Securities Exemption Tables

The tables provided below include brief descriptions of each of the exemptions from registration available for the offer and sale of securities to residents of the State of Washington.  The information contained therein is intended to provide general information regarding the exemptions available. It is not complete, and should not be relied upon in order to effect an actual offering or sale of securities.  Please refer to the actual statute and related rules for complete information. If you have questions, please contact Faith Anderson at Faith.Anderson@dfi.wa.gov.

Exempt Transactions under RCW 21.20.320

Exempt Securities under RCW 21.20.310

Intrastate Crowdfunding under RCW 21.20.880 to .886

Federal Covered Securities


Exempt Transactions
(RCW 21.20.320)

Exemption General Description Filing Requirements Considerations Broker-Dealer Registration and Commissions Related Statute and Regulations
Non-Issuer Isolated Transactions - Non-control person Exemption for sales of an outstanding security by a person not in control of, controlled by, or under common control with the issuer and not involving a distribution No filing requirements If the sale is effected through a broker-dealer, limited to 3 sales in the State of Washington during the prior 12 months. The issuer is not required to register as a broker-dealer.
Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(1)

WAC 460-44A-050(1)(a) and (b)

Interpretive Statement 9
Non-Issuer Isolated Transactions - Control person Exemption for sales of outstanding securities by or on behalf of a person in control of, controlled by, or under common control with the issuer No filing requirements Must be effected in one of the following manners:

i. By a registered broker-dealer in accordance with Section 4(4) of the Securities Act of 1933 and Rule 144 thereunder; or

ii. Any other transaction not effected through a broker-dealer and not involving a distribution, if the sale, including any other sales of securities of the same class during the prior 12 months inside or outside this state by the person, does not exceed 1% of the outstanding shares or units of that class.
The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or a registered broker-dealer. Salespersons are not required to be registered.
RCW 21.20.320(1)

WAC 460-44A-050(1)(c)

Interpretive Statement 9
Isolated Transactions - Issuer Exemption for up to 3 sales of an outstanding security during the prior 24 months by or on behalf of the issuer No filing requirements Limited to 3 sales inside or outside the State of Washington during the prior 24 months The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(1)

WAC 460-44A-050(1)(d)

Interpretive Statement 9
Non-public Offering Exemption for sales not involving a public offering consistent with 4(a)(2) of the federal Securities Act of 1933 No filing requirements Offering must qualify for exemption from federal registration pursuant to Section 4(a)(2) of the federal Securities Act of 1933 and Securities and Exchange Commission Securities Act Release No. 4552 The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(1)

WAC 460-44A-050(2)

Federal Rules: Section 4(a)(2) (15 USC 77d(a)(2)) (l

Release 33-4552
Manual Exemption Exemption for offers or sales by a registered broker-dealer of outstanding securities of an issuer that is listed in a nationally recognized securities manual or that files certain reports on EDGAR.

Also includes any resale transactions by a sponsor of a unit investment trust registered under the Investment Company Act of 1940.
No filing requirements Nationally recognized securities manuals include Fitch Investors Service, Mergent Manuals and Standard and Poor's Corporation Records.

If the issuer is not listed in one of the above securities manuals, the issuer must file documents through EDGAR which include a description of the business, names of the officers and directors, an audited balance sheet of the issuer dated within 18 months, and audited income statements for each of the two preceding fiscal years.

See WAC 460-44A-100 for additional requirements.
The issuer is not required to be registered as a broker-dealer.

Commissions may be paid to  registered broker-dealers.
RCW 21.20.320(2)

WAC 460-44A-100

WAC 460-44A-110

WAC 460-10A-160
Unsolicited Orders Exemption for any non-issuer transaction effected pursuant to an unsolicited order for the purchase of securities No filing requirements Transaction must be effected by or through a registered broker-dealer. The issuer is not required to register as a broker-dealer.

