ORDER EXEMPTING CERTAIN OFFERS OF BUSINESS OPPORTUNITIES
MADE ON THE INTERNET FROM BUSINESS OPPORTUNITY REGISTRATION
WHEREAS the Banking Commissioner (the "Commissioner") is charged with the administration of Chapter 672c of the Connecticut General Statutes, the Connecticut Business Opportunity Investment Act (the "Act").
WHEREAS Section 36b-62(a) of the Act provides, in part, that: "Prior to the . . . offer for sale of a business opportunity the seller shall register said business opportunity with the commissioner . . . ."
WHEREAS Section 36b-65(a) adds that "[u]nless exempted by subsection (e) of this section , any person who advertises, sells, contracts, offers for sale or promotes any business opportunity in this state or from this state must register with the commissioner and file an application . . . ."
WHEREAS Section 36b-65(e)(3) states, in part, that: "The following business opportunities are exempt from subsections (a) and (b) of section 36b-62 . . . [section] 36b-64; subsections (a), (b), (c), (d) and (f) of this section . . . and . . . [subdivision] (1) . . . of section 36b-67 [of the Act] . . . (3) any other business opportunity that the commissioner by . . . order may exempt, conditionally or unconditionally, if he finds that enforcement of all the provisions of sections 36b-60 to 36b-79, inclusive, with respect to such business opportunity is not necessary to protect the public interest, and for the protection of purchaser-investors due to the limited character of the business opportunity . . . .";
WHEREAS the Commissioner acknowledges that an attempt or offer to dispose of, or the solicitation of an offer to buy, a business opportunity or an interest in a business opportunity for value, that is made on or through the Internet, the World Wide Web or similar proprietary or common carrier electronic system (such systems hereinafter being referred to collectively as the "Internet"), would constitute an "offer" for purposes of Section 36b-61(5)(B) of the Act, and would otherwise trigger registration and related requirements under the Act;
WHEREAS the Commissioner also acknowledges that use of the Internet may be a legitimate means of encouraging business growth and that a communication made on the Internet may be directed not only to particular recipients but also to anyone with access to the Internet;
WHEREAS the Commissioner finds that the issuance of this Order is necessary or appropriate in the public interest or for the protection of purchaser-investors and consistent with the purposes fairly intended by the policy and provisions of the Act;
WHEREAS the Commissioner further finds that the registration of certain Internet offers is not necessary or appropriate in the public interest or for the protection of purchaser-investors;
THE COMMISSIONER THEREFORE ORDERS THAT:
1) Pursuant to Section 36b-65(e)(3) of the Act, offers of business opportunities made by or on behalf of sellers on or through the Internet shall be exempt from the registration and consent to service of process requirements in Sections 36b-62(a) and (b); the bonding requirement in Section 36b-64, the registration and related requirements in subsections (a), (b), (c), (d) and (f) of Section 36b-65, and the prohibition against unregistered offers in Section 36b-67(1) of the Act if the following conditions are observed:
(A) The Internet offer indicates, directly or indirectly, that the business opportunity is not being offered to residents of Connecticut;
(B) The Internet offer is not specifically directed to any person in Connecticut by, or on behalf of, the seller of the business opportunity; and
(C) No sales of the seller's business opportunities are made in Connecticut as a result of the Internet offering until such time as the business opportunity has been registered under Sections 36b-62 and 36b-65 of the Act and a disclosure document is delivered to Connecticut purchaser- investors within the time frame prescribed by Section 36b-63 of the Act
2) Nothing in this Order shall preclude a seller, or person acting on behalf of a seller, which offers business opportunities on the Internet or effects sales to Connecticut purchaser- investors following such an offering from relying upon any other applicable exemption pursuant to Section 36b-65(e) of the Act, or any exclusion pursuant to Section 36b-61(6)(D) of the Act.
3) Nothing in this Order shall relieve any person relying on the exemption from registration herein from compliance with other applicable provisions of the Act or any regulation or order under the Act, including, without limitation, the antifraud provisions in Section 36b-67(6) of the Act.
4) This Order shall remain in effect until amended or rescinded by the Commissioner.
So ordered at Hartford, Connecticut this 20th day of November 1996.
John P. Burke