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NASAA SUPPORTS ONE SMALL BUSINESS BILL, URGES MORE STUDY OF SECURITIZATION MEASURE

Massachusetts' Guthary Testifies on Senate Bills, State-Level Capital Formation Efforts; NASAA Raises Concerns About Securitizing Small
 Business Loans Without Further Review
 WASHINGTON, March 4 /PRNewswire/ -- One measure now before the U.S. Senate might represent a helpful advance in small business capital formation, but another, which would securitize small business loans, should be put on hold pending the outcome of a federal study of the potential market problems and risks involved, according to North American Securities Administrators Association, Inc. (NASAA) President and Massachusetts Securities Division Director Barry Guthary, who testified today before the Senate Subcommittee on Securities.
 Guthary was asked to offer the views of state securities regulators on the Small Business Incentive Act of 1933, which he generally supported, and the Small Business Loan Securitization and Second Market Enhancement Act, in relation to which he voiced concerns. The NASAA president urged the Senate to hold off on further consideration of the securitization measure until the completion of a congressionally mandated study in which the Treasury Department, Securities and Exchange Commission and Small Business Administration are to determine the feasibility, barriers and investor risks associated with the development of a secondary market for small business loans.
 Guthary told the senators that the case for preemption of state review under the securitization act had not been made. He also noted that the potentially lower grade securities permitted under the act would not receive adequate review if only considered by private rating services, which have come under some fire in the municipal securities marketplace. Better to leave these potential risks open to full review under the study ordered by Congress, Guthary suggested, than to rush in with legislation framed without the benefit of all the facts.
 The NASAA president also reported on the strong success of state level efforts to encourage small business capital formation. He noted that the Small Corporate Offering Registration (SCOR) system developed within NASAA is now in place in 36 states. SCOR provides a simplified disclosure process for offerings of $1 million or less. Guthary noted that new developments are now on the horizon at the state level, including regional review of offerings and a simplified process for offerings up to $ 5 million.
 -0- 3/4/93
 /NOTE: A full copy of the Guthary statement to the Senate is available upon request./
 /CONTACT: Scott Stapf for the North American Securities Administrators Association, 703-276-1116 or, after hours, 703-534-5348/


CO: North American Securities Administrators Association, Inc. ST: District of Columbia IN: FIN SU: LEG

DC -- DC002 -- 2782 03/04/93 08:21 EST
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Publication:PR Newswire
Date:Mar 4, 1993
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