Commissions may be paid to a registered broker-dealer.
RCW 21.20.320(3)

Interpretive Statement 16
Transactions between Issuer and Underwriter Exemption for transactions between the issuer or other person on whose behalf the offering is made and an underwriter No filing requirements   The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(4)
Sales of whole loans secured by real estate Exemption for any transaction in a bond or other evidence of indebtedness secured by real estate if the entire mortgage, deed of trust, or agreement, together with all the bonds is offered and sold as a unit No filing requirements This exemption is not available if the transaction involves: (a) a partial interest in one or more bonds, (b) one of multiple bonds sold to more than one purchaser as part of a single plan of financing, or (c) a security including an investment contract other than the bond. The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(5)

WAC 460-44A-075
Transactions by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian or conservator   No filing requirements   The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(6)
Transactions by bona fide pledgee Exemption for transactions executed by a bona find pledgee without any purpose of evading RCW 21.20 No filing requirements   The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(7)
Sales to financial institutions Exemption for sales to financial institutions, broker-dealers, or institutional buyers whether the purchaser is acting for itself or in some fiduciary duty   Financial institutions include banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, and pensions or profit-sharing trusts. The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(8)

Interpretive Statement 11
Small Offering Exemption/Rule 504 Small Offering Exemption (SOE) for offerings of up to $1 million made in reliance on federal Rule 504 of Regulation D or Rule 147 or Rule 147A Issuers are required to file a notice at least 10 business days prior to the first sale or delivery of signed subscription agreement from resident of WA.

If relying on federal Rule 504, file the following:

- A manually signed copy of the Form D filed electronically with the SEC;

- A report of the date of sale in Washington (may be included in cover letter);

- $50 filing fee. If relying on federal Rule 147or Rule 147A, file the following:

- Notice;

- Form U-2; and

- $50 filing fee.
No general solicitation

Sales limited to 20 non-accredited investors from Washington and unlimited accredited investors.

Issuer and related parties cannot be subject to any of the disqualification provisions set forth in rule 506(d).

Legend: Securities certificate must state restrictions on resale and transferability, and indicate the securities have not been registered.
The issuer is not required to register as a broker-dealer.

No commissions may be paid.
WAC 460-44A-504

Also:

WAC 460-44A-500 through 505 and WAC 460-44A-508

Federal Rules:

Regulation D

Rule 147

Rule 147A
Non-public offering under Rule 506(b) and RCW 21.20.320(1) Exemption for sales not involving a public offering pursuant to Rule 506(b) of Regulation D To be filed within 15 days of first sale or delivery of signed subscription agreement from resident of WA:

A manually signed copy of the Form D filed electronically with the SEC;

- A report of the date of first sale in Washington (may be included in cover letter); and

- $300 filing fee.

Filings may be submitted electronically at EFD.
Effective October 9, 1996, pursuant to the National Securities Market Improvement Act of 1996 (NSMIA), offerings made pursuant to federal Rule 506 are preempted from state regulation. Such offerings, however, remain subject to the filing and fee requirements.

The offering may be sold to an unlimited number of accredited investors and to not more than 35 non-accredited investors, regardless of residency. There is no limit on the offering amount.
For offerings exempt under Rule 506(b) of Regulation D, there are no licensing requirements and no restrictions on the payment of commissions. RCW 21.20.320(1)

WAC 460-44A-506

Also:

WAC 460-44A-500 through 505

Federal Rules:

Regulation D
Sales to accredited investors pursuant to public solicitation Model Accredited Investor Exemption (MAIE) for offerings limited to accredited investors. Issuer must be relying upon an exemption from federal registration pursuant to Section 3(b)(1) of the Securities Act of 1933 which provides for public solicitation. To be filed within 15 days of first sale or delivery of signed subscription agreement from resident of WA:

- MAIE form;

- Form U-2; and

- $300 filing fee.
The only corresponding federal exemption, that does not require an extensive federal filing, is Rule 504 of Regulation D, which is capped at $5 million. Therefore, this exemption is also effectively capped at $5 million.

The issuer must reasonably believe that all purchasers are purchasing for investment purposes only, not for resale.

