Minutes - September 22, 2022

A meeting of the State Securities Board was held on September 22, 2022, in Room 320, Thomas Jefferson Rusk State Office Building, at 10:00 a.m. Those present were: E. Wally Kinney, Chair; Kenny Koncaba, Member; Robert Belt, Member; Melissa Tyroch, Member; Ejike E. Opka II, Member; Travis J. Iles, Securities Commissioner; Tommy Green, Director, Inspections and Compliance Division; Joseph J. Rotunda, Director, Enforcement Division; Marlene K. Sparkman, General Counsel; Emily Diaz, Assistant Director, Registration Division; Betsy Hodges, Assistant Director, Inspections and Compliance 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; Sonia Fergerson, Executive Assistant; and Joshua Blumenkopf, Financial Examiner, Inspections and Compliance Division. Also attending was Kim Lopez-Gonzales.

Chair Kinney called the meeting to order at 10:00 a.m.

Minutes of the May 12, 2022, meeting were approved.

The Audit Committee reported on the Agency’s Internal Audit Report for Fiscal Year 2022, prepared by Garza/Gonzalez & Associates, and the Board reviewed the report.

The Board voted to adopt the following published rule proposals:

  • New §101.9, concerning vendor protest procedures.
  • New forms updated to add citations to the codified Texas Securities Act and make other nonsubstantive changes:
    • Form 133.5. Secondary Trading Exemption Notice.
    • Form 133.6. Secondary Trading Exemption Renewal Notice.
    • Form 133.7. Securities Application.
    • Form 133.12. Renewal Application for Mutual Funds and Other Continuous Offerings.
    • Form 133.13. Application for Renewal Permit.
    • Form 133.16. Texas Crowdfunding Portal Withdrawal of Registration.
    • Form 133.18. Certification of Balance Sheet by Principal Financial Officer.
    • Form 133.26. Request for Determination of Money Market Fund Status for Federal Covered Securities.
    • Form 133.27. Year-End Report of Sales of Federal Covered Securities by a Money Market Fund.
    • Form 133.29. Intrastate Exemption Notice.
    • Form 133.30. Information Concerning Projected Market Prices and Related Market Information.
    • Form 133.34. Undertaking Regarding Non-Issuer Sales.
    • Form 133.36. Request for Reduced Fees for Certain Persons Registered in Multiple Capacities.
  • Repeal current forms that are being replaced:
    • Form 133.5. Secondary Trading Exemption Notice.
    • Form 133.6. Secondary Trading Exemption Renewal Notice.
    • Form 133.7. Application for Registration of Securities.
    • Form 133.12. Renewal Application for Mutual Funds and Other Continuous Offerings.
    • Form 133.13. Application for Renewal Permit.
    • Form 133.16. Texas Crowdfunding Portal Withdrawal of Registration.
    • Form 133.18. Certification of Balance Sheet by Principal Financial Officer.
    • Form 133.26. Request for Determination of Money Market Fund Status for Federal Covered Securities.
    • Form 133.27. Year-End Report of Sales of Federal Covered Securities by a Money Market Fund (Pursuant to §123.3).
    • Form 133.29. Intrastate Exemption Notice.
    • Form 133.30. Information Concerning Projected Market Prices and Related Market Information.
    • Form 133.34. Undertaking Regarding Non-issuer Sales.
    • Form 133.36. Request for Reduced Fees for Certain Persons Registered in Multiple Capacities.

The Board voted to publish for public comment the following new rule proposals:

  • New forms updated for consistency, to eliminate unneeded provisions, and make other nonsubstantive changes:
    • Form 133.2. Public Information Charges-Billing Detail.
    • Form 133.3. ADA Accommodations Request.
    • Form 133.4. Request for Consideration of a Registration Application by a Military Applicant.
    • Form 133.9. Notice Filing for Third Party Brokerage Arrangements on Financial Entity Premises.
    • Form 133.10. Investment Company Report of Sales in the State of Texas.
    • Form 133.11. Sales Report Form for Non-continuous Offerings.
    • Form 133.14. Consent of Independent Accountants.
    • Form 133.15. Texas Crowdfunding Portal Registration.
    • Form 133.19. Waiver or Refund Request by a Military Applicant.
    • Form 133.20. Texas Crowdfunding Portal Registration by an Authorized Small Business Development Entity.
    • Form 133.21. Crowdfunding Exemption Notice.
    • Form 133.22. Waiver or Refund Request by a Military Spouse for a Renewal Fee.
    • Form 133.23. Request for Recognition of Out-Of-State License or Registration by a Military Spouse.
  • Repeal current forms that are being replaced:
    • Form 133.2. Public Information Charges--Billing Detail.
    • Form 133.3. ADA Accommodations Request Form.
    • Form 133.4. Request for Consideration of a Registration Application by a Military Applicant.
    • Form 133.9. Notice Filing for Third Party Brokerage Arrangements on Financial Entity Premises.
    • Form 133.10. Investment Company Report of Sales.
    • Form 133.11. Sales Report Form for Non-continuous Offerings.
    • Form 133.14. Consent of Independent Accountants.
    • Form 133.15. Texas Crowdfunding Portal Registration.
    • Form 133.19. Waiver or Refund Request by a Military Applicant.
    • Form 133.20. Texas Crowdfunding Portal Registration by an Authorized Small Business Development Entity.
    • Form 133.21. Crowdfunding Exemption Notice (SEC Rule 147A Offerings using §139.26).
    • Form 133.22. Waiver or Refund Request by a Military Spouse for a Renewal Fee.
    • Form 133.23. Request for Recognition of Out-Of-State License or Registration by a Military Spouse.

The Commissioner gave a report on the Agency’s budget and performance measures.

The Commissioner gave a general update on Agency operations.

The Commissioner gave an update on the Agency’s legislative appropriations request and gave a report on what may be expected during the upcoming legislative session.

The Board retired to executive session at 11:28 a.m. to 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 their approval of the Commissioner’s job performance. The Board discussed its concerns with the loss of experienced professional and requested that the Commissioner formulate and execute a plan to address the long-term staffing issues of the Agency. The Board then offered to provide any assistance with implementing this plan that it may be allowed by law to provide. The Commissioner and the Board discussed possible steps to implement such a plan.

The Board then discussed possible times and dates for future Board Meetings and selected 10:00 a.m. on February 23, 2023, May 16, 2023, and September 21, 2023.

The meeting was then adjourned at 12:50 p.m.