SEC Responds to Rule 15a-6 and Foreign Broker-Dealer FAQs

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2013-04-05


Editor’s Note: Russell Sacks is a partner at Shearman & Sterling in the Financial Institutions Advisory & Financial Regulatory Group, and is based on a Shearman & Sterling publication.

On March 21, 2013, the staff of the Division of Trading and Markets (the “Staff”) of the US Securities and Exchange Commission (the “SEC”) released responses reflecting the Staff’s views on frequently asked questions (the “FAQs”) relating to Rule 15a-6 (“Rule 15a-6” or the “Rule”) under the US Securities Exchange Act of 1934, as amended (the “Exchange Act”). The FAQs affirm, among other things, the SEC’s broad interpretation of Rule 15a-6 confirming the applicability of both the “Seven Firms” and “Nine Firms” to foreign broker-dealers, including those that use unaffiliated US-registered broker-dealers to intermediate transactions in accordance with Rule 15a-6(a)(3). This memorandum provides a brief background of Rule 15a-6 and highlights the important points included in the FAQs.


Broker-dealers [1] located outside the United States that conduct securities transactions with persons in the United States (including solicitation of those transactions) are required to register with the SEC, unless an exemption from registration is available. Rule 15a-6 under the Exchange Act, which the SEC adopted in 1989, currently provides a conditional exemption from broker-dealer registration for a non-US broker-dealer falling under the definition of “foreign broker or dealer” [2] that engages in certain activities involving certain US investors. Since the adoption of Rule 15a-6, the Staff has expanded its scope through “no action” and other interpretive guidance. [3] In 2008, the SEC proposed changes to update and expand the scope of the rule, but that proposal has yet to be adopted.

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Russell D. Sacks, Shearman & Sterling LLP,

Date tagged:

04/05/2013, 13:56

Date published:

04/05/2013, 09:25