reglab/statecodes huggingface dataset:
2023 Texas Statutes › Government Code › Title 12 - Securities Act › Chapter 4003 - Securities › Subchapter A. Permit Qualifying Securities for Sale › Section 4003.006. Examination of and Determination on Permit Application

Sec. 4003.006.  EXAMINATION OF AND DETERMINATION ON PERMIT APPLICATION.  (a)  On the filing of an application for a permit qualifying securities for sale under this subchapter, the commissioner shall examine the application and the papers and documents filed with the application.
(b)  After the examination, the commissioner shall:
(1)  issue a permit to the applicant authorizing the applicant to issue and dispose of the securities if the commissioner determines that:
(A)  the applicant's proposed plan of business appears to be fair, just, and equitable;
(B)  any consideration paid or to be paid by promoters for the securities is fair, just, and equitable if that consideration is less than the proposed offering price to the public; and
(C)  the securities the applicant proposes to issue and the methods to be used by the applicant in issuing and disposing of the securities will not work a fraud upon the purchaser of the securities; or
(2)  deny the application for a permit and notify the applicant in writing of the commissioner's decision if the commissioner determines that the applicant's proposed plan of business appears to be unfair, unjust, or inequitable.
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 4003 - Securities › Subchapter A. Permit Qualifying Securities for Sale › Section 4003.007. Form and Contents of Permit

Sec. 4003.007.  FORM AND CONTENTS OF PERMIT.  A permit qualifying securities for sale must:
(1)  be in the form the commissioner prescribes; and
(2)  state in bold type that the issuance of the permit is permissive only and does not constitute a recommendation or endorsement of the securities permitted to be issued.
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 4003 - Securities › Subchapter A. Permit Qualifying Securities for Sale › Section 4003.008. Term of Permit

Sec. 4003.008.  TERM OF PERMIT.  A permit qualifying securities for sale that is issued under this subchapter is valid for one 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 4003 - Securities › Subchapter A. Permit Qualifying Securities for Sale › Section 4003.009. Renewal of Permit

Sec. 4003.009.  RENEWAL OF PERMIT.  (a)  An issuer or registered dealer may file a renewal application with the commissioner if the securities authorized to be sold under a permit qualifying securities for sale that is issued under this subchapter are not sold before the permit expires.
(b)  The renewal application must:
(1)  state:
(A)  the total number of shares sold in this state;
(B)  the total number of shares sold outside this state; and
(C)  the total number of shares outstanding;
(2)  contain a detailed balance sheet;
(3)  contain an operating statement; and
(4)  provide any other information the commissioner may require.
(c)  The commissioner shall examine a renewal application and issue a renewal permit or deny the application using the standards stated in Section 4003.006 applicable to an original application.
(d)  If issued, a renewal permit:
(1)  is valid for one year; and
(2)  must be in the form the commissioner prescribes.
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 4003 - Securities › Subchapter A. Permit Qualifying Securities for Sale › Section 4003.010. Use of Permit for Certain Purposes Prohibited

Sec. 4003.010.  USE OF PERMIT FOR CERTAIN PURPOSES PROHIBITED.  A dealer, issuer, or agent may not use a permit qualifying securities for sale in connection with a sale or effort to sell a security.
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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.051. Eligibility for Registration by Notification

Sec. 4003.051.  ELIGIBILITY FOR REGISTRATION BY NOTIFICATION.  (a)  Securities may be registered by notification under this subchapter if the securities are issued by an issuer that:
(1)  has been in continuous operation for at least three years; and
(2)  has shown, during at least the three years preceding the date of registration under this subchapter, average annual net earnings after deducting all prior charges, including income taxes but not including charges on securities to be retired out of the proceeds of sale, as follows:
(A)  for interest-bearing securities, not less than one and one-half times the annual interest charges on those securities and on all other outstanding interest-bearing securities of equal rank;
(B)  for securities with a specified dividend rate, not less than one and one-half times the annual dividend requirements on those securities and on all other outstanding securities of equal rank; and
(C)  for securities with no specified dividend rate, not less than five percent on all outstanding securities of equal rank, together with the amount of those securities then offered for sale, based on the maximum price at which the securities are to be offered for sale.
(b)  For purposes of calculating average annual net earnings under Subsection (a)(2)(C), an issuer's ownership of more than 50 percent of the outstanding voting stock of a corporation:
(1)  is construed as the issuer's proportionate ownership of that corporation; and
(2)  permits the inclusion of that corporation's earnings applicable to the payment of dividends on the stock owned in the earnings of the issuer of the securities being registered by notification.
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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.052. Registration Statement Required

