TITLE 7. BANKING AND SECURITIES

PART 7. STATE SECURITIES BOARD

CHAPTER 101. GENERAL ADMINISTRATION

7 TAC §101.6

The Texas State Securities Board adopts an amendment to §101.6, concerning Historically Underutilized Business Program, without changes to the proposed text as published in the June 28, 2019, issue of the Texas Register (44 TexReg 3203). The amended rule will not be republished.

The amendment corrects a cross reference and ensures that accurate and current information regarding the Board's participation in the Historically Underutilized Business Program is reflected.

No comments were received regarding adoption of the amendment.

The amendment is adopted under Texas Civil Statutes, Article 581-28-1 and Texas Government Code, §2161.003. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 2161.003 requires that a state agency adopt the rules of the Comptroller of Public Accounts regarding Historically Underutilized Businesses under Government Code §2161.002 as its own.

The adopted amendment affects Texas Government Code, §2161.003.

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 August 5, 2019.

TRD-201902500

Travis J. Iles

Securities Commissioner

State Securities Board

Effective date: August 25, 2019

Proposal publication date: June 28, 2019

For further information, please call: (512) 305-8303

CHAPTER 103. RULEMAKING PROCEDURE

7 TAC §103.5

The Texas State Securities Board adopts an amendment to §103.5, concerning Petitions, without changes to the proposed text as published in the June 28, 2019, issue of the Texas Register (44 TexReg 3203).

A cross-reference to the statute being implemented is provided and information may be gathered that would facilitate the Staff being able to compile information on the economic, fiscal, employment, and cost impact of the proposal if such information is available to the petitioner.

The public will have accurate information regarding the petition process and the petitioner will be alerted of the cost information that the Agency will need to go forward with proposing a new rule or rule change.

No comments were received regarding adoption of the amendment.

The amendment is adopted under Texas Civil Statutes, Article 581-28-1 and Texas Government Code, §2001.021. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 2001.021 requires state agencies to adopt rules prescribing the form for a rulemaking petition and the procedure for its submission, consideration, and disposition.

The adopted amendment affects Texas Civil Statutes, Articles 581-2-5, 581-4.N, 581-4.P, 581-5.T, 581-7.A, 581-8, 581-12.C, 581-12-1.B, 581-13.D, 581-19.B, 581-28.A, 581-28.B, 581-28-1.B, 581-28-1.D, 581-42.A, 581-42.B., 581-44, 581-45.N, and Texas Government Code, §2001.021.

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 August 5, 2019.

TRD-201902501

Travis J. Iles

Securities Commissioner

State Securities Board

Effective date: August 25, 2019

Proposal publication date: June 28, 2019

For further information, please call: (512) 305-8303

CHAPTER 104. PROCEDURE FOR REVIEW OF APPLICATIONS

7 TAC §104.5

The Texas State Securities Board adopts an amendment to §104.5, concerning Registration of Dealers and Investment Advisers--Review of Applications, without changes to the proposed text as published in the June 28, 2019, issue of the Texas Register (44 TexReg 3205). The rule will not be republished.

The recent reorganization of the Registration Division is recognized, and the review process more closely mirrors that process in §104.4 for securities registration.

The rule accurately reflects the review process for registrations.

No comments were received regarding adoption of the amendment.

The amendment is adopted under Texas Civil Statutes, Article 581-28-1 and Texas Government Code §2005.003. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 2005.003 requires state agencies issuing permits to adopt procedural rules for processing permit applications and issuing permits.

The adopted amendment affects Texas Civil Statutes, Articles 581‑13 and 581-15, and Texas Government Code §2005.003.

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 August 5, 2019.

TRD-201902502

Travis J. Iles

Securities Commissioner

State Securities Board

Effective date: August 25, 2019

Proposal publication date: June 28, 2019

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 June 28, 2019, issue of the Texas Register (44 TexReg 3205).

The rule accurately references the North American Securities Administrators Association ("NASAA") statements of policy ("SOPs") applicable when reviewing applications to register securities.

Uniformity with other states will be increased when reviewing applications to register securities.

No comments were received regarding adoption of the amendment.

The amendment is adopted under Texas Civil Statutes, Article 581-28-1. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.

The adopted amendment affects Texas Civil Statutes, Article 581‑7.

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 August 5, 2019.

TRD-201902503

Travis J. Iles

Securities Commissioner

State Securities Board

Effective date: August 25, 2019

Proposal publication date: June 28, 2019

For further information, please call: (512) 305-8303

CHAPTER 133. FORMS

7 TAC §133.17

The Texas State Securities Board adopts the repeal of §133.17, which adopts by reference the Crowdfunding Exemption Notice form used to claim the exemption in §139.25, which is concurrently adopted for repeal, without changes to the proposed text as published in the June 28, 2019, issue of the Texas Register (44 TexReg 3206). The repealed rule will not be republished.

The form and exemption have been replaced with a new, more-flexible offering exemption and form to coordinate with the recently-adopted SEC Rule 147A.

A form that is no longer needed has been eliminated.

No comments were received regarding adoption of the repeal.

The repeal is adopted under Texas Civil Statutes, Article 581-5.T and Article 581-28-1. Section 5.T provides that the Board may prescribe new exemptions by rule. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.

The adopted repeal affects Texas Civil Statutes, Article 581-7.

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 August 5, 2019.

TRD-201902504

Travis J. Iles

Securities Commissioner

State Securities Board

Effective date: August 25, 2019

Proposal publication date: June 28, 2019

For further information, please call: (512) 305-8303

CHAPTER 139. EXEMPTIONS BY RULE OR ORDER

7 TAC §139.25

The Texas State Securities Board adopts the repeal of §139.25, concerning Intrastate Crowdfunding Exemption, without changes to the proposed text as published in the June 28, 2019, issue of the Texas Register (44 TexReg 3207). The repeal will not be republished.

The exemption has been replaced with a new, more-flexible offering exemption (§139.26) to coordinate with the recently-adopted SEC Rule 147A.

An exemption that is no longer needed has been eliminated.

No comments were received regarding adoption of the repeal.

The repeal is adopted under Texas Civil Statutes, Article 581-28-1. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.

The adopted repeal affects Texas Civil Statutes, Articles 581-7 and 581-12.

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 August 5, 2019.

TRD-201902505

Travis J. Iles

Securities Commissioner

State Securities Board

Effective date: August 25, 2019

Proposal publication date: June 28, 2019

For further information, please call: (512) 305-8303