Part 6.
CREDIT UNION DEPARTMENT
Chapter 91.
CHARTERING, OPERATIONS, MERGERS, LIQUIDATIONS
Subchapter A. GENERAL RULES
7 TAC §91.101
The Texas Credit Union Commission proposes new §91.101
relating to general definitions. The proposed rule, if adopted, would replace
existing rule §91.102 which is proposed for repeal as published elsewhere
in this issue.
The Government Code and the General Appropriations Act require each state
agency to review and consider for readoption each rule adopted by that agency
pursuant to the Government Code, Chapter 2001 (Administrative Procedures Act).
Such reviews shall include, at a minimum, an assessment by the agency as to
whether the reason for adopting or readopting the rule continues to exist.
After conducting a preliminary review of §91.102, the Commission determined
that because of the number of changes required to update the definitions,
it would be less confusing to credit unions and to the general public to repeal
the existing rule and to adopt a new rule.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed new rule.
Lynette Pool has determined that for each year of the first five years
the rule is in effect, the public benefit anticipated will be that the definitions
for terms used throughout the statutes and rules (1) will be clearer, and
(2) provide credit unions with definitions of terms that were ambiguous or
simply undefined in the past. There is no anticipated economic cost to entities
that are currently required to comply with this section.
Written comments on the proposal must be submitted within 45 days after
its publication in the
Texas Register
to Lynette
Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson Lane,
Austin, Texas, 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code, which is interpreted as authorizing the Credit
Union Commission to reasonable rules necessary for administering Chapter 15
and Subtitle D, Title 3, of the Texas Finance Code.
The specific sections affected by this proposed rule are contained in Chapter
15 and Subtitle D, Title 3, of the Texas Finance Code pertaining to the Credit
Union Commission and Department and to the supervision, regulation and operating
powers of credit unions.
§91.101.Definitions and Interpretations.
(a)
Words and terms used in this chapter that are defined in
finance code §121.002, have the same meanings as defined in the finance
code. The following words and terms, when used in this chapter, shall have
the following meanings, unless the context clearly indicates otherwise.
(1)
Act--The Texas Credit Union Act (Texas Finance Code, Subtitle
D).
(2)
Allowance for loan and lease losses (ALLL)--A general valuation
allowance that has been established through charges against earnings to absorb
losses on loans and lease financing receivables. An ALLL excludes the regular
reserve and special reserves.
(3)
Applicant--An individual or credit union that has submitted
an application to the commissioner .
(4)
Application--A written request filed by an applicant with
the department seeking to incorporate, amend articles of incorporation or
bylaws, deviate from standard bylaws, obtain a certificate of authority to
do business in the state of texas or to obtain other relief for which the
commission is authorized by the act to issue a final decision or order subject
to judicial review.
(5)
Automated teller machine (ATM)--An automated, unstaffed
credit union facility owned by or operated exclusively for the credit union
at which deposits are received, cash dispensed, or money lent.
(6)
Community of interest--A unifying factor among persons
that by virtue of its existence, facilitates the successful organization of
a new credit union or promotes economic viability of an existing credit union.
The types of factors included are:
(A)
Employment by or a work-related relationship with an enterprise;
(B)
Membership in an organization with a primary purpose of
other than making credit union services available to its members;
(C)
Residence, employment, or attending school within a certain
geographic area; or
(D)
Such other factor that creates an identifiable affinity
among the persons to be included within a credit union's field of membership.
(7)
Construction or development loan--A financing arrangement
for the purpose of acquiring property or rights to property, including land
or structures, with the intent of converting the property into income-producing
property, including residential housing for rental or sale, commercial, industrial
or similar use.
(8)
Core capital--Has the same meaning as "tier one capital"
as set forth in the capital regulations adopted by the appropriate federal
banking regulatory agency.
(9)
Corporate credit union--A credit union whose field of membership
consists primarily of other credit unions.
(10)
Day--Whenever periods of time are specified in this title
in days, calendar days are intended. When the day, or the last day fixed by
statute or under this title for taking any action falls on Saturday, Sunday,
or a state holiday, the action may be taken on the next succeeding day which
is not a Saturday, Sunday, or a state holiday.
(11)
Department newsletter--The monthly publication that serves
as an official notice of all applications, and by which procedures to protest
applications are described.
