reglab/statecodes huggingface dataset:
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter D. Examination Requirements › Section 4004.151. Examination Requirements

Sec. 4004.151.  EXAMINATION REQUIREMENTS.  (a)  Except as provided by Subsection (c), the commissioner shall require that, to be registered under this chapter, each applicant must pass a written examination to determine whether the applicant possesses the qualifications and competency to engage in the business of dealing in and selling securities as a dealer or agent, or rendering services as an investment adviser or investment adviser representative.  If the applicant is a corporation or partnership, the officers, directors, or partners to be licensed by the corporation or partnership must pass the written examination described by this section.
(b)  The commissioner may accept some or all of the examinations administered by securities self-regulatory organizations to fulfill the examination requirements of this section.
(c)  The board may waive the examination requirement under Subsection (a) for any applicant or class of applicants.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter D. Examination Requirements › Section 4004.152. Examination Results

Sec. 4004.152.  EXAMINATION RESULTS.  (a)  Except as provided by Subsection (b), the board shall notify each examinee of the results of a registration examination required by this subchapter not later than the 30th day after the date the examinee takes the examination.
(b)  If an examination is graded or reviewed by a testing service:
(1)  the board shall notify each examinee of the results of the examination not later than the 14th day after the date the board receives the results from the testing service; and
(2)  if notice of the examination results will be delayed for longer than 90 days after the examination date, the board shall notify each examinee of the reason for the delay before the 90th day.
(c)  The board may require a testing service to notify an examinee of the results of the examination.
(d)  If requested in writing by an examinee who fails an examination administered under this subchapter, the board shall provide the examinee with an analysis of the examinee's performance on the examination.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter E. Denial or Revocation of Registration › Section 4004.201. Denial of Registration

Sec. 4004.201.  DENIAL OF REGISTRATION.  The commissioner may deny an application for registration under this chapter in accordance with Section 4007.105.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter E. Denial or Revocation of Registration › Section 4004.202. Automatic Revocation of Registration of Agents and Investment Adviser Representatives After Revocation of Registration of Dealer or Investment Adviser

Sec. 4004.202.  AUTOMATIC REVOCATION OF REGISTRATION OF AGENTS AND INVESTMENT ADVISER REPRESENTATIVES AFTER REVOCATION OF REGISTRATION OF DEALER OR INVESTMENT ADVISER.  (a)  The revocation of the registration of a dealer or an investment adviser under Section 4007.105 constitutes a revocation of the registration of any agent of the dealer or of any investment adviser representative of the investment adviser, as appropriate.
(b)  The commissioner shall promptly send notice of the revocation of the registration of a dealer or of an investment adviser to each applicable agent or investment adviser representative.
(c)  All evidences of registration that have been revoked shall be immediately surrendered to the commissioner on request.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter F. Expiration and Renewal of Registration › Section 4004.251. Expiration of Registration

Sec. 4004.251.  EXPIRATION OF REGISTRATION.  Except as provided by Sections 4004.252(a) and 4004.253, all registrations expire at the end of the calendar year.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter F. Expiration and Renewal of Registration › Section 4004.252. Renewal of Registration

Sec. 4004.252.  RENEWAL OF REGISTRATION.  (a)  A person may renew an unexpired registration by filing a renewal application in the form the commissioner prescribes and by paying the required renewal fee to the board before the registration's expiration date.
(b)  New registrations for the year succeeding the expiration of registrations shall be issued on the filing of a written application and payment of the fee as provided by this subchapter.  If an applicant registers after December 1 of any year, the applicant may immediately apply for a renewal of the applicant's registration for the ensuing year.
(c)  The filing of additional statements or the provision of additional information is not required for renewal unless specifically requested by the commissioner.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter F. Expiration and Renewal of Registration › Section 4004.253. Staggered Renewal; Proration of Registration Renewal Fee

