We often get the question “Why are some securities on MicroPlace only available to residents of certain states” or worse “I’m from Pennsylvania, why aren’t any securities on MicroPlace currently available to me?”
The answer is a set of state securities regulations called “blue sky laws.” These laws govern the offer or sale of investments to you. Just like the Securities and Exchange Commission (SEC) has certain regulations regarding offers or sales of investments, each of the 50 states also has its own rules and regulations. Prior to offering their securities on MicroPlace, each of our issuers (like Oikocredit-USA or FINCA International) is required to register their investment (or be subject to an exemption from registration) with each state in which they intend to offer it. Annually, they must renew this registration or exemption. Therein lies the rub!
Each state has its own rules and regulations which may or may not conform to each other or to the SEC. While one state may readily approve an investment, another state may determine it does not comply with their regulations. In addition, there has been more scrutiny recently concerning the offer of securities online, which doesn’t permit a broker to have a face to face relationship with the investor. (That’s partly why we’re required to ask you all those pesky questions like the value of your net worth or your annual income). In addition, a state may initially approve an investment, then deny the renewal based on a change in rules or interpretations. That’s why an investment may initially be available in your state, then no longer available at a later date. We know this is frustrating for you, but I’m afraid we and the issuers are at the mercy of the states!
We do however maintain lists of investors who have requested that we notify them once an investment becomes available in their state. If you’d like to be added to this list, please contact us and we can add your name to the list.
Finally, if you’d like to read more about blue sky laws, here are two informative articles: