A meeting of the State Securities Board was held on September 21, 2023, in Room 320, Thomas Jefferson Rusk State Office Building, at 10:00 a.m. Those present were: E. Wally Kinney, Chair; Robert Belt, Member; Melissa Tyroch, Member; Ejike E. Opka II, Member; Travis J. Iles, Securities Commissioner; Tommy Green, Director, Inspections and Compliance Division; Derek Lauterjung, Director, Staff Services Division; Joseph J. Rotunda, Director, Enforcement Division; Marlene K. Sparkman, General Counsel; Emily Diaz, Assistant Director, Registration Division; Tina Lawrence, Assistant Director, Enforcement Division; Cheryn Netz, Assistant General Counsel; Misty Smith, Assistant Director, Staff Services Division; Shaun Yarroll, Assistant Director, Registration Division; Cristi Ochoa, Attorney, Inspections and Compliance Division; Brian Shepherd, Staff Attorney, General Counsel Division; and Sonia Fergerson, Executive Assistant. Also attending was Kim Lopez-Gonzales.
Chair Kinney called the meeting to order at 10:00 a.m.
Minutes of the May 16, 2023, meeting were approved.
The Board voted to excuse Member Koncaba’s absence from the current meeting and the May 16, 2023, Board meeting.
The Audit Committee reported on the Agency’s Internal Audit Report for Fiscal Year 2023, prepared by Garza/Gonzalez & Associates, and the Board reviewed the report.
Upon the recommendation of the Audit Committee, the Board voted to retain Garza/Gonzalez & Associates as the internal auditor for Fiscal Year 2024.
The Board reviewed and voted to re-adopt the following rule chapters pursuant to the Agency's rule review plan:
- Chapter 102. Complaint Process.
- Chapter 107. Terminology.
- Chapter 127. Miscellaneous.
- Chapter 131. Guidelines for Confidentiality of Information.
The Board voted to adopt the following proposed rules:
- Repeal of Form 133.8, Consent to Service.
The Board voted to publish for public comment the following new rule proposals:
- Amending §115.18(b), (d), (e), and (h), concerning special provisions relating to military applicants, to implement changes to Chapter 55 of the Occupations Code; make nonsubstantive changes to update references and conform terminology; and add subsection (i) to state the purpose of the section.
- Amending §116.18(b), (d), (e), and (h), concerning special provisions relating to military applicants, to implement changes to Chapter 55 of the Occupations Code; make nonsubstantive changes to update references and conform terminology; and add subsection (i) to state the purpose of the section.
- New Form 133.22, Waiver or Refund Request by a Military Service Member or Military Spouse for a Renewal Fee, and new Form 133.23, Request for Recognition of Out-Of-State License or Registration Pursuant to Occupations Code §55.0041.
- Repeal of Form 133.22, Waiver or Refund Request by a Military Spouse for a Renewal Fee, and Form 133.23, Request for Recognition of Out-Of-State License or Registration by a Military Spouse.
- Amending §106.1, concerning guidelines for the assessment of administrative fines.
- Amending §107.1, concerning general.
- Amending §107.2, concerning definitions, to relocate provisions within the rule, remove obsolete terminology and conform to current terminology, and add new definitions for “NASAA” and “CFR.”
- Repealing §113.1, concerning qualification of securities.
- Adding new §113.1, concerning definitions.
- Amending §113.2, registration by coordination, to rename the section and incorporate the qualification of securities provisions from §113.1, which is being proposed for repeal.
- Amending §113.3(1), concerning fair, just, and equitable standards.
- Amending §113.4(d)(2) and (e), application for registration, to provide alternative means for notification of abandonment of an application.
- Amending §113.5(a) and (c), concerning financial statements.
- Amending §113.6, concerning renewal update.
- Amending §113.8, concerning notification of status in other states.
- Amending §113.9, concerning securities underlying transferable warrants and employee stock options.
- Amending §113.11(a)(1) and (b)(1), concerning shelf registration of securities.
- Amending §113.12, concerning applicability of statements of policy to exempt offerings.
- Amending §113.13(a)-(c) and (e), concerning multijurisdictional disclosure system–MJDS offerings, to remove references to an obsolete federal form.
- Amending §113.14(a) and (c), concerning statements of policy.
- Amending §114.1(b), concerning introduction, to add a newly defined term appearing in §114.2.
- Amending §114.2(1) and (4), concerning definitions, to add a new term “Exemptions Sections” and remove definitions that duplicate those already appearing in §107.2.
- Amending §114.4(a)-(b), (d), and (f), concerning filings and fees, to remove duplicate definitions; and replace quotations of statutory language concerning fees with references to the appropriate statutory provision.
- Amending §123.3(a)-(e), and (g)-(i), concerning conditional exemption for money market funds.
- Amending §127.1, concerning enforcement, to remove quotations of statutory language that has changed.
- Amending §127.3, concerning seal of the state.
- Amending §127.4(a)-(b), concerning prosecutorial assistance to county or district attorneys.
- Amending §131.1(a), concerning information sharing.
- Amending §135.1, concerning exemption.
- Amending §137.1, concerning application.
- Amending §137.2, concerning filing requirements, to fix an incorrect reference.
- Amending §137.3, concerning preliminary prospectus.
- Amending §137.6(a) and (e), concerning standards for supplemental advertising, to update terminology.
The Commissioner gave a report on the Agency’s budget and performance measures.
The Commissioner discussed Section 35.A fees (now Texas Government Code Section 4006.001 of the codified Act).
The Commissioner gave a general update on Agency operations.
The Commissioner provided an update on the conclusion of the Regular Session of the 88th Legislative Session.
The Board retired to executive session at 11:55 a.m. discuss the performance review of the Securities Commissioner pursuant to the exception granted by Section 551.074 of the Texas Government Code, Open Meetings Act.
Following the executive session, the Board reconvened the open meeting at 12:17 p.m., and noted approval of the Commissioner's job performance and recommended that the salary of the Securities Commissioner be increased to $177,836 a year.
The Board then discussed possible times and dates for future Board Meetings and selected 10:00
a.m. on February 22, 2024, May 9, 2024, and September 19, 2024.
The meeting was then adjourned at 12:35 p.m.