TITLE 7. BANKING AND SECURITIES
PART 7. STATE SECURITIES BOARD
CHAPTER 106. GUIDELINES FOR THE ASSESSMENT OF ADMINISTRATIVE FINES
7 TAC §106.1
The Texas State Securities Board adopts an amendment to §106.1, concerning Guidelines for the Assessment of Administrative Fines, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7245). The amended rule will not be republished.
The reference to the Texas Securities Act (Act) in the rule has been updated to reference the correct section in the codified version of the Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022.
The statutory reference conforms to the codified version of the Act, and the rule is current and accurate, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.
The amendment affects Texas Government Code §4007.106.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401175
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 107. TERMINOLOGY
7 TAC §107.1, §107.2
The Texas State Securities Board adopts amendments to §107.1, concerning General; and §107.2, concerning Definitions, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7245). The amended rules will not be republished.
The rules are amended to update the statutory references to the Texas Securities Act (Act) in the rules to refer to the codified version of the Act. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022. Section 107.1 is also amended to capitalize the word "Board" to conform terminology. Other amendments have been made to existing definitions in §107.2, which have been relocated; repealed because they are no longer used in the Act or elsewhere in the Board Rules; or amended to conform to terms now used in the Act or in the rules. New definitions have also been added for the terms "NASAA," and "CFR," so those definitions that appear elsewhere in the rules can be eliminated.
Statutory references conform to the codified version of the Act, defined terms that are no longer used have been removed, and rules are current and accurate, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendments.
The amendments are adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.
The amendments affect the Texas Securities Act, Texas Government Code, §§4001.001-4008.105.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401176
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 113. REGISTRATION OF SECURITIES
7 TAC §113.1
The Texas State Securities Board adopts the repeal of §113.1, concerning Qualification of Securities, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7247). The repealed rule will not be republished.
The text of this section has been relocated to existing §113.2, which has been renamed to reflect the added relocated text. A new §113.1, concerning Definitions, has also been concurrently adopted which adds a new definitions section to this chapter.
Text of the repealed rule has been relocated to another rule to improve clarity and readability.
No comments were received regarding adoption of the repeal.
The repeal is adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.
The repeal affects the following sections of the Texas Securities Act: Texas Government Code Chapter 4003, Subchapters A, B, and C.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401179
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
7 TAC §§113.1 - 113.6, 113.8, 113.9, 113.11 - 113.14
The Texas State Securities Board adopts a new rule and amendments to eleven rules, §§113.1 - 113.6, 113.8, 113.9, 113.11 - 113.14 in this chapter without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7247). The new rule and amended rules will not be republished.
The new rule and amended rules make nonsubstantive changes to the chapter. Specifically, the Board adopts new §113.1, concerning Definitions; and adopts amendments to §113.2, concerning Registration by Coordination; §113.3, concerning Fair, Just, and Equitable Standards; §113.4, concerning Application for Registration; §113.5, concerning Financial Statements; §113.6, concerning Renewal Update; §113.8; concerning Notification of Status in Other States; §113.9, concerning Securities Underlying Transferable Warrants and Employee Stock Options; §113.11, concerning Shelf Registration of Securities; §113.12, concerning Applicability of Statements of Policy to Exempt Offerings; §113.13, concerning Multijurisdictional Disclosure System--MJDS Offerings; and §113.14, concerning Statements of Policy.
The existing §113.1, concerning Qualification of Securities, is concurrently repealed.
New §113.1, concerning Definitions, adds a new definitions section to this chapter. The text of existing §113.1 of this title (relating to Qualification of Securities), is relocated to existing §113.2 of this title (relating to Registration by Coordination), which is renamed to reflect the relocated text.
The references to sections of the Texas Securities Act (Act) in §§113.2, 113.3, 113.5, 113.6, 113.8, 113.9, 113.11, 113.12, 113.13, and 113.14 are updated to refer to the correct sections in the codified version of the Act in the Texas Government Code, or to the newly defined terms in new §113.1, as applicable. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022.
Sections 113.2, 113.11, and 113.13 are also amended to remove references to the "Securities and Exchange Commission" and language that defines this term as the "SEC" since this term is already defined in §107.2 of this title (relating to Definitions) as "SEC."
