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Do I have to register securities in Kentucky?

On Behalf of | Jan 7, 2020 | Regulatory Work |

All securities that are offered or sold here in Kentucky must be registered. This is required by state law. There are some rare instances in which a security is covered or exempt and may not have to be registered though.

Anyone wishing to register a security in the state must file various documents including the U-1 and U-2 forms with the Kentucky Department of Financial Institutions (DFI). Applicants must pay a $125 examination fee and between .06% and 1% in registration fees on the total securities that will be offered for sale. The lowest amount that an applicant may have to pay for the latter is $60. The highest is $1,200.

Some entities that offer securities may be exempt from registering them under Regulation (Reg.) D, Rule 506. They must exercise their right to an exemption within 15 days of their first sale by electronically filing a Form D with the U.S. Securities and Exchange Commission (SEC). Entities wishing to qualify for exempt status must also supply both state and federal officials with statements confirming their ability to act on behalf of the issuer and acknowledging when the first sale was made. A filing fee of $250 is due at the same time.

There are many different steps that individuals wishing to register a security or qualify for an exemption must take to remain in compliance with state or federal laws. Civil and criminal penalties may be assessed on both the state and federal levels if the proper protocol isn’t followed in such cases. An attorney in Louisville can help you navigate this process so that you don’t find yourself in legal hot water on down the line.

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