Wether your a Financier, a curious investor or a even new Stock Broker/Dealer Agent, If your not up to speed on the NSMIA of 1996? This short post will give you a brief overview of what the National Securities Markets Improvement Act is and what it is used for.

Here is a question? What is the National Securities Markets Improvement Act of 1996 (NSMIA)? The National Securities Markets Improvement Act is a law passed in 1996 that sought to simplify securities regulation in the U.S. by apportioning more regulatory power to the federal government.

NSMIA is a List of Securities that are Federally Listed on the NSMIA Website.

NSMIA Securities are Federally Covered Securities.

The National Securities Markets Improvement Act (NSMIA) amended the Investment Company Act of 1940 and the Investment Advisers Act of 1940 and went into effect on Jan. 1, 1997. Its main consequence was to increase the authority of federal regulators at the expense of their state-level counterparts, a change that was expected to increase the efficiency of the financial services industry. 

What Changed after NSMIA was Introduced?

NSMIA caused a material impact on the responsibilities of federal and state regulators. Ultimately, it reduced the overlap between federal and state power. State security laws no longer oversaw the following topics:

1. Capital

2. Margin

3. Bonding

4. Custody requirements

N.S.M.I.A

• The National Securities Market Improvement Act (NSMIA) was introduced to more efficiently allocate capital in financial markets.
• NSMIA amended the Investment Company Act of 1940 to promote more efficient management of mutual funds, protect investors, and provide more effective regulation.
• Nationally traded securities, securities of registered investment companies, sales to qualified purchasers, and securities issued in certain exempt offers are exempt from state regulation.

There are a-lot of Securities that are listed on the N.S.M.I.A website. To catch up on the latest case by case basis? Here is the List HERE.

I do hope you learned something here, If you did not catch my Invesment Fund Article Here, Id highly recommend you go read it. It’s all about Investment Funds.

What are covered securities under NSMIA?

Today, most stocks traded in the U.S. are considered covered securities. In addition to the offers and sales of certain exempt securities, the NSMIA defines “covered” securities as securities that: Are listed on national securities exchanges such as the New York Stock Exchange and the Nasdaq.

Thanks for Stopping by,
Godspeed

JS