<<Prev Rule

Texas Administrative Code

Next Rule>>
TITLE 7BANKING AND SECURITIES
PART 7STATE SECURITIES BOARD
CHAPTER 107TERMINOLOGY
RULE §107.2Definitions

The following words and terms, when used in Part 7 of this title (relating to the State Securities Board), shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Act or Securities Act or Texas Securities Act--The Texas Securities Act, Texas Revised Civil Statutes, Article 581-1 et seq., as amended.

  (2) Affiliate--An "affiliate" of, or person "affiliated" with a specified person, is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

  (3) APA or Administrative Procedure Act--The Administrative Procedure Act, Texas Government Code, Title 10, Chapter 2001, as amended.

  (4) Applicant--A person who submits an application for registration of securities, documents in connection with the offer and sale of federal covered securities, or for registration as a dealer, agent, investment adviser, or investment adviser representative, or who files an application for an order of the Securities Commissioner.

  (5) Board or Securities Board--The State Securities Board of the State of Texas.

  (6) Certified--In conjunction with the term "financial statement(s)," means financial statement(s) prepared in accordance with generally accepted accounting principles and examined in accordance with generally accepted auditing standards by independent certified public accountants or independent public accountants for the purposes of expressing an opinion thereon. Such opinion shall be one acceptable to the Securities Commissioner.

  (7) Code or Internal Revenue Code--The Internal Revenue Code of 1986, as amended.

  (8) Commissioner or Securities Commissioner--The State Securities Commissioner for the State of Texas.

  (9) Control--The possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or company, whether through the ownership of voting securities, by contract, or otherwise.

  (10) Credit union--For definition see the Texas Credit Union Act (Texas Finance Code, Chapter 121, as amended), which regulates such credit unions.

  (11) Detailed balance sheet--A balance sheet.

  (12) Detailed statement showing all assets and liabilities--A balance sheet.

  (13) Domestic corporation--A corporation incorporated under the laws of the State of Texas.

  (14) Federal covered investment adviser--An investment adviser who is registered under the Investment Advisers Act of 1940 (15 U.S.C. §80b-1 et seq.), as amended. A federal covered investment adviser is not required to be registered pursuant to the Texas Securities Act.

  (15) Federal covered securities--Any security or securities described as a "covered security" or as "covered securities" in the Securities Act of 1933, §18(b), or rules or regulations promulgated thereunder.

  (16) Financial statement(s)--Balance sheet and related statements of income, changes in stockholders' equity, and cash flows, all (consolidated, if applicable) prepared in accordance with generally accepted accounting principles. The information contained in the previously described statements may vary according to presentation and titles as they relate to specific entities, such as individuals, partnerships, and nonprofit organizations.

  (17) Investment Advisers Act of 1940--The federal statute of that name, as amended, 15 United States Code §80b-1, et seq.

  (18) Investment Company Act of 1940--The federal statute of that name, as amended, 15 United States Code §80a-1, et seq.

  (19) License--The whole or part of any registration as a dealer, investment adviser, agent, or investment adviser representative, or similar form of permission required by the Texas Securities Act to sell securities or render investment advice.

  (20) Licensing--The process respecting the granting, denial, renewal, revocation, suspension, withdrawal, or amendment of a license.

  (21) Managing agent or manager--One who is authorized to act generally for an organization within a particular locality.

  (22) FINRA--The Financial Industry Regulatory Authority, created through the consolidation of NASD and the member regulation, enforcement, and arbitration functions of the New York Stock Exchange.

  (23) Officer--A president, vice president, secretary, treasurer, or principal financial officer, comptroller, or principal accounting officer, or any other person occupying a similar status or performing similar functions with respect to any organization or entity, whether incorporated or unincorporated.

  (24) Operating statement--An income statement.

  (25) Parent--A person controlling another person directly or indirectly.

  (26) Profit and loss statement--An income statement.

  (27) Proposed plan of business--As used in the Texas Securities Act, those aspects and only those aspects of the business set-up (other than that done or proposed in respect to the pricing and selling of its securities) which would materially affect the business relationship between the prospective investor and those in control of the business as such relationship would exist after the sale to the public of the securities sought to be registered.

  (28) Regulatory standards--All standards coming within the meaning of "rule" as defined herein.

  (29) Rendering services as an investment adviser--Any act by which investment advisory services are provided for compensation.

  (30) Rule--Any statement by the Board or the Securities Commissioner of general applicability that implements, interprets, or prescribes law or policy, or describes the procedure or practice requirements of the Board or Securities Commissioner.

