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By Jim Christie

SAN FRANCISCO, July 9 (Reuters) - "IOUs" the state of California has issued instead of payments amid its budget crisis are "securities" under U.S. law and their holders and potential buyers are protected by anti-fraud law, federal regulators said on Thursday.

The determination comes amid efforts by some entrepreneurs to establish a secondary market for the IOUs, which the government of the most populous U.S. state began issuing last week to vendors and to taxpayers owed refunds to maintain dwindling cash for priority payments, including payments to its bondholders.

Major banks in California have said they would no longer accept the IOUs, which are technically registered warrants, after Friday. Some analysts have said that decision could speed efforts to set up online trading platforms for the IOUs.

In response, California State Treasurer Bill Lockyer's office earlier this week said it would redeem IOUs sold through eBay (EBAY.O: Quote, Profile, Research), Craigslist or other means only if accompanied by a notarized bill of sale signed by their listed payee.

More than $350 million worth of the IOUs have been issued since July 2, according to the state controller's office.

"In addition to the anti-fraud provisions of the federal securities laws, other parts of the federal securities laws also apply to the purchase and sale of the IOUs," said a statement issued by the U.S. Securities and Exchange Commission.

"Persons acting as intermediaries between buyers and sellers of the IOUs may need to register as brokers, dealers or municipal securities dealers, or as alternative trading systems or national securities exchanges," it said.