What Is a State Administrator?
A state administrator is a government or regulatory agency, or official, who oversees and enforces state-level rules and regulations regarding securities transactions. Model legislation called the Uniform Securities Act guides each state in the United States for setting its own laws for securities transactions that do not otherwise fall under federal regulation. The state administrator's job is to protect investors from securities fraud at the state level.
While the Securities and Exchange Commission (SEC) regulates and enforces the federal securities laws, each state also has its own securities regulator who enforces what is known as "blue sky" laws. These state laws cover many of the same activities the SEC regulates, such as the sale of securities and those who sell them, but they are confined to securities sold or persons who sell them within each individual state.
- A state administer can be a government or regulatory agency, or an official in charge of enforcing laws.
- Rules and regulations regarding securities transactions exist on both the federal and state level.
- The SEC enforces federal securities laws, but at the state level, a state administer is in charge of regulating the rules.
- Regulations at the state level are called "blue sky laws," and it is the job of the State Administer to monitor whether they are being observed.
- While the laws vary by state, they most often mandate that companies register their offerings of securities before they can be sold in the state, and also govern the licensing of brokerage firms and their brokers.
Understanding State Administrators
The state administrator essentially acts like the federal securities regulator, the Securities and Exchange Commission (SEC), on matters that do not fall under the SEC's purview.
A state administrator's role includes the ability to bar, censure, restrict or suspend registered organizations or individuals who fail to adhere to the terms set forth in the Uniform Securities Act. These terms include willful securities violations, unethical business practices, felony convictions, and other such infractions.
State administrators enforce a state's "Blue Sky Laws." In addition to the federal securities laws, each state has its own set of securities laws—commonly referred to as "Blue Sky Laws"—that are designed to protect investors against fraudulent sales practices and activities taking place within the state's jurisdiction.
While these laws do vary from state to state, most state laws typically require companies making offerings of securities to register their offerings before they can be sold in a particular state, unless a specific state exemption is available. The laws also license brokerage firms, their brokers, and investment adviser representatives.
State securities administrators also oversee investment advisors who manage less than $100 million. These advisors must register with the state securities agency in the state where they have their principal place of business and must file a form called "Form ADV" with the state.
The state administrator can also provide information about a company doing business in the state and can check the Central Registration Depository (CRD) to tell you whether your broker or brokerage firm has a disciplinary history. They also can confirm whether a company has been cleared to sell its securities in your state.