SEC Clarifies and Expands Business Broker Exemption
On January 31, 2014, the Securities and Exchange Commission issued a no-action letter, M&A Brokers, which accepts the view that brokers who participate in securities transactions solely to effect the sale and purchase of “privately held companies” can accept percentage-based compensation without having to register as brokers under Section 15(a) of the Securities Exchange Act. The letter supersedes and clarifies two earlier no-action letters, Country Business, Inc. and International Business Exchange Corp.
In the Legal Update "SEC Clarifies And Expands Business Broker Exemption," Partner Stephen M. Goodman explains in more detail the specific do’s and dont's which business brokers must follow if they want to avoid registering under the Exchange Act and still get paid a percentage of the transaction value.
