FOR IMMEDIATE RELEASE: June 25, 2013
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Kansas Securities Commissioner Eases Exemption Limitations for Raising Capital in Kansas
The Kansas Securities Commissioner issued a special order Friday to modify limitations under the Invest Kansas Exemption.
Topeka, KS--- Interim Securities Commissioner Josh Ney signed an order Friday authorizing certain modifications of conditions for the Invest Kansas Exemption (IKE) under K.A.R. 81-5-21. IKE was adopted by the office in August of 2011 to remove regulatory requirements for Kansas companies trying to raise capital in Kansas. It allows Kansas businesses to raise up to $1 million from local investors without going through the expensive and time-consuming process of registering securities with the Office of the Kansas Securities Commissioner.
The most significant modification authorized by the order was to increase the maximum amount issuers can accept from investors who are not accredited from $1,000 to $5,000. "One of the key functions of our office is to foster capital formation in our state," said Ney. "We know how difficult it can be for a small business owner to raise money for his or her business, especially in rural communities. This change gives more flexibility for Kansas-based offerings by increasing the amount community members can invest, making it easier for small businesses to raise capital from local investors through the IKE exemption."
Other modifications include a technical change to K.A.R. 81-5-21(b) to enable IKE to be used along with certain other exemptions, and the addition of a requirement for persons who manage IKE issuers to be residents of Kansas.
Five Kansas businesses have used this exemption since its adoption in 2011. In Stafford, community members used IKE to build their Stafford Mercantile variety store. “The Invest Kansas Exemption is the most phenomenal thing for rural towns,” said Clare Moore, member of the board of directors for the Mercantile. “People need to know they can utilize it.”
Another Kansas community, Minneola, used IKE to build a grocery store when the previous one went out of business. “I don’t think we could have done it without IKE,” said Luke Jaeger, president of the board for the Hometown Market, the community’s new grocery store.
Communities and small businesses in Kansas are encouraged to contact the Securities Commissioner’s Office to learn more. For more information, go to ksc.ks.gov/IKE.