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← Series 79: Underwriting & New Financing
Series 79 practice questionmediumBlue Sky Laws

Under the National Securities Markets Improvement Act of 1996 (NSMIA), which of the following offerings is preempted from state blue sky registration requirements?

  1. AA Regulation A offering of $20 million
  2. BAn offering of securities listed on the NYSE, or securities offered under Rule 506 of Regulation D✓ Correct answer
  3. CAll private placements regardless of the exemption used
  4. DOnly offerings by companies with more than $1 billion in assets
Explanation

Why B — An offering of securities listed on the NYSE, or securities offered under Rule 506 of Regulation D

NSMIA designates certain securities as 'covered securities' that are exempt from state blue sky registration requirements, including securities listed on national securities exchanges (NYSE, Nasdaq), securities offered under Rule 506 of Regulation D, and securities sold to qualified purchasers. While states cannot require registration of these covered securities, they retain the authority to require notice filings and fees, and they retain anti-fraud enforcement authority. This federal preemption was designed to eliminate the burden of complying with 50 different state registration regimes.

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