Sec. 4003.052.  REGISTRATION STATEMENT REQUIRED.  (a)  To register securities by notification that are entitled to that registration, an issuer of the securities or a registered dealer must file with the commissioner a registration statement that complies with this section.
(b)  A registration statement filed under this section must:
(1)  be in the form the commissioner prescribes;
(2)  be signed by the applicant filing the statement; and
(3)  contain the following information:
(A)  the name and business address of the main office of the issuer of the securities to be registered and the address of the issuer's principal office, if any, in this state;
(B)  the title of the securities to be registered and the total amount of securities to be offered;
(C)  the price at which the securities are to be offered for sale to the public, the amount of securities to be offered in this state, and the amount of the registration fee, computed as provided by Chapter 4006;
(D)  a brief statement of the facts showing that the securities are entitled to be registered by notification;
(E)  the name and business address of the applicant filing the statement;
(F)  subject to Subsection (c) and except as provided by Section 4003.053, financial statements that include, for at least the three years preceding the date of registration:
(i)  a certified income statement;
(ii)  a certified balance sheet; and
(iii)  a certified statement of stockholders' equity;
(G)  a copy of any prospectus describing the securities; and
(H)  a filing of a consent to service of process conforming to the requirements of Section 4001.102, if the issuer:
(i)  is registering the securities; and
(ii)  is not a resident of this state or incorporated or formed under the laws of this state.
(c)  The financial statements described by Subsection (b)(3)(F) must reflect the financial condition of the issuer of the securities to be registered on a date not earlier than the 90th day before the date the issuer or registered dealer files the registration statement.
(d)  Filing a registration statement that complies with this section constitutes the registration of the securities by notification, subject to Section 4003.055.
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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.053. Exception to Certification Requirement for Financial Statements

Sec. 4003.053.  EXCEPTION TO CERTIFICATION REQUIREMENT FOR FINANCIAL STATEMENTS.  Financial statements filed as required by this subchapter are not required to be certified by an independent certified public accountant or independent public accountant if:
(1)  the fiscal year of the issuer of the securities to be registered ended on a date earlier than the 90th day before the date of the filing; and
(2)  financial statements in addition to those required by this subchapter are filed that:
(A)  contain the information required by Section 4003.052; and
(B)  are certified by an independent certified public accountant or independent public accountant as of the end of the issuer's preceding fiscal 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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.054. Registration Procedures

Sec. 4003.054.  REGISTRATION PROCEDURES.  (a)  The commissioner shall complete the procedures specified by this section to register securities entitled to registration by notification.
(b)  The commissioner shall:
(1)  examine the registration statement filed under Section 4003.052 and the accompanying papers to determine their sufficiency under the requirements of this subchapter; and
(2)  record the registration by notification of the securities described on receipt of:
(A)  the registration statement;
(B)  any prospectus;
(C)  payment of the filing fee and registration fee; and
(D)  a consent to service of process, if required.
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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.055. Effective Date of Registration by Notification

Sec. 4003.055.  EFFECTIVE DATE OF REGISTRATION BY NOTIFICATION.  (a)  Except as provided by Subsection (b), the registration of securities by notification takes effect five days after the date the commissioner receives the registration statement filed under Section 4003.052 and all accompanying papers.
(b)  The commissioner may waive or reduce the five-day waiting period if the commissioner determines that the public will not be injured by the waiver or reduction of the waiting period.
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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.056. Effect of Registration by Notification