(12)
Field of membership (FOM)--Refers to the totality of persons
a credit union may accept as members. The FOM may consist of one group, several
groups with a related community of interest, or several unrelated groups with
each having its own community of interest.
(13)
Imminent danger of insolvency--A circumstance or condition
in which a credit union is unable or lacks the means to meet its current obligations
as they come due in the regular and ordinary course of business, even if the
value of its assets exceeds its liabilities; or the credit union has a positive
net worth ratio equal to two percent or less of its assets.
(14)
Improved residential property--Real property consisting
of a residential dwelling having one to four dwelling units, at least one
of which is occupied by the owner of the property. This term shall also include
a one to four unit dwelling occupied in whole or in part by the owner on a
seasonal basis.
(15)
Indirect financing--A program in which a credit union
makes the credit decision in a transaction where the credit is extended by
the vendor and assigned to the credit union or a loan transaction that generally
involves substantial participation in and origination of the transaction by
a vendor.
(16)
Loan-to-value ratio--The aggregate amount of all sums
owed on an item of collateral securing a loan divided by the value of the
collateral.
(17)
Loan and extension of credit--A direct or indirect advance
of funds to a member, or on that member's behalf, that is conditioned upon
the repayment of the funds by the member or the application of collateral.
The terminology also includes the purchase of a member's loan or other obligation,
a lease financing transaction, a credit sale, a line of credit or loan commitment
under which the credit union is contractually obligated to advance funds to
or on behalf of a member, an advance of funds to honor a check or share draft
drawn on the credit union by a member, or any other indebtedness not classified
as an investment security.
(18)
Manufactured home--A HUD-code manufactured home as defined
by the Texas Manufactured Housing Standards Act.
(19)
Metropolitan Statistical Area (MSA)--A geographic area
as defined by the director of the U. S. Office of Management and Budget.
(20)
Mobile office--A branch office that does not have a single,
permanent site, including a vehicle that travels to various public locations
to enable members to conduct their credit union business.
(21)
Office--Includes any branch office, service facility or
place of business established by a credit union at which deposits are received,
checks or share drafts paid, or money lent. A branch does not include an automated
teller machine (ATM), a shared service center, or a remote service facility.
(22)
Overlap--The situation which exists when a group of persons
is eligible for membership in two or more state, foreign, or federal credit
unions doing business in this state. Notwithstanding this provision, no overlap
exists if eligibility for credit union membership results solely from a family
relationship.
(23)
Person--An individual, partnership, corporation, association,
government, governmental subdivision or agency, business trust, estate, trust,
or any other public or private entity.
(24)
Principal office--The home office of a credit union.
(25)
Protestant--A credit union that opposes or objects to
the relief requested by an applicant.
(26)
Remote service facility--An automated, unstaffed credit
union facility owned or operated by, or operated for, the credit union, such
as an automated teller machine, cash dispensing machine, point-of-sale terminal,
or other remote electronic facility, at which deposits are received, cash
dispensed, or money lent.
(27)
Reserves--Allocations of retained earnings and includes
regular and special reserves, except for any allowances for loan, lease or
investment losses.
(28)
Resident of this state--A person physically located in,
living in or employed in the state of Texas.
(29)
Respondent--A credit union or other person against whom
a disciplinary proceeding is directed by the department
(30)
Shared service center--A facility which is connected electronically
with two or more credit unions so as to permit the facility, through personnel
at the facility and the electronic connection, to provide a credit union member
at the facility the same credit union services that the credit union member
could lawfully obtain at the principal office of the member's credit union
(31)
Secured credit--A loan made or extension of credit given
upon an assignment of an interest in collateral pursuant to applicable state
laws so as to make the enforcement or promise more certain than the mere personal
obligation of the debtor or promisor. Any assignment may include an interest
in personal property or real property or a combination thereof.
(32)
Title--Title 7, Part VI of the Texas Administrative Code
(TAC), Banking and Securities, which contains all of the department's rules.
(33)
Underserved area--A geographic area, which could be described
as one or more contiguous metropolitan statistical areas (MSA) or one or more
contiguous political subdivisions, including counties, cities, and towns,
that satisfy any one of the following criteria:
(A)
A majority of the residents earn less than 80 percent of
the average for all wage earners as established by the u. S. Bureau of labor
statistics;
(B)
The annual household income for a majority of the residents
falls at or below 80 percent of the median household income for the nation;
or
(C)
The commission makes a determination that the lack of available
or adequate financial services has adversely effected economic development
within the specified area.
