FINANCIAL INSTITUTIONS

[Filed August 13, 2018, 9:22 a.m., effective September 13, 2018]

Effective Date of Rule: Thirty-one days after filing.

Purpose: The department of financial institutions is hereby adjusting the filing fees required for initial and renewal applications for registration as an investment adviser, broker-dealer, investment adviser representative, and securities salesperson, in addition to the initial and renewal notice filing fees for federal covered advisers, upward by ten dollars effective January 31, 2019, to defray the costs of administering the Securities Act of Washington, chapter 21.20 RCW, pursuant to RCW 21.20.340 and 43.320.110 as amended by SB 6024 (2018). On March 22, 2018, Governor Jay Inslee signed into law SB 6024, which authorizes the director of the department of financial institutions to increase the fees set forth in RCW 21.20.340 upward by no more than fifteen dollars upon a finding that a fee increase is necessary to defray the costs of administering the Securities Act of Washington. The securities division's annual revenues are insufficient to sustain its operations. The securities division's annual expenditures have exceeded its revenues cumulatively by approximately $14.4 million since fiscal year 2004. The securities division's yearly deficits are projected to continue through fiscal year 2019, resulting in an approximate $7.5 million deficit in fund balance for the division, far below the recommended minimum fund balance of $1.6 million. The fee increase will correct the deficiencies in revenues that have persisted since fiscal year 2004 and the full amount of the fee increase will be allocated to the securities division.

Citation of Rules Affected by this Order: New WAC 460-05A-010.

Statutory Authority for Adoption: RCW 21.20.340 and 43.320.110 as amended by SB 6024 (2018).

Adopted under notice filed as WSR 18-13-076 on June 15, 2018.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at the Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's own Initiative: New 1, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

Date Adopted: August 13, 2018.

Chapter 460-05A WAC

FEES

WAC 460-05A-010Licensing fees.

(1) In accordance with RCW 21.20.340(15), the fees specified in RCW 21.20.340 (6) and (7) are adjusted upward by ten dollars effective January 1, 2019, in order to defray the costs of administering the Securities Act of Washington, chapter 21.20 RCW. Accordingly, the following fees shall apply:

(a) For registration of a broker-dealer or investment adviser, the fee shall be one hundred sixty dollars for original registration and eighty-five dollars for each annual renewal. When an application is denied or withdrawn the director shall retain one half of the fee.

(b) For a federal covered adviser filing pursuant to RCW 21.20.050, the fee shall be one hundred sixty dollars for original notification and eighty-five dollars for each annual renewal. A fee shall not be assessed in connection with converting an investment adviser registration to a notice filing when the investment adviser becomes a federal covered adviser.

(c) For registration of a salesperson or investment adviser representative, the fee shall be fifty dollars for each original registration with each employer and thirty dollars for each annual renewal. When an application is denied or withdrawn the director shall retain one half of the fee.

(2) Upon a finding by the department of financial institutions that the fee increase, or portion thereof, set forth in subsection (1) of this section is not necessary to defray the costs of administering the Securities Act of Washington, chapter 21.20 RCW, the department may waive that portion of the fee attributable to a fee increase under RCW 21.20.340(15).