Uniform Securities Act - Explained
What is the Uniform Securities Act?
Written by J. Mance Gordon
Updated at April 20th, 2024
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
What is the Uniform Securities Act?
The Uniform Securities Act refer to a model law through which state securities laws are created. This model law is aimed at helping the government regulate security transaction at the state level. The Uniform Securities Act is a model law that guide states when drafting their own laws.
This model enable states to establish laws that tackle securities fraud in states that adopt it. The Act parleys with the provisions of the Securities and Exchange Commission (SEC) in enforcing securities laws and regulating transactions.
What is Regulated by the Uniform Securities Act?
At first, the Uniform Securities Act started out as the Uniform Sales of Securities Act of 1930 before it was later revised and created to become the Uniform Securities Act of 1956. The act was created by the National Conference of Commissioners on Uniform State Laws (NCCUSL).
The creation of the Uniform Securities Act became expedient because not all investments or securities are registered at the federal level. Also, SEC cannot regulate all investments or securities, there is a need to have assisting laws or act. Some are registered under state government and regulations must exist for these securities at the state level. The Uniform Securities Act was enacted to enforce securities regulations and also protect investors.
Before the Uniform Securities Act came into force, there were similar acts which were amended to give birth to the act. This act guides states when drafting their securities laws, although, not all states adopted the act. Through the application of the act, a more structured and consistent enforcement and regulation of securities deals is achieved across states that adopts it.
The application of the Uniform Securities Act entails that states understand their roles and authority as contained in act. For states that adopt the Uniform Securities Act, it must be applied in terms of registration of IPOs, broker-dealers and other securities agents. The act must also be applied to prevent securities fraud and other unethical practices.