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 …