For Securities Professionals

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Regulation of Dealers & Investment Advisers

The Texas State Securities Board reviews the applications of dealers, agents, investment advisers and/or investment adviser representatives. A review is conducted to ensure that individuals and firms offering or selling securities or rendering investment advice in this state, for compensation, meet certain minimum qualifications, are financially solvent and are of good business repute.

Securities Registration and Exemptions

Before securities can be offered or sold in Texas, they must be registered or notice-filed with the Texas State Securities Board, or exempt from registration, in accordance with the Texas Securities Act and Board Rules.

Securities include investments such as stocks, bonds, notes, debentures, limited partnership interests, oil and gas interests, and investment contracts.

Generally, an "investment contract" is created when a person invests something of value in a common enterprise with the expectation of a return generated by an outside manager.

Inspections & Compliance

The Texas State Securities Board takes various measures to determine if registered broker-dealers and investment advisers are complying with applicable securities laws. In addition to examinations of registered broker-dealers and investment advisers, the State Securities Board investigates complaints involving registrants and monitors disclosures made by brokers and investment adviser representatives.

Enforcement

The Enforcement staff enforces the Texas Securities Act through the detection and prevention of violations that include illegal sales of unregistered nonexempt securities, sales of securities by unregistered dealers, and fraud committed in connection with the sale of securities.

Administrative sanctions include denial, revocation, or suspension of dealer, agent, investment adviser, or investment adviser representative registrations; cease and desist orders prohibiting the sale of securities or prohibiting fraudulent conduct; and administrative fines. The Act also provides for criminal penalties.