59.055 Conditions of offer and sale of securities. It is unlawful for any person to offer or sell any security in this state, unless:
(1) The security is registered and the offer or sale is not in violation of any rule or order of the Director of the Department of Consumer and Business Services or any condition, limitation or restriction imposed by the director upon such registration;
(2) The security is exempt under ORS 59.025 or the sale is exempt under ORS 59.035; or
(3) The security is a federal covered security for which a notice has been filed and fees have been paid under ORS 59.049. [1967 c.537 §7; 1997 c.772 §4]
59.035 Transactions exempt from registration. The following transactions are exempt from ORS 59.049 and 59.055 if they are not part of an attempt to evade fraudulently any provision of the Oregon Securities Law:
(1) Any transaction by a sheriff, marshal or court appointed fiduciary.
(2) An isolated nonissuer transaction in this state, whether effected through a broker-dealer or not.
(3) Any transaction by an issuer in its securities pursuant to a pro rata offering to its existing security holders, if:
(a) No commission or remuneration, other than a standby fee, is paid or given directly or indirectly in connection with the transaction; and
(b) The issuer has not had an effective registration under the Oregon Securities Law nor has used this exemption within one year prior to the date of the offering or sale.
(4) Any offer, sale, transfer or delivery of securities to a bank, savings institution, trust company, insurance company, investment company, pension or profit-sharing trust, or other financial institution or institutional buyer (including but not limited to the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration, the United States Department of Veterans Affairs and the Government National Mortgage Association), or to a broker-dealer, mortgage broker or mortgage banker, whether the purchaser is acting for itself or in a fiduciary capacity when the purchaser has discretionary authority to make investment decisions.
(5) Any transaction by an offeror with an accredited investor as defined in section 2 (15)(i) or (ii) of the Securities Act of 1933, as amended, or rules of the Director of the Department of Consumer and Business Services, but only if there is no public advertising or general solicitation in connection with the transaction.
(6) The issue and delivery of any security in exchange for any other security of the same issuer pursuant to a right of conversion entitling the holder of the security surrendered in exchange to make the conversion without the payment of additional consideration, if the security surrendered was, when issued, convertible and registered or exempt from registration.
(7) Any transaction in a vendor’s interest in a land sale contract, or a bond or note secured by a mortgage or trust deed upon real estate, so long as the entire vendor’s interest or mortgage or trust deed, with all the bonds or notes secured thereby, are sold to a single purchaser, in a single sale.
(8) Agency or principal sales by licensed broker-dealers, executed upon customers’ orders on any exchange or on the over-the-counter market, but not the solicitation of such orders, where there is no intent to avoid the provisions of the Oregon Securities Law and a public offering is not involved. Such broker-dealers shall keep and maintain, for two years from the date of the order, a record of all the sales executed upon customers’ orders, giving the name and address of each customer, the name and identity of the security involved, the dates of the sales, the price paid or received for the security, and the commission or other expenses charged to the customer.
(9) The offer or sale by a licensed broker-dealer of any security acquired in the ordinary and usual course of business, when such security is a part of an issue which has been registered in whole or in part, if the offer or sale is made in good faith and not directly or indirectly for the benefit of the issuer or for the promotion of any scheme or enterprise effecting a violation or an evasion of any provisions of the Oregon Securities Law, unless:
(a) The registration has been revoked or suspended; or
(b) The continued sale of the security has been enjoined.
(10) The offer or sale by licensed broker-dealer, acting either as principal or agent, of securities theretofore sold and distributed to the public, if the sale meets the requirements of paragraphs (a), (b) and (c) or (a), (b) and (d) of this subsection:
(a) Such securities are sold at prices reasonably related to the current market price thereof at the time of sale, and, if such licensed broker-dealer is acting as agent, the commission collected by such licensed broker-dealer on account of the sale thereof is not in excess of usual and customary commissions collected with respect to securities and transactions having comparable characteristics;
(b) Such securities do not constitute an unsold allotment to or subscription by such broker-dealer as a participant in the distribution of such securities by the issuer or by or through an underwriter;
(c) The issuer is listed in any recognized securities manual approved by rule by the director, and the listing contains the names of the issuer’s officers and directors, a balance sheet of the issuer as of a date not more than 18 months prior to the date of such sale, and a profit and loss statement for either the fiscal year preceding the date of the balance sheet or the most recent year of operations; and
(d) The securities are authorized for quotation on a nationwide automated quotations system approved by rule or order of the director.
