Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 21.20.180, 21.20.210, 21.20.450.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: Update or repeal various sections to ensure consistency with the Securities Act, chapter 21.20 RCW, and to enhance clarity.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: Financial statement requirements are also regulated by the SEC. Where possible, consistent with investor protection, the division attempts to make its requirements consistent with those of the SEC.

Process for Developing New Rule: Amendments to this chapter will be generated through the rules review process mandated by the Governor's Executive Order 97-02.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting William M. Beatty, Securities Division, Department of Financial Institutions, P.O. Box 9033, Olympia, WA 98507-9033, (360) 902-8760, fax (360) 704-6923, bbeatty@dfi.wa.gov, Securities Division Web Site http://www.wa.gov/dfi/securities.

June 25, 1998

Deborah R. Bortner

Director of Securities