Section 113.4 is also amended in (d)(2) to allow the Registration Division to send notices required by this section by methods other than regular mail, such as by email, and to remove the definition of the Texas Securities Act, as this term is already defined in §107.2 of this title (relating to Definitions). Language in §113.4(e) concerning registration of excess securities that duplicates text from the Act is replaced with references to the applicable statutory provisions.
Section 113.5 is also amended to reflect that an exemption referenced in this rule has been repealed by adding the word "former" to such reference.
Section 113.8 is also amended for clarity and to improve readability.
Section 113.9 is also amended to divide it into three subsections for clarity and to improve readability.
Section 113.11(a)(1) and (b)(1) is also amended to revise the references to the "Code of Federal Regulations" in these subsections to "CFR." Rule 107.2 of this title (relating to Definitions) is concurrently amended to add "CFR" as a defined term.
Section 113.13(b), (c), and (e) is also amended to remove a reference to an obsolete SEC form and to revise the cross reference to §113.2 to state its new caption, and subsection (e) is also amended to conform terminology.
Section 113.14(a) is also amended to remove the definition of the term "NASAA." Rule 107.2 of this title (relating to Definitions) is concurrently amended to add "NASAA" as a defined term. Subsection (c) is revised to remove the reference to "print" copies to allow for the requestor’s preferred format (most likely electronic).
Statutory references conform to the codified version of the Act, and the rules accurately coordinate with federal standards and requirements which promotes transparency and efficient regulation and with respect to the amendment to §113.4, applicants will receive timelier notice of a possible abandonment of their registration applications.
No comments were received regarding adoption of the new rule and amendments.
The new rule and amendments are adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.
The new section and amendments affect the following sections of the Texas Securities Act: Texas Government Code Chapter 4003, Subchapters A, B, and C.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401177
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 114. FEDERAL COVERED SECURITIES
7 TAC §§114.1, 114.2, 114.4
The Texas State Securities Board adopts amendments to §114.1, concerning Introduction; §114.2, concerning Definitions; and §114.4, concerning Filings and Fees, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7251). The amended rules will not be republished.
The references to sections of the Texas Securities Act in §§114.1, 114.2, and 114.4 are updated to refer to either a newly defined term found in §114.2, or to the correct sections in the codified version of the Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022.
Section 114.2 is also amended to add a definition for "Exemptions Sections," and §114.1 is also amended to refer to this new defined term.
Definitions of the "Act" and the "SEC" are removed from §114.2 since they are already defined in Rule 107.2 of this title.
Section 114.4 is also amended to remove language in subsection (a)(3) defining the "Act," since this term is already defined in Rule 107.2 of this title.
Language in §114.4(a)(3), (b)(1)(B), and (b)(4)(C) concerning fees that replicates language in the Act is replaced with references to the applicable statutory provisions.
Additionally, the period in §114.4(d)(1) preceding "the following" language is replaced with a colon to improve accuracy, consistency, and readability; and the words "a year" are added after "6%" in §114.4(d)(1)(B)(i) and (d)(2)(B) to better track the applicable language in Section 302.002 of the Texas Finance Code.
Statutory references conform to the codified version of the Act, and rules are current and accurate, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendments.
The amendments are adopted under the authority of the Texas Government Code, §4002.151 and §4005.024, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 4005.024 provides that the Board may prescribe new exemptions by rule.
The amendments affect the following sections of the Texas Securities Act: Texas Government Code, Chapter 4005, Subchapters A and B; and Chapter 4006.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401180
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 115. SECURITIES DEALERS AND AGENTS
7 TAC §115.18
The Texas State Securities Board adopts an amendment to §115.18, concerning Special Provisions Relating to Military Applicants, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7253). The amended rule will not be republished.
The amendment implements the requirements of Senate Bill 422, passed in the 2023 Texas Legislative Session, which amended §55.0041 of the Texas Occupations Code, effective September 1, 2023.
To reflect the statutory changes, the amendment expands out-of-state occupational license recognition to include military service members, as long as certain criteria are met. The time period for which verification of good standing occurs is also modified from "as soon as practicable" to no later than 30 days. The amendment also addresses the term of the recognition in situations of divorce or other events impacting the military spouse's status. Finally, a statement of purpose is added to the rule to make it clear that this rule addresses the requirements provided under Chapter 55, Texas Occupations Code, and not federal law.
