September 19, 1990
TO: STATE LIAISON COMMITTEE NO. 22-90
UNIT INVESTMENT TRUST COMMITTEE NO. 43-90
CONTRACTUAL PLANS COMMITTEE NO. 9-90
RE: NEW MEXICO PROPOSES REGISTRATION RULES
__________________________________________________________
The New Mexico Securities Division has recently proposed
for public comment a comprehensive revision of its administrative
rules. A copy of the proposed rules are attached.
The following proposed rules relate to mutual funds, unit
investment trusts and/or contractual plans:
(1) Proposed Rule 4.400 allows an investment company to
register its securities by filing a copy of Form U-1 and
the most current effective federal registration statement
with the Division. However, an application for
registration of a contractual plan will not be approved if
more than a pro-rata portion of the load or commission is
deducted from any installment payment. The rule further
states that the sales charge or load, in connection with
the sale of securities of an open-end investment company,
shall not exceed 9% of the offering price.
(2) Proposed Rule 5.133 sets forth the procedure for claiming
the blue chip exemption from registration for qualified
mutual funds and unit trusts. A mutual fund or unit trust
wishing to claim the exemption must file three copies of
Form M, a consent to service of process on Form U-2 and the
appropriate filing fee. If sales are to be made more than
12 months after the filing is received by the Division, an
additional notice and fee must be submitted. Please note
that the term of effectiveness in the proposed rule does
not make a distinction between mutual funds and unit
trusts.
The proposed rule also states that incomplete forms will be
returned and a $50 fee assessed on reapplications.
In addition, the proposed rule states that the director of
the Division will issue an order denying the use of the
blue chip exemption for contractual plans if more than a pro-rata
portion of the load or commission is deducted from any
installment payment. Again, the rule states that the sales
charge or load shall not exceed 9% of the offering price.
(3) Proposed Rule 5.203 states that "no manual has been
approved by the director" with respect to the transactional
exemption provided for in Section 58-13B-27C(1) of the New
Mexico Securities Act (manual exemption).
Written comments may be submitted to the New Mexico
Securities Division through October 15, 1990. A hearing on the
proposed rules will be held at 9:00 a.m., Monday, October 29,
1990 and the rules are anticipated to be adopted on November 15,
1990. Please contact me with any comments by October 1, 1990 so
that such can be included in the Institute's comment letter.
Patricia Louie
Assistant General Counsel
Attachment