Your Survival Guide to State Regulation Laws
MANGUM & ASSOCIATES
If you’re a business planning on offering securities, you already know about adhering to federal SEC regulations. However, many companies don’t properly prepare themselves to face individual state securities laws (aka. Blue Sky Laws). While many states have adopted the same legislation as federal laws, many also have their own, which could significantly tamper with your registration process if you’re unprepared.
For example, if you’re a large company registered in every state, it could mean being subjected to up to 50 different securities regulation agencies, not to mention the SEC, the National Association of Securities Dealers, or any of the various regional exchanges you’re involved with. States also have their own notice and registration requirements, and state regulators can even conduct investigations if they see fit.
With this in mind, it’s important to know why Blue Sky Laws exist, the do’s and don’ts, and the basic steps for filing securities. Our 5-minute guide will give you the knowledge and resources you need to master them.
MANGUM & ASSOCIATES
What are they?
Blue Sky Laws are designed to ensure transparency and protect investors from securities fraud by mandating disclosure. Each state has their own State Securities Commissioner to enforce their regulation laws.
While they vary from state to state, Blue Sky Laws do share two main requirements:
- Issuers selling their own securities, agents, brokerage firms, and individual brokers must be registered in each state they offer or sell securities.
- All offered or sold securities must be registered in the state they are offered in, unless allowed exemption.
