Quick Take | Blame It on Kansas: The History of Blue Sky

StopwatchAt the NICSA Strategic Leadership Forum in February, in a breakout session on “Forecast: Clouds Making Way for Blue Sky,” representatives from American Beacon Advisors, Deloitte & Touche, the Investment Company Institute, Putnam Investments and session sponsor Boston Financial Data Services talked about how asset managers can ensure efficient, cost-effective and compliant Blue Sky administration. Here’s the quick take from that session:

The history of Blue Sky state compliance:

  • Began in Kansas in 1911
  • Major changes made in 1996 through efforts of the ICI in the NSMIA (National Securities Market Improvement Act): States still receive fees and notice filings, but registration is only at federal level for covered securities

With the introduction of omnibus:

  • Brokers now must provide shareholder sales information
  • Sales reporting from multiple systems

Fund oversight changes:

  • Pre-1996 Blue Sky was a legal requirement
  • Post-1996 Blue Sky moved to transfer agent operations

New risks:

  • Complicated filings process still exist per state, they are not uniform
  • States requesting more information about sales

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