KRS 292.420: Burden of proving exemption.

(1) In any proceeding under this chapter, the burden of proving an exemption or an

exception from a definition is upon the person claiming it.

(2) The commissioner may require any person, who is selling or offering for sale or

who is about to sell or offer for sale or who has sold or offered for sale any security

within this state, to file a statement of the claim of exemption, if any, upon which

such person is relying, and if any time, in the opinion of the commissioner, the

information contained in such state ment filed is misleading, incorrect, inadequate,

or fails to establish the right of exemption, the commissioner may require such

person, agent, or investment adviser to file such information as may in his opinion

be necessary to establish the claimed exemp tion. The refusal to furnish information

as required by order of the commissioner pursuant to the provisions of this

subsection, within a reasonable time to be fixed by the commissioner, shall be

proper ground for the entry of an order by the commissioner suspending and/or

canceling the registration of the broker-dealer, agent or investment adviser.

(3) The commissioner shall have authority at all times to consider and determine

whether any proposed sale, transaction, issue, or security is entitled to an exemption

or an exception from the definition accorded by this chapter, provided, however,

that the commissioner in his or her discretion may decline to exercise such authority

as to any proposed sale, transaction, issue, or security. Any interested party de siring

the commissioner to exercise such authority shall submit to the commissioner a

verified statement of all material facts relating to the proposed sale, transaction,

issue, or security, which verified statement shall be accompanied by a request for a

ruling as to the particular exemption or exception from definition, together with a

filing fee of two hundred fifty dollars ($250). After such notice to interested parties

as the commissioner shall deem proper and after a hearing, if any, the commissioner

may enter an order finding the proposed sale, transaction, issue, or security entitled

or not entitled to the exemption or the exception from definition as claimed. An

order so entered, unless an appeal be taken therefrom in the manner prescribed in

this c hapter, shall be binding upon the commissioner, provided that the proposed

sale, transaction, issue, or security when consummated or issued conforms in every

relevant and material particular with the facts as set forth in the verified statement

as submitted.