Securities

Regulation D Registration

To obtain a Regulation D application form, go to the forms page.

3 AAC 08.500. CREATION OF CLASSIFICATIONS.

The following classifications of transactions in securities are created, to which 3 AAC 08.500 – 3 AAC 08.540 apply:

(1) an offering relying on "Regulation D" as adopted by the SEC in 17 C.F.R. 230 and 239;

(2) an offering relying on another federal regulation or statute and that otherwise meets the requirements of 3 AAC 08.500 – 3 AAC 08.540.

3 AAC 08.501. DEFINITIONS SPECIFIC TO "REGULATION D" PROCEDURE.

(a) As used in 3 AAC 08.500 – 3 AAC 08.540 the definitions of the following terms are contained in 17 C.F.R. 230.501, as revised as of October 1, 1999, and are adopted by reference:

(1) "accredited investor;"

(2) "affiliate;"

(3) "aggregate offering price;"

(4) "business combination;"

(5) "calculation of number of purchasers;"

(6) "executive officer;"

(7) "issuer;"

(8) "purchaser representative."

(b) Unless the context indicates otherwise, in 3 AAC 08.501 – 3 AAC 08.540,

(1) "closing a sale" means that transaction under which the offeror becomes legally bound to sell the securities;

(2) repealed ___/___/2000

(3) "permitted Alaska purchaser" means a person who, at the time the person becomes a purchaser of the securities, comes within any of the following categories or whom the issuer reasonably believes comes within any of the following:

(A) a natural person who purchases, in this state, at least $10,000 of the securities being offered, if the purchaser’s total purchase does not exceed five percent of the purchaser’s net worth at the time of purchase; the purchase must be only for cash, marketable securities, or both; the net worth of the purchaser’s spouse may be included for the purpose of this subparagraph;

(B) a natural person who had an individual income in excess of $70,000 in each of the two most recent years and who reasonably expects an income in excess of $70,000 in the current year, if the amount purchased in this state does not exceed 10 percent of the person’s individual income for the most recent year; the purchase must be only for cash, marketable securities, or both; the income of a spouse may be included for the purpose of this subparagraph;

(C) a limited partnership, limited liability partnership, limited liability company, partnership, corporation, trust, or other entity in which each of the equity owners, or holders of beneficial interests in the case of a trust, satisfies the requirements of (A) or (B) of this paragraph, if the amount invested by the entity would be allowable as an individual purchase by each person under (A) or (B) of this paragraph.

(c) A person who is not a registered agent, a registered state investment adviser, or a federal covered adviser in compliance with AS 45.55.040(h) and who acts as a purchaser representative is not considered an agent, state investment adviser, or federal covered adviser if the activity as purchaser representative is merely an incidental part of the person’s usual activities or occupation.


3 AAC 08.503. REGISTRATION AND REPORTING OF "REGULATION D" OFFERINGS.

(a) An applicant registering under the provisions of 3 AAC 08.500 – 3 AAC 08.540 is only required to file the registration statement on State of Alaska Form 08-101, any items required by the registration statement, any items requested by the staff, and the fee required by in 3 AAC 08.920(a)(5). If additional documents, including the offering documents, are filed with the administrator, the administrator will treat the filing as an application for registration by qualification.

(b) Sales of an offering registered under 3 AAC 08.500 – 3 AAC 08.505 may be made only by a broker-dealer and salesperson registered under this chapter or by other persons exempted from registration by AS 45.55 or this chapter.

(c) Notwithstanding the requirements of (b) of this section, an issuer or sponsor of an issuer to be formed may register up to five salespersons as agents who are exempt from the examination requirement of 3 AAC 08.011(h)(2). To register an agent, the issuer or sponsor of an issuer must file an application for registration in accordance with 3 AAC 08.011(h)(1) and pay a fee in accordance with 3 AAC 08.015(a)(1)(B). A salesperson may not be registered to more than one person at a time without complying with the dual registration provisions of 3 AAC 08.010(e)-(f).

(d) The registrant shall, for three years after the closing of the offering, maintain and keep open for inspection by the administrator or his designee inside or outside of this state

(1) all offering materials;

(2) records relating to purchaser representatives used, and materials and data relied upon to determine the qualifications of the purchaser representatives;

(3) records relating to purchasers, and materials and data relied upon to determine the qualifications of the purchasers;

(4) records relating to securities sales after the closing of the offering, that are considered as part of the offering; and

(5) all offering materials used in connection with offerings registered under 3 AAC 08.500 – 3 AAC 08.505.

