What are the blue sky laws?

• A. anti-fraud statutes
• B. merit based regulation in US
• C. uniform securities act
• D. self-regulatory organization

Answer: (B)

Blue sky laws are the state-level securities laws in the United States that regulate the sale of securities to protect investors. They are best described as merit-based regulation because they require securities offerings to be registered, brokers and dealers to be licensed, and issuers to provide disclosures before selling to residents. This emphasis on registration, licensing, and disclosure evaluates the investment’s legitimacy and protects the public, rather than relying solely on prohibiting fraud. They’re not simply a single uniform act or a self-regulatory organization; those are separate concepts.