115.1.GeneralProvisions.
(a) Definitions.Wordsandtermsusedinthischapterarealsodefinedin§107.2ofthistitle (relatingtoDefinitions).Thefollowingwords andterms, whenusedin this chapter,shall havethefollowing meanings, unless the context clearly indicates otherwise.
agent.
(1)Applicant--Apersonwhosubmitsanapplicationforregistrationasadealeroran
(2) Branchoffice--Anylocationwhereoneormoreagentsofadealer regularly conductthebusinessofeffectinganytransactionsin,orinducingorattemptingtoinducethepurchaseorsale of, any security, or that is held out as such.
(A)This definition excludes:
(i) anylocationthatisestablishedsolelyforcustomerserviceand/or back officetypefunctionswherenosalesactivitiesare conducted and that is not held out to the public as a branch office;
(ii)anylocationthatistheagent’sprimaryresidence,providedthat:
(I)onlyoneagent,ormultipleagentswhoresideatthat location and are members of the same immediate family, conduct business at the location;
(II)thelocationisnotheldouttothepublicasanofficeand the agent does not meet with customers at the location;
location;
(III)neithercustomerfundsnorsecuritiesarehandledatthat
(IV) theagentisassignedtoadesignatedbranchoffice,and suchdesignatedbranchofficeis reflectedonall businesscards,stationery,advertisements,andother communications to the public by such agent;
(V) theagent’scorrespondence andcommunicationswith the public are subject to the dealer’s supervision;
through the dealer’s electronic system;
(VI)electronic communications (e.g., e-mail) are made
(VII)allordersareenteredthroughthedesignatedbranch office or an electronic system established by the dealer that is reviewable at the branch office;
(VIII)writtensupervisoryprocedurespertainingtosupervision of sales activities conducted at the residence are maintained by the dealer; and
dealer;
(IX)alistoftheresidencelocationsare maintained bythe
(iii) anylocation,otherthanaprimary residence,thatisusedfor securitiesbusinessforlessthan30businessdaysinanyonecalendaryear,providedthedealercomplieswith the provisions of clause (ii)(II) - (VIII) of this subparagraph;
(iv) anyofficeofconvenience,whereagentsoccasionally and exclusively by appointment meet with customers, which is not held out to the public as an office;
(v) anylocationthatisusedprimarilytoengageinnon-securities activitiesandfromwhichtheagent(s)effectsnomorethan25securitiestransactionsinanyonecalendaryear; providedthatanyadvertisementor salesliteratureidentifyingsuchlocationalso setsforththeaddressand telephonenumberofthelocationfromwhichtheagent(s)conductingbusinessatthenon-branchlocationsare directly supervised;
(vi) thefloor ofa registerednationalsecurities exchangewherea 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 theexclusionsinsubparagraph (A) of this paragraph, anylocationthatisresponsiblefor supervising the activities of persons associated with the dealer at oneor more non-branch locations of the dealer is considered to be a branch office.
(C) Theterm“businessday” shallnotincludeanypartialbusinessday providedthattheagentspendsatleastfourhoursonsuchbusinessdayathisorherdesignatedbranchoffice during the hours that such office is normally open for business.
(3) Supervisor--Thepersonnamedbyadealertosupervisetheactivitiesofabranch office and registered as an agent with the Securities Commissioner.
(4) Control--Thepossession,directorindirect,ofthepowertodirectorcausethe direction of the management and policies of a person orcompany,whetherthroughtheownership of voting securities, by contract, or otherwise.
(5) Inthisstate--AsusedintheTexasSecuritiesAct,Section12,hasthesame meaningastheterm“withinthisstate”asdefinedin§107.2ofthistitle(relatingtoDefinitions)andparagraph (8) of this subsection.
(6) FINRA--The FinancialIndustryRegulatoryAuthority,createdthroughthe consolidationofNASD andthemember regulation,enforcement,andarbitrationfunctionsofthe New York Stock Exchange.
(7) Officer--Apresident,vicepresident,secretary,treasurer,orprincipalfinancial officer,comptroller,orprincipalaccountingofficer,oranyotherpersonoccupyingasimilarstatusorperforming similar functions with respect to any organization or entity, whether incorporated or unincorporated.
(8)Within this state--
(A) Apersonisa“dealer”whoengages“withinthisstate”inoneormoreof theactivitiessetoutintheTexasSecuritiesAct,Section4.C,if eitherthepersonortheperson’sagentis presentinthisstateortheofferee/purchaserortheofferee/purchaser’sagentispresentinthisstateatthetime of the particular activity. A person can be a dealer in more than one state at the same time.
(B) Likewise, apersonisan “agent”who engages“within this state”inone ormoreoftheactivitiessetoutintheTexasSecuritiesAct,Section4.D,whetherbydirect actorthrough subagentsexceptasotherwiseprovided,ifeither the person or the person’sagentispresentinthisstateor theofferee/purchaserortheofferee/purchaser’sagentispresentinthisstateatthetimeoftheparticular activity. A person can be an agent in more than one state at the same time.
(C) Offersandsalescanbemadebypersonalcontact,mail, telegram, telephone, wireless, electronic communication, or any other form of oral or written communication.