Sec. 4003.056.  EFFECT OF REGISTRATION BY NOTIFICATION.  On registration of securities by notification, the securities may be sold in this state by a registered dealer or a registered 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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.057. Term of Registration

Sec. 4003.057.  TERM OF REGISTRATION.  A registration of securities by notification is effective for one 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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.058. Renewal of Registration

Sec. 4003.058.  RENEWAL OF REGISTRATION.  A registration of securities by notification may be renewed for additional periods of one year if:
(1)  the securities are entitled to registration under this subchapter at the time of renewal; and
(2)  a new filing is made under this subchapter together with the payment of the renewal fee of $10.
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 4003 - Securities › Subchapter B. Registration by Notification › Section 4003.059. Insufficient or Fraudulent Registration Statement

Sec. 4003.059.  INSUFFICIENT OR FRAUDULENT REGISTRATION STATEMENT.  (a)  If at any time, in the commissioner's opinion, the information in a registration statement filed under this subchapter is insufficient to establish that the securities described in the statement are or were entitled to registration by notification under this subchapter, or that the registration information contains or contained false, misleading, or fraudulent facts, the commissioner may order the applicant who filed the statement to cease and desist from selling or offering for sale the securities registered or proposed to be registered by notification under this subchapter until additional information is filed with the commissioner that in the commissioner's judgment is necessary to establish that those securities are or were entitled to registration by notification under this subchapter.
(b)  The provisions of Section 4007.107 relating to hearings apply to an order entered under this section.
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 4003 - Securities › Subchapter C. Registration by Coordination › Section 4003.101. Eligibility for Registration by Coordination

Sec. 4003.101.  ELIGIBILITY FOR REGISTRATION BY COORDINATION.  A security may be registered by coordination if a registration statement has been filed under the Securities Act of 1933 (15 U.S.C. Section 77a et seq.) in connection with the same offering.
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 4003 - Securities › Subchapter C. Registration by Coordination › Section 4003.102. Registration Statement Required

Sec. 4003.102.  REGISTRATION STATEMENT REQUIRED.  To register securities by coordination, an issuer of the securities or a registered dealer must file with the commissioner a registration statement that contains:
(1)  the following information:
(A)  the amount of securities to be offered in this state;
(B)  the states in which a registration statement or similar document in connection with the offering has been or is expected to be filed; and
(C)  any adverse order, judgment, or decree previously entered in connection with the offering by a court or the Securities and Exchange Commission;
(2)  one copy of the prospectus filed under the Securities Act of 1933 (15 U.S.C. Section 77a et seq.) together with all amendments to the prospectus;
(3)  a copy of:
(A)  the articles of incorporation and bylaws, or their substantial equivalents, currently in effect;
(B)  any agreements with or among underwriters; and
(C)  any indenture or other instrument governing the issuance of the securities to be registered;
(4)  a specimen or copy of the security;
(5)  any other information or copies of any other documents filed under the Securities Act of 1933 (15 U.S.C. Section 77a et seq.) the commissioner requests;
(6)  an undertaking to promptly forward all amendments to the federal registration statement other than an amendment that delays the effective date only; and
(7)  a consent to service of process conforming to the requirements of Section 4001.102 if:
(A)  the registration statement is filed by the issuer or by a dealer that will offer the securities for sale as the issuer's agent; and
(B)  the issuer is not a resident of this state or incorporated or formed under the laws of 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 4003 - Securities › Subchapter C. Registration by Coordination › Section 4003.104. Term of Registration

Sec. 4003.104.  TERM OF REGISTRATION.  (a)  Except as provided by this section, a registration by coordination of securities under this subchapter is effective until the first anniversary of the date the commissioner declares the registration to be effective.
(b)  The initial registration by coordination of securities of an open-end investment company, as defined by the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), is effective until two months after the end of the issuer's fiscal year.
(c)  The registration by coordination of securities of a unit investment trust, as defined by the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), is effective until the first anniversary of the date of effectiveness granted by the Securities and Exchange Commission.
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 4003 - Securities › Subchapter C. Registration by Coordination › Section 4003.105. Renewal of Registration

