HD16 - The Effectiveness of the Commonwealth's Securities Laws


Executive Summary:
This study was undertaken in accordance with HJR 665 which directed the State Corporation Commission (Commission) to study the effectiveness of the Commonwealth's securities laws. The Commission was requested to:

• conduct a "best practices study" to evaluate the appropriateness of the Commonwealth's securities laws in view of the trends of federal and other states' securities regulations to simplify and reduce the costs of compliance for small issues of securities, and

• determine whether the Commonwealth should adopt legislation that would create a securities regulatory framework to encourage capital formation for small and early development companies while maintaining appropriate protection for the investing public.

Pursuant to the instructions of the General Assembly, the Commission prepared this report including (1) an overview of the current federal and state securities regulatory environment, (2) a presentation of the current obstacles facing small company securities offerings in Virginia as discovered through public forums held by the Commission, an extensive state survey conducted by the Commission, and reports issued by outside organizations, (3) an analysis of securities laws in place in other states and at the federal level, (4) a review of the current securities regulatory system in place in Virginia, and (5) findings and recommended amendments to the Virginia Securities Act and the corresponding regulations.