(11) An offer, but not the sale, of a security meeting either of the following descriptions:
(a) A security for which registration statements have been filed under both the Oregon Securities Law and the Securities Act of 1933, as amended, if no stop or refusal order or order under ORS 59.105 is in effect and no public proceeding or examination looking toward such an order is pending. However, an offer for such a security may not be accepted until the securities have been registered as provided in the Oregon Securities Law.
(b) A security for which a registration statement has been filed under the Oregon Securities Law and the offer is allowed by the director. However, an offer for such a security may not be accepted until the securities have been registered as provided in the Oregon Securities Law.
(12)(a) Any transactions in securities by an offeror within or without this state that meet all of the requirements of subparagraph (A) or (B) of this paragraph and all of the requirements of subparagraphs (C), (D) and (E) of this paragraph:
(A) When the offeror is an issuer, the transactions result in not more than 10 purchasers within this state of securities of the issuer during any 12 consecutive months.
(B) When the offeror is a nonissuer the securities must have been bought and held for at least 12 consecutive months and the transactions result in not more than 10 purchasers within this state of securities from the nonissuer during any 12 consecutive months.
(C) No commission or other remuneration is paid or given directly or indirectly in connection with the offer or sale of the securities.
(D) No public advertising or general solicitation is used in connection with any transaction under this exemption.
(E) At the time of any transaction under this exemption the offeror does not have under the Oregon Securities Law an application for registration or an effective registration of securities which are part of the same offering.
(b) In connection with transactions under paragraph (a) of this subsection:
(A) Purchasers of securities of the offeror registered under ORS 59.065, exempt under ORS 59.025, exempt under any other subsection of this section, or for which a notice has been filed under ORS 59.049, are not counted as purchasers under this exemption.
(B) Repeat transactions with persons who are counted as purchasers within Oregon under paragraph (a) of this subsection do not increase the number of purchasers. However, a purchaser remains a purchaser for 12 months following the month of the last sale to that purchaser.
(C) No limitations are placed on the number of transactions or purchasers without this state. No limitations are placed on the number of offers under this exemption.
(13) A transaction with security holders, pursuant to a statutory vote by such security holders on a merger, consolidation, partial or complete liquidation, reclassification of securities, plan of exchange or sale of assets, in consideration of the issuance of securities of another issuer.
(14) Capital stock issued by a professional corporation organized under ORS chapter 58.
(15) Any other transaction exempted by rule of the director. [1967 c.537 §5; 1971 c.624 §2; 1973 c.823 §§91,156; 1985 c.349 §3; 1987 c.603 §2; 1989 c.197 §3; 1991 c.67 §11; 1997 c.772 §3; 2001 c.32 §1]
59.025 Securities exempt from registration. The following securities are exempt from ORS 59.049 and 59.055:
(1)(a) A security issued or guaranteed by the United States or by a state, a political subdivision of a state or an agency or other instrumentality of any of the foregoing.
(b) Any other security offered in connection with or as part of the security set forth in paragraph (a) of this subsection if the security cannot be severed and sold separately from the security in paragraph (a) of this subsection.
(2) A security issued or guaranteed by a foreign government with which the United States is at the time of the sale maintaining diplomatic relations, or by a state, province or political subdivision thereof having the power of taxation or assessment, if the security is recognized as a valid obligation by such foreign government or state, province or political subdivision thereof.
(3) A security that represents an interest in or a direct obligation of or is guaranteed by a national bank, federal savings and loan association, federal credit union or federal land bank or joint stock land bank or national farm loan association.
(4) Any of the following securities:
(a) A security listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Stock Exchange, the Midwest Stock Exchange, the Pacific Stock Exchange or any other exchange recognized by rule of the Director of the Department of Consumer and Business Services;
(b) A security designated or approved for designation upon notice of issuance under the National Association of Securities Dealers Automated Quotation System, Inc. National Market System;
(c) Any other security of the issuer of a security listed or designated under paragraph (a) or (b) of this subsection, that is of senior or substantially equal rank to the listed or designated security;
(d) A security issuable under rights or warrants listed or approved under paragraph (a), (b) or (c) of this subsection; or
(e) A warrant or right to purchase or subscribe to any security referred to in paragraph (a), (b), (c) or (d) of this subsection.
(5) A security maintaining a rating approved by the director in a recognized securities manual.
