Section 3a Securities Exemption - Explained

The video tutorial explains the statutory-based exemption, focusing on Rule 3A and Rule 147, which serve as a safe harbor for intrastate offerings. Rule 147 allows issuers to issue securities within a state without registration, provided they meet specific requirements. These include the company's location, revenue, assets, and use of proceeds being primarily within the state. The tutorial also covers restrictions on the resale of securities to ensure compliance with the safe harbor provision.

What is the primary purpose of Rule 147 in the context of securities issuance?

• To allow interstate offerings without registration

• To provide a safe harbor for intrastate offerings

• To eliminate the need for any state-level compliance

• To regulate international securities transactions

Why is Rule 147 considered a 'safe harbor' provision?

• It ensures automatic approval of all securities offerings

• It allows for some rule violations while still qualifying for exemption

• It provides a way to bypass state laws

• It guarantees exemption from all federal regulations

Which of the following is NOT a requirement for a company to qualify for an intrastate offering under Rule 147?

• 80% of the proceeds must be used within the state

• 80% of its assets must be located within the state

• 80% of its revenue must come from within the state

• The company must be registered in multiple states

Under Rule 147, what percentage of a company's revenue must be generated within the state to qualify for an intrastate offering?

• 50%

• 60%

• 70%

• 80%

What is the term used to describe the period during which securities must be held before they can be resold under Rule 147?

• Resting period

• Holding phase

• Cooling-off period

• Coming to rest