Issuer and related parties cannot be subject to any of the disqualification provisions set forth in WAC 460-44A-300(5)(a).
The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers.  Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(17)

WAC 460-44A-300

WAC 460-44A-501(1)
Preorganization Certificates Exemption for up to 10 sales of preorganization certificates if no commissions are paid and no payment is made by the subscribers No filing requirements This exemption is available to issuers incorporating in certain states that require a minimum number of subscribers to "incorporate."  Not available to Washington corporations because Washington does not require a minimum number of subscribers. The issuer is not required to register as a broker-dealer.

No commissions may be aid. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(10)
Existing security holders Exemption for any transactions pursuant to an offer to existing security holders of the issuer There are no filing requirements unless a commission will be paid, in which case the issuer must file a notice specifying the terms of the offer at least 5 business days prior to any sale along with a Form U-2. The sale may move forward after five business days if the Director does not disallow the exemption. Existing security holders include persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants exercisable within not more than 90 days of their issuance. The issuer is not required to register as a broker-dealer.

If a notice is filed first, commissions may be paid to salespersons or broker-dealers.  Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(11)

Interpretive Statement 12

Interpretive Statement 13

Interpretive Statement 14
Red Herring Exemption Exemption for offers, but not sales, of securities for which registration statements have been filed under RCW 21.20 and the Securities Act of 1933 Registration statement must be on file with the Division and the SEC Exemption is for offers only, not sales.

In order to claim exemption, the issuer must not be the subject of any stop order or refusal order and no public proceeding or examination looking toward such an order may be pending under RCW 21.20 or the Securities Act of 1933.
The issuer is not required to register as a broker-dealer.

Because no sales may occur, no commissions may be paid.
RCW 21.20.320(12)
Stock Dividends Exemption for the issuance of any stock dividend by a corporation No filing requirements The corporation distributing the stock does not necessarily have to be the issuer of the stock.

Nothing of value may be given by the stockholders in consideration for the stock dividend. Stockholders can elect to receive the dividend in cash or stock.
The issuer is not required to register as a broker-dealer.

Because no payment may be made in connection with a stock dividend, no commissions may be paid.
RCW 21.20.320(13)
Mergers/ Reorganizations Exemption for any transaction incident to a right of conversion or a statutory or judicially approved reclassification, recapitalization, reorganization, quasi reorganization, stock split, reverse stock split, merger, consolidation, or sale of assets. No filing requirements The transactions must be conducted pursuant to the statutory provisions in the state in which the issuer is incorporated or pursuant to judicial approval. The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers. Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(14)
Secondary trading Exemption for sales of securities through registered broker-dealers of securities previously sold and distributed to the public No filing requirements Securities previously sold and distributed to the public does not include resales of securities previously sold to the public pursuant to federal Regulation D.

Securities sold pursuant to this exemption must be sold at prices reasonable related to the current market price, may not constitute the whole or a part of an unsold allotment to the broker-dealer as an underwriter, and must have been lawfully sold and distributed under state securities laws.
The issuer is not required to register as a broker-dealer.

Sales may be effected by and commission may be paid to registered broker-dealers or persons exempted from the registration requirements of RCW 21.20.040.
RCW 21.20.320(15)

WAC 460-44A-200
Transactions by cooperative associations Exemption for transactions by a mutual or cooperative association that involves a non-transferable instrument or interest that qualifies its holder to be a member or is issued in connection the holder's membership. There are no filing requirements if the offering does not involve public solicitation or if the association is an employee cooperative and identifies itself as an employee cooperative in advertising or public solicitation.

Otherwise, for transactions which involve public solicitation, the issuer must file a Cooperative/Mutual Association Notification of Claim of Exemption specifying the terms of the offer at least 10 business days prior to any solicitation and a Form U-2.  The issuer may begin soliciting investors after 10 business days if the Director does not disallow the exemption.
The transaction must involve an instrument or interest that is nontransferable except in the case of death, operation of law, and in other limited circumstances.

The instrument or interest must either: (A) qualify its holder to be a member or patron of the association; (B) represent a contribution of capital to the association by a person who is or intends to become a member or patron; (C) represent a patronage dividend or other patronage allocation; or (D) represent the terms or conditions by which a member or patron purchases, sells, or markets products, commodities, or services from, to, or through the association.
The issuer is not required to register as a broker-dealer.

