A company selling securities to residents of the state of Minnesota must comply with federal and state securities laws. State securities laws are collectively and individually referred to as “Blue Sky Laws.” These Blue Sky Laws vary among the states, sometimes to a significant degree. In 2006 the Minnesota Legislature enacted a version of the Uniform Securities Act, which substantially revised the prior Minnesota Securities Act. The Minnesota Uniform Securities Act (“MUSA”) became effective in August 2007. This section highlights the most frequently used exemptions from the securities laws of the state of Minnesota and summarizes certain changes that will result from the enactment of MUSA, where applicable.
Under MUSA, it is unlawful to offer or sell a security in Minnesota unless the security is a federal covered security, the security, transaction, or offer is exempt from registration under Minn. Stat. §§ 80A.45 to 80A.47, or the security is registered under chapter 80A (Minn. Stat. § 80A.49). If registration is required, it should be noted that, prior to the passage of MUSA, Minnesota was a “merit” review state; Minnesota is now a “disclosure” state. Generally, this means that as long as the issuer satisfies the information disclosure requirements under MUSA, the Minnesota Department of Commerce cannot prohibit the issuer from selling its securities within the state.
