NASAA Releases Federal Legislative Agenda

WASHINGTON (January 22, 2001) – State securities regulators released their federal legislative agenda Monday, urging final approval of bills that would enhance prosecution of abuses in the “micro-cap” market, impose greater accountability for federal preemption of state laws and simplify investor scrutiny of investment advisers.

“With these proposals, Congress has an opportunity to both streamline securities regulation and enhance investor protection,” said Deborah Bortner, president of the North American Securities Administrators Association and director of securities for Washington state. “We look forward to working with the Congress and President Bush, who as a former governor, will bring a vital perspective to legislation aimed at strengthening our complementary system of state, industry and federal securities regulation.”

The Securities Markets Enhancement Act, which would among other things simplify public access to information on investment advisers via the Investment Adviser Registration Depository, was approved as part of a larger measure by the Senate Banking, Housing and Urban Affairs in July. Another key proposal – the Youth Financial Education Act – is under consideration, while the Microcap Fraud Prevention Act and the Federalism Accountability Act have not been reintroduced.

Since the passage of the first “blue sky” law nearly 90 years ago, state securities regulators have been protecting investors from fraud and abusive tactics. Recent issues highlighted by state securities regulators in congressional hearings include the pitfalls of day trading and the involvement of organized crime in the “micro-cap” market. With millions of new investors in the market, proposals to reform Social Security and calls to increase the national savings rate, state securities regulators` grass-roots investor education is more important than ever.

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