Focus Now Shifts from Congress to the Rulemaking Process

WASHINGTON (July 21, 2010) – The North American Securities Administrators Association (NASAA) today applauded the signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which recognizes and enhances the strong investor protection role of state securities regulators.

“By signing the Dodd-Frank legislation into law, President Obama ushers in a new era of investor protection and financial market oversight. State securities regulators are eager to help fulfill this important mission on behalf of Main Street investors,” NASAA President and Texas Securities Commissioner Denise Voigt Crawford said following the bill signing ceremony, which she attended with other regulators, government officials and investor advocates.

“In several respects, this new law acknowledges the strong role of state securities regulators in strengthening much-needed protections for investors. The Dodd-Frank Act addresses a number of NASAA’s top priority issues,” Crawford said. “In other respects, however, the legislation shifts the debate from Congress to the Securities and Exchange Commission, which has been authorized or directed to conduct studies or rulemaking that will decide whether, and in what form, issues important to investors and state securities regulators will be resolved.”

The Dodd-Frank bill addresses a number of NASAA’s key issues by increasing state regulatory oversight of investment advisers; updating the accredited investor definition; incorporating a “bad boy” disqualifier to prevent securities law violators from conducting securities offerings under SEC Regulation D, Rule 506; and including state securities, banking and insurance regulators as nonvoting members of the Financial Stability Oversight Council, which will be established to identify risks to U.S. financial stability and promote market discipline. The legislation also creates a grant program for up to $500,000 for a state that has adopted the NASAA and NAIC model rules on senior designations, and includes a state securities regulator as a member of the SEC’s Investor Advisory Commission.

In two other NASAA priority areas, fiduciary duty and arbitration, the legislation shifts the focus to the SEC. “This is not a time to rest on our laurels. Our work is not complete,” Crawford said. “With the focus now shifting from the legislative process to the 67 studies and more than 200 rulemakings authorized by the legislation, our task as regulators is to now work cooperatively to ensure that the studies, rules and implementation procedures of the Dodd-Frank legislation actually help investors and strengthen investor confidence,” Crawford said.

NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico.

For more information:
Bob Webster, NASAA Director of Communications
202-737-0900