Washington State Department of Financial Institutions

Division of Securities Rulemaking Docket

Rulemaking is the process government agencies must use to create, modify, or repeal rules in the Washington Administrative Code (WAC).Below you will find information about current Division of Securities rulemaking activity.

Petition for Adoption, Amendment, or Repeal of a State Rule
Individuals or groups who wish to petition DFI to adopt, amend, or repeal an administrative rule may do so by using the form linked below. You also may contact DFI using other formats, such as a letter or email.

Rulemaking: Investment Adviser Rules

The Securities Division is soliciting comments on proposed amendments to the investment adviser rules set forth in Chapter 460-24A WAC.

The proposed amendments would update various provisions of the investment adviser rules, including the rules regarding financial reporting requirements, custody, books and records, and unethical practices. The proposed amendments would add new rule sections addressing proxy voting, advisory contracts, and compliance procedures and practices, and would create exemptions from registration for certain private fund advisers and venture capital fund advisers. Many of these changes would make Washington’s rules consistent with current federal law and NASAA model rules.

Please find a copy of the proposed rule making notice and the text of the proposed rules below. 

Documents

Submit Your Comments

If you have any questions or comments, please contact Jill Vallely at (360) 902-8801 or by email at jill.vallely@dfi.wa.gov.

Expedited Rulemaking: To Conform "Accredited Investor" Standards to Federal Law Amended

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) was signed into law. As mandated by the Act, the Securities and Exchange Commission (“SEC”) amended its net worth standards used to determine whether an individual is an accredited investor. Accredited investor status is used to determine the availability of certain exemptions to securities registration under the Securities Act of 1933. The amendments, as adopted by the SEC, exclude the value of a person’s primary residence and clarify the treatment of any indebtedness secured by the residence in calculating net worth. See Securities and Exchange Commission Release No. 33-9287, available at: http://www.sec.gov/rules/final/2011/33-9287.pdf.

The Securities Division has adopted corresponding amendments to its definition of “accredited investor” to conform to current federal standards. In particular, the rules affected are WAC 460-44A-501 and WAC 460-80-108. A copy of the Rule-making Order (CR-103P) and marked copies of the affected rules are attached.

Questions may be directed to Michelle Webster at michelle.webster@dfi.wa.gov or (360) 902-8736.

Documents

Rulemaking: Mortgage Paper Securities Rules Amended

The Division of Securities has amended the rules set forth in chapter 460-33A WAC, which provide an optional method of registration for “mortgage paper securities” as defined in WAC 460-33A-015(4).

The amended rules strengthen investor suitability requirements; revise the calculation of the number of investors that may participate in a loan; establish requirements for participation agreements; revise net worth and bonding requirements; revise provisions regarding escrow accounts and escrow agreements; establish requirements for servicing agreements; codify the requirement for a disclaimer in advertisements; clarify the fiduciary duties of a mortgage broker-dealer; include additional “dishonest and unethical practices” in WAC 460-33A-090; clarify the requirements for appraisals; clarify investors’ rights to receive information and access records concerning their investments; update recordkeeping requirements in WAC 460-33A-115; and make other updates and changes.

Questions concerning this rulemaking notice may be directed to Jill Vallely at jill.vallely@dfi.wa.gov or (360) 902-8801.

Documents

Submit Your Comments

If you have any questions or comments, please contact Jill Vallely at (360) 902-8801 or by email at jill.vallely@dfi.wa.gov.

Rulemaking: Correcting References to Securities Act of Washington Amended

The Securities Division has amended WAC 460-10A-215, 460-20B-035, 460-24A-020 & -045, 460-33A-010 & -015, and 460-44A-501 in order to correct references made to definitions found in the Securities Act of Washington, RCW 21.20.005. The Division has not revised the definitions themselves.

Recently, the Office of the Code Reviser revised the definitions section of the Securities Act of Washington, RCW 21.20.005, by alphabetizing the defined terms. This re-ordering resulted in a re-numbering of the defined terms in this section. As a result, the Washington Administrative Code now contains several inaccurate references.

The Division has now amended its rules to correct these inaccuracies. A copy of the rulemaking order (Form CR-103) is linked below, in addition to the text of the amendments.

Questions?

Questions concerning this rulemaking notice may be directed to Dan Matthews at dmatthews@dfi.wa.gov or (360) 902-8785.

Documents

Sections Amended

Completed Rulemaking Archive

Rulemaking Steps

Generally, rulemaking takes place in three distinctive steps based on filings required by the Office of the Code Reviser:

  1. CR-101 Pre-proposal Statement of Inquiry. At this stage, proposed text is usually not available. Comment is invited on whether rules in the areas identified in the CR-101 are needed and, if so, the content of those rules.
  2. A CR-102 Rulemaking Proposal is filed if it is decided to proceed. Proposed text is filed with the CR-102 and a comment period and public hearing are scheduled.
  3. After the comment period and public hearing, a CR-103 Rulemaking Order will be filed if it is decided to proceed with the rule. The final text is included with the CR-103. The newly adopted rules are generally effective 31 days after filing with the Code Reviser.

Once a rule has been adopted, it becomes a part of the Washington Administrative Code (WAC).

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