Blog FinReg + Policy Watch October 22, 2020

Divided SEC Votes to Propose “Finder” Exemption from Broker Registration

On October 7, the SEC voted 3-2 to propose a conditional exemption (“Exemption”) to permit natural persons to engage in limited securities activities as “finders” on behalf of private issuers without registering as brokers under Section 15 of the Securities Exchange Act of 1934, as amended (“Exchange Act”). The proposed Exemption would put an end to some of the debate and uncertainty surrounding the permissibility of private issuers using unregistered finders to assist with raising capital, a murky area of U.S. securities law and regulation that Goodwin covered in greater detail in a previous client alert. Read the client alert to learn more about the background of the proposed Exemption, its impact if adopted and the questions it raises.

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