What are the legal requirements for issuing structured debt?

Structured debt is a type of alternative investment that involves issuing debt securities in portions, or “structures”, instead of as a single debt security. In Washington, the legal requirements for issuing structured debt are governed by the state’s alternative investment law. The first requirement is that the issuer of the structured debt must register with the Securities Division of the Washington State Department of Financial Institutions. This registration process requires the submission of a Form U-7, which must be accompanied with a filing fee. Additionally, the issuer must also show that they have the legal capacity to issue securities, and that the securities meet the security standards as defined in the alternative investment law. The issuer must also provide a disclosure document to potential buyers, which outlines the purpose of the structured debt and any relevant risks associated with it. This document must be filed with the Securities Division, and must detail the terms of the structured debt offering, including the amount of the security, the interest rate, and any repayment schedule. The Washington State Department of Financial Institutions also requires that the structured debt be audited by a qualified independent auditor. This audit must be completed within a reasonable timeframe and must verify the material facts relating to the structured debt. Once the structured debt meets all legal requirements, the issuer must then market the securities in accordance with state investment laws. This includes providing buyers with access to a monthly statement, informing the public of the full terms of the structured debt, and ensuring that all investors have access to the required disclosure document. Once all of these requirements have been met, the structured debt can be issued and buyers can invest in the security. It is important for potential buyers of structured debt to be aware of the legal requirements, as well as the associated risks of investing in alternative investments.

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What are the legal requirements for issuing structured debt?

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