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SEC Rule 15a-6: Difference between revisions

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SEC Rule 15a-6 (view source)

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{{a|brokerage|}}[[Rule 15a-6]] under the {{t|Securities Exchange Act of 1934}} provides conditional exemptions from [[broker-dealer]] registration for  [[foreign broker-dealer]]s that engage in certain specified activities with [[U.S. investor]]s including:
*Effecting [[Reverse solicitation|unsolicited]] securities transactions;
*Providing research reports to major U.S. institutional investors, and effecting transactions in the subject securities with or for those investors;
*[[Solicitation|Soliciting]] and [[Effect|effecting]] transactions with or for U.S. institutional investors or major U.S. institutional investors through a “[[chaperoning broker/dealer]]”; and
*Soliciting and effecting transactions with or for [[registered broker-dealer]]s, banks acting as [[broker/dealer]]s, certain international organizations, foreign persons temporarily present in the U.S., U.S. citizens resident abroad, and foreign