May 18, 1989
TO: UNIT INVESTMENT TRUST COMMITTEE NO. 23-89
RE: FUTURE OF THE MANUAL EXEMPTION
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As you know, the manual exemption has come under increasing
attack because many states believe that securities that could not
otherwise qualify for registration, such as penny stocks, are
being sold pursuant to the exemption. Most recently, Virginia
repealed its manual exemption claiming that the exemption created
a number of abuses by penny stock companies. (See Unit
Investment Trust Committee No. 10-89, dated March 6, 1989).
Attached is a copy of a recent article that indicates that
more states may repeal or limit the manual exemption. We will
keep you informed of developments.
Natalie Shirley
Associate General Counsel
Attachment