A state statute establishing standards for offering and selling securities, the purpose being to protect citizens from investing in fraudulent schemes or unsuitable companies.

Blue"-sky" law`.

A law enacted to provide for the regulation and supervision of investment companies in order to protect the public against companies that do not intend to do a fair and honest business and that offer investments that do not promise a fair return; -- so called because the promises made by some investment companies are as boundless or alluring as the blue sky, or, perhaps, because designed to clear away the clouds and fogs from the simple investor's horizon.

[Colloq.]

© Webster 1913.