Commissions may be paid to salespersons or broker-dealers.Registration as a salesperson or broker-dealer is not required.
RCW 21.20.320(16)

Exempt Securities
(RCW 21.20.310)

Exemption General Description Filing Requirements Considerations Broker-Dealer Registration and Commissions Related Statute and Regulations
Municipal Securities Exemption for any security or certificate of deposit issued or guaranteed by the U.S., state, political subdivision, or any agency or corporate or other instrumentality of the foregoing. If the securities are payable solely from nongovernmental, industrial or commercial enterprise and not otherwise exempt under WAC 460-42A-080, the issuer must file the following prior to the initial offer in this state pursuant to WAC 460-18A-100:

- Notice form;

- Form U-2; and

- Fee of $100 for the first $100,000 offered in this state, plus 1/20 of 1% of the amount in excess of $100,000.
Does not include a security that is payable solely from revenues received from a nongovernmental industrial or commercial enterprise (e.g. hospital, health care facility or university) UNLESS such payments are made or unconditionally guaranteed by a person whose securities are exempt from registration pursuant to subsections (7) or (8) of RCW 21.20.310.

OR The security meets either: (1) the security receives a rating of "AA" or better from S&P or Mergent's Manuals; or (2)(a) the security is issued to fund a single-family mortgage loan program operated by a state housing finance agency; and (b) the security receives a rating of at least "A+" from S&P or Mergent's Manuals.
The issuer is not required to register as a broker-dealer, nor are sales agents of the issuer required to be licensed as securities salespersons.

Commissions may be paid to broker-dealers or their salespersons.  Registration as a salesperson or broker-dealer is required, unless an exemption from registration otherwise exists.
RCW 21.20.310(1)

WAC 460-42A-020

WAC 460-42A-030

Policy Statement 8

RCW 21.20.340(1)(b)

RCW 21.20.005(2)

Federal Rules:
Section 3(a)(2) (15 USC 77c(a)(2))

Section (18)(b)(4)(E) (15 USC 77r(b)(4)(E))
Securities issued by Canadian and foreign municipalities Any security issued or guaranteed by Canada or other foreign government with which the U.S. maintains diplomatic relations. No filing requirements Does not include any security payable solely from revenues to be received from a nongovernmental industrial or commercial enterprise unless such payments are made and unconditionally guaranteed by a person whose securities are exempt from registration pursuant to RCW 21.20.310(7) or (8). The issuer is not required to register as a broker-dealer, nor are sales agents of the issuer required to be licensed as securities salespersons.

Commissions may be paid to broker-dealers or their salespersons. Registration as a salesperson or broker-dealer is required, unless an exemption from registration otherwise exists.
RCW 21.20.310(2)

RCW 21.20.005(2)
Securities issued by banks Any security issued by and representing an interest in or a debt of, or guaranteed by an bank organized under the laws of the U.S., or any bank or trust company organized and supervised under the laws of any state No filing requirements   The issuer is not required to register as a broker-dealer, nor are sales agents of the issuer required to be licensed as securities salespersons.

Commissions may be paid to broker-dealers or their salespersons.  Registration as a salesperson or broker-dealer is required, unless an exemption from registration otherwise exists.
RCW 21.20.310(3)

RCW 21.20.005(2)

Interpretive Statement 3

Interpretive Statement 4
Securities issued by other financial institutions Any security issued by and representing an interest in or a debt of, or guaranteed by any federal savings and loan association, or any building and loan or similar association organized under the laws of any state and authorized to do business in this state No filing requirements   The issuer is not required to register as a broker-dealer, nor are sales agents of the issuer required to be licensed as securities salespersons.

