Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 21.20.320(2), 21.20.450.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: RCW 21.20.320(2) was amended during the 1997 legislative session to grant the director rule making authority concerning nonissuer transactions by registered salespersons of registered broker-dealers. The intent behind this amendment was to authorize the director to adopt the NASAA model manual exemption.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: The federal Securities and Exchange Commission (SEC) and each of the fifty states and the District of Columbia also regulate this area. NASAA model regulations are not adopted by the NASAA membership until the opportunity to comment is afforded to both the membership and the public.

Process for Developing New Rule: Please see paragraph above.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting William M. Beatty, Securities Division, Department of Financial Institutions, P.O. Box 9033, Olympia, WA 98507-9033, (360) 902-8760, FAX (360) 704-6923, e-mail bbeatty@dfi.wa.gov, Securities Division Web Site http://www.wa.gov/dfi/securities.

April 2, 1998

Michael E. Stevenson

Program Manager