Restoring the Secondary Trading Market Act
Summary
The Restoring the Secondary Trading Market Act aims to amend the Securities Act of 1933. It seeks to exempt off-exchange secondary trading from state regulation under specific conditions. These conditions include the issuer making current information publicly available.
Expected Effects
This act, if passed, would reduce state-level regulatory burdens on off-exchange securities trading. It could lead to increased trading activity and potentially lower compliance costs for issuers. However, it may also reduce investor protections at the state level.
Potential Benefits
- Reduced Compliance Costs: Issuers may experience lower costs due to exemption from state regulations.
- Increased Trading Activity: The reduced regulatory burden could lead to more trading in the secondary market.
- Greater Efficiency: Streamlining regulations could make the market more efficient.
- Attract Investment: Could attract more investment into companies that meet the criteria for exemption.
- Innovation: May foster innovation in trading platforms and strategies.
Most Benefited Areas:
Potential Disadvantages
- Reduced State Oversight: Exempting off-exchange trading from state regulation could weaken investor protection.
- Potential for Fraud: Reduced oversight might increase the risk of fraudulent activities.
- Uneven Playing Field: Smaller investors may be at a disadvantage if they lack the resources to assess the risks without state protections.
- Erosion of State Authority: The act could be seen as an overreach of federal power into areas traditionally regulated by states.
- Complexity: The criteria for exemption may be complex and difficult to interpret.
Constitutional Alignment
The bill's alignment with the US Constitution centers on the Commerce Clause (Article I, Section 8), which grants Congress the power to regulate interstate commerce. By amending the Securities Act of 1933, the bill seeks to standardize regulations for off-exchange secondary trading, potentially streamlining interstate commerce in securities. However, the Tenth Amendment reserves powers not delegated to the federal government to the states, raising questions about the extent to which Congress can preempt state securities regulations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).