Proposed Rule(s) Filing F.orm

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1 Department of State Division of Publications 312 Rosa L. Parks Avenue, 8th Floor SnodgrassfTN Tower Nashville; TN Phone: For Department of State Use Only Sequence Number: _ Q9.~-~?~et~-~l '1_. Rule ID(s): /:,{gf21 File Date: Effective Date: l~/ ej.? /11 Proposed Rule(s) Filing F.orm Proposed rules are submitted pursuant to Tenn. Code Ann , , and in lieu of a rulemaking hearing. It is the intent of the Agency to promulgate these rules without a rulemaking hearing unless a petition requesting such hearing is filed within ninety (90) days of the filing of the proposed rule with the Secretary of State. To be effective, the petition must be filed with the Agency and be signed by ten (10) persons who will be affected by the amendments, or submitted by a municipality which will be affected by the amendments, or an association of ten (10) or more members, or any standing committee of the General Assembly. The agency shall forward such petition to the Secretary of State. Pursuant to Tenn. Code Ann , any new fee or fee increase promulgated by state agency rule shall take effect on July 1, following the expiration of the ninety (90) day period as provided in This section shall not apply to rules that implement new fees or fee increases that aie promulgated as emergency rules pursuant to (a) and to subsequent rules that make permanent such emergency rules, as amended during the rulemaking process. In addition, this section shall not apply to state agencies that did not, during the preceding two (2) fiscal years, collect fees in an amount sufficient to pay the cost of operating the board, commission or entity in accordance with (b). ~9~1"1cy/Board/Commission: i [)~partment of Commerc~cmd Insurance Division: : Securities Contact Person: j Kelsey Brigg~~ Address: 500 James Robertson Parkway ?'.ip: 3724_3 Phone: I E_m_a_il:...! Kelsey.j.bridges@tn.gov Revision Type (check all that apply): X Amendment New Repeal Rule(s) (ALL chapters and rules contained in filing must be listed here. If needed, copy and paste additional tables to accommodate multiple chapters. Please make sure that ALL new rule and repealed rule numbers are listed in the chart below. Please enter only ONE Rule Number/Rule Title per row) ~!'---' ' Chapter Number Chapter Title ' General Administration ~ RL_Jle Nu,_m_ b_e_r--+-i -R-u-le- T--it-le ] t.dministration of the Act,..,.._,..,..., _,, i ~ ~---. ' SS-7038 (June 2016) RDA 1693

2 (Place substance of rules and other info here. Please be sure to include a detailed explanation of the changes being made to the listed rule(s). Statutory authority must be given for each rule change. For information on formatting rules go to Guidelines August2014.pdf) Tenn. Comp. R. & Regs Administration of the Act is amended by deleting Paragraph (4) in its entirety and replacing it with the following language: (4) Forms. (a) All filings submitted with the Division shall be on the proper form as designated under these Rules. An application shall be deemed submitted on the proper form unless objection to the form is made by the Division prior to the effective date of the application. The following forms, as in effect at the time of use, are approved for filing with the Division: 1. "Form U-1", Uniform Application to Register Securities; 2. "Form U-2", Uniform Consent to Service of Process (naming. the commissioner as the party to be served); 3. "Form U-2A", Uniform Form of Corporate Resolution; 4. "Form U4", Uniform Application for Securities Industry Registration or Transfer; 5. "Form U5", Uniform Termination Notice for Securities Industry Registration; 6. "Form UT', Small Company Offering Registration Form; 7. "Form U-CF", Uniform Notice of Federal Crowdfunding Offering; 8. "Form USB", Uniform Surety Bond; 9. "Form BD", Uniform Application for Broker-Dealer Registration; 10. "Form BOW", Uniform Request for Broker-Dealer Withdrawal; 11. "Form ADV", Uniform Application for Investment Adviser Registration; 12. "Form ADV-E", Certificate of Accounting of Client Securities and Funds in the Possession or Custody of an Investment Adviser; 13. "Form ADV-W", Notice of Withdrawal from Registration as an Investment Adviser; 14. "Form D", Notice of Sale of Securities Pursuant to Regulation D, Section 4(6), and/or Uniform Limited Offering Exemption; 15. "Form NF", Uniform Investment Company Notice Filing; 16. "Form IN-0911", Application for Registration as an Oil and Gas Issuer-Dealer; 17. "Form IN-1460", Notice of Sale of Securities Pursuant to Accredited Investor Exemption; 18. "Form IN-1461", Notice of Sale of Securities Pursuant to Employee Stock Purchase/Option Plan Exemption; 19. "Form IN-1493", Designation of Accountant; 20. "Regulation A - Tier 2", Uniform Notice Filing of Regulation A - Tier 2 Offering; and SS-7038 (June 2016) 2 RDA 1693

3 21. "Notice of Exemption", Notice of Intention to Offer or Sell Securities Pursuant to the Invest Tennessee Exemption. (b) (c) All instructions on the above named forms are applicable, except as expressly provided elsewhere in these Rules, and are adopted verbatim and incorporated herein by reference. In cases where a form, as set out in subparagraph (4)(a), directly or indirectly requires the maintenance of certain books and records, the registrant shall maintain adequate books and records to comply with the filing requirements of the form and all books and records requirements as provided in the Act and the Rules. Authority: T.C.A (b)(11), , (b}, , , , , , , , , , , , , and (a)(2)(A-B). SS-7038 (June 2016) 3 RDA 1693

4 .. '.. -,, * If a roll-call vote was necessary, the vote by the Agency on these rules was as follows: Board Member Aye No Abstain Absent Signature (if required) I certify that this is tlcc/.ate and complete copy of proposed rules, lawfully promulgated and adopted by the Commissioner on /9: 17 (date as mmldd/yyyy), and is in compliance with the provisions of T.C.A The Secretary of State is hereby instructed that, in the absence of a petition for proposed rules being filed under the conditions set out herein and in the locations described, he is to treat the proposed rules as being placed on file in his office as rules at the expiration of ninety (90) days of the filing of the proposed rule with the Secretary of State.,,~S.f. 1. /s: '',,,, Date: ---.~------,-SJ ~~i._. / 'J, 111,~,,-v" ST,'\TE...._ 1 U' - : OF ~ Name of Officer: ulie Mix McPeak... : : TENN'::SSEE : Commissioner of the Department of Commerce and "!OT.' RY Title of Officer: Insurance ; I ' / 1,I e ~ ~ {~-. PU CLIC. ~-$ ";. 0' e L..._~ "', ~ )',V "- ',/ 0,V CQ ",S,1,\_l~S i ed,and sworn to before me on:,,,,,,,,, u\-..,,,,,,,\\. 111 r,0 -,, ri-, :"'1 fx r)i"" ' Notary Public Signature: My commission expires on:. / }'--1-"-5_,/2_o '0" All proposed rules provided for herein have been examined by the Attorney General and Reporter of the State of Tennessee and are approved as to legality pursuant to the provisions of the Administrative Procedures Act, Tennessee Code Annotated, Title 4, Chapter 5. Department of State Use Only Attorney General and Reporter 1/u/<µ>1'1 r I Date '--+- /2"-'- 1Pi7 _ ~ "' \... <..,;, 4.,.:,,;-..,.,:.~',,.. Signature: - ~~~lr~t'alm. "-1,<--, ~n~ Filed with the Department of State on: qy/~j. "--g- -=-+- /1,_J.. \.W (".l I-; ('sl ~(}") ' i (J) : -::. ~,. l~ :~-~ l 1! (_:,! \ ~ r,,...,_ n- c,~--:: Effective on :._I=- ;).-+- / ""- d..,._ 1-1-' i'}jj / J,_'7_. _ I Tre Hargett Secretary of State SS-7038 (June 2016) 4 RDA 1693

5 Regulatory Flexibility Addendum Pursuant to TC.A through , prior to initiating the rule making process, all agencies shall - conduct a revi'ew of-whether a proposedmte'or ruleaffects'small business. This proposed rule amendment will not affect small businesses. SS-7038 (June 2016) 5 RDA 1693

6 Impact on Local Governments Pursuant to T.C.A and "any rule proposed to be promulgated shall state in a simple declarative -sente nce ; withollt"additionat~comments on'the-merits 0 0Mhe potiey of-the 0 rules or re9u-lation,-,whether the rule or regulation may have a projected impact on local governments." (See Public Chapter Number 1070 ( of the 2010 Session of the General Assembly) This proposed rule amendment will not have an impact on local government. SS-7038 (June 2016) 6 RDA 1693

7 Additional Information Required by Joint Government Operations Committee Atl agencies; upon filmg a rnle/ must'also 'SubmiMhe'foliowirrg pursuant 1o T :CA ' ,226(i)( 1 ). (A) A brief summary of the rule and a description of all relevant changes in previous regulations effectuated by such rule; This proposed rule amendment will update the list of forms accepted by the Securities Division to include forms that have come into popular use since the last revision to the rule. This amendment does not eliminate any forms currently aooroved and listed for acceptance by the Division. (B) A citation to and brief description of any federal law or regulation or any state law or regulation mandating promulgation of such rule or establishing guidelines relevant thereto; This rule amendment is authorized by various provisions of the Tennessee Securities Act of 1980 (T.C.A et seq.), particularly T.C.A , which provides that the Commissioner "may from time to time make, promulgate, amend, and rescind such rules, forms, and orders as are necessary to carry out this part[.]" Additionally, T.C.A (a)(13) provides for the inclusion of the "Notice of Exemption" form for securities issued pursuant to the Invest Tennessee exemption. This rule is further authorized by the National Securities Market Improvement Act of 1996, which expressly provides that the states may collect notice filings for covered securities which are exempt from federal registration (e.g., Form D), and the Jumpstart Our Business Startups Act, which expanded Regulation A and prompted the SEC to establish a new class of covered securities for crowdfundinq offerinqs. (C) Identification of persons, organizations, corporations or governmental entities most directly affected by this rule, and whether those persons, organizations, corporations or governmental entities urge adoption or rejection of this rule; This rule will only affect securities professionals who wish to submit forms to the Securities Division which were not reviousl authorized b this rule. (D) Identification of any opinions of the attorney general and reporter or any judicial ruling that directly relates to the rule or the necessity to promulgate the rule; I There are no known opinions of the attorney general or judicial rulings that directly relate to this rule. (E) An estimate of the probable increase or decrease in state and local government revenues and expenditures, if any, resulting from the promulgation of this rule, and assumptions and reasoning upon which the estimate is based. An agency shall not state that the fiscal impact is minimal if the fiscal impact is more than two percent (2%) of the agency's annual budget or five hundred thousand dollars ($500,000), whichever is less; I This rule will not affect state or local government revenues and expenditures. (F) Identification of the appropriate agency representative or representatives, possessing substantial knowledge and understanding of the rule; Frank Borger-Gilligan, Assistant Commissioner; Elizabeth Bowling, Director of Registration for the Securities Division; Kaycee Wolf, Chief Counsel for Insurance, Securities, and TennCare Oversight (G) Identification of the appropriate agency representative or representatives who will explain the rule at a scheduled meeting of the committees; I Kelsey Bridges, Assistant General Counsel for Securities (H) Office address, telephone number, and address of the agency representative or representatives who will explain the rule at a scheduled meeting of the committees; and SS-7038 (June 2016) 7 RDA 1693

8 I 500 James Robertson Parkway, Nashville, TN 37243; (615) ; JI). Any.additional information relevantto the rul~_proposed for continuation that the committee r~~uests. SS-7038 (June 2016) 8 RDA 1693

9 (4) Forms. (a) All filings submitted with the Division shall be on the proper form as designated under these Rules[ An application shall be prepared in accordance 1 Nith the form prescribed thereof as in effect on the date of filing]. An application shall be deemed submittedffiteg} on the proper form unless objection to the form is made by the Division prior to the effective date of the application. The following forms, as in effect at the time of use, are approved for filing with the Division: 1. "Form U-1", Uniform Application to Register Securities; 2. "Form U-2", Uniform Consent to Service of Process (naming the commissioner [Commissioner of Commerce and Insurance] as the party to be served); 3. "Form U-2A", Uniform Form of Corporate Resolution; 4. "Form U4''. Uniform Application for Securities Industry Registration or Transfer; 5. "Form US", Uniform Termination Notice for Securities Industry Registration; ~ "Form U7", Small Company Offering Registration Form: L "Form U-CF", Uniform Notice of Federal Crowdfunding Offering:!L "Form USB", Uniform Surety Bond: filef..1.qf+}. "Form BD", Uniform Application for Broker-Dealer Registration; "Form BOW", Uniform Request for Broker-Dealer Withdrawal;.11. 8}. "Form ADV", Uniform Application for Investment Adviser Registration; J1f91. "Form ADV-E", Certificate of Accounting of Client Securities and Funds in the Possession or Custody of an Investment Adviser; j] 4.Q}. "Form ADV-W", Notice of Withdrawal from Registration as an Investment Adviser;.H 44}. "Form D", Notice of Sale of Securities Pursuant to Regulation D, Section 4(6), and/or Uniform Limited Offering Exemption; ~ - "Form NF", Uniform Investment Company Notice Filing["IN 0911", Application for Registration as an Oil and Gas Issuer Dealer]; 1.fil43}. "Form IN-0911 ", Application for Registration as an Oil and Gas Issuer-Dealer ["Form NF", Uniform Investment Company Notice Filing]; 11 44}. "Form IN-1460''. Notice of Sale of Securities Pursuant to Accredited Investor Exemption[ Form for Accredited Investors Notice Filing];.1.fil-1-a}. "Form IN-1461", Notice of Sale of Securities Pursuant to Employee Stock Purchase/Option Plan Exemption:[ Form for Employee Stock Option/Purchase Plan Notice Filing; and] 1

10 1fil:4-e}. "Form IN-1493", Designation of Accountant.Ji 20. "Regulation A - Tier 2", Uniform Notice Filing of Regulation A - Tier 2 Offering; and 2.i "Notice of Exemption," Notice of Intention to Offer or Sell Securities Pursuant to the Invest Tennessee Exemption. (b) (c) All instructions on the above named forms are applicable, except as expressly provided elsewhere in these Rules, and are adopted verbatim and incorporated herein by reference. In cases where a form, as set out in {#Hsf subparagraph (4)(a), directly or indirectly requires the maintenance of certain books and records, the registrant shall maintain adequate books and records to comply with the filing requirements of the form and all books and records requirements as provided in the Act and the Rules. Authority: TC.A (b)(11), , (b), , , , , , , , , , , , , and (a)(2)(A B){, Pu/Jlie Aets of 1997, Chapter 164, 8, and Publie Aets of 2001, Chapter 61]. 2

Proposed Rule(s) Filing Form

Proposed Rule(s) Filing Form Department of State Division of Publications 312 Rosa L. Parks Avenue, 8th Floor Snodgrass/TN Tower Nashville, TN 37243 Phone: 615-741-2650 Email: publications.information@tn.gov For Department of State