October 3, 1991
TO: STATE LIAISON COMMITTEE NO. 20-91
UNIT INVESTMENT TRUST COMMITTEE NO. 33-91
RE: INSTITUTE RESPONDS TO VERMONT CONCERNS REGARDING BLUE
CHIP EXEMPTION
__________________________________________________________
As we previously informed you, earlier this year the
Institute testified before the Vermont House Commerce Committee
to request its support for inclusion of the blue chip exemption
for qualified mutual funds and unit investment trusts in
legislation under consideration by the Committee. However, the
Department of Banking, Insurance and Securities requested that
the legislative committee defer its decision pending a study by
the Securities Division with respect to the scope of federal
regulation imposed on investment companies. (See Memorandum to
State Liaison Committee No. 9-91 and Unit Investment Trust
Committee No. 11-91, dated March 21, 1991.)
The Securities Division requested that the Institute submit
additional information regarding the rationale for adoption of
the blue chip exemption in Vermont. Specifically, the Securities
Division requested information regarding the availability of the
blue chip exemption in the states, the possibility of adoption of
an alternative exemption based on the portfolio holdings of funds
and trusts, the costs of blue sky registration, the effect that
electronic filing will have on the investment company industry
and the progress of the NASAA Investment Company
Registration/Trading Practices project on uniformity of
registration procedures. A copy of the Securities Division's
letter to the Institute, as well as the Institute's response is
attached.
We will keep you advised of developments.
Patricia Louie
Assistant General Counsel
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