Part VII.
State Securities Board
Chapter 101.
General Administration
7 TAC §101.3
The State Securities Board proposes an amendment to §101.3,
concerning application of Board rules. The amendment renders the section gender
neutral, eliminates archaic language, and clarifies that conflicts between
industry and the investing public will be resolved in favor of the investing
public.
John R. Morgan, Deputy Securities Commissioner, has determined that for
the first five-year period the rule is in effect there will be no fiscal implications
for state or local government as a result of enforcing or administering the
rule.
Mr. Morgan also has determined that for each year of the first five years
the rule is in effect the public benefit anticipated as a result of enforcing
the rule will be will be to inform the public and industry of the policies
underlying the application of the Board's rules and conform the section with
other Board rules and statutes. There will be no effect on small businesses.
There is no anticipated economic cost to persons who are required to comply
with the rule as proposed.
Comments on the proposal to be considered by the Board should be submitted
in writing within 60 days after publication of the proposed sections in the
The amendment is proposed under Texas Civil Statutes, Article
581-28-1. Section 28-1 provides the Board with the authority to adopt rules
and regulations necessary to carry out and implement the provisions of the
Texas Securities Act, including rules and regulations governing registration
statements and applications; defining terms; classifying securities, persons,
and matters within its jurisdiction; and prescribing different requirements
for different classes.
Statutes and codes affected: none applicable.
§101.3.Application.
(a)
Generally. All rules shall be applied collectively, to
the extent relevant, in connection with specific adjudications made by the
Commissioner in the course of his
or her
regulatory functions.
The Commissioner will make his
or her
determination on the basis
of specific characteristics and circumstances of the individual adjudications
under consideration and in light of the basic statutory purposes for regulation
in the particular area. The Commissioner may, in his
or her
discretion,
waive any requirement of any rule in situations where, in his
or her
opinion, such requirement is not necessary in the public interest or
for the protection of investors. The captions of the various rules are for
convenience only. Should there be a conflict between the caption of a rule
and the text of the rule, the text will be controlling. Material denoted by
a cross reference caption is not a rule or part of a rule.
(b)
Investor protection standard.
Within the confines
of statutory authority, conflicts
[
(c)
Precedent. Because rules cannot adequately anticipate all
potential application requirements, the failure to satisfy all regulatory
standards of the Board will not necessarily foreclose the possibility of a
favorable disposition of the matter pending before the Commissioner, and,
similarly, the satisfaction of all such regulatory standards will not necessarily
preclude an unfavorable disposition if the specific characteristics and circumstances
so warrant. For this reason, the nature of the disposition of any particular
matter pending before the Commissioner is not necessarily of meaningful precedential
value, and the Commissioner shall not be bound by the precedent of any previous
adjudication in the subsequent disposition of any
pending
matter
[
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July
12, 1999.
TRD-9904191
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: August 22, 1999
For further information, please call: (512) 305-8300
7 TAC §113.2
The State Securities Board proposes an amendment to §113.2,
concerning registration of securities by coordination. The proposal clarifies
that registration by coordination under the Texas Securities Act, §7.C,
is not available when an offering is already effective with the U.S. Securities
and Exchange Commission.
Micheal Northcutt, Director, Securities Registration Division, has determined
that for the first five-year period the rule is in effect there will be no
fiscal implications for state or local government as a result of enforcing
or administering the rule.
Mr. Northcutt also has determined that for each year of the first five
years the rule is in effect the public benefit anticipated as a result of
enforcing the rule will be to inform issuers and their counsel that the coordination
process requires that registration at the federal and state levels is to be
accomplished contemporaneously. There will be no effect on small businesses.
There is no anticipated economic cost to persons who are required to comply
with the rule as proposed.
Comments on the proposal to be considered by the Board should be submitted
in writing within 60 days after publication of the proposed sections in the
The amendment is proposed under Texas Civil Statutes, Article
581-28-1. Section 28-1 provides the Board with the authority to adopt rules
and regulations necessary to carry out and implement the provisions of the
Texas Securities Act, including rules and regulations governing registration
statements and applications; defining terms; classifying securities, persons,
and matters within its jurisdiction; and prescribing different requirements
for different classes.
