PROPOSED RULES
FINANCIAL INSTITUTIONS
(Securities Division)
Original Notice.
Preproposal statement of inquiry was filed as WSR 07-19-067.
Title of Rule and Other Identifying Information: Amendments to WAC 460-16A-205 to update existing and adopt new North American Securities Administrators Association (NASAA) guidelines and statements of policy.
Hearing Location(s): Department of Financial Institutions, 150 Israel Road S.W., Tumwater, WA 98501, on January 23, 2008, at 10 a.m.
Date of Intended Adoption: January 23, 2008.
Submit Written Comments to: Jill M. Vallely, Securities Division, P.O. Box 9033, Olympia, WA 98507-9033, e-mail jvallely@dfi.wa.gov, fax (360) 704-7035, by January 22, 2008.
Assistance for Persons with Disabilities: Contact Jill Vallely by January 18, 2008, TTY (360) 664-8126 or (360) 902-8760.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The Washington securities division uses guidelines and policies created by NASAA as the basis for regulating certain offerings and licensees. These guidelines and policies are periodically updated and occasionally new guidelines and policies are adopted. As part of the NASAA adoption process, all policies and guidelines are subjected to a public comment process. This amendment would update Washington's regulations to reflect the latest versions of all previously adopted guidelines. It would also adopt NASAA's statement of policy regarding church extension fund securities and uniform disclosure guidelines for cover legends for the first time. This will facilitate greater uniformity with the many other states that rely on NASAA guidelines and policies.
WAC 460-16A-205 (1)(b), (c), (d), (e), (f), (i), (j), and (q) would be amended to adopt the most recent version of the NASAA guideline codified in those subsections. New subsection (1)(y) would adopt "Church Extension Fund Securities" and new subsection (1)(z) would adopt "Guidelines for Cover Legends."
Statutory Authority for Adoption: RCW 21.20.450.
Statute Being Implemented: Chapter 21.20 RCW.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of financial institutions, securities division, governmental.
Name of Agency Personnel Responsible for Drafting: Jill M. Vallely, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760; Implementation: Scott Jarvis, Director of Department of Financial Institutions, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760; and Enforcement: Michael E. Stevenson, Director of Securities Division, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposal does not impose additional costs on business.
A cost-benefit analysis is not required under RCW 34.05.328. The department of financial institutions is not one of the agencies listed in RCW 34.05.328.
December 17, 2007
Scott Jarvis
Director
OTS-1239.1
AMENDATORY SECTION(Amending WSR 02-22-106, filed 11/6/02,
effective 12/7/02)
WAC 460-16A-205
Adoption of NASAA statements of policy.
(1) In order to promote uniform regulation, the administrator
adopts the following North American Securities Administrators
Association (NASAA) statements of policy for offerings
registering pursuant to RCW 21.20.180 or 21.20.210:
(a) Registration of publicly offered cattle feeding programs, as adopted September 17, 1980;
(b) Registration of commodity pool programs, as adopted
with amendments through ((August 30, 1990)) May 7, 2007;
(c) Equipment programs, as adopted with amendments
through ((October 24, 1991)) May 7, 2007;
(d) Registration of oil and gas programs, as adopted with
amendments through ((October 24, 1991)) May 7, 2007;
(e) Real estate investment trusts, as adopted with
amendments through ((September 29, 1993)) May 7, 2007;
(f) Real estate programs, as adopted with amendments
through ((September 29, 1993)) May 7, 2007;
(g) Loans and other material affiliated transactions, as adopted with amendments through November 18, 1997;
(h) Options and warrants, as adopted with amendments through September 28, 1999;
(i) Registration of direct participation programs - omnibus guidelines, as adopted ((March 29, 1992)) with
amendments through May 7, 2007;
(j) Mortgage program guidelines, as adopted ((September
10, 1996)) with amendments through May 7, 2007;
(k) Church bonds, as adopted April 14, 2002;
(l) Health care facility offerings, pertaining to the offering of nonprofit health care facility bonds, as adopted April 5, 1985;
(m) Corporate securities definitions, as adopted September 28, 1999;
(n) Impoundment of proceeds, as adopted with amendments through September 28, 1999;
(o) Preferred stock, as adopted with amendments through April 27, 1997;
(p) Promotional shares, as adopted September 28, 1999, except that the term promotional shares shall be limited to those equity securities which were issued within the last three years and that all promotional shares in excess of twenty-five percent of the shares to be outstanding upon completion of the offering may be required to be deposited in escrow absent adequate justification that escrow of such shares is not in the public interest and not necessary for the protection of investors;
(q) Registration of asset-backed securities, as adopted
((October 25, 1995)) with amendments through May 7, 2007,
except for offerings registering or required to register
pursuant to chapter 460-33A WAC or RCW 21.20.705 through
21.20.855;
(r) Promoters' equity investment, as adopted with amendments through April 27, 1997;
(s) Specificity in use of proceeds, as adopted September 28, 1999;
(t) Underwriting expenses, underwriter's warrants, selling expenses, and selling security holders, as adopted with amendments through September 28, 1999;
(u) Unsound financial condition, as adopted September 28, 1999;
(v) Unequal voting rights, as adopted October 24, 1991;
(w) Guidelines for general obligation financing by
religious denominations, as adopted April 17, 1994; ((and))
(x) Risk disclosure guidelines, as adopted September 9, 2001;
(y) Church extension fund securities, as adopted with amendments through April 18, 2004; and
(z) Guidelines for cover legends as adopted October 2, 2004.
(2) An offering registering pursuant to RCW 21.20.180 or 21.20.210 that falls within one or more of the statements of policy listed in subsection (1) of this section must comply with the requirements of said statement of policy or policies.
(3) The statements of policy referred to in subsection (1) of this section are found in CCH NASAA Reports published by Commerce Clearing House. Copies are also available at the office of the securities administrator.
[Statutory Authority: RCW 21.20.450. 02-22-106, § 460-16A-205, filed 11/6/02, effective 12/7/02; 98-17-013, § 460-16A-205, filed 8/10/98, effective 9/10/98; 96-11-017, § 460-16A-205, filed 5/6/96, effective 6/6/96; 95-17-068, § 460-16A-205, filed 8/16/95, effective 9/16/95; 93-01-075, § 460-16A-205, filed 12/14/92, effective 1/14/93; 91-04-008, § 460-16A-205, filed 1/25/91, effective 2/25/91.]