The North American Securities Administrators Association has announced its policy recommendations for the 115th Congress to consider as part of its efforts to better protect the public against investment fraud, ensure honest and transparent markets and facilitate responsible capital formation for even the smallest of companies, without undermining investor protection.

As the securities regulators closest to Main Street investors, as well as many startup and small businesses, NASAA members have a unique perspective on national policy issues. This perspective helped frame our legislative priorities for the 115th Congress.

NASAA will advocate for, and support, legislation introduced in the 115th Congress designed to:

  • Preserve and promote protections for retail investors;
  • Strengthen laws to prevent financial exploitation of America’s growing senior population;
  • Protect the integrity of securities markets;
  • Enhance collaboration between securities regulators; and
  • Maintain state authority to act as laboratories to grow jobs through capital formation. 

State securities regulators encourage Congress and the administration to promote financial regulatory policies that hold true to our shared responsibility to look out for investors and preserve the integrity of our capital markets. 

For example, Congress can help preserve and promote protections for retail investors by providing for a fiduciary standard for broker-dealers consistent with the standard for investment advisors; ensuring regulators’ independence and ability to take timely action; maintaining federal rules that disqualify felons and other “bad actors” from private offerings; and exploring possible reforms to improve oversight of the private placement market, including Regulation D, Rule 506 offerings. 

Congress should also take steps to strengthen the SEC’s oversight program for federally registered investment advisors (RIAs).

We also encourage Congress to strengthen laws to prevent the financial exploitation of America’s growing senior population. Specifically, we recommend that Congress promptly pass the bipartisan SeniorSafe Act of 2017, which will remove barriers for financial services professionals to report suspected senior financial exploitation to state regulators and other appropriate governmental authorities. 

We also call upon Congress to establish a federal grant program to support state efforts to protect seniors from financial exploitation, and to initiate a study by the Government Accountability Office to identify the true economic costs and overall impact of senior financial exploitation.

State securities regulators also believe it is important to preserve investor protections enacted in the wake of the financial crisis. Investors and securities markets continue to benefit from common-sense reforms enacted after the financial crisis, including policies designed to increase transparency regarding the activity of private funds. Protecting the integrity of securities markets also requires that state securities regulators have access to a wide range of investigative tools.

One of my personal priorities as NASAA president is to encourage greater collaboration between securities regulators.

I was pleased to sign an MOU agreement between NASAA and the SEC last month to facilitate the sharing of information to ensure that new federal rules for intrastate crowdfunding offerings and regional offerings serve their intended purpose. This agreement stands as an example for Congress to consider as it assesses or creates new structures to allow information sharing about cybersecurity and other matters among law enforcement agencies and regulators at the state and federal levels. We strongly urge the inclusion of state securities, insurance, and banking regulators in those discussions and in any new framework.

To build on our collaborative relationship with the SEC, NASAA calls on Congress to require that at least one member of the five-member Commission possess state securities regulatory experience. The appointment of even one SEC Commissioner with significant experience as a state securities regulator would dramatically improve coordination between state and federal securities authorities and bring a perspective informed by experiences from Main Street America where investor protection is personal and capital formation means real jobs. 

Our final priority focuses on improving access to capital for small and emerging businesses while protecting investors, a goal we share with Congress. States act as laboratories to grow jobs through capital formation. We encourage Congress to empower states to respond to the needs of small businesses and investors by promoting federal-state collaboration aimed at helping small businesses responsibly access capital from investors and customers in their regions and localities. 

As it develops new policies to expand the private securities markets, we encourage Congress to prioritize the protection of Main Street, mom-and-pop investors who may lack financial means or sophistication to evaluate for themselves a private offering’s risks.

We look forward to continuing our nearly 100-year legacy of carrying out our responsibilities to protect investors in small towns and large cities across America and providing regulatory frameworks for responsible capital formation.