Nonsubstantive changes to conform terminology have also been made, and the references to sections of the Texas Securities Act in the rule have been updated to refer to the correct sections in the codified version of the Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022.
Related forms have been concurrently adopted as are comparable amendments to the corresponding rule for investment advisers and investment adviser representatives.
The rule is consistent with the applicable statutory requirements and statutory references conform to the codified version of the Act, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. The amendment is also adopted under §55.0041 of the Texas Occupations Code, as amended by SB 422, which requires state agencies that issue licenses to adopt rules for the recognition of out-of-state licenses for military applicants.
The amendment affects the following sections of the Texas Securities Act, Texas Government Code: §§4006.001 and 4007.105; and Chapter 4004, Subchapters B through F.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401182
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 116. INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES
7 TAC §116.18
The Texas State Securities Board adopts an amendment to §116.18, concerning Special Provisions Relating to Military Applicants, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7255). The amended rule will not be republished.
The amendment, in part 1, implements the requirements of Senate Bill 422, passed in the 2023 Texas Legislative Session, which amended §55.0041 of the Texas Occupations Code, effective September 1, 2023.
To reflect the statutory changes, the amendment expands out-of-state occupational license recognition to include military service members, as long as certain criteria are met. The time period for which verification of good standing occurs is also modified from "as soon as practicable" to no later than 30 days. The amendment also addresses the term of the recognition in situations of divorce or other events impacting the military spouse's status. Finally, a statement of purpose is added to the rule to make it clear that this rule addresses the requirements provided under Chapter 55, Texas Occupations Code, and not federal law.
Nonsubstantive changes to conform terminology have also been made, and the references to sections of the Texas Securities Act in the rule have been updated to refer to the correct sections in the codified version of the Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022.
Related forms have been concurrently adopted as are comparable amendments to the corresponding rule for dealers and agents.
The rule is consistent with the applicable statutory requirements and statutory references conform to the codified version of the Act, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. The amendment is also adopted under §55.0041 of the Texas Occupations Code, as amended by SB 422, which requires state agencies that issue licenses to adopt rules for the recognition of out-of-state licenses for military applicants.
The amendment affects the following sections of the Texas Securities Act, Texas Government Code: §§4006.001 and 4007.105; and Chapter 4004, Subchapters B through G.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401183
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 123. ADMINISTRATIVE GUIDELINES FOR REGISTRATION OF OPEN-END INVESTMENT COMPANIES
7 TAC §123.3
The Texas State Securities Board adopts an amendment to §123.3, concerning Conditional Exemption for Money Market Funds, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7257). The amended rule will not be republished.
The references to sections of the Texas Securities Act in the rule are updated to refer to the correct sections in the codified version of the Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022. The rule is also amended to replace a reference to a Securities and Exchange Commission Release found in subsection (b)(2) with a reference to a cite to the SEC rule in the Code of Federal Regulations, and to update terminology in subsections (b)(7) and (g).
Statutory references conform to the codified version of the Act, and rules are current, accurate, and coordinate with federal standards and requirements, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the authority of the Texas Government Code, §4002.151 and §4005.024, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 4005.024 provides that the Board may prescribe new exemptions by rule.
The amendment affects the following sections of the Texas Securities Act: Texas Government Code, Chapter 4003, Subchapters A, B, and C; Chapter 4005, Subchapter A; and Chapter 4006.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401186
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 127. MISCELLANEOUS
7 TAC §§127.1, 127.3, 127.4
The Texas State Securities Board adopts amendments to §127.1, concerning Enforcement; §127.3, concerning Seal of the State; and §127.4, concerning Prosecutorial Assistance to County or District Attorneys, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7258). The amended rules will not be republished.
The references to sections of the Texas Securities Act in §§127.1, 127.3, and 127.4 are updated to refer to the correct sections in the codified version of the Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022. Section 127.1 is also amended to remove the statutory quotations to the Act in subsection (b) and revised to improve readability. Section 127.1 is also amended to capitalize the term "Commissioner" in subsections (a) and (b) for consistency.
Statutory references conform to the codified version of the Act, and rules are current and accurate, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendments.