(34)
Uninsured membership share--Funds paid into a credit union
by a member that constitute uninsured capital under conditions established
by the credit union and agreed to by the member including possible reduction
under section 122.105 of the act, risk of loss through operations, or other
forfeiture. Such funds shall be considered an interest in the capital of the
credit union upon liquidation, merger, or conversion.
(35)
Unsecured credit--A loan or extension of credit based
solely upon the general credit financial standing of the borrower. The term
shall include loans or other extensions of credit supported by the signature
of a co-maker, guarantor, or endorser.
(b)
The same rules of construction that apply to interpretation
of Texas statutes and codes, the definitions in the Act and in Government
Code §2001.003, and the definitions in subsection (a) of this section
govern the interpretation of this title. If any section of this title is found
to conflict with an applicable and controlling provision of other state or
federal law, the section involved shall be void to the extent of the conflict
without affecting the validity of the rest of this title.
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 24, 2000.
TRD-200005070
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 837-9236
7 TAC §91.102
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Credit Union Department or in the Texas Register office, Room 245, James
Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas Credit Union Commission proposes the repeal
of §91.102 pertaining to general definitions.
The Government Code and the General Appropriations Act require each state
agency to review and consider for readoption each rule adopted by that agency
pursuant to the Government Code, Chapter 2001 (Administrative Procedures Act).
Such reviews shall include, at a minimum, an assessment by the agency as to
whether the reason for adopting or readopting the rule continues to exist.
After conducting a preliminary review of §91.102, the Commission determined
that because of the number of changes required to update the definitions,
it would be less confusing to credit unions and to the general public to repeal
the existing rule and to adopt a new rule, proposed §91.101, which is
published elsewhere in this issue of the
Texas Register
.
Lynette Pool, Deputy Commissioner, has determined that for each year of
the first five years the repeal is in effect, there will be no fiscal implications
for state or local government as a result of enforcing or administering the
repeal of this section.
Lynette Pool has determined that for each year of the first five years
the repeal is in effect, the public benefit anticipated as a result of the
repeal will be that the new rule adopted in its place would (1) be clearer,
and (2) provide credit unions with definitions of terms that were ambiguous
or simply undefined in the past. There is no anticipated economic cost to
entities that are currently required to comply with this section as result
of its repeal.
Written comments on the proposed repeal must be submitted within 45 days
after its publication in the
Texas Register
to Lynette Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson
Lane, Austin, Texas, 78752-1699.
The repeal is proposed under the provisions of §15.402 of
the Texas Finance Code, which authorizes the commission to adopt reasonable
rules for administering the Texas Credit Union Act.
The specific sections affected by this proposed repeal are contained in
Chapter 15 and Subtitle D, Title 3, of the Texas Finance Code pertaining to
the Credit Union Commission and Department and to the supervision, regulation,
and operating powers of credit unions.
§91.102.Definitions.
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 24, 2000.
TRD-200005068
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 837-9236
7 TAC §91.302
The Texas Credit Union Commission proposes amendments to §91.302
relating to election by electronic device, absentee or mail ballots. The proposed
amendments authorize additional options for conducting member elections, including
by electronic means or absentee ballot. Currently, the rule only addresses
mail ballots.
The Government Code and the General Appropriations Act require each state
agency to review and consider for readoption each rule adopted by that agency
pursuant to the Government Code, Chapter 2001 (Administrative Procedures Act).
Such reviews shall include, at a minimum, an assessment by the agency as to
whether the reason for adopting or readopting the rule continues to exist.
After conducting a preliminary review of §91.302, the Commission determined
that other methods of conducting elections or voting are necessary given the
diverse fields of membership of some credit unions and recent technological
innovations.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed amendments.
Lynette Pool has determined that for each year of the first five years
the rule is in effect, the public benefit anticipated will be that a greater
number of credit union members will participate in the democratic election
process for the betterment of the credit unions as a whole. There is no anticipated
economic cost to entities that are currently required to comply with this
section as result of its proposed adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the
Texas Register
to Lynette
Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson Lane,
Austin, Texas, 78752-1699.
The amendment is proposed under the provisions of §122.052
of the Texas Finance Code, which is interpreted as authorizing the Credit
Union Commission to establish rules for the balloting process.
