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TITLE 7BANKING AND SECURITIES
PART 7STATE SECURITIES BOARD
CHAPTER 114FEDERAL COVERED SECURITIES
RULE §114.4Filings and Fees

(a) Generally. Unless otherwise provided in subsection (b) of this section, prior to the initial offer of the federal covered securities in this state, the issuer shall provide to the Securities Commissioner:

  (1) a notice filing, verified under oath by the applicant, consisting of:

    (A) page 1 of a Form U-1, Uniform Application to Register Securities, with items 1-6 completed, or a document providing substantially the same information; or

    (B) if the issuer is an investment company, Form NF, Uniform Investment Company Notice Filing.

  (2) a consent to service of process signed by the issuer, if required by §114.3 of this title (relating to Consents to Service of Process), if, previously, such a consent to service has not been filed with the Securities Commissioner; and

  (3) the fee provided for in the Texas Securities Act (Act), §35.A(1) plus one-tenth of 1.0% of the aggregate amount of federal covered securities proposed to be sold to persons located within this state based on the price at which such securities are to be offered to the public, as provided in the Act, §35.B(2).

(b) Special circumstances.

  (1) SEC Regulation D, Rule 506 offerings. In connection with an offering described in both §109.13(k) of this title (relating to Limited Offering Exemptions) and SEC Regulation D, Rule 506, at the time the Form D is filed with the SEC, but no later than 15 days after the first sale of the federal covered securities in this state, the issuer shall provide to the Securities Commissioner:

    (A) a notice on Form D; and

    (B) a fee of one-tenth of 1.0% of the aggregate amount of federal covered securities described as being offered for sale, but in no case more than $500, as provided in the Texas Securities Act, §35.B(7).

    (C) The filing of Form D and the payment of the filing fee shall be made electronically through the EFD System.

  (2) Listed securities. No filing, consent to service, or fee shall be required of an issuer offering federal covered securities that are also "listed securities" as defined in §114.2 of this title (relating to Definitions).

  (3) Money market status approved. Section 123.3 of this title (relating to Conditional Exemption for Money Market Funds) sets forth the requirements for obtaining and maintaining a money market designation and the reduced fee schedule available to funds so designated. In connection with an offering of securities of an issuer that has applied for and been granted money market status as provided in §123.3 of this title (relating to Conditional Exemption for Money Market Funds), the issuer shall provide to the Securities Commissioner:

    (A) a consent to service of process signed by the issuer, if required by §114.3 of this title (relating to Consents to Service of Process), if such a consent to service has not previously been filed with the Securities Commissioner;

    (B) any other filing required by §123.3 of this title (relating to Conditional Exemption for Money Market Funds) or subsection (f) of this section; and

    (C) the fee provided for in §123.3 of this title (relating to Conditional Exemption for Money Market Funds).

  (4) Secondary trading. A registered dealer or issuer that chooses to comply with the Texas Securities Act, §5.O(9), by filing a form, shall provide to the Securities Commissioner, prior to the sale of the securities in this state:

    (A) a notice filing, verified under oath by the applicant, consisting of page 1 of a Form U-1, Uniform Application to Register Securities, with items 1-6 completed, or a document providing substantially the same information;

    (B) a consent to service of process signed by the dealer or issuer, if such a consent to service has not previously been filed with the Securities Commissioner;

    (C) a fee of $500, as provided in the Act, §35.B(6); and

    (D) a written statement from the issuer that the issuer of such securities is in compliance with the reporting requirements of the Securities Exchange Act of 1934, §13 or §15(d), as applicable.

(c) Supplemental reports.

  (1) Unless otherwise provided in paragraph (2) of this subsection, each applicant required to pay a fee in connection with federal covered securities offered in this state shall submit to the Securities Commissioner annual reports showing the amount of federal covered securities authorized to be sold in Texas, the actual amount sold in Texas, the consideration received therefor, and the amount of unsold securities authorized to be sold in Texas. Upon completion of all offerings of federal covered securities authorized for sale in Texas, a final sales report must be filed with the Securities Commissioner showing the total aggregate amount of federal covered securities authorized and sold in Texas and the total consideration received therefor.

  (2) This subsection does not apply to an applicant proceeding pursuant to subsection (b)(1) or (b)(4) of this section.

(d) Excess sales.

