Florida Statutes § 517.061 — Exempt transactions.

517.061 Exempt transactions.—Except as otherwise provided in subsection (11), the exemptions provided herein from the registration requirements of s. 517.07 are self-executing and do not require any filing with the office before being claimed. Any person who claims entitlement to an exemption under this section bears the burden of proving such entitlement in any proceeding brought under this chapter. The registration provisions of s. 517.07 do not apply to any of the following transactions; however, such transactions are subject to s. 517.301:(1)(a) Any judicial sale or any sale by an executor, an administrator, a guardian, or a conservator; any sale by a receiver or trustee in insolvency or bankruptcy; any sale by an assignee as defined in s. 727.103, with respect to an assignment as defined in that section; or any transaction incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims, or property interests. (b) Except for a security exchanged in a case brought under Title 11 of the United States Code, a security issued in exchange for one or more bona fide outstanding securities, claims, or property interests, or partly in such exchange and partly for cash, if the terms and conditions of such issuance and exchange are approved:1. By a court, an official or agency of the United States, a banking or insurance commission of a state or territory of the United States, or another governmental authority expressly authorized by law to grant such approval. 2. After a hearing upon the fairness of such terms and conditions and at which all persons to whom issuance of securities in such exchange is proposed have the right to appear. (2) The issuance of notes or bonds in connection with the acquisition of real property or renewals thereof, if such notes or bonds are issued to the sellers of, and are secured by all or part of, the real property so acquired. (3) A transaction involving a stock dividend or equivalent equity distribution, regardless of whether the business entity distributing the dividend or equivalent equity distribution is the issuer, if nothing of value is given by stockholders or other equity holders for the dividend or equivalent equity distribution other than the surrender of a right to a cash or property dividend in the event that each stockholder or other equity holder may elect to take the dividend or equivalent equity distribution in cash, property, or stock. (4) A transaction under an offer to existing security holders of the issuer, including persons that at the date of the transaction are holders of convertible securities, options, or warrants, if a commission or other remuneration is not paid or given, directly or indirectly, for soliciting a security holder in this state. (5) The issuance of securities to such equity security holders or creditors of a business entity in the process of a reorganization of such business entity, made in good faith and not for the purpose of evading this chapter, either in exchange for the securities of such equity security holders or claims of such creditors or partly for cash and partly in exchange for the securities or claims of such equity security holders or creditors. (6) A transaction involving the distribution of the securities of an issuer to the security holders of another person in connection with a merger, consolidation, exchange of securities, sale of assets, or other reorganization to which the issuer, or the issuer’s parent or subsidiary, and the other person, or the person’s parent or subsidiary, are parties. (7) The offer or sale of securities, solely in connection with the transfer of ownership of an eligible privately held company, through a merger and acquisition broker in accordance with s. 517.12(22). (8) The offer or sale of securities under a bona fide employee stock purchase, savings, option, profit-sharing, pension, or similar employee benefit plan, including any securities, plan interests, and guarantees issued under a compensatory benefit plan or compensation contract, contained in a record, established by the issuer, its parents, its majority-owned subsidiaries, or the majority-owned subsidiaries of the issuer’s parent for the participation of the issuer’s employees, directors, managers, managing members, general partners, trustees, officers, consultants, or advisors, and their family members who acquire such securities from such persons through gifts or domestic relations orders. This includes offers or sales of such securities to all of the following persons:(a) Former employees, directors, managers, managing members, general partners, trustees, officers, consultants, or advisors, provided that the securities are issued to such persons in connection with their prior employment by or services provided to the issuer. (b) Insurance agents who are exclusive insurance agents of the issuer, or of the issuer’s parents or subsidiaries, or who derive more than 50 percent of their annual income from such persons. (9) The offer or sale of securities to:(a) A bank, trust company, savings institution, insurance company, dealer, investment company as defined in the Investment Company Act of 1940, 15 U.S.C. s. 80a-3, as amended, pension or profit-sharing trust, or qualified institutional buyer, whether any of such entities is acting in its individual or fiduciary capacity. (b) A savings and loan association, building and loan association, cooperative bank, or credit union, which is supervised and examined by a state or federal authority having supervision over any such institution. (c) A federal covered adviser; investment adviser registered pursuant to the laws of a state; exempt reporting adviser or private fund adviser as those terms are defined in s. 517.12(23)(a)2. and 3., respectively; investment adviser relying on the exemption from registering with the Securities and Exchange Commission under s. 203(l) or (m) of the Investment Advisers Act of 1940, as amended; business development company as defined in s. 2(a)(48) of the Investment Company Act of 1940, as amended; or business development company as defined in s. 202(a)(22) of the Investment Advisers Act of 1940, as amended. (d) A small business investment company licensed by the Small Business Administration under s. 301(c) of the Small Business Investment Act of 1958, as amended, or rural business investment company as defined in s. 384A of the Consolidated Farm and Rural Development Act. (e) A plan established and maintained by a state, a political subdivision thereof, or any agency or instrumentality of a state or a political subdivision, for the benefit of its employees, if such plan has total assets in excess of $5 million, an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as described in s. 3(21) of such act, which is a bank, savings and loan association, insurance company, or federal covered adviser, or if the employee benefit plan has total assets in excess of $5 million or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors. (f) An organization described in s. 