June 12, 1990
TO: STATE SECURITIES MEMBERS NO. 17-90
UNIT INVESTMENT TRUST MEMBERS NO. 34-90
RE: SOUTH DAKOTA PROMULGATES FINAL RULES
__________________________________________________________
The South Dakota Securities Division recently promulgated
final rules with respect to the filing requirements for the blue
chip exemption from registration for qualified mutual funds and
unit investment trusts. A mutual fund or unit trust may claim
the exemption if the following are filed with the Division:
1. two copies of the completed blue chip form;
2. a copy of the issuer's most recent audited
financial statement;
3. a self-addressed stamped envelope; and
4. the specified fee.
Claiming the blue chip exemption is an alternative to
registration of an investment company's securities. However,
mutual funds that cannot, or do not, claim the blue chip
exemption from registration must comply with the provisions of
Sections 20:08:04:33 through 20:08:04:41 (cash and cash
equivalents, restrictions on investments, prohibited investments,
disclosure of investment policies, net assets required,
redemption fee, use of affiliated broker-dealers, and
notification of non-compliance).
In addition, Section 20:08:06:17 provides a self-executing
secondary trading exemption for investment companies which are
subject to the reporting requirements of Section 15(d) of the
Securities and Exchange Act of 1934 as provided in Section 47-
31A-402(b)(2) of the South Dakota Securities Act.
The final rules are effective as of May 16, 1990. Attached
is a copy of the applicable provisions.
Patricia Louie
Assistant General Counsel
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