Commissions may be paid to broker-dealers or their salespersons. Registration as a salesperson or broker-dealer is required, unless an exemption from registration otherwise exists.
RCW 21.20.310(4)

RCW 21.20.005(2)

Interpretive Statement 4
Securities issued by insurance companies Any security issue by and representing an interest in or a debt of, or insured or guaranteed by, any insurance company authorized to do business in this state. No filing requirements   The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
RCW 21.20.310(5)
Securities issued by credit unions Any security issued or guaranteed by any credit union, industrial loan association, or similar association organized and supervised under the laws of this state No filing requirements   The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
RCW 21.20.310(6)
Securities issued by railroad or public utility Any security issued or guaranteed by any railroad, other common carrier, public utility or holding company

This section also exempts equipment trust certificates in respect of equipment conditionally sold or leased to a railroad or public utility, if other securities issued by such railroad or public utility would be exempt under this subsection.
No filing requirements The issuer must either be: (a) subject to the jurisdiction of the interstate commerce commission (no longer exists); (b) a registered holding company under the Public Utility Holding Company Act of 1935; (c) regulated in respect of its rates and charges by certain governmental authorities; or (d) regulated in respect of the issuance or guarantee of the security by a governmental authority of the U.S., any state, Canada, or any Canadian province. The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
RCW 21.20.310(7)
Blue chip exemption Exemption for offers and sales of securities by an issuer which has a class of securities that is required to be and is registered under Section 12 of the Securities Exchange Act of 1934, and has been so registered for the three years immediately preceding the offering date. No filing requirements The issuer must have had annual consolidated net income of at least one million dollars in four of its last five fiscal years including its last fiscal year and if the offering is of interest bearing securities, at least 1 1/2 times its annual interest expense.

Offerings of stock or shares must be on equal or superior terms with outstanding securities of the issuer.

See additional requirements in WAC 460-42A-080.
The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
RCW 21.20.310(8)

WAC 460-42A-080
Listed securities Any security listed or approved for listing upon notice of issuance on the NYSE; NYSE American; NASDAQ/NGM; Tier I of the NYSE Arca, Inc.; Tier I of the NASDAQ PHLX LLC; the CBOE; options listed on the Nasdaq ISE LLC; the Nasdaq Capital Market; Tier I and Tier II of BATS BZX Exchange, Inc.; and Investors Exchange LLC. No filing requirements   The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
RCW 21.20.310(8)

WAC 460-42A-081
World Class Foreign Issuer Securities offered by a foreign issuer which has a class of equity securities listed for trading on a foreign exchange No filing requirements See additional requirements in WAC 460-42A-082. The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
RCW 21.20.310(8)

WAC 460-42A-082
International Banks Any security issued or guaranteed as to both principal and interest by an international bank of which the United States is a member No filing requirements   The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
RCW 21.20.310(8)

WAC 460-42A-085
Commercial Paper Any prime quality negotiable paper not intended to be marketed to the general public and of the type eligible for discounting by federal reserve banks. No filing requirements Commercial paper must evidence an obligation to pay cash within nine months of the date of issuance, exclusive of days of grace, or be a renewal of such paper that is likewise limited. Exemption also applies to any guarantee of such paper or of any such renewal. The issuer is not required to register as a broker-dealer, nor are sales agents of the issuer required to be licensed as securities salespersons.

Commissions may be paid to broker-dealers or their salespersons. Registration as a salesperson or broker-dealer is required, unless an exemption from registration otherwise exists.
RCW 21.20.310(9)

RCW 21.20.005(2)
Securities issued pursuant to employee benefit plans Any security issued pursuant to an employee stock option plan, savings, pension, profit-sharing, or similar benefit plan There are no filing requirements if the plan meets the qualifications of Sections 401, 422 or 423 of the Internal Revenue Code. There are also no filing requirements if the plan includes both incentive stock options qualified under Section 422 and nonqualified incentive stock options.

Otherwise, at least 30 days prior to offering the plan to any employees in this state, the issuer must file the following:   

 - Copy of the Plan  

- Form U-2  

 Assuming the Director has no comments regarding the plan, an acknowledgement will be sent to the issuer or its counsel waiving the remainder of the 30-day period.
  The issuer is not required to register as a broker-dealer, nor are sales agents of the issuer required to be licensed as securities salespersons.