The amendments are adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.
The amendment to §127.1 affects the Texas Government Code, §§4007.001 and 4007.053. The amendment to §127.3 affects the Texas Government Code, §4001.154(c). The amendment to §127.4 affects Texas Government Code, §4007.001.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401187
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 131. GUIDELINES FOR CONFIDENTIALITY OF INFORMATION
7 TAC §131.1
The Texas State Securities Board adopts an amendment to §131.1, concerning Information Sharing, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7259). The amended rule will not be republished.
The amendment updates the statutory reference to the Texas Securities Act in the rule to refer to the codified version of the Texas Securities Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022.
Statutory references conform to the codified version of the Act, and rules are current and accurate, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the authority of the Texas Government Code, §4002.151 and §4002.161, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 4002.161 provides that the Board approve governmental and regulatory authorities and associations of governmental and regulatory authorities to which the Commissioner may disclose confidential information at the Commissioner’s discretion.
The amendment affects the Texas Government Code, §§4002.161 and 4007.056.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401188
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 133. FORMS
7 TAC §133.22, §133.23
The Texas State Securities Board adopts the repeal of two rules, concerning forms adopted by reference. Specifically, the State Securities Board adopts the repeal of §133.22, a form concerning Waiver or Refund Request by a Military Spouse for a Renewal Fee; and §133.23, a form concerning Request for Recognition of Out-Of-State License or Registration by a Military Spouse, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7260). The repealed rules will not be republished.
The repealed forms have been replaced with new forms being concurrently adopted to correspond with amendments to §115.18 and §116.18, which are concurrently adopted and implement the requirements of Senate Bill 422, passed in the 2023 Texas Legislative Session, which amended §55.0041 to the Texas Occupations Code.
The two existing forms have been eliminated so they can be replaced with two new forms to implement the requirements of SB 422.
No comments were received regarding adoption of the repeal.
The repeals are adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. The repeals are also adopted under §55.0041 of the Texas Occupations Code, as amended by SB 422, which requires state agencies that issue licenses to adopt rules for the recognition of out-of-state licenses for military applicants.
The repeals affect the following sections of the Texas Securities Act, Texas Government Code: §§4006.001 and 4007.105; and Chapter 4004, Subchapters B through G.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401192
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
7 TAC §133.22, §133.23
The Texas State Securities Board adopts two new rules, concerning forms adopted by reference, without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TexReg 7261). Specifically, the State Securities Board adopts new §133.22, which adopts by reference a form concerning Waiver or Refund Request by a Military Service Member or Military Spouse for a Renewal Fee; and new §133.23, which adopts by reference a form concerning Request for Recognition of Out-Of-State License or Registration Pursuant to Texas Occupations Code §55.0041. The new rules will not be republished.
The new sections adopt by reference forms that have been created to implement amendments to §115.18 and §116.18, which have been concurrently adopted to implement the requirements of Senate Bill 422, passed in the 2023 Texas Legislative Session, which amended §55.0041 to the Texas Occupations Code.
New Form §133.22 allows either a military service member or military spouse falling within the provisions of Texas Occupations Code §55.0041 to apply for a waiver or refund of a renewal fee pursuant to §115.18 or §116.18, which have been concurrently amended.
New Form §133.23 may be filed by either a military service member or military spouse eligible for non-registration under Texas Occupations Code §55.0041. The form needs to be resubmitted annually during the period that the individual qualifies for unique treatment under Texas Occupations Code §55.0041. Upon issuance of the confirmation by the Registration Division for the initial or a renewal filing, the individual will be considered to be notice filed for purposes of recordkeeping and certification.
Eligible military spouses and eligible military service members can complete the forms to either obtain a waiver or refund of renewal fees or to practice securities business in Texas without being registered.
Concurrent with this adoption is the repeal of existing forms §133.22 and §133.23.
No comments were received regarding adoption of the new rules.
The new rules are adopted under the authority of the Texas Government Code, §4002.151, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. The new rules are also adopted under §55.0041 of the Texas Occupations Code, as amended by SB 422, which requires state agencies that issue licenses to adopt rules for the recognition of out-of-state licenses for military applicants.
