§ 8d — Offerings made through registered Internet portals

(a) An issuer shall make an offering or sale of securities pursuant to subsection T of Section 4 of this Act through the use of one or more registered Internet portals. (b) The Internet portal: (1) shall be a registered broker-dealer under the Securities Exchange Act of 1934 (15 U.S.C. 78o); (2) shall be a funding portal registered under the Securities Act of 1933 (15 U.S.C. 77d-1) and the Securities and Exchange Commission has adopted rules under authority of Section 3(h) of the Securities Exchange Act of 1934 (15 U.S.C. 78c) and Section 304 of the Jumpstart Our Business Startups Act (P.L. 112-106) governing funding portals; (3) shall be a dealer registered under this Act as of the date of any offer or sale of securities made through the Internet portal; or (4) shall, to the extent it meets the qualifications for exemption from registration pursuant to subsection (d) of this Section: (A) file, not later than 30 days before the date of the first offer or sale of securities made within this State, an application for registration (or renewal of registration, as applicable) as a registered Internet portal with the Secretary of State, in writing or in electronic form as prescribed by the Secretary of State, which the Secretary of State shall make available as an electronic document on the Secretary of State's Internet website, containing such information and required deliveries as specified therein; and (B) pay the application filing fee established under Section 11a of this Act; the Secretary of State shall, within a reasonable time, examine the filed application and other materials filed and, approve or deny the application. (c) If any change occurs in the information submitted by, or on behalf of, an Internet portal to the Secretary of State, the Internet portal shall notify the Secretary of State within 10 days after such change occurs and shall provide the Secretary of State with such additional information (if any) requested by the Secretary of State in connection therewith. (d) Notwithstanding anything contained in this Act to the contrary, neither an Internet portal nor its owning or operating entity is required to register as a dealer or an investment advisor under this Act if each of the following applies with respect to the Internet portal and its owning or operating entity: (1) It does not solicit purchases, sales, or offers to buy the securities offered or displayed on the Internet portal. (2) It does not collect or hold funds in connection with any purchase, sale, or offer to buy any securities offered or displayed on the Internet portal. (3) It does not compensate employees, agents, or other persons for the solicitation or based on the sale of securities displayed or referenced on the Internet portal. (4) It is not compensated based on the amount of securities sold. (5) The fee it charges an issuer for an offering of securities on the Internet portal is a fixed amount for each offering, a variable amount based on the length of time that the securities are offered on the Internet portal, a variable amount based on the total proposed offering amount, or any combination of such fixed and variable amounts. (6) It does not offer investment advice or recommendations; however, an Internet portal is not deemed to be offering investment advice or recommendations simply by virtue of: (A) selecting transactions in which the Internet portal shall serve as an intermediary; (B) establishing reasonable selection criteria for an issuer to meet in order to establish an offer or sale of securities through the Internet portal; (C) establishing reasonable selection criteria for a potential purchaser to meet in order to participate in an offer or sale of securities made through the Internet portal; or (D) terminating an issuer transaction at any time before the first sale of the securities of such issuer if the Internet portal determines such action is appropriate, after reasonable due diligence, to protect potential purchasers, and the Internet portal is able to direct the qualified escrowee to return all funds then provided by potential purchasers, if any. (7) It does not engage in such other activities as the Secretary of State, by rule, determines are prohibited. (e) Upon completion of an offering made pursuant to subsection T of Section 4, each registered Internet portal involved with the transactions (and the issuer, to the extent applicable) shall store any and all electronic materials related to the completed offering (including copies of all offering documents, all offering materials, and all purchaser information) on a secure, non-public, server or in such other manner as the Secretary of State may hereafter deem acceptable by rule. (f) Notwithstanding anything contained in this Act to the contrary, in connection with any offering or sale of securities pursuant to subsection T of Section 4 of this Act, the hosting registered Internet portal may elect, in its discretion, to accept as compensation (in whole or part) for the services provided in connection with the subject offering: (1) such equity in, or other securities issued by, issuer on the Internet portal as part of the subject offering; or (2) equity in, or other securities issued by, issuer of any kind, provided that any right to distribution or payment with respect to such class of equity or other securities received by the registered Internet portal be equal, or junior, in terms of priority to the distribution and payment rights, as applicable, of the securities being offered on the Internet portal as part of the subject offering.

Legislative History

(Source: P.A. 99-182, eff. 1-1-16; 100-507, eff. 6-1-18 .)