Part 7.
STATE SECURITIES BOARD
Chapter 107.
TERMINOLOGY
7 TAC §107.2
The State Securities Board proposes an amendment to §107.2,
concerning definitions. The amendment would change the definition for "rendering
services as an investment adviser" and add a definition for "federal covered
investment adviser" that comports with House Bill 2255, enacted by the 77th
Texas Legislature.
Michael S. Gunst, Director, Dealer Registration Division, and David Grauer,
Director, Enforcement Division, 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. Grauer 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 that persons seeking guidance about terms
used in the Board's rules will find defined terms used consistently throughout.
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 30 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, Articles 581-4, 581-12,
and 581-13.
§107.2.Definitions.
The following words and terms, when used in Part VII of this title
(relating to the State Securities Board), shall have the following meanings,
unless the context clearly indicates otherwise.
(1) - (31)
(No change.)
(32)
Rendering services as an investment adviser--Any
act by which investment advisory services are provided for compensation.
[
(33) - (43)
(No change.)
(44)
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 and not required to be registered
pursuant to 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 August 13, 2001.
TRD-200104662
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: September 23, 2001
For further information, please call: (512) 305-8300
7 TAC §§115.1 - 115.3, 115.5, 115.7, 115.8
The State Securities Board proposes amendments to §115.1,
concerning general provisions; §115.2, concerning application requirements; §115.3,
concerning examinations; §115.5, concerning minimum records; §115.7,
concerning maintenance and inspection of records; and §115.8, concerning
fee requirements.
The amendment to §115.1 would add a definition for "solicitor" and
provides for limited registration as such.
The amendment to §115.2(a) would eliminate the requirement to file
a separate consent to service of process document. Amendments made in House
Bill 2255 ("HB 2255") to Section 8 of the Texas Securities Act ("TSA") would
render the consent to service contained in the Form BD adequate and eliminate
the need for a separate document to be executed. Form 133.16 would also be
eliminated due to changes made to the TSA by HB 2255 rendering it unnecessary.
Changes in subsection (d) would provide for the automatic withdrawal of applications
for dealer or agent registration (initial registration or otherwise) if an
applicant fails to respond to the staff's written requests for information
when the application has been pending for a period of six months or more.
Subsection (e) would be changed to correct a cross- reference to (a).
The amendment to §115.3 would provide an examination waiver for a
person acting as a solicitor for a dealer and remove a requirement to surrender
evidences of registration for cancellation.
The amendments to §115.5 and §115.7 would conform their provisions
with the terminology used in new Section 13-1 added to the TSA by HB 2255.
The amendment to §115.8 would add a new subsection (c) to correspond
to the language added in Section 42.C of the TSA by HB 2255.
Michael S. Gunst, Director, Dealer Registration Division, and David Grauer,
Director, Enforcement Division, have 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. Gunst and Mr. Grauer also have 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 apprise dealers and their agents
of their obligations under the Texas Securities Act and Board rules. 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 30 days after publication of the proposed sections in the
The amendments are proposed under Texas Civil Statutes, Articles
581-28-1, 581-12.B, and 581-42.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. Section 42.B provides the Board with the authority to adopt rules reducing
fees for person required to register in two or more capacities.
The proposed amendments affect Texas Civil Statutes, Articles 581-12 through
581-13, 581-15 through 581-19, and 581- 25.
§115.1.General Provisions.
(a)
Definitions. Words and terms used in this chapter are also
defined in §107.2 of this title (relating to Definitions). The following
words and terms, when used in this chapter, shall have the following meanings,
unless the context clearly indicates otherwise.
(1) - (8)
(No change.)
(9)
Solicitor--Any agent who limits their
activities to referring potential clients to a dealer for compensation.
(b)
Registration requirements of dealers, issuers, agents,
solicitors,
and branch offices.
(1)
Requirements of registration.
(A)
No dealer, issuer, [
(B)
(No change.)
(2)
(No change.)
(c)
Types of registrations.
(1)
(No change.)
(2)
Restricted registration. The restricted registrations are
as follows:
(A) - (K)
(No change.)
(L)
registration to deal in all general securities except municipal
securities; [
(M)
registration to act as a solicitor for
a dealer; and
(N)
[
(3)
(No change.)
