WSR 14-13-058

PREPROPOSAL STATEMENT OF INQUIRY

[Filed June 12, 2014, 1:21 p.m.]

Subject of Possible Rule Making: The securities division is considering the creation of a new rule to clarify that securities issuers and salespersons for issuers must notify the securities division of the termination of salespersons for the issuer (as required pursuant to RCW 21.20.080) by filing Form U5 with the division.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 21.20.070, 21.20.080, and 21.20.450.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: RCW 21.20.080 states that if the employment or association of a salesperson for an issuer is terminated, the salesperson and the issuer must notify the securities division of the termination. However, RCW 21.20.080 does not specify how to make this notification. The securities division is considering adopting a rule to specify that the required notification shall be made by filing Form U5 with the division. The rule would clarify how issuers and salespersons for issuers should comply with the existing statute.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: The new rule that the securities division is considering will affect the regulation of securities salespersons of issuers. Securities salespersons of issuers are not generally required to register as such with either the United States Securities and Exchange Commission or FINRA, the self-regulatory organization for broker-dealers and securities salespersons. The rule we are considering proposing, however, would require the same form and termination notice as required at the federal level for a securities salesperson that is associated with a broker-dealer.

Process for Developing New Rule: The securities 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 Jill Vallely, Department of Financial Institutions, Securities Division, P.O. Box 9033, Olympia, WA 98507-9033, phone (360) 902-8801, fax (360) 704-7035, e-mail jill.vallely@dfi.wa.gov.

June 12, 2014

William M. Beatty, Director

Securities Division