SEC provides expanded no-action relief from broker-dealer registration for intermediaries in private M&A transactions

The staff of the Securities and Exchange Commission’s (SEC’s) Division of Trading and Markets issued a no-action letter on 4 February that provides important new guidance on how intermediaries may effect securities transactions in connection with the transfer of ownership of privately held companies without having to register and be regulated as broker-dealers under the Securities Exchange Act of 1934.

In its M&A brokers letter, the staff relaxed some of the conditions outlined in earlier no-action letters that had limited the circumstances in which intermediaries may engage in such transactions. The staff’s new position expands the types of private M&A transactions on which intermediaries may advise and broadens the scope of services they may provide without subjecting themselves to Exchange Act registration.

The staff’s letter responded to a request for no-action relief from broker-dealer registration under section 15(b) of the Exchange Act for intermediaries engaging in certain activities in connection with purchases and sales of privately held companies…

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