§115.2.Application Requirements.
(a)
Securities dealer application requirements. A complete
application consists of the following and must be filed in paper form with
the Securities Commissioner:
(1) - (2)
(No change.)
[(3)
Form 133.16, an agreement for maintenance
and inspection of records;]
(3)
[
[(5)
all foreign corporations and other nonresident
applicants must file an irrevocable consent to service of process utilizing
Forms U-2 and U-2A, or Form 133.8;]
(4)
[
(5)
[
(6)
[
(7)
[
(8)
[
(b) - (c)
(No change.)
(d)
Withdrawal [
[(1)
Any initial application for dealer or
agent registration that fails to meet registration requirements within six
months of the filing date of the application will be considered withdrawn.
A copy of this subsection will be mailed to the applicant at least 30 days
prior to the withdrawal of the application pursuant to this subsection.]
[
(e)
Central Registration Depository System (CRD).
(1)
Whenever the Texas Securities Act or Board rules require
the filing of an application with the Securities Commissioner for dealer or
agent registration, members of the National Association of Securities Dealers,
Inc. (NASD) or applicants for membership in the NASD shall make such filing
electronically through the CRD which is jointly operated by the NASD and the
North American Securities Administrators Association, Inc. (NASAA). Applicants
shall use the applicable uniform form for the submission of the filing in
question and shall supplement their electronic filing by filing, in paper
form, the items listed in paragraphs (3) -
(7)
[
(2)
(No change.)
§115.3.Examination.
(a) - (b)
(No change.)
(c)
Waivers of examination requirements.
(1) - (2)
(No change.)
(3)
A partial waiver of the examination requirements of the
Texas Securities Act, §13.D, is granted by the Board to the following
classes of persons:
(A) - (C)
(No change.)
(D)
applicants seeking registration for the purpose of dealing
exclusively in oil and gas interests (other than interests in limited partnerships).
Such persons are not required to take the general securities examination,
but are required to pass an examination on state securities law as required
by subsection (b)(4) of this section. Provided, however, any persons registered
prior to January 1, 1976, for the purpose of dealing exclusively in oil and
gas interests, are not required to pass an examination; [
(E)
applicants who are officers, partners, or employees of
an issuer (other than an open-end investment company) if the issuer's securities
will be registered for sale in Texas. Such officers, partners, and employees
are not required to take the general securities examination, but are required
to pass an examination on state securities law as required by subsection (b)(4)
of this section. Evidences of registration granted pursuant to this subparagraph
are restricted to sales of the currently registered securities of the issuer
; and
[
(F)
applicants seeking registration as a solicitor
for a dealer. Such persons are not required to take the general securities
examination, but are required to pass an examination on state securities law
as required by subsection (b)(4) of this section.
(4)
(No change.)
(d)
(No change.)
§115.5.Minimum Records.
(a) - (d)
(No change.)
(e)
Records to be preserved by dealers.
(1) - (8)
(No change.)
(9)
The records required to be maintained pursuant to this
section may be maintained by any electronic storage media available so long
as such records are available for immediate
and complete
[
(f)
(No change.)
§115.7.Maintenance and Inspection of Records.
(a)
The Securities Commissioner, without notice, may inspect
a registered dealer as necessary to ensure compliance with the Texas Securities
Act and Board rules.
[
(b)
The [
(1)
enter the business premises of a registered
dealer; and
(2)
examine and copy books and records pertinent
to the inspection.
(c)
During the inspection, the dealer shall:
(1)
provide to the Commissioner or the Commissioner's authorized
representative immediate and complete access to the person's office, place
of business, files, safe, and any other location in which books and records
pertinent to the inspection are located; and
(2)
allow the Commissioner or the Commissioner's authorized
representative to make photostatic or electronic copies of books or records
subject to inspection.
(d)
A dealer may not charge a fee for copying
information under this section.
(e)
[
§115.8.Fee Requirements.
(a) - (b)
(No change.)
(c)
Fees for concurrent registrations. Notwithstanding
Texas Securities Act, §§35 and 41, a person shall pay only one fee
required under those sections to engage in business in this state concurrently
for the same person or company as:
(1)
a dealer and an investment adviser; or
(2)
an agent and an investment adviser representative.
