(a) Dealers, investment advisers, dealer agents, and investment adviser
representatives who use the Internet, the World Wide Web, and similar
proprietary or common carrier electronic systems (collectively, the "Internet")
to distribute information on available products and services through certain
communications made on the Internet directed generally to anyone having access
to the Internet, and transmitted through postings on Bulletin Boards, displays
on "Home Pages" or similar methods ("Internet Communications") shall not be
deemed to be a "dealer" in this state for purposes of the Act, § 4.D, based
solely on that fact if the following conditions are observed:
(1) The Internet Communication contains a legend in which it is clearly
stated that:
(A) the dealer, investment adviser, dealer agent, or investment adviser
representative in question may only transact business in this state if first
registered, excluded, or exempted from Texas dealer, investment adviser, dealer
agent, or investment adviser representative registration requirements, as may
be; and
(B) follow-up, individualized responses to persons in Texas by such dealer,
investment adviser, dealer agent, or investment adviser representative that
involve either the effecting or attempting to effect transactions in securities,
or the rendering of personalized investment advice for compensation, as may be,
will not be made absent compliance with Texas dealer, investment adviser, dealer
agent, or investment adviser representative registration requirements, or an
applicable exemption or exclusion;
(2) The Internet Communication contains a mechanism, including and without
limitation, technical "firewalls" or other implemented policies and procedures,
designed reasonably to ensure that prior to any subsequent, direct communication
with prospective customers or clients in Texas, said dealer, investment adviser,
dealer agent, or investment adviser representative is first registered in Texas
or qualifies for an exemption or exclusion from such requirement. Nothing in
this section shall be construed to relieve a Texas registered dealer, investment
adviser, dealer agent, or investment adviser representative from any applicable
securities registration requirement in Texas;
(3) The Internet Communication does not involve either effecting or
attempting to effect transactions in securities, or the rendering of
personalized investment advice for compensation, as may be, in Texas over the
Internet, but is limited to the dissemination of general information on products
and services; and
(4) In the case of a dealer agent or investment adviser representative:
(A) the affiliation with the dealer or investment adviser of the dealer agent
or investment adviser representative is prominently disclosed within the
Internet Communication;
(B) the dealer or investment adviser with whom the dealer agent or investment
adviser representative is associated retains responsibility for reviewing and
approving the content of any Internet Communication by a dealer agent or
investment adviser representative;
(C) the dealer or investment adviser with whom the dealer agent or investment
adviser representative is associated first authorizes the distribution of
information on the particular products and services through the Internet
Communication; and
(D) in disseminating information through the Internet Communication, the
dealer agent or investment adviser representative acts within the scope of the
authority granted by the dealer or investment adviser.
(b) The position expressed in this section extends to state dealer,
investment adviser, dealer agent, and investment adviser representative
registration requirements only, and does not excuse compliance with applicable
securities registration, antifraud, or related provisions.
(c) Nothing in this section shall be construed to affect the activities of
any dealer, investment adviser, dealer agent, or investment adviser
representative engaged in business in this state that is not subject to the
jurisdiction of the Securities Commissioner as a result of the National
Securities Markets Improvement Act of 1996, as amended.
Authority: The provisions of this § 139.18 issued under Texas Civil
Statutes, Articles 581-28-1 and 581-12.B
Source: The provisions of this § 139.18 adopted to be effective
December 2, 1997, 22 TexReg 11668.
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