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts trust or similar business trust, partnership, or limited liability company, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5 million. (g) A trust, with total assets in excess of $5 million, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Securities and Exchange Commission Rule 506(b)(2)(ii), 17 C.F.R. s. 230.506(b)(2)(ii), as amended. (h) An entity of a type not listed in paragraphs (a)-(g) or paragraph (j) which owns investments as defined in Securities and Exchange Commission Rule 2a51-1(b), 17 C.F.R. s. 270.2a51-1(b), as amended, in excess of $5 million and is not formed for the specific purpose of acquiring the securities offered. (i) A family office as defined in Securities and Exchange Commission Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940, 17 C.F.R. s. 275.202(a)(11)(G)-1, as amended, provided that:1. The family office has assets under management in excess of $5 million; 2. The family office is not formed for the specific purpose of acquiring the securities offered; and 3. The prospective investment of the family office is directed by a person who has knowledge and experience in financial and business matters that the family office is capable of evaluating the merits and risks of the prospective investment. (j) An entity in which all of the equity owners are described in paragraphs (a)-(i). (10)(a) The offer or sale, by or on behalf of an issuer, of its own securities if the offer or sale is part of an offering made in accordance with all of the following conditions:1. There are no more than 35 purchasers, or the issuer reasonably believes that there are no more than 35 purchasers, of the securities of the issuer in this state during an offering made in reliance upon this subsection or, if such offering continues for a period in excess of 12 months, in any consecutive 12-month period. 2. Neither the issuer nor any person acting on behalf of the issuer offers or sells securities pursuant to this subsection by means of any form of general solicitation or general advertising in this state. 3. Before the sale, each purchaser or the purchaser’s representative, if any, is provided with, or given reasonable access to, full and fair disclosure of all material information, which must include written notification of a purchaser’s right to void the sale under subparagraph 4. 4. Any sale made pursuant to this subsection is voidable by the purchaser within 3 days after the first tender of consideration is made by such purchaser to the issuer by notifying the issuer that the purchaser expressly voids the purchase. The purchaser’s notice to the issuer must be sent by e-mail to the issuer’s e-mail address set forth in the disclosure document provided to the purchaser or purchaser’s representative or by hand delivery, courier service, or other method by which written proof of delivery to the issuer of the purchaser’s election to rescind the purchase is evidenced. (b) The following purchasers are excluded from the calculation of the number of purchasers under subparagraph (a)1.:1. Any spouse or child of the purchaser or any related family member who has the same principal residence as such purchaser. 2. A trust or estate in which a purchaser, any of the persons related to such purchaser specified in subparagraph 1., and any business entity specified in subparagraph 3., collectively, have more than 50 percent of the beneficial interest, excluding any contingent interest. 3. A business entity in which a purchaser, any of the persons related to such purchaser specified in subparagraph 1., and any trust or estate specified in subparagraph 2., collectively, are beneficial owners of more than 50 percent of the equity securities or equity interest. 4. An accredited investor. A business entity must be counted as one purchaser. However, if the business entity is organized for the specific purpose of acquiring the securities offered and is not an accredited investor, each beneficial owner of equity securities or equity interests in the business entity must be counted as a separate purchaser. A noncontributory employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 must be counted as one purchaser if the trustee makes all investment decisions for the plan. (11) Offers or sales of securities by an issuer in a transaction that meets all of the following conditions:(a) The offers or sales of securities are made only to persons who are, or who the issuer reasonably believes are, accredited investors. (b) The issuer is not a business entity that has an undefined business operation, lacks a business plan, lacks a stated investment goal for the funds being raised, or plans to engage in a merger or acquisition with an unspecified business entity. (c) The issuer reasonably believes that all purchasers are purchasing for investment and not with the view to or for sale in connection with a distribution of the security. Any resale of a security sold in reliance on this exemption within 12 months after sale is presumed to be with a view to distribution and not for investment, except a resale pursuant to a registration statement effective under this chapter or pursuant to an exemption available under this chapter, the Securities Act of 1933, as amended, or the rules and regulations adopted thereunder. (d)1. A general announcement of the proposed offering, made by any means, includes only the following information:a. The name, address, and telephone number of the issuer of the securities. b. The name, a brief description, and price, if known, of any security to be issued. c. A brief description of the business. d. The type, number, and aggregate amount of securities being offered. e. The name, address, and telephone number of the person to contact for additional information. f. A statement that:(I) Sales will be made only to accredited investors; (II) Money or other consideration is not being solicited and will not be accepted by way of this general announcement; and (III) The securities have not been registered with or approved by any state securities agency or the Securities and Exchange Commission and are being offered and sold pursuant to an exemption from registration. 