Sec. 4004.253.  STAGGERED RENEWAL; PRORATION OF REGISTRATION RENEWAL FEE.  (a)  The board by rule may adopt a system under which registrations expire on various dates during the year.
(b)  For the year in which the registration expiration date is changed, registration fees payable after the 60th day and before the 30th day before January 1 of the next year shall be prorated on a monthly basis so that each person pays only that portion of the registration fee that is allocable to the number of months during which the registration is valid.  On renewal of the registration on the new expiration date, the total registration renewal fee is payable.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter F. Expiration and Renewal of Registration › Section 4004.254. Notice of Expiration Required

Sec. 4004.254.  NOTICE OF EXPIRATION REQUIRED.  Not later than the 30th day before the date a person's registration is scheduled to expire, the commissioner shall send written notice of the impending expiration to the person at the person's last known address according to the board's records.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter F. Expiration and Renewal of Registration › Section 4004.255. Renewal of Expired Registration

Sec. 4004.255.  RENEWAL OF EXPIRED REGISTRATION.  (a)  A person whose registration has been expired for 90 days or less may renew the registration by:
(1)  filing a renewal application with the commissioner; and
(2)  paying to the board:
(A)  the required renewal fee; and
(B)  a fee that is equal to one-half of the original registration application fee.
(b)  A person whose registration has been expired for more than 90 days but less than two years may renew the registration by:
(1)  filing a renewal application with the commissioner; and
(2)  paying to the board:
(A)  all unpaid renewal fees; and
(B)  a fee that is equal to the original registration application fee.
(c)  A person whose registration has been expired for two years or more may not renew the registration.  The person may obtain a new registration by complying with the requirements and procedures, including the examination requirements, for obtaining an original registration.  The person must pay to the board a fee that is equal to the original registration application fee.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter F. Expiration and Renewal of Registration › Section 4004.256. Effect of Expired Registration

Sec. 4004.256.  EFFECT OF EXPIRED REGISTRATION.  A person who sells securities or who renders investment advising services after the person's registration has expired but before the registration is renewed is subject to the sanctions provided by this title for selling securities or rendering investment advice without being registered.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter F. Expiration and Renewal of Registration › Section 4004.257. Continuing Education

Sec. 4004.257.  CONTINUING EDUCATION.  (a)  The board may recognize, prepare, or administer continuing education programs for a person who is registered under this chapter.
(b)  A person who is registered under this chapter must participate in continuing education programs if the board requires participation as a condition of maintaining the person's certificate or evidence of registration.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter G. Notice Filings of Federal Covered Investment Advisers and Certain Representatives of Federal Covered Investment Advisers › Section 4004.301. Applicability

Sec. 4004.301.  APPLICABILITY.  This subchapter does not apply to an investment adviser or investment adviser representative who is exempt from registration under this title or by board rule.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter G. Notice Filings of Federal Covered Investment Advisers and Certain Representatives of Federal Covered Investment Advisers › Section 4004.302. Notice Filing

Sec. 4004.302.  NOTICE FILING.  The board by rule shall authorize a federal covered investment adviser or a representative of a federal covered investment adviser to render services as an investment adviser in this state if the commissioner receives:
(1)  a notice filing submitted by the adviser or representative that:
(A)  is on the form and contains the information the commissioner prescribes; and
(B)  if applicable, contains a consent to service appointing the commissioner as the adviser's attorney for service of process, as required by Section 4001.102; and
(2)  a notice filing fee in the amount determined under Chapter 4006.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter G. Notice Filings of Federal Covered Investment Advisers and Certain Representatives of Federal Covered Investment Advisers › Section 4004.303. Effective Date of Notice Filing

Sec. 4004.303.  EFFECTIVE DATE OF NOTICE FILING.  On the commissioner's receipt of a notice filing and fee payment that meet the requirements of Section 4004.302, the notice filing takes effect and is valid for the remainder of the calendar year.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter G. Notice Filings of Federal Covered Investment Advisers and Certain Representatives of Federal Covered Investment Advisers › Section 4004.304. Renewal

