| The Alabama
Securities Act requires that any security sold in this state must be registered
with the Commission, unless the security qualifies for a statutory exemption
from registration. The Act provides for a number of exemptions, including
an exemption for “any security issued by and representing an interest in or a
debt of, or guaranteed by, any bank organized under the laws of the United
States or any bank . . . organized and supervised under the laws of this
state.” See Section 8-6-10(3) (Code of Ala. 1975). This
exemption was further expanded by the National Securities Markets Improvement
Act which provided federal “Covered Security” status for any federal chartered
bank or a bank organized under the laws of any state. It is the Commission’s position that this exemption, as well as
the status of covered security is not available for securities issued by a bank
in the process of organization. If any securities are to be sold to generate
funds that will be used or placed at risk before the formal incorporation of
the bank, then the sale of those securities must have an exemption other than
Ala. Code § 8-6-10(3) or must be registered under the Alabama Securities
Act, provided that any issuer who complies with the following procedures will be
considered to be qualified for the exemption at Ala. Code § 8-6-10(3) |
- All funds from the offering are placed into escrow with an insured, third-party depository institution,
as discussed in provision (4) below, such funds will not be considered to be “used” or “placed at risk.”
- The bank in organization may not accept any funds from an offering of securities in reliance on this policy
statement until it has received a determination from the appropriate primary federal or state regulator, as the case
may be, that its application is substantially complete.
- The bank in organization must utilize an offering circular and comply with the FDIC’s or other relevant federal
banking regulator’s statement of policy regarding the use of offering circulars in connection with public distribution of
bank securities.
- All proceeds of an offering conducted in reliance upon this policy statement by a bank in organization must
be held in escrow with an insured, third-party depository institution until after the bank in organization has received
the certificate of the Superintendent of Banks pursuant to Ala. Code § 5-5A-6 authorizing the filing of the certificate
of incorporation or comparable authorization from other appropriate primary federal or state regulators. If the de novo
bank does not receive such authorization within one year after commencement of the offering, the escrowed funds
plus interest accrued, if any, must be returned in full to investors. The requirement that proceeds be held in escrow
and the conditions for the proceeds’ return must be set forth in both the offering circular and the subscription agreements
utilized in the offering.
- Effective May 1, 2003, at least ten (10) business days prior to the commencement of an offering in reliance
upon this policy statement, the bank in organization shall provide the Commission copies of the offering circular and
subscription agreement which it proposes to use in the offering and copies of the Interagency Biographical and Financial
reports theretofore provided to bank regulatory authorities for each person who is expected to effect or attempt to effect
offers or sales of the securities. The Commission staff will perform a disclosure review of the materials to be used in the
offering and review the disciplinary history of any persons expected to effect or attempt to effect offers or sales of the
securities. The exemption will be effective if the Commission staff has not entered into a proceeding or issued a stop
order within ten(10) business days of the filing.
- Those persons for whom notification is provided who will effect or attempt to effect offers or sales of the securities
shall not be required to be registered as a broker-dealer agent or restricted agent and will not be required to complete NASD
securities examinations subject to the following:
a.
A full background check has been completed by the primary federal or state regulator within the previous
twelve (12) months
b.
Notification of such persons participation in the offering is received by the Commission staff no later than
ten (10) business days prior to the commencement of the offering.
c. No
commission or other remuneration shall be paid, either directly or indirectly, primarily for the
solicitation of the sale of the de novo bank securities.
- Nothing herein affects or impairs the applicability of the anti-fraud provisions of the Alabama Securities Act.
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