(e) The administrator will, in the administrator’s discretion, modify or waive any requirement in 3 AAC 08.500 – 3 AAC 08.505. An applicant for waiver must prove that the action requested is consistent with AS 45.55, and that the investors are otherwise adequately protected.


3 AAC 08.504. REGISTRATION OF RULE 504 OFFERINGS.

(a) Offerings of securities not exceeding the greater of $1,000,000 or the limit established under 17 C.F.R. 230.504(b)(2) (SEC Rule 504(b)(2)) may be registered as follows:

(1) an unlimited number of sophisticated or suitable purchasers may be involved;

(2) written offering documents providing full and adequate disclosure of material facts must be provided to each purchaser;

(3) advertising is not allowed without a waiver from the administrator under 3 AAC 08.520(b);

(4) the sum of the following amounts may not exceed the greater of $1,000,000 or the limit established under 17 C.F.R. 230.504(b)(2):

(A) the dollar value for the amount of securities being registered;

(B) the aggregate offering price of all securities of the issuer sold within the 12 months before the effective date of the certificate of registration;

(C) the aggregate offering price of all securities of the issuer sold during the course of the offering being registered if the securities were sold in reliance on 15 U.S.C. 77c(b) (sec. 3(b) of the Securities Act of 1933) or in violation of 15 U.S.C. 77e(a) (sec. 5(a) of the Securities Act of 1933);

(5) provisions on offerings to sophisticated purchasers are as follows:

(A) the registration of an offering to sophisticated purchasers under this section allows sales to

(i) an accredited investor;

(ii) a permitted Alaska purchaser; or

(iii) a person, acting alone or with a purchaser representative, who the issuer reasonably believes has the knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the proposed investment; the issuer’s reasonable belief of the person’s knowledge and experience must exist before a person becomes a purchaser;

(B) sales under this paragraph may be made by the issuer, a person registered in this state to sell for the issuer, a broker-dealer, or a person exempted from registration by AS 45.55 or this chapter;

(6) the registration of an offering to suitable purchasers under this section allows

(A) sales to be made only by a broker-dealer registered in this state who is also registered as a broker-dealer with the SEC under 15 U.S.C. 78o(b) (sec. 15(b) of the Securities Exchange Act of 1934);

(B) registration if the broker-dealer who will conduct the sales reasonably believes that adequate diligence and review have been applied in connection with the offering being registered in order for the broker-dealer to adequately determine the suitability of the offering to a purchaser; and

(C) sales if the broker-dealer reasonably believes that the security is suitable for the purchaser after reasonable inquiry concerning the purchaser’s investment objectives, financial situation, and needs, and after consideration of any other information known by the broker-dealer.

(b) For purposes of this section, 17 C.F.R. 230.504(b)(2), as revised as of October 1, 1999, is adopted by reference.


3 AAC 08.505. REGISTRATION OF RULE 505 OFFERINGS.

(a) Offerings of securities not exceeding the greater of $5,000,000 or the limit established under 17 C.F.R. 230.505(b)(2)(i) (SEC Rule 505(b)(2)(i)) may be registered under this section, subject to the following:

(1) an unlimited number of accredited investors may be involved;

(2) the issuer must reasonably believe that, applying the provisions for "calculation of number of purchasers" in 17 C.F.R. 230.501, the number of purchasers, other than accredited investors, total no more than 35;

(3) sales may be made only to sophisticated or suitable purchasers as described in (b)-(c) of this section;

(4) the requirements of 3 AAC 08.515(a) and (c)-(f) apply to offerings registered under this section;

(5) advertising is not allowed without a waiver from the administrator under 3 AAC 08.520(b);

(6) the sum of the following amounts may not exceed the greater of $5,000,000 or the limit established under 17 C.F.R. 230.505(b)(2)(i):

(A) the dollar value for the amount of securities being registered;

(B) the aggregate offering price of all securities of the issuer sold within the 12 months before the effective date of the certificate of registration;

(C) the aggregate offering price of all securities of the issuer sold during the course of the offering being registered if the securities were sold in reliance on 15 U.S.C. 77c(b) (sec. 3(b) of the Securities Act of 1933) or in violation of 15 U.S.C. 77e(a) (sec. 5(a) of the Securities Act of 1933).

