North Carolina § 78A-49 - Rules, forms, orders, and hearings.

§ 78A-49. Rules, forms, orders, and hearings.

The Administrator may from time to time make, amend, and rescind such rules, forms, and orders as are necessary to carry out the provisions of this Chapter, including rules and forms governing registration statements, applications, and reports, and defining any terms, whether or not used in this Chapter, insofar as the definitions are not inconsistent with the provisions of this Chapter. For the purpose of rules and forms the Administrator may classify securities, persons, and matters within his jurisdiction, and prescribe different requirements for different classes. In order to protect the investing public, the Administrator may by rule or order prescribe suitability standards for investments in viatical settlement contracts. No rule, form, or order may be made, amended, or rescinded unless the Administrator finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of this Chapter. In prescribing rules and forms the Administrator may cooperate with the securities administrators of the other states and the Securities and Exchange Commission with a view to effectuating the policy of this statute to achieve maximum uniformity in the form and content of registration statements, applications, and reports wherever practicable. The Administrator may by rule or order prescribe (i) the form and content of financial statements required under this Chapter, (ii) the circumstances under which consolidated financial statements shall be filed, and (iii) whether any required financial statements shall be certified by independent or certified public accountants. All financial statements required to be filed with the Administrator shall be audited and shall be prepared in accordance with generally accepted accounting principles, except where the Administrator may by rule or order provide otherwise. In determining whether to permit the filing of financial statements that have not been audited, the Administrator shall consider all of the following factors: Whether lesser standards for financial statements will impair investor protection. The cost of preparation of audited financial statements relative to the proposed offering amount. Whether recently audited financial statements of the issuer are available in addition to current interim statements. Whether the issuer has commenced significant business operations. Any other factors that are relevant to the protection of the investing public. The Administrator may by rule or order require the filing of any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature or advertising communication addressed or intended for distribution to prospective investors, unless the security or transaction is exempted by G.S. 78A-16 and G.S. 78A-17 (except G.S. 78A-17(9), (17), (19), and (20)) and such exemption has not been denied or revoked under G.S. 78A-18 or the security is a security covered under federal law or the transaction is with respect to a security covered under federal law. All rules and forms of the Administrator shall be published. No provision of this Chapter imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, or order of the Administrator, notwithstanding that the rule, form, or order may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason. Every hearing in an administrative proceeding shall be public unless the Administrator in his discretion grants a request joined in by all the respondents that the hearing be conducted privately. History (1925, c. 190, s. 11; 1927, c. 149, s. 11; 1973, c. 1380; 1987, c. 849, s. 6; 1997-419, s. 11; 2001-436, s. 10; 2003-413, s. 4; 2016-103, s. 3.) Editor's Note. - Session Laws 2016-103, s. 4(a) and (b), provides: "4.(a) Notwithstanding any provision of Article 2A of Chapter 150B of the General Statutes, within 12 months of the effective date of this act [Session Laws 2016-103 was effective July 22, 2016], the Secretary of State shall adopt rules to implement the provisions of this act in accordance with the following procedure: "(1) At least 15 business days prior to adopting a rule, submit the rule and a notice of public hearing to the Codifier of Rules. The Codifier of Rules shall publish the proposed rule and the notice of public hearing on the Internet within five business days. "(2) At least 15 business days prior to adopting a rule, notify persons on the mailing list maintained pursuant to G.S. 150B-21.2(d) and any other interested parties of the Secretary's intent to adopt a rule and of the public hearing. "(3) Accept written comments on the proposed rule for at least 15 business days prior to adoption of the rule. "(4) Hold at least one public hearing on the proposed rule no less than five days after the rule and notice have been published. "A rule adopted in accordance with this section becomes effective on the first day of the month following the month the Secretary adopts the rule and submits the rule to the Codifier of Rules for entry into the North Carolina Administrative Code. "(b) Any rule adopted more than 12 months after the effective date of this act [Session Laws 2016-103 was effective July 22, 2016] shall comply with the requirements of Article 2A of Chapter 150B of the General Statutes." Effect of Amendments. - Session Laws 2016-103, s. 3, effective July 22, 2016, substituted "G.S. 78A-16 and G.S. 78A-17 (except G.S. 78A-17(9), (17), (19), and (20))" for "G.S. 78A-16 or 78A-17 (except 78A-17(9), (17), and (19))" in subsection (d).