March 30, 1989
TO: UNIT INVESTMENT TRUST MEMBERS NO. 19-89
RE: ARIZONA GRANTS NO-ACTION ON EXEMPTION FOR RE-SALES
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In most states, unit trusts rely on an exemption from
registration under the state securities acts for resales of units
of unit trusts. The most commonly relied on exemption is the
manual exemption, which exempts a distribution if the issuer is
listed in a securities manual accepted by the state securities
department. Several states have recently attempted to amend or
repeal their manual exemption, because of the belief that
securities that could otherwise not qualify for registration,
such as penny stocks, are being sold under the manual exemption.
Arizona currently has a bill pending that would amend the
manual exemption in such a way that would make it less clear that
unit trusts can rely upon it for resales. The Institute
contacted the Arizona Securities Division and the Arizona Bar
Association about this problem. We are pleased to announce that
the Division has provided the Institute with a letter
recommending that no-action be taken with respect to resales of
units of unit trusts that have been previously registered under
the Arizona Securities Act. Attached is a copy of the no-action
letter.
In a related matter, Virginia has repealed its manual
exemption and Massachusetts has proposed to amend its manual
exemption in such a way that unit trusts may not be able to rely
on it for resales. The Institute is working with both states to
resolve the problems created by these changes. We will keep you
informed of developments.
Natalie Shirley
Associate General Counsel
Attachment