(b) Provisions on offerings to sophisticated purchasers are as follows:

(1) the registration of an offering to sophisticated purchasers under this section allows sales to

(A) an accredited investor;

(B) a permitted Alaska purchaser; or

(C) a person, acting alone or with a purchaser representative, who the issuer reasonably believes has the knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the proposed investment; the issuer’s reasonable belief of the person’s knowledge and experience must exist before a person becomes a purchaser;

(2) sales under this paragraph may be made by the issuer, a person registered in this state to sell for the issuer, a broker-dealer, or a person exempt from registration by AS 45.55 or this chapter.

(c) The registration of an offering to suitable purchasers under this section allows

(1) sales to be made only by a broker-dealer registered in this state who is also registered as a broker-dealer with the SEC under 15 U.S.C. 78o(b) (sec. 15(b) of the Securities Exchange Act of 1934);

(2) registration if the broker-dealer who will conduct the sales reasonably believes that adequate diligence and review have been applied in connection with the offering being registered in order for the broker-dealer to adequately determine the suitability of the offering to a purchaser; and

(3) sales if the broker-dealer reasonably believes that the security is suitable for the purchaser after reasonable inquiry concerning the purchaser’s investment objectives, financial situation, and needs, and after consideration of any other information known by the broker-dealer.

(d) For purposes of this section, 17 C.F.R. 230.505(b)(2)(i), as revised as of October 1, 1999, is adopted by reference. 


3 AAC 08.506. NOTICE FILING PROCEDURES FOR TRANSACTIONS OF FEDERAL COVERED SECURITIES NOT INVOLVING PUBLIC OFFERINGS.

(a) An issuer offering a federal covered security in a transaction that is not a public offering for the purposes of 15 U.S.C. 77d(2) and 15 U.S.C. 77r(b)(4)(D) (secs. 4(2) and 18(b)(4)(D) of the Securities Act of 1933) shall file with the administrator no later than 15 days after the first sale of that federal covered security in this state

(1) a notice on SEC Form D, including Part E and the Appendix, or on any successor form adopted by the SEC; and

(2) a nonrefundable notice filing fee as provided in 3 AAC 08.920(a)(3).

(b) A notice filing under this section is effective

(1) only if the administrator receives each item required by (a) of this section; and

(2) on the date that the administrator receives the last of the items required by (a) of this section.

(c) After receipt of the items required (a) of this section, the administrator will issue a certificate of notice as of the date of receipt of those items. Sales may occur before the effective date of the notice filing under this section.

(d) A notice filing under this section is valid for one year from the effective date established under (b) of this section, or for two years from that date if, when submitting the items required under (a) of this section, the issuer paid the fee required by 3 AAC 08.920(a)(3) for an automatic extension. To renew a notice, the issuer must submit the items required by (a) of this section, as if the issuer were making an initial filing.


Sec. 45.55.075. Federal covered securities.

(a) Unless otherwise exempt under AS 45.55.900, a security that is a federal covered security under 15 U.S.C. 77r(b)(2) (Securities Act of 1933) may only be offered for sale and sold into, from, or within the state upon the administrator's receipt of

(1) a copy of the registration statement filed by the issuer with the United States Securities and Exchange Commission or, in place of the registration statement, the Uniform Investment Company Notice Filing Form adopted by North American Securities Administrators Association, Inc., or a similar notice filing form;

(2) a consent to service of process signed by the issuer; and

(3) a notice filing fee as prescribed by the administrator for a notice filing under this section and, if necessary to compute the fee, a report of the value of the federal covered securities offered or sold in this state.

(b) A notice filing under this section may be renewed by filing, before the expiration of an effective notice filing, a renewal notice and filing fee as prescribed by the administrator and, if necessary to compute the fee, a report of the value of the federal covered securities offered or sold in this state. A renewal notice filing is effective on the expiration date of the previous notice filing.

(c) A notice filing under this section may be amended as provided by the administrator by regulation or order. A notice filing may be terminated by an issuer upon providing the administrator with notice of the termination.

