February 19, 1992
TO: UNIT INVESTMENT TRUST COMMITTEE NO. 10-92
RE: INSTITUTE COMMENTS ON PROPOSED AMENDMENT TO MANUAL EXEMPTION
RULE IN UTAH
__________________________________________________________
As we previously advised you, last year legislation was
enacted in Utah which amends the manual exemption contained in
Section 61-1-14(2)(b) of the Utah Uniform Securities Act. As a
result of this legislative change, the Utah Securities Division
amended Rule R177-14-2b to require that the financial statements
contained in a manual listing must contain an unqualified audit
report by an independent certified accountant. The Institute
contacted the staff of the Securities Division to discuss the
effect this requirement may have on sponsors of unit trusts
relying on the manual exemption for resales in Utah. (See
Memorandum to Unit Investment Trust Members No. 13-91, dated
March 20, 1991.)
The Institute recently met with the staff of the Securities
Division to discuss a proposal currently under consideration by
the Securities Division which would revise the financial
statement requirement in order that unit trusts may rely on the
manual exemption. However, the proposal also requires the filing
of a notice and payment of a fee in order to claim the exemption.
The Institute submitted the attached letter to the
Securities Division which sets forth the ramifications that
imposition of a fee would have on the resale market for units of
unit trusts in Utah. As an alternative to revising the financial
statement requirements of the manual exemption rule, the
Institute recommended that the Securities Division specifically
find that registration for resales of units of unit trusts is not
necessary for the protection of the public if the initial offer
and sale was registered or an initial notice to claim the blue
chip exemption from registration was filed.
We will keep you advised of developments.
Patricia Louie
Assistant General Counsel
Attachment