N.D. Cent. Code § 10-04-07.1

10-04-07.1. Registration by announcement - Secondary

1. Securities that have been outstanding and in the hands of the public for not less than

one year as the result of prior original registration in North Dakota or through securities

and exchange commission registration, by the issuer, or by the underwriter on behalf

of an issuer, are entitled to registration by announcement in the manner and subject to

the conditions provided by this section.

In addition to the foregoing, stock, having equal voting rights with other classes,

of life insurance companies may also qualify for registration under this section

provided the company has been in continuous operation for twenty years immediately

preceding the date of filing for registration and provided further that in addition to

supplying the information required by subdivisions a through c of subsection 2 the

applicant can supply all of the following:

a. A balance sheet and an earnings statement showing statutory net earnings after

all dividends (returned premiums) to policyholders and after all expenses

including state and federal income taxes for the fiscal period ended not more than

twelve months prior to the filing date upon which either an unqualified or a

qualified opinion has been expressed by a certified public accountant; provided,

however, that any qualification of opinion relates only to generally accepted

principles of accounting which may have been modified to meet the reporting

requirements of the various state insurance departments.

b. Such balance sheet separates the surplus account into its component parts and

shows a positive balance in the accumulated unrestricted retained earnings

account, on statutory basis.

c. Earnings statements for the four fiscal years immediately preceding the beginning

date of the earnings statement required in subdivision a prepared by the same

certified public accountant showing statutory net earnings after the deductions

enumerated in subdivision a for each fiscal year; provided, however, that these

statements need not be accompanied by an unqualified or a qualified opinion of

the certified public accountant unless such certified public accountant did actually

perform an audit of the company for any year or years covered by the earnings

statements in which case the requirements of subdivision a apply for the year or

years so audited.

d. A statement prepared by a certified public accountant or actuary showing a net

gain in insurance in force for each of the last five fiscal years.

2. Securities entitled to registration by announcement may be registered only by a

broker-dealer registered with the department as provided for in section 10-04-10 by

filing with the department a written announcement of intention to trade in the securities

containing the following:

a. Name of issuer and location of the headquarters or principal office.

b. A brief description of the security, including price and current earnings.

c. A statement that the securities have been outstanding and in the hands of the

public not less than one year as aforesaid.

d. A balance sheet not more than twelve months old.

e. A statement that the security has been registered in North Dakota or by the

securities and exchange commission.

3. The filing of such announcement with the department constitutes the registration of the

security, unless advised to the contrary within forty-eight hours or advised to furnish

additional information, and such broker-dealer shall pay to the commissioner a filing

fee of twenty-five dollars. Upon registration, such securities may be sold in this state

for a period of one year from date of registration by registered broker-dealers at a price

or prices reasonably related to the current market price of such security at the time of

sale, subject, however, to any and all rights and authority granted the commissioner

and to any person or purchaser under chapter 10-04, in respect of securities
egistration, such securities may be sold in this state

for a period of one year from date of registration by registered broker-dealers at a price

or prices reasonably related to the current market price of such security at the time of

sale, subject, however, to any and all rights and authority granted the commissioner

and to any person or purchaser under chapter 10-04, in respect of securities

registered by the commissioner by coordination or qualification. No security registered

under this section shall be sold directly or indirectly for the benefit of the issuer, or an

underwriter of such securities, or for the promotion of any scheme or enterprise with

the intent of violating or evading any provision of this chapter; provided, that no

security, the registration of which has been revoked by the commissioner, or

application for registration of which has been denied by the commissioner, or

withdrawn by the applicant, shall be registered under this section.

4. Securities registered pursuant to section 10-04-07.2 or 10-04-08 become eligible for

trading in the secondary market at current market prices upon completion of the

original offering when said securities are outstanding and in the hands of the public

and remain so until the end of the registration year when renewal for secondary is

permissible. Notification of completion of initial offering should be sent to the

commissioner when the offering is completed requesting change to secondary.