August 31, 1989
TO: UNIT INVESTMENT TRUST COMMITTEE NO. 58-89
RE: VERMONT PROPOSES REPEAL OF THE MANUAL EXEMPTION
__________________________________________________________
As you know, over the past several months many states have
attempted to repeal or amend their manual exemption for reasons
unrelated to unit trusts. (Memoranda to Unit Investment Trust
Members Nos. 33-88 and 19-89; Memoranda to Unit Investment Trust
Committee Nos. 57-89, 16-89, 15-89, 12-89 and 10-89). Many
states believe that securities that could otherwise not qualify
for registration, such as penny stocks, are being sold under the
manual exemption. In most states, unit trusts rely on the manual
exemption for resales of units of unit trusts.
Vermont currently has a bill pending which would repeal the
manual exemption. The Institute contacted the Vermont Securities
Division and testified before the Vermont Senate Finance
Committee regarding the consequences such repeal would have on
resales of units of unit trusts. We are working with the Vermont
Securities Division to fashion an administrative solution so that
units of unit trusts will continue to be able to be resold in
Vermont even if the manual exemption is repealed. A copy of the
Institute's letter and written testimony are attached.
We will keep you informed of further developments.
Patricia Louie
Assistant General Counsel
Attachments