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Exemptions

NON-SELF EXECUTING EXEMPTIONS

Commonly Used Exemptions that require filings with the Securities Division:

Vermont Crowdfunding – Vermont’s Intrastate Crowdfunding Exemption where Vermont businesses can offer securities to Vermont residents.

Full requirements of Vermont Crowdfunding can be found in V.S.R. § 5-11.

Filing Requirements:

  • A certificate of good standing issued by the issuer’s domiciliary state; and if the issuer is not domiciled in Vermont, a certificate of authority issued by the Vermont Secretary of State, both of which must be issued within thirty (30) days of filing with the commissioner; 
  • A copy of the offering document  
  • Name, address, telephone number and social security number for any of the issuer’s officers, directors, partners, members, twenty percent (20%) shareholders and promoters presently connected with the issuer in any capacity;
  • The primary contact person for communication with the commissioner and that person’s phone number and e-mail address

Required Fee: Check payable to Vermont Department of Financial Regulation

  • Initial Filing: $200
  • Annual renewal for duration of offering: $200

Testing the Waters

Issuers may be able to gauge interest in a potential Regulation A offering prior to registration.

Full requirements can be found in V.S.R. § 6-4.

Non-Profit Securities Exemption

Full requirements of the Non-profit Securities Exemption may be found in 9 V.S.A. § 5201(7) and V.S.R. § 5-4.

Filing Requirements thirty (30) days prior to sale:

  • The material terms of the proposed offer or sale;
  • The identity of the issuer;
  • The amount and type of securities to be sold pursuant to the exemption;
  • A description of the use of proceeds from the offering;
  • The name, business address, and a brief description of the employment responsibilities of each agent who will represent the organization in the offer or sale of the securities in Vermont;
  • Any offering document, prospectus, and/or trust indenture;
  • A consent to service of process (Form U-2 and, if necessary, a Form U-2A);
  • Any other information requested by the commissioner.

Required Fee: Check payable to the Vermont Department of Financial Regulation

  • Initial filing: $200
  • Annual renewal filing for duration of offering: $200

Vermont Accredited Investor Exemption – Allows issuers to offer securities exclusively to Accredited Investors without registering the offering in the state. 

Full requirements for the Vermont Accredited Investor Exemption can be found in V.S.R. § 5-7.

Filing Requirements within 15 days of first sale in Vermont:

  • Accredited Investor Exemption Uniform Notice of Transaction
  • Form U-2
  • General announcements/advertisements

Required Fee: Check payable to the Vermont Department of Financial Regulation

  • Initial filing: $200
  • Annual renewal filing for duration of offering: $200

SELF-EXECUTING EXEMPTIONS

Commonly Used Self-Executing Exemptions:

Solar/Utility No-action (SUN) Exemption-Exempts certain issuers offering securities investments in community solar projects

Full requirements for the SUN Exemption can be found in DFR Order 14-023-S

Cooperative Association Exemptions: Exempts certain securities offered by businesses formed under the cooperative laws of Vermont.

Non-Profit:

  • Full requirements of the non-profit Cooperative Association Exemption can be found in 9 V.S.A. § 5201(8)

For Profit:

  • Full requirements of the for-profit Cooperative Association Exemption can be found in V.S.R. § 5-9

Non-Issuer Transaction Exemption

Exempts secondary market sales of securities from registration under limited circumstances. The full requirements of the Non-issuer Transaction Exemption can be found in V.S.R. § 5-6

Manual Exemption

  • Exempts secondary markets transactions from registration if listed in an approved securities manual.
  • Full Requirements of the Manual Exemption can be found in V.S.R. § 5-8.

DFR Approved Manuals:

• Mergent’s Industrial Manual

• Mergent’s International Manual

• OTCQX Best Market Manual

De Minimis Offering Exemption-Exempts securities offered in the state that:

  • Is purchased by fewer than 25 investors;  
  • Does not use general solicitation 
  • Does not pay commissions to any intermediary not registered as a broker-dealer in Vermont.

Full language of the De Minimis Offering Exemption can be found in 9 V.S.A. § 5202(14)

QUESTIONS?

Contact Director of Capital Markets Noel Hudson. 

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Securities