WSR 08-05-003

PERMANENT RULES

DEPARTMENT OF

FINANCIAL INSTITUTIONS

[ Filed February 6, 2008, 3:53 p.m. , effective March 8, 2008 ]


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

Other Findings Required by Other Provisions of Law as Precondition to Adoption or Effectiveness of Rule: No rule may be made unless the director of the department of financial institutions finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of chapter 21.20 RCW. The director hereby makes such a finding with respect to this proposal.

Purpose: The Washington securities division uses guidelines and policies created by the North American Securities Administrators Association (NASAA) as the basis for regulating certain offerings and licensees. These guidelines and policies are periodically updated and occasionally new guidelines and policies are adopted. This amendment would update Washington's regulations to reflect the latest versions of all previously adopted guidelines. It would also adopt NASAA's Statement of Policy Regarding Church Extension Fund Securities and Uniform Disclosure Guidelines for Cover Legends for the first time. This will facilitate greater uniformity with the many other states that rely on NASAA guidelines and policies.

Citation of Existing Rules Affected by this Order: Amending WAC 460-16A-205.

Statutory Authority for Adoption: RCW 21.20.450.

Adopted under notice filed as WSR 08-01-127 on December 19, 2007.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.

Date Adopted: February 6, 2008.

Scott Jarvis

Director

OTS-1239.2


AMENDATORY SECTION(Amending WSR 02-22-106, filed 11/6/02, effective 12/7/02)

WAC 460-16A-205   Adoption 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 ((August 30, 1990)) May 7, 2007;

(c) Equipment programs, as adopted with amendments through ((October 24, 1991)) May 7, 2007;

(d) Registration of oil and gas programs, as adopted with amendments through ((October 24, 1991)) May 7, 2007;

(e) Real estate investment trusts, as adopted with amendments through ((September 29, 1993)) May 7, 2007;

(f) Real estate programs, as adopted with amendments through ((September 29, 1993)) May 7, 2007;

(g) Loans and other material affiliated transactions, as adopted with amendments through November 18, 1997;

(h) Options and warrants, as adopted with amendments through September 28, 1999;

(i) Registration of direct participation programs - omnibus guidelines, as adopted ((March 29, 1992)) with amendments through May 7, 2007;

(j) Mortgage program guidelines, as adopted ((September 10, 1996)) 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;

(m) Corporate securities definitions, as adopted September 28, 1999;

(n) Impoundment of proceeds, as adopted with amendments through September 28, 1999;

(o) Preferred stock, as adopted with amendments through April 27, 1997;

(p) Promotional shares, as adopted September 28, 1999, 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) Registration of asset-backed securities, as adopted ((October 25, 1995)) with amendments through May 7, 2007, except for offerings registering or required to register pursuant to chapter 460-33A WAC or RCW 21.20.705 through 21.20.855;

(r) Promoters' equity investment, as adopted with amendments through April 27, 1997;

(s) Specificity in use of proceeds, as adopted September 28, 1999;

(t) Underwriting expenses, underwriter's warrants, selling expenses, and selling security holders, as adopted with amendments through September 28, 1999;

(u) Unsound financial condition, as adopted September 28, 1999;

(v) Unequal voting rights, as adopted October 24, 1991;

(w) Guidelines for general obligation financing by religious denominations, as adopted April 17, 1994; ((and))

(x) Risk disclosure guidelines, as adopted September 9, 2001;

(y) Church extension fund securities, as adopted with amendments through April 18, 2004; and

(z) Guidelines for cover legends, as adopted October 2, 2004.

(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.

[Statutory Authority: RCW 21.20.450. 02-22-106, 460-16A-205, filed 11/6/02, effective 12/7/02; 98-17-013, 460-16A-205, filed 8/10/98, effective 9/10/98; 96-11-017, 460-16A-205, filed 5/6/96, effective 6/6/96; 95-17-068, 460-16A-205, filed 8/16/95, effective 9/16/95; 93-01-075, 460-16A-205, filed 12/14/92, effective 1/14/93; 91-04-008, 460-16A-205, filed 1/25/91, effective 2/25/91.]

Washington State Code Reviser's Office