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Open Meeting Archive

Agency Name:State Securities Board
Date of Meeting:08/01/2019
Time of Meeting:09:00 AM
Board:State Securities Board
Street Location:208 E. 10th Street, Room 600
City Location:Austin
State Location:TX
Status:Active
Date of Submission:07/22/2019
Additional Information Obtained From:Travis J. Iles, Securities Commissioner 208 E. 10th Street Austin, Texas 78701 (512)305-8301
Emergency Mtg:N
Agenda:1. Minutes of November 13, 2018, Board Meeting; consider excused absences, if any.

2. Rules.

A. Published rule proposals.

1. Intrastate crowdfunding.
a. Repeal of 139.25, Intrastate Crowdfunding Exemption.
b. Repeal of Form 133.17, Crowdfunding Exemption Notice, used to claim the exemption in 139.25.

2. Amending 113.14(b), concerning statements of policy, to update the rule to reflect recent revisions to the NASAA Statements of Policy for Corporate Securities Definitions; Loans and Other Material Transactions; Underwriting and Selling Expenses, Underwriter's Warrants, and Selling Security Holders; and Unsound Financial Condition; and to correct the placement of an apostrophe.

3. Updates in connection with rule review.
a. Amending 101.6, concerning the historically underutilized business program, to update the cross-reference to the Comptroller's rules.
b. Amending 103.5, concerning petitions, to include a reference to the Texas Government Code and to collect information on the economic, fiscal, employment, and cost impact of the proposal, to the extent that such information is available to the petitioner.
c. Amending 104.5, concerning registration of dealers and investment advisers-review of applications, to update the procedures to adjust for the recent reorganization of the Registration Division and to more closely mirror the review process in 104.4.

B. New Rule Proposals.

1. Sunset review implementation.
a. Recommendations 1.3 - Branch offices.
1. Amending 115.1(b), concerning general provisions; 115.2(c), concerning application requirements, and 115.4(a), concerning evidences of registration; to remove the registration requirement for branch offices and replace it with a notification.
2. Amending 116.1(b), concerning general provisions; 116.2(c), concerning application requirements; and 116.4(a), concerning evidences of registration; to remove the registration requirement for branch offices and replace it with a notification requirement.
b. Recommendation 1.8 - Online submission of applications and fees.
1. New 115.22, concerning electronic submission of applications and fees, to provide dealer and agent applicants with the option to submit certain documents and fees electronically.
2. New 116.22, concerning electronic submission of applications and fees, to provide investment adviser and investment adviser representative applicants with the option to submit certain documents and fees electronically.
c. Recommendation 1.9 - Notarization.
1. Amending 109.13(l)(9)(A), concerning limited offering exemptions, to remove the requirement that Form 133.29 be sworn.
2. Amending 114.4(a), (b), and (f), concerning filings and fees, to remove the requirement that these notice filings be verified under oath.
3. Amending 115.2(a)(4), concerning application requirements, to permit a dealer applicant's principal financial officer to certify that the balance sheet submitted with the dealer's application is true and correct.
4. Amending 116.2(a)(2)(B), concerning application requirements, to permit an investment adviser applicant's principal financial officer to certify that the balance sheet submitted with the adviser's application is true and correct.
5. New Forms to be signed under penalty of perjury and certified as true and correct, rather than notarized:
Form 133.5, Secondary Exemption Trading Notice;
Form 133.6, Secondary Trading Exemption Renewal Notice;
Form 133.8, Consent to Service;
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 133.29, Intrastate Exemption Notice;
Form 133.30, Information Concerning Projected Market Prices and Related Market Information;
Form 133.34, Undertaking Regarding Non-Issuer Sales;
Form 133.35, Application for Designation as Matching Service Under 109.15;
Form 133.36, Request for Reduced Fees for Certain Persons Registered in Multiple Capacities.
Additionally, the title for Form 133.8 would also be changed to reflect that it operates as a consent to service, required by Section 8 of the Texas Securities Act.
6. Repeal current forms that are being replaced:
Form 133.5, Secondary Exemption Trading Notice;
Form 133.6, Secondary Trading Exemption Renewal Notice;
Form 133.8, Power of Attorney;
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 133.29, Intrastate Exemption Notice;
Form 133.30, Information Concerning Projected Market Prices and Related Market Information;
Form 133.34, Undertaking Regarding Non-Issuer Sales;
Form 133.35, Application for Designation as Matching Service Under 109.15;
Form 133.36, Request for Reduced Fees for Certain Persons Registered in Multiple Capacities.
d. Recommendation 2.2 - Across-the-Board recommendation - Negotiated Rulemaking.
New 103.6. Negotiated Rulemaking.

