Securities standards and Gold Gate’s platform have been developed to permit the issuance of securities that are compliant with U.S. federal and state securities laws and follow verification procedures below:
Regulation D 506 (c) exemption:
- Purchasers of securities offered, according to Rule 506, receive “restricted” securities, meaning that the securities cannot be sold for at least six months or a year without registering them.
- Companies that comply with the requirements of Rule 506(b) or (c) do not have to register their offering of securities with the SEC. However, they must file what is known as a “Form D” electronically with the SEC after they first sell their securities.
- Form D is a brief notice that includes the names and addresses of the company’s promoters, executive officers and directors, and some details about the offering. However, it contains little other information about the company. You can access the SEC’s EDGAR database to determine whether the company has filed a Form D. *For more information please see: https://www.sec.gov/fast-answers/answers-rule506htm.html
- Investors in the offering are required to all be accredited investors; and
- The company takes reasonable steps to verify that all investors are accredited investors, which could include reviewing documentation, such as W-2s, tax returns, bank and brokerage statements, credit reports, and the like.
- Gold Gate puts each investor through a thorough KYC (Know Your Customer) and AML (Anti-Money Laundering) verification process before giving access to investment opportunities.
An accredited investor is a person or entity who is allowed to deal, trade and invest in financial securities as long as they satisfy one (or more) requirements regarding income, net worth, asset size, governance status or professional experience.
- To be an accredited investor, a person must have an annual income exceeding $200,000, or $300,000 for joint income, for the last two years with the expectation of earning the same or higher income in the current year. An individual must have earned income above the thresholds either alone or with a spouse over the last two years. The income test cannot be satisfied by showing one year of an individual’s income and the next two years of joint income with a spouse. The exception to this rule is when a person is married within the period of conducting a test.
- A person is also considered an accredited investor if they have a net worth exceeding $1 million, either individually or jointly with his spouse. The SEC also considers a person to be an accredited investor if they are a general partner, executive officer, director, or a related combination thereof for the issuer of unregistered securities.
- An entity is an accredited investor if it is a private business development company or an organization with assets exceeding $5 million. Also, if an entity consists of equity owners who are accredited investors, the entity itself is an accredited investor. However, an organization cannot be formed with the sole purpose of purchasing specific securities.
*For more information please see: https://www.investopedia.com/terms/a/accreditedinvestor.asp)
To be compliant with back-end trading in Gold Gate’s exclusive secondary marketplace, Gold Gate intends to work with an SEC-registered broker-dealer that will oversee all security transactions. This broker-dealer will be given access to the secondary marketplace within the Gold Gate platform so that investors can buy and sell with ease without having to transfer their shares to other exchanges.