M&A Brokers: New federal exemption from securities broker registration

Eden L. Rohrer | K&L Gates

Eden Rohrer is a partner in the firm’s New York office. She concentrates her practice in securities broker-dealer regulatory, compliance, enforcement defense, litigation and arbitration matters in the financial services and fintech industries. She advises emerging and established companies on the development, regulation and operation of funding portals, capital raising platforms and trading platforms, including in connection with angel investing, crowdfunding, in the private and public securities markets. In addition, Eden advises clients with respect to the sale of digital securities and assets, cryptocurrencies, and initial coin offerings (ICOs).

Eden’s practice involves all aspects of broker-dealer regulation, including Self-Regulatory Organization (SRO) membership, cross border transactions and chaperoning of foreign broker-dealers (under SEC Rule 15a-6).

She advises firms in the FINRA new membership (NMA) and the continuing membership (CMA) processes and prepares required materials, files applications and shepherds firms through the entire process. She has assisted clients to develop and obtain various regulatory approvals for electronic brokerage platforms, alternative trading systems (ATS) and robo-adviser platforms. She has advised not-for-profit organizations and university incubators.

Eden assists broker-dealers and their associated persons to respond to regulatory examinations and inquiries and provides effective representation in a range of enforcement proceedings with the SEC, FINRA, NYSE, state and foreign regulatory authorities. She has many years of experience preparing and defending witnesses in FINRA on-the-record interviews and SEC testimony. Enforcement matters have involved issues including unregistered brokers or dealers, market manipulation, insider trading, anti-money laundering, distribution of unregistered securities, net capital requirements, direct market access, market making, Rule 15c2-11, Regulation M, soft dollar arrangements, cross border trading, electronic intrusion and customer impersonation, sales practices, supervision, private placements in both privately held and publicly traded securities, credit default swaps, futures, options, fixed income, indexes, and other investment products.

In addition, Eden has extensive experience in FINRA and AAA arbitrations and state and federal litigation involving a broad range of securities issues. She has represented broker-dealers in industry disputes as well as defended a variety of customer claims. Her litigation and enforcement defense experience make her particularly well-suited to provide broker-dealer counseling on many topics.

Eden regularly advises clients with respect to broker-dealer status issues to determine whether proposed activities would require or are exempt from broker-dealer registration. She assists firms in obtaining guidance, materiality consultations, interpretive letters, and no-action relief from FINRA and the SEC with respect to novel securities issues and the creation of new products and services. Eden is a leader in the M&A Broker space as one of the six lawyers who authored the request to the SEC for No-Action relief for mergers and acquisition brokers—the M&A Brokers No-Action Letter. The M&A Brokers Letter allows M&A brokers to receive transaction-based compensation without registering as securities brokers with the SEC. She regularly counsels M&A Broker clients.

Jessica D. Cohn | K&L Gates

Jessica Cohn is an associate in the firm’s Washington, D.C., office and a member of the Asset Management and Investment Funds practice area. Jessica advises registered investment companies and their independent board members on regulatory, compliance, and transactional matters arising under the U.S. federal securities laws, including on issues related to fund organization, registration, regulatory filings, changes to, and the implementation of, investment strategies, acquisitions and fund adoption transactions, and utilizing a manager-of-managers structure. Jessica has experience representing closed-end investment companies in offerings of preferred stock, establishing and refinancing various forms of leverage, proxy solicitations, and tender offers.

Jessica also advises clients regarding the formation and registration of broker-dealers with the SEC and the FINRA new membership application (NMA) process, including by preparing required materials, filing forms and applications, and responding to requests from FINRA’s membership application program group.

I. Who is required to register as a securities broker | 2:00pm – 2:15pm

II. New federal exemption for M&A brokers | 2:15pm – 2:30pm

III. Withdrawal of M&A Brokers SEC No-Action Letter | 2:30pm – 2:45pm

IV. State Registration Issues | 2:45pm – 3:00pm