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April 18, 1990
TO: BOARD OF GOVERNORS NO. 29-90
STATE SECURITIES MEMBERS NO. 10-90
UNIT INVESTMENT TRUST MEMBERS NO. 21-90
RE: INSTITUTE OBTAINS BLUE CHIP EXEMPTION IN ALABAMA
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Currently, all mutual funds and unit trusts that offer
their shares to Alabama residents must register the offering with
the Alabama Securities Division. To register in Alabama, 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 filing fee
of $40 and a registration fee of one-tenth of one percent of the
aggregate amount registered (maximum fee of $1,000) must be
submitted with the application for registration.
We are pleased to inform you that as a result of the
Institute's efforts, effective January 1, 1991, Alabama 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 is currently registered as an investment adviser, and has
been registered or is affiliated with an adviser that hasbeen
registered as an adviser 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 Alabama
Securities Division, the name and address of the issuer, a
description of the securities to be offered and the appropriate
non-refundable filing fee. The fee to be submitted is as
follows: $300 if a fund's total net assets are $25,000,000 or
less; $600 if the fund's total net assets are more than
$25,000,000 but less than $100,000,000 and $1,000 if the fund's
total net assets are $100,000,000 or more.
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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 Alabama Securities Division, the name and address of the
issuer, a description of the securities to be offered and a
filing fee of $200. Claiming this exemption and paying the
appropriate fee will exempt resales of the units of the unit
trust that claimed the exemption.
Alabama is the ninth state to adopt the blue chip
exemption. Attached is a copy of the relevant portions of the
bill.
Patricia Louie
Assistant General Counsel
Attachment