The specific section affected by these proposed amendments to this rule
is §122.052 of the Texas Finance Code relating to meetings of members;
voting.
Election By Electronic Device, Absentee,
or
Mail Ballots.
(a)
The use of
electronic device, absentee
or
mail ballots by any credit union shall ensure fair and equitable
opportunity for any qualified member to seek office, including a provision
for nomination by petition, and providing the appropriate notice and information
to all members.
(b)
Any elections held by electronic device,
absentee, or mail ballot are subject to the following conditions:
(1)
The election tellers shall be appointed by the board of
directors;
(2)
At least 30 days prior to the annual meeting, the board
of directors will cause either a printed ballot or notice of a ballot, along
with appropriate instructions, to be mailed to all members eligible to vote;
(3)
Ballots must be received no later than midnight 5 calendar
days prior to the annual meeting;
(4)
The votes will be tallied by the tellers and the results
of the vote will be made public at the annual meeting.
(c)
In the event of a malfunction of the electronic
balloting system, the board of directors may in its discretion order elections
to be held by mail ballot only. The board may make reasonable adjustments
to the voting time frames in subsection (b) of this section, or postpone the
annual meeting if necessary, to complete the elections prior to the annual
meeting.
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 24, 2000.
TRD-200005066
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 837-9236
Subchapter B. FEES
7 TAC §97.113
The Texas Credit Union Commission proposes to amend existing §97.113
concerning operating fees. The amendment is correcting a Texas Administrative
Code cite that no longer exists as a result of the Credit Union Commission
repealing §91.211 and adopting §91.210 in its place.
Lynette Pool, Deputy Commissioner, has determined that for the first five-year
period the amended rule is in effect, there will be no fiscal implications
for state or local government as a result of enforcing or administering the
rule.
Miss Pool has determined that for each year of the first five years the
rule is in effect, the public benefit anticipated will be that the statutory
cite contained in the rule will be correct, therefore preventing future confusion
on the part of those referencing the Commission's rules. There will be no
effect on small businesses as a result of amending this section. There is
no anticipated economic cost to entities that are currently required to comply
with these sections as result of the proposed amendments adoption.
Written comments on the proposed amendment must be submitted within 30
days after its publication in the
Texas Register
to Lynette Pool, Deputy Commissioner, Credit Union Department, 914
East Anderson Lane, Austin, Texas, 78752-1699.
The amendment is proposed under the provisions of §15.402
of the Texas Finance Code, which authorizes the commission to set, by rule,
reasonable supervision fees, charges, and revenues required to be paid by
credit unions authorized to do business under the Texas Credit Union Act.
The specific section affected by the proposed amendment is §15.402
of the Texas Finance Code.
§97.113.Operating Fees.
(a)-(e)
(No change.)
(f)
Out of state branches. Credit unions operating branch offices
in Texas as authorized by
§91.210
[
(g)-(h)
(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 24, 2000.
TRD-200005072
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 837-9236
7 TAC §97.205
The Texas Credit Union Commission proposes new §97.205
pertaining to the use of historically underutilized businesses (HUB). Section
97.205 is being proposed to provide to comply with §2161.003 of the Texas
Government Code, and states that the Credit Union Department shall comply,
to the extent applicable, with the requirements of the HUB rules adopted by
the General Services Commission when purchasing goods and services that are
paid for with State appropriated money.
Lynette Pool, Deputy Commissioner, has determined that for the first five-year
period the new rule is in effect, there will be no fiscal implications for
state or local government as a result of enforcing or administering the rule.
Ms. Pool has also determined that for each year of the first five years
the proposed rule is in effect, the public benefit anticipated will be the
continued support of the local economy. Small businesses, in particular those
woman- or minority-owned, will continue to see new business as a result of
adopting this section. There is no anticipated impact on local employment.
Written comments on the proposed rule must be submitted within 30 days
after its publication in the
Texas Register
to Lynette Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson
Lane, Austin, Texas, 78752-1699.
The new section is proposed under the provisions of Texas Government
Code §2161.003, which require state agencies to adopt the General Service
Commission's rules relating to the use of HUBs, which were adopted/modified
based on the Disparity Study mandated by House Bill 2626. The Commission interprets
this section as authorizing it to adopt rules for purchasing goods and services
in compliance with Chapter 111, Subchapter B of Title 1, Texas Administrative
Code.
