Investment Adviser Rulemaking — CR-103P Rule Making Order

RULE-MAKING ORDER
PERMANENT RULE ONLY
CR-103P (December 2017)
(Implements RCW 34.05.360)

CODE REVISER USE ONLY

Agency: Department of Financial Institutions, Securities Division

Effective date of rule:
Permanent Rules
☒
31 days after filing.
☐
Other (specify)
(If less than 31 days after filing, a specific finding under RCW 34.05.380(3) is required and should be stated below)

Any other findings required by other provisions of law as precondition to adoption or effectiveness of rule?
☐ Yes
☒ No
If Yes, explain:

Purpose: The Department of Financial Institutions hereby amends the investment adviser rules in Chapter 460-24A WAC. The amendments incorporate updates to federal law, incorporate NASAA model rules, and make other updates, clarifications, and corrections. The amendments add new sections requiring errors and omissions insurance and investment adviser representative continuing education. The amendments also add new sections specifying the requirements for physical and cybersecurity policies and procedures and code of ethics. The amendments adopt the SEC Marketing Rule, update the definition of “qualified client,” adopt the NASAA examination validity extension program, and make updates to other rules including definitions, delinquency fees, custody, fee invoices, books and records, notice of changes, and unethical business practices. The amendments repeal WAC 460-24A-108.

Citation of rules affected by this order: New: WAC 460-24A-051, WAC 460-24A-056, WAC 460-24A-121, WAC 460-24A-123 Repealed: WAC 460-24A-108 Amended: WAC 460-24A-005, WAC 460-24A-020, WAC 460-24A-030, WAC 460-24A-040, WAC 460-24A-047, WAC 460-24A-050, WAC 460-24A-057, WAC 460-24A-060, WAC 460-24A-071, WAC 460-24A-24A-072, WAC 460-24A-100, WAC 460-24A-106, WAC 460-24A-107, WAC 460-24A-109, WAC 460-24A-120, WAC 460-24A-122, WAC 460-24A-125, WAC 460-24A-126, WAC 460-24A-130, WAC 460-24A-135, WAC 460-24A-145, WAC 460-24A-150, WAC 460-24A-200, WAC 460-24A-205, WAC 460-24A-220. Suspended:

Statutory authority for adoption: RCW 21.20.450

Other authority: None.

PERMANENT RULE (Including Expedited Rule Making)

Adopted under notice filed as WSR 26-15-068 on July 15, 2026 (date). Describe any changes other than editing from proposed to adopted version:

The Securities Division revised the errors and omissions insurance requirement in WAC 460-24A-051 to change the compliance date from January 1, 2027 to January 1, 2028.

The Securities Division revised WAC 460-24A-121(2)(d)(iii) to replace the phrase “take action regarding” with “identify the occurrence of.” The Securities Division revised WAC 460-24A-121(2)(d)(iv) to replace the phrase “maintain plans for resilience and to restore any capabilities or services that were impaired due to an information security event” to “take action regarding a detected information security event.” These edits conform to the NASAA Model Rule for Investment Adviser Written Policies and Procedures.

The Securities Division revised WAC 460-24A-123(2)(b)(iii) to add the phrase “that you hold in your records so long as you receive the confirmation or statements.” This phrase is consistent with the NASAA Model Rule for Investment Adviser Written Policies and Procedures and had been inadvertently omitted.

The Securities Division revised the subsection numbering in the proxy voting rule at WAC 460-24A-125. Previously, WAC 460-24A-125 had subsections (1) to (4). Now, the rule has subsections (1)(a) to (d), and (2). The Securities Division also moved a sentence that was initially located within what is now subsection (1)(b) to a standalone subsection (2), and added minor clarifying language. These changes clarify that subsections (1)(a) to (d) apply only to registered investment advisers that vote client securities, whereas subsection (2) applies to registered investment advisers that do not vote client securities.

The Securities Division revised WAC 460-24A-205(1)(g) to specify how advisers may demonstrate annual proof of insurance of errors and omissions insurance. The revised language conforms WAC 460-24A-205(1)(g) to the language in WAC 460-24A-050(6)(a)(ii)(F).

If a preliminary cost-benefit analysis was prepared under RCW 34.05.328, a final cost-benefit analysis is available by contacting:

Name:
Address:
Phone:
Fax:
TTY:
Email:
Web site:
Other:

Note: If any category is left blank, it will be calculated as zero. No descriptive text.

Count by whole WAC sections only, from the WAC number through the history note. A section may be counted in more than one category.

The number of sections adopted in order to comply with:
Federal statute:	New	Amended	Repealed
Federal rules or standards:	New	Amended 6	Repealed
Recently enacted state statutes:	New	Amended	Repealed
The number of sections adopted at the request of a nongovernmental entity:
	New	Amended	Repealed
The number of sections adopted on the agency’s own initiative:
	New 4	Amended 25	Repealed 1
The number of sections adopted in order to clarify, streamline, or reform agency procedures:
	New 4	Amended 25	Repealed 1
The number of sections adopted using:
Negotiated rule making:	New	Amended	Repealed
Pilot rule making:	New	Amended	Repealed
Other alternative rule making:	New	Amended	Repealed

Date Adopted: 10/21/2026
Name: Charlie Clark
Title: Director, Department of Financial Institutions Signature: