The Extra-territorial Reach of the Broker-Dealer Registration Requirements Under the U.S. Securities Exchange Act of 1934; the Staff of the Securities and Exchange Commission Addresses Frequently Asked Questions Regarding Rule 15a-6 and Foreign Broker-Dealers

Background. Rule 15a-6 under the Securities Exchange Act of 1934 (“Rule 15a-6”) provides conditional exemptions from broker-dealer registration for “foreign broker-dealers” that engage in certain specified activities involving U.S. investors (“Rule 15a-6 Activities”). Rule 15a-6 activities include:

A. Effecting unsolicited securities transactions;

B. Providing research reports to “Major U.S. Institutional Investors,” and effecting transactions in the subject securities with or for those investors;

C. Soliciting and effecting transactions with or for “U.S. Institutional Investors” or “Major U.S. Institutional Investors” through a “chaperoning broker-dealer;” and

D. Soliciting and effecting transactions with or for registered broker dealers, banks acting in a broker or dealer capacity, certain international organizations, foreign persons temporarily present in the U.S., U.S. citizens resident abroad, and foreign branches and agencies of U.S. persons.

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Topics:  Broker-Dealer, Investors, Rule 15a-6, SEC, Securities Exchange Act

Published In: Finance & Banking Updates, International Trade Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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