|(a) An application for registration may be denied,
or a registration may be revoked or suspended, if the Securities Commissioner
finds that the person has been convicted of any felony, or of a misdemeanor
offense that directly relates to its duties and responsibilities.
In determining whether a misdemeanor conviction directly relates to
such duties and responsibilities, the Securities Commissioner shall
consider each of the following factors:
(1) the nature and seriousness of the crime;
(2) the relationship of the crime to the purposes for
requiring registration of investment advisers and investment adviser
(3) the extent to which the registration applied for
might offer an opportunity to engage in further criminal activity
of the same type as that in which the applicant previously had been
(4) the relationship of the crime to the ability or
capacity required to perform the duties and discharge the responsibilities
of a registered investment adviser or investment adviser representative;
(5) any correlation between the elements of the crime
and its duties and responsibilities.
(b) After the Securities Commissioner has determined
the criminal conviction directly relates to the duties and responsibilities
of the license, the Securities Commissioner shall consider the following
evidence in determining whether the person is eligible for a license
issued by the Agency:
(1) The extent and nature of the person's past criminal
(2) The age of the applicant at the time of the commission
of the crime.
(3) The amount of time that has elapsed since the applicant's
last criminal activity.
(4) The conduct and work activity of the applicant
prior to and following the criminal activity.
(5) Evidence of the applicant's rehabilitation or rehabilitative
effort while incarcerated or following release.
(6) Evidence of the person's compliance with any conditions
of community supervision, parole, or mandatory supervision.
(7) Other evidence of the applicant's present fitness,
including letters of recommendation, may be provided and considered,
including letters from prosecution, law enforcement, and correctional
officers who prosecuted, arrested, or had custodial responsibility
for the applicant; the sheriff and chief of police in the community
where the applicant resides; and any other persons in contact with
(8) It shall be the responsibility of the applicant
to the extent possible to secure and provide to the Securities Commissioner
the letters of recommendation described by paragraph (7) of this subsection.
(c) The State Securities Board considers that the following
crimes directly relate to the duties and responsibilities of investment
advisers and investment adviser representatives:
(1) any criminal violation of which fraud is an essential
element or that involves wrongful taking or possession of property
(2) any criminal violation of the securities laws or
regulations of this state, or of any other state in the United States,
or of the United States, or any foreign jurisdiction;
(3) any criminal violation of statutes designed to
protect consumers against unlawful practices involving insurance,
securities, commodities or commodity futures, real estate, franchises,
business opportunities, consumer goods, or other goods and services;
(4) any criminal violation involving an assault on
(d) Prior to filing an application, a person may request
a preliminary evaluation of license eligibility from the State Securities
Board by following the procedure set out in §104.7 of this title
(relating to Preliminary Evaluation of License Eligibility) and paying
the requisite fee.
(e) Prior to taking any action under subsection (a)
of this section to deny any application for registration, the State
Securities Board shall comply with the notification requirements of
Texas Occupations Code, §53.0231 Notice of Pending Denial of
License, and §53.051.
(f) Prior to taking any action under subsection (a)
of this section to revoke or suspend any application for registration,
the State Securities Board shall comply with the notification requirements
of Texas Occupations Code, §53.051.
(g) State Auditor Applicant Best Practices Guide.
(1) The State Securities Board shall post a link on
its website to the Applicant Best Practices Guide, to be developed
and published by the state auditor as required by Texas Occupations
Code, §53.026. This guide, which shall be posted once it becomes
available, shall set forth best practices for an applicant with a
prior conviction to use when applying for a license.
(2) In each notice to deny, revoke, or suspend a registration
or to deny a person the opportunity be examined for a registration,
the State Securities Board shall include a link to the guide as described
in paragraph (1) of this subsection.
|Source Note: The provisions of this §116.6 adopted to be effective August 12, 2001, 26 TexReg 5799; amended to be effective March 28, 2010, 35 TexReg 2549; amended to be effective November 12, 2019, 44 TexReg 6864