June 3, 1997
TO: INVESTMENT ADVISERS COMMITTEE No. 19-97
SMALL FUNDS COMMITTEE No. 15-97
STATE LIAISON COMMITTEE No. 17-97
UNIT INVESTMENT TRUST COMMITTEE No. 37-97
RE: VIRGINIA PROPOSES RULES TO IMPLEMENT CHANGES MANDATED BY
NATIONAL MARKETS BILL
______________________________________________________________________________
The Virginia Corporation Commission has released for comment proposed amendments
to its securities regulations to implement the National Securities Markets Improvement Act of
1996 ("NSMIA"), as well as amendments recently adopted to the Virginia Securities Act as a
result of NSMIA. Of particular interest to investment companies and investment advisers, the
proposed amendments would:
Set forth notice filing requirements for investment companies (21 VAC 5-30-70) and federal
covered advisers (21 VAC 5-80-10 et seq.);
Adopt a transactional exemption for internet offers (21 VAC 5-40-110);
Impose requirements on federal covered advisers relating to custody of client funds (21
VAC 5-80-140), agency cross transactions (21 VAC 5-80-150), supervisory obligations (21
VAC 5-80-170), disclosure requirements (21 VAC 5-80-190), and dishonest or unethical
practices (21 VAC 5-80-200), each of which appear to be violative of the state’s authority
under NSMIA;
Provide an institutional and de minimis exemption for federal covered advisers (21 VAC 5-
80-210); and
Adopt the Form S.A.14, Consent to Service of Process for Notice Filing as a Federal Covered
Adviser, and Form NF, the Uniform Investment Company Notice Filing form (21 VAC 5-85-
10).
A copy of the proposed regulations is attached. As comments are due to the Commission by
July 11, please provide me with any thoughts or comments you may have on the proposed
regulations no later than July 3, 1997, by telephone at (202) 326-5813, by facsimile at (202) 326-
5828 or by e-mail at bateman@ici.org.
Marguerite C. Bateman
Associate Counsel
Attachment (in .pdf format)