Current through Reg. 49, No. 38; September 20, 2024
(a) Definitions.
The following words and terms, when used in this section, shall have the
following meanings, unless the context clearly indicates otherwise.
(1) Authorized small business development
entity--An entity incorporated or organized under the laws of Texas and
authorized to do business in Texas that is:
(A) a Type A corporation authorized under the
Texas Local Government Code, Chapter 504;
(B) a Type B corporation authorized under
Texas Local Government Code, Chapter 505;
(C) a Texas nonprofit organization authorized
by an agency or authority of the federal government to distribute housing and
community development block grants;
(D) a Texas municipal corporation;
(E) the Texas Veterans Commission;
or
(F) a Texas nonprofit community
development financial institution certified by the Community Development
Financial Institutions Fund.
(2) Registered Small Business Development
Entity--An Authorized Small Business Development Entity registered as a Texas
crowdfunding portal under this section.
(3) Crowdfunding Web Portal--The Internet
website of a Registered Small Business Development Entity through which offers
and sales of securities exempt from registration pursuant to §RSA
139.25 of this title (relating to Intrastate
Crowdfunding Exemption) and/or § 139.26 of this title (relating to
Intrastate Crowdfunding Exemption for SEC Rule 147A Offerings) are
made.
(4) Third Party Operator--A
third party that a Registered Small Business Development Entity subcontracts
with pursuant to subsection (h) of this section.
(b) Securities offered and sold. A Registered
Small Business Development Entity must limit the securities offered and sold on
its Crowdfunding Web Portal to those of issuers located within its service
area. Such securities must be exempt from securities registration pursuant to
§RSA
139.25 of this title (relating to Intrastate
Crowdfunding Exemption) and/or § 139.26 of this title (relating to
Intrastate Crowdfunding Exemption for SEC Rule 147A Offerings).
(c) Internet website. The Crowdfunding Web
Portal must meet the requirements in §
RSA
115.19(b) of this chapter
(relating to Texas Crowdfunding Portal Registration and Activities).
(d) Prohibited activities. A Registered Small
Business Development Entity shall not engage in the activities listed in §
RSA
115.19(c) of this chapter
(relating to Texas Crowdfunding Portal Registration and Activities), except
that a Registered Small Business Development Entity is permitted to hold a
financial interest in an issuer offering securities on its Crowdfunding Web
Portal. A Registered Small Business Development Entity may not operate or
facilitate a secondary market in securities offered and sold through its
Crowdfunding Web Portal.
(e)
Background and regulatory checks. A Registered Small Business Development
Entity must meet the requirements in §
RSA
115.19(d) of this chapter
(relating to Texas Crowdfunding Portal Registration and Activities).
(f) Recordkeeping. A Registered Small
Business Development Entity must meet the requirements in §
RSA
115.19(e) of this chapter
(relating to Texas Crowdfunding Portal Registration and Activities). In lieu of
a copy of Form 133.15 (relating to Texas Crowdfunding Portal registration), the
Registered Small Business Development Entity must maintain a copy of Form
133.20 (relating to Texas Crowdfunding Portal Registration by an Authorized
Small Business Development Entity).
(g) Filings.
(1) Application. In lieu of the application
requirements in §
RSA
115.2 of this title (relating to Application
Requirements), a complete application of an Authorized Small Business
Development Entity registering as a Texas crowdfunding portal consists of the
following and must be filed with the Securities Commissioner:
(A) Form 133.20, including all applicable
schedules and supplemental information;
(B) Form U-4, for the designated officer and
a Form U-4 for each agent to be registered (officers of a corporation or
partners of a partnership shall not be deemed agents solely because of their
status as officers or partners);
(C) a copy of the articles of incorporation
or other documents which indicate the form of organization, certified by the
Texas Secretary of State or by an officer or partner of the
applicant;
(D) any other
information deemed necessary by the Commissioner to determine the financial
responsibility, business repute, or qualifications of the applicant;
and
(E) the appropriate
registration fee(s).
(2)
Post-reporting requirements. A Registered Small Business Development Entity is
subject to the dealer and agent requirements in §
RSA
115.9 of this title (relating to
Post-Registration Reporting Requirements).
(3) Renewal. The registration of a Registered
Small Business Development Entity expires at the close of the calendar year,
but subsequent registration for the succeeding year shall be issued upon
written application and upon payment of the appropriate renewal fee(s), without
filing of further statements or furnishing any further information unless
specifically requested by the Commissioner.
(h) Subcontracting of portal operations. A
Registered Small Business Development Entity may subcontract with a Third Party
Operator to operate its Crowdfunding Web Portal under the following conditions:
(1) The Third Party Operator is located in
Texas and authorized to do business in Texas;
(2) A written agreement is executed between
the Registered Small Business Development Entity and the Third Party Operator
specifying:
(A) the scope of work to be
performed by the Third Party Operator;
(B) that the business offices and records
reflecting the activities of the Crowdfunding Web Portal are located in Texas
and those locations are identified in the written agreement; and
(C) the division of responsibility between
the Registered Small Business Development Entity and the Third Party Operator
for maintaining records and instituting procedures to comply with subsections
(c), (d), and (e) of this section; and
(3) A copy of the written agreement required
by paragraph (2) is filed with the Securities Commissioner a minimum of 10 days
prior to the commencement of operations by the Third Party Operator of the
Crowdfunding Web Portal;
(4) A
Registered Small Business Development Entity registered as a Texas Crowdfunding
Portal pursuant to this section is responsible for ensuring the Securities
Commissioner is provided with access to the records and website as required by
subsection (f) of this section and §
RSA
115.19(e) of this
chapter.
