Securities Issuances Regulated by State Law
Do issuers have to Comply with State Securities Laws?
Written by J. Mance Gordon
Updated at April 20th, 2024
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Are all issuers of securities required to comply with state blue sky laws?
Generally, no. In 1996, Congress passed the National Securities Markets Improvement Act (NSMIA) with the purpose of simplifying the registration process for issuers of securities. The NSMIA preempted any state regulation of certain covered securities. Covered securities include:
those traded on a national exchange (such as the NYSE or CME); securities of registered investment companies, and offers of securities exempt from Federal registration under Regulation D, Rule 506.
NSMIA effectively limited the ability of states to regulate many security offerings. In addition to these preempted offerings, states also recognize any number of exemptions for certain issuances of securities:
- isolated transactions involving the issuance of securities;
- offers or sales to a limited number of offerees or purchasers within a stated time period;
- issuances qualifying as private offerings under Rule 504; and
- issuances to a predefined, but limited, number of purchasers.
Another optional model law is known as the Uniform Limited Offering Exemption. This provision excuses certain securities offerings, such as offerings issued pursuant to Regulation D, Rule 505.
Related Topics
- Securities Law (Intro)
- What are Securities Laws?
- What is a Security?
- What qualifies as an Investment contract?
- What are the primary federal securities laws?
- What are the regulatory goals of security laws?
- What is the Securities and Exchange Commission?
- What is an Initial Public Offering?
- What is a Direct Public Offering?
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- Forward Looking
- Red Herring Prospectus (Securities) Definition
- Registration of Securities
- What is an issuer allowed to do at each stage of the registration process?
- How are issuers classified for purposes of the registration and offering process?
- What is an issuer allowed to do during the Pre-filing Period?
- What are the limitations on the issuer during the Post-filing, Waiting Period?
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- Section 3(a)?
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- Section 4(a)(5)?
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- What is a Rule 506(b) Exemption?
- What is a Rule 506(c) Exemption?
- What is Rule 502(d) and the Rule 144 Safe Harbor?
- Rule 144a
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- Liability Under the Securities and Exchange Act of 1933
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- Blue Sky Laws State Securities Laws
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