1. The following securities are exempt from Sections 61-1-7 and 61-1-15:
   1. security, including a revenue obligation, issued or guaranteed by the United States, a state, a political subdivision of a state, or an agency or corporate or other instrumentality of one or more of the foregoing, or a certificate of deposit for any of the foregoing;

This exemption is for the issuance and trading of Government and Municipal Securities. The most common form of securities issued by the Federal government are Treasury Bonds, Treasury Notes, Treasury Bills, and Strip or Zero Coupon Bonds. Bonds which are issued by a state, city, or other political subdivision of a state (such as sewer and water districts) are known as municipal bonds.

The government has established agencies and corporations which are part of the government. The term "agency or corporate or other instrumentality of one or more of the foregoing" refers to government agencies and corporations only. These agencies or corporations issue bonds and include such organizations as Government National Mortgage Association (GNMA), FNMA, and FICO (issued by the FDIC).

When this exemption refers to "certificate of deposit" (CD), it is referring to any CD issued by the government or government agency or corporation. It does not include CDs which are issued by banks or brokerage firms. It should also be noted that mutual funds or unit investment trusts which hold government securities are not exempt under this section.

Finally, most of the securities which qualify under this exemption are also considered to be federal covered securities under section 18 of the Securities Act of 1933. The main exception is a municipal security issued by an issuer which is located in Utah. See Federal Covered Securities.

Bank Letters of Credit: In an effort to enhance the credit worthiness of a municipal bond, sometimes a bank will offer a letter of credit. It is the policy of the Division that the letter of credit cannot be separated from the security and thus is not a separate security in itself. Therefore, the bank letter of credit is part of the security and is exempt from registration.

Guarantees of Principal and/or Interest by Banks and Corporations: In an effort to enhance the credit worthiness of a municipal bond, sometimes a bank or a corporation will guarantee the principal and interest of the security. It is the policy of the Division that the guarantee cannot be separated from the security and thus is not a separate security in itself. Therefore the guarantee is part of the security and is exempt from registration.