WSR 11-04-014



[ Filed January 21, 2011, 2:31 p.m. ]

January 21, 2011

Descriptive Statement pursuant to RCW 34.05.230(4)

Subject: Securities Act Interpretive Statement - 23 (SAIS 23) and Franchise Act Interpretive Statement - 07 (FIS 07). Accredited Investor Definition - Indebtedness Secured by Primary Residence.

The securities administrator has adopted interpretive statements under the Securities Act of Washington, chapter 21.20 RCW, and the Franchise Investment Protection Act, chapter 19.100 RCW, interpreting the definition of "accredited investor" as it pertains to natural persons in WAC 460-44A-501 and 460-80-108 to allow the exclusion of the amount of indebtedness secured by the primary residence up to its fair market value in calculating a person's net worth. Any indebtedness secured by a natural person's primary residence that is in excess of the fair market value of the residence shall be considered a liability and deducted from the person's net worth.

To receive a copy of SAIS 23 or FIS 06, contact Cheryl Pearson, Securities Division, P.O. Box 9033, Olympia, WA 98507-9033, (360) 902-8760,

William M. Beatty

Director of Securities

Washington State Code Reviser's Office