(d) With respect to a security that is a covered security under 15 U.S.C. 77r(b)(4)(D) (Securities Act of 1933), the administrator, by regulation or order, may require the issuer to file a notice on United States Securities and Exchange Commission Form D and a consent to service of process signed by the issuer no later than 15 days after the first sale of a covered security in this state and a fee established by the administrator for a notice filing under this section.

(e) The administrator, by regulation or order, may require the filing of any document filed with the United States Securities and Exchange Commission under 15 U.S.C. 77a - 77bbbb (Securities Act of 1933), with respect to a covered security under 15 U.S.C. 77r(b)(3) or (4) (Securities Act of 1933).

(f) The administrator may issue a stop order suspending the offer and sale of a federal covered security, except a federal covered security under 15 U.S.C. 77r(b)(1) (Securities Act of 1933), if the administrator finds that

(1) the stop order is in the public interest; and

(2) there is a failure to comply with a condition established under this section.

(g) The administrator, by regulation or order, may waive any or all of the provisions of this section.


3 AAC 08.510. INTEGRATION REQUIREMENTS.

(a) All separate sales of securities by an issuer that are a part of the same offering registered under 3 AAC 08.501 – 3 AAC 08.505, or noticed under 3 AAC 08.506 are included as securities sold under the same offering, except as otherwise provided in this section.

(b) In determining whether to treat separate sales of securities inside or outside of this state as part of the same offering, the administrator will consider whether the sales

(1) are part of a single plan of financing;

(2) involve issuance of the same class of security;

(3) are made at or about the same time;

(4) are made for the same type of consideration; and

(5) are made for the same general purpose.

(c) A sale of securities made more than six months before the effective date of registration under 3 AAC 08.501 – 3 AAC 08.505, or of notice under 3 AAC 08.506, or more than six months after the termination of the offering, is not included as a sale made as part of the same offering under this section if sales of securities of the same or similar class by the issuer do not occur during either six-month period. For purposes of this subsection,

(1) the effective date of a registration under 3 AAC 08.504 or 3 AAC 08.505 is the date a registrant is authorized to sell securities under a certificate of registration issued by the administrator;

(2) the effective date of a notice under 3 AAC 08.506 is the date established under 3 AAC 08.506(b);

(3) the termination date of the offering under 3 AAC 08.504, 3 AAC 08.505, or 3 AAC 08.506 is the earlier of the

(A) expiration date of a certificate of registration in the case of an offering under 3 AAC 08.504 or 3 AAC 08.505, or a certificate of notice in the case of an offering under 3 AAC 08.506; or

(B) date of last sale of securities.

(d) An offering of an interest in a partnership is not included as a security sold under the same offering under 3 AAC 08.504 or 3 AAC 08.506, even if a common sponsor or affiliate is involved in an offering of interest in another entity, if the following conditions are satisfied:

(1) the partnership

(A) must be a separate legal entity;

(B) must maintain separate books and records; and

(C) may not commingle funds of the partnership with those of the sponsor or any other entity having the same sponsor;

(2) the partnership, at the time the interests are sold, must have an independent opportunity to meet its primary investment objective; for purposes of this paragraph, the partnership does not have an independent opportunity to meet its primary investment objective if the partnership is substantially dependent on the creation, continued existence, or economic results of investments of another entity having a common sponsor;

(3) a material portion of the gross offering proceeds of the partnership may not be invested in properties where another entity having a common sponsor has also invested, and continues to hold invested, a material portion of the other entity's gross offering proceeds;

(4) an offering that does not identify at least 50 percent of the assets in which the partnership intends to invest does not qualify under this subsection if

(A) another entity with a common sponsor was formed to conduct the same general type of activity and that entity has not invested or committed the major portion of that entity's gross offering price before commencement of this offering by the registering partnership; or

(B) the sponsor creates a simultaneous or subsequent offering through another entity to conduct the same general type of activity before the registering partnership has invested or committed for investment the major portion of the partnership's gross offering proceeds; this subparagraph does not apply if the investment to be made by the other entity is fully identified;

(5) an offering of interests in a partnership that is formed to engage in sale and leaseback transactions does not qualify under this subsection if the ultimate intended lessee of the assets in which the partnership invests is a sponsor of the partnership.

