BILL ANALYSIS

H.B. 1592

By: Legler

Pensions, Investments & Financial Services

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The State Securities Board is a five-member board appointed by the governor whose members serve six-year terms. The board is composed of five public members and is responsible for regulating the securities industry in Texas. The financial services industry is significantly under-represented on the board because the board's membership does not include a representative from the industry it regulates. H.B. 1592 requires that two appointees to the board be from the securities industry to provide more proportionate representation.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 1592 amends The Securities Act to change the composition of the State Securities Board from a board consisting of five members of the general public to a board consisting of two board members each of whom is registered as a dealer, agent, investment adviser, or investment adviser representative and is not employed by a commercial bank or nonbank affiliate and three board members who are members of the general public. The bill makes provisions relating to a person's ineligibility for appointment to the board applicable specifically to the appointment of a public member of the board and makes a conforming change with respect to grounds for removal on the basis of such ineligibility. The bill establishes that the statutory change in the board's composition made by the bill does not affect the eligibility of a board member appointed before September 1, 2011, to continue serving the term of that appointment. The bill requires each of the first two persons appointed to the board on or after September 1, 2011, to be a dealer, agent, investment adviser, or investment adviser representative and not employed by a commercial bank or nonbank affiliate.

EFFECTIVE DATE

September 1, 2011.