/8d new
9    815 ILCS 5/11afrom Ch. 121 1/2, par. 137.11a
10    815 ILCS 5/18.1