National online system proposed for securities offerings
New NASAA president proposes creating a national online system for securities offerings that she says would help protect investors and at the same time help companies raise capital.
The new head of the group that represents state securities regulators wants to create a nationwide online registration system for securities offerings.
Andrea Seidt, Ohio’s securities commissioner and incoming president of the North American Securities Administrators Association, told the group at its annual conference Tuesday in Salt Lake City that the proposal would help both investors and companies seeking to raise money.
The system would have NASAA guidelines, forms and core state requirements embedded in its design, and would allow users to track the filing status of offerings across the country, Ms. Seidt said.
“I honestly believe that one-stop electronic state registration, if done right, will be the smartest way for businesses to raise capital here in the United States,” she said.
State review of securities offerings improves the quality of deals and helps “screen the market for frauds that reduce the amount of capital available to legitimate business interests,” she said.
In late September, private funds and issuers of private-placement investments were allowed to start advertising their offerings to the general public, although they can be sold only to investors who meet certain high-net-worth and income requirements.
During their conference, state regulators expressed concern about whether investors would be harmed by the greater latitude that private offerings now have to solicit them. Ms. Seidt sees the nationwide registration system as a way to protect them.
“Yes, there are good deals out there, probably some real gems, but it will be increasingly difficult to find those gems amongst the real gambles and, well, real losers that are also out there for general consumption,” Ms. Seidt said.
Ms. Seidt takes over the NASAA presidency from A. Heath Abshure, Arkansas’ securities commissioner. She has served as Ohio securities commissioner for five years. She also has worked for the Ohio Attorney General. Previously, she was an attorney specializing in defending against federal corporate and class action litigation.
Another item on Ms. Seidt’s agenda is to help the Securities and Exchange Commission complete rule makings related to the financial reform law and another measure that eases securities registration for small investors. She said that demands for the SEC to justify rules through economic analysis have gone too far.
“Cost-benefit analysis is important, but our reluctance to share necessary information and our inability to find common ground should not stall policy that both investors and businesses want and need,” Ms. Seidt said.
State regulators will push Congress to fund the SEC at a level that would allow it to increase its examination coverage of investment advisers. Currently, the SEC examines annually about 10% of the approximately 10,600 registered advisers.
“[SEC Chairman Mary Jo] White should not have to lie awake at night worried about what might be going on inside federally registered investment advisers,” Ms. Seidt said. “The SEC should be able to hire enough examiners to answer that question for her.”
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