WSR 19-04-083
PERMANENT RULES
DEPARTMENT OF
FINANCIAL INSTITUTIONS
[Filed February 4, 2019, 12:43 p.m., effective March 7, 2019]
Effective Date of Rule: Thirty-one days after filing.
Purpose: The department of financial institutions hereby amends WAC 460-16A-205 to update its adoption of various statements of policy promulgated by the North American Securities Administrators Association (NASAA) that are applied to securities offerings sought to be registered under RCW 21.20.180 or 21.20.210. These statements of policy do not apply to offerings of federal covered securities or offerings that are exempt from registration under the Securities Act of Washington, chapter 21.20 RCW. The amendments make the following changes:
•Adopt updated versions of the following statements of policy: Corporate securities definitions; loans and other material transactions; preferred stock; promoters' equity investment; specificity in use of proceed; underwriting and selling expenses, underwriter's warrants and selling security holders; unsound financial condition; voting rights, registration of asset-backed securities; registration of commodity pool programs; registration of equipment programs; and registration of oil and gas programs;
•Adopt the new statement of policy regarding use of electronic offering documents and electronic signatures; and
•Repeal the adoption of the statement of policy regarding health care facility offerings, which was repealed by NASAA when it became obsolete as a result of the fact that health care facility offerings are now structured as municipal bonds and exemptions from registration apply.
Citation of Rules Affected by this Order: Amending WAC 460-16A-205.
Statutory Authority for Adoption: RCW 21.20.450.
Adopted under notice filed as WSR 19-01-088 on December 18, 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Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at the Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's own Initiative: New 0, Amended 1, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.
Number of Sections Adopted using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.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: February 4, 2019.
Gloria Papiez
Director
AMENDATORY SECTION(Amending WSR 11-13-036, filed 6/8/11, effective 7/9/11)
WAC 460-16A-205Adoption 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 May ((7, 2007))6, 2012;
(c) Equipment programs, as adopted with amendments through May ((7, 2007))6, 2012;
(d) Registration of oil and gas programs, as adopted with amendments through May ((7, 2007))6, 2012;
(e) Real estate investment trusts, as adopted with amendments through May 7, 2007;
(f) Real estate programs, as adopted with amendments through May 7, 2007;
(g) Loans and other material affiliated transactions, as adopted with amendments through ((March 31, 2008))May 6, 2018;
(h) Options and warrants, as adopted with amendments through March 31, 2008;
(i) Registration of direct participation programs - omnibus guidelines, as adopted with amendments through May 7, 2007;
(j) Mortgage program guidelines, as adopted 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;
)) Corporate securities definitions, as adopted with amendments through ((March 31, 2008))May 6, 2018;
(((n)))(m) Impoundment of proceeds, as adopted with amendments through March 31, 2008;
(((o)))(n) Preferred stock, as adopted with amendments through ((March 31, 2008))September 11, 2016;
(((p)))(o) Promotional shares, as adopted with amendments through March 31, 2008, 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)))(p) Registration of asset-backed securities, as adopted with amendments through ((May 7, 2007))May 6, 2012, except for offerings registering or required to register pursuant to chapter 460-33A WAC or RCW 21.20.705 through 21.20.855;
(((r)))(q) Promoters' equity investment, as adopted with amendments through ((March 31, 2008))September 11, 2016;
(((s)))(r) Specificity in use of proceeds, as adopted with amendments through ((March 31, 2008))September 11, 2016;
(((t)))(s) Underwriting expenses, underwriter's warrants, selling expenses, and selling security holders, as adopted with amendments through ((March 31, 2008))May 6, 2018;
(((u)))(t) Unsound financial condition, as adopted with amendments through ((March 31, 2008))May 6, 2018;
(((v)))(u) Unequal voting rights, as adopted with amendments through ((March 31, 2008))September 11, 2016;
(((w)))(v) Guidelines for general obligation financing by religious denominations, as adopted April 17, 1994;
(((x)))(w) Risk disclosure guidelines, as adopted September 9, 2001;
(((y)))(x) Church extension fund securities, as adopted with amendments through April 18, 2004; and
(((z)))(y) Guidelines for cover legends, as adopted October 2, 2004.
(z) Electronic offering documents and electronic signatures, as adopted May 8, 2017.
(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.