In fact, Section 18(a) of the Securities Act lists the things states used to do, such as: requiring registration or qualification of securities, prohibit, limit, or impose conditions upon the use of offering documents; prohibit, limit, or impose conditions, based on the merits of such offering or issuer, upon the offer or sale of securities.

Repeal this law you would go from one national, simple rule to potentially 50 different rules, none of which are consistent with one another. It would be a big step backwards to do this, and impose a lot of additional cost and expense on early stage companies.

If you want to look for yourself, look at PDF p. 687 of http://banking.senate.gov/public/_files/AYO09D44_… and cross reference against PDF p.32 of http://www.sec.gov/about/laws/sa33.pdf

Disclaimer: Jason and I have co-taught at CU Law before, so agreement here may not be shocking.

In addition to entrepreneurship, I teach and research in the area tech policy. The result of patchwork state regulation in telecom regulation is not uniformly inspiring. The benefits are not always clear while the costs of compliance with inconsistent patchworks are often considerable. It would be interesting to know what significant benefits the proposed revision seeks to capture.

States can also glom on their own requirements in addition to Form D, which reduces a lot of the benefit of having the single form AND firms still need to keep updated information on state blue sky procedures because of these requirements, so time/cost savings are lost there as well.

On top of that, several states have self-executing exemptions, so under non-Reg D procedures there is literally nothing to do in order to claim the exemption.

Last, most offerings involve only a couple of states at a time, so the burden on any individual client is usually not that high.

Firms here in the Bay Area seem to be split on whether to go the Form D route or state law blue sky. I haven't noticed a cost, time or complexity difference either way.

I'd love to see a genuinely uniform securities registration exemption process. Unfortunately Form D is not it.

In the end, though, I think I agree with you insofar as Sen. should not throw the baby out with the bath water. Uniform, electronic, click-to-add-state exemption procedures would be ideal.