By Craddick H.B. No. 2846
77R9211 CLG-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the application of state securities law to certain
1-3 investment advisers.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subsection A, Section 12, The Securities Act
1-6 (Article 581-12, Vernon's Texas Civil Statutes), is amended to read
1-7 as follows:
1-8 A. (1) Except as provided in Section 5 of this Act, no
1-9 person, firm, or corporation [or dealer] shall, directly or through
1-10 agents or salesmen, offer for sale, sell or make a sale of any
1-11 securities in this state without first being registered as in this
1-12 Act provided. No salesman or agent shall, in behalf of any dealer,
1-13 sell, offer for sale, or make sale of any securities within the
1-14 state unless registered as a salesman or agent of a registered
1-15 dealer under the provisions of this Act.
1-16 (2) No person, firm, or corporation shall, directly or
1-17 through agents, render services as an investment adviser in this
1-18 state without first being registered as in this Act provided. No
1-19 agent shall, on behalf of a dealer, render services as an
1-20 investment adviser in this state unless registered as an agent of a
1-21 registered dealer under this Act. These registration requirements
1-22 do not apply, however, to an investment adviser or agent of an
1-23 investment adviser who during the preceding 12-month period had
1-24 fewer than 15 clients, who does not hold itself out to the public
2-1 as an investment adviser, and who does not act as an investment
2-2 adviser to an investment company registered under the Investment
2-3 Company Act or to a company that has elected to be a business
2-4 development company under Section 54, Investment Company Act, and
2-5 has not withdrawn its election. For purposes of determining the
2-6 number of clients an investment adviser had, the definition of a
2-7 client under Rule 203(b)(3)-1, as amended, adopted under the
2-8 Investment Company Act applies, and a shareholder, partner, or
2-9 beneficial owner of a business development company, as defined by
2-10 the Investment Company Act, is not considered to be a client of
2-11 that investment adviser unless the person is a client separate and
2-12 apart from being a shareholder, partner, or beneficial owner. In
2-13 this subsection, "Investment Company Act" means the Investment
2-14 Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), as amended.
2-15 SECTION 2. This Act takes effect September 1, 2001.