  (31) Savings and loan association--For definition see the Texas Savings and Loan Act (Texas Finance Code, Chapter 61, as amended), which regulates such savings and loan associations.

  (32) SEC--The United States Securities and Exchange Commission.

  (33) Securities Act of 1933--The federal statute of that name, as amended, 15 United States Code §77a, et seq.

  (34) Securities Exchange Act of 1934--The federal statute of that name, as amended, 15 United States Code §78a, et seq.

  (35) Staff--Personnel of the Securities Board, excluding the members of the Board, the Securities Commissioner, and the Deputy Commissioner.

  (36) State, territory, or insular possession of the United States--As used in the Texas Securities Act, includes a commonwealth.

  (37) Statement to reflect the financial condition--A balance sheet.

  (38) Telephone or telegram--For purposes of the Texas Securities Act, §7.C(2)(c), includes any means of electronic transmission such as, but not limited to, telephone, telegraph, wireless, email, graphic scanning, modem, or facsimile; provided, however, that the office of the State Securities Board has the necessary equipment to accept such a transmission.

  (39) Within this state--

    (A) A person is a "dealer" who engages "within this state" in one or more of the activities set out in the Texas Securities Act, §4.C, if either the person or the person's agent is present in this state or the offeree/purchaser or the offeree/purchaser's agent is present in this state at the time of the particular activity. A person can be a dealer in more than one state at the same time.

    (B) Likewise, a person is an "agent" who engages "within this state" in one or more of the activities set out in the Texas Securities Act, §4.D, whether by direct act or through subagents except as otherwise provided, if either the agent or the agent's subagent is present in this state or the offeree/purchaser or the offeree/purchaser's agent is present in this state at the time of the particular activity. A person can be an agent in more than one state at the same time.

    (C) Offers and sales can be made by personal contact, mail, telegram, telephone, wireless, electronic communication, or any other form of oral or written communication.

  (40) Accredited investors--Persons who are either individual accredited investors or institutional accredited investors as those terms are defined in this section.

  (41) Individual accredited investor--Natural person as described in Rule 501(a)(5) and (6) promulgated by the SEC under the Securities Act of 1933 as made effective in SEC Release Number 33-6389, as amended in Release Numbers 33-6758, 33-6825, and 33-9287.

  (42) Institutional accredited investor--An entity described in Rule 501(a)(1) - (4), (7) and (8) promulgated by the SEC under the Securities Act of 1933 as made effective in SEC Release Number 33-6389, as amended in Release Numbers 33-6758 and 33-6825.

  (43) Form D--

    (A) For paper filings--Form D, Notice of Exempt Offering of Securities, as effective on September 23, 2013 (referenced in 17 Code of Federal Regulations §239.500).

    (B) For electronic filings made through the EFD System--The information, relating to a filing designated to be made in Texas, that is submitted through the EFD System in connection with a Form D filing made with the SEC. It includes all information made available to the Securities Commissioner through the EFD System in connection with the Texas filing.

  (44) EFD System--The Electronic Filing Depository system provided by the North American Securities Administrators Association (NASAA) that is used for electronic filing of Form D with the Securities Commissioner.


Source Note: The provisions of this §107.2 adopted to be effective January 1, 1976; amended to be effective September 14, 1977, 2 TexReg 3338; amended to be effective September 6, 1979, 4 TexReg 3014; amended to be effective March 19, 1984, 9 TexReg 1436; amended to be effective June 1, 1984, 9 TexReg 2774; amended to be effective August 29, 1985, 10 TexReg 2999; amended to be effective October 30, 1985, 10 TexReg 4081; amended to be effective February 15, 1989, 14 TexReg 692; amended to be effective November 29, 1989, 14 TexReg 6075; amended to be effective March 17, 1994, 19 TexReg 1543; amended to be effective April 8, 1997, 22 TexReg 3216; amended to be effective August 21, 1997, 22 TexReg 7485; amended to beeffective August 24, 1998, 23 TexReg 8667; amended to be effective August 12, 2001, 26 TexReg 5786; amended to be effective November 26, 2001, 26 TexReg 9578; amended to be effective June 12, 2002, 27 TexReg 4934; amended to be effective February 21, 2008, 33 TexReg 1319; amended to be effective June 21, 2011, 36 TexReg 3714; amended to be effective December 21, 2011, 36 TexReg 8505; amended to be effective June 13, 2012, 37 TexReg 4185; amended to be effective February 16, 2015, 40 TexReg 700

Link to Texas Secretary of State Home Page | link to Texas Register home page | link to Texas Administrative Code home page | link to Open Meetings home page