Texas Administrative Code
Title 7 - BANKING AND SECURITIES
Part 7 - STATE SECURITIES BOARD
Chapter 116 - INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES
Section 116.18 - Special Provisions Relating to Military Applicants

Universal Citation: 7 TX Admin Code ยง 116.18

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) Current registration--A registration or license that is:
(A) issued by another state, the District of Columbia, or a territory of the United States that has registration requirements that are substantially equivalent to the requirements for a Texas registration in the same capacity;

(B) in good standing; and

(C) in the same capacity as the application for registration in Texas.

(2) Good standing--A registration or license that is effective and unrestricted. A registration or license is considered to be restricted and not in good standing if it is subject to:
(A) an undertaking, special stipulations or agreements relating to payments, limitations on activity or other restrictions;

(B) a pending administrative or civil action; or

(C) an order or other written directive issued pursuant to statutory authority and procedures, including orders of denial, suspension, or revocation.

(3) Military spouse--A person who is married to a military service member.

(4) Military service member--A person who is on active duty.

(5) Military veteran--A person who has served on active duty and who was discharged or released from active duty.

(6) Active duty--Current full-time military service in the armed forces of the United States or active duty military service as a member of the Texas military forces, as defined by Government Code, § RSA 437.001, or similar military service of another state.

(7) Armed forces of the United States--The Army, Navy, Air Force, Space Force, Coast Guard, or Marine Corps of the United States or a reserve unit of one of those branches of the armed forces.

(8) Military applicant--A military spouse, military service member, or military veteran.

(b) Expedited review of an application submitted by a military applicant as authorized by Occupations Code, §§ 55.004, 55.005, and 55.006.

(1) A military applicant may use the procedure set out in this subsection if the military applicant:
(A) holds a current registration in another jurisdiction; or

(B) has been registered in Texas in the same capacity within the five years preceding the date of the application for registration.

(2) If the military applicant is not registered within five days of submitting an application, the military applicant may request special consideration of his or her application for registration by filing Form 133.4, Request for Consideration of a Registration Application by a Military Applicant, with the Securities Commissioner. Within five business days of receipt of the completed Form 133.4, the military applicant will be notified in writing of the reason(s) for the pending or deficient status assigned to the application.

(3) In addition to the waivers of examination requirements set out in § 116.3 of this title (relating to Examination), the Commissioner in his or her discretion is authorized by the Board to grant full or partial waivers of the examination requirements of the Texas Securities Act, §4004.151, on a showing of alternative demonstrations of competency to meet the requirements for obtaining the registration sought.

(4) A military applicant proceeding under this subsection may be registered despite having pending and/or deficient items ("deficiencies"). The deficiencies will be communicated to the military applicant in writing or by electronic means within five business days from approval of the registration.

(5) The deficiencies noted at the time the registration is granted must be resolved by the military applicant within a 12 month period. Failure to resolve outstanding deficiencies will cause the registration granted under this subsection or any renewal of such registration to automatically terminate 12 months after the date the registration was initially granted pursuant to this subsection.

(c) Waiver or refund of initial application fee and Texas Securities Law Examination fee for a military applicant as authorized by Occupations Code, § RSA 55.009.

(1) To qualify for a fee waiver or refund, the applicant must be:
(A) a military applicant who holds a current registration in another jurisdiction; or

(B) a military service member or military veteran whose military service, training, or education substantially meets all the requirements for the registration sought who submits Form 133.4, Request for Consideration of a Registration Application by a Military Applicant, with the applicant's registration application.

(2) To request a waiver or refund of a fee previously paid, the applicant must submit Form 133.19, Waiver or Refund Request by a Military Applicant.
(A) If requesting a waiver of the fee to take the Texas Securities Law Examination, Form 133.19 must be submitted when filing the request to take the Texas Securities Law Examination.

(B) If requesting a waiver of the initial application fee, Form 133.19 must be submitted with the initial application.

(C) If requesting a refund of the initial application fee or Texas Securities Law Examination fee that was paid in error, Form 133.19 must be submitted within four years from the date the fee was collected or received.

(d) Registration of persons with military experience as authorized by Occupations Code, § 55.007.

(1) An applicant who is a military service member or military veteran may request special consideration of verified military service, training, or education towards registration requirements, other than an examination requirement, for the registration sought by submitting Form 133.4, Request for Consideration of a Registration Application by a Military Applicant, with the applicant's registration application.

(2) The procedure authorized by this subsection is not available to a military service member or military veteran who:
(A) is registered in another jurisdiction but such registration is not in good standing; or

(B) has been convicted of a crime that could be the basis for denial of the registration pursuant to the Texas Securities Act, §4007.105.

(e) Renewals by military service members, as authorized by Occupations Code, § 55.002 and § 55.003. If a military service member's registration is not renewed in a timely manner, the military service member may renew the registration pursuant to this subsection.

(1) Renewal of the registration may be requested by the military service member, the military service member's spouse, or an individual having power of attorney from the military service member. The renewal application shall include a current address and telephone number for the individual requesting the renewal.

(2) Renewal may be requested before or within two years after expiration of the registration.

(3) A copy of the official orders or other official military documentation showing that the military service member is or was on active duty shall be submitted to the Securities Commissioner along with the renewal application.

(4) A copy of the power of attorney from the military service member, if any, shall be filed with the Securities Commissioner along with the renewal application if the individual having the power of attorney executes any of the documents required in this subsection.