The proposed amendment affects Texas Civil Statutes, Article 581-7.
§113.2.Registration by Coordination.
(a)
Time to file. Applications for registration under the Texas
Securities Act, §7.C, should be filed contemporaneously with the Securities
and Exchange Commission ("SEC") registration application. Delayed filings
will jeopardize coordination effectiveness.
Applications filed after
effectiveness with the SEC are not eligible to use §7.C.
(b)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July
12, 1999.
TRD-9904192
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: August 22, 1999
For further information, please call: (512) 305-8300
7 TAC §113.11, §113.12
The State Securities Board proposes amendments to §113.11,
concerning shelf registration of securities, and §113.12, concerning
applicability of guidelines to exempt offerings. The amendments remove cross-references
to a chapter that has been repealed and a section that is being concurrently
proposed for repeal.
Micheal Northcutt, Director, Securities Registration Division, has determined
that for the first five-year period the rules are in effect there will be
no fiscal implications for state or local government as a result of enforcing
or administering the rules.
Mr. Northcutt also has determined that for each year of the first five
years the rules are in effect the public benefit anticipated as a result of
enforcing the rules will be the elimination of obsolete cross-references.
There will be no effect on small businesses. There is no anticipated economic
cost to persons who are required to comply with the rules as proposed.
Comments on the proposal to be considered by the Board should be submitted
in writing within 60 days after publication of the proposed sections in the
The amendments are proposed under Texas Civil Statutes, Article
581-28-1. Section 28-1 provides the Board with the authority to adopt rules
and regulations necessary to carry out and implement the provisions of the
Texas Securities Act, including rules and regulations governing registration
statements and applications; defining terms; classifying securities, persons,
and matters within its jurisdiction; and prescribing different requirements
for different classes.
The proposed amendments affects Texas Civil Statutes, Articles 581-5 and
581-7.
§113.11.Shelf Registration of Securities.
(a)
Applicability.
(1)-(2)
(No change.)
(3)
Where appropriate, the provisions of Chapters 117,
[
(b)
(No change.)
§113.12.Applicability of Guidelines to Exempt Offerings.
This chapter and the guidelines listed in this section do not apply
to offerings made pursuant to an exemption under either the Texas Securities
Act, §5 or §6, or an exemption by Board rule pursuant to the Texas
Securities Act, §5.T, or to an offering of federal covered securities,
as that term is defined in §107.2 of this title (relating to Definitions).
In other words, the requirements contained in one of the following guidelines
would apply only to an offering for which an application for registration
is filed with the Securities Commissioner:
(1)
(No change.)
[(2)
Chapter 119 of this title (relating
to Publicly Offered Cattle Feeding Programs);]
(2)
[
(3)
[
[(5)
§135.5 of this title (relating
to Registration of Bonds);]
(4)
[
(5)
[
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of the Secretary of State, on
July 12, 1999.
TRD-9904193
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: August 22, 1999
For further information, please call: (512) 305-8300
7 TAC §114.4
The State Securities Board proposes an amendment to §114.4,
concerning filings and fees for federal covered securities. The change to
subsection (b)(4) clarifies that verification of SEC reporting requirements
is to be made by an issuer making a notice filing for secondary trading and
the addition of paragraph (f)(5) reflects that the period of effectiveness
for federal covered securities in SEC Regulation D, Rule 506 offerings extends
from the time the notice filing is made with this Agency until the time that
the offering is completed or terminated.
Micheal Northcutt, Director, Securities Registration Division, has determined
that for the first five-year period the rule is in effect there will be no
fiscal implications for state or local government as a result of enforcing
or administering the rule.
