Ohio § 1707.02

§ 1707.02.

(A) “Exempt,” as used in this section, means exempt from sections 1707.08 to 1707.11 and 1707.39 of the Revised Code . (B)(1) Except as provided in division (B)(2) of this section, the following securities are

exempt, if the issuer or guarantor has the power of taxation or assessment for the

purpose of paying the obligation represented by the security, or is in specific terms

empowered by the laws of the state of issuance to issue securities payable as to principal

or interest, or as to both, out of revenues collected or administered by such issuer: (a) Any security issued or guaranteed by the United States; (b) Any security issued or guaranteed by, and recognized, at the time of sale, as its

valid obligation by, any foreign government with which the United States is, at the

time of sale, maintaining diplomatic relations; (c) Any security issued or guaranteed, and recognized as its valid obligation, by any

political subdivision or any governmental or other public body, corporation, or agency

in or of the United States, any state, territory, or possession of the United States,

or any foreign government with which the United States is, at the time of sale, maintaining

diplomatic relations. (2) If a security described in division (B)(1) of this section is not payable out of

the proceeds of a general tax, the security is exempt only if, at the time of its

first sale in this state, there is no default in the payment of any of the interest

or principal of the security, and there are no adjudications or pending suits adversely

affecting its validity. (C) Any security issued or guaranteed by a state or nationally chartered bank, savings

and loan association, savings bank, or credit union, or a governmental corporation

or agency created by or under the laws of the United States or of Canada is exempt,

if it is under the supervision of or subject to regulation by the government or state

under whose laws it was organized. (D) Any interim certificate is exempt, if the securities to be delivered therefor are

themselves exempt, are the subject matter of an exempt transaction, have been registered

by description or registered by qualification, or are the subject matter of a transaction

which has been registered by description. (E)(1) A security is exempt if it meets any of the following requirements: (a) The security is listed, or authorized for listing, on the New York stock exchange,

the American stock exchange, or the national market system of the NASDAQ stock market,

or any successor to such entities. (b) The security is listed, or authorized for listing, on a national securities exchange

or system, or on a tier or segment of such exchange or system, designated by the securities

and exchange commission in rule 146(b) promulgated under section 18(b)(1) of the Securities

Act of 1933. 1 (c) The security is listed, or authorized for listing, on a national securities exchange

or system, or on a tier or segment of such exchange or system, that has listing standards

that the division of securities, on its own initiative or on the basis of an application,

determines by rule are substantially similar to the listing standards applicable to

securities described in division (E)(1)(a) of this section. (d) The security is a security of the same issuer that is equal in seniority or that

is a senior security to a security described in division (E)(1)(a), (b), or (c) of

this section. (2) Application for approval of a stock exchange or system not approved in this section

may be made by any organized stock exchange or system, or by any dealer who is a member

of such exchange, in such manner and upon such forms as are prescribed by the division,

accompanied by payment of an approval fee of two hundred dollars, and the division

shall make such investigation and may hold such hearings as it deems necessary to

determine the propriety of giving approval.  The cost of such investigation shall be borne by the applicant.  The division may enter an order of approval, and if it does so, it shall notify

the applicant of such approval. (3) The division may revoke the approval of an exchange or system enumerated in division

(E)(1) of this section, provided that the exchange or system is not listed in section

18(b)(1) of the Securities Act of 1933 or any rule promulgated thereunder.  The division may effect a revocation after due notice, investigation, a hearing,

and a finding that the practices or requirements of such exchange or system have been

so changed or modified, or are, in their actual operation, such that the contemplated

protection is no longer afforded.  The principles of res adjudicata ordinarily applicable in civil matters shall not

be applicable to this matter, which is hereby declared to be administrative rather

than judicial.  Notice of the hearing may be given by electronic mail at least ten days before such

hearing. (4) The division may suspend the exemption of any security described in division (E)(1)

of this section, provided that the security is listed or authorized for listing on

an exchange or system that is not listed in section 18(b)(1) of the Securities Act

of 1933 or any rule promulgated thereunder.  The division may effect a suspension by giving notice, by electronic mail, to that

effect to the exchange or system upon which such security is listed or designated

and to the issuer of such security.  After notice and hearing, the division may revoke such exemption if it appears to

it that sales of such security have been fraudulent or that future sales of it would

be fraudulent.  The division shall set such hearing not later than ten days from the date of the

order of suspension, but may for good cause continue such hearing upon application

of the exchange or system upon which such security is listed or designated or upon

application of the issuer of such security. (F) Any security, issued or guaranteed as to principal, interest, or dividend or distribution

by a corporation owning or operating any public utility, is exempt, if such corporation

is, as to its rates and charges or as to the issuance and guaranteeing of securities,

under the supervision of or regulated by a public commission, board, or officer of

the United States, or of Canada, or of any state, province, or municipal corporation

in either of such countries.  Equipment-trust securities based on chattel mortgages, leases, or agreements for

conditional sale, of cars, locomotives, motor trucks, or other rolling stock or of

motor vehicles mortgaged, leased, or sold to, or finished for the use of, a public

utility, are exempt;  and so are equipment securities where the ownership or title

of such equipment is pledged or retained, in accordance with the laws of the United

States or of any state, or of Canada or any province thereof, to secure the payment

of such securities. (G) Commercial paper and promissory notes are exempt when they are not offered directly

or indirectly for sale to the public. (H) Any security issued or guaranteed by an insurance company, except as provided in section 1707.32 of the Revised Code , is exempt if such company is under the supervision of, and the issuance or guaranty

of such security is regulated by, a state. (I) Any security, except notes, bonds, debentures, or other evidences of indebtedness

or of promises or agreements to pay money, which is issued by a person, corporation,

or association organized not for profit, including persons, corporations, and associations

organized exclusively for conducting county fairs, or for religious, educational,

social, recreational, athletic, benevolent, fraternal, charitable, or reformatory

purposes, and agricultural cooperatives as defined in section 1729.01 of the Revised Code , is exempt, if no part of the net earnings of such issuer inures to the benefit of

any shareholder or member of such issuer or of any individual, and if the total commission,

remuneration, expense, or discount in connection with the sale of such securities

does not exceed two per cent of the total sale price thereof plus five hundred dollars. (J)(1) Any securities outstanding for a period of not less than five years, on which there

has occurred no default in payment of principal, interest, or dividend or distribution

for the five years immediately preceding the sale, are exempt. (2) For the purpose of division (J) of this section, the dividend, distribution, or interest

rate on securities in which no such rate is specified shall be at the rate of at least

four per cent annually on the aggregate of the price at which such securities are

to be sold. (K) All bonds issued under authority of Chapter 165. or 761., or section 4582.06 or 4582.31 of the Revised Code are exempt. 1

 15 U.S.C.A. § 77r.