TITLE 7. BANKING AND SECURITIES
PART 7. STATE SECURITIES BOARD
CHAPTER 111. SECURITIES EXEMPT FROM REGISTRATION
7 TAC §111.2
The Texas State Securities Board adopts an amendment to §111.2, concerning Listed and Designated Securities, without changes to the proposed text as published in the July 12, 2024, issue of the Texas Register (49 TexReg 4979). The amended rule will not be republished.
The references to sections of the Texas Securities Act (Act) 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 (HB 4171).
The section is also amended to replace the reference to the term "United States Securities and Exchange Commission" with the term "SEC" in subsection (d). SEC is already a defined term in §107.2, concerning Definitions. The nonsubstantive amendments are made pursuant to the Agency's periodic review of its rules.
Statutory references are current and accurate and conform to the codified version of the Act; and terminology and references are updated.
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. 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 adopted amendment affects the following sections of the Texas Securities Act: Texas Government Code Chapter 4003, Subchapters A, B, and C, and Chapter 4005.
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 October 25, 2024.
TRD-202405026
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: November 14, 2024
Proposal publication date: July 12, 2024
For further information, please call: (512) 305-8303
CHAPTER 113. REGISTRATION OF SECURITIES
7 TAC §113.14
The Texas State Securities Board adopts an amendment to §113.14, concerning Statements of Policy, without changes to the proposed text as published in the July 12, 2024, issue of the Texas Register (49 TexReg 4980). The amended rule will not be republished.
The amendment adopts by reference certain updated North American Securities Administrators Association ("NASAA") statements of policy ("SOPs") that were amended by NASAA on September 12, 2023.
Uniformity with other states when reviewing applications to register securities is increased.
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 adopted amendment 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 October 25, 2024.
TRD-202405030
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: November 14, 2024
Proposal publication date: July 12, 2024
For further information, please call: (512) 305-8303
CHAPTER 114. FEDERAL COVERED SECURITIES
7 TAC §114.4
The Texas State Securities Board adopts an amendment to §114.4, concerning Filings and Fees, without changes to the proposed text as published in the July 12, 2024, issue of the Texas Register (49 TexReg 4981). The amended rule will not be republished.
Section 114.4(b) is amended to add a new paragraph (6) to specifically address federal covered securities offered pursuant to Securities and Exchange Commission (SEC) Federal Crowdfunding. Previously, these offerings fell within the catch-all for federal covered securities provided by subsection (a). To assist issuers in more readily locating the filing and fee requirements for SEC Federal crowdfunding offerings, a specific provision covering these offerings is provided in new subsection (b)(6). No change is made to the filing or fee requirements of this rule, other than to permit a filer to use the Uniform Notice Filing of Federal Crowdfunding form instead of page 1, Items 1-6 of the Form U-1. The Federal Crowdfunding form includes a consent to service of process. The nonsubstantive amendment is made pursuant to the Agency's periodic review of its rules.
Federal Crowdfunding filings are more efficient because a specific filing requirement for Federal Crowdfunding filings has been provided and Federal Crowdfunding filers are permitted to use a different form for these filings.
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 7171, 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 adopted amendment affects the following sections of the Texas Securities Act: Texas Government Code Chapter 4003, Subchapters A, B, and C; 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 October 25, 2024.
TRD-202405034
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: November 14, 2024
Proposal publication date: July 12, 2024
For further information, please call: (512) 305-8303
CHAPTER 133. FORMS
7 TAC §133.7
The Texas State Securities Board adopts the repeal of rule §133.7, which adopts by reference a form concerning Securities Application, without changes to the proposed text as published in the July 12, 2024, issue of the Texas Register (49 TexReg 4982). The repealed rule will not be republished.
The adopted repeal of the rule allows for the simultaneous adoption of a new rule and a new corrected form by reference, which are being concurrently adopted. The repeal is made pursuant to the Agency's periodic review its rules.
An existing form has been eliminated so it can be replaced with a new corrected form.
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 adopted repeal affects the following sections of the Texas Securities Act: Texas Government Code Chapter 4003, Subchapters A, B, and C; and Chapter 4006, Subchapters A, B, and C.
§133.7.Securities Application.
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 October 25, 2024.
TRD-202405037
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: November 14, 2024
Proposal publication date: July 12, 2024
For further information, please call: (512) 305-8303
7 TAC §133.7
The Texas State Securities Board adopts new rule §133.7, which adopts by reference a form concerning Securities Application, without changes to the proposed text as published in the July 12, 2024, issue of the Texas Register (49 TexReg 4982). The new rule will not be republished.
Previous §133.7 and the form it adopted by reference, which referred to a different form that has been repealed and no longer exists, is repealed and replaced with a new rule that adopts a new corrected form by reference. The new rule is made pursuant to the Agency's periodic review its rules.
A repealed form has been replaced with a new, updated form.
No comments were received regarding adoption of the new rule.
STATUTORY AUTHORITY
The new rule 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 adopted new rule affects the following sections of the Texas Securities Act: Texas Government Code Chapter 4003, Subchapters A, B, and C; and Chapter 4006, 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 October 25, 2024.
TRD-202405036
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: November 14, 2024
Proposal publication date: July 12, 2024
For further information, please call: (512) 305-8303
7 TAC §133.33
The Texas State Securities Board adopts an amendment to §133.33, concerning Uniform Forms Accepted, Required, or Recommended, without changes to the proposed text as published in the July 12, 2024, issue of the Texas Register (49 TexReg 4983). The amended rule will not be republished.
The amendment to §133.33 updates the statutory reference to the Texas Securities Act (Act) in §133.33(a)(8) to refer to 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 (HB 4171).