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 August 13, 2001.
TRD-200104663
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: September 23, 2001
For further information, please call: (512) 305-8300
7 TAC §§116.1, 116.2, 116.5, 116.7, 116.8, 116.10, 116.13, 116.15
The State Securities Board proposes amendments to §116.1,
concerning general provisions; §116.2, concerning definitions; §116.5,
concerning minimum records; §116.7, concerning maintenance and inspection
of records; §116.8, concerning fee requirements; §116.10, concerning
supervisory requirements; §116.13, concerning advisory fee requirements;
and §116.15, concerning advertising restrictions.
The amendment to §116.1 would add definitions for "federal covered
investment adviser" and "registered investment adviser" to amplify those contained
in House Bill 2255 ("HB 2255"); conform the definition of "rendering services
as an investment adviser" to concurrently proposed changes to §107.2;
clarify that branch offices in Texas must be registered; and eliminate a notice
filing on a Form ADV in lieu of filing through the IARD.
The amendment to §116.2(a) would eliminate the requirement to file
a separate consent to service of process document. Amendments made in HB 2255
to Section 8 of the Texas Securities Act ("TSA") would render the consent
to service contained in the Form ADV adequate and eliminate the need for a
separate document to be executed. Form 133.16 would also be eliminated due
to changes made to the TSA by HB 2255, rendering it unnecessary. The changes
to subsection (d) would provide for the automatic withdrawal of applications
for investment adviser and investment adviser representative registration
(initial registration or otherwise) if an applicant fails to respond to the
staff's written request for information when the application has been pending
for a period of six months or more. The change to subsection (e) would correct
a cross-reference to (a).
The amendments to §116.5 and §116.7 would conform their provisions
with the terminology used in new Section 13-1 added to the TSA by HB 2255.
The amendment to §116.8 would add a new subsection (c) to correspond
to the language added in Section 42.C of the TSA by HB 2255.
The amendments to §§116.10, 116.13, and 116.15 would clarify
that §116.10 and §116.13 apply only to registered investment advisers.
As regards to the §116.15, advertising restrictions, the general language
regarding antifraud applies to all investment advisers; however, the specific
restrictions on advertising content should be amended to reflect applicability
only to registered investment advisers.
Michael S. Gunst, Director, Dealer Registration Division, and David Grauer,
Director, Enforcement Division, have 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. Gunst and Mr. Grauer also have 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 apprise investment adviser and
investment adviser representatives of their obligations under the Texas Securities
Act and Board rules. 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 30 days after publication of the proposed sections in the
The amendments are proposed under Texas Civil Statutes, Articles
581-28-1, 581-12.B, and 581-42.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. Section 42.B provides the Board with the authority to adopt rules reducing
fees for person required to register in two or more capacities.
The statutes and codes affected by the proposed new chapter are Texas Civil
Statutes, Articles 581-12 through 581-13, 581-15 through 581-19, and 581-25.
§116.1.General Provisions.
(a)
Definitions. Words and terms used in this chapter are also
defined in §107.2 of this title (relating to Definitions). The following
words and terms, when used in this chapter, shall have the following meanings,
unless the context clearly indicates otherwise.
(1) - (7)
(No change.)
(8)
Rendering services as an investment adviser--Any
act by which investment advisory services are provided for compensation.
[
(9) - (10)
(No change.)
(11)
"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 and not required to be registered
pursuant to the Texas Securities Act.
(12)
"Registered investment adviser"--An investment
adviser who has been issued a registration certificate by the Securities Commissioner
under the Texas Securities Act, §15. (A federal covered investment adviser
is not prohibited from being registered with the Securities Commissioner.
If a federal covered investment adviser elects to register with the Securities
Commissioner, it is subject to all of the registration requirements of the
Act.)
(b)
Registration of investment advisers, investment adviser
representatives, and branch offices.
(1)
Requirements of registration.
(A)
(No change.)
(B)
Each branch office
of a registered investment adviser
in Texas must be registered. A registered officer, partner, or investment
adviser representative must be named as branch office manager.
(2)
Exemption from the registration requirements. The Board
pursuant to the Texas Securities Act, §§12.B and 5.T, exempts from
the registration provisions of the Act, §12, persons not required to
register as an investment adviser or an investment adviser representative
on or after July 8, 1997, by act of Congress in Public Law Number 104-290,
Title III.