Commissions may be paid to broker-dealers or their salespersons.  Registration as a salesperson or broker-dealer is required, unless an exemption from registration otherwise exists.
RCW 21.20.310(10)

RCW 21.20.005(2)

Interpretive Statement 6
Securities issued by nonprofit organizations Any security offered and sold to members, contributors, or participants in a nonprofit organization organized exclusively for religious, educational, fraternal, or charitable purposes Issuers are required to file a notice at least 10 business days prior to the commencement of the offering in Washington. The notice consists of the Notification of Claim of Exemption and the $50 filing fee. The Director has 10 full business days to disallow the offering. Refer to RCW 21.20.310(11) for specific disclosure statements that must be included in the written disclosure provided to investors. The issuer is not required to register as a broker-dealer, nor are sales agents of the issuer required to be licensed as securities salespersons.

Commissions may be paid to broker-dealers or their salespersons.  Registration as a salesperson or broker-dealer is required, unless an exemption from registration otherwise exists.
RCW 21.20.310(11)

RCW 21.20.340(11)

RCW 21.20.005(2)

Also:

RCW 84.36.800(4)
Charitable gift annuity by a university/college Any charitable gift annuities issued by a board of a state university, regional university or of the state college No filing requirements   Not applicable RCW 21.20.310(12)

RCW 21.20.005(2)
Charitable gift annuity by an issuer Any charitable gift annuity issued by an insurer or institution holding a certificate of exemption under RCW 48.38.010 No filing requirements   Not applicable RCW 21.20.310(13)

RCW 21.20.005(2)

Also:

RCW 48.38.010

Intrastate Crowdfunding
(RCW 21.20.880 to .886)

Exemption General Description Filing Requirements Considerations Broker-Dealer Registration and Commissions Related Statute and Regulations
Small Securities Offering/Intrastate Crowdfunding Intrastate crowdfunding exemption at RCW 21.20.880 The Securities Division must declare the offering exempt before the issuer can offer and sell in Washington.

Issuers must file the following:

- Washington Crowdfunding Form, and documents specified in WAC 460-99C-010.

- $600 filing fee.
The offering must be made in reliance on federal Rule 147 or Rule 147A.

Maximum offering amount of $1 million. All investors must be Washington residents. Issuer must be located in Washington. Restrictions on resales apply.

The amount that each investor can invest is limited to the lesser of: (a) $2,000 or 5% of income or net worth, whichever is greater, if either the annual income or net worth of the investor is less than $100,000; or (b) 10% of the annual income or net worth of the investor, if either the annual income or net worth of the investor is greater than $100,000.

Issuer must provide annual reports to investors.

For more information, see our Brochure.
The issuer is not required to register as a broker-dealer. Sales agents are not required to be licensed as securities salespersons. RCW 21.20.880 to .886

Chapter 460-99C WAC

Rule 147

Rule 147A

Federal Covered Securities

Federal covered securities are securities that are preempted from state registration by Section 18(b)(4) of the Securities Act of 1933. However, you may be required to make a notice filing with the Securities Division to sell federal covered securities in Washington.

Federal Covered Security General Description State Notice Filing Requirements Considerations Broker-Dealer Registration and Commissions Related Statute and Regulations
Federal Regulation Crowdfunding Exemption (Reg. CF) Federal exemption for crowdfunding offerings under Section 4(a)(6) of the Securities Act of 1933 and Regulation CF adopted thereunder. An issuer that offers and sells securities under federal Regulation Crowdfunding, that either (1) has its principal place of business in Washington; or (2) sells 50% or greater of the aggregate amount of the offering to Washington residents, must file the following:

- Uniform Notice of Federal Crowdfunding Offering Form (Form U-CF), or copies of all documents filed with the SEC

- Form U-2

- Fee of $100 for the first $100,000 offered in this state, plus 1/20 of 1% of the amount in excess of $100,000. Renewal fee is $50.
Offering of up to $1 million under federal Regulation Crowdfunding.

Timing of the Notice Filing:

If the issuer has its principal place of business in Washington, the notice filing must be filed in Washington when the issuer makes its initial Form C filing with the SEC.

