April 27, 1990
TO: UNIT INVESTMENT TRUST MEMBERS NO. 24-90
RE: VIRGINIA LEGISLATION
__________________________________________________________
As you know, the Institute has been actively working with
the Virginia General Assembly, the Virginia Corporations
Commission and the Virginia Securities Commission to eliminate
the requirement that unit trusts pay the annual amendment fee set
forth in Section 509 of the Virginia Securities Act. A copy of
the Institute's testimony before the Virginia House Corporations,
Insurance and Banking Committee and House Bill 1039 are attached.
We are pleased to inform you that House Bill 1039 passed
both houses of the Virginia General Assembly and will go into
effect July 1, 1990. The bill amends the Virginia Securities Act
as follows:
1. increases the minimum registration fee to $400 and
the maximum fee to $1,000 (currently set at $200
and $700) in Section 509(b) of the Act;
2. provides that the annual amendment fee of $300 in
Section 512 need not be paid by or on behalf of any
unit investment trust; and
3. provides that unit investment trusts are not liable
for any fees incurred during fiscal year 1990 (July
1, 1989 through June 30, 1990) and that if a trust
paid the $300 amendment fee during that period,
such will be refunded upon application of the
registrant.
The Institute is also pleased to announce that the
Securities Commission and Securities Division have agreed to
administratively reinstate, without cost, the unit trusts that
have requested termination or withdrawal of their registration
statements since July 1, 1989. We are currently working with the
Securities Division to determine the appropriate action on the
part of the unit trust sponsors in order to effect this
reinstatement.
In addition, the Securities Commission and Securities
Division have also agreed to propose an administrative regulation
addressing the potential problem of oversales by providing that a
unit trust may file a post-sales report and request for refund of
excess registration fees. Unit trust sponsors could pay an
initial registration fee in excess of $400 and receive a refund
of a portion of such fee, if warranted under the 1/20th of 1% fee
schedule, subject to the $400 minimum fee. For example, if a
trust sponsor paid a registration fee of $1,000 and sold trust
shares in Virginia in the aggregate amount of $800,000 or less,
it could so report and receive a refund in the amount of $600.
This policy is similar to the indefinite registration procedure
except that it involves prepayment of a higher fee to the
Commission with a potential refund, rather than payment of a
minimum fee and later payment of any incremental registration
fees due.
We will keep you informed of further developments.
Patricia Louie
Assistant General Counsel
Attachments