March 14, 1990
TO: BOARD OF GOVERNORS NO. 18-90
STATE SECURITIES MEMBERS NO. 4-90
UNIT INVESTMENT TRUST MEMBERS NO. 17-90
RE: UTAH ADOPTS BLUE CHIP EXEMPTION
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Currently, all mutual funds and unit trusts that offer
their shares to Utah residents must register the offering with
the Utah Securities Division. To register in Utah, a fund or
trust must submit the Form U-1, U-2, U-2A and a copy of the
prospectus and statement of additional information. A
registration fee of $500.00 for offerings of less than $10
million, or $700.00 for offerings over $10 million, must be
submitted with the application for registration.
We are pleased to inform you that as a result of the
Institute's efforts, effective July 1, 1990, Utah has enacted an
exemption for qualified mutual funds and unit trusts based on the
similar exemption in the Revised Uniform Securities Act of 1985.
The exemption is an alternative to the registration process.
A mutual fund is exempt from registration if its investment
adviser or an affiliate of its investment adviser has been
registered under the Investment Advisers Act of 1940 for at least
three years. If qualified, a mutual fund may claim the exemption
by submitting annually to the Utah Securities Division, the name
and address of the issuer and the securities to be offered and
$500.00.
A unit trust is exempt from registration if its principal
underwriter has been the principal underwriter for registered
investment companies with aggregate total assets in excess of
$100,000,000 for at least three years. If qualified, a unit
trust may claim the exemption by submitting on a one-time basis
to the Utah Securities Division, the name and address of the
issuer and the securities to be offered and $500.00. Claiming
this exemption and paying the appropriate fee will exempt resales
of the units of the unit trust that claimed the exemption.
Utah is the eighth state to adopt the blue chip exemption.
Attached is a copy of the relevant portions of the bill. The
Division has indicated that it will adopt a form on which to
claim the exemption in the near future. We will keep you advised
of developments.
Patricia Louie
Assistant General Counsel
Attachment