This term refers to state statutes, rules and regulations providing for the supervision and regulation of offers and sales of securities. Public mergers must also comply with applicable blue sky laws.

While blue sky laws vary from state to state, most typically require a company making an offering of securities to register or qualify the offering before the securities can be sold in a particular state, unless a specific state exemption is available. Blue sky laws also require the registration or licensure of brokerage firms, their brokers, and investment adviser representatives.

The registration and qualification requirements of the states' blue sky laws are preempted by the National Securities Market Improvement Act of 1996 (NSMIA) where the offered securities are covered securities.

For more information on blue sky laws, see Practice Notes: