THE IMPACT OF NSMIA ON SMALL ISSUERS

Small businesses are a vital part of our economy, accounting, dependin g on one's definition, for perhaps forty percent of the business activ ities in this country. Capital formation for small businesses historic ally has been fraught with difficulties, which include nonsensical and discriminatory state securities laws. Because of the statutory exclus ions from NSMIA's preemption provisions, NSMIA itself provides no reli ef from state securities laws for small businesses engaged in capital formation. NSMIA does, however, contain a broad delegation of authorit y to the U.S. Securities and Exchange Commission, which the author bel ieves could be used to expand significantly and beneficially the preem ptive scope of NSMIA and thereby provide important benefits for the ca pital formation activities of small businesses.