If the issuer does not have its principal place of business in Washington, but residents of this state have purchased 50% or greater of the aggregate amount of the offering, the notice filing must be filed when the issuer becomes aware that such purchases have met this threshold and in no event later than fifteen days from the date of completion of the offering.
Securities must be offered through a registered broker-dealer or crowdfunding portal. Securities salespersons of the issuer may be required to register. WAC 460-18A-210

Section 4(a)(6) (15 USC 77d(a)(6))

Regulation Crowdfunding

Section 18(b)(4)(C) (15 USC 77r(b)(4)(C))
Regulation A Tier 2 Offerings under Tier 2 of Regulation A of the Securities Act of 1933 An issuer must submit the following at least 21 calendar days prior to the initial sale in Washington:

- Regulation A – Tier 2 Offering Notice Filing Form, or copies of all documents filed with the SEC.

- Form U-2

- Fee of $100 for the first $100,000 offered in this state, plus 1/40 of 1% of the amount in excess of $100,000. Renewal fee is $100.
Offering up to $50 million under federal Regulation A Tier 2.

No more than $15 million of the offering may be offered by selling security holders that are affiliates of the issuer.

Investors must be accredited investors, or invest no more than 10% of the greater of their annual income or net worth.

Offering must be qualified by SEC before offering and selling securities.
The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
WAC 460-18A-200

Regulation A

Section 18(b)(3) (15 USC 77r(b)(3))

Salesperson for issuers: WAC 460-23B
Non-public offering under Rule 506(b) and RCW 21.20.320(1) Exemption for sales not involving a public offering pursuant to Rule 506(b) of Regulation D To be filed within 15 days of first sale or delivery of signed subscription agreement from resident of WA:

A manually signed copy of the Form D filed electronically with the SEC;

- A report of the date of first sale in Washington (may be included in cover letter); and

- $300 filing fee.

Filings may be submitted electronically at EFD.
Effective October 9, 1996, pursuant to the National Securities Market Improvement Act of 1996 (NSMIA), offerings made pursuant to federal Rule 506 are preempted from state regulation. Such offerings, however, remain subject to the filing and fee requirements.

The offering may be sold to an unlimited number of accredited investors and to not more than 35 non-accredited investors, regardless of residency. There is no limit on the offering amount.
For offerings exempt under Rule 506(b) of Regulation D, there are no licensing requirements and no restrictions on the payment of commissions. RCW 21.20.320(1)

WAC 460-44A-506

Also:

WAC 460-44A-500 through 504

Federal Rules:
Regulation D

Section 18(b)(4)(F) (15 USC 77r(b)(4)(F))
Offering involving general solicitation under Rule 506(c) Exemption for sales only to verified accredited investors pursuant to Rule 506(c) of Regulation D To be filed within 15 days of first sale or delivery of signed subscription agreement from resident of WA:

- A manually signed copy of the Form D filed electronically with the SEC;

- A report of the date of first sale in Washington (may be included in cover letter); and

- $300 filing fee.

Filings may be submitted electronically at EFD.
Effective October 9, 1996, pursuant to the National Securities Market Improvement Act of 1996 (NSMIA), offerings made pursuant to federal Rule 506 are preempted from state regulation. Such offerings, however, remain subject to the filing and fee requirements.

All purchasers of the securities must be verified accredited investors. There is no limit on the offering amount.
For offerings involving general solicitation under Rule 506(c) of Regulation D, salespersons and broker-dealers may need to be licensed in order to receive commissions or other remuneration. WAC 460-44A-506

Section 18(b)(4)(F) (15 USC 77r(b)(4)(F))

Also:

WAC 460-44A-500 through 508

Federal Rules:

Regulation D
Offerings by Out-of-State Municipal Securities Issuers Offerings by out-of-state issuers of municipal securities that are not otherwise exempt from registration under RCW 21.20.310(1) and WAC 460-42A-030, or WAC 460-42A-080 The issuer must file the following prior to the initial offer in this state pursuant to WAC 460-18A-100:

- Notice form;

- Form U-2; and

- Fee of $100 for the first $100,000 offered in this state, plus 1/20 of 1% of the amount in excess of $100,000.
Issuers that qualify for the exemption at RCW 21.20.310(1) and WAC 460-42A-030 do not need to make a notice filing. The issuer is not required to register as a broker-dealer, nor are sales agents of the issuer required to be licensed as securities salespersons.