Sec. 4004.304.  RENEWAL.  A federal covered investment adviser or a representative of a federal covered investment adviser may renew a notice filing on or before the filing's expiration date if the commissioner receives:
(1)  a renewal notice filing submitted by the adviser or representative; and
(2)  a renewal fee in the amount determined under Chapter 4006.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter H. Requirements for Protection of Vulnerable Adults From Financial Exploitation › Section 4004.351. Definitions

Sec. 4004.351.  DEFINITIONS.  In this subchapter:
(1)  "Department" means the Department of Family and Protective Services.
(2)  "Exploitation," "financial exploitation," and "vulnerable adult" have the meanings assigned by Section 281.001, Finance Code.
(3)  "Securities professional" means an agent, an investment adviser representative, or a person who serves in a supervisory or compliance capacity for a dealer or investment adviser.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
Amended by:
Acts 2021, 87th Leg., R.S., Ch. 915 (H.B. 3607), Sec. 9.106, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter H. Requirements for Protection of Vulnerable Adults From Financial Exploitation › Section 4004.353. Form and Content of Report

Sec. 4004.353.  FORM AND CONTENT OF REPORT.  The board by rule shall prescribe the form and content of the report required to be submitted by a dealer or investment adviser to the commissioner under Section 4004.352(b).
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter H. Requirements for Protection of Vulnerable Adults From Financial Exploitation › Section 4004.354. Notifying Third Parties of Suspected Financial Exploitation of Vulnerable Adults

Sec. 4004.354.  NOTIFYING THIRD PARTIES OF SUSPECTED FINANCIAL EXPLOITATION OF VULNERABLE ADULTS.  If a dealer or investment adviser submits reports of suspected financial exploitation of a vulnerable adult to the commissioner and the department under Section 4004.352(b), the dealer or investment adviser may at the time the dealer or investment adviser submits the reports also notify a third party reasonably associated with the vulnerable adult of the suspected financial exploitation, unless the dealer or investment adviser suspects the third party of financial exploitation of the vulnerable adult.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter H. Requirements for Protection of Vulnerable Adults From Financial Exploitation › Section 4004.355. Temporary Hold on Transactions in Certain Cases of Suspected Financial Exploitation of Vulnerable Adults

Sec. 4004.355.  TEMPORARY HOLD ON TRANSACTIONS IN CERTAIN CASES OF SUSPECTED FINANCIAL EXPLOITATION OF VULNERABLE ADULTS.  (a)  Notwithstanding any other law, a dealer or investment adviser:
(1)  may place a hold on any transaction that involves an account of a vulnerable adult if the dealer or investment adviser:
(A)  submits a report of suspected financial exploitation of the vulnerable adult to the commissioner and the department under Section 4004.352(b); and
(B)  has cause to believe the transaction is related to the suspected financial exploitation alleged in the report; and
(2)  must place a hold on any transaction involving an account of a vulnerable adult if the hold is requested by the commissioner, the department, or a law enforcement agency.
(b)  Subject to Subsection (c), a hold placed on any transaction under Subsection (a) expires on the 10th business day after the date the hold is placed.
(c)  A dealer or investment adviser may extend a hold placed on any transaction under Subsection (a) for a period not to exceed 30 business days after the expiration of the period prescribed by Subsection (b) if requested by a state or federal agency or a law enforcement agency investigating the suspected financial exploitation.  The dealer or investment adviser may also petition a court to extend a hold placed on any transaction under Subsection (a) beyond the period prescribed by Subsection (b).  A court may enter an order extending or shortening a hold or providing other relief.
(d)  Each dealer and investment adviser shall adopt internal policies, programs, plans, or procedures for placing a hold on a transaction involving an account of a vulnerable adult under Subsection (a).
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
Amended by:
Acts 2021, 87th Leg., R.S., Ch. 502 (H.B. 4477), Sec. 3, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter H. Requirements for Protection of Vulnerable Adults From Financial Exploitation › Section 4004.356. Immunity

