july 9, 2011. corporation finance policy project group dennis britson (ia), chair lisa enright (on)...
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Corporation Finance Policy Project Group Update
July 9, 2011
Corporation Finance Policy Project Group
Dennis Britson (IA), ChairLisa Enright (ON)Sheri Palma (TX)Meredith Tweedie (DE)Jill Vallely (WA)Kaycee Wolf (AR)
11 Policies were updated in 2008
Consistency with Uniform Securities Act of 2002
Consistency with Sarbanes-Oxley ActMoving definitions to definitions SOPPlain english usageSimplificationUpdating cross-referencesHandout identifies the policies and highlights
the changes made in 2008
In Progress – Review Analyst Notes
Impoundment of ProceedsOptions and WarrantsPreferred StockPromoters EquityPromoters SharesSecurities DefinitionsUnderwriting ExpensesUnsound Financial Condition
In ProgressHealth Care Facility Offering PolicyProject Group will recommend repeal of the
SOPWe believe the policy is not being used and is
not necessary
In Progress
Model employee benefit plan exemptionProject group has a draft and will recommend
to the Corporation Finance Section Committee
To align with federal rule 701
In ProgressPerson to Person LendingNASAA provided information to the United
States Government Accountability Office as part of a study resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act
GAO is preparing a Statement of Facts on Person-To-Person Lending
Handout: February 14, 2011 Report by our project group – Michael Benson (PA) was the lead drafter.
Peer-To-Peer (P2P) Lending Platform - - the ServicerA platform – a website – offers opportunity to
purchase debt securities offered by a person or business.
Platform connects issuers with investors.Initial Model: Solely a conduit and issuer would issue
the note directly to the issuer.Current Model: Securitization with indenture trustee
holding promissory notes with servicer servicing loans and paying investors.
Loan contract is between the servicer and the issuer, not between the issuer and the investor.
Peer-To-Peer (P2P) Lending Platform - - the Servicer
Peer-to-Peer Lending allows individuals and small businesses to obtain unsecured loans that are funded by other people’s purchase of note securities.
Peer-To-Peer (P2P) Lending Platform - - the Servicer
The issuers in these offerings are placing offers using general solicitation – which in many states would preclude the ability to qualify for an exempt transaction.
Notably, the offer of securities is the first step in the process.
Who is the Issuer/Borrower?
Typically an individual or small business that posts a note listing with a brief narrative describing the anticipated use of the proceeds and their credit history.
Information is limited and tends to be unverifiable.
Who is the Investor/Lender?
A person seeking an investment through the peer-to-peer securitization platform.
Individuals or entities review note offerings and choose specific issuer postings to purchase.
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