Section 109.5 - Dealer Registration Exemption for Sales to Financial Institutions and Certain Institutional Investors(a) Availability. The exemption from dealer and agent registration provided by the Texas Securities Act, §4004.001, or this section is not available if the financial institution or other institutional investor named therein is in fact acting only as agent for another purchaser that is not a financial institution or other institutional investor listed in §4005.011 or this section. These exemptions are available only if the financial institution or other institutional investor named therein is acting for its own account or as a bona fide trustee of a trust organized and existing other than for the purpose of acquiring the specific securities for which the dealer or agent is claiming the exemption.(b) Sales to certain institutional investors. The State Securities Board, pursuant to the Act, §4004.001, exempts a person from the dealer and agent registration requirements of the Act, when the person sells or offers for sale any securities to any of the following persons: (1) an "institutional accredited investor," as that term is defined in § RSA 107.2 of this title (relating to Definitions), excluding, however, any self-directed employee benefit plan with investment decisions made solely by persons that are "individual accredited investors" as defined in § RSA 107.2 of this title;(2) any "qualified institutional buyer" (as that term is defined in § RSA 107.2 of this title (relating to Definitions)); and(3) a corporation, partnership, trust, estate, or other entity (excluding individuals) having net worth of not less than $5 million, or a wholly-owned subsidiary of such entity, as long as the entity was not formed for the purpose of acquiring the specific securities.(c) Financial statements. For purposes of determining a purchaser's total assets or net worth under this section, the issuer and the seller may rely upon the entity's most recent annual balance sheet or other financial statement which shall have been audited by an independent accountant or which shall have been verified by a principal of the purchaser.7 Tex. Admin. Code § 109.5
The provisions of this §109.5 adopted to be effective July 14, 2005, 30 TexReg 3987; amended to be effective June 21, 2011, 36 TexReg 3714; Amended by Texas Register, Volume 46, Number 12, March 19, 2021, TexReg 1733, eff. 3/21/2021; Amended by Texas Register, Volume 49, Number 28, July 12, 2024, TexReg 5141, eff. 7/18/2024