(e) A person may request an order from the administrator as to whether a transaction is exempt, under (b), (c), or (d) of this section, from treatment under (a) of this section as a sale under the same offering. To make that request, a person must file it with the person's application for registration, setting out arguments and citations in support of the request. For registrations under 3 AAC 08.504 and 3 AAC 08.505, and upon receipt of a properly filed request, the administrator will include with the certificate of registration an order as to whether separate sales will be integrated under this section.

(f) If, under (e) of this section, a person requests an order for an exemption under (c) or (d) of this section, but not for an exemption under (b) of this section, an order that an exemption is unavailable under (c) or (d) of this section does not raise a presumption of integration under (b) of this section.

(g) Offers and sales of securities under an employee benefit plan, as defined by 17 C.F.R. 230.405, are not included under (a) of this section for purposes of integration. For purposes of this subsection, the definition of "employee benefit plan" in 17 C.F.R. 230.405, as revised as of October 1, 1999, is adopted by reference.

(h) In this section,

(1) "partnership"

(A) includes a general partnership, limited partnership, limited liability partnership, joint venture, or other similar entity; and

(B) means a partnership existing on May 24, 1984 or formed on or after that date;

(2) "sponsor"

(A) means a promoter or person directly or indirectly instrumental in organizing the entity wholly or in part, or a person who manages or participates in the management of the partnership;

(B) includes a general partner and affiliate of the sponsor; and

(C) does not include an independent third party whose only compensation is for professional services rendered in connection with the offering of interests in the partnership; for purposes of this subparagraph, "independent third party" includes an attorney, accountant, or underwriter.


3 AAC 08.515. INFORMATION REQUIREMENTS.

(a) The provisions of 3 AAC 08.501 – 3 AAC 08.540 do not relieve a person from compliance with the statutory requirements of AS 45.55 for full and adequate disclosures of material items.

(b) If an offering is registered under 3 AAC 08.504, written disclosures must be provided in connection with all offers and sales as required under (a)(2) of that section.

(c) If an offering is registered under 3 AAC 08.505, the offeror must provide full and adequate disclosure of all matters material to an understanding of the issuer, the issuer's business, and the securities being offered. Disclosures must

(1) provide each prospective purchaser with at least the type of information and documentation required by 17 C.F.R. 230.502(b)(2); for purposes of this paragraph, 17 C.F.R. 230.502(b)(2), as revised as of October 1, 1999, is adopted by reference;

(2) include a procedure for a prospective purchaser to ask questions and receive answers concerning the terms of the offering and to obtain any additional information that

(A) the issuer possesses or can acquire through reasonable effort or expense; and

(B) is necessary to verify the accuracy of information provided under this section; and

(3) include a procedure for a prospective purchaser who is not an accredited investor to obtain a brief written description of any written information concerning the offering that is provided by the issuer to any accredited investor; failure by a purchaser to request the information does not constitute a waiver of the issuer’s statutory obligation to provide full and complete disclosure; for purposes of this paragraph, a prospective purchaser includes a permitted Alaska purchaser.

(d) Notwithstanding (c) of this section, if an offering is registered under 3 AAC 08.505 and is restricted to accredited investors, full and adequate disclosure of material items does not require disclosure of specific information or a specific method of providing disclosure.

(e) A disclosure required by this section must be provided to a person before that person purchases the securities.

(f) if written information is provided to a prospective permitted Alaska purchaser, the offering materials must contain the following legend, which must be set out in a prominent place:

"IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.

"THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHER-MORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

"THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME."


3 AAC 08.520. LIMITATIONS ON MANNER OF OFFERING.

(a) An issuer or person acting on behalf of an issuer may not offer or sell securities registered under 3 AAC 08.500 – 3 AAC 08.540 by general solicitation or general advertising. For purposes of this subsection, general solicitation or general advertising includes

(1) an advertisement, article, notice, or other communication published in a newspaper, magazine, or similar medium, or broadcast over television or radio; and

(2) a seminar or meeting to which attendees are invited by general solicitation or general advertising.

(b) The administrator will, in the administrator’s discretion, waive or conditionally waive the provisions of (a) of this section. To request a waiver, the registrant must

(1) file a request for waiver;

(2) provide the advertising materials or an adequate description of the advertising materials and identify the media that will be used;

(3) state the reasons for requesting the waiver and show that purchasers are otherwise protected; and

(4) provide an attorney’s opinion that the proposed use of the advertising will not invalidate the offering under the laws or regulations of any federal or state regulatory agencies having securities jurisdiction over the offering

3 AAC 08.530. DISQUALIFICATION.

(a) A person who is disqualified from using an exemption under 17 C.F.R. 230.504 or 17 C.F.R. 230.505 is also disqualified from registering under 3 AAC 08.504 or 3 AAC 08.505, respectively.

