OPINIONS INTERPRETING UTAH’S SECURITIES LAWS
Opinions from the Utah Attorney General and the Securities Commission/Division
1927-1983
Note: Most of these opinions are from versions of the statute no longer in effect. Readers are cautioned that the opinions in this list may have little or no precedential effect.
Subject |
Date |
Opinion/Result |
Source |
Definition of Security |
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Whiskey warehouse receipts |
Whiskey warehouse receipts are securities. |
A.G. formal |
|
Sale of mineral deeds |
The sale of mineral rights on property is a security. |
A.G. formal |
|
Burial lots |
An agreement to purchase burial lots and burial property is a security. |
A.G. formal |
|
Voluntary associations |
Voluntary association securities are under the exemption provisions of the Securities Act. |
A.G. formal |
|
Memorial trust |
Memorial trust agreement is a security under Utah law. |
A.G. formal |
|
Discount corporate membership |
A membership in a plan giving discount privileges is a security. |
A.G. formal |
|
Country club pledges |
Country club deposits and pledges are securities and are not exempt. |
A.G. informal |
|
Warrants, plans, options |
Warrants, plans, options and rights fit in the statutory definition of a security and must be registered, even if the common stock is listed on a responsible exchange. |
A.G. formal |
|
Promissory note |
A promissory note meeting certain conditions is a security, but exempt from registration. |
A.G. informal |
|
Promissory note |
Sixty-day demand notes are securities and are not exempt from registration. |
A.G. formal |
|
Prearranged funeral plans |
Plans that offer pre-purchase of a casket are prearranged funeral plans under the securities laws. |
A.G. informal |
|
Oil and gas leaseholds as securities |
Offerings of oil and gas leaseholds are considered securities and people buying and selling them may be broker-dealers. |
Division opinion |
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Non-competitive oil and gas leases |
Non-competitive oil and gas leases are securities. |
A.G. informal |
|
Real estate instruments |
The sale of real estate mortgages and notes for profit are securities, might not qualify for exemption. |
A.G. formal |
|
Discount membership plans |
Some discount membership plans serve as an investment contract rather than a discounted means of purchasing goods and services, and are therefore classified as securities. |
Division opinion |
|
Escrow |
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Release of officer’s stock in escrow |
It would fulfill the intent of the statute if those wishing to purchase stock in escrow are required to escrow the same amount of stock under the same terms as those purchasing in cash. |
Division opinion |
|
Escrow form letter |
Revised form letter concerning escrow of securities issued for intangible assets. |
A.G. informal |
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Escrow policies |
Reply about commission policies on escrow withdrawals and retrieving files of the Utah Securities Commission from a court. |
A.G. informal |
|
Grave headstones and pre-need contracts |
The key element in selling a headstone is whether it is part of a pre-need plan, if sold separately and not under a pre-need plan, the funds do not need to be escrowed. |
A.G. informal |
|
Release of escrow |
Stock held in escrow under prior law is still subject to limitations imposed by the prior laws. |
A.G. informal |
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Exchange listed securities exemption |
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Exemption of additional exchange listings |
If a security is under equal supervision and regulation as the original security, the additional listing will be exempt. |
A.G. formal |
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“Approved” for listing |
Securities approved for listing on an exchange are not exempt from registration until actually listed. |
A.G. formal |
|
Additional issue of stock |
Additional issues of stock must be listed to be exempt. |
A.G. formal |
|
Warrants, plans, options |
Warrants, plans, options and rights fit in the statutory definition of a security and must be registered, even if the common stock is listed on a responsible exchange. |
A.G. formal |
|
Exchange listed senior securities |
Securities listed on an approved exchange are exempt, as are any securities senior to those listed. |
A.G. informal |
|
Other exemptions |
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Debenture notes |
Debenture notes are not exempt from registration. |
A.G. formal |
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Membership in agricultural cooperatives |
Certificates of membership or interest in agricultural cooperatives are exempt securities and are not required to be registered. |
A.G. formal |
|
Public utilities |
Public utilities are exempt from registration. |
A.G. formal |
|
Isolated sales |
Stock may be sold to different individuals or corporations and still be considered an isolated sale if it is unsolicited and part of one transaction. |
A.G. formal |
|
Pensions |
Pensions offered by companies are not exempt securities and must be registered. |
A.G. formal |
|
Senior securities |
Senior securities and evidences of indebtedness need to be listed on an exchange to be exempt. |
A.G. formal |
|
Exemption for sales of personal stock by officer |
Treasury stock given to officers is exempt when sold to the public. If sales are made by someone other than the officer, the seller must be registered. |
A.G. formal |
|
Public utility holding company |
Public utility holding companies are exempt from registration. |
A.G. formal |
|
Promissory note |
A promissory note meeting certain conditions is exempt from registration. |
A.G. informal |
|
Promissory note |
Sixty-day demand notes are not exempt. |
A.G. formal |
|
Exchange of stock |
Corporation proposing to exchange stock for mineral rights is not exempt from registration. |
A.G. informal |
|
Senior unregistered securities |
The Commission should not give exemption letters to senior, unregistered securities. |
A.G. informal |
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Spin-offs |
Guidelines for the exemption of spin-offs. |
Division opinion |
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Isolated Transaction exemption |
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Sales to company insiders |
A limited number of sales to company insiders qualifies as an isolated transaction. |
A.G. formal |
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Isolated sale |
An exchange of stock related to an acquisition is isolated. |
A.G. informal |
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Licensing |
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One-time transaction |
An agent may sell securities without a license as a one-time transaction. To transact multiple securities requires a license. |
A.G. formal |
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Chamber of Commerce solicitations |
The hotel committee of the Chamber of Commerce must register before soliciting. |
A.G. formal |
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NASD expulsion |
If an organization expels a member, it is as if the member was expelled by the SEC. |
A.G. informal |
|
Certificate of authority for broker dealers |
Broker-dealers have to file a certificate of subscription agreements authority to do business with the Secretary of State’s office. |
A.G. informal |
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Registration |
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|
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When registration is effective |
The Commission is not authorized to record the registration of a security before the security is filed with the Commission. |
A.G. formal |
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Filing received before new law was enacted |
Division should permit registration to go effective even if filed under prior law. |
A.G. informal |
|
Real estate investment trusts |
Criteria for registering real estate investment trusts in Utah. |
Division opinion |
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Other |
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Sales by thrifts |
Commission has power over the sale of securities by thrift corporations. |
A.G. formal |
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Registering as a foreign corporation |
Foreign corporations doing no business but selling securities in the state are not required to register as doing business. |
A.G. formal |
|
Maximum commission |
10% is the maximum load (commission) that investment companies can put on certificates. |
Division opinion |
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Advertising |
Advertisements must include the name of one dealer registered in the State of Utah. |
Division opinion |
|
Funeral establishments are required to file reports |
Funeral directors and mortuary establishments are required to file annual reports with the Utah Securities Commission; failure to file will result in fines. |
A.G. informal |
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Mutual funds |
Statute does not require any limitations on investments by mutual funds or other regulated investment companies. |
A.G. informal |
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Pre-organization certificates |
If a corporation is a subscriber, it is the entity that subscribes, not the shareholders of the entity. |
A.G. informal |
|
Authority of the Securities Commission |
Director of the Department of Business Regulation has authority to exercise all powers of the Securities Commission. |
A.G. informal |