(6) A security that represents an interest in or a direct obligation of and that has been or is to be issued by a bank, trust company, savings and loan association, or credit union, that is subject to the examination, supervision and control of a regulatory agency of this state.
(7) Commercial paper issued, given or acquired in a bona fide way in the ordinary course of legitimate business, trade or commerce, when the commercial paper is not made the subject of a public offering.
(8) A security, the issuance of which is under supervision, regulation or control by the Public Utility Commission of this state, if the Public Utility Commission is exercising control over, or is regulating or supervising, the issuer thereof.
(9) Stock or membership certificates issued by an agricultural cooperative corporation or irrigation association when the stock is issued to evidence membership in the cooperative or association or as a patronage dividend and certificates issued to members or patrons by such a cooperative or association evidencing their respective interests in reserves or as patronage dividends. This exemption shall not apply to any cooperative or association that expects to engage in or is engaged in the production, processing or marketing of forest products.
(10) Stock or membership certificates issued by a fishing cooperative corporation, when the stock or certificates are issued to members of the cooperative corporation either for the purpose of showing membership in the cooperative corporation or for the purpose of showing their respective interests in reserves or patronage dividends. For purposes of this subsection, a fishing cooperative corporation is an association of persons engaged commercially in harvesting, marketing or processing products of aquatic life from fresh and salt water, that is formed or operated under ORS chapter 62 with the purpose of commercially harvesting, marketing or processing such products or engaging in group bargaining with respect to the sale of such products.
(11) Stock or membership certificates issued by an association of consumers formed or operated under ORS chapter 62 with the purpose of providing groceries to its consumer members, when the stock or certificates are issued to members either for the purpose of showing membership in the association or for the purpose of showing their respective interests in patronage dividends or reserves. For purposes of the exemption under this subsection:
(a) The price of stock or a membership certificate may not exceed $300.
(b) The benefits shall be limited to discounts on purchases or patronage dividends, or any combination of such discounts and dividends.
(c) The association may issue only one stock or membership certificate to an individual.
(12) Any security issued in connection with an employee’s stock purchase, savings, pension, profit sharing or similar employee’s benefit plan, provided:
(a) That the plan meets the requirements for qualification under section 401 of the Internal Revenue Code of 1986; and
(b) That the terms of the plan are fair, just and equitable to employees under rules of the director.
(13) Any security issued by a person:
(a) Organized and operated exclusively for religious, educational, benevolent, fraternal, charitable or reformatory purpose and not for pecuniary profit, and no part of the net earnings of which inures to the benefit of any person, private stockholder, or individual; and
(b) Designated by rule of the director.
(14) Any other security exempted by rule of the director. [1967 c.537 §4; 1969 c.688 §1; 1973 c.428 §9; 1975 c.491 §2; 1985 c.193 §1; 1985 c.349 §2a; 1987 c.603 §1a; 1987 c.677 §9; 1989 c.171 §6; 1989 c.197 §2; 1991 c.67 §10; 1993 c.18 §14; 1997 c.772 §2]
DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
DIVISION OF FINANCE AND CORPORATE SECURITIES
SECURITIES EXEMPT FROM REGISTRATION
Self-Executing Registration Exemptions
(1) The securities listed in ORS 59.025 are exempt from registration or notice filing requirements. Sales of securities listed in 59.025 may only be effected through licensed persons, unless a person is otherwise exempted by statute or rule. No filing or fee is required to utilize any registration exemption in 59.025.
(2) Persons relying on exemptions from registration have the burden of proof, pursuant to ORS 59.275, in establishing the availability of an exemption.
Stat. Auth.: ORS 59.285
Stats. Implemented: ORS 59.025, ORS 59.195 & ORS 59.275
Hist.: FCS 7-2000; f. & cert. ef. 6-2-00
The following exchanges are recognized by the Director for the purpose of the exemption from registration in section (4) of ORS 59.025:
(1) Chicago Board Options Exchange.
(2) Philadelphia Stock Exchange, Inc. only to the extent of securities of issuers who qualify under Tier 1 listing and maintenance requirements of the Exchange
Stat. Auth.: ORS 59.025(4) & ORS 59.285
Stats. Implemented: ORS 59.025(4)
Hist.: CC 32, f. & ef. 9-1-76; Renumbered from 815-030-0021; FCS 10-1994, f. & cert. ef. 10-3-94; FCS 7-2000; f. & cert. ef. 6-2-00
Securities maintaining the following ratings by publishers of securities manuals are approved for the purpose of the exemption from registration in subsection (5) of ORS 59.025:
(1) Ratings of BBB or better for debt securities, and ratings of F-3 or better for commercial paper by Fitch Investors Service, Inc.
