Title

FINRA Establishes New Limited Registration Regime for “Capital Acquisition Brokers,” Including Private Fund Placement Agents
Client Memorandum

Created date

9/13/2016

The SEC recently approved a FINRA proposal to establish a new limited membership category for broker-dealers engaged solely in certain corporate financing advisory and capital raising activities, referred to as “capital acquisition brokers” or “CABs.”  Under the new regime, firms that engage only in these limited activities can elect to be regulated as CABs, subject to a streamlined set of FINRA rules, including significantly less burdensome and restrictive rules governing communications with the public.  Notably, unlike FINRA’s 2014 proposal to establish a “limited corporate financing broker” category, certain firms that act as placement agents for private investment funds may be eligible to be CABs.