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Open Meeting Archive

Agency Name:	State Securities Board
Date of Meeting:	09/19/2024
Time of Meeting:	10:00 AM
Board:	State Securities Board
Street Location:	208 E 10th St., Room 320
City Location:	Austin
State Location:	TX
Status:	Active
Date of Submission:	09/12/2024
Additional Information Obtained From:	Travis J. Iles, Securities Commissioner 208 E. 10th Street, 5th Floor Austin, Texas (512) 305-8301
Emergency Mtg:	N
Agenda:	1. Minutes of May 9, 2024, Board Meeting; consider absences. 2. Internal Audit: Review of internal audit report for FY 2024 Recommendation from the Board's Audit Committee related to the selection of an internal auditor for the FY 2025 audit, possibly followed by a vote selecting the internal auditor for FY 2025 3. Rulemaking - Consideration of published rule proposals for adoption. A. Amendments in connection with recent NASAA changes to Statements of Policy and rule review. The rule changes below would incorporate recent changes to NASAA Statements of Policy or were identified during rule review. 1. NASAA Statements of Policy (SOPs). Amend �113.14(b), Statements of Policy, to update the rule to reflect September 12, 2023, revisions to the NASAA SOPs for Impoundment of Proceeds; Options and Warrants; Promotional Shares; and Debt Securities. 2. Amendments Concerning Federal Crowdfunding Offering Filing Requirement. Amend �114.4, Filings and Fees, to add a new paragraph (b)(6) to specifically address federal covered securities offered pursuant to SEC Regulation Crowdfunding. Amend �133.33, Uniform Forms Accepted, Required, or Recommended, to add the uniform notice of federal crowdfunding form to the list of uniform forms accepted. B. Nonsubstantive amendments in connection with rule review. The rule changes below would generally involve updating citations to reference the codified Texas Securities Act; updating other outdated terms, references or citations; abbreviating citations; capitalizing terms and using defined terms; and/or edits to improve accuracy, consistency, and readability. Other changes specific to a rule are described below: 1. Chapter 111. Securities Exempt from Registration. Amend �111.2, Listed and Designated Securities. 2. Chapter 133. Forms. New Form 133.7, Securities Application, to remove a reference to a repealed form. Repeal of Form 133.7, Securities Application. Amend �133.33, Uniform Forms Accepted, Required, or Recommended, to cite to codified Act and add Form U-6 to the list of uniform forms accepted. 3. Chapter 139. Exemptions by Rule or Order. Amend �139.1, Policies. Amend �139.2, Professional Associations. Amend �139.7, Sale of Securities to Nonresidents, to add the word "internet" to subsection (b). Amend �139.8, Sales to Underwriters. Amend �139.9, Bank Holding Companies. Amend �139.10, Exchange Offers. Amend �139.11, Transactions in United States Savings Bonds. Amend �139.12, Oil and Gas Auction Exemption. Amend �139.13, Resales under SEC Rule 144 and Rule 145(d). Amend �139.14, Non-Issuer sales. Amend �139.15, Credit Enhancements. Amend �139.16, Sales to Individual Accredited Investors, to use the updated SEC definition of "individual accredited investor" in limited use advertisement requirement found in subsection (e). Amend �139.18, Dealer and Investment Adviser Use of the Internet to Disseminate Information on Products and Services, to remove obsolete terminology and conform to current terminology. Amend �139.19, Accredited Investor Exemption. Amend �139.20, Third Party Brokerage Arrangements on Financial Entity Premises. Amend �139.21, Dealer, Agent, and Securities exemptions for Canadian Accounts. Amend �139.22, Exemption for Investment Adviser to a High Net Worth Family Entity. Amend �139.23, Registration Exemption for Investment Advisers to Private Funds. Amend �139.24, Charitable Organizations Assisting Economically Disadvantaged Clients with Texas Qualified Tuition Program Plans. Amend �139.26, Intrastate Crowdfunding Exemption for SEC Rule 147A offerings. Amend �139.27, Mergers and Acquisitions Dealer Exemption. 4. Rulemaking - Consideration of rule proposals for publication and comment. A. Chapter 115 and Chapter 116 Rulemaking. The rule changes below incorporate and recognize certain FINRA rules on branch offices and internal inspections; adopt by reference certain conduct and marketing rules and related recordkeeping requirements; coordinate examination waivers with NASAA model rules and FINRA rules; and would require registered persons to report certain misdemeanor actions and changes in legal status to the Commissioner. 1. Chapter 115, Securities Dealers and Agents. Rulemaking in connection with incorporating and recognizing FINRA rules on residential supervisory locations and remote inspections pilot program. Amend �115.1(a)(2), General Provisions, to add a new subparagraph to the list of locations excluded from the definition of branch office to incorporate and recognize FINRA rules on residential supervisory locations Amend �115.10, Supervisory Requirements, to amend subsection (c), internal inspections, to incorporate and recognize the FINRA remote inspections pilot program 2. Chapter 115, Securities Dealers and Agents. Rulemaking adopting recent SEC conduct rule (Regulation Best Interest) and other conduct rules. Amend �115.5, Minimum Records, to add new recordkeeping obligations in subsection (h) relating to conduct rules Add new �115.24, Adoption by Reference of Conduct Rules 3. Chapter 116, Investment Advisers and Investment Adviser Representatives. Rulemaking adopting recent SEC Marketing Rule. Amend �116.5, Minimum Records, to