(a) Availability. The exemption from dealer and agent
registration provided by the Texas Securities Act, §4004.001,
or this section is not available if the financial institution or other
institutional investor named therein is in fact acting only as agent
for another purchaser that is not a financial institution or other
institutional investor listed in §4005.011 or this section. These
exemptions are available only if the financial institution or other
institutional investor named therein is acting for its own account
or as a bona fide trustee of a trust organized and existing other
than for the purpose of acquiring the specific securities for which
the dealer or agent is claiming the exemption.
(b) Sales to certain institutional investors. The State
Securities Board, pursuant to the Act, §4004.001, exempts a person
from the dealer and agent registration requirements of the Act, when
the person sells or offers for sale any securities to any of the following
persons:
(1) an "institutional accredited investor," as that
term is defined in §107.2 of this title (relating to Definitions),
excluding, however, any self-directed employee benefit plan with investment
decisions made solely by persons that are "individual accredited investors"
as defined in §107.2 of this title;
(2) any "qualified institutional buyer" (as that term
is defined in §107.2 of this title (relating to Definitions));
and
(3) a corporation, partnership, trust, estate, or other
entity (excluding individuals) having net worth of not less than $5
million, or a wholly-owned subsidiary of such entity, as long as the
entity was not formed for the purpose of acquiring the specific securities.
(c) Financial statements. For purposes of determining
a purchaser's total assets or net worth under this section, the issuer
and the seller may rely upon the entity's most recent annual balance
sheet or other financial statement which shall have been audited by
an independent accountant or which shall have been verified by a principal
of the purchaser.
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Source Note: The provisions of this §109.5 adopted to be effective July 14, 2005, 30 TexReg 3987; amended to be effective June 21, 2011, 36 TexReg 3714; amended to be effective March 21, 2021, 46 TexReg 1733; amended to be effective July 18, 2024, 49 TexReg 5141 |