Restoring the Secondary Trading Market Act

H.R. 7127 would amend federal securities law to prevent states from regulating off-exchange secondary trading (direct stock sales between investors) for companies that maintain publicly available current financial information. Currently, states enforce "Blue Sky Laws" that regulate securities sales within their borders, creating different compliance requirements across states. The bill would preempt these state regulations for off-exchange trading, allowing brokers and traders to operate under a single federal standard rather than navigating varying state rules. Supporters argue this would reduce regulatory burdens and facilitate interstate commerce in stock trading. However, state securities regulators have expressed concerns that the bill would limit their ability to protect investors from fraud and misconduct. The bill has passed committee review and is eligible for a floor vote in the House.