add new paragraph (a)(13) to require registered investment advisers to comply with SEC recordkeeping requirements of the SEC Marketing Rule Amend �116.15, Advertising Restrictions, to rename section and to adopt by reference the SEC Marketing Rule 4. Amendments Concerning Examination Requirements. Amend �115.3, Examination. to add subparagraphs (c)(5)(A) and (B) to recognize and grant waivers of reexamination requirements for certain classes of applicants who participate in recognized NASAA or FINRA continuing education programs (EVEP or MQP) and meet other requirements to add subparagraph (c)(5)(C) to recognize and grant waivers of examination requirements to applicants who have received an examination waiver from FINRA; and to amend subsection (d) to impose a waiting period for retaking the securities law examination and to add references to other sources of information concerning the Texas securities law examination process Amend �116.3, Examination. to replace a discontinued professional designation in (c)(2)(E) with a new professional designation that is eligible for an examination waiver to remove an unneeded requirement in (c)(3) and add new subparagraphs (c)(3)(A) and (B) to recognize and grant waivers of reexamination requirements for certain classes of applicants who participate in recognized NASAA or FINRA continuing education programs (EVEP or MQP) and meet other requirements to add subparagraph (c)(3)(C) to recognize and grant waivers of examination requirements to applicants who have received an examination waiver from FINRA; and to amend subsection (d) to impose a waiting period for retaking the securities law examination and to add references to other sources of information concerning the Texas securities law examination process 5. Post-Registration Reporting Requirements Amendments. Amend �115.9, Post-Registration Reporting Requirements to amend subparagraph (a)(3) to require registered dealers and agents to report misdemeanor offense actions that are listed in �115.6(c), Registration of Persons with Criminal Backgrounds; and to amend subparagraph (a)(6) to clarify that registered persons must notify the Commissioner of changes of legal status Amend �116.9, Post-Registration Reporting Requirements to amend subparagraph (a)(3) to require registered investment advisers and investment adviser representatives to report misdemeanor offense actions that are listed in �116.6(c), Registration of Persons with Criminal Backgrounds; and to amend subparagraph (a)(6) to clarify that registered persons must notify the Commissioner of changes of legal status B. Other Amendments to Chapters 115 and 116 in connection with rule review. The nonsubstantive and other rule changes below generally would involve updating citations to reference the codified Texas Securities Act; updating other outdated quotations, references or citations; removing outdated, obsolete or redundant language or terminology; abbreviating citations; using defined terms; and/or edits to improve accuracy, consistency, and readability. Other changes specific to a rule are described below: 1. Chapter 115. Securities Dealers and Agents. Amend �115.1, General Provisions, to adjust quotations in subsection (a) to be consistent with the codified Act, and to remove redundant language in (b)(2)(D) Amend �115.2, Application Requirements, to reorganize subsections (a) and (e) and to add cross reference to �115.22 in (a) to improve consistency and readability; to add reference to certificate of formation in (a)(2)(A) to improve accuracy; and to amend (d) to allow option to notify applicants by email of automatic withdrawal of applications Amend �115.3, Examination Amend �115.4, Evidences of Registration Amend �115.5, Minimum Records, to add reference to certificate of formation in (e)(5) to improve accuracy Amend �115.6, Registration of Persons with Criminal Backgrounds Amend �115.8, Fee Requirements Amend �115.11(a), Finder Registration and Activities, to inform finder applicants that finders by definition are not permitted to register in other capacities Amend �115.16, Use of Senior-Specific Certifications and Professional Designations Amend �115.21, System Addressing Suspected Financial Exploitation of Vulnerable Customers Pursuant to the Texas Securities Act, Section 45, to rename the section Amend �115.22, Electronic Submission of Forms and Fees 2. Chapter 116 Investment Advisers and Investment Adviser Representatives. Amend �116.1, General Provisions, to remove redundant language in (b)(2)(D) Amend �116.2, Application Requirements, to add cross reference to �116.22 in (a) to improve consistency and readability, to add reference to certificate of formation in (a)(2)(A) to improve accuracy; and to amend (d) to allow option to notify applicants by email of automatic withdrawal of applications Amend �116.3, Examination Amend �116.4, Evidences of Registration Amend �116.5, Minimum Records, to add reference to certificate of formation in (b)(3) to improve accuracy Amend �116.6, Registration of Persons with Criminal Backgrounds Amend �116.8, Fee Requirements Amend �116.16, Use of Senior-Specific Certifications and Professional Designations Amend �116.21, System Addressing Suspected Financial Exploitation of Vulnerable Customers Pursuant to the Texas Securities Act, Section 45, to rename the section 5. Report on budget and performance. 6. Update on Agency operations. 7. Legislative update. 8. Executive Session to conduct the annual performance review of the Securities Commissioner. 9. 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:	2024005352
Datestamp:	09/12/2024 09:19 AM
Archive Date:	09/21/2024