Sec. 4004.356.  IMMUNITY.  (a)  A securities professional or person serving in a legal capacity for a dealer or investment adviser who makes a notification under Section 4004.352(a), a dealer or investment adviser that submits a report under Section 4004.352(b) or makes a notification to a third party under Section 4004.354, or a securities professional or person serving in a legal capacity who or dealer or investment adviser that testifies or otherwise participates in a judicial proceeding arising from a notification or report is immune from any civil or criminal liability arising from the notification, report, testimony, or participation in the judicial proceeding, unless the securities professional, person serving in a legal capacity for the dealer or investment adviser, or dealer or investment adviser acted in bad faith or with a malicious purpose.
(b)  A dealer or investment adviser that in good faith and with the exercise of reasonable care places or does not place a hold on any transaction under Section 4004.355(a)(1) is immune from civil or criminal liability or disciplinary action resulting from the action or failure to act.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter H. Requirements for Protection of Vulnerable Adults From Financial Exploitation › Section 4004.357. Records

Sec. 4004.357.  RECORDS.  To the extent permitted by state or federal law, a dealer or investment adviser, on request, shall provide access to or copies of records relevant to the suspected financial exploitation of a vulnerable adult to the commissioner, the department, a law enforcement agency, or a prosecuting attorney's office, either as part of a report to the commissioner, department, law enforcement agency, or prosecuting attorney's office or at the request of the commissioner, department, law enforcement agency, or prosecuting attorney's office in accordance with an investigation.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.001. Scope of Exemption

Sec. 4005.001.  SCOPE OF EXEMPTION.  Except as expressly provided otherwise in this title, this title does not apply to any sale of, offer for sale of, solicitation of, subscription to, dealing in, or delivery of a security made in a transaction or under a condition specified in this subchapter.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.002. Court Supervised Sales

Sec. 4005.002.  COURT SUPERVISED SALES.  The exemption provided by Section 4005.001 applies to the sale of a security made:
(1)  at a judicial, executor's, administrator's, guardian's, or conservator's sale; or
(2)  by a receiver or trustee in insolvency or bankruptcy.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.003. Pledged Securities

Sec. 4005.003.  PLEDGED SECURITIES.  The exemption provided by Section 4005.001 applies to the sale of a security pledged in good faith as security for a bona fide debt that is made by or for the account of a pledge holder or mortgagee that is selling the security or offering the security for sale or delivery in the ordinary course of business to liquidate the debt.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.004. Isolated Transactions

Sec. 4005.004.  ISOLATED TRANSACTIONS.  (a)  The exemption provided by Section 4005.001 applies to the sale of a security that is made by a vendor or on a vendor's behalf by a dealer or other agent and is made in the ordinary course of a bona fide personal investment of the vendor's personal holdings or a change in the investment if:
(1)  the vendor is not engaged in the business of selling securities; and
(2)  the sale is an isolated transaction not made in the course of repeated and consecutive transactions of a like character.
(b)  A sale or offer for sale under Subsection (a) is not exempt from this title if the sale or offer is made or intended to be made by the vendor or the vendor's agent for the direct or indirect benefit of a company other than the individual vendor.  The usual commission of a vendor's agent is not a benefit for the purposes of this subsection.
(c)  A person acting as an agent for a vendor in any sale or offer for sale under Subsection (a) must be registered under this title.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.005. Insurance Company Sales

Sec. 4005.005.  INSURANCE COMPANY SALES.  (a)  The exemption provided by Section 4005.001 applies to the sale of a security made by or on behalf of an insurance company that:
(1)  is subject to the supervision or control of the Texas Department of Insurance; and
(2)  owns the security as a legal and bona fide investment.
(b)  A sale or offer for sale under Subsection (a) is not exempt from this title if the sale or offer is made or intended to be made directly or indirectly for the benefit of another company.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.006. Stock Dividends

