The National Securities Markets Improvement Act of 1996 (NSMIA) is a piece of legislation passed by the United States Congress that is designed to improve efficiency in the securities markets. The NSMIA reduced the amount of overlap between state and federal regulatory agencies, aiming to create more efficient and effective regulation. The Act also strengthened investor protections and increased reliance on the efficiency of the securities market itself.

At the time, the U.S. securities industry was highly fragmented, with states imposing their own regulations, and U.S. securities exchanges competing in their own jurisdictions. This led to inefficient regulations and market fragmentation. The NSMIA was aimed at creating a level playing field in which securities offerings and trades could be regulated from a single point.

The NSMIA established the National Securities Exchange Commission (SEC) as the authority tasked with regulating the offer, sale, and trading of securities. The SEC is also charged with registering and overseeing Investment Advisory firms, as well as administering the Sarbanes-Oxley Act, which governs corporate practices and limits corporate and accounting fraud.

The NSMIA also created exemptions for certain securities, which are known as "covered securities". These include nationally traded stocks and mutual funds. The exemptions also apply to over-the-counter (OTC) securities, such as commodities and futures contracts. These exemptions allow securities firms to offer these securities without having to obtain a license in each state.

Additionally, the NSMIA opened up opportunities for growth in the securities industry, offering incentives for companies to publicly register capital, securities, and instruments of the company in order to gain access to public trading markets. It also gave state securities regulators the ability to enforce national standards. This enhanced consumer protection, as well as creating an efficient and fair market.

The NSMIA has proven to be effective. Statistics released by the SEC show that the Act has achieved its purpose of creating a more efficient, centralized securities market. The NSMIA also helped create a viable alternative to the traditional methods of raising capital. The Act is credited with opening up the securities market to a larger number of investors who otherwise may not have been able to participate.

In conclusion, the National Securities Markets Improvement Act of 1996 was an important step towards modernizing the U.S. Securities market, streamlining regulations and offering important consumer protections. The Act has opened up opportunities for growth and investment, as well as making the markets more efficient and competitive.