June 19, 1991
TO: STATE SECURITIES MEMBERS NO. 27-91
RE: TEXAS ADOPTS RULE EXCLUDING 144A SECURITIES FROM
INVESTMENT LIMITATION
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The Institute is pleased to inform you that, effective May
16, 1991, the Texas Securities Board adopted an amendment to
Section 123.2 of the Texas Administrative Code that excludes
securities eligible for resale pursuant to Rule 144A of the
Securities and Exchange Commission from the current fifteen
percent investment limitation in restricted securities.
The Institute submitted a comment letter supporting the
amendment since such will greatly benefit mutual funds by
allowing funds to utilize the liberalized guidelines adopted by
the SEC with respect to restricted securities.
The Texas Securities Board also adopted an amendment to
Section 123.1 of the Texas Administrative Code to clarify that
all distributors, including financial institutions, must be
registered as dealers in Texas. As you may be aware, unlike the
majority of states that except "banks" from the definition of
"dealer," banks are not excepted from the definition of "dealer"
in the Texas Securities Act. The rule further requires agents
and salesmen to be registered as provided for in the Texas
Securities Act.
* * *
Attached is a copy of the final rules. We will keep you
advised of further developments.
Patricia Louie
Assistant General Counsel
Attachment