it has actually been conducting business.The statute does not restrict the form of compensation an M&A broker may receive. Similarly, the authors of the No-Action Letter request asked the SEC to confirm that the M&A broker would be permitted to receive transaction-based or other compensation, as agreed by the parties, in connection with an M&A transaction as defined in the No-Action Letter. Therefore, first under the No-Action Letter and now under the statute, the SEC has tacitly affirmed the permissibility of transaction-based compensation for M&A brokers without threatening the M&A broker’s exemption if it is otherwise available.We look forward to sharing updates on the developments under the new statute when it becomes effective.************************************************************************ Consolidated Appropriations Act of 2023, P.L. 117-328, Division AA, Title V, “Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification,” adding a new subsection 13 to 15 U.S.C. §78o(b). 15 U.S.C. 78o(b). SEC No-Action Letter dated January 31, 2014, revised February 4, 2014, from the SEC to Colish, Hewitt, Rohrer, Lerner, Silver and Nathanson. 15 U.S.C. 78o(b)(13)(C). “Control” exists if the buyer or group of buyers has the right to vote or to sell or direct the sale of at least 25% of a class of voting securities of the company or, in the case of a partnership or limited liability company, the right to receive upon dissolution, or has contributed, at least 25% of the capital. 15 U.S.C. 78o(b)(13)(E)(ii). To be active in the management of the acquired company, the purchaser must, without limitation, (i) elect executive officers, (ii) approve the company’s annual budget, (iii) serve as an executive or other executive manager, or (iv) “carry out such other activities as the [Securities and Exchange] Commission may, by rule, determine to be in the public interest.” 15 U.S.C. 78o(b)(13)(E)(iv)(I)(bb). The information to be made available is: (i) the most recent financial

he business of effecting transactions in securities to be registered as a broker or dealer or associated with a registered broker or dealer. The M&A Broker NAL defines “M&A Broker” as a person engaged in the business of effecting securities transactions solely in connection with the transfer of ownership and control of a privately held company through the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business combination involving, securities or assets of the company, to a buyer that will actively operate the company the business conducted with the assets of the company.See No-Action Withdrawal at 3.SeeNASAA Model Rule Exempting Certain Merger & Acquisition Brokers (“M&A Brokers”) From Registration, Adopted September 29, 2015. The NASAA Model rule tracks the M&A Broker NAL, but there is a minor difference between the two. For example, the control threshold in the NASAA Model Rule is 20% compared to 25% in the Federal M&A Broker exemption and M&A Broker NAL.See 15 U.S.C. §78o(b)(13). 15 U.S.C. §78o(b)(13)(E)(ii).Id. §78o(b)(13)(E)(iii)(I).Id. §78o(b)(13)(E)(iii)(II). H.R. 2617 states that the Commission, may by rule modify the dollar figures if the Commission determines that such a modification is necessary or appropriate in the public interest or for the protection of investors. See H.R. 2617 at 1082. 15 U.S.C. §78o(b)(13)(C).Id. §78o(b)(13)(B).See No-Action Withdrawal at 1.[View source.]

he Secretary of Treasury may determine to make exemptions, but at this time has chosen not to make any additional exemptions. See Chart 2 of the Guide for a list of exemption short titles. The categories are:(a) Regulated entities exemptions: Below is a summary list of the 20 types of regulated entities that are exempted; however, please note that specific criteria and additional details on each exemption are set out in the Final Rulemaking. In consultation with their lawyers, companies should consult the text of the regulations before concluding that an entity qualifies for an exemption:Securities reporting issuer (Exemption #1)—An entity qualifies for this exemption if either of the following two criteria apply: (i) the entity is an issuer of a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. §78l); or (ii) the entity is required to file supplementary and periodic information under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78o).U.S. governmental authority (Exemption #2)—Any entity qualifies for this exemption if both of the following criteria apply: (i) the entity is established under the laws of the United States, an Indian Tribe, a State, or political subdivision of a State, or under an interstate compact between two or more States, and (ii) the entity exercises governmental authority on behalf of the United States or any such Indian tribe, State, or political subdivision.Bank (Exemption #3)—An entity qualifies for this exemption if any of the following three criteria apply: (i) the entity is a “bank” as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. §1813), (ii) the entity is a “bank” as defined in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. §80a-2); or(iii) the entity is a “bank” as defined in section 202(a) of the Investment Advisors Act (15 U.S.C. § 80b-2).Credit Union (Exemption #4)—An entity qualifies for this exemption if any of the following two criteria app