Sec. 4003.105.  RENEWAL OF REGISTRATION.  (a)  Except as provided by Subsection (b) and subject to Subsection (c), a registration of securities under Section 4003.104 may be renewed for additional periods of one year if the appropriate registration forms and renewal fees are received before the expiration date of the registration to be renewed.
(b)  Subject to Subsection (c), for renewal of the initial registration of securities described by Section 4003.104(b), the issuer or the issuer's agent may renew the registration by submitting the appropriate registration forms and renewal fees  not later than two months after the end of the issuer's fiscal year.
(c)  The same standards of fairness, justice, and equity prescribed by this subchapter for original approval of a registration apply to the renewal of the 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 4003 - Securities › Subchapter D. Prohibited Sales › Section 4003.151. Certain Sales Prohibited

Sec. 4003.151.  CERTAIN SALES PROHIBITED.  If the sale of a security entitles the purchaser or subsequent holder to exchange that security for another, or to purchase another security, the sale of, including an exchange for, the other security may not be made unless the sale is authorized under this title, if not exempt under this title, or by another provision of law.
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 4003 - Securities › Subchapter E. Regulation of Offers › Section 4003.201. Definition

Sec. 4003.201.  DEFINITION.  In this subchapter, "broadcast offer" means an offer disseminated by radio, television, recorded telephone presentation, or other mass media.
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 4003 - Securities › Subchapter E. Regulation of Offers › Section 4003.202. Applicability

Sec. 4003.202.  APPLICABILITY.  This subchapter does not apply to transactions or securities exempt under Chapter 4005.
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 4003 - Securities › Subchapter E. Regulation of Offers › Section 4003.203. Authorized Written, Printed, or Broadcast Offers

Sec. 4003.203.  AUTHORIZED WRITTEN, PRINTED, OR BROADCAST OFFERS.  A person may make in this state a written or printed offer, including a pictorial demonstration with any accompanying script, or broadcast offer to sell a security if:
(1)  a copy of the offer is filed with the commissioner not later than the 10th day after the date of the offer's first use in this state;
(2)  the person making or distributing the offer is a registered dealer or registered agent of a registered dealer;
(3)  either:
(A)  the security is registered under Subchapter B or C or the commissioner has issued a permit qualifying securities for sale for the security under Subchapter A; or
(B)  an application for registration under Subchapter B or C or for a permit under Subchapter A has been filed with the commissioner;
(4)  for a registration for the security that has not become effective under Subchapter B or C or for a permit that has not been issued under Subchapter A, the offer prominently states on the first page of a written or printed offer or as a preface to any pictorial or broadcast offer either:
(A)  "INFORMATIONAL ADVERTISING ONLY.
THE SECURITIES HEREIN DESCRIBED HAVE NOT BEEN QUALIFIED OR REGISTERED FOR SALE IN TEXAS. ANY REPRESENTATION TO THE CONTRARY OR CONSUMMATION OF SALE OF THESE SECURITIES IN TEXAS PRIOR TO QUALIFICATION OR REGISTRATION THEREOF IS A CRIMINAL OFFENSE."; or
(B)  other language required by the Securities and Exchange Commission that in the commissioner's opinion will inform investors that the securities may not yet be sold;
(5)  the person making or distributing the offer in this state:
(A)  has not received written notice of an order prohibiting the offer under Section 4007.101 or 4007.102; or
(B)  has received notice of an order described by Paragraph (A) but the order is no longer in effect; and
(6)  payment is not accepted from the offeree and no contract of sale is made before registration of the security is effective under Subchapter B or C or a permit is issued under Subchapter A.
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 4003 - Securities › Subchapter E. Regulation of Offers › Section 4003.204. Authorized Oral Offers

