1. (a) Savings institutions. The term "savings institution," as used in the Securities Act, §5.H, includes any federally chartered credit union, savings and loan association, or federal savings bank, and any credit union or savings and loan association chartered under the laws of any state of the United States.

2. (b) Sales to financial institutions and certain institutional investors acting as agent.

   1. (1) The sale of securities to a financial institution or other institutional investor listed in the Securities Act, §5.H, or subsection (c) of this section, is not exempt under §5.H or subsection (c) of this section 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 §5.H or subsection (c) of this section.
   2. (2) The Securities Act, §5.H, and subsection (c) of this section exempt only sales to a financial institution or other institutional investor named therein 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 seller is claiming an exemption under §5.H or subsection (c) of this section.

3. (c) Sales to certain institutional investors. The State Securities Board, pursuant to the Securities Act, §5.T, exempts from the securities registration requirements of the Securities Act, §7, the offer and sale of any securities to any of the following purchasers:

   1. (1) an "accredited investor" (as that term is defined in Rule 501(a)(1)-(4), (7), and (8) promulgated by the Securities and Exchange Commission (SEC) under the Securities Act of 1933, as amended (1933 Act), as made effective in SEC Release Number 33-6389, as amended in Release Numbers 33-6437, 33-6663, 33-6758, and 33-6825), excluding, however, any self-directed employee benefit plan with investment decisions made solely by persons that are "accredited investors" as defined in Rule 501(a)(5)-(6);
   2. (2) any "qualified institutional buyer" (as that term is defined in Rule 144A(a)(1) promulgated by the SEC under the 1933 Act, as made effective in SEC Release Number 33-6862, and amended in Release Number 33-6963); and
   3. (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.
4. (d) 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.
5. (e) Exemption from registration for dealers, salesmen, investment advisers, and agents. The State Securities Board, pursuant to the Texas Securities Act, §5.T and §12.B, exempts a dealer, salesman, investment adviser, or agent from the dealer registration requirements of the Texas Securities Act, when such person is engaging in the offer or sale of securities and/or the rendering of investment advisory services to a financial institution or other institutional investor listed in the Texas Securities Act, §5.H, or subsection (c) of this section, where such financial institution or other institutional investor 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 or the investment advisory services for which the dealer, salesman, investment adviser, or agent is claiming an exemption under §5.H or subsection (c) of this section.

Source Note:The provisions of this §109.3 adopted to be effective January 1, 1976; amended to be effective May 17, 1976, 1 TexReg 1181; amended to be effective November 6, 1980, 5 TexReg 4223; amended to be effective June 20, 1985, 10 TexReg 1863; amended to be effective February 19, 1991, 16 TexReg 669; amended to be effective August 23, 1991, 16 TexReg 4349; amended to be effective December 1, 1992, 17 TexReg 8163; amended to be effective May 24, 1993, 18 TexReg 3045; amended to be effective April 5, 1998, 23 TexReg 3431.