2. Updates in connection with rule review.
a. Chapter 113:
Amending 113.1, concerning qualification of securities, to delete the reference to SEC Regulation B, which has been repealed. Amending 113.4(c), concerning application for registration, to eliminate paragraph (3) relating to the Securities Registration Depository ("SRD") System and remove a cross-reference to the eliminated paragraph. Amending 113.11(b)(1), concerning shelf registration of securities, to remove the reference to SEC Form S-2, which the SEC no longer uses.
b. Chapter 114:
1. Chapter 114:
Amending 114.3, concerning consents to service of process, to remove subsection (c) relating to the SRD System.
Amending 114.4(a) and (b), concerning filings and fees, to permit unit investment trusts to file Form NF electronically through the EFD System, and to add a new paragraph (b)(5) to specifically address federal covered securities offered pursuant to SEC Regulation A, Tier II ("Regulation A+").
2. Amending 133.33, concerning uniform forms accepted, required, or recommended, to add the Regulation A - Tier 2 form to the list of uniform forms accepted.

3. Rulemaking implementing other/non-Sunset changes by the 2019 Legislature.
a. Occupations Code, Chapter 55 - military spouses (Senate Bill 1200).
1. Amending 115.18 concerning special provisions relating to military applicants, to implement SB 1200 relating to military spouses.
2. Amending 116.18, concerning special provisions relating to military applicants, to implement SB 1200 relating to military spouses.
3. New Forms 133.22, Waiver or Refund Request by a Military Spouse for a Renewal Fee, and 133.23, Request for Recognition of Out-Of-State License or Registration by a Military Spouse.
b. Occupations Code, Chapter 53 - consideration of criminal convictions of applicants for registration and registrants (House Bill 1342).
1. Amending 115.6, concerning registration of persons with criminal backgrounds, to implement HB 1342.
2. Amending 116.6, concerning registration of persons with criminal backgrounds, to implement HB 1342.
3. Amending 104.7, concerning preliminary consideration of license eligibility, to implement HB 1342.

C. Rule review.

1. Pursuant to the notice published December 7, 2018:
a. Chapter 113. Registration of Securities.
b. Chapter 114. Federal Covered Securities.
c. Chapter 123. Administrative Guidelines for Registration of Open-End Investment Companies.
d. Chapter 125. Minimum Disclosures in Church and Nonprofit Institution Bond Issues.
e. Chapter 135. Industrial Development Corporations and Authorities.
f. Chapter 137. Administrative Guidelines for Regulation of Offers.

2. Pursuant to the notice published March 1, 2019:
a. Chapter 105. Rules of Practice in Contested Cases.
b. Chapter 106. Guidelines for the Assessment of Administrative Fines.

3. Pursuant to the notice published June 7, 2019:
a. Chapter 107. Terminology.
b. Chapter 127. Miscellaneous.
c. Chapter 131. Guidelines for Confidentiality of Information.

3. Board approval of a grant and preapproval of another grant from the Investor Protection Trust for investor education purposes.

4. Review and vote to approve the internal audit plan for FY 2019; annual selection of Audit Committee members.

5. Legislative and appropriations update.

6. Report on budget and performance.

7. Update on Agency operations.

8. Consider and possibly adopt resolutions honoring Alan Waldrop and David A. Appleby, former Board members.

9. Executive session to conduct a performance review of the Securities Commissioner.

10. Possible action on matters discussed in Executive session.




Persons with disabilities who plan to attend this meeting and require auxiliary aids or services should contact Sonia Fergerson at (512) 305-8306 at least five business days prior to the meeting so that appropriate arrangements can be made.
TRD ID:2019004322
Datestamp:07/22/2019 09:58 AM
Archive Date:08/03/2019


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