A meeting of the State Securities Board was held on January 27, 2016, in Room 320, Thomas Jefferson Rusk State Office Building, at 11:00 a.m. Those present were: Beth Ann Blackwood, Chair; E. Wally Kinney, Member; G. Alan Waldrop, Member; Miguel Romano, Jr., Member; John Morgan, Securities Commissioner; Ronak V. Patel, Deputy Securities Commissioner; Tommy Green, Director, Inspections and Compliance Division; Derek Lauterjung, Director, Staff Services Division; Patty Loutherback, Director, Registration Division; Joseph J. Rotunda, Director, Enforcement Division; Marlene K. Sparkman, General Counsel; Oscar Gonzalez, Assistant Director, Registration Division; Stephanie Tourk, Assistant General Counsel; Robert Elder, Communications; and Sonia Fergerson, Executive Assistant. Also attending were Nathan Roach, R.C. Rondero de Mosier, Monday Rufus, Robert Gonzales, and Amy Kofron.
Chair Blackwood called the meeting to order at 11:00 a.m.
Minutes of the August 25, 2015, meeting were approved.
The Board voted to adopt the following proposed rules:
1. Amending §113.1, concerning qualification of securities;
2. Amending §115.4(e) and §116.4(e), concerning evidences of registration, to relocate detailed provisions relating to renewals by military service members to §115.18 and §116.18 and implement changes made to the Occupations Code by Senate Bill 1307;
3. Amending §115.8 and §116.8, concerning fee requirements, to implement changes made to the Occupations Code by Senate Bill 807 and to provide for a fee reduction for small businesses registered in multiple capacities following the repeal of Section 41 of the Texas Securities Act in House Bill 7;
4. Amending §115.18 and §116.18, concerning special application provisions available to a military spouse, military service member, or military veteran, to implement changes made to the Occupations Code by Senate Bill 1307 and Senate Bill 807 relating to military applicants, and to relocate provisions from other sections that relate to military applicants;
5. Repealing Form 133.4, concerning request for special consideration of a registration application by a military spouse, military service member, or military veteran;
6. Adopting new Form 133.4, concerning request for consideration of a registration application by a military applicant;
7. Adopting new Form 133.19, concerning waiver or refund request by a military applicant; and
8. Amending §139.12, concerning oil and gas auction exemption, to add “associate auctioneer” to the definition of “auctioneer” to recognize this new type of registration added by House Bill 2481.
The Board voted to publish for public comment the following new rule proposals:
1. Amending §123.3(b), concerning conditional exemption for money market funds, to align the rule to SEC Rule 2a-7 as revised by SEC Release IC-31166;
2. Creating new §115.20, concerning Texas crowdfunding portal registration and activities of small business development entities;
3. Amending §139.25(l), concerning intrastate crowdfunding exemption, to implement Section 44, added to the Texas Securities Act by House Bill 1629, permitting certain small business development entities registered as Texas intrastate crowdfunding portals pursuant to new §115.20 to have a financial interest in an issuer listed on its Internet web portal; and
4. Creating new Form 133.20, Texas crowdfunding portal registration by an authorized small business development entity.
The Board voted to re-adopt the following rule chapters:
1. Chapter 109. Transactions Exempt From Registration.
2. Chapter 111. Securities Exempt From Registration.
3. Chapter 139. Exemptions by Rule or Order.
4. Chapter 133. Forms.
The Board received information on a prospective grant for $2,500 (for the purchase of a license from Lightbulb Press, Inc. for its “Online Dictionary of Financial Terms” for the period of February 1, 2016 through January 31, 2018) that is pending before the Investor Protection Trust.
The Audit Committee reported on the Agency's Internal Audit Report for Fiscal Year 2015, and the Board voted to engage Monday Rufus as the internal auditor for FY 2016. The Board decided to retain the current committee members, E. Wally Kinney and David A. Appleby, to serve on the Audit Committee and work with the Board's new internal auditor.
The Commissioner gave a report on the Agency’s budget and performance measures.
The Commissioner gave a general update on Agency operations.
The Board retired to executive session at 11:55 a.m. to discuss the performance review of the Securities Commissioner pursuant to the exception granted by Section 551.074 of the Texas Government Code, Open Meetings Act.
Following the executive session, the Board reconvened the open meeting, noted approval of the Commissioner's job performance, and recommended that the salary of the Securities Commissioner be increased to $139,443 a year if funds are available for that purpose.
The meeting was then adjourned.