  (1) Except as provided in paragraph (2) of this subsection, an offeror who sells securities in this state in excess of the amount of federal covered securities authorized may do the following.

    (A) If the authorization is still in effect an offeror may:

      (i) request authorization for the excess securities by paying three times the difference between the initial fee paid and one-tenth of 1.0% of the aggregate amount of the securities sold to persons in this state, as provided in the Texas Securities Act, §§35.B(2) and 35-1.A; and

      (ii) pay the amendment fee provided for in the Texas Securities Act, §35.A(1).

    (B) If the authorization is no longer in effect an offeror may:

      (i) request authorization of the excess securities in accordance with subparagraph (A)(i) of this paragraph, plus interest on the amount of fees owed computed at the rate of 6.0% from the date the authorization was no longer in effect until the date the subsequent request is made; and

      (ii) pay the amendment fee provided for in the Texas Securities Act, §35.A(1).

    (C) The authorization for the excess securities shall be effective retroactively to the effective date of the initial authorization for the offering.

  (2) An offeror in an SEC Regulation D, Rule 506 offering, who paid less than the maximum fee prescribed in subsection (b)(1) of this section and offered a greater amount of federal covered securities than authorized may do the following:

    (A) file an amended Form D disclosing the amount of federal covered securities offered; and

    (B) pay three times the difference between the initial fee paid and the fee which should have been paid, plus interest on the fee owed computed at the rate of 6.0% from the date the original Form D was received by the Securities Commissioner until the date the amended notice is received by the Securities Commissioner, as provided in the Texas Securities Act, §35-1.B.

    (C) The filing of Form D and the payment of the filing fee shall be made electronically through the EFD System.

  (3) After compliance with paragraph (2) of this subsection, the amended Form D shall be effective retroactively to the date of the initial filing.

(e) Requests for additional documents. The Securities Commissioner may, upon written request, require a copy of any document required to be filed with the SEC in connection with the offering or sale of the federal covered securities.

(f) Period of effectiveness.

  (1) The initial authorization for federal covered securities of an open-end investment company, as defined in the Investment Company Act of 1940, shall be effective until two months after the end of the issuer's fiscal year. After the initial authorization, the issuer or its agent may renew the authorization by submitting, within two months after the end of the issuer's fiscal year:

    (A) a notice filing, verified under oath by the applicant, consisting of Form NF, Uniform Investment Company Notice Filing; and

    (B) payment of the appropriate fees.

  (2) The authorization for federal covered securities of a unit investment trust, as defined in the Investment Company Act of 1940, shall be effective until one year from the date of effectiveness granted by the SEC.

  (3) Any other authorization of federal covered securities shall be effective for one year from the date the authorization is accepted by the Securities Commissioner.

  (4) The renewal of an authorization for federal covered securities under this chapter may be renewed for additional periods of one year if the notice filing and renewal fees are received prior to the expiration date of the existing authorization. Failure to tender the renewal fee prior to the expiration date may subject the issuer to higher fees, pursuant to the Texas Securities Act, §§35-1 or 35-2.

  (5) For SEC Regulation D, Rule 506 offerings issued under special circumstances in subsection (b)(1) of this section, the period of effectiveness extends from the date of the notice filing until the offering is completed or terminated.

(g) Applicability of dealer and agent registration requirements. In conducting sales in this chapter, dealer and agent registration requirements of the Texas Securities Act and Board rules must be complied with.

(h) Preservation of fees. The fees provided in this section correspond to the filing or registration fees that would be collected pursuant to the Texas Securities Act in effect on the day before the effectiveness of the National Securities Markets Improvement Act of 1996, Public Law Number 104-290.

(i) Applicability of antifraud provisions. With regard to this chapter, the Texas Securities Act prohibits fraud or fraudulent practice in connection with the sale or offer for sale of federal covered securities.


Source Note: The provisions of this §114.4 adopted to be effective April 8, 1997, 22 TexReg 3219; amended to be effective December 2, 1997, 22 TexReg 12038; amended to be effective November 7, 1999, 24 TexReg 9608; amended to be effective May 2, 2000, 25 TexReg 3740; amended to be effective February 24, 2004, 29 TexReg 1643; amended to be effective June 21, 2011, 36 TexReg 3715; amended to be effective December 23, 2018, 43 TexReg 8089

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