WSR 14-17-037

PROPOSED RULES

[Filed August 13, 2014, 4:15 p.m.]

Preproposal statement of inquiry was filed as WSR 14-13-058.

Title of Rule and Other Identifying Information: The securities division proposes to create a new rule at WAC 460-23B-070 regarding the termination of salespersons for issuers. The proposed rule will specify 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 by filing Form U5 with the division.

Hearing Location(s): Department of Financial Institutions (DFI), 150 Israel Road S.W., Tumwater, WA 98501, on October 1, 2014, at 10:00 a.m.

Date of Intended Adoption: October 2, 2014.

Submit Written Comments to: Jill Vallely, Securities Division, P.O. Box 9033, Olympia, WA 98507-9033, e-mail jill.vallely@dfi.wa.gov, fax (360) 704-7035, by September 30, 2014.

Assistance for Persons with Disabilities: Contact Carolyn Hawkey, P.O. Box 9033, Olympia, WA 98507, TTY (360) 664-8126 or (360) 902-8760.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: 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 proposes a new rule at WAC 460-23B-070 to specify that the required notification shall be made by filing Form U5 with the division.

Reasons Supporting Proposal: The rule will clarify how issuers and salespersons for issuers should comply with the existing statute. The Form U5 is the Uniform Termination Notice for Securities Industry Registration. It is used to notify regulators of the termination of securities salespersons and investment adviser representatives. 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. However, the proposed rule would require the same form and termination notice as required at the federal level for securities salespersons associated with broker-dealers. In doing so, the rule promotes a uniform notification procedure for the termination of securities salespersons.

Statutory Authority for Adoption: RCW 21.20.070, 21.20.080, 21.20.450.

Statute Being Implemented: Chapter 21.20 RCW.

Name of Proponent: DFI, securities division, governmental.

Name of Agency Personnel Responsible for Drafting: Jill Vallely, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760; Implementation: Scott Jarvis, Director, DFI, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760; and Enforcement: William Beatty, Director, Securities, 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 proposed rule will not impose more than minor costs on businesses.

A cost-benefit analysis is not required under RCW 34.05.328. DFI is not one of the agencies listed in RCW 34.05.328.

August 13, 2014

Scott Jarvis

Director