The state-federal system of regulation within the United States is collaborative and complementary.
Congress in 2004 recognized that state securities regulators are essential partners to federal regulators in protecting investors when it removed federal preemptive provisions from the “Securities Fraud Deterrence and Investor Restitution Act of 2004” (H.R. 2179).
As an organization dedicated to investor protection and attuned to the critical role of state regulation with respect to all types of financial services, NASAA is concerned that as the worlds of banking, insurance, and securities increasingly intersect, federal regulators, such as the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) may seek to encroach further upon state regulatory jurisdiction, not only in banking, but potentially in the areas of insurance and securities as well.
NASAA believes that there must be continued cooperation and shared efforts among state, federal, and industry regulators. NASAA is pleased to offer the resources on this page to help users understand both the unique regulatory relationship that exists among state, federal, and industry regulators, and the onging challenges to that system of regulation.
Index
- Challenges to State Regulatory Authority
- NASAA Response
- State Response
- Congressional Response
- Backgrounders, Analysis & Reports
- NASAA Enforcement Database
NASAA Position on State Regulatory Authority
Protecting investors and punishing those who would victimize investors with abusive sales practices are fundamental roles of government, be it federal, state, or provincial. NASAA members are dedicated to pursuing those firms and individuals who have violated the securities laws within our jurisdictions.
NASAA members strive to ensure that they maintain the authority to regulate at the state level and bring enforcement actions with appropriate remedies against those firms that violate securities laws in their jurisdictions.
Congress made clear in its passage of National Securities Markets Improvement Act of 1996 its intent to foster a cooperative rulemaking process between state and federal securities regulators. Congress also has recognized that state securities regulators are essential partners to federal regulators in protecting investors.
NASAA members will continue to remain vigilant and prepared to face attempts to neutralize state regulators who are aggressively protecting investors.
- NASAA Letter to President Obama Regarding Directive Affirming the Value of State Regulatory Authority: Letter | News Release
Challenges to State Regulatory Authority: NASAA Response
Resolution
In July 2005 NASAA members endorsed and adopted a resolution opposing efforts to preempt state securities authority in the United States. This resolution reflects the strong voice of NASAA members in vigorous opposition to any attempt to preempt or circumvent our efforts to protect investors.
Testimony
The Role of State Securities Regulators in Protecting Investors, Senate Banking Committee Testimony of NASAA President Ralph Lambiase (2004)
Comment Letters & Correspondence
NASAA Comment Letter to the OCC Regarding Docket No. 03-02. Proposed Rulemaking, 12 CFR 7.4000, Visitorial Powers (2003)
NASAA Letter to the House Financial Services Committee Regarding HR 2179(2003)
Statements
NASAA Members Adopt Resolution on State Securities Regulatory Authority (2005)
NASAA Statement on the Securities Fraud Deterrence and Investor Restitution Act of 2003 (H.R. 2179)(2004)
States Urge Congress to Reconsider Proposal That Weakens Investor Protection(2003)
NASAA Statement on HR 2179(2003)
Reports
Report of the Task Force on the Future of Shared State and Federal Securities Regulation(1997)
State Response
National Association of Secretaries of State Resolution on Securities Regulation (2005)
National Governors Association: Rule Change Harms States, Consumers (2004)
National Association of Secretaries of State Resolution on Securities Regulation (2003)
States Unite To Fight Sweeping OCC Preemption (2003)
National Governors Association letter to OCC (2003)
National Association of Attorneys General testimony: Congressional Review of OCC Preemption(2004)
National Conference of State Legislators: State Sovereignty in Financial Services
National Governors Association Letter on Securities Regulation (2002)
Congressional Response
Rep. Barney Frank Letter to Office of Thrift Supervision(2006)
OCC Response to Frank Letter(2005)
Rep. Barney Frank Letter to Comptroller of the Currency(2005)
Key Problems with the OCC’s Preemption Rule (2004)
Committee Democrats Urge Republican Lawmaker to Let State Securities Officials Do Their Jobs(2003)
Frank and Galvin Blast Attempts to Hijack States’ Efforts to Protect Investors(2003)
Hearing on H.R. 2179, the Securities Fraud Deterrence and Investor Restitution Act of 2003, Statement by House Financial Services Committee Ranking Member Paul Kanjorski (D-PA) (2003)
Backgrounders, Analysis & Reports
Mutual Fund Trading Abuses: Lessons Can Be Learned from SEC Not Having Detected Violations at an Earlier Stage, Government Accountability Office, (2005)
The OCC’s Preemption Rules Exceed the Agency’s Authority and Present a Serious Threat to the Dual Banking System and Consumer Protection, Arthur E. Wilmarth Jr., George Washington University Law School, Annual Review of Banking and Financial Law, Vol. 23, pp. 225-364, 2004
State Enforcement Database
State securities regulators have a long history of vigorously pursuing sales practice abuses and a variety of frauds against unsuspecting investors. State securities regulators often initiate investigations as a result of complaints from investors who feel they have been wronged by a broker-dealer, securities professional, or those claiming to be a securities specialist. Many investors understandably feel that the logical place to start with a grievance is their local state securities regulator.