Sec. 4003.204.  AUTHORIZED ORAL OFFERS.  (a) In this section, "oral offer" means an offer that is not a broadcast offer.
(b)  A person may make in this state an oral offer to sell a security in person, by telephone, or by other direct individual communication if:
(1)  the person making the offer is a registered dealer or registered agent of a registered dealer;
(2)  either:
(A)  the security is registered under Subchapter B or C or the commissioner has issued a permit qualifying securities for sale for the security under Subchapter A; or
(B)  an application for registration under Subchapter B or C or for a permit under Subchapter A has been filed with the commissioner;
(3)  the person making or distributing the offer:
(A)  has not received written notice of an order prohibiting the offer under Section 4007.101 or 4007.102; or
(B)  has received notice of an order described by Paragraph (A) but the order is no longer in effect; and
(4)  payment is not accepted from the offeree and no contract of sale is made before registration of the security is effective under Subchapter B or C or a permit is issued under Subchapter A.
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 4003 - Securities › Subchapter E. Regulation of Offers › Section 4003.205. Dealer Named in Offer

Sec. 4003.205.  DEALER NAMED IN OFFER.  A dealer whose name is included in a written, printed, or broadcast offer along with the name of a registered dealer is not deemed, on that fact alone, to have made an offer in this state to sell a security.
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 4003 - Securities › Subchapter E. Regulation of Offers › Section 4003.206. Effect of Compliance or Noncompliance

Sec. 4003.206.  EFFECT OF COMPLIANCE OR NONCOMPLIANCE.  (a) An offer to sell a security that complies with Section 4003.203 or 4003.204 does not violate Subchapter A, B, or C.
(b)  An offer to sell a security that does not comply with Section 4003.203 or 4003.204 violates 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 4003 - Securities › Subchapter F. Crowdfunding › Section 4003.251. Definition

Sec. 4003.251.  DEFINITION.  In this subchapter, "authorized small business development entity" means:
(1)  a Type A corporation authorized under Chapter 504, Local Government Code;
(2)  a Type B corporation authorized under Chapter 505, Local Government Code;
(3)  a nonprofit organization authorized by an agency or authority of the federal government to distribute housing and community development block grants;
(4)  a municipal corporation;
(5)  the Texas Veterans Commission; or
(6)  a nonprofit community development financial institution certified by the Community Development Financial Institutions Fund.
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 4003 - Securities › Subchapter F. Crowdfunding › Section 4003.252. Crowdfunding

Sec. 4003.252.  CROWDFUNDING.  (a)  The board shall adopt rules to regulate and facilitate online intrastate crowdfunding applicable to authorized small business development entities.  The board may create other requirements necessary to carry out this subchapter.
(b)  The rules must:
(1)  allow an authorized small business development entity to list on the entity's web portal offerings of securities by issuers in which the entity is financially interested;
(2)  allow an authorized small business development entity and the entity's web portal to list offerings of securities without offering investment advice;
(3)  allow an authorized small business development entity to subcontract the operations of a crowdfunding web portal to a third party as permitted by board rule; and
(4)  limit the offerings of securities on an authorized small business development entity's web portal to securities of issuers located within the service area of the entity.
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 4003 - Securities › Subchapter G. Protection for Purchasers of Securities › Section 4003.301. Deposit in Trust Account