Mr. Northcutt also has determined that for each year of the first five
years the rule is in effect the public benefit anticipated as a result of
enforcing the rule will be to assure that the party making a secondary trading
notice filing has authority to act on behalf of the issuer and to recognize
that securities sold in SEC Regulation D, Rule 506 offerings may be sold for
indefinite periods. There will be no effect on small businesses. There is
no anticipated economic cost to persons who are required to comply with the
rule as proposed.
Comments on the proposal to be considered by the Board should be submitted
in writing within 60 days after publication of the proposed sections in the
The amendment is proposed under Texas Civil Statutes, Articles
581-28-1 and 581-5.T. Section 28-1 provides the Board with the authority to
adopt rules and regulations necessary to carry out and implement the provisions
of the Texas Securities Act, including rules and regulations governing registration
statements and applications; defining terms; classifying securities, persons,
and matters within its jurisdiction; and prescribing different requirements
for different classes. Section 5.T provides that the Board may prescribe new
exemptions by rule.
The proposed amendment affects Texas Civil Statutes, Articles 581-5 and
581-7.
§114.4.Filings and Fees.
(a)
(No change.)
(b)
Special circumstances.
(1)-(3)
(No change.)
(4)
Secondary trading. A registered dealer or issuer
that
[
(A)
(No change.)
(B)
a consent to service of process signed by the dealer
or issuer
, if such a consent to service has not previously been filed
with the Securities Commissioner;
(C)
(No change.)
(D)
a written statement
from the issuer
[
(5)
(No change.)
(c)-(e)
(No change.)
(f)
Period of effectiveness.
(1)-(4)
(No change.)
(5)
For SEC Regulation D, Rule 506 offerings
issued under special circumstances in subsection (b)(1) of this section, the
period of effectiveness extends from the date of the notice filing until the
offering is completed or terminated.
(g)-(i)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
July 12, 1999.
TRD-9904194
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: August 22, 1999
For further information, please call: (512) 305-8300
7 TAC §§135.1-135.5
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the State Securities Board or in the Texas Register office, Room 245, James
Earl Rudder Building, 1019 Brazos Street, Austin.)
The State Securities Board proposes the repeal of
Chapter 135, §§135.1-135.5, concerning securities issued by industrial
development corporations and authorities, so that it may be replaced by a
new chapter that is being concurrently proposed.
Micheal Northcutt, Director, Securities Registration Division, has determined
that for the first five-year period the repeals are in effect there will be
no fiscal implications for state or local government as a result of enforcing
or administering the repeals.
Mr. Northcutt also has determined that for each year of the first five
years the repeals are in effect the public benefit anticipated as a result
of enforcing the repeals will be to eliminate confusing and unnecessary provisions.
There will be no effect on small businesses. There is no anticipated economic
cost to persons who are required to comply with the repeals as proposed.
Comments on the proposal to be considered by the Board should be submitted
in writing within 60 days after publication of the proposed sections in the
The repeal is proposed under Texas Civil Statutes, Article 581-28-1.
Section 28-1 provides the Board with the authority to adopt rules and regulations
necessary to carry out and implement the provisions of the Texas Securities
Act, including rules and regulations governing registration statements and
applications; defining terms; classifying securities, persons, and matters
within its jurisdiction; and prescribing different requirements for different
classes.
The repeal affects Texas Civil Statutes, Articles 581-5 and 581-7, and
Texas Civil Statutes, Article 5190.6.
§135.1.Scope.
§135.2.Definitions.
§135.3.General.
§135.4.Exemptions from Registration Requirements.
§135.5.Registration of Bonds.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of the Secretary of State on July
12, 1999.
TRD-9904195
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: August 22, 1999
For further information, please call: (512) 305-8300
7 TAC §§135.1-135.3
The State Securities Board proposes a new Chapter 135, §§135.1-135.3,
concerning securities issued by industrial development corporations and authorities.
The new provisions create an exemption from securities registration for bonds
of industrial development corporations issued under the Texas statute and
reminds issuers that the dealer registration and antifraud provisions of the
Texas Securities Act apply when they utilize the exemption. The proposed new
chapter would replace the existing chapter, which is being concurrently proposed
for repeal.
