What is Blue Sky Manual Exemption
The “Blue Sky” laws of the United States are the individual state laws that regulate the offer and sale of securities and the registration of broker/dealers. All securities issued by a company must be offered and sold in compliance with or under an exemption from blue sky laws and regulations of each state in which securities are sold.
Domestic and non-U.S. companies that trade on the over-the-counter platform in the U.S. must be properly registered with the individual U.S. states. One way to accomplish this is for a company to register individually with each state. This method involves the considerable expense of individual state licensing fees and attorneys’ fees.
An alternative method is for a company to have a published description in a “recognized securities manual”, which have been designated by 39 U.S. states. After a review of audited financial information, a company that is approved and published in a “recognized securities manual ” will qualify for the exemption in two-thirds of the U.S. states. The “manual exemption” is a provision within the Blue Sky statutes that can exempt a company from having to register with a state (for secondary trading compliance of its securities) if the company’s description appears in a “recognized securities manual” approved by that state. This enables a company to achieve the desired result without the effort and expense of individual state registration.
To smooth the way for brokers to trade a company’s stock in the U.S. over-the-counter market, it is important that an OTC-traded company be in compliance with the individual state securities laws right from the beginning. A published description will facilitate the trading of a company’s stock and vastly broaden its reach to brokers throughout the United States.
Key Benefits
- Significantly reduces effort and expense of individual state licensing/filing fees
- Recognized and trusted by 39 states that act in accordance with Blue Sky regulatory securities laws for secondary trading of a company’s common stock or ADR’s
- Enable brokers to actively solicit your company’s stock in certain states for secondary trading purposes
- Target a vast audience of over one million securities analysts, portfolio managers, and individual investors who will receive ongoing coverage of key company financial and relevant business developments in print and online
Issuer Requirements
- Audited financial statements. If a merger or acquisition has occurred, a pro-forma reflecting the new or merged entity is also required.
- Description of active business & operations (blind pools not accepted)
Disclaimer — Some states have specific requirements and should be contacted individually.