On March 5, 2013, the North American Securities Administrators Association (NASAA), an association of state securities regulators, unveiled its advocacy agenda for 2013. NASAA believes its agenda “provides the 113th Congress with a roadmap to promote investor confidence by striking the most reasonable balance between promoting capital formation and protecting investors.”
The agenda is built on five core principles:
•Promote Sustained Investor Confidence by Ensuring Market Transparency, Enhancing Investor Education, and Imposing Strong Penalties;
•Policies Intended to Spur Capital Formation Must Balance the Need to Maintain Investor Protection;
•Support Strong and Complete Implementation of Investor Protections in the Dodd-Frank Act by the Conclusion of the 113th Congress;
•Regulation is an Inherently Public Function that Should be Performed by Government Regulators, not Outsourced to an Industry Self-Regulatory Organization; and •State Authority Should Not Be Preempted, and Should Instead Be Expanded.
NASAA will seek legislation in four specific areas:
•Authorize the SEC’s Office of Compliance Inspections and Examinations to collect user fees from the investment advisers it examines;
•Permit reasonable civil recovery for fraud associated with crowd-funding and other small offerings;
•Strengthen investor protection provisions weakened by the JOBS Act to minimize the Act’s enormous potential for abuse; and •Empower state regulators to curtail the use of mandatory pre-dispute arbitration clauses in contracts between state-registered investment advisers and their clients.
Heath Abshure, NASAA president, stated “We’re going to seek a congressional fix…even if the SEC were to do nothing, that doesn’t mean Congress can’t do anything. We’re taking the approach that we’re going to go after all of them.”