Blue Sky Laws Application to Offerings after NSMIA

Summary

This practice note discusses the reduced scope of state Blue Sky Laws after the National Securities Markets Improvement Act of 1996 (NSMIA). In addition to complying with federal securities laws, every offer and sale of securities must comply with state securities laws, which are often referred to as "Blue Sky Laws." Each state has its own Blue Sky Law, administrative rules, and a regulatory or administrative agency that, among other things, regulates the offer and sale of securities and the licensing of securities intermediaries such as broker-dealers. NSMIA preempted elements of Blue Sky Laws, but significant state law authority remains, as discussed below.