NASAA: Mission, Jurisdiction & Authority

Instructor: Bryant Trombly

Bryant has taught graduate finance and has an MBA and master's degree in information technology.

In this lesson you will learn about North American Securities Administrators Association (NASAA), its mission as an international investor protection organization, and its jurisdiction and authority.

The North American Securities Administrators Association (NASAA)

Tamara has never invested before. While she knows it can be a great way to save and grow her money for future goals, she is also worried. How should she determine which advisers and firms are reputable? Which securities are legitimate? How can she learn more about investing while protecting herself from scams?

She reaches out to a friend and long time investor to ask about these concerns. Her friend quickly points her to the North American Securities Administrators Association (NASAA) as a resource.

Mission of the NASAA

Tamara follows her friend's advice and learns that the North American Securities Administrators Association (NASAA) promotes the protection of everyday investors and provides educational resources so they can also better protect themselves.

NASAA was created in 1919 to bring together the small number of state securities regulators in the Midwest. Since that time NASAA has grown to include regulators from all over North America. It's mission then was the same as today, to work together for the protection of investors. The NASAA particularly focuses on protecting those investors who do not have the expertise, experience, or resources to protect themselves. This sounds like just the organization that Tamara was looking for.

NASAA pursues this investor protection mission through two main activities. The first is in acting as a resource to educate investors on important topics such as:

  • the basics of investing
  • financial conversation starters,
  • how to stay aware of common scams and frauds.

The other path of protection is through registration and regulation of advisers, broker-dealers, and investment securities.

NASAA Protections

Tamara has learned that the first thing she can do when researching an adviser or broker dealer is to make sure that they are properly registered with a member of NASAA. If they are registered, Tamara can see if there have been any complaints or issues with customers or regulators in the past. She can also feel protected in knowing that if she had a complaint in the future, she could submit it to the NASAA who would investigate it on her behalf.

An unregistered adviser or firm is a major red flag, and Tamara should not work with them.

Once Tamara has found a reputable advisor to work with she can also verify that each of the investment securities offered have been registered and cleared through the NASAA as well. Any securities that are not properly registered are likely to be purely speculative or even fraudulent.

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