(A) - (B)
(No change.)
(C)
Notice filing requirements and fees for investment advisers
and investment adviser representatives exempted from registration pursuant
to this subsection only.
(i)
Initially, the provisions of subparagraphs (A) and (B)
of this paragraph are available provided that the investment adviser files:
[(I)
a copy of its current Form ADV as filed
with the SEC, if a Form ADV is required to be filed by the investment adviser
with the SEC;]
(I)
[
(II)
[
[(ii)
Upon amendment to its Form ADV, the
investment adviser files a copy of its amended Form ADV as filed with the
SEC, if a Form ADV is required to be filed by the investment adviser with
the SEC.]
(ii)
[
[(I)
a copy of its Form ADV as filed with
the SEC, if a Form ADV is required to be filed by the investment adviser with
the SEC; and]
[(II)
renewal fees which would have been paid
had the investment adviser and each investment adviser representative been
registered in Texas.]
(D)
(No change.)
(c)
(No change.)
§116.2.Application Requirements.
(a)
Investment adviser and investment adviser representative
application requirements. A complete application consists of the following
and must be filed in paper form with the Securities Commissioner, except in
such time as the Investment Adviser Registration Depository System (IARD)
becomes available:
(1) - (2)
(No change.)
[(3)
Form 133.16, an agreement for maintenance
and inspection of records;]
(3)
[
[(5)
all foreign corporations and other nonresident
applicants must also file an irrevocable written consent to service of process
utilizing Forms U-2 and U-2A, or Form 133.8;]
(4)
[
(5)
[
(6)
[
(7)
[
(8)
[
(9)
[
(10)
[
(11)
[
(b) - (c)
(No change.)
(d)
Withdrawal [
(e)
Investment Adviser Registration Depository (IARD).
(1)
Whenever the Texas Securities Act or Board rules require
the filing of an application with the Securities Commissioner for investment
adviser or investment adviser representative registration, such application
must be filed electronically via the IARD, which is jointly operated by the
NASD, the North American Securities Administrators Association, Inc. (NASAA),
and the Securities and Exchange Commission (SEC). Applicants shall use the
applicable uniform forms for the submission of the filing in question and
shall supplement their electronic filing by filing, in paper form, the items
listed in paragraphs (3)-
(10)
[
(2)
(No change.)
(f)
(No change.)
§116.5.Minimum Records.
(a) - (c)
(No change.)
(d)
The records required to be maintained pursuant to this
section may be maintained by any electronic storage media available so long
as such records are available for immediate
and complete
[
(e)
(No change.)
§116.7.Maintenance and Inspection of Records.
(a)
The Securities Commissioner, without notice, may inspect
a registered investment adviser as necessary to ensure compliance with the
Texas Securities Act and Board rules.
[
(b)
The [
(1)
enter the business premises of a registered
investment adviser; and
(2)
examine and copy books and records pertinent
to the inspection.
(c)
During the inspection, the investment
adviser shall:
(1)
provide to the Commissioner or the Commissioner's authorized
representative immediate and complete access to the person's office, place
of business, files, safe, and any other location in which books and records
pertinent to the inspection are located; and
(2)
allow the Commissioner or the Commissioner's authorized
representative to make photostatic or electronic copies of books or records
subject to inspection.
(d)
An investment adviser may not charge a
fee for copying information under this section.
(e)
[
§116.8.Fee Requirements.
(a) - (b)
(No change.)
(c)
Fees for concurrent registrations. Notwithstanding
Texas Securities Act, §§35 and 41, a person shall pay only one fee
required under those sections to engage in business in this state concurrently
for the same person or company as:
(1)
a dealer and an investment adviser; or
(2)
an agent and an investment adviser representative.
§116.10.Supervisory Requirements.
Each
registered
investment adviser shall establish and maintain
a system to supervise the activities of its investment adviser representatives
that is reasonably designed to achieve compliance with the Texas Securities
Act and Board rules.
§116.13.Advisory Fee Requirements.
(a)
Any
registered
investment adviser who wishes
to charge 3.0% or greater of the assets under management must disclose that
such fee is in excess of the industry norm and that similar advisory services
can be obtained for less.
