Shawn K.(Zipe) posted this in the following link. The post discusses some region laws and interpretation/misinterpretation of the flag law by the water cops. It is worth a read http://www.wakeworld.com/MB/Discus/messages/65921/192880.html
Department of Boating and Waterways.
Title 14, section 7009
7009. The Ski Flag.
(a) A red or orange flag measuring no less than 12 inches on each side, in
the shape of a square or rectangle, mounted or displayed in such a manner
as to be visible from every direction shall be known as a ski flag.
(b) The use of this flag will not be construed as conferring any rights or
privileges on its users, and its display will not be construed in itself as
restricting the use of the water in the vicinity of the vessel displaying the
(c) Operators of vessels will, however, exercise precaution commensurate
with conditions indicated.
(d) The ski flag shall be displayed when one or more of the following
(1) A downed skier.
(2) A skier in the water preparing to ski.
(3) A ski line extended from the vessel.
(4) A ski in the water in the vicinity of the vessel. The ski flag shall not
be displayed at any other time.
NOTE: Authority cited: Sections 652, 658, 658.7 and 659, Harbors and Navigation Code.
Reference: Sections 650, 655.3, 658.7 and 659, Harbors and Navigation Code
Based on how the law is written, a holder is not only legal, but encouraged!
"mounted or displayed in such a manner
as to be visible from every direction "
Sounds pretty clear to me, just need to make sure that is is visible from all directions.
Link to the codes:http://dbw.ca.gov/boating.htm