The specific section affected by the proposed rule is Texas Finance Code §15.402
pertaining to the general authority of the Commission.
§97.205.Use of Historically Underutilized Businesses.
Pursuant to Chapter 2161 of the Government Code, the Department hereby
incorporates by reference the rules of the General Services Commission, 1
TAC §§111.11-111.28, or any successor rules, regarding historically
underutilized businesses. The Department shall comply, to the extent applicable,
with the requirements of these rules when purchasing goods and services that
are paid for with State appropriated money.
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 24, 2000.
TRD-200005071
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 837-9236
Chapter 109.
TRANSACTIONS EXEMPT FROM REGISTRATION
7 TAC §109.7
The State Securities Board proposes an amendment to §109.7,
concerning secondary trading exemptions. The amendment notes that the various
"Moody's" manuals listed have been renamed as "Mergent's" manuals and clarifies
that electronic versions of the print manuals are also acceptable.
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 that registered dealers seeking reliance upon the
exemption contained in §5.O of the Texas Securities Act will have notice
of the manuals included among the Board's "recognized securities manuals"
for purposes of the exemption. 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 section 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 581-5.O.
§109.7.Secondary Trading Exemptions.
(a)-(d)
(No change.)
(e)
The term "recognized securities manual" used in the
Texas
Securities Act, §5.O(9)(c), is limited to the following
and includes any electronic publication format that is as readily available
to the general public as the printed version, including, without limitation,
CD-Rom and electronic dissemination over the Internet
:
(1)-(2)
(No change.)
(3)
Mergent's
[
(4)
Mergent's
[
(5)
Mergent's
[
(6)
Mergent's
[
(7)
Mergent's
[
(8)
Mergent's
[
(9)
Mergent's
[
(f)
(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 17, 2000.
TRD-200004931
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 305-8300
7 TAC §115.1
The State Securities Board proposes an amendment to §115.1,
concerning dealer registration requirements for discount brokerage service
networks. The amendment would delete references to discount brokerage service
networks in light of a new conditional exemption for third party brokerage
arrangements on financial entities premises. This new exemption is being concurrently
proposed as §139.20.
Michael S. Gunst, Director, Dealer Registration Division, and Tom Spradlin,
Director of Information Resources and Planning, have 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. Gunst and Mr. Spradlin also have 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 eliminate a provision that would duplicate
another. 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 section in the
The amendment is proposed under Texas Civil Statutes, Articles
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 new rule affects Texas Civil Statutes, Articles 581-12, 581-13, and
581-18.
§115.1.General Provisions.
(a)-(d)
(No change.)
(e)
Multiple registration.
(1)
(No change.)
(2)
The undertaking in paragraph (1)(A) of this subsection
shall not be required for the following:
[
affiliated state or national
banks and/or their subsidiaries, or affiliated state or federal savings and
loan associations and/or their subsidiaries, where the securities-related
activity consists of the following:]
[
acting as a correspondent in a discount brokerage
service network coordinated with an unaffiliated general dealer;]
[
acting as a municipal and government securities
dealer; and/or]
[
acting as an investment adviser through a
bona fide trust department;]
(A)
[
(B)
[
(f)-(k)
(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 17, 2000.
TRD-200004932
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 305-8300
7 TAC §115.3
The State Securities Board proposes an amendment to §115.3,
concerning dealer and agent examinations. The amendment to subsection (b)
makes the examination requirements easier to understand by setting them out
in outline format rather than narrative format. The change to subsection (b)
does not make any substantive changes to the existing examination requirements.
The deletions from subsection (c)(2)(E) correspond with a new conditional
exemption for third party brokerage arrangements on financial entity premises.
This new exemption is being concurrently proposed as §139.20.
Michael S. Gunst, Director, Dealer Registration Division, and Tom Spradlin,
Director of Information Resources and Planning, have 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. Gunst and Mr. Spradlin also have determined that for each year of the
first five years the rule is in effect the public benefits anticipated as
a result of enforcing the rule will be to make the examination requirements
easier for industry to understand and to a eliminate provision that duplicates
another. 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 section 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 new rule affects Texas Civil Statutes, Articles 581-12 and 581-13.
§115.3.Examination.
(a)
(No change.)
(b)
Content. Each applicant must satisfy examination requirements.