Sec. 4005.006.  STOCK DIVIDENDS.  The exemption provided by Section 4005.001 applies to a distribution of securities by a corporation directly to the corporation's stockholders as a stock dividend or other distribution paid out of earnings or surplus.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.007. Existing Security Holders

Sec. 4005.007.  EXISTING SECURITY HOLDERS.  (a)  In this section, "existing security holder" includes a person who is a holder of a convertible security or nontransferable warrant at the time of the transaction.
(b)  The exemption provided by Section 4005.001 applies to an offer by the issuer of its securities to the issuer's existing security holders and to any transaction pursuant to the offer if no commission or other remuneration, other than a stand-by commission, is paid or given directly or indirectly for soliciting any security holder in this state.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.008. Financial Distress

Sec. 4005.008.  FINANCIAL DISTRESS.  (a)  The exemption provided by Section 4005.001 applies to the issuance in good faith of securities by a company:
(1)  to the company's security holders or creditors in the process of a bona fide reorganization of the company made in good faith; or
(2)  to the security holders or creditors of a predecessor company if the issuing company is organized solely for the purpose of taking over the assets and continuing the business of the predecessor company.
(b)  The exemption provided by Section 4005.001 applies to an issuance of securities described by Subsection (a) only if:
(1)  the securities are issued in exchange for securities of the security holders, claims of the creditors, or both; and
(2)  the security holders or creditors do not pay, give, or promise any consideration, and are not obligated to pay or give any consideration, for the securities issued other than the securities of or claims against the company or the company's predecessor held or owned by the security holders or creditors at the time of the issuance.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.009. Merger, Consolidation, and Asset Sales

Sec. 4005.009.  MERGER, CONSOLIDATION,  AND ASSET SALES.  (a)  The exemption provided by Section 4005.001 applies to the issuance or sale of securities by one corporation to another corporation or to the security holders of the corporation pursuant to a vote by one or more classes of those security holders, as required by the certificate of formation, certificate of incorporation, or applicable corporation statute, in connection with:
(1)  a merger;
(2)  a consolidation; or
(3)  a sale of corporate assets.
(b)  The exemption provided by Section 4005.001 applies to an issuance or sale described by Subsection (a) only if the security holders do not pay, give, or promise any consideration, and are not obligated to pay or give any consideration, for the securities issued or sold other than the corporation's securities held by the security holders at the time of the issuance or sale.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.010. Exchange of Shares

Sec. 4005.010.  EXCHANGE OF SHARES.  (a)  The exemption provided by Section 4005.001 applies to the issuance or sale of securities by one corporation to the corporation's stockholders in connection with:
(1)  the change of par value stock to no par value stock or vice versa; or
(2)  the exchange of outstanding shares for the same or a greater or smaller number of shares.
(b)  The exemption provided by Section 4005.001 applies to an issuance or sale described by Subsection (a) only if the security holders do not pay, give, or promise any consideration, and are not obligated to pay or give any consideration, for the securities issued or sold other than the corporation's securities held by the security holders at the time of the issuance or sale.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.011. Institutional Investors

Sec. 4005.011.  INSTITUTIONAL INVESTORS.  The exemption provided by Section 4005.001 applies to the sale of a security to:
(1)  a bank;
(2)  a trust company;
(3)  a building and loan association;
(4)  a savings and loan association;
(5)  an insurance company;
(6)  a surety or guaranty company;
(7)  a savings institution;
(8)  an investment company as defined by the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.);
(9)  a small business investment company as defined by the Small Business Investment Act of 1958 (15 U.S.C. Section 661 et seq.); or
(10)  a registered dealer actually engaged in buying and selling securities.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.012. Private Limited Offerings

