March 30, 2023

SEC Division of Trading and Markets Withdraws No-Action Letter for M&A Brokers

Effective immediately, the SEC Division of Trading and Markets withdrew a no-action letter that provided relief from registration requirements for certain persons under Exchange Act Section 15(a). The withdrawal follows a recent exemption adopted by Congress for broker-dealers defined as “M&A Brokers.”

Exchange Act Section 15(a) requires broker-dealers to register with the SEC, subject to exemptions adopted by the SEC. The letter applied to persons who "affect securities transactions in connection with the transfer of ownership and control of a privately-held company under certain terms and conditions."

The Division determined it appropriate to withdraw the M&A Letter following Congress’s recent implementation of an exemption from registration under Section 15(b) which the Division said allows M&A Brokers to “engage in conduct that is largely similar to that discussed in the M&A Broker Letter.” The Division stated that Congress included an additional condition to the exemption which is that all eligible privately held companies subject to a securities transaction must be below certain earning and gross revenues amounts.

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