Exemptions - Change In Ownership

Posted By: hawkfan

Exemptions - Change In Ownership - 03/10/07 05:47 PM

After the last exam we learned we needed to be documenting that we verified there was no change in ownership/control for our exemptions (the box on the bienniel renewal form). Do we need to do this for Phase I customers as well?
Posted By: hawkfan

Re: Exemptions - Change In Ownership - 03/12/07 03:58 PM

Does anybody know out there? I know we don't have to file the renewal form for Phase I, but was unsure if we needed to document the no change in ownership for Phase I.

Basically what the examiner wanted us to do for documentation is have a copies of signature cards and check off on a spreadsheet every year that we viewed the signature cards and there has been no changes in ownership.
Posted By: MN Banker

Re: Exemptions - Change In Ownership - 03/12/07 04:02 PM

I would say yes. For example, if you have a business that is a Phase I exemption because they are a subsidiary of a listed business, then you would want to make sure that they are still owned by that business and qualify for the exemption.

I'm not sure if it's a requirement or not, but that would be my reason for doing it.
Posted By: Elwood P. Dowd

Re: Exemptions - Change In Ownership - 03/12/07 06:22 PM

Quote:
...we learned we needed to be documenting that we verified there was no change in ownership/control


Your "teacher" is a bit off. You are to report a known change in control. It's a reasonable expectation that you would notice if a change in control had taken place in connection with your annual review of a Phase II exempt person; e.g. there might be new officers, new signatories, etc. There is simply no requirement or even a suggestion that you must investigate to see if a change in control has taken place just so you can put a check in a box. Your reviewer has offered an opinion that I think most people would disagree with.

The concept of a change in control isn't really applicable to a Phase I exempt person.