April 15, 1991
TO: BOARD OF GOVERNORS NO. 23-91
STATE SECURITIES MEMBERS NO. 16-91
RE: NEBRASKA AMENDS INDEFINITE REGISTRATION PROVISIONS
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The Institute is pleased to inform you that legislation
amending Nebraska's indefinite registration provision for mutual
funds has been signed by the Governor and will be effective as of
September 6, 1991. A copy of LB 305 is attached.
The amendment to Section 8-1108(5) of the Nebraska
Securities Act provides that a fund may elect to register an
indefinite amount of securities if the registrant pays a fee of
$1,000 with the application for registration. Within sixty days
after the expiration of the fund's registration period, the fund
must file a sales report reflecting actual sales in Nebraska and
submit any additional fees due. The initial $1,000 fee will be
deducted from the total amount due; if the total fee due is less
than $1,000, no payment must be made and no credit or refund will
be allowed or returned.
We are also pleased to inform you that in recognition of
the significant amount of fees paid to Nebraska because of the
open-end fee for registration of securities, LB 305 establishes a
fee break for funds registering an indefinite amount of
securities. LB 305 provides that the fee for registration of
securities of a mutual fund shall be 1/10th of 1% for the first
$10 million of securities sold in Nebraska and 1/20th of 1% of
the remainder. You should be aware that this fee schedule is not
available for funds registering a definite amount of securities.
Currently, a mutual fund may elect to register an
indefinite amount of securities; however, the fund must pay a
registration fee equal to the amount of its Nebraska registration
fee for the preceding year. Within sixty days of the expiration
of the fund's registration, the fund must file a sales report and
a registration fee for the upcoming year equal to the amount of
sales reflected on the sales report. If sales reflected on the
sales report are less than the preceding year (the figure on
which the fee was based), then a credit, up to ten thousand
dollars, was allowed. If sales reflected on the sales report are
more than the preceding year (the figure on which the fee was
based), then additional fees had to be paid. This procedure has
been somewhat confusing for both the funds and the Nebraska
Securities Bureau.
We believe the amendment to Nebraska's indefinite
registration provision will not only simplify the procedure for
funds electing to register an indefinite amount of securities but
also enable more funds to take advantage of this procedure.
The staff of the Nebraska Securities Bureau will be
revising the sales report form in the near future to reflect the
change in the indefinite registration procedure. We will keep
you advised of developments.
Patricia Louie
Assistant General Counsel
Attachment