Sec. 4005.012.  PRIVATE LIMITED OFFERINGS.  (a)  The exemption provided by Section 4005.001 applies to the following sales made without any public solicitation or advertisement:
(1)  the sale of a security by the issuer of the security if the total number of security holders of the issuer does not exceed 35 persons after the sale; or
(2)  the sale by an issuer of the issuer's securities to not more than 15 persons during the 12-month period ending with the date of the sale if the persons purchased the securities for their own account and not for distribution.
(b)  For the purpose of determining the number of persons under Subsection (a)(2), the following persons are not included:
(1)  a purchaser of a security in a transaction exempt under another provision of this subchapter;
(2)  a purchaser of a security exempt under Subchapter B; and
(3)  a purchaser of a security that is part of an offering registered under Subchapter A, B, or C, Chapter 4003.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.013. Compensation Plans and Contracts

Sec. 4005.013.  COMPENSATION PLANS AND CONTRACTS.  The exemption provided by Section 4005.001 applies to the sale or distribution of a security without any public solicitation or advertisement if the sale or distribution is made:
(1)  by an issuer of the security or any participating subsidiary of the issuer; and
(2)  under a bona fide thrift, savings, stock purchase, retirement, pension, profit-sharing, option, bonus, appreciation right, incentive, or similar written compensation plan or written compensation contract established by the issuer or the issuer's subsidiary for the benefit of:
(A)  employees, directors, general partners, managers, or officers of the issuer or subsidiary;
(B)  the issuer's or subsidiary's trustees, if the issuer or subsidiary is a business trust; or
(C)  consultants or advisers who provide to the issuer or subsidiary bona fide services unrelated to the offer or sale of securities in a capital-raising transaction.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.014. Mortgages and Liens

Sec. 4005.014.  MORTGAGES AND LIENS.  The exemption provided by Section 4005.001 applies to a single transaction in which:
(1)  the securities disposed of consist exclusively of notes or bonds secured by a mortgage or vendor's lien on real property or tangible personal property; and
(2)  the entire mortgage or lien is sold or transferred with all of the notes or bonds secured by the mortgage or lien.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.015. Nonprofits

Sec. 4005.015.  NONPROFITS.  The exemption provided by Section 4005.001 applies to the disposition of a security or membership:
(1)  issued by a corporation or association:
(A)  that is organized exclusively for a religious, educational, benevolent, fraternal, charitable, or reformatory purpose;
(B)  that is not organized for pecuniary profit; and
(C)  for which no part of the net earnings inures to the benefit of any stockholder, shareholder, or individual member of the corporation or association; and
(2)  for which no commission or remuneration is paid or given or is to be paid or given.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.016. Financial Institutions

Sec. 4005.016.  FINANCIAL INSTITUTIONS.  The exemption provided by Section 4005.001 applies to:
(1)  the sale, by the issuer itself or by a registered dealer, of any security issued or guaranteed by:
(A)  a bank organized and subject to regulation under the laws of:
(i)  the United States; or
(ii)  a state, territory, or insular possession of the United States; or
(B)  a savings and loan association organized and subject to regulation under the laws of this state; or
(2)  the sale, by the issuer itself, of any security issued by a federal savings and loan association.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.017. Government Issuance or Guarantee

Sec. 4005.017.  GOVERNMENT ISSUANCE OR GUARANTEE.  The exemption provided by Section 4005.001 applies to the sale, by the issuer itself or by a registered dealer, of any security either issued or guaranteed by:
(1)  the United States;
(2)  the District of Columbia, a state, territory, or insular possession of the United States;
(3)  a political subdivision of a state of the United States, including a county, city, municipal corporation, district, and authority; or
(4)  a public or governmental agency or instrumentality of an entity described by Subdivisions (1)-(3).
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.018. Cooperatives

