WSR 19-11-065
PERMANENT RULES
DEPARTMENT OF
FINANCIAL INSTITUTIONS
(Securities Division)
[Filed May 15, 2019, 1:59 p.m., effective June 15, 2019]
Effective Date of Rule: Thirty-one days after filing.
Purpose: The securities division hereby amends WAC 460-42A-030, which provides that certain municipal securities are exempt from registration under RCW
21.20.310(1) if they receive requisite ratings from designated ratings agencies. Specifically, the securities division amends WAC 460-42A-030 to correct an inadvertent drafting error, and to recognize equivalent ratings by Fitch Ratings, a nationally recognized statistical rating organization that issues credit ratings to municipal securities.
In 2014, the securities division amended WAC 460-10A-160 to update references to securities manuals for the purpose of the "manual exemption." As part of this update, Moody's Investors Service was replaced with a reference to Mergent's Investor Service to reflect current publishers of securities manuals. In an early 2017 update to our rules to remove references to discontinued securities manuals, the securities division inadvertently replaced a reference to Moody's Investors Service with a reference to Mergent, Inc. in WAC 460-42A-030. However, Mergent, Inc. does not publish such municipal securities ratings, while Moody's Investors Service, Inc. is a well-known ratings organization.
The securities division had no intent to disqualify offerings with the requisite rating from Moody's Investors Service, Inc. from relying on the municipal securities exemption in WAC 460-42A-030. Accordingly, the securities division amends WAC 460-42A-030 to replace references to Mergent, Inc. with references to Moody's Investors Service, Inc. Beyond the 2017 drafting error, WAC 460-42A-030 has not been significantly amended since 1989. Accordingly, the securities division also amends WAC 460-42A-030 to recognize equivalent ratings by Fitch Ratings, a nationally recognized statistical rating organization that also issues credit ratings to municipal securities.
Citation of Rules Affected by this Order: Amending WAC 460-42A-030.
Adopted under notice filed as WSR 19-07-075 on March 19, 2019.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.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 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: May 15, 2019.
Charles Clark
Director
AMENDATORY SECTION(Amending WSR 17-05-002, filed 2/1/17, effective 3/4/17)
WAC 460-42A-030
Exemption of securities pursuant to RCW 21.20.310(1).Any security which would otherwise be exempt from registration under RCW
21.20.310(1) except that it is payable from a nongovernmental industrial or commercial enterprise shall be exempt from registration if it meets the requirements of either subsection (1) or (2) of this section:
(1) The security receives a rating of "AA" or better from Standard and Poor's Corporation or an equivalent rating from ((Mergent))Moody's Investors Service, Inc. or Fitch Ratings, Inc.; or
(2)(a) The security is issued to fund a single-family mortgage loan program established and operated by a state housing finance agency; and
(b) The security receives a rating of at least "A+" from Standard and Poor's Corporation or an equivalent rating from ((Mergent))Moody's Investors Service, Inc. or Fitch Ratings, Inc.