Registration by Qualification
Securities offerings that are exempt from federal registration with the Securities and Exchange Commission (SEC) under the Securities Act of 1933, but not exempt from registration in New Mexico or other states, are required to register by qualification. The relevant statutes and regulations under the New Mexico Uniform Securities Act (NMSA) for registration by qualification in New Mexico are as follows.
- NMSA 58-13C-304 - Securities Registration by Qualification specifies the information, documents, and conditions for this type of registration.
- NMSA 58-13C-305 - Securities Registration Filings provides authority for the filing, fee, and other requirements for securities registrations, including provisions for effective periods, reports, and amendments that are specified further by regulation 12.11.8 NMAC.
- NMSA 58-13C-306 - Denial, Suspension, and Revocation of Securities Registration provides grounds and procedures for denial, suspension, and revocation of securities registrations and provides authority for the commissioner to apply “merit” or fairness standards for examinations of registration statements. The fairness criteria are specified by regulations as described for 12.11.9 NMAC.
- 126.96.36.199 NMAC - Specifies the requirements for application forms, offering documents, fees, amendments, extensions of registration, and abandoned applications, and reports of sales: A registration fee of 0.10% (one-tenth of one percent) of the aggregate amount of securities to be offered in New Mexico, with a minimum fee of $525 and a maximum fee of $2,500 for each year of registration
- A requirement for Regulation A offerings (federal exemption) to be filed by qualification in New Mexico
- Documents specified by NMSA 58-13C-304
- Form U-1: Uniform Application to Register Securities
- Form U-2: Uniform Consent to Service of Process
- Form U-2A: Uniform Form of Corporate Resolution
- 12.11.10 NMAC specifies the acceptable forms, content, and delivery requirements for the prospectus in a registered securities offering as follows:
- 12.11.9 NMAC list several statements of policy (SOPs) adopted by the North American Securities Administrators Association Inc. (NASAA), which may be applicable for registration of securities depending upon the types of securities or business operations of issuers. Exceptions from the policies may be allowed by the commissioner for good cause shown. See links to the various NASAA SOPs at: Statements of Policy.
- Generally, audited financial statements are required unless the issuer meets conditions for reviewed financial statements based on other regulations for SCOR or nonprofit debt offerings.
Small Company Offering Registration (SCOR) is a uniform program among states for the registration by qualification of small issuers that limit their offerings in size or location under federal exemptions specified by Securities and Exchange Commission (SEC) Regulation D – Rule 504, Regulation A, or Rule 147 under the Securities Act of 1933.
A significant feature of the SCOR type of registration is the Form U-7 Disclosure Document, which is designed as a do-it-yourself prospectus for entrepreneurs to prepare in consultation with their attorney and accountant. An extensive manual is available at the link below to the North American Securities Administrators Association (NASAA) website. The manual provides detailed instructions and guidance for preparing the disclosures on the SCOR Form (Form U-7).
SCOR Statement of Policy
12.11.10 NMAC authorizes SCOR and Form U-7 in compliance with the SCOR Statement of Policy on the NASAA website. SCOR information on the NASAA website also includes instructions and some model agreements that can be used for registration under the SCOR program.
Although SCOR issuers are required to comply with the same statutes and regulations outlined above for other issuers that register by qualification, significant deficiencies with respect to the merit or fairness standards are relatively rare due to the circumstances of small companies raising capital in their local community.
The Western Regional Review Program was developed to enable the coordinated review of SCOR filings (CR-SCOR) by securities regulators in two or more of the 10 Western states. The participating states are Alaska, Arizona, Colorado, Idaho, Montana, New Mexico, Oregon, Utah, Washington and Wyoming. This method enables a uniform coordinated review of registration applications under the SCOR program so that issuer applicants communicate only with the lead reviewer after filing applications in two or more of the participating states. The lead reviewer is ordinarily in the securities agency of the issuer’s home state.
Information on Filing Requirements
The following exhibits must be filed in each state in which the applicant is filing under the Western Regional Review Program:
- Accountant's content
- Articles of Incorporation or Organization (if LLC)
- Bylaws or Operating Agreement (if LLC)
- Consent to inclusion in the disclosure document of any evaluation of litigation or administrative action by counsel, if any
- Consent to inclusion in the disclosure document of tax adviser's opinion or description of tax consequences, if any
- Copy of all advertising materials
- Copy of any resolutions by board of directors setting forth terms and provisions of stock to be issued
- Copy of Subscription Agreement
- Escrow of Proceeds Agreement
- Form D (Rule 504 offerings only)
- Form of Selling Agency or Underwriting Agreement (if applicable)
- Legal opinion
- Offering document: SCOR (Form U-7) or Form 1-A
- Schedule setting forth the name and residential street address of each officer, director, and principal shareholder
- Specimen of security to be issued (including any legend restricting resale)
- Uniform Application to Register Securities (Form U-1) link Every issuer seeking registration must complete this form, sign it, and have it notarized
- Uniform Consent to Service of Process (Form U-2) link Every issuer seeking registration must complete this form, sign it, and have it notarized
- Uniform Form of Corporate Resolution (Form U-2A) link Every Corporate issuer seeking registration must complete and sign this form
Contact your state securities administrator for more information about specific filing requirements in your state. If you plan to offer in states not included in the West review, please visit the NASAA coordinated review webpage.