Sec. 4005.018.  COOPERATIVES.  (a)  The exemption provided by Section 4005.001 applies to:
(1)  the sale and issuance of:
(A)  any securities issued by a farmers' cooperative marketing association organized under Chapter 52, Agriculture Code, or the predecessor of that law (Article 5737 et seq., Revised Statutes);
(B)  any securities issued by a mutual loan corporation organized under Chapter 54, Agriculture Code, or the predecessor of that law (Article 2500 et seq., Revised Statutes); or
(C)  any equity securities issued by a cooperative association organized under the Texas Cooperative Association Law as described by Section 1.008(i), Business Organizations Code, or the predecessor of that law (Article 1396-50.01, Vernon's Texas Civil Statutes); or
(2)  the sale of any securities issued by a farmers' cooperative society organized under Chapter 51, Agriculture Code, or the predecessor of that law (Article 2514 et seq., Revised Statutes).
(b)  The exemption provided by Section 4005.001 does not apply to an agent of a farmers' cooperative marketing association, mutual loan corporation, cooperative association, or farmers' cooperative society if the sale of the securities is made to:
(1)  nonmembers; or
(2)  members and a commission is paid or contracted to be paid to the agent.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.020. Unsolicited Orders

Sec. 4005.020.  UNSOLICITED ORDERS.  The exemption provided by Section 4005.001 applies to a dealer's execution of an unsolicited order for the purchase of securities for which the initial offering of the securities has been completed if the dealer:
(1)  acts solely as an agent for the purchaser;
(2)  does not have a direct or indirect interest in the sale or distribution of securities ordered; and
(3)  does not receive a commission, profit, or other compensation from any source other than the purchaser.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.021. Oil, Gas, or Mining Interests

Sec. 4005.021.  OIL, GAS, OR MINING INTERESTS.  (a)  Subject to Subsection (b), the exemption provided by Section 4005.001 applies to the sales of interests in and under oil, gas, or mining leases, fees, or titles, or contracts relating to those interests in which:
(1)  the total number of sales by any one owner of interests, whether whole, fractional, segregated, or undivided in any single oil, gas, or mineral lease, fee, or title, or contract relating to those interests, is not more than 35 during a 12 consecutive month period; and
(2)  no use is made of advertisement or public solicitation.
(b)  If a sale of an interest described by Subsection (a) is made for an owner of the interest by an agent of the owner, the exemption under that subsection applies only if the agent is registered under this title.
(c)  An oil, gas, or mineral unitization or pooling agreement may not be considered a sale under this title.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.022. Issuer Sales of Exempt Securities

Sec. 4005.022.  ISSUER SALES OF EXEMPT SECURITIES.  (a)  The exemption provided by Section 4005.001 applies to the sale by the issuer itself or by a subsidiary of the issuer of any securities that would be exempt under Subchapter B if sold by a registered dealer.
(b)  This section does not apply to securities that would be exempt under Section 4005.053.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.023. Options

Sec. 4005.023.  OPTIONS.  (a)  In this section, "option" means and includes a put, call, straddle, or other option or privilege of buying from another person or selling to another person a specified number of securities at a specified price, without being obligated to do so, on or before a specified date. The term does not include an option or privilege that by its terms may terminate before the specified date on the occurrence of a specified event.
(b)  The exemption provided by Section 4005.001 applies to a sale of an option by or through a registered dealer if, at the time of the sale:
(1)  the performance of the terms of the option is guaranteed by a broker-dealer registered under the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.);
(2)  the guaranty and broker-dealer described by Subdivision (1) are in compliance with any requirements or rules adopted or approved by the board;
(3)  the option is not sold by or for the benefit of the issuer of the security that may be purchased or sold on exercise of the option;
(4)  the security that may be purchased or sold on exercise of the option is either:
(A)  exempted under Section 4005.054; or
(B)  quoted on the NASDAQ stock market and meets the requirements of Sections 4005.019(b)(1), (6), (7), and (8); and
(5)  the sale is not directly or indirectly for the purposes of providing or furthering a scheme to violate or evade this title.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.024. Exemptions by Rule or Order

Sec. 4005.024.  EXEMPTIONS BY RULE OR ORDER.  The exemption provided by Section 4005.001 applies to the sale of a security made in other transactions or under other conditions not specified in this subchapter as the board by rule or order may define or prescribe, conditionally or unconditionally.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter A. Exempt Transactions › Section 4005.025. Issuance or Transfer to Nonprofits