(b) The administrator will, in the administrator’s discretion, deny registration under 3 AAC 08.500 – 3 AAC 08.540 if a person described in 17 C.F.R. 230.262(a), (b), or (c)

(1) meets any of the disqualification provisions of 17 C.F.R 230.262 applicable to that person;

(2) has filed a registration statement that is the subject of a currently effective stop order entered by a state within five years before the registration of the offering;

(3) within the 10 years preceding the filing of the registration, has been convicted of

(A) a felony or misdemeanor in connection with the purchase or sale of a security or involving a false filing with a state; or

(B) a felony involving fraud or deceit, including forgery, embezzlement, obtaining money under false pretenses, larceny, and conspiracy to defraud; or

(4) has been subject to a state administrative or court order or judgment, including an injunction, entered within the five years preceding the filing of the registration, if a violation of a state banking, insurance, real estate, or securities law is the grounds for the order or judgment.

(c) A disqualification under (b)(2)-(4) of this section does not apply if the person subject to the disqualifying order is licensed to conduct securities-related business in the state in which the order or judgment was entered.

(d) A disqualification under (b)(2)-(4) of this subsection is automatically waived if the state that created the basis for disqualification waives the disqualification.

(e) The administrator will review the representations in each registration to determine whether registration should be denied under (b) of this section. The administrator will, in the administrator’s discretion, allow the registration upon a showing that allowing the registration is in the public interest and that safeguards have been provided for that offering.

(f) For purposes of this section, 17 C.F.R. 230.262, as revised as of October 1, 1999, is adopted by reference.

3 AAC 08.535. LIMITATION ON SALES EXPENSES.

(a) Expenses of an offering registered under 3 AAC 08.504 or 3 AAC 08.5


05, including sales expenses, acquisition expenses, expenses for preparing the offering, and other similar expenses, must be reasonable after taking into account the nature of the offering, the amount to be raised by the offering, and the proposed use of the money.

(b) If the proposed business of the issuer requires a minimum amount of proceeds to commence or continue the business in the manner proposed, those proceeds are subject to impoundment as provided under 3 AAC 08.190.

3 AAC 08.540. RESCISSION OF IMPROVIDENT SALES.

(a) The improvident closing of a sale of securities in violation of a provision of 3 AAC 08.500 – 3 AAC 08.505 does not by itself invalidate the registration of the securities if the registrant

(1) seeks an appropriate amendment to the registration with the administrator, provides full details of the transaction, demonstrates that the registrant and the person acting on behalf of the registrant who sold the security acted in good faith, demonstrates that the sale was made without an intent to violate the provisions of this section, and receives an amended order authorizing the proposed transaction;

(2) cancels the sale or provides rescission to the purchaser involved within a reasonable time after discovery; or

(3) either

(A) cancels the sale or provides rescission before release of proceeds held in escrow under AS 45.55.110 and 3 AAC 08.180 – 3 AAC 08.186; or

(B) has the financial capacity to pay and offers to or does provide the rescission payment out of separate funds, if the payment does not create additional risks or obligations to the remaining purchasers or the project for which the money was raised.

(b) Regardless of whether a registrant cancels a sale or provides rescission under this section to a purchaser who is counted as a purchaser in a "calculation of number of purchasers" under 17 C.F.R. 230.501, the registrant may not omit that purchaser from the "calculation of number of purchasers" for purposes of meeting the requirements of 3 AAC 08.505(a)(2).

(c) A rescission payment or payment date may not be made subject to resale of the interest to be cancelled.

(d) This section applies to the registrant and any other person who is responsible for the sale of security and subject to the requirements of AS 45.55 and this chapter.

(e) A rescission payment under this section must be made without condition, and the person offering the rescission must have the financial capacity to pay.

(f) If the rescission creates additional risks or obligations for the remaining purchasers who do not accept rescission under (a) of this section, those risks and obligations must be disclosed.

(g) This section does not relieve a person from compliance with other federal or state law.