Tag Archives: FINRA

Financial and Operational Rules for Capital Access Brokers (“CAB”)

Karen A. Steighner, MBA, Financial & Operations Principal

On January 3, 2017, The Securities and Exchange Commission (SEC) approved FINRA’s rule set for firms that meet the definition of “capital acquisition broker”  (CAB) and that elect to be governed under this rule set. CAB’s are firms that engage in a limited range of activities, essentially advising companies and private equity funds on capital raising and corporate restructuring, and acting as placement agents for sales of unregistered securities to institutional investors under limited conditions1. More specifically, this set of rules applies to firms engaged in capital raising through private placements; certain additional private placements to institutional investors; private equity fund portfolio transactions; and advice to companies regarding mergers and acquisitions (M&A) as well as corporate restructuring transactions. These Rules provide the basis for a regulatory system that parallels, but is simpler than, the standard FINRA rules for non-CAB broker-dealers.

The 400 Series of the CAB Rules became effective April 14 2017 and relate to the financial and operations obligations of CABs including capital compliance, audit, books and records, and Continue reading Financial and Operational Rules for Capital Access Brokers (“CAB”)