Sec. 4003.301.  DEPOSIT IN TRUST ACCOUNT.  (a)  If the commissioner considers it necessary to protect the interests of prospective purchasers of securities a company sells or offers for sale, the commissioner may require the company to deposit in a trust account at a bank or trust company approved by the commissioner and doing business in this state:
(1)  all or part of the proposed securities; or
(2)  subject to Subsection (b), all or part of the money and other funds received from the sale of those securities.
(b)  A company is not required to deposit funds received from the sale of securities in a trust account to the extent the commissioner considers the funds necessary to be used, provided that the amount of the funds the company is not required to deposit does not exceed the amount allowed as expenses and commissions for the sale of the securities.
(c)  The funds must remain on deposit until the proposed or existing company sells a specified monetary amount or number of shares of the securities that in the commissioner's opinion will reasonably assure the public's protection.
(d)  When the commissioner makes a written determination that the terms of the escrow agreement have been fully met, the bank or trust company in which the funds of a proposed or existing corporation are deposited in a trust account as provided by this section shall transfer to the corporation and the corporation's executive officers the funds to allow the corporation to use the securities or money in the corporation's business.
(e)  If a proposed or existing company that deposits funds in a trust account as provided by this section does not sell the minimum amount of capital necessary under the escrow agreement within two years, the commissioner may authorize the bank or trust company at which the funds are deposited to return to the subscribers the portion of the funds that were deposited or escrowed under the escrow agreement.  The bank or trust company shall return the funds to the subscribers on receipt of authorization from the commissioner under this subsection.  If the bank or trust company holds securities under the escrow agreement, the bank or trust company may return the securities to the corporation only after the bank or trust company receives from the issuer evidence of cancellation thereof.
(f)  A dealer or issuer of securities shall provide to the commissioner and the bank or trust company at the time the dealer or issuer makes the deposit required by this section:
(1)  the names of the purchasers of or subscribers for the securities; and
(2)  the amount of money paid by each.
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 4003 - Securities › Subchapter G. Protection for Purchasers of Securities › Section 4003.302. Marketing Expenses

Sec. 4003.302.  MARKETING EXPENSES.  (a)  Total expenses for marketing securities, including all commissions for the sale of the securities, and all other incidental selling expenses, may not in the aggregate exceed 20 percent of the price at which the stock or other securities of a proposed or existing company are to be sold or offered for sale to the public of this state.
(b)  The commissioner may reduce the percentage listed in Subsection (a) to a percentage that in the commissioner's opinion is fair, just, and equitable under the facts of the particular case.
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 4003 - Securities › Subchapter G. Protection for Purchasers of Securities › Section 4003.303. Prospectus Required for Certain Offers

Sec. 4003.303.  PROSPECTUS REQUIRED FOR CERTAIN OFFERS.  (a)  Except as provided by Subsection (b), the commissioner shall require that, in connection with a permit qualifying securities for sale, all offers for the sale of the securities be made through a prospectus that:
(1)  fairly discloses the material facts about the plan of finance and business; and
(2)  must be filed with and approved by the commissioner.
(b)  The prospectus requirements of this section are satisfied if the applicant files a prospectus or offering circular with the commissioner that is also filed with the Securities and Exchange Commission under the Securities Act of 1933 (15 U.S.C. Section 77a et seq.) or the regulations under that law.
(c)  Failure to comply with the prospectus requirements of this section violates 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 4003 - Securities › Subchapter G. Protection for Purchasers of Securities › Section 4003.304. Investor Education

Sec. 4003.304.  INVESTOR EDUCATION.  (a)  The commissioner, with board approval, shall develop and implement investor education initiatives to inform the public about the basics of investing in securities. The initiatives must place a special emphasis on the prevention and detection of securities fraud.  Materials developed for and distributed as part of the initiatives must be published in both English and Spanish.
(b)  In developing and implementing the initiatives, the commissioner shall use the commissioner's best efforts to collaborate with public or nonprofit entities with an interest in investor education.
(c)  For use in providing investor education initiatives and subject to Chapter 575, the commissioner may accept grants and donations from:
(1)  a person who is not affiliated with the securities industry; or
(2)  a nonprofit association, regardless of whether the entity is affiliated with the securities industry.
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 A. General Provisions › Section 4004.001. Rules for Exemption From Registration Requirements

Sec. 4004.001.  RULES FOR EXEMPTION FROM REGISTRATION REQUIREMENTS.  The board may adopt rules that exempt certain classes of persons from the dealer, agent, investment adviser, and investment adviser representative registration requirements, or provide conditional exemptions from registration, if the board determines that the rules are consistent with the purposes of 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 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter A. General Provisions › Section 4004.002. Certain Displays or Advertisement of Registration Prohibited

Sec. 4004.002.  CERTAIN DISPLAYS OR ADVERTISEMENT OF REGISTRATION PROHIBITED.  Except as expressly provided by this title, a dealer, agent, investment adviser, or investment adviser representative may not by public display or advertisement use the fact that the person is registered under this title, the person's registration certificate or evidence of registration, or a certified copy of the certificate or evidence of registration in connection with any sale or effort to sell any security or any rendering of services as an investment adviser.
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 A. General Provisions › Section 4004.003. Display of Information Regarding Complaints

Sec. 4004.003.  DISPLAY OF INFORMATION REGARDING COMPLAINTS.  A dealer, agent, investment adviser, or investment adviser representative regulated under this title shall prominently display at all times in the person's place of business:
(1)  a sign containing the name, mailing address, and telephone number of the board; and
(2)  a statement informing consumers that complaints against a dealer, agent, investment adviser, or investment adviser representative may be directed to the board.
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 B. Registration of Dealers and Investment Advisers › Section 4004.051. Registration of Dealers Required

Sec. 4004.051.  REGISTRATION OF DEALERS REQUIRED.  Except as provided by Section 4001.056(d) or Subchapter A, Chapter 4005, a dealer or other person or company, including a corporation or firm, may not, directly or through the dealer's or other person's or company's agents, offer for sale, sell, or make a sale of any securities in this state unless the dealer or other person or company is first registered as provided by this chapter.
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 B. Registration of Dealers and Investment Advisers › Section 4004.052. Registration of Investment Advisers Required

Sec. 4004.052.  REGISTRATION OF INVESTMENT ADVISERS REQUIRED.  Except as provided by Subchapter A, Chapter 4005, a person may not, directly or through the person's investment adviser representative, render services as an investment adviser in this state unless the person:
(1)  is registered under this chapter;
(2)  submits a notice filing as provided by Subchapter G; or
(3)  is otherwise exempt 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 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter B. Registration of Dealers and Investment Advisers › Section 4004.054. Issuance of Registration Certificate

Sec. 4004.054.  ISSUANCE OF REGISTRATION CERTIFICATE.  The commissioner shall issue a certificate of registration to an applicant for registration as a dealer or investment adviser if:
(1)  the commissioner is satisfied that the applicant has complied with the requirements of this chapter; and
(2)  the applicant:
(A)  if applicable, has filed a written consent to service that complies with Section 4001.102; and
(B)  has paid the fees required by 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 B. Registration of Dealers and Investment Advisers › Section 4004.055. Form and Contents of Registration Certificate

Sec. 4004.055.  FORM AND CONTENTS OF REGISTRATION CERTIFICATE.  The registration certificate must be in the form the commissioner prescribes and must state:
(1)  the principal place of business and address of the dealer or investment adviser;
(2)  the name and business address of each person interested in the business as a principal, officer, director, or managing agent of the dealer or investment adviser; and
(3)  that the dealer or investment adviser has been registered for a current calendar year as a dealer in securities or as an investment adviser, as appropriate.
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 B. Registration of Dealers and Investment Advisers › Section 4004.056. Temporary Permission to Engage in Business as Dealer or Investment Adviser

Sec. 4004.056.  TEMPORARY PERMISSION TO ENGAGE IN BUSINESS AS DEALER OR INVESTMENT ADVISER.  (a)  Pending final disposition of an application under this subchapter, the commissioner may, for special cause shown, grant an applicant temporary permission to engage in business as a dealer or investment adviser under this title, subject to any terms and conditions that the commissioner prescribes.
(b)  Temporary permission granted by the commissioner under this section may be revoked at any time.
(c)  A dealer or investment adviser acting under temporary permission granted under this section is considered to be a registered dealer or registered investment adviser for any purpose of 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 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter B. Registration of Dealers and Investment Advisers › Section 4004.057. Amendment of Registration Certificate

Sec. 4004.057.  AMENDMENT OF REGISTRATION CERTIFICATE.  (a)  A dealer or investment adviser shall immediately certify under oath to the commissioner any change in the personnel of a partnership or in the principals, officers, directors, or managing agents of the dealer or investment adviser.
(b)  A change in the registration certificate required as the result of a change described by Subsection (a) may be made at any time by submitting to the commissioner a written application that specifies the reason for the change.
(c)  On the issuance of an amended registration certificate, the dealer or investment adviser shall promptly surrender the original certificate and any outstanding certified copies of the original certificate to 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 B. Registration of Dealers and Investment Advisers › Section 4004.058. Posting Registration Certificates

Sec. 4004.058.  POSTING REGISTRATION CERTIFICATES.  On receipt of a registration certificate issued under this chapter, the dealer or investment adviser named in the certificate shall immediately post and conspicuously display the certificate at all times in the dealer's or investment adviser's principal place of business, if the dealer's or investment adviser's principal place of business is maintained in this state. The dealer or investment adviser shall similarly post and conspicuously display a duplicate copy of the dealer's or investment adviser's certificate in each branch office located 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 4004 - Regulation of Dealers, Investment Advisers, Dealers' Agents, and Investment Adviser Representatives › Subchapter C. Registration of Agents and Investment Adviser Representatives › Section 4004.101. Registration of Agents

Sec. 4004.101.  REGISTRATION OF AGENTS.  (a)  An agent may not, on behalf of a registered dealer, sell, offer for sale, or make a sale of any securities in this state unless the agent is registered as an agent for that particular registered dealer under this chapter.
(b)  On written application by a registered dealer, and on satisfactory compliance with the requirements of this title, the commissioner shall register a person as an agent of the registered dealer.
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 C. Registration of Agents and Investment Adviser Representatives › Section 4004.102. Registration of Investment Adviser Representatives

Sec. 4004.102.  REGISTRATION OF INVESTMENT ADVISER REPRESENTATIVES.  (a)  A person may not act or render services as an investment adviser representative for an investment adviser in this state unless the person is registered or submits a notice filing as an investment adviser representative for that particular investment adviser as provided by this subchapter and Subchapter G.
(b)  On written application by an investment adviser and on satisfactory compliance with the requirements of this title, the commissioner shall register a person as an investment adviser representative of that investment adviser.
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 C. Registration of Agents and Investment Adviser Representatives › Section 4004.103. Application for Registration

Sec. 4004.103.  APPLICATION FOR REGISTRATION.  The application described by Sections 4004.101 and 4004.102 must:
(1)  be in the form the commissioner prescribes;
(2)  state:
(A)  the residence and address of the person whose registration as an agent or investment adviser representative is requested through the application; and
(B)  any other information relating to that person's previous history, record, and associations that the commissioner may require; and
(3)  be signed and sworn to by the person whose registration as an agent or investment adviser representative is requested through the application.
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 C. Registration of Agents and Investment Adviser Representatives › Section 4004.104. Issuance of Evidence of Registration

Sec. 4004.104.  ISSUANCE OF EVIDENCE OF REGISTRATION.  For each person registered under this subchapter, the commissioner shall issue evidence of registration of the agent or investment adviser representative to the registered dealer or investment adviser who requested the person's registration, as appropriate. The registered dealer or investment adviser who requested the person's registration shall retain the evidence of registration for the dealer's agents or investment adviser's representatives, as appropriate.
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 C. Registration of Agents and Investment Adviser Representatives › Section 4004.105. Form and Contents of Evidence of Registration

Sec. 4004.105.  FORM AND CONTENTS OF EVIDENCE OF REGISTRATION.  The evidence of registration described by Section 4004.104 must:
(1)  be in the form the commissioner prescribes; and
(2)  state:
(A)  the name of the agent or investment adviser representative;
(B)  the address of the registered dealer or investment adviser, as appropriate; and
(C)  that the person is registered for the current calendar year as an agent of the dealer or as an investment adviser representative of the investment adviser, as appropriate.
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 C. Registration of Agents and Investment Adviser Representatives › Section 4004.106. Cancellation of Registration

Sec. 4004.106.  CANCELLATION OF REGISTRATION.  On application by a registered dealer or investment adviser, the commissioner shall cancel the registration of the registered dealer's agent or the investment adviser's representative.
Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 1.01, eff. January 1, 2022.