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March 1, 1989
TO: BOARD OF GOVERNORS NO. 14-89
CLOSED-END FUND MEMBERS NO. 13-89
STATE SECURITIES MEMBERS NO. 7-89
UNIT INVESTMENT TRUST MEMBERS NO. 18-89
RE: INSTITUTE DEFEATS WYOMING ATTEMPT TO PLACE FEE ON EXEMPTION
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In 1985, the Wyoming Securities Act was amended to exempt
from registration all investment companies registered under the
Investment Company Act of 1940. (See Memorandum to Board of
Governors No. 23-86; State Securities Members No. 12-86; Unit
Investment Trust Members No. 23-86, dated April 2, 1986.) As you
may remember, last year, the Wyoming Secretary of State
unsuccessfully attempted by legislation to repeal this exemption.
Upon the legislation's defeat, the Secretary of State indicated
that she would try again the following year. (See Memorandum to
Board of Governors No. 21-88; State Securities Members No. 7-88;
Unit Investment Trust Members No. 25-88; Closed-End Fund Members
No. 13-88, dated March 11, 1988.)
This year, the Secretary of State supported a bill that
would have placed a substantial fee on the exemption from
registration that exceeded the fee for registration in Wyoming.
The Secretary of State testified that while she was now convinced
that her office should not regulate mutual funds and unit trusts,
she believed that mutual funds and unit trusts should share the
financial burden of her office's regulation and oversight of the
entire industry.
The Institute testified that we do not object to the cost
of reasonable regulation, including, in certain instances, a fee
for an exemption. However, the fee proposed in the bill is
unrelated to the cost of reasonable regulation. We also
testified that mutual funds and unit trusts have always been good
friends to the State of Wyoming. Mutual funds and unit trusts
provide an opportunity for Wyoming citizens to participate in the
marketplace. In addition, mutual funds and unit trusts make
large investments in Wyoming by purchasing the bonds and
obligations that help finance Wyoming public projects.
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As a result of the Institute's efforts, the bill was
defeated on the floor of the Senate. The Secretary of State has
again vowed to support a similar bill next year. We will keep
you informed of developments.
Natalie Shirley
Associate General Counsel