SB 1389 Summary

• Creates the Oklahoma Intrastate Crowdfunding Exemption allowing certain for-profit business entities to raise up to $1,000,000 from Oklahoma residents without federal securities registration, subject to compliance with federal intrastate offering requirements under Section 3(a)(11) of the Securities Act of 1933 and SEC Rule 147.

• Requires issuers to file a $200 notice with the Oklahoma Securities Commission at least 10 days before offering, provide comprehensive disclosure statements to investors, and use escrow agreements with federally insured financial institutions to hold investor funds until the target offering amount is reached.

• Limits non-accredited investor purchases to the greater of $2,000 or 5% of annual income/net worth if income or net worth is below $100,000, or 10% (capped at $100,000) if income or net worth is $100,000 or more.

• Establishes requirements for intermediaries (crowdfunding platforms) to register with the Commission for a $200 fee, verify investor residency using Oklahoma driver licenses or identification, implement fraud prevention measures, and comply with anti-money laundering and privacy regulations.

• Effective November 1, 2016.