(9) Finder--An individualwho receives compensation forintroducingan accredited investor to anissueroran issuerto an accreditedinvestor solelyforthepurpose ofapotential investmentin thesecuritiesoftheissuer,butdoesnotparticipateinnegotiatinganyofthetermsofaninvestmentanddoes notgiveadvicetoanysuchpartiesregardingtheadvantagesordisadvantagesofenteringintoaninvestment, andconductsthisactivityinaccordancewith§115.11ofthistitle(relatingtoFinderRegistrationandActivities). Notethatan individualregisteredas a finder is notpermittedtoregisterin anyothercapacity;however,a registered general dealer is allowed to engage in finder activity without separate registration as a finder.
(b)Registrationrequirementsofdealers,issuers, agents,andbranchoffices.
(1)Requirements of registration.
(A)Nodealer,issuer,oragentofadealerorissuershallsellorofferforsale anysecuritieswithinthisstatewithoutfirstbeingregisteredasadealeroragent,orexemptfromregistration.
(B)EachbranchofficeinTexasmustberegistered.Aregisteredofficer, partner, or agent must be named as supervisor.
(2)Persons not required to register as an agent.
(A)Registrationasanagentisnotrequiredforaperson,associated witha dealerregisteredinTexas,whoeffectsatransactionpursuanttotheSecuritiesExchangeActof1934,Section
15(h)(3), provided such person is:
such a transaction; and
(i)notineligibletoregisterwiththisstateforanyreasonotherthan
one other state.
(ii)registered with a registered securities associationandat least
state,” if the person:
(B)Forpurposesofthisparagraph,apersonis“ineligibletoregisterwiththis
(i)has been convicted of a securities-related felony; or
(ii)has been convicted of a theft-related felony.
(C) Forpurposesof this paragraph, a “registered securities association”is onecurrentlyrecognizedassuchbytheSECpursuanttotheSecuritiesExchangeActof1934,Section15A.
(D) Personsnotrequiredtoregister with theSecuritiesCommissioner pursuanttosubparagraph(A)ofthisparagraph,areremindedthattheTexasSecuritiesActprohibitsfraudor fraudulentpracticesindealinginanymannerinanysecuritieswhetherornotthepersonengaginginfraudor fraudulentpracticesisrequiredtoberegistered.TheAgencyhasjurisdictiontoinvestigateandbring
enforcementactionstothefullextentauthorizedintheTexasSecuritiesActwithrespecttofraudordeceit, or unlawful conduct by a dealer or agent in connection with transactions involving securities in Texas.
(c)Typesofregistrations.
(1)Generalregistration.Ageneralregistrationisaregistrationtodealinallcategories of securities, without limitation.
(2)Restricted registration. The restricted registrations are as follows:
(A)registrationtodealexclusivelyinthesaleofinterests(otherthaninterests in limited partnerships) in oil, gas, and mining leases, fees, or titles or contracts relating thereto;
(B)registration to deal exclusively in municipal securities;
(C)registrationtodealexclusivelyinrealestatesyndicationinterestsand/or condominium securities, including interests in real estate limited partnerships;
employees;
(D)registrationtodealexclusivelyinsalesofsecuritiestothedealer’sown
(E)registration to deal exclusively in securities issued by open-end investmentcompaniesregisteredunderthe Texas Securities Actandthe InvestmentCompanyActof1940;
(F)registration for an issuer to deal exclusively in its own securities; (G) registration to deal exclusively in options on foreign currencies;
programs;
(H)registrationtodealexclusivelyinsalesofsecuritiesindirect participation
(I)registration to deal exclusively in government securities;
customers of the dealer;
(J)registrationtoacceptordersunsolicitedbysuchpersonfromexisting
(K)registration to deal exclusively in corporate securities;
(L)registrationtodealinallgeneralsecuritiesexceptmunicipalsecurities; (M) registration to act exclusively as a finder;
(N)registration to deal exclusively in investment banking; and
(O)registrationwithotherrestrictionswhichtheSecuritiesCommissionermay impose based upon the facts.
(3) Inrestrictedregistrations,theevidenceofregistrationshallindicatethattheholder thereof is entitled to act as a dealer only in the specified issue or category of securities.
(d) Prohibitiononfraudandavailabilityofanexemptionfromregistration.The Texas SecuritiesActprohibitsfraudorfraudulentpracticesindealinginanymannerinanysecuritieswhetherornot thepersonengaginginfraudorfraudulentpracticesisrequiredtoberegistered. TheAgencyhasjurisdiction toinvestigateandbringenforcementactionstothefull extentauthorizedin theTexasSecuritiesActwith respecttofraudordeceit,orunlawful conduct by a dealeroragentinconnectionwithtransactionsinvolving securitiesinTexas.However,theregistrationrequirementsdetailedinthischapterdonotapplytodealersand agentsthatareexemptfromregistrationassuchpursuanttotheTexasSecuritiesAct,Section5,orbyBoard rulepursuanttotheTexasSecuritiesAct,Section5.TorSection12.C,containedinChapter109or139ofthis title.
SourceNote:Theprovisionsofthis§115.1adoptedtobeeffectiveAugust12,2001,26TexReg5794;
amendedtobeeffectiveAugust22,2004,29TexReg7966;amendedtobeeffectiveJanuary8,2006,30
TexReg8866;amendedtobeeffectiveSeptember1,2006,31TexReg6709;amendedtobeeffective February 21,2008, 33TexReg1319; amended tobeeffective August 16,2010, 35TexReg 7050;amended to be effective November 8, 2012, 37 TexReg 8786.