(5) A renewal application submitted to the Securities Commissioner pursuant to this subsection shall be accompanied by the applicable renewal fee set out in § RSA 116.8 of this title (relating to Fee Requirements).

(6) The State Securities Board will not assess any increased fee or other penalty against the military service member for failure to timely renew the registration if it is established to the satisfaction of the Securities Commissioner that all requirements of this subsection have been met.

(f) Other provisions in this chapter.

(1) Unless specifically allowed in this section, an applicant must meet the requirements for registration or renewal specified in this chapter. This includes the requirement that certain filings be made electronically through the IARD.

(2) A one-year period, instead of the 90-day period contained in § RSA 116.2 of this title (relating to Application Requirements), will apply to the automatic withdrawal of an application for which a Form 133.4 is properly filed.

(g) Additional information. An applicant receiving special consideration pursuant to this section in connection with a registration application or renewal shall provide any other information deemed necessary by the Commissioner. Such information may include, but is not limited to documentation:

(1) demonstrating status as a military spouse, service member, or military veteran;

(2) to determine whether the applicant meets licensing requirements through some alternative method;

(3) relating to prior military service, training, or education that may be credited towards a registration requirement; or

(4) to determine an investment adviser's financial responsibility or an investment adviser's or investment adviser representative's business repute or qualifications.

(h) Recognition of out-of-state license or registration of an individual who is either a military service member or a military spouse as authorized by Occupations Code, § 55.0041.

(1) An individual who is a resident of Texas and who is either a military service member or a military spouse may use the procedure set out in this subsection if the individual holds a current registration in another jurisdiction;

(2) The period covered by this subsection is only for the time during which the military service member is stationed at a military installation in Texas. Notwithstanding, if the individual is a military spouse, in the event of a divorce or other event that affects the individual's status as a military spouse, the recognition period covered by this subsection may continue, but for all individuals using the procedure set out in this subsection, this recognition period may not exceed three years from the date the individual:
(A) first becomes registered, or makes a notice filing pursuant to § RSA 116.1(b)(2) of this chapter (relating to general provisions), in Texas under Option 1, set out in paragraph (3) of this subsection; or

(B) first receives the confirmation from the Registration Division under Option 2, set out in paragraph (4)(C)(ii) of this subsection.

(3) Option 1: registration in Texas, or a notice filing made pursuant to § 116.1(b)(2) of this chapter, with waiver or refund of the initial filing fee and renewal fees. If the individual is registered or notice filed in Texas, for all or part of the period set out in paragraph (2) of this subsection, the individual may request a waiver or refund of a fee previously paid.
(A) The initial filing fee may be waived or refunded by following the procedure set out in subsection (c) of this section, including filing Form 133.19, Waiver or Refund Request by a Military Applicant.

(B) A renewal fee may be waived by submitting Form 133.22, Waiver or Refund Request by a Military Service Member or Military Spouse for a Renewal Fee, at the time the renewal is submitted. A refund of a renewal fee that was paid in error, is requested by submitting Form 133.22 within four years from the date the fee was collected or received.

(4) Option 2: notification and authorization of activity without registration, or notice filing pursuant to § 116.1(b)(2) of this chapter. Upon confirmation under subparagraph (C) or (D) of this paragraph, the individual will be considered to be notice filed in Texas. Such notice filing expires at the end of the calendar year.
(A) An individual may engage in activity without a license or registration under the authority of Occupations Code, § 55.0041, and this paragraph, only for the period specified in paragraph (2) of this subsection.

(B) An individual who becomes ineligible under Occupations Code, § 55.0041, or paragraph (1) or (2) of this subsection prior to the three year period identified in paragraph (2) of this subsection, must notify the Securities Commissioner of such ineligibility within 30 days and immediately cease activity until such time as the individual is registered in Texas, or makes a notice filing pursuant to § 116.1(b)(2) of this chapter, in the appropriate capacity to conduct activity in Texas.

(C) Before engaging in an activity in Texas requiring registration, or a notice filing pursuant to § 116.1(b)(2) of this chapter, the individual must initially:
(i) provide notice of the individual's intent to engage in activity in Texas and specify the type of activity by filing with the Securities Commissioner:
(I) Form 133.23, Request for Recognition of Out-Of-State License or Registration Pursuant to Occupations Code § 55.0041;

(II) proof of the individual's residency in Texas (a permanent change of station (PCS) order may serve as proof of residency); and

(III) a copy of the individual's military identification card.

(ii) receive confirmation that the Registration Division:
(I) has verified the individual's license in another jurisdiction, which the Registration Division shall complete such verification no later than the 30th day after the date the individual provides the notice and submits the information required by subparagraph (C)(i) of this paragraph; and

(II) authorizes the individual to engage in the specified activity.

(D) To continue to conduct business in Texas without registration, or a notice filing pursuant to § 116.1(b)(2) of this chapter, under Option 2, after the expiration of the initial confirmation under subparagraph (C)(ii) of this paragraph, the individual must renew annually on the same schedule as renewals of registration. This enables the Registration Division to determine that the individual remains eligible under Occupations Code, § 55.0041, to continue to conduct securities activities in Texas without being registered.
(i) A renewal is made by submitting the same documents identified in subparagraph (C)(i) of this paragraph.

(ii) A renewal is not effective until the individual receives confirmation that the Registration Division:
(I) has verified the individual's license in another jurisdiction; and

(II) authorizes the individual to engage in specified activity.

(i) The purpose of this section is to establish procedures authorized by Texas Occupations Code, Chapter 55, and is not intended to modify or alter rights that may be provided under federal law.

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