The new rules affect the following sections of the Texas Securities Act, Texas Government Code: §§4006.001 and 4007.105; and Chapter 4004, Subchapters B through G.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401189
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 135. INDUSTRIAL DEVELOPMENT CORPORATIONS AND AUTHORITIES
7 TAC §135.1
The Texas State Securities Board adopts an amendment to §135.1, concerning Exemption, without changes to the proposed text as published in the December 15, 1023, issue of the Texas Register (48 TexReg 7262). The amended rule will not be republished.
The reference to the Texas Securities Act (Act) in the rule has been updated to reference the correct section in the codified version of the Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022.
The statutory reference conforms to the codified version of the Act, and the rule is current and accurate, which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the authority of the Texas Government Code, §4002.151 and §4005.024, as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 4005.024 provides that the Board may prescribe new exemptions by rule.
The amendment affects the following sections of the Texas Securities Act: Texas Government Code, Chapter 4003, Subchapters A, B, and C; Chapter 4005, Subchapter A; and Texas Local Government Code, Title 12, Subtitle C1, particularly Local Government Code §501.203.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401193
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303
CHAPTER 137. ADMINISTRATIVE GUIDELINES FOR REGULATION OF OFFERS
7 TAC §§137.1 - 137.3, 137.6
The Texas State Securities Board adopts amendments to §137.1, concerning Application; §137.2, concerning Filing Requirements; §137.3, concerning Preliminary Prospectus; and §137.6, concerning Standards for Supplemental Advertising. Sections 137.2, 137.3, and 137.6 were adopted without changes to the proposed text as published in the December 15, 2023, issue of the Texas Register (48 TegReg 7263) and will not be republished. Section 137.1 was adopted with one change to the published proposal and will be republished. The change consisted of removing an unnecessary comma in subsection (d).
The references to sections of the Texas Securities Act in §§137.1, 137.2, and 137.3 are updated to refer to the correct sections in the codified version of the Act in the Texas Government Code. The codification was adopted by HB 4171, 86th Legislature, 2019 Regular Session, and became effective January 1, 2022. The rest of the amendments make other nonsubstantive and cleanup changes.
Section 137.1 is also amended to subdivide the text into subsections by subject.
Section 137.2 and §137.6 is also amended to capitalize the term "Commissioner" for consistency.
Section 137.2(c) is also amended to correct a reference to a Securities and Exchange Commission rule.
The reference to the term "Securities and Exchange Commission" in Section 137.3 is replaced with "SEC," which is already defined in §107.2 of this title. The section is also amended to abbreviate a cite to the Code of Federal Regulations. Rule 107.2 of this title, concerning Definitions, is concurrently amended to add "CFR" as a defined term.
Section 137.6(e) is also amended to update outdated terminology.
Statutory references conform to the codified version of the Act, and the rules accurately coordinate with federal standards and requirements which promotes transparency and efficient regulation.
No comments were received regarding adoption of the amendments.
The amendments are adopted under the authority of the Texas Government Code, §4002.151 as adopted by HB 4171, 86th Legislature, 2019 Regular Session, effective January 1, 2022. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.
The amendments affect Chapter 4003, Subchapter E, of the Texas Government Code.
§137.1.Application.
(a) This chapter relates to offers to sell securities which must be filed with the Commissioner under the Texas Securities Act, Chapter 4003, Subchapter E.
(b) This chapter does not apply to advertising for sales made in reliance upon exemptions contained in the Act, Chapter 4005, Subchapters A or B, including exemptions by rule adopted by the State Securities Board pursuant to the Texas Securities Act, §4005.024.
(c) This chapter does not require the filing of any offering documents, prepared by or on behalf of the issuer, in connection with the offer of federal covered securities, as that term is defined in §107.2 of this title (relating to Definitions).
(d) The Texas Securities Act prohibits fraud or fraudulent practices in connection with the purchase or sale of any security, whether exempt or not. The Agency has jurisdiction to investigate and bring enforcement actions with respect to fraud or deceit, or unlawful conduct by a dealer or agent, in connection with any securities subject to the Texas Securities Act, including federal covered securities or transactions involving federal covered securities.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 18, 2024.
TRD-202401194
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: April 7, 2024
Proposal publication date: December 15, 2023
For further information, please call: (512) 305-8303