June 13, 1990
TO: BOARD OF GOVERNORS NO. 42-90
STATE SECURITIES MEMBERS NO. 18-90
UNIT INVESTMENT TRUST MEMBERS NO. 37-90
RE: COLORADO ADOPTS BLUE CHIP EXEMPTION
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Currently, all mutual funds and unit trusts that offer
their shares to Colorado residents must file a Notice of Sale of
Securities within ten days after the first sale is made in
Colorado with the Colorado Securities Division and pay the
appropriate filing fee.
The Colorado Bar Association proposed extensive amendments
to the Colorado Securities Act, including a provision that would
require offerings registered with the Securities and Exchange
Commission to be registered in Colorado unless a specific
exemption from registration was available.
We are pleased to inform you that as a result of the
Institute's efforts, legislation has been enacted in Colorado
that contains an exemption for qualified mutual funds and unit
trusts based on the similar exemption in the Revised Uniform
Securities Act of 1985.
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 forat least
three years. 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.
We are currently working with the Colorado Securities
Division to determine the procedure that will be required to
claim the exemption for mutual funds and unit trusts, as well as
the fee. As soon as the procedure and fee have been determined,
we will immediately notify you inasmuch as the legislation will
be effective on July 1, 1990.
Colorado is the tenth state to adopt the blue chip
exemption. Attached is a copy of the relevant provisions of the
bill.
Patricia Louie
Assistant General Counsel
Attachment