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Blue Sky Laws

Securities laws and regulations in each of the fifty states, regulating the offering of securities in that state. In addition to the requirement to respect national standards, all states have "blue sky" laws regulating securities activities in their respective states.

Generally, both brokers and firms must be registered in each state in which they do business with customers. State laws also require issuers of securities to register their offerings with the state before they can be sold to its residents. Most blue-sky laws include provisions relating to fraudulent activities and the licensing of people selling securities.

Additional Comments:

The term is said to have originated in the early 1900s when a Supreme Court justice declared his desire to protect investors from speculative ventures that had "as much value as a patch of blue sky."

Related Terms:

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