A meeting of the State Securities Board was held on May 9, 2024, in Room 320, Thomas Jefferson Rusk State Office Building, at 10:00 a.m. Those present were: E. Wally Kinney, Chair; Melissa Tyroch, Member; Ejike E. Opka II, Member; David B. Montgomery, Member; Travis J. Iles, Securities Commissioner; Cristi Ochoa, Deputy Commissioner; Tommy Green, Director, Inspections and Compliance Division; Derek Lauterjung, Director, Staff Services Division; Cheryn Netz, General Counsel; Joseph J. Rotunda, Director, Enforcement Division; Emily Diaz, Assistant Director, Registration Division; Misty Smith, Assistant Director, Staff Services Division; Shaun Yarroll, Assistant Director, Registration Division; Barbara Engle, Assistant Director, Inspections and Compliance Division; Brian Shepherd, Staff Attorney, General Counsel Division; Kathryn Miner, Legal Assistant, Enforcement Division; and Sonia Fergerson, Executive Assistant. Also attending was Kim Lopez-Gonzales.
Chair Kinney called the meeting to order at 10:04 a.m.
The Board voted to excuse Member Belt’s absence from the meeting.
Minutes of the February 22, 2024, meeting were approved.
After discussion and a recommendation of the Audit Committee, the Board voted to approve the
internal audit plan for fiscal year 2024 prepared by Garza/Gonzalez & Associates.
The Board reviewed and voted to re-adopt the following rule chapters pursuant to the Agency's rule review plan:
- Chapter 115. Securities Dealers and Agents.
- Chapter 116. Investment Advisers and Investment Adviser Representatives.
The Board voted to adopt the following proposed rules:
- Amending §109.1, concerning transactions involving existing security holders, to conform to current terminology.
- Amending §109.2, concerning parent subsidiary transactions.
- Amending §109.3, concerning financial institutions under the Texas Securities Act, §5.H, to rename the section.
- Amending §109.4, concerning securities registration exemption for sales to financial institutions and certain institutional investors.
- Amending §109.5, concerning dealer registration exemption for sales to financial institutions and certain institutional investors.
- Amending §109.6, concerning investment adviser registration exemption for investment advice to financial institutions and certain institutional investors.
- Amending §109.7, concerning secondary trading exemption under the Texas Securities Act, §5.O, to rename the section and to adjust quotation in (b) to be consistent with the codified Act.
- Amending §109.8, concerning initial offering completed, to adjust quotations to be consistent with the codified Act.
- Amending §109.11(d), concerning guarantee of options, to update terminology.
- Amending §109.13, concerning limited offering exemptions, to add new defined terms to subsection (a) to be used in this section and reorganize subsection (a) into multiple paragraphs to incorporate the added defined terms; to adjust the quotation in (e) to be consistent with the codified Act; to rename (f),(g), and (h); to conform to current terminology in (f)(1) and (l)(3); to amend subsection (l) to add “of this subsection” to paragraphs (3),(4), and (5) of that subsection; and to correct and conform cross references in paragraphs (1) and (6) of subsection (l) to the proposed changes to subsection (a) in this section.
- Amending §109.14, concerning oil, gas, and other mineral interests.
- Amending §109.17, concerning banks under the Securities Act, §5.L, to rename the section and to adjust quotations to be consistent with the codified Act.
The Board voted to publish for public comment the following new rule proposals:
- Amending §113.14(b), concerning statements of policy to update the rule to reflect September 12, 2023, revisions to the NASAA SOPs for Impoundment of Proceeds; Options and Warrants; Promotional Shares; and Debt Securities.
- Amending §114.4, concerning filings and fees, to add a new paragraph (b)(6) to specifically address federal covered securities offered pursuant to SEC Regulation Crowdfunding.
- Amending §133.33, concerning uniform forms accepted, required, or recommended, to add the uniform notice of federal crowdfunding form (Form U-CF) and Form U-6 to the list of uniform forms accepted, and to cite to codified Act.
- Amending §111.2, concerning listed and designated securities.
- New Form 133.7, concerning securities application, to remove a reference to a repealed form.
- Repeal of Form 133.7, concerning securities application.
- Amending §139.1, concerning policies.
- Amending §139.2, concerning professional associations.
- Amending §139.7, concerning sale of securities to nonresidents, to add the word “internet” to subsection (b).
- Amending §139.8, concerning sales to underwriters.
- Amending §139.9, concerning bank holding companies.
- Amending §139.10, concerning exchange offers.
- Amending §139.11, concerning transactions in United States savings bonds.
- Amending §139.12, concerning oil and gas auction exemption.
- Amending §139.13, concerning resales under SEC Rule 144 and Rule 145(d).
- Amending §139.14, concerning non-issuer sales.
- Amending §139.15, concerning credit enhancements.
- Amending §139.16, concerning sales to individual accredited investors, to use the updated SEC definition of “individual accredited investor” in limited use advertisement requirement found subsection (e).
- Amending §139.18, concerning dealer and investment adviser use of the internet to disseminate information on products and services, to remove obsolete terminology and conform to current terminology.
- Amending §139.19, concerning accredited investor exemption.
- Amending §139.20, concerning third party brokerage arrangements on financial entity premises.
- Amending §139.21, concerning dealer, agent, and securities exemptions for Canadian accounts.
- Amending §139.22, concerning exemption for investment adviser to a high net worth family entity.
- Amending §139.23, concerning registration exemption for investment advisers to private funds.
- Amending §139.24, concerning charitable organizations assisting economically disadvantaged clients with Texas Qualified Tuition Program Plans.
- Amending §139.26, concerning intrastate crowdfunding exemption for SEC Rule 147A offerings.
- Amending §139.27, concerning mergers and acquisitions dealer exemption.
The Commissioner gave a report on the Agency’s budget and performance measures.
The Commissioner gave a general update on Agency operations.
The Board confirmed the designation of Cristi Ochoa as Deputy Securities Commissioner.
The meeting was then adjourned at 11:13 a.m.