The amendment to §133.33 also adds the Uniform Notice of Federal Crowdfunding (Form U-CF) form and Form U6 to the list in subsection (a) of uniform forms accepted. The Form U-CF is used for making the required notice filings for this type of federal covered securities. A related change to §114.4 is being concurrently adopted. Form U6 is used by state securities regulators, including the Agency, and by federal securities regulators, for reporting disclosure events and disciplinary actions against individuals and organizations. The addition of Form U6 to the list of uniform forms accepted acknowledges through formal rulemaking the Agency's current practice of accepting these forms as a means of notifying the Agency of such events disclosed in these forms.
The amendments to this section are made pursuant to the Agency's periodic review of its rules.
Federal Crowdfunding filings are more accurate and efficient because a specific form is provided for these filings, and the rule is current, accurate, and reflects an existing practice.
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. 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 adopted amendment affects the following sections of the Texas Securities Act: Texas Government Code Chapter 4005, Subchapter A; and §4007.105.
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 October 25, 2024.
TRD-202405038
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: November 14, 2024
Proposal publication date: July 12, 2024
For further information, please call: (512) 305-8303
CHAPTER 139. EXEMPTIONS BY RULE OR ORDER
7 TAC §§139.1, 139.2, 139.7 - 139.16, 139.18 - 139.24, 139.26, 139.27
The Texas State Securities Board adopts amendments to 21 rules in this chapter, §§139.1, 139.2, 139.7 - 139.16, 139.18 - 139.24, 139.26, and 139.27, without changes to the proposed text as published in the July 12, 2024, issue of the Texas Register (49 TexReg 4984). The amended rules will not be republished.
The amended rules make nonsubstantive changes to the chapter. Specifically, the Board adopts amendments to §139.1, concerning Policies; §139.2, concerning Professional Associations; §139.7, concerning Sale of Securities to Nonresidents; §139.8, concerning Sales to Underwriters; §139.9, concerning Bank Holding Companies; §139.10, concerning Exchange Offers; §139.11, concerning Transactions in United States Savings Bonds; §139.12, concerning Oil and Gas Auction Exemption; §139.13, concerning Resales under SEC Rule 144 and Rule 145(d); §139.14, concerning Non-Issuer Sales; §139.15, concerning Credit Enhancements; §139.16, concerning Sales to Individual Accredited Investors; §139.18, concerning Dealer and Investment Adviser Use of the Internet To Disseminate Information on Products and Services; §139.19, concerning Accredited Investor Exemption; §139.20, concerning Third Party Brokerage Arrangements on Financial Entity Premises; §139.21, concerning Dealer, Agent, and Securities Exemptions for Canadian Accounts; §139.22, concerning Exemption for Investment Adviser to a High Net Worth Family Entity; §139.23, concerning Registration Exemption for Investment Advisers to Private Funds; §139.24, concerning Charitable Organizations Assisting Economically Disadvantaged Clients with Texas Qualified Tuition Program Plans; §139.26, concerning Intrastate Crowdfunding Exemption for SEC Rule 147A Offerings; and §139.27, concerning Mergers and Acquisitions Dealer Exemption. The nonsubstantive amendments are made pursuant to the Agency's periodic review of its rules.
The references to sections of the Texas Securities Act (Act) in §§139.1, 139.8 - 139.16, 139.18 - 139.24, 139.26, and 139.27 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 (HB 4171). The rest of the amendments make other nonsubstantive and cleanup changes.
Section 139.2 is amended to capitalize "Board" and "Commissioner" for consistency. Section 139.2 is also amended to reference the section of the Texas Business Organizations Code where the existing cite in the rule concerning professional associations has been moved.
Sections 139.10, 139.13, 139.16, 139.19, 139.23, and 139.26 are amended to replace the references in those sections to the term "Securities and Exchange Commission" with the term "SEC." SEC is already a defined term in §107.2, concerning Definitions.
Section 139.7(b) is amended to add the word "internet" to the means that an offer or sale can be made under this rule. In addition, the words "or her" are added to §139.7 for consistency.
The language in subsection §139.16(e), which sets forth the content of the rule's limited use advertisement requirement, is updated to reflect the current SEC definition of "individual accredited investor." A parenthetical in subsection (g) is deleted to conform to the preferred format for multiple references to a rule within a rule.
Section 139.18 is amended to replace the outdated term "dealer agent" with "agent."
Section 139.20 contains a cross reference to §109.17 of this title (relating to Banks under the Securities Act, §5.L). This caption of this cross reference to §109.17 is renamed, and the incorrect capitalization of "under" and "the" in the caption is corrected.
Sections 139.23, 139.26, and 139.27 is also amended for consistency to reformat the citations in these sections to the SEC rules and to add a missing "--" to §139.23(a)(6).
Statutory references are current and accurate and conform to the codified version of the Act; and terminology and references are updated.
No comments were received regarding adoption of the amendments.
The amendments are adopted under the authority of the Texas Government Code, §§4002.151, 4004.001, and 4005.024, as adopted by HB 4171. 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 4004.001 provides the Board with the authority to prescribe new dealer, agent, investment adviser, or investment adviser representative registration exemptions by rule. Section 4005.024 provides that the Board may prescribe new exemptions by rule.
The adopted amendments affect the Texas Securities Act, Texas Government Code Chapter 4003, Subchapters A, B, and C; Chapter 4004; and Chapter 4005, Subchapters A and B.
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 October 25, 2024.
TRD-202405041
Travis J. Iles
Securities Commissioner
State Securities Board
Effective date: November 14, 2024
Proposal publication date: July 12, 2024
For further information, please call: (512) 305-8303