POLICY STATEMENT
The
Alabama Securities Act requires that any security sold in this state must be
registered with the Commission, unless the security qualifies for a statutory
exemption from registration. The Act
provides for a number of exemptions, including an exemption for “any security
issued by and representing an interest in or a debt of, or guaranteed by, any
bank organized under the laws of the United States or any bank . . . organized
and supervised under the laws of this state.”
See Section 8-6-10(3) (Code of Ala. 1975). It has been the Commission’s position that
this exemption is not available for securities issued by a bank in the process
of organization.
This
position has recently been challenged, and the Alabama Securities Commission
staff has been requested to carefully reexamine its interpretation of the
Alabama Securities Act with regard to this issue. An argument has been made that Section 8-6-10(3) should be interpreted
to allow a bank information to sell presubscription stock or certificates
without first registering that stock or certificate with the Commission. The staff of the Alabama Securities
Commission has carefully and thoughtfully considered this request. In reaching its conclusion, the Commission
staff has consulted with a number of other state securities agencies, as well
as the Alabama Department of Banking.
The staff has also carefully considered the language and overriding
purpose of the statute.
During
this investigation, the staff has learned that a number of other states, having
virtually identical statutory language as Alabama, require a bank in formation
to register its preorganizational shares or stock prior to the sale of the
same. The staff has also determined, in
consultation with the Alabama Department of Banking, that the Banking
Department does not regulate or control the activities of a bank in
formation. In fact, applicants for a
banking license are instructed by the Banking Department to contact the
Securities Commission and comply with the applicable securities laws and
regulations.
Finally,
it is apparent that a bank in formation does not fall within the strict
language of the exemption provided in Section 8-6-10(3), in that a bank in
formation is not yet a bank “organized under the laws of the United States or .
. . under the laws of the state.”
Therefore, it is the opinion of the Alabama Securities Commission that
any security issued by a bank in formation is a security subject to registration pursuant to the provisions
of the Alabama Securities Act. The
Banking Department is in agreement that the preorganizational shares and stock
of a bank in formation should be registered with the Securities Commission. |