(2) Ratings of Baa or better for debt securities and ratings of P-3 or better for commercial paper by Moody's Investors Service.
(3) Ratings of BBB or better for debt securities and ratings of A-3 or better for commercial paper by Standard and Poor's Corporation.
Stat. Auth.: ORS 59.285
Stats. Implemented: ORS 59.025(5)
Hist.: CC 13, f. 9-19-73, ef. 10-1-73; Renumbered from 815-030-0025.5; CC 1-1978, f. & ef. 1-4-78; Renumbered from 815-030-0020; FCS 4-1990, f. & cert. ef. 8-21-90; FCS 7-2000; f. & cert. ef. 6-2-00; FCS 9-2001, f. & cert. ef. 9-28-01
Employee Benefit Plans
The terms of an employee benefit plan are fair, just, and equitable for the purposes of ORS 59.025(12)(b) if it is a plan of an employee-owned enterprise.
Stat. Auth.: ORS 59.285
Stats. Implemented: ORS 59.025(12)
Hist.: FSC 3-1987(Temp), f. 9-24-87, ef. 9-28-87; FCS 5-1988, f. 3-22-88, cert. ef. 3-25-88; Renumbered from 815-030-0021.1; FCS 7-2000; f. & cert. ef. 6-2-00
(1) A person may offer and sell Charitable Remainder Annuity Trusts, Charitable Remainder Unitrusts, and Pooled Income Funds and be exempt from the provisions of ORS 59.055 if:
(a) The person is exempt from federal taxation under the provisions of Section 501(c)(3) of the Internal Revenue Code; and
(b) The Charitable Remainder Trusts and the Pooled Income Funds qualify under the requirements of Section 664 or Section 642 of the Internal Revenue Code and all other applicable provisions and regulations thereof.
(2) The Director may by rule or order deny, condition, or withdraw this exemption if, in the Director's opinion, the availability of this exemption to a person would work a fraud or imposition upon the purchaser.
Stat. Auth.: ORS 59.285
Stats. Implemented: ORS 59.025(13)
Hist.: CC 25, f. & ef. 12-5-75; Renumbered from 815-030-0040; FCS 4-1990, f. & cert. ef. 8-21-90
Additional Exempt Employee Benefit Plans
Pursuant to ORS 59.025(14), securities issued in connection with an employee benefit plan are exempt from registration if the plan:
(1) Is subject to or voluntarily complies with Title 1 of the Employee Retirement Income Security Act of 1974, as amended;
(2) Meets the requirements of Section 403(b) of the Internal Revenue Code; or
(3) Does not permit employee contributions.
Stat. Auth.: ORS 59.285
Stats. Implemented: ORS 59.025(15)
Hist.: CC 3, f. 10-2-69, ef. 10-25-69; Renumbered from 815-010-0010; CC 2-1978, f. 6-5-78, ef. 6-10-78; Renumbered from 815-030-0025; FCS 3-1987(Temp), f. 9-24-87, ef. 9-28-87; FCS 5-1988, f. 3-22-88, cert. ef. 2-25-88; FCS 4-1990, f. & cert. ef. 8-21-90; FCS 7-2000; f. & cert. ef. 6-2-00
Memberships in a Non-profit Cooperative
Pursuant to authority in ORS 59.025(14), the director exempts any certificate evidencing membership issued by a non-profit cooperative that meets all of the following criteria:
(1) The issuing cooperative is formed pursuant to ORS 62.800 to 62.815;
(2) The issuing cooperative owns or leases land in Oregon on which manufactured dwellings are or will be located;
(3) Only a natural person who owns and occupies a manufactured dwelling that is located on land owned or leased by the issuing cooperative may be issued a membership certificate;
(4) The issuing cooperative issues not more than one membership certificate for any space lease in the cooperative, regardless of the number of occupants in the manufactured dwelling located on the space.
(5) The issuing cooperative sets the price of membership at a reasonable level, not to exceed $1,000; and
(6) Each membership certificate includes a condition that requires the certificate must be returned to the cooperative in exchange for no more than the price originally paid by the purchasing individual upon termination of the individual’s membership in the cooperative.
Stat. Auth.: ORS 59.285
Stats. Implemented: ORS 59.025(14)
Hist.: FCS 1-2009, f. & cert. ef. 2-3-09