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Blue Sky Q&A, Regulation D Rule 506 Offering: North Carolina
Practical Law Article 3-526-7021 (Approx. 4 pages)
Blue Sky Q&A, Regulation D Rule 506 Offering: North Carolina
by Practical Law Corporate & Securities
| Law stated as of 31 Jul 2018 • North Carolina |
A Q&A guide for North Carolina state blue sky filings for unregistered offerings under Rule 506 of Regulation D under the Securities Act. This is one of a series of state Q&A guides providing key information for issuers making state-level NSMIA notice filings for a Rule 506 offering, including filing deadlines, mailing addresses, state statutory authority and filing fees. These guides should be used together with Standard Document, Blue Sky Filing Cover Letter, Regulation D Rule 506 Offering.
1. What is the deadline for the blue sky filing in this state?
The filing must be made within 15 days after the first sale of securities in the state.
2. What state agency regulates securities offerings in this state? What is the mailing address and telephone number for the state securities regulator?
The state securities regulator in North Carolina is the Securities Division of the North Carolina Department of the Secretary of State.
Securities Division
North Carolina Department of the Secretary of State
2 South Salisbury Street
Raleigh, NC 27601
(919) 814-5400
3. What is the statutory authority under which the blue sky filing must be made?
The filing requirement is set out at Section 78A-31(b) of the North Carolina Securities Act (N.C.G.S.A. § 78A-31(b)) and Rule .1211 thereunder (18 NCAC 6A.1211).
Additional information can be found in Informational Bulletin, State filing requirements for Issuers Relying on the Securities Act of 1933, Regulation D, Rule 506 beginning March 16, 2009 (March 16, 2009).
4. Does a notice on Form D have to be filed with the state securities regulator?
A notice on Form D must be filed. See Practice Note, Form D: Notice of Exempt Offering of Securities.
5. Does the state participate in the Electronic Filing Depository (EFD) system established by the North American Securities Administrators Association (NASAA) and, if so, is the filer's use of the EFD system optional or mandatory?
North Carolina participates in the EFD system, but filers are not required to use the EFD at this time. Filers may submit the Form D and pay the filing fee by mail or through the EFD. This Q&A guide will be updated as appropriate when North Carolina announces its participation in the EFD system.
6. Does a separate consent to service of process have to be filed with the state authorities? If so, what is the identity of the designated appointee?
Most states require a non-resident issuer to consent to having the appropriate state authority designated to receive service of process on its behalf for any actions arising out of violations of the blue sky law of that state. The electronic Form D includes a combined federal-state consent to service of process that was intended to eliminate the need to file a Form U-2, Uniform Consent to Service of Process at the state level (see SEC Release No. 33-8891 (Feb. 6, 2008), at Part II.A.6). However, there are still some states that, because of their laws, continue to require that issuers submit a separate Form U-2, although the trend is in the direction of eliminating this redundant filing requirement. See Practice Note, Form D: Notice of Exempt Offering of Securities.
In North Carolina there is no requirement to file a separate consent to service of process.
7. Is there a filing fee? If so, what is the amount and who is the payee?
A filing fee of $350 (flat rate) is payable at the time of filing. The fee is payable to the Office of the Secretary of State of North Carolina.
The information in this Blue Sky Q&A was prepared in consultation with F. Lee Liebolt, Jr. Mr. Liebolt practices corporate and securities law in New York.