Micheal Northcutt, Director, Securities Registration Division, has determined
that for the first five-year period the rules are in effect there will be
no fiscal implications for state or local government as a result of enforcing
or administering the rules.
Mr. Northcutt also has determined that for each year of the first five
years the rules are in effect the public benefit anticipated as a result of
enforcing the rules will be to provide a simple, distinct exemption for these
securities that are presently being offered under other exemptions, rather
than registered. There will be no effect on small businesses. There is no
anticipated economic cost to persons who are required to comply with the rules
as proposed.
Comments on the proposal to be considered by the Board should be submitted
in writing within 60 days after publication of the proposed sections in the
The new rules are proposed under Texas Civil Statutes, Articles
581-28-1 and 581-5.T. Section 28-1 provides the Board with the authority to
adopt rules and regulations necessary to carry out and implement the provisions
of the Texas Securities Act, including rules and regulations governing registration
statements and applications; defining terms; classifying securities, persons,
and matters within its jurisdiction; and prescribing different requirements
for different classes. Section 5.T provides that the Board may prescribe new
exemptions by rule.
The new rules affect Texas Civil Statutes, Articles 581-5 and 581-7, and
Texas Civil Statutes, Article 5190.6.
§135.1.Exemption.
The State Securities Board, pursuant to the Texas Securities Act, §5.T,
exempts from the securities registration requirements of the Act, securities
issued pursuant to the Development Corporation Act of 1979, Texas Civil Statutes,
Article 5190.6.
§135.2.Dealer and Agent Registration.
Any person who acts as an agent of the issuer in connection with a
sale to any prospective purchaser in a transaction exempt from securities
registration by virtue of this section shall be registered as either a dealer
or agent under the Texas Securities Act, as applicable.
§135.3.Anti-fraud Provisions.
Nothing in this section relieves issuers or persons acting on their
behalf from the duty to disclose to prospective investors information to satisfy
the anti-fraud provisions of the Texas Securities Act.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July
12, 1999.
TRD-9904196
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: August 22, 1999
For further information, please call: (512) 305-8300
Conflicts
] between the
industry
[
investment banker
] and the best interest of the
investing public will be resolved in favor of the investing public. Likewise,
conflicts between existing securities holders and the best interest of the
prospective investor will be resolved in favor of the prospective investor.
pending before him
].
Chapter 113.
Registration of Securities
119,
] 121, 129, 141, and 143 of this title (relating to Administrative
Guidelines for Registration of Real Estate Programs; [
Publicly Offered
Cattle Feeding Programs;
] Administrative Guidelines for Registration
of Oil and Gas Programs; Administrative Guidelines for Registration of Asset-Backed
Securities; Administrative Guidelines for Registration of Equipment Programs;
and Administrative Guidelines for Registration of Real Estate Investment Trusts),
[
§135.5 of this title (relating to Registration of Bonds),
]
and other provisions of this chapter also will be applied.
(3)
] Chapter 121 of this title
(relating to Administrative Guidelines for Registration of Oil and Gas Programs);
(4)
] Chapter 129 of this title
(relating to Administrative Guidelines for Registration of Asset-Backed Securities);
(6)
] Chapter 141 of this title
(relating to Administrative Guidelines for Registration of Equipment Programs);
and
(7)
] Chapter 143 of this title
(relating to Administrative Guidelines for Registration of Real Estate Investment
Trusts).
Chapter 114.
Federal Covered Securities
who
] chooses to comply with the Texas Securities Act,
§5.O(9), by filing a form
,
[
that
] shall provide
to the Securities Commissioner, prior to the sale of the securities in this
state:
confirming
] that the issuer of such securities is in compliance with the reporting
requirements of the Securities Exchange Act of 1934, §13 or §15(d),
as applicable.
Chapter 135.
Industrial Development Corporations and Authorities
Chapter 137.
Administrative Guidelines for Regulation of Offers