On May 19, 2026, the Securities and Exchange Commission (SEC) proposed an amendment to Rule 146 that would preempt state securities law registration and qualification requirements for all offerings registered under the Securities Act of 1933, as amended (Securities Act). While registered offerings of exchange-listed securities are already exempt from state blue sky requirements, registered offerings of unlisted securities remain subject to extensive state-by-state registration and qualification requirements.
To achieve this preemption, the SEC has proposed amending Rule 146 to define “qualified purchaser,” for purposes of Section 18(b)(3) of the Securities Act, to include any person to whom securities are offered or sold in an offering registered under the Securities Act. As a result, securities offered and sold in any registered offering would qualify as “covered securities,” thereby exempting those offerings from state registration and qualification requirements. The SEC stated that the proposal is intended to lower the costs of registered offerings of unlisted securities and facilitate capital formation while maintaining investor protection. If adopted, the proposal would eliminate the need to comply with multiple states’ registration and qualification requirements for registered offerings of unlisted securities. The change would be particularly significant for public, non-listed real estate investment trusts (REITs) and business development companies (BDCs), which historically have faced extensive state blue sky review and multistate registration burdens. By removing state-level registration and merit review, the proposal could reduce costs, shorten offering timelines, and ease state-by-state compliance burdens.The proposal will be subject to a 60-day public comment period following publication in the Federal Register. After the comment period closes, the SEC will review comments and consider final rulemaking.
If you have any questions, or would like additional information, please contact one of the attorneys on our Investment Funds team.
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