Attorney General's Opinons

Opinions from the Utah Attorney General and the Securities Commission/Division interpreting Utah's securities laws.

NOTE: Most of these opinions are from versions of the statute no longer in effect.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
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
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
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
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
Exchange listed securities exemption
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
“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
Debenture notes
Debenture notes are not exempt from registration.
A.G. formal
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
Spin-offs
Guidelines for the exemption of spin-offs.
Division Opinion
Isolated Transaction exemption
Sales to company insiders
A limited number of sales to company insiders qualifies as an isolated transaction.
A.G. formal
Isolated sale
An exchange of stock related to an acquisition is isolated.
A.G. informal
Licensing
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
Chamber of Commerce solicitations
The hotel committee of the Chamber of Commerce must register before soliciting.
A.G. formal
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
Registration
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
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
Other
Sales by thrifts
Commission has power over the sale of securities by thrift corporations.
A.G. formal
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
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
Mutual funds
Statute does not require any limitations on investments by mutual funds or other regulated investment companies.
A.G. informal
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