1.1.9. Exemption from State Registration Requirements
Blue sky laws are the state regulatory requirements for securities offerings. These requirements may pertain to registration, qualification, and filing requirements. Because these requirements vary from state to state, issuers may have to comply with a crazy-quilt of inconsistent state regulations in addition to federal requirements.
In 1996, the National Securities Markets Improvement Act of 1996 (NSMIA) was enacted to ease the state regulatory burden. NSMIA exempts certain “covered securities” from state registration requirements and from most state regulatory hurdles. These “covered securities” specifically include:
• Securities listed on a national exchange, such as the NYSE, American Stock Exchange, or Nasdaq
• Registered investment companies, such as mutual funds
• Sales to “