(b)
Any
registered
investment adviser who wishes
to charge a fee based on a share of the capital gains or the capital appreciation
of the funds or any portion of the funds of a client must comply with SEC
Rule 205-3 (17 Code of Federal Regulations §275.205-3), which prohibits
the use of such fee unless the client is a "qualified client." In general,
a qualified client may include:
(1) - (3)
(No change.)
§116.15.Advertising Restrictions.
The antifraud provisions of the Texas Securities Act prohibit an investment
adviser from using any advertisement that contains any untrue statement of
material fact or that is otherwise misleading. The prohibition would include
any notice, circular, letter, or other written communication addressed to
more than one person, or any notice or other announcement in any publication
or by radio, television, Internet, the World Wide Web, or similar proprietary
or common carrier electronic systems, that offers any service as an investment
adviser.
(1)
Specifically, an advertisement
of a registered investment
adviser
may not:
(A) - (D)
(No change.)
(2)
A registered
[
(A) - (D)
(No change.)
(3)
In addition, generally
a registered
[
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 August 13, 2001.
TRD-200104664
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: September 23, 2001
For further information, please call: (512) 305-8300
7 TAC §133.16
(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 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 §133.16,
a form concerning the agreement for maintenance and inspection of records.
House Bill 2255, passed by the 77th Texas Legislature, adds Section 13-1 to
the Texas Securities Act ("TSA") and statutorily recognizes that the Commissioner,
without notice, may inspect a registered dealer or registered investment adviser
as necessary to ensure compliance with the TSA and Board rules. The provision
becomes effective on September 1, 2001, so, after that date, there would be
no need for this form.
Michael S. Gunst, Director, Dealer Registration Division, and David Grauer,
Director, Enforcement Division, have determined that for the first five-year
period 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.
Mr. Gunst and Mr. Grauer also have determined that for each year of the
first five years the repeal is in effect the public benefit anticipated as
a result of enforcing the repeal will be the elimination of an unnecessary
form. There will be no effect on small businesses. There is no anticipated
economic cost to persons who are required to comply with the repeal as proposed.
Comments on the proposal to be considered by the Board should be submitted
in writing within 30 days after publication of the proposed section 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.
Statutes and codes affected: none applicable.
§133.16.Agreement for Maintenance and Inspection of Records.
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 August 13, 2001.
TRD-200104665
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: September 23, 2001
For further information, please call: (512) 305-8300
person coming within the designation cannot conduct such activity without
first being registered as an investment adviser/dealer under the provisions
of the Act or notice-filed under the provisions of §116.1(b)(2)(A) of
this title (relating to General Provisions). Likewise, every person employed
or appointed, or authorized by such person to render services which include
the giving of investment advice cannot conduct such activities unless registered
as a dealer/investment adviser, a salesman, or an agent under the provisions
of the Act, or notice-filed as a dealer/investment adviser, a salesman, or
an agent under the provisions of §116.1(b)(2)(B) of this title.
]
Chapter 115.
SECURITIES DEALERS AND AGENTS
or
] agent
, or solicitor
of a dealer or issuer shall sell or offer for sale any securities within
this state without first being registered as a dealer
,
[
or
] agent,
or solicitor
or exempt from registration.
and
]
(M)
] registration with other restrictions
which the Securities Commissioner may impose based upon the facts.
(4)
] a copy of articles of incorporation,
partnership agreement, articles of association, trust agreement, or other
documents which indicate the form of organization, certified by the appropriate
jurisdiction or by an officer or partner of the applicant;
(6)
] assumed name certificate,
if applicable. The improper use by an applicant of an assumed name containing
"incorporated," "corporation," "associates," "limited," or an abbreviation
of one of those words, may be grounds for denying registration of the applicant
if such designation is thereby misleading;
(7)
] a balance sheet prepared in
accordance with generally accepted accounting practices reflecting the financial
condition of the dealer as of a date not more than 90 days prior to the date
of such filing. The balance sheet should be prepared by independent certified
public accountants or independent public accountants, or must instead be attested
by the sworn notarized statement of the applicant's principal financial officer.
