SEC Broadens Definition Of "Covered Securities"

On April 18, 2007, the U.S. Securities and Exchange Commission (the "SEC") adopted an amendment to Rule 146 of the Securities Act of 1933, as amended (the "Securities Act"), to designate securities listed or authorized for listing on the Nasdaq Capital Market ("NCM") as "covered securities" under Section 18 of the Securities Act.¹ This rule change is significant in that covered securities are exempt from state regulation pursuant to Section 18.

Prior to the rule change, covered securities under Section 18 included only those securities listed, or authorized for listing on:

• the New York Stock Exchange (the "NYSE");
• the American Stock Exchange (the "AMEX");
• the Nasdaq Global Market of the Nasdaq Stock Market² (the "NGM");