The North American Securities Administrators Association (NASAA), a powerful group representing state securities regulators, opposes the Restoring the Secondary Trading Market Act. This bill, due for review today (January 22, 2026), aims to replace state regulation of off-exchange secondary trading.
For clarity, off-exchange secondary trading lets investors trade securities outside traditional exchange platforms. Its popularity has surged recently, but it has also sparked debates over transparency and investor protection.
The Restoring the Secondary Trading Market Act intends to simplify regulatory procedures by circumventing state-level supervision. However, the NASAA stands firmly against this proposal, fearing it could weaken investor protection.
NASAA’s Opposition Explained
The NASAA’s statement provides a clear insight into their position. They see the bill as a harmful move that could compromise the securities market’s integrity. The Association emphasizes the crucial role of state regulation in fostering a secure and transparent trading environment.
The NASAA warns that the proposed bill risks upsetting this balance. By overriding state regulation, the Act could pave the way for fraudulent activities. They argue that the suggested federal oversight might not match the effectiveness of existing state-level regulation.
Moreover, the NASAA fears that the Act could erode states’ ability to shield their residents from predatory financial practices. The Association insists that state securities regulators have successfully protected investors. Hence, any attempt to bypass these regulators could endanger investors.
In conclusion, the Restoring the Secondary Trading Market Act, although aiming to streamline regulatory procedures, faces opposition from the NASAA. The Association’s main worry is the potential threat to investor protection by undermining state securities regulators. The future of this issue remains uncertain as the bill enters the review stage.
