(2) The following transactions are exempted from Sections 61-1-7 and 61-1-15:

* * *

(e) a transaction in a bond or other evidence of indebtedness secured by a real or chattel mortgage or deed of trust, or by an agreement for the sale of real estate or chattels, if the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidences of indebtedness secured thereby, is offered and sold as a unit;

This exemption is for the issuance of debt which is secured by a real estate or chattel mortgage or deed of trust. The term chattel refers to personal property.

Mortgage Pools - Mortgage pools cannot rely on this exemption. A mortgage pool is created when an individual or corporation acquires, packages, and resells mortgages. Mortgage pools issued by the Government National Mortgage Association (GNMA) or the Federal National Mortgage Association (FNMA) are exempt from registration by section 61-1-14(l)(a).

Utah Treatment of Securities Exempt Under Section 4(5) of the Securities Act of 1933 -As reported in the Blue Sky Law Reports, the Division of Securities, Department of Commerce, State of Utah ("Division") reasserted its authority to require the registration of securities offered or sold under Section 4(5) of the Securities Act of 1933, or mortgage related securities as defined in Section 3(a)(41) of the Securities Exchange Act of 1934. As also reported, this reassertion became effective April 29, 1991. Inadvertently, no "grandfather" provision was provided. Through this letter the staff of the Division clarifies its position regarding securities initially offered in reliance upon the Secondary Mortgage Market Enhancement Act of 1984 prior to April 29, 1991 ('Mortgage-related securities").

First, mortgage-related securities initially offered in Utah on or after April 29, 1991, must register with the Division. The Division understands that a majority of the mortgage-related securities typically register with the U. S. Securities & Exchange Commission. Thus, registration with the Division typically will be by coordination. Mortgage-related securities relying upon an applicable federal exemption from registration must register with the Division by qualification.

Second, a current offering of "non-shelf" mortgage-related securities which commenced in Utah before April 29, 1991, may continue to rely upon the Secondary Mortgage Market Enhancement Act of 1984 ("SMMEA") without registering with the Division.

Third, a current "take-down" from a shelf registration of mortgage-related securities which commenced in Utah before April 29, 1991, may continue to rely upon SMMEA without registering with the Division. The "take-down" may remain open after April 29, 1991.

Fourth, a shelf registration which may have one or more take-down offerings commencing after April 29, 1991, must register, with the Division, the securities remaining on the shelf before a take-down may commence in Utah.

Letter to Dolores N. Kelley, Manager CCH, from Steve Neilsen, June 4, 1991