TEXAS ADOPTS LEGISLATION RELATING TO OVERSALES AND SALES OF UNREGISTERED SECURITIES

July 27, 1989 TO: STATE SECURITIES MEMBERS NO. 28-89 UNIT INVESTMENT TRUST MEMBERS NO. 39-89 RE: TEXAS ADOPTS LEGISLATION RELATING TO OVERSALES AND SALES OF UNREGISTERED SECURITIES __________________________________________________________ Currently, Texas allows oversales to be corrected during the registration period by the registration of excess sales and payment of three times the difference between the initial fee paid and the fee required. Effective September 1, 1989, Texas has enacted legislation the provides that oversales can be corrected after the registration period has expired by registering the excess sales and paying three times the difference between the initial fee paid and the fee required, plus interest on that amount from the date the registration expired to the date the subsequent application is filed. In addition, the legislation provides that the commissioner may impose a fee equal to six times the registration fee if sales occur in an unregistered security or the security or transaction is not exempt from registration. Attached is a copy of the pertinent provisions of the legislation. Patricia Louie Assistant General Counsel Attachment