(1)-(2)
(No change.)
(3)
Each applicant for registration as an investment adviser
or investment adviser agent must pass
:
[
(A)
the Uniform Investment Adviser Law Examination (the
new entry level competency examination, Series 65, administered after December
31, 1999); or
[
(B)
the following combination of examinations:
[
(i)
a general securities representative
examination as described in paragraph (1)(A) of this subsection or a limited
examination as described in paragraph (1)(B) of this subsection; and
(ii)
the Uniform Combined State
Law Examination (Series 66), the Uniform Investment Advisers State Law Examination
(Series 65, as it existed and was administered on or before December 31,
1999), or an examination on the Texas Securities Act administered by this
Agency.
(C)
Each of these examinations (except the Texas Securities
Act examination) is administered by the NASD and can be scheduled by submitting
a Form U-10 to the NASD.
[
(D)
The following persons are not required to pass any
examination for registration as an investment adviser or as an investment
adviser agent upon submission of proof of registration, certification, or
designation, as follows:
[
(i)
persons who were registered
as an investment adviser or investment adviser agent on or before December
31, 1999, provided the person has maintained a registration as an investment
adviser or investment adviser agent with any state securities administrator
that has not lapsed for more than two years from the date of the last registration;
(ii)
applicants who are certified
by the Association for Investment Management and Research, or its predecessors
the Federation of Chartered Financial Analysts or the Institute of Chartered
Financial Analysts, to be chartered financial analysts (CFA);
(iii)
applicants who are certified
by the Certified Financial Planner Board of Standards, Inc., to use the mark
"CERTIFIED FINANCIAL PLANNER" (CFP);
(iv)
applicants who are designated
by the American Institute of Certified Public Accountants as accredited personal
financial specialists (PFS);
(v)
applicants who are designated
by the Investment Counsel Association of America, Inc., as chartered investment
counselors (CIC); or
(vi)
applicants who are designated
by the American College, Bryn Mawr, Pennsylvania, as chartered financial consultants
(ChFC).
[
applicants who are designated
by the American College, Bryn Mawr, Pennsylvania, as chartered financial consultants
(ChFC).]
(E)
[
(c)
Exemptions from examination requirements.
(1)
(No change.)
(2)
A full waiver of the examination requirements of the Texas
Securities Act, §13.D, is granted by the Board to the following classes
of persons:
(A)-(B)
(No change.)
(C)
issuers restricting distribution of securities to security
holders of an affiliate company, a subsidiary, or a parent of the issuer,
provided the registration certificate is issued on a temporary basis and terminated
immediately after the offering;
and
(D)
officers and employees whose firms restrict their officers'
and employees' securities activities to acting as brokers between and among
principals for the sale of a majority of the stock or equity securities of
a privately held business pursuant to a privately negotiated purchase agreement,
where the managerial control of the business will devolve upon the purchaser(s)
and where compensation received by the firm will be payable for the brokerage
activities only
.
[
[
officers and employees of
financial institutions whose securities-related activity consists solely of
acting as a correspondent in a discount brokerage service network coordinated
with a separate general dealer. For purposes of this subparagraph, the following
terms have the following meanings:]
[
"financial institutions" shall include state
or national banks, state or federal savings and loan associations as defined
in §109.17 of this title (relating to Banks under The Securities Act, §5.L),
and credit unions;]
[
"acting as a correspondent" means that the
activities of the officers and employees are limited to advertising the discount
brokerage service, assisting customers in completing application forms, and
referring customers to a representative of the separate general dealer; and]
[
"separate general dealer" means an entity
registered as a general securities dealer; the term does not encompass a requirement
that the general dealer be unaffiliated with the financial institution.]
(3)-(4)
(No change.)
(d)-(f)
(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 17, 2000.
TRD-200004933
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 305-8300
7 TAC §133.9
The State Securities Board proposes a new form §133.9,
concerning a notice filing to claim the conditional exemption in §139.20
for third party brokerage arrangements on financial entity premises. The new
section adopts by reference a form that is to be used in conjunction with
the new conditional exemption contained in §139.20, which is being concurrently
proposed. Financial entities coming within the purview of the new §139.20
exemption would file Form 133.9, instead of a complete dealer application
package.
