Small businesses may account for 40% of the business activities in this country, but capital formation rules always have discriminated against small businesses and imposed rules that make it unreasonably difficult for small companies to exploit external sources of capital. NSMIA, through its broad statutory delegation to the SEC of the right to expand the preemption of state blue sky laws, provides a unique opportunity for the Commission to deliver much-needed and much-deserved help to small issuers engaged in capital formation and to finally break the hegemonic hold states have over the rules governing capital formation by small businesses. Society will benefit if the SEC moves boldly to implement this delegated authority to expand the statutory preemption of NSMIA.

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The Business Lawyer (ABA), Vol. 53, No. 3 (February 1998), pp. 575-589