On Jul. 17, 2025, FINRA extended time for SEC to take action until Sep. 12, 2025.
On Jun. 4, FINRA proposed rule changes on capital acquisition broker.
FINRA proposed rule change to amend capital acquisition broker rules (CAB Rules).
Aims to extend pool of permissible investors for newly-issued unregistered securities.
Allow to act as placement agents/finders for secondary transactions of unregistered securities in some cases; associates participate in private securities transactions (PST).
Follows FINRA 2020 Notice 10-04 on capital acquisition brokers (CABS), see #71356.
Proposed Amendments
New FINRA CAB Rule 016(i)(8), expand permissible investors for sales of newly-issued unregistered securities to include eligible employees (under institutional investor).
Proposed eligible employee includes knowledgeable employees for private fund issuers, specified officers, directors, and employees of issuers other than private funds.
Under proposed CAB Rule 016(c)(1)(H), allow capital acquisition broker to act as placement agents, finders for secondary transactions of unregistered securities.
In limited circumstance where seller and purchaser of such unregistered securities are institutional investors and sale qualifies for exemption from registration under SRT.
Permit CAB associated persons participate in private securities transactions (PSTs), same requirements for associated persons of non-CAB B/D who participate in PSTs.
FINRA CAB Rule 328 prohibition on PSTs, (FINRA Rule 3280(e)), creates logistical and other business-related difficulties, for firms with separate affiliates effect transactions
Consultation
Comments must be sent within 21 days from pending publication in federal register.
Jun. 10, 2025 SEC Proposal
On Jun. 10, 2025, SEC issued notice of filing of proposal, 21-day comment period.
Jun. 16, 2025 SEC Fed Reg Proposal
On Jun. 16, 2025, SEC published proposal in the federal register, comments Jul. 7.
Jul. 2025 FINRA Extension
On Jul. 17, 2025, FINRA extended time for SEC to take action until Sep. 12, 2025.