Part 7.
STATE SECURITIES BOARD
Chapter 115.
SECURITIES DEALERS AND AGENTS
7 TAC §115.17
The Texas State Securities Board proposes new §115.17,
concerning anti-money laundering programs for dealers. The proposed rule would
require securities dealers registered in Texas, who are not covered by the
anti-money laundering provisions of the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
(USA PATRIOT) Act of 2001 ("Patriot Act"), to develop and implement an anti-money
laundering program. The Patriot Act does not cover securities dealers who
are non-NASD (National Association of Securities Dealers, Inc.) members.
Micheal Northcutt, Director, Registration Division, and Benette Zivley,
Director, Inspections and Compliance Division, have determined that for the
first five-year period the rule is in effect there will be no foreseeable
fiscal implications for state or local government as a result of enforcing
or administering the rule.
Mr. Northcutt and Mr. Zivley 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 prevent securities dealers from
being used for money laundering or the financing of terrorist activities.
There will be no effect on micro- or small businesses. There is no anticipated
economic cost to persons who are required to comply with the rule as proposed.
There is no anticipated impact on local employment.
In coordination with their review of the proposed requirements, the Board
encourages firms to study the anti-money laundering template for small firms
created by the National Association of Securities Administrators at http://tinyurl.com/ayfqx.
The Board anticipates that use of the template will achieve compliance with
the requirements without cost to the firms.
The Board solicits comments on the proposed rule and asks specifically
for suggestions regarding minimal compliance procedures for anti-money laundering
programs of small dealer firms.
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
Statutory authority: 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.
Cross-reference to Statute: Texas Civil Statutes, Article 581-1, et seq.
Statutes and codes affected: Texas Civil Statutes, Articles 581-13-1, 581-14,
and 581-23-1.
§115.17.Anti-Money Laundering Programs for Dealers.
(a)
This section only applies to a person who is registered
or required to be registered with the Securities Commissioner as a dealer,
but who is not a member of the National Association of Securities Dealers,
Inc. (NASD).
(b)
Each dealer shall develop and implement a written anti-money
laundering program reasonably designed to prevent the dealer from being used
for money laundering or the financing of terrorist activities and to achieve
and monitor compliance. Each dealer's anti-money laundering program must be
approved in writing by its board of directors or trustees, or if it does not
have one, by its sole proprietor, general partner, or other persons who have
similar functions. A dealer shall make its anti-money laundering program available
for inspection by the Securities Commissioner.
(c)
The anti-money laundering program shall at a minimum:
(1)
establish and implement policies, procedures, and internal
controls reasonably designed to prevent the dealer from being used for money
laundering or the financing of terrorist activities and to achieve and monitor
compliance;
(2)
provide for independent testing for compliance to be conducted
by the dealer's personnel or by a qualified outside party;
(3)
designate a person or persons responsible for implementing
and monitoring the operations and internal controls of the program; and
(4)
provide ongoing training for appropriate persons.
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 June 24, 2005.
TRD-200502614
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Earliest possible date of adoption: August 7, 2005
For further information, please call: (512) 305-8303
Chapter 116.
INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES