Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 7 - STATE SECURITIES BOARD › Chapter 115 - SECURITIES DEALERS AND AGENTS › Section 115.1 - General Provisions

Current through Reg. 49, No. 28; July 12, 2024
(a)
				Definitions. Words and terms used in this chapter are also defined in §
									RSA 107.2 of this
				title (relating to Definitions). The following words and terms, when used in
				this chapter, shall have the following meanings, unless the context clearly
				indicates otherwise.
(1) Applicant--A person
				who submits an application for registration as a dealer or an agent.
(2) Branch office--Any location where one or
				more agents of a dealer regularly conduct the business of effecting any
				transactions in, or inducing or attempting to induce the purchase or sale of,
				any security, or that is held out as such.
(A) This definition excludes:
(i) any location that is established solely
				for customer service and/or back office type functions where no sales
				activities are conducted and that is not held out to the public as a branch
				office;
(ii) any location that is
				the agent's primary residence, provided that:
(I) only one agent, or multiple agents who
				reside at that location and are members of the same immediate family, conduct
				business at the location;
(II) the
				location is not held out to the public as an office and the agent does not meet
				with customers at the location;
(III) neither customer funds nor securities
				are handled at that location;
(IV)
				the agent is assigned to a designated branch office, and such designated branch
				office is reflected on all business cards, stationery, advertisements, and
				other communications to the public by such agent;
(V) the agent's correspondence and
				communications with the public are subject to the dealer's
				supervision;
(VI) electronic
				communications (e.g., e-mail) are made through the dealer's electronic
				system;
(VII) all orders are
				entered through the designated branch office or an electronic system
				established by the dealer that is reviewable at the branch office;
(VIII) written supervisory procedures
				pertaining to supervision of sales activities conducted at the residence are
				maintained by the dealer; and
(IX)
				a list of the residence locations are maintained by the dealer;
(iii) any location, other than a
				primary residence, that is used for securities business for less than 30
				business days in any one calendar year, provided the dealer complies with the
				provisions of clause (ii)(II) - (VIII) of this subparagraph;
(iv) any office of convenience, where agents
				occasionally and exclusively by appointment meet with customers, which is not
				held out to the public as an office;
(v) any location that is used primarily to
				engage in non-securities activities and from which the agent(s) effects no more
				than 25 securities transactions in any one calendar year; provided that any
				advertisement or sales literature identifying such location also sets forth the
				address and telephone number of the location from which the agent(s) conducting
				business at the non-branch locations are directly supervised;
(vi) the floor of a registered national
				securities exchange where a dealer conducts a direct access business with
				public customers; and
(vii) a
				temporary location established in response to the implementation of a business
				continuity plan.
(B)
				Notwithstanding the exclusions in subparagraph (A) of this paragraph, any
				location that is responsible for supervising the activities of persons
				associated with the dealer at one or more non-branch locations of the dealer is
				considered to be a branch office.
(C) The term "business day" shall not include
				any partial business day provided that the agent spends at least four hours on
				such business day at his or her designated branch office during the hours that
				such office is normally open for business.
(3) Supervisor--The person named by a dealer
				to supervise the activities of a branch office and registered as an agent with
				the Securities Commissioner.
(4)
				Control--The possession, direct or indirect, of the power to direct or cause
				the direction of the management and policies of a person or company, whether
				through the ownership of voting securities, by contract, or
				otherwise.
(5) In this state--As
				used in the Texas Securities Act, §12, has the same meaning as the term
				"within this state" as defined in §
										RSA 107.2 of this
				title (relating to Definitions) and paragraph (8) of this subsection.
(6) FINRA--The Financial Industry Regulatory
				Authority, created through the consolidation of NASD and the member regulation,
				enforcement, and arbitration functions of the New York Stock
				Exchange.
(7) Officer--A president,
				vice president, secretary, treasurer, or principal financial officer,
				comptroller, or principal accounting officer, or any other person occupying a
				similar status or performing similar functions with respect to any organization
				or entity, whether incorporated or unincorporated.
(8) Within this state--
(A) A person is a "dealer" who engages
				"within this state" in one or more of the activities set out in the Texas
				Securities Act, §4.C, if either the person or the person's agent is
				present in this state or the offeree/purchaser or the offeree/purchaser's agent
				is present in this state at the time of the particular activity. A person can
				be a dealer in more than one state at the same time.
(B) Likewise, a person is an "agent" who
				engages "within this state" in one or more of the activities set out in the
				Texas Securities Act, §4.D, whether by direct act or through subagents
				except as otherwise provided, if either the person or the person's agent is
				present in this state or the offeree/purchaser or the offeree/purchaser's agent
				is present in this state at the time of the particular activity. A person can
				be an agent in more than one state at the same time.
(C) Offers and sales can be made by personal
				contact, mail, telegram, telephone, wireless, electronic communication, or any
				other form of oral or written communication.
(9) Finder--An individual who receives
				compensation for introducing an accredited investor to an issuer or an issuer
				to an accredited investor solely for the purpose of a potential investment in
				the securities of the issuer, but does not participate in negotiating any of
				the terms of an investment and does not give advice to any such parties
				regarding the advantages or disadvantages of entering into an investment, and
				conducts this activity in accordance with §
										RSA
				115.11 of this title (relating to Finder
				Registration and Activities). Note that an individual registered as a finder is
				not permitted to register in any other capacity; however, a registered general
				dealer is allowed to engage in finder activity without separate registration as
				a finder.
(10) Texas crowdfunding
				portal--Any person registered as a Texas dealer pursuant to §
										RSA
				115.19 of this title (relating to Texas
				Crowdfunding Portal Registration and Activities) or §
										RSA
				115.20 of this title (relating to Texas
				Crowdfunding Portal Registration and Activities of Small Business Development
				Entities).