Commissions may be paid to registered broker-dealers or their salespersons.
RCW 21.20.310(1)

WAC 460-42A-020

WAC 460-42A-030

Policy Statement 8

RCW 21.20.340(1)(b)

RCW 21.20.005(2)

Federal Rules:

Section 3(a)(2)(15 USC 77c(a)(2))

Section (18)(b)(4)(E) (15 USC 77r(b)(4)(E))
Closed-End Investment Companies Offerings of Closed-End Investment Companies Issuers must file the following prior to offering and selling securities in Washington:

- Form NF

- Form U-2

- Fee of $100 for the first $100,000 offered in this state, plus 1/20 of 1% of the amount in excess of $100,000
Securities must be notice filed before they are sold in the state. Oversales are subject to the Securities Act Policy Statement Regarding Oversales by Investment Companies.

Filings may be renewed each year by paying $100 renewal fee.
The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
WAC 460-18A-020

Policy Statement PS-22

"Section 18(b)(2) (15 USC 77r(b)(2))
Investment Companies other than Closed-End Investment Companies Offerings of Investment Companies other than Closed-End Companies Issuers must file the following prior to offering and selling securities in Washington:

- Form NF

- Form U-2

- Fee of $100 for the first $100,000 offered in this state, plus 1/40 of 1% of the amount in excess of $100,000
Securities must be notice filed before they are sold in the state. Oversales are subject to the Securities Act Policy Statement Regarding Oversales by Investment Companies.

Filings may be renewed for an additional one-year period by paying $50 renewal fee.
The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
WAC 460-18A-010

Policy Statement PS-22

Section 18(b)(2) (15 USC 77r(b)(2))
Traded Securities/Senior Securities Transactions in securities listed on the NYSE, NYSE American, or NASDAQ/NGM, or a national securities exchange that has listing standard that the SEC has determined by rule to be substantially similar to these exchanges; and offerings by an issuer of securities equal to or senior to securities listed on these exchanges No filing requirements   The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
Section 18(b)(1)(A)-(C) (15 USC 77r(b)(1)(A)-(C))

Rule 146
Transactions in securities of issuers that file reports pursuant to Section 13 and 15(d) of the Securities Exchange Act of 1934 Transactions in reporting company stock exempt under Section 4(a)(1) or (3) No filing requirements   The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed, unless an exemption otherwise exists.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
Section 4(a)(1) (15 USC 77d(a)(1))

Section 4(a)(3) (15 USC 77d(a)(3))

Section 18(b)(4)(A) (15 USC 77r(b)(4)(A))

Section 13 (15 USC 78m)

Section 15(d) (15 USC 78o(d))
Section 4(a)(4) Unsolicited transactions by brokers in securities on any exchange or in the over-the-counter market No filing requirements   The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed, unless an exemption otherwise exists.

Commissions may be paid to registered broker-dealers or their licensed salespersons.
Section 4(a)(4) (15 USC 77d(a)(4))

Section 18(b)(4)(B) (15 USC 77r(b)(4)(B))
Section 4(a)(7) Exemption for non-issuer resales to accredited investors of securities initially offered and sold under Rule 506(b) or (c) No filing requirements Non-issuer resales of securities initially offered and sold under Regulation D Rule 506(b) and (c). The resales must be made to accredited investors. No general solicitation. Bad actor disqualification applies to sellers. Seller must request disclosure information from issuers specified in Section 4(a)(7), and provide it to buyers. The issuer is not required to register as a broker-dealer. Sales agents of the issuer are required to be licensed.

Broker-Dealer, salesperson, and agent of the issuer registration may be required unless an exemption otherwise exists.
Section 4(a)(7) (15 USC 77d(a)(7))

Section 18(b)(4)(G) (15 USC 77r(b)(4)(G))