June 16, 1992
TO: STATE SECURITIES MEMBERS NO. 32-92
UNIT INVESTMENT TRUST MEMBERS NO. 40-92
RE: VERMONT INCREASES REGISTRATION FEE; ADOPTS OVERSALES POLICY
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Earlier this year, legislation increasing the fee for
registration of securities and amending the term of registration
was passed by the Vermont Legislature. As of July 1, 1992, the
fee to register a definite amount of securities increases to a
minimum of $250 and maximum of $1,000. Funds electing to register
an indefinite amount of securities must pay the maximum
registration fee of $1,000. The legislation also provides that a
registration statement will be effective for one year.
Currently, the minimum registration fee is $50 and the
maximum fee is $500. Moreover, if a fund paid the maximum fee of
$500 to register an indefinite amount of securities, the term of
the registration statement was also indefinite.
In conjunction with the amendments to the Vermont Securities
Act contained in House Bill 601, the Vermont Department of
Banking, Insurance and Securities issued two policy statements
which set forth the registration and renewal procedure for mutual
funds and unit investment trusts and the oversales policy of the
Department. The following is a brief summary of each of these two
policy statements:
Bulletin 92-1-S - Open-End Investment Companies and Unit
Investment Trusts Registration and Renewal After July 1, 1992:
A. Definite Registration
This policy statement sets forth the provision for
registration and renewal of mutual funds and unit investment
trusts. A fund or trust may elect to register either a definite
or indefinite amount of securities. If a definite amount is
registered, a fee of $1.00 per $1,000 must be paid, with a minimum
fee of $250 and a maximum fee of $1,000. Within 60 days of the
anniversary date of the registration, the fund or trust must file
a sales report indicating the amount of sales in Vermont. Mutual
funds must annually submit an application to renew the
registration prior to the expiration of the registration with the
applicable fee.
A fund or trust may amend the registration statement to
increase the amount registered during the one-year registration
period. If securities are sold in excess of the amount registered
(and such is discovered after the expiration of the registration),
the oversold securities may be retroactively registered by
following the procedure for oversales.
B. Indefinite Registration
A fund or trust may elect to register an indefinite amount
of securities by paying the maximum fee of $1,000 at the time of
registration or renewal. The registration will be effective for
one year; thereafter, a renewal fee of $1,000 must be paid prior
to the expiration of the registration/renewal period. No sales
report will be required to be filed if an indefinite amount is
registered.
C. Transition Provisions for Funds that Previously
Registered an Indefinite Amount
As stated earlier, the foregoing amendments will be
effective as of July 1, 1992. Therefore, funds that initially
registered an indefinite amount of securities by paying a
registration fee of $500 must renew the registration of the fund
(including all portfolios or series of the fund). Funds that
registered an indefinite amount prior to July 1, 1991 must renew
the registration within 60 days of the first fiscal year end after
July 1, 1992. Funds that registered an indefinite amount after
July 1, 1991 must renew the registration within 60 days of the
first fiscal year end after July 1, 1993.
Bulletin 92-2-S - Oversales by Unit Investment Trusts and
Open-End Investment Companies:
The Department has adopted a policy of allowing a fund or
trust to retroactively register securities sold in excess of the
amount originally registered within 60 days of the expiration of
the one-year registration period. A fund or trust may amend the
registration and register the oversold securities by submitting an
amended application (Form U-1) and paying the difference between
the initial registration fee paid and the actual amount due for
the oversold securities plus a $100 penalty. Upon receipt of the
amended application and additional fee, registration of the excess
securities shall become effective as of the date of the initial
registration/renewal.
Please be aware that this policy statement replaces a
previous no-action policy issued by the Department on June 12,
1990 regarding oversales by unit investment trusts.
* * *
In addition to the foregoing policy statements, the
Department also issued two policy statements pertaining to the
registration of branch offices in Vermont (Bulletin 92-3-S) and
changes in name and successor registration requirements for
broker-dealers (Bulletin 92-4-S).
A copy of the pertinent provisions of House Bill 601 and the
four policy statements is attached. We will keep you advised of
further developments.
Patricia Louie
Assistant General Counsel
Attachments