Blue Sky Law

[Guest deankr]

Here is a situation for you.

A Rep makes a sale of a Mutual Fund to a client that lives in the Virgin Islands but the Fund is NOT registered in the Virgin Islands. The Rep is licensed to sell in the Virgin Islands as well as Florida and has his office in Florida.

Is the point of sale in the Virgin Islands or Florida?

The Fund Family is registered in Florida but not the Virgin Islands, issues with this sale?

[GBurns]

I am assuming US Virgin Islands.

Does the US Virgin Islands have any governing regulations?

Does the US Virgin Islands require registration by the Mutual Fund?

Does the client have a US residence also? Where?

What is the citizenship etc status of the client?

Does the client have a proper Social Security Number?

Where did the solicitation and transaction take place?

Does the Mutual Fund accept deposits etc from non-continental US residents? The Mutual Fund probably has already addressed such legal issues and should be the best source of information on the issues.

I do not think that it matters since I have for many decades seen no-resident aliens (people from many other countries) open accounts with mutual funds etc with no problems, except distribution taxation and termination issues. But that does not mean that it is legal or problem free.

[Guest deankr]

Thank you for the response. You are correct, this is regarding the US Virgin Islands.

Right now, I'm not sure on the VI governing regulations.

Yes, the Virgin Islands does require registration by the Fund.

The client does NOT have a US residence.

The client is a citizen of the US.

The client does have a proper SSN.

Most of the trades that I've seen have been from Rep's with offices in Florida. I'm not able to tell where the trade was solicited, only that the Rep is from Florida and the client lives in the US Virgin Islands.

The Fund does accept deposits from non-continental US residents.

Maybe a better question is if the client does not have a resident address in the US, and the fund is not registered in the US Virgin Islands, is this a trade that the Fund company should allow to go through?

Thanks again for any insight into this matter.