If attested by the principal financial officer of the applicant, such officer
shall certify as follows: I am the principal financial officer of (name of
dealer). The accompanying balance sheet has been prepared under my direction
and control and presents fairly its financial position on the dates indicated
to the best of my knowledge, belief, and ability. (Signature and Title).
(8)
] Form 133.23, a franchise tax
certification form;
(9)
] any other information deemed
necessary by the Securities Commissioner to determine a dealer's financial
responsibility or a dealer's or agent's business repute or qualifications;
and
(10)
] the appropriate registration
fee(s).
and abandonment
] of a dealer or
agent [
initial
] application for registration.
(2)
]
If an applicant for registration with the
Securities Commissioner as a dealer or agent fails to make any type of response
to the most recent written request for information relating to an application
that has been pending for six months, the application will be considered withdrawn.
This withdrawal will occur automatically if the applicant fails to respond
to the most recent written request for information sent by certified mail
to the applicant's address as set forth in the application. This certified
written request shall inform the applicant that the application will be considered
withdrawn if a response to the request for information is not received within
30 days from the date of the certified letter. A copy of this subsection and
the most recent written request for information will be included with the
certified letter.
(10)
]
of subsection (a) of this section, directly with the Commissioner. With regard
to the items listed in paragraphs (1) and (2) of subsection (a) of this section,
only page 1 of Form BD and page 1 of Form U-4 for designated officer must
be filed in paper form directly with the Commissioner.
and
]
. Such evidences of registration must be surrendered to
the State Securities Board for cancellation immediately upon completion of
the distribution of securities for which the securities and dealer registrations
have been obtained.
]
free
] access by representatives of the Securities Commissioner. Any
electronic storage media must preserve the records exclusively in a non-rewriteable,
non-erasable format; verify automatically the quality and accuracy of the
storage media recording process; serialize the original and, if applicable,
duplicate units of storage media, and time-date for the required period of
retention the information placed on such electronic storage media; and have
the capacity to download indexes and records preserved on electronic storage
media to an acceptable medium. In the event that a records retention system
commingles records required to be kept under this section with records not
required to be kept, representatives of the Securities Commissioner may review
all commingled records.
All records required to be maintained by
registered dealers shall be maintained at the location designated in Form
133.16 and at other locations registered as branch offices with the Securities
Commissioner.
]
Securities
] Commissioner or his or her
authorized representative
, during regular business hours,
may
:
[
conduct on-site inspections of registered dealers without notice
and shall be entitled to immediate and free access to all records, required
to be maintained pursuant to Board rules or maintained in the normal course
of business of the dealer, and to all locations where such records are kept.
The Commissioner or his or her authorized representative shall be permitted
to make photostatic or computer copies of such records.
]
(c)
]
The
[
In the
alternative, the Securities
] Commissioner or his or her authorized representative
may require that all records required to be maintained pursuant to Board rules
or maintained in the normal course of business of the dealer be made available
in any office of the State Securities Board designated by the Commissioner
or his or her representative within 48 hours of a request or within a greater
time period as the Commissioner or his or her authorized representative deems
reasonable.
Chapter 116.
INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES
person coming within the designation cannot conduct such activity without
first being registered as an investment adviser/dealer under the provisions
of the Act or notice-filed under the provisions of subsection (b)(2)(A) of
this section. Likewise, every person employed or appointed, or authorized
by such person to render services which include the giving of investment advice
cannot conduct such activities unless registered as a dealer/investment adviser,
a salesman, or an agent under the provisions of the Act, or notice-filed as
a dealer/investment adviser, a salesman, or an agent under the provisions
of subsection (b)(2)(B) of this section.
]
(II)
] a consent to service of process;
and
(III)
] an initial fee equal to
the amount that would have been paid had the investment adviser and each investment
adviser representative filed for registration in Texas.
(iii)
] Annually, the investment
adviser files
renewal fees which would have been paid had the investment
adviser and each investment adviser representative been registered in Texas.
