NASAA Recommends Legislative Agenda for 116th Congress

The North American Securities Administration ("NASAA") offered a legislative agenda for the 116th Congress.

According to NASAA, Congress should:

• support "enhanced standards of conduct for broker-dealers";
• "encourage, monitor, and responsibly regulate financial innovation" (NASAA stated it would discourage so-called regulatory "sandboxes," and call for "rigorous oversight" of cryptocurrency and ICOs);
• "address intergenerational investor issues" (including addressing senior financial exploitation and providing investor education for millennials);
• "maintain enforcement independence of state securities regulators";
• "protect regulatory remedies" (including the elimination of the five-year statute of limitations applicable to disgorgement actions);
• "ensure oversight of private placement brokers and finders";
• "provide state security regulators access to filings of Suspicious Activity Reports";
• "prevent and deter fraud through effective penalties";
• "examine public and private offering regimes" (including, e.g., consideration of the impact of the JOBS Act, and whether it unduly expanded the definition of a private offering);
• "enact responsible policies to encourage small business capital formation" (including, e.g., providing an exemption for M&A brokers from federal regulation and coordinating state and federal offering exemptions);
• "modernize the accredited investor definition" (including, at a minimum, adjusting it upwards for fraud);
• "reduce fraud and improve transparency in the private markets" (including, e.g., mandating the filing of a Form D in many private offerings and imposing substantial penalties for failure to file);
• "secure investor choice and transparency in dispute resolution" (including, e.g., limiting mandatory arbitration and not permitting mandatory arbitration in initial public offerings);
• "make harmed investors whole" (including ensuring that broker-dealers pay arbitration awards entered against them);
• "safeguard shareholder rights" (by imposing limitations on "dual-class shares" and increasing oversight of proxy advisers); and
• protect "data security and privacy" through additional cybersecurity legislation and regulation.