Federal Securities Act of 2008 Would Impact Blue Sky Law

The proposed federal Securities Act of 2008 would impact Blue Sky law in the following ways if adopted:

Secs. 4 and 5(a) of the Act (pp. 10-12) amend 1933 Act Sec. 18(b)(1) to: (1) delete the reference in Sec. 18(b)(1)(A) to the National Market System of the Nasdaq Stock Market (so that securities listed or authorized for listing on any of the Nasdaq tiers will be "covered securities" without need for SEC rulemaking under Sec. 18(b)(1)(B)); (2) add a qualifier to Sec. 18(b)(1)(A) that the NYSE, AMEX or Nasdaq may designate a tier or segment of securities which will not be "covered securities"; and (3) add a new Sec. 18(b)(1)(D) making any warrant or right to subscribe to or purchase any of the securities specified in 18(b)(1)(A) - (C) "covered securities."

Sec. 5(b) of the Act (p. 12) amends 1933 Act Sec. 18(b)(4)(D) to add language confirming that states may require that notice filings for Rule 506 offerings include "information corresponding to that in all the parts and the appendix to Form D," thereby ending the controversy over whether states could insist that pp. 6-8 of Form D (the paper version) be filed with them when those pages don't have to be filed with the SEC.

Sec. 13 of the Act (pp. 20-21) amends Advisers Act Sec. 205(a) to clarify that Advisers Act Sec. 205 [imposing certain limitations on advisory contracts] applies only to advisers registered or required to be registered with the SEC, not state-registered advisers.

Sec. 16 of the Act (pp. 25-27) amends Exchange Act Sec. 24 to authorize the SEC to share privileged information with, among others, "State securities or law enforcement authorities" (as defined in new Sec. 24(d)(4)(C)).

Above summary attributed to Michele Kulerman, Vice Chair of ABA Committee of State Regulation and Counsel for Hogan & Hartson in the District of Columbia.