The North American Securities Administrators Association ("NASAA") outlined legislative priorities for the 115th Congress. NASAA emphasized protections for retail investors, seniors and securities markets, and the continued "empowerment" of state regulatory authorities.

NASAA urged Congress to:

  • protect retail investors by (i) establishing a fiduciary standard to govern broker-dealer conduct, (ii) ensuring regulator independence and (iii) maintaining private placement market requirements that bar "bad actors";
  • protect America's growing senior population by (i) enacting the Senior$afe Act, (ii) establishing a federal grant program to protect senior investors, and (iii) directing the Government Accountability Office to evaluate the economic costs of senior financial exploitation;
  • enhance collaboration between securities regulators by (i) requiring at least one member of the SEC Commission to have experience as a state securities regulator, and (ii) "[e]ncourag[ing] federal regulators to share pertinent information with state regulators regarding shared priorities," particularly regarding cybersecurity matters;
  • protect the integrity of security markets by adopting policies that (i) improve the oversight of private fund advisers, (ii) preserve investor protections enacted in the wake of the 2008 financial crisis, and (iii) modernize privacy law protections; and
  • empower states to (i) improve access to capital for small and emerging businesses, and (ii) reaffirm that the accredited investor definition should "provide a meaningful carve-out from the protections afforded by securities registration for offerings made to investors with the financial means and sophistication to evaluate for themselves an offering's risks."

Commentary / Steven Lofchie

The gist of the NASAA recommendations is this: give state regulators greater support and more authority to impose fines. It is not clear what, if anything, the request for improved financial stability means. One interesting recommendation concerns the carve-out for offerings for sophisticated investors. That recommendation seems to call for a decrease in some regulation, though it is hard to say what exactly is being requested.

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