Michael S. Gunst, Director, Dealer Registration Division, and Tom Spradlin,
Director of Information Resources and Planning, have 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. Gunst and Mr. Spradlin also have 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 provide the form for a notice filing
to claim a conditional exemption from dealer registration. 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 section in the
The new rule is proposed under Texas Civil Statutes, Article
581-28-1 and 581-12.B. 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 12.B provides the Board with the authority
to prescribe new dealer/agent registration exemptions by rule.
The new rule affects Texas Civil Statutes, Articles 581-12, 581-13, and
581-18.
§133.9.Notice Filing for Third Party Brokerage Arrangements on Financial Entity Premises.
The State Securities Board proposes to adopt by reference the notice
filing for third party brokerage arrangements form. This form is available
from the State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167.
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 17, 2000.
TRD-200004935
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: September 3, 2000
For further information, please call: (512) 305-8300
Subchapter C. MEMBERS
Chapter 97.
COMMISSION POLICIES AND ADMINISTRATIVE RULES
§91.211
]
of this title (
relating
[
Relating
] to [
Application
for a
] Certificate of Authority
to do
[
To Do
]
Business in the State of Texas) shall pay an annual operating fee of $200
per branch office.
Subchapter C. DEPARTMENT OPERATIONS
Part 7.
STATE SECURITIES BOARD
Moody's
] Bank and Finance
Manual and News Reports;
Moody's
] Industrial Manual
and News Reports;
Moody's
] Public Utility
Manual and News Reports;
Moody's
] Transportation
Manual and News Reports;
Moody's
] Municipal and
Government Manual and News Reports;
Moody's
] International
Manual and News Reports; and
Moody's
] OTC Industrial
Manual and News Reports, provided however, that
Mergent's
[
Moody's
] OTC Industrial News Reports are recognized solely for the purpose
of updating a current listing in the OTC Industrial Manual. A registered dealer
who, between the date of the last publication of
Mergent's
[
Moody's
] OTC Industrial Manual and the effective date of this rule,
relies upon a listing in the
Mergent's
[
Moody's
] OTC
Industrial News Reports to comply with §5.O of the Act may continue to
rely upon such listing until the publication date of the next
Mergent's
[
Moody's
] OTC Industrial Manual, which follows the effective
date of this rule.
Chapter 115.
DEALERS AND SALESMEN
(A)
(i)
(ii)
(iii)
(B)
] issuer-dealer bank holding
companies and affiliated banks offering discount brokerage services, investment
advisory services, municipal, and/or government securities;
(C)
] a salesman who makes application
in order to reflect transfer from one employer to another or seeks multiple
registration and does not own 10% or more of the voting control of the subject
dealers or investment advisers.
the Uniform Investment
Adviser Law Examination (Series 65), or the General Securities Representative
Examination (Series 7) and the Uniform Combined State Law Examination (Series
66). Each of these examinations is administered by the NASD. In lieu of the
Series 66, a person may pass the examination on the Texas Securities Act administered
by this Agency. A person who was registered as an investment adviser or investment
adviser agent on or before December 31, 1999, is not required to pass the
examination(s) previously described in this paragraph, provided the person
has maintained a registration as an investment adviser or investment adviser
agent with any state securities administrator that has not lapsed for more
than two years from the date of the last registration. An applicant for registration
as an investment adviser or investment adviser agent who is in one of the
following classes of persons is not required to pass the Series 65 examination:
]
applicants who are certified by the Association
for Investment Management and Research, or its predecessors the Federation
of Chartered Financial Analysts or the Institute of Chartered Financial Analysts,
to be chartered financial analysts (CFA);
]
applicants who are certified by the Certified Financial Planner Board of Standards,
Inc., to be certified financial planners (CFP);
]
applicants who are designated by the
American Institute of Certified Public Accountants as accredited personal
financial specialists (PFS);
]
applicants who are designated by the
Investment Counsel Association of America, Inc., as chartered investment counselors
(CIC); or
]
(E)
(4)
] The Association for Investment
Management and Research, the Certified Financial Planner Board of Standards,
Inc., the American Institute of Certified Public Accountants, the American
College, and the Investment Counsel Association of America, Inc., are required
to submit to the Securities Commissioner any changes to their certification
programs as such changes occur.
;
]
(E)
(i)
(ii)
(iii)
Chapter 133.
FORMS
Chapter 139.
EXEMPTIONS BY RULE OR ORDER