Florida Blue Sky Laws are an important consideration for syndicators who aim to raise capital from investors in the state. These laws govern the securities industry within Florida’s borders. By gaining a solid understanding of the fundamental aspects of Florida’s blue sky laws, you can craft an offer that is not only smart and effective for business but also keeps you well within the legal boundaries, thereby minimizing potential legal risks.


What are Blue Sky Laws in General? 

Securities laws fundamentally exist with the prime objective of safeguarding investors. In the United States, the regulatory landscape for securities involves two primary levels of oversight: the federal agency known as the Securities and Exchange Commission (SEC) and individual state security regulation agencies.

The SEC serves as the chief watchdog for the securities industry at the federal level, enforcing regulations and overseeing the protection of investors nationwide. Similarly, each state has its own security regulation agency that focuses on maintaining investor safety within its jurisdiction. These state-level agencies play a vital role in preserving market integrity and promoting transparency.

However, the reach and power of these state agencies are substantially limited by federal law when it comes to scrutinizing or controlling the sale of most securities when they are offered under a Federal regulation. A common example of this is a syndication of a Regulation D (Reg D) offering. Reg D offerings are securities that are exempt from registration requirements, enabling companies to raise capital more efficiently. While states can’t usually intervene significantly in these federal offerings, they maintain certain rights to keep their residents safe.

States typically mandate that a notice be submitted to them when a federal security, like a Reg D offering, is being sold within their borders. This notice is often accompanied by a stipulated fee. In addition, state agencies retain the power to conduct investigations into these securities transactions, and, if necessary, they can initiate fraud actions to ensure the protection of the state’s residents who are investing in these offerings.

A state’s specific securities regulations come into full effect when the entire securities transaction takes place within that state. For instance, in the state of Florida, this would fall under the purview of the Florida Blue Sky Laws. These laws ensure the regulation of securities within the state, protecting Floridian investors from fraudulent activities and promoting the fair and equitable operation of the securities marketplace.


What if I Need to Notify Florida about my Regulation D Syndication?

Navigating the complexities of securities regulations can often seem daunting, particularly when it comes to understanding the obligations related to offerings like Regulation D Rule 506b or 506c. Among these obligations, one of the key areas of concern usually revolves around providing appropriate notice to state regulators.

In the context of Florida, it is imperative to understand the specific nuances of its securities laws, colloquially known as the Florida Blue Sky Laws. The good news for syndicators looking to raise capital in Florida under Regulation D, whether using Rule 506b or Rule 506c, is the simplicity of the notice requirements.

In contrast to many states that require formal notice filings along with applicable fees, Florida’s approach is more relaxed. Specifically, Florida does not impose any notice requirements for Regulation D Rule 506b or 506c offerings. This means that issuers undertaking such offerings are not obligated to provide the state’s regulatory agency with any formal declaration or notice about these offers.

However, it is important to remember that this exemption from notice requirements does not mean that issuers are exempt from other aspects of Florida’s Blue Sky Laws. Therefore, while the notice requirements may be non-existent for Regulation D offerings in Florida, compliance with other regulations pertaining to the fair and transparent operation of the securities marketplace remains paramount.

The bottom line is that Florida’s approach towards the notice requirements for Regulation D Rule 506b or 506c offers provides issuers with a streamlined process, eliminating the need for additional paperwork, thereby making the fundraising process more efficient and less cumbersome. Nevertheless, issuers should remain diligent and maintain a thorough understanding of all other applicable state and federal laws to ensure full legal compliance.


What are Florida’s Blue Sky Laws?

FL ST § 517.051 Exempt securities

FL ST § 517.07 Registration of securities

FL ST § 517.072 Viatical settlement investments

FL ST § 517.171 Burden of proof

FL ST § 517.311 False representations; deceptive words; enforcement


What are Florida’s securities laws exemptions?

Navigating the intricate realm of securities law can be a daunting task for any business entity or individual. Florida’s Blue Sky Laws, the state’s securities regulations, are no exception. Yet understanding the exemptions to these laws can be crucial for businesses as they strive to operate efficiently and in accordance with the law.

Securities laws typically serve a dual purpose of ensuring transparency in securities transactions and protecting investors. However, recognizing that not all situations necessitate the same degree of oversight, these laws also provide for specific exemptions. In Florida, the list of entities and situations exempted from certain aspects of its Blue Sky Laws is extensive.

The exemptions begin at the top, with governmental entities, including federal corporate instrumentalities and certain foreign governmental entities. This allows such bodies to operate without the constraints of the securities laws, reflecting the inherent trust placed in them due to their governmental status.

Next on the list are financial institutions, such as banks, savings banks, savings institutions, savings and loan entities, building and loan entities, land banks, farm loan associations, trust companies, international development banks, and credit unions. The trust that consumers place in these institutions is mirrored in the exemptions they are granted under Florida’s securities laws.

A variety of other entities, including railroads, public service utilities, and holding corporations, also benefit from these exemptions. This reflects the essential services these organizations provide and the high degree of regulation they typically undergo in their regular operations.

Insurance contracts also fall under the umbrella of exemptions. This category relates to the nature of these contracts and their distinction from traditional securities.

Another exemption is provided for fixed-return securities. These are investments that offer a guaranteed rate of return and are considered less risky than variable-return securities, thus requiring less regulation.

Non-profit agricultural cooperatives are also exempt. This is a recognition of the unique role these cooperatives play in supporting farming communities and their fundamentally non-commercial nature.

Non-profit organizations are exempt as well, reflecting the charitable, educational, or other socially beneficial purposes these organizations serve. Their non-profit status often entails a high degree of transparency and accountability already, reducing the need for additional regulatory oversight.

Lastly, an exemption is provided for current transaction commercial paper. Commercial paper represents short-term, unsecured debt issued by corporations, often for financing short-term liabilities, and these transactions are typically seen as less risky.


Frequently Asked Questions

Do I need an attorney from Florida then to put together an offering?

That depends. If the offering you are putting together is under Regulation D and not one of the Florida-specific Blue Sky Laws (as discussed above), then probably not. 

For example, if you needed a real estate syndication attorney to put together a private placement memorandum for a multifamily deal in Jacksonville, Florida, that was going to be offered in different states, and you didn’t need counsel on questions related to Florida laws, then chances are a licensed syndication lawyer would be able to help. They could even put together the entity for you and write the operating agreement, they just couldn’t provide you counsel on the specific laws of Florida and how they may or may not pertain to your offer.

However, if you were putting together a private placement memorandum for a development project in Miami, Florida, all of the investors were from Florida, and you wanted to use one of Florida’s Blue Sky Laws above as an exception to registration, then you would need to work with someone licensed in Florida.


Is it ok if the real estate syndication attorney, licensed outside of Florida, looks over my purchase contract?

They can look, but they can’t give you advice as it pertains to Florida. For example, Tilden Moschetti, Esq, syndication attorney for the Moschetti Syndication Law Group, will look, if asked, about the contract underlying your purchase contract in Tampa, Florida, but makes it clear that he can give business consulting advice (discussion on price and broad deal points like the length of time until closing), but cannot speak to any specific term as he is not licensed there.