WSR 14-02-126

PREPROPOSAL STATEMENT OF INQUIRY

[Filed January 2, 2014, 11:31 a.m.]

Subject of Possible Rule Making: The [securities] division (division) is considering amending chapter 460-44A WAC to make ministerial updates to account for changes to Rule 506(b) and the adoption of Rule 506(c). The impacted WAC sections are WAC 460-44A-050, 460-44A-500, 460-44A-501, 460-44A-502, 460-44A-503, and 460-44A-506.

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

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: On July 10, 2013, the Securities and Exchange Commission adopted two final rules through SEC Release Nos. 33-9414 and 33-9415. These rules impact the existing exemption under Federal Rule 506(b) and create a new exemption in Federal Rule 506(c). Further, the text of the rules in WAC 460-44A-500 through 460-44A-508 is largely based upon the text of Federal Regulation D, which has been the subject of a number of minor revisions that are not yet reflected in our rules. We are considering amending these rules to reflect the recent amendments to Federal Rule 506 and to more closely align our rules with Federal Regulation D. By engaging in this rule making, the government and the public would be benefited through more uniform and accurate regulation and communication.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: The amendments that the division is considering affect the regulation of securities and exempt securities transactions. Securities are subject to regulation by the Securities and Exchange Commission under federal law. The amendments under consideration would better coordinate our rules with other federal and state agencies.

Process for Developing New Rule: The division is soliciting comments from interested persons and will adopt rules only after the consideration of public comments.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting Dan Matthews, Department of Financial Institutions, Securities Division, P.O. Box 9033, Olympia, WA 98507-9033, phone (360) 902-8785, fax (360) 704-6496, e-mail dmatthews@dfi.wa.gov.

January 2, 2014

William M. Beatty, Director

Securities Division