2. The issuer may, in connection with an offer, provide information in addition to the information provided in the general announcement as specified in subparagraph 1. if such information is delivered:a. Through an electronic database that is restricted to persons who have been prequalified as accredited investors; or b. After the issuer reasonably believes that the prospective purchaser is an accredited investor. (e) The issuer does not use telephone solicitation unless, before placing the call, the issuer reasonably believes that the prospective purchaser to be solicited is an accredited investor. (f) The issuer files with the office a notice of transaction on a form prescribed by commission rule, an irrevocable written consent to service of civil process in accordance with s. 517.101, and a copy of the general announcement within 15 days after the first sale is made in this state. The commission may adopt by rule procedures for filing documents by electronic means. (g) Dissemination of the general announcement of the proposed offering to persons who are not accredited investors does not disqualify the issuer from claiming the exemption under this subsection. (12) The isolated sale or offer for sale of securities when made by or on behalf of a bona fide owner, not the issuer or underwriter, of the securities, who disposes of such securities for the owner’s own account, and such sale is not made directly or indirectly for the benefit of the issuer or an underwriter of such securities or for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading this chapter. For purposes of this subsection, isolated offers or sales include, but are not limited to, an isolated offer or sale made by or on behalf of a bona fide owner, rather than the issuer or underwriter, of the securities if:(a) The offer or sale of securities is in a transaction satisfying all of the conditions specified in paragraphs (10)(a) and (b); or (b) The offer or sale of securities is in a transaction exempt under s. 4(a)(1) of the Securities Act of 1933, as amended, or under Securities and Exchange Commission rules or regulations. (13) By or for the account of a pledgeholder, a secured party as defined in s. 679.1021(1), or a mortgagee selling or offering for sale or delivery in the ordinary course of business and not for the purposes of avoiding this chapter, to liquidate a bona fide debt, a security pledged in good faith as security for such debt. (14) An unsolicited purchase or sale of securities on order of, and as the agent for, another solely and exclusively by a dealer registered pursuant to s. 517.12; provided that this exemption applies solely and exclusively to such registered dealers and does not authorize or permit the purchase or sale of securities at the direction of, and as agent for, another by any person other than a dealer so registered; and provided further that such purchase or sale may not be directly or indirectly for the benefit of the issuer or an underwriter of such securities or for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading this chapter. (15) A nonissuer transaction with a federal covered adviser with investments under management in excess of $100 million acting in the exercise of discretionary authority in a signed record for the account of others. (16) The sale by or through a registered dealer of any securities option if, at the time of the sale of the option:(a) The performance of the terms of the option is guaranteed by any dealer registered under the Securities Exchange Act of 1934, as amended, which guaranty and dealer are in compliance with such requirements or rules as may be approved or adopted by the commission; or (b)1. Such options transactions are cleared by the Options Clearing Corporation or any other clearinghouse recognized by commission rule; 2. The option is not sold by or for the benefit of the issuer of the underlying security; and 3. The underlying security may be purchased or sold on a recognized securities exchange registered under the Securities Exchange Act of 1934, as amended. (17)(a) The offer or sale of securities, as agent or principal, by a dealer registered pursuant to s. 517.12, when such securities are offered or sold at a price reasonably related to the current market price of such securities, provided that such securities are:1. Securities of an issuer for which reports are required to be filed by s. 13 or s. 15(d) of the Securities Exchange Act of 1934, as amended; 2. Securities of a company registered under the Investment Company Act of 1940, as amended; 3. Securities of an insurance company, as that term is defined in s. 2(a)(17) of the Investment Company Act of 1940, as amended; or 4. Securities, other than any security that is a federal covered security and is not subject to any registration or filing requirements under this chapter, that have been listed or approved for listing upon notice of issuance by a securities exchange registered under the Securities Exchange Act of 1934, as amended; and all securities senior to any securities so listed or approved for listing upon notice of issuance, or represented by subscription rights which have been so listed or approved for listing upon notice of issuance, or evidences of indebtedness guaranteed by an issuer with a class of securities listed or approved for listing upon notice of issuance by such securities exchange, such securities to be exempt only so long as such listings or approvals remain in effect. The exemption provided in this subparagraph does not apply when the securities are suspended from listing approval for listing or trading. (b) The exemption provided in this subsection does not apply if the sale is made for the direct or indirect benefit of an issuer or