Newly Created “Capital Acquisition Broker” Rule Reduces Regulatory Burdens on Some Broker-Dealers

Lauren Mack Broker Dealer Registration, Compliance, FINRA, SEC

By Greg Caramenico and Lauren Mack On August 18th, the Securities and Exchange Commission (“SEC”) approved a Financial Industry Regulatory Authority Inc. (“FINRA”) rule that establishes less burdensome regulations for “Capital Acquisition Brokers” (“CABs”), which are a subclass of broker-dealers that engage only in limited activities. CABs can elect to be governed by the new rules by converting their current FINRA membership or by submitting a new …

SEC issues No-Action Letter providing M&A Brokers with relief from broker-dealer registration

Simon Riveles Broker Dealer Exemption, Broker Dealer Registration, M&A Broker, Private Equity Fund

By Simon Riveles and Simon M. Cooke On January 31, 2014, the SEC’s Division of Trading and Markets (the “SEC”) issued a No-Action Letter allowing an M&A Broker (defined below), to effect securities’ transactions in connection with the transfer of ownership of a privately held company (also defined below), subject to certain conditions, without registering as a broker-dealer pursuant to Section 15(b) of the Securities …

Private Placements under FINRA Scrutiny

Simon Riveles Broker Dealer Exemption, Broker Dealer Registration, Compliance, FINRA, FINRA Rule 5123, Private Placement, Uncategorized

Peter Tyson and Simon Riveles The Financial Industry Regulatory Authority (“FINRA”) announced in its Annual Regulatory and Examination Priorities Letter from January 11, 2013 that it would prioritize policing private placements in 2013. Of particular concern to FINRA is enhancing its risk-based supervision of the private placement market, and addressing inadequate disclosures and due diligence procedures, which can mislead and/or harm investors. FINRA’s announcement is …

SEC Grants “Accredited Crowdfunding” Platforms Relief from Broker Dealer Registration

Simon Riveles Broker Dealer Registration, Crowdfunding, Jobs Act, SEC

By Ryan Finn and Simon Riveles In two recent no action letters the SEC granted exemptive relief from broker dealer registration to crowdfunding sites on the basis that the platforms received carried interest rather than transaction base compensation. Although the SEC made it clear that the no-action letters were to be narrowly construed to the specific facts of each case, some commentators extrapolated that the …