This is a very brief overview of an extremely complex area of law. This page is designed to acquaint a person with the securities registration process and some of the exemptions from the registration requirements. It is stressed that technical compliance with the requirements of state and federal securities is important to avoid exposure to criminal, civil, or administrative liabilities.
Securities offered for sale or sold in North Dakota must be registered with the Securities Department unless the security is the subject of an exemption from the registration requirements. Many of the exemptions are self-executing and a notice is not required to be filed. There are other exemptions that do require a filing of an application and provide for an approval process before the offer for sale or sale of the security. It is important to determine whether an instrument falls within the statutory definition of "security". Once it is established that a security is present, the next step is to determine if an exemption would apply to the transaction, if such exemption provides for a filing and approval process or if registration of the security is necessary.
The North Dakota Securities Department administers and enforces the North Dakota Securities Act, N.D.C.C. Chapter 10-04, by registering securities; reviewing exemptions; issuing no-action letters and interpretive opinions; and licensing broker-dealers and their agents, and investment advisers and their representatives. The Securities Department investigates complaints alleging violations of the Securities Act and rules and if violations are found, the Securities Commissioner may bring an administrative or civil action or make a referral for criminal prosecution.