a control person of such issuer or if such securities constitute the whole or part of an unsold allotment to, or subscription or participation by, a dealer as an underwriter of such securities. (c) The exemption provided in this subsection is not available for any securities that have been denied registration pursuant to s. 517.111. Additionally, the office may deny this exemption with reference to any particular security, other than a federal covered security, by order published in such manner as the office finds proper. (18) Any nonissuer transaction by a registered dealer, and any resale transaction by a sponsor of a unit investment trust registered under the Investment Company Act of 1940, as amended, in a security of a class that has been outstanding in the hands of the public for at least 90 days; provided that, at the time of the transaction, the following conditions in paragraphs (a)-(c) and either paragraph (d) or paragraph (e) are met:(a) The issuer of the security is actually engaged in business and is not in the organizational stage or in bankruptcy or receivership and is not a blank check, blind pool, or shell company whose primary plan of business is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person. (b) The security is sold at a price reasonably related to the current market price of the security. (c) The security does not constitute the whole or part of an unsold allotment to, or a subscription or participation by, the dealer as an underwriter of the security. (d) The security is listed in a nationally recognized securities manual designated by rule of the commission or a document filed with and publicly viewable through the Securities and Exchange Commission electronic data gathering and retrieval system and contains:1. A description of the business and operations of the issuer. 2. The names of the issuer’s officers and directors, if any, or, in the case of an issuer not domiciled in the United States, the corporate equivalents of such persons in the issuer’s country of domicile. 3. An audited balance sheet of the issuer as of a date within 18 months before such transaction or, in the case of a reorganization or merger in which parties to the reorganization or merger had such audited balance sheet, a pro forma balance sheet. 4. An audited income statement for each of the issuer’s immediately preceding 2 fiscal years, or for the period of existence of the issuer, if in existence for less than 2 years or, in the case of a reorganization or merger in which the parties to the reorganization or merger had such audited income statement, a pro forma income statement. (e)1. The issuer of the security has a class of equity securities listed on a national securities exchange registered under the Securities Exchange Act of 1934, as amended; 2. The class of security is quoted, offered, purchased, or sold through an alternative trading system registered under Securities and Exchange Commission Regulation ATS, 17 C.F.R. s. 242.301, as amended, and the issuer of the security has made current information publicly available in accordance with Securities and Exchange Commission Rule 15c2-11, 17 C.F.R. s. 240.15c2-11, as amended; 3. The issuer of the security is a unit investment trust registered under the Investment Company Act of 1940, as amended; 4. The issuer of the security has been engaged in continuous business, including predecessors, for at least 3 years; or 5. The issuer of the security has total assets of at least $2 million based on an audited balance sheet as of a date within 18 months before such transaction or, in the case of a reorganization or merger in which parties to the reorganization or merger had such audited balance sheet, a pro forma balance sheet. (19) The offer or sale of any security effected by or through a person in compliance with s. 517.12(17). (20)(a) A nonissuer transaction in an outstanding security by or through a dealer registered or exempt from registration under this chapter, if, at the time of the transaction, all of the following conditions are met:1. The issuer is a reporting issuer in a foreign jurisdiction, and the issuer has been subject to continuous reporting requirements in such foreign jurisdiction for not less than 180 days before the transaction. 2. The security is listed on a foreign securities exchange or foreign securities market designated by commission rule, is a security of the same issuer which is of senior or substantially equal rank to the listed security, or is a warrant or right to purchase or subscribe to any such security. (b) The commission shall consider all of the following in designating a foreign securities exchange or foreign securities market for purposes of this subsection:1. Organization under foreign law. 2. Association with a community of dealers, financial institutions, or other professional intermediaries with an established operating history. 3. Oversight by a governmental or self-regulatory body. 4. Oversight standards set by general law. 5. Reporting of securities transactions on a regular basis to a governmental or self-regulatory body. 6. A system for exchange of price quotations through common communications media. 7. An organized clearance and settlement system. 8. Listing in Securities and Exchange Commission Regulation S Rule 902, 17 C.F.R. s. 230.902, as amended. If, after an administrative hearing in compliance with ss. 120.569 and 120.57, the office finds that revocation is necessary or appropriate in furtherance of the public interest and for the protection of investors, it may revoke the designation of a foreign securities exchange or foreign securities market. (21) Other transactions exempted by commission rule upon a finding by the office that the application of s. 517.07 to a particular transaction is not necessary or appropriate in furtherance of the public interest and for the protection of investors due to the small dollar amount of the securities involved or the limited character of the offering. In conjunction with its adoption by rule of such exemptions, the commission may exempt persons selling or offering for sale securities in such a transaction from the registration requirements of s. 517.12. A rule adopted by the commission under this subsection may not have the effect of narrowing or limiting any exemption specified in this section.