e Secretary of Treasury may determine to make exemptions, but at this time has chosen not to make any additional exemptions. See Chart 2 of the Guide for a list of exemption short titles. The categories are:(a) Regulated entities exemptions: Below is a summary list of the 20 types of regulated entities that are exempted; however, please note that specific criteria and additional details on each exemption are set out in the Final Rulemaking. In consultation with their lawyers, companies should consult the text of the regulations before concluding that an entity qualifies for an exemption:Securities reporting issuer (Exemption #1)—An entity qualifies for this exemption if either of the following two criteria apply: (i) the entity is an issuer of a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. § 78l); or (ii) the entity is required to file supplementary and periodic information under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78o).U.S. governmental authority (Exemption #2)—Any entity qualifies for this exemption if both of the following criteria apply: (i) the entity is established under the laws of the United States, an Indian Tribe, a State, or political subdivision of a State, or under an interstate compact between two or more States, and (ii) the entity exercises governmental authority on behalf of the United States or any such Indian tribe, State, or political subdivision.Bank (Exemption #3)—An entity qualifies for this exemption if any of the following three criteria apply: (i) the entity is a “bank” as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. § 1813), (ii) the entity is a “bank” as defined in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. § 80a-2); or (iii) the entity is a “bank” as defined in section 202(a) of the Investment Advisors Act (15 U.S.C. § 80b-2).Credit Union (Exemption #4)—An entity qualifies for this exemption if any of the following two criteria

The attorneys at Williams Mullen have prepared a Corporate Transparency Act (Act or CTA) Exemption Checklist to help “legal entities,” including any domestic or foreign corporation, limited liability company, limited partnership, statutory business trust or other form of entity created by the filing of a document with a secretary of state or other similar office, determine whether they must comply with beneficial ownership reporting requirements under Act.The Act and its implementing regulations include 23 specific exemptions. These exemptions (outlined below) mainly apply to larger U.S. entities or U.S. regulated entities.YOU ARE EXEMPT FROM THE CTA IF YOU CAN CHECK ANY OF THE FOLLOWING BOXES: A business concern that is an issuer of a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 781) or that is required to file reports under section 15(d) of that Act (15 U.S.C. 78o(d)); A business concern constituted, sponsored, or chartered by a State or Indian Tribe, a political subdivision of a State or Indian Tribe, under an interstate compact between two or more States, by a department or agency of the United States, or under the laws of the United States; A depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); A credit union (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752); A bank holding company (as defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841)) or a savings and loan holding company (as defined in section 10(a) of the Home Owners’ Loan Act (12 U.S.C. 1467a(a)); A broker or dealer (as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c)) that is registered under section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o); An exchange or clearing agency (as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C

1 Exemption for Certain Exchange Members, Exchange Act Release No. 74581 (Mar. 25, 2015), 80 Fed. Reg. 18035 (Apr. 2, 2015) (to be codified at 17 C.F.R. § 240.15b9-1) (“Proposal”). 15 U.S.C. § 78o(3). FINRA is registered as a national securities association under Section 15A(a) of the Exchange Act.

1 Exemption for Certain Exchange Members, Exchange Act Release No. 74581 (Mar. 25, 2015), 80 Fed. Reg. 18035 (Apr. 2, 2015) (to be codified at 17 C.F.R. § 240.15b9-1) (“Proposal”). 15 U.S.C. § 78o(3). FINRA is registered as a national securities association under Section 15A(a) of the Exchange Act.

18035 (Apr. 2, 2015) (to be codified at 17 C.F.R. § 240.15b9-1) (“Proposal”). 15 U.S.C. § 78o(3). FINRA is registered as a national securities association under Section 15A(a) of the Exchange Act.

ties commission (or an agency or officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the U.S. Commodity Futures Trading Commission; or the National Credit Union Administration that: At the time of such sale, bars the person from: Association with an entity regulated by such commission, authority, agency, or officer; Engaging in the business of securities, insurance or banking; or Engaging in savings association or credit union activities; or Constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct entered within ten years before such sale; or Is subject to an order of the SEC entered pursuant to section 15(b) or 15B(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b) or 78o-4(c)) or section 203(e) or (f) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(e) or (f)) that, at the time of such sale: Suspends or revokes such person’s registration as a broker, dealer, municipal securities dealer or investment adviser; Places limitations on the activities, functions or operations of such person; or Bars such person from being associated with any entity or from participating in the offering of any penny stock; or Is subject to any order of the SEC entered within five years before such sale that, at the time of such sale, orders the person to cease and desist from committing or causing a violation or future violation of: Any scienter-based anti-fraud provision of the federal securities laws, including without limitation section 17(a)(1) of the Securities Act of 1933 (15 U.S.C. 77q(a)(1)), section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78j(b)) and 17 CFR 240.10b-5, section 15(c)(1) of the Securities Exchange Ac

mation contained in the . . . database would be valuable to a proprietary trader because it would, among other things, provide insights into which [the firm's] customers were trading in the market (and in what securities) at present, as well as the direction and size of each customer's order flow. Additionally, because large orders by [of the firm]'s institutional customers could be broken up into smaller orders placed over one day or several days, such post-trade information could provide further material, nonpublic insight into orders that may be forthcoming in a particular security."This action could signal an intent to scrutinize other firms' policies and disclosures related to information barriers. Similarly structured firms with both proprietary and customer businesses should engage in a careful review of their policies, technology systems and disclosures in this regard to ensure compliance and avoid similar encounters with the SEC.https://www.sec.gov/news/press-release/2023-176 15 U.S.C. §78o(g)