January 12, 1990
TO: STATE LIAISON COMMITTEE NO. 1-90
UNIT INVESTMENT TRUST COMMITTEE NO. 1-90
RE: PROPOSED AMENDMENTS TO MASSACHUSETTS RULES
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The Massachusetts Securities Division has recently proposed
for public comment several amendments to its regulations. The
following amendments relate to mutual funds and/or unit
investment trusts:
1) 950 CMR 12.200 reorganizes and revises the entire section
pertaining to the regulation of broker-dealers doing
business in Massachusetts. Among other things, the
proposed amendments clarify certain requirements for
registration as a principal and agent, clarify when initial
and renewal applications become effective, increase the
record-keeping requirements of a broker-dealer and
incorporate the NASAA definition of dishonest and unethical
practices of broker-dealers and agents.
2) 950 CMR 13.306 revises the filing requirements for
investment company shares to match current Division
practice.
3) 950 CMR 14.402(b)(1)(B) sets forth a definition of "non-
issuer transaction or distribution" that is more
restrictive than the current definition. The proposed
definition excludes a transaction by a controlling person
if the transaction, when aggregated with other transactions
during the preceding twelve months, involves the sale of
more than one percent of the outstanding shares of the
security involved in the transaction, rather than two
percent as provided for in the current definition.
4) 950 CMR 14.402(b)(2)(A) removes many of the securities
manuals currently recognized by the Securities Division for
purposes of the state's manual exemption. However, the
Division will continue to recognize Moody's Bank and
Finance Manual and Moody's Public Utility Manual.
5) 950 CMR 14.403 revises the filing requirements for sales
literature and clarifies what constitutes sales literature.
* * *
Attached is a copy of the proposed amendments. The
Securities Division will hold a public hearing on the proposed
amendments Wednesday, January 31, 1990. However, written
comments may be submitted through February 10, 1990. Please
contact me with any comments by January 24, 1990 so that such can
be included in the Institute's comment letter.
Patricia Louie
Assistant General Counsel
Attachment