January 18, 1996
TO: SEC RULES COMMITTEE No. 4-96
STATE LIAISON COMMITTEE No. 3-96
UNIT INVESTMENT TRUST COMMITTEE No. 3-96
RE: 1996 NASAA COMMITTEES
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For calendar year 1996, NASAA has made substantial changes in the number and
membership of its committees. These changes include merging the Investment Companies
Sales Practices Committee into the Broker Dealer Sales Practices Committee and renaming it the
"Sales Practices Committee." The Investment Companies Committee remains intact, though its
membership was reduced from nine to five members. Also intact are the Disclosure Reform
Task Force and the Investor Education Committee. NASAA has created at least four new
committees that may be of interest:
Coordinated Review of Investment Company Offerings Committee
This Committee, which is chaired by Denise Crawford, the Texas Securities
Commissioner, has been charged with developing a protocol whereby the states that
actively comment on mutual fund offerings would consolidate their comments in a
single comment letter that would be sent by one state on behalf of all of the commenting
states. The Committee hopes to have a pilot project in place in April 1996. Attached is a
letter from the Institute to Crawford expressing the Institutes concern with this
proposed approach.
Review of Uniform Securities Act Committee
This Committee, which is chaired by Michael Vargon, Deputy Director of the New
Mexico Securities Division, will be reviewing the Uniform Securities Act, Revised
Uniform Securities Act ("RUSA"), and the NASAA Model Amendments to RUSA to
determine whether any updates are necessary. In the short term, the Committee will
focus its efforts on adopting uniform provisions relating to: (1) the definition of
institutional investor; (2) exemptions from registration for exchange listed securities; (3)
subpoena enforcement; and (4) treatment of limited liability companies under state
securities laws. They will work with other NASAA Committees on these uniform
provisions.
Federal Legislation Committee
This Committee, which is chaired by Richard Weinroth, General Counsel of the Arizona
Securities Division, will provide assistance to the NASAA Task Force on the Future of
Shared State and Federal Securities Regulation (see below) and to NASAA on issues
relating to federal legislation.
Implementation, Coordination and Harmonization Committee
This Committee, which is chaired by Gene Cella, Deputy Securities Administrator for
North Carolina, will consider how best to implement, for maximum effectiveness,
resolutions and guidelines adopted by NASAA and NASAA Committees. Committee
members include: William Blessing (ID), Joe Borg (AL), Melissa Johnson (TN), Milly
Lipper (PA), Brad Skolnik (IN), Patricia Struck (WI), and Carl Tyson (MI).
With the exception of this last Committee, attached is a list of each committees charges and
membership. The specific charges of the Implementation Committee have not yet been
published.
In addition to these Committees, NASAA has created a Task Force on the Future of
Shared State and Federal Securities Regulation. This Task Force, the fourteen members of
which include securities industry executives, lawyers, academicians, and regulators, has been
asked to determine the optimum allocation of resources and responsibilities between state and
federal securities regulators. While the Institute opted not to serve on the Task Force, we
provided a detailed submission to it concerning mutual fund regulation. Additionally,
Matthew P. Fink, the Institutes President, made a formal presentation to the Task Force in
which he described the problems encountered by mutual funds in obtaining and maintaining
state registration and how investors are disserved by the current system of regulation. While
the Task Forces report and recommendations are expected to be published in the Spring of
1996, Mr. Fink requested that the Task Force expedite its recommendations relating to the
regulation of mutual funds in light of the amount of study of the issue to date, the consensus
that has emerged as to the appropriate solution, and Congressional consideration of this issue.
A copy of NASAAs announcement of the creation of the Task Force is attached.
Tamara K. Cain
Assistant Counsel
Attachments