PREPROPOSAL STATEMENT OF INQUIRY
FINANCIAL INSTITUTIONS
Subject of Possible Rule Making: Amendments to chapter 460-24A WAC, the rules regulating investment advisers.
Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 21.20.450.
Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: Housekeeping amendments are needed to reflect statutory renumbering that occurred in the 1998 amendments to the Securities Act, chapter 21.20 RCW; WAC 460-24A-050 needs to be amended to allow for the changes to the Series 65 examination which will occur on January 1, 2000; WAC 460-24A-150 needs to be amended to reflect the adoption by the SEC of Release IA-1731, which amended its rule regarding performance-based compensation. In addition, the Securities Division will consider whether to amend WAC 460-24A-170 by adopting the NASAA model rules on net worth and bonding; and consider whether to amend WAC 460-24A-200 by adopting a NASAA model rule on record-keeping requirements for investment advisers.
Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: Other agencies that regulate this subject are the federal Securities and Exchange Commission and, collectively through the North American Securities Administrators Association, the regulators of investment advisers from the other states. Adopting these proposed rule will foster uniformity with these regulators.
Process for Developing New Rule: The change to the Series 65 to a competency examination, and the model rules on net worth, bonding, and recordkeeping were developed through a national notice and comment process by NASAA. The SEC adopted Release IA-1731 through its rule-making procedure which provides for public notice and comment.
Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by addressing any comments to the attention of Nelda Shannon, Securities Division, P.O. Box 9033, Olympia, WA 98507-9033, phone (360) 902-8768, fax (360) 704-6968, e-mail nshannon@dfi.wa.gov.
June 22, 1999
Deborah R. Bortner
Assistant Director