[
:
]
(4)
] a copy of articles of incorporation,
partnership agreement, articles of association, trust agreement, or other
documents which indicate the form of organization, certified by the jurisdiction
or by an officer or partner of the applicant;
(6)
] assumed name certificate,
if applicable. The improper use by an applicant of an assumed name containing
"incorporated," "corporation," "limited," or an abbreviation of one of those
words, may be grounds for denying registration of the applicant if such designation
is thereby misleading;
(7)
] a balance sheet prepared in
accordance with generally accepted accounting practices reflecting the financial
condition of the investment adviser as of a date not more than 90 days prior
to the date of such filing. The balance sheet should be prepared by independent
certified public accountants or independent public accountants, or must instead
be attested by the sworn notarized statement of the applicant's principal
financial officer. If attested by the principal financial officer of the applicant,
such officer shall certify as follows: I am the principal financial officer
of (name of investment adviser). The accompanying balance sheet has been prepared
under my direction and control and presents fairly its financial position
on the dates indicated to the best of my knowledge, belief, and ability. (Signature
and Title).
(8)
] Form 133.23, a franchise tax
certification form;
(9)
] disclosure document or Part
II of Form ADV;
(10)
] a copy of the investment
adviser's standard advisory contract;
(11)
] fee schedule;
(12)
] any other information deemed
necessary by the Securities Commissioner to determine an investment adviser's
financial responsibility or an investment adviser's or investment adviser
representative's business repute or qualification; and
(13)
] the appropriate registration
fee(s).
and abandonment
] of an investment
adviser or investment adviser representative [
initial
] application
for registration. [
(1) Any initial application for investment adviser
or investment adviser representative registration that fails to meet registration
requirements within six months of the filing date of the application will
be considered withdrawn without prejudice. A copy of this subsection will
be mailed to the applicant at least 30 days prior to the withdrawal of the
application pursuant to this subsection. (2)
] If an applicant for registration
with the Securities Commissioner as an investment adviser or investment adviser
representative fails to make any type of response to the most recent written
request for information relating to an application that has been pending for
six months, the application will be considered withdrawn. This withdrawal
will occur automatically if the applicant fails to respond to the most recent
written request for information sent by certified mail to the applicant's
address as set forth in the application. This certified written request shall
inform the applicant that the application will be considered withdrawn if
a response to the request for information is not received within 30 days from
the date of the certified letter. A copy of this subsection and the most recent
written request for information will be included with the certified letter.
(12)
] of subsection (a)
of this section, directly with the Commissioner.
free
] access by representatives of the Securities Commissioner. Any
electronic storage media must preserve the records exclusively in a non-rewriteable,
non-erasable format; verify automatically the quality and accuracy of the
storage media recording process; serialize the original and, if applicable,
duplicate units of storage media, and time-date for the required period of
retention the information placed on such electronic storage media; and have
the capacity to download indexes and records preserved on electronic storage
media to an acceptable medium. In the event that a records retention system
commingles records required to be kept under this section with records not
required to be kept, representatives of the Securities Commissioner may review
all commingled records.
All records required to
be maintained by registered investment advisers shall be maintained at the
location designated in Form 133.16 and at such other locations registered
as branch offices with the Securities Commissioner.
]
Securities
] Commissioner or his or her
authorized representative
, during regular business hours,
may
:
[
conduct on-site examinations of registered investment advisers
without notice and shall be entitled to immediate and free access to all records,
required to be maintained pursuant to Board rules or maintained in the course
of normal business of the investment adviser, and to all locations where such
records are kept. The Commissioner or his or her authorized representative
shall be permitted to make photostatic or computer copies of such records.
]
(c)
]
The
[
In the
alternative, the Securities
] Commissioner or his or her authorized representative
may require that all records
required to be
maintained pursuant
to Board rules or maintained in the
normal
course of [
the
normal
] business of the investment adviser be made available in any
office of the State Securities Board designated by the Commissioner or his
or her representative within 48 hours of a request or within a greater time
period as the Commissioner or his or her authorized representative deems reasonable.
An
] investment adviser
may advertise its past performance (both actual performance and hypothetical
or model results) only if the advertisement discloses all material facts necessary
to avoid any unwarranted inference. An investment adviser may not advertise
its performance data if the advertisement:
an
] investment adviser may not advertise gross performance data (i.e.,
performance data that does not reflect the deduction of various fees, commissions,
and expenses that a client would pay) unless the investment adviser also includes
net performance information in an equally prominent manner.
Chapter 133.
FORMS
Chapter 139.
EXEMPTIONS BY RULE OR ORDER