Sec. 4005.025.  ISSUANCE OR TRANSFER TO NONPROFITS.  The exemption provided by Section 4005.001 applies to the issuance or transfer of securities by the issuer of its securities to a corporation or association organized exclusively for a religious, educational, benevolent, fraternal, charitable, or reformatory purpose and not for pecuniary profit, only if:
(1)  the corporation or association does not provide anything of value for the securities other than, for a security that is an option, payment of the exercise price of the option to acquire the securities at a price not to exceed the fair market value of the underlying securities on the date the option was granted;
(2)  the issuance or transfer is not made for the purpose of raising capital for the issuer;
(3)  a commission or other form of consideration is not paid or provided to a third party with respect to the issuance or transfer; and
(4)  the issuance or transfer is not directly or indirectly for the purposes of providing or furthering a scheme to violate or evade this title.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter B. Exempt Securities › Section 4005.051. Scope of Exemption

Sec. 4005.051.  SCOPE OF EXEMPTION.  Except as expressly provided otherwise in this title, this title does not apply to a security described by this subchapter when offered for sale, sold, or dealt in by a registered dealer or a registered dealer's agent.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter B. Exempt Securities › Section 4005.052. Railroads or Utilities

Sec. 4005.052.  RAILROADS OR UTILITIES.  The exemption provided by Section 4005.051 applies to:
(1)  a security issued or guaranteed either as to principal, interest, or dividend by a corporation that owns or operates a railroad or any other public service utility if the corporation is subject to regulation or supervision either as to the corporation's rates and charges or as to the issuance of the corporation's own securities by:
(A)  the Texas Department of Transportation; or
(B)  a public commission, an agency, a board, or officers of:
(i)  the government of the United States;
(ii)  the District of Columbia, a state, territory, or insular possession of the United States, or a municipal corporation; or
(iii)  Canada or a province of Canada; or
(2)  equipment trust certificates or equipment notes or bonds:
(A)  that are based on chattel mortgages, leases or agreements for conditional sale of cars, motive power or other rolling stock mortgages, leased or sold to or provided for the use of or on a railroad or other public service utility corporation if the corporation is subject to regulation or supervision as described by Subdivision (1); or
(B)  for which the ownership or title of the equipment is pledged or retained to secure the payment of the equipment trust certificates, bonds, or notes, in accordance with the laws of:
(i)  the United States;
(ii)  the District of Columbia or a state, territory, or insular possession of the United States; or
(iii)  Canada or a province of Canada.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter B. Exempt Securities › Section 4005.053. Nonprofit Corporations

Sec. 4005.053.  NONPROFIT CORPORATIONS.  The exemption provided by Section 4005.051 applies to a security issued and sold by a domestic corporation that:
(1)  is not organized and engaged in business for profit; and
(2)  does not have capital stock.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4005 - Exemptions › Subchapter B. Exempt Securities › Section 4005.054. Listed Securities

Sec. 4005.054.  LISTED SECURITIES.  (a)  The exemption provided by Section 4005.051 applies to securities that at the time of sale:
(1)  are fully listed on:
(A)  the American Stock Exchange;
(B)  the Boston Stock Exchange;
(C)  the Chicago Stock Exchange;
(D)  the New York Stock Exchange; or
(E)  a recognized and responsible stock exchange approved by the commissioner, as provided by Subchapter C;
(2)  are designated or approved for designation on notice of issuance on the national market system of the NASDAQ stock market; or
(3)  are senior to, or if of the same issue, on a parity with, any securities listed or designated as described by Subdivision (1) or (2) or represented by subscription rights that are listed or designated as described by Subdivision (1) or (2), or evidence of indebtedness guaranteed by a company, any stock of which is listed or designated as described by Subdivision (1) or (2).
(b)  Securities described by Subsection (a) are exempt only so long as the exchange on which the securities are listed remains approved under this section or Subchapter C.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.