The North American Securities Administrators Association ("NASAA") released its legislative agenda for the 117th Congress. The state securities leaders stated that federal legislators should place retail investors "front-and-center."

NASAA's federal legislative advocacy includes:

  • regulating private placement brokers and finders "appropriately," halting the proliferation of forced arbitration contracts, safeguarding the independence of the SEC's Investor Advocate and Investor Advisory Committee, examining the process of expungement of customer complaint information, and pursuing legislation that would establish a new, fourth tier of monetary penalties for recidivists;
  • enhancing regulatory oversight of private markets, by reforming Exchange Act Section 12(g) ("Registration of Securities by Issuer; Exemptions") and Securities Act Rule 506 ("Exemption for Limited Offers and Sales without Regard to Dollar Amount of Offering") under Regulation D ("Rules Governing the Limited Offer and Sale of Securities Without Registration Under the Securities Act"), standardizing environmental, social and governance (or "ESG") disclosure, and enhancing cybersecurity risk disclosures;
  • promoting diversity and inclusion on corporate boards and in venture capital firms;
  • "common-sense" legislation that would (i) prevent increased financial exploitation of the elderly and (ii) the monitoring of Millennial-specific risk (e.g., app-based trading platforms);
  • "vigorously exercis[ing]" its oversight authority of Self-Directed Individual Retirement Accounts, SEC Regulation Best Interest, Exchange Act Rule 10b5-1 ("Trading 'on the Basis of' Material Nonpublic Information in Insider Trading Cases"), Special Purpose Acquisition Companies (or "SPACs"), direct listing and multi-class share structures; and
  • supporting small and emerging businesses by promoting "responsible" capital formation.

Commentary

"Principle V" of the NASAA report (beginning on page 16) is intended to advance capital raising by small businesses. Ideally, NASAA should move this closer to the top of its priorities list.

Primary Sources

  1. NASAA Press Release: NASAA's Legislative Agenda Calls for Congress to Prioritize Investor Protection
  2. NASAA's Legislative Agenda for the 117th Congress

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