Do finders need to register with SEC?
The Securities and Exchange Commission (SEC) currently requires finders who receive fees based on the size or successful completion of securities transactions to register as broker-dealers.
Can broker/dealer pay a finders fee?
Under most state laws you can’t pay a commission to someone for finding you an investor unless they are a licensed broker dealer. At the same time, most broker dealers (think Merrill Lynch or Charles Schwab) don’t want their broker’s putting investors into smaller deals.
What is a no-action letter SEC?
An individual or entity who is not certain whether a particular product, service, or action would constitute a violation of the federal securities laws may request a “no-action” letter from the SEC staff.
What is the difference between SEC no-action letters and SEC finders letters?
Additionally, while SEC No-Action letters can sometimes be used as guidance as to how the SEC will react to a similar set of facts, SEC No-Action letters surrounding finders are getting old, and the view of finders may change in the very near future.
Are you expecting a new SEC Release regarding finders?
We are expecting the SEC to issue a new release regarding finders and will report it on the main page of the site when it is released.
Do finders have to register with the SEC?
Therefore, addressing the issue GENERALLY, if the finder is only a finder, he does not have to register. Being a finder means that he only introduces, he does not discuss, negotiate, or get involved in the transaction. However, the SEC may take a different view of “discuss” or “get involved” than you do.
How do I send a request letter to the SEC?
You may call 202-551-5777 or send an email to [email protected] with any questions about preparing a request letter. Please read our Privacy Act Notice to learn about how we may use the information you send to us.