              THEA~TORNEYGENERAI.
                      OF TEXAS
                             Ausnlv    1% TEXAS


                                October   18, 1960


Honorable William M. King                 Opinion No.    WW-95   1
Securities  Commissioner
State Securities  Board                   Re: Whether the Securities      Commis-
State Office Building                     sioner has authority to publish an
Austin 11, Texas                          administrative   interpretation    of Sec-
                                          tion 1 OA of the Securities   Act.
Dear   Sir:

        You have requested our opinion as to whether the Securities          Com-
missioner   has authority to publish an administrative      interpretation  of
Section 1 OA of the Securities   Act.   Article 58 1, V. C. S. For brevity’s
sake, we do not now quote the language detailed on the four pages of
your request,    but rather state that this interpretation   defines and inter-
prets the key phrases of Section 1 OA and, in addition, lists some seven
factors illustrative   of those to be considered   in determining    whether or
not the proposed plan of business appears to be “fair,        just and equitable”
and some six factors illustrative     of those not to be considered.

         The application of the doctrine of “fair,    just and equitable” to a
particular   proposed plan of business requires     the exercise  of discretion-
ary judgment by the Securities      Commissioner,    based on the particular
fact situation presented.     There are a multitude of factors which may
be considered with respect to any individual case and the relative weight
to be given these factors is a matter within the discretion      of the Commis-
sioner.    However,   in determining   whether or not a particular    proposed
plan of business is “fair,    just and equitable, ” the Commissioner,     by neces-
sity, must test such a plan with a definite set of factors in mind.        Cer-
tainly the Commissioner      has authority to publish and thereby notify the
securities   industry of these standards of general application he will take
into consideration   in guiding his judgment in a determination      under Sec-
tion 1 OA.

         We do not find that the Securities    Commissioner    is without author-
ity to issue this administrative   interpretation.    However,   in the absence
of a particular  fact situation by which to test the propriety of the illustra-
tive factors contained in your request,     this office cannot determine whether
or not these facts are contrary to the intent of the Securities      Act in an
individual case.
Hon.   William    M.   King,   page 2     (WW-951)




                                        SUMMARY

                   The Securities   Commissioner      has authority to
         publish an administrative     interpretation    of Section 1 OA
         of the Texas Securities     Act, but the Attorney General,
         by this opinion, does not pass on the propriety of the
         illustrative  factors contained therein as used in deter-
         mining whether or not a particular       proposed plan of
         business is “fair,    just and equitable. ”

                                              Very    truly yours,

                                              WILL WILSON
                                              Attorney General       of Texas




                                              BY
                                                   Richard A. Weils
RAWlpe                                             Assistant Attorney    General

APPROVED:

OPINION    COMMITTEE:

W. V. Geppert,   Chairman
Virgil Pulliam
Robert T. Lewis
Grundy Williams
Tom I. McFarling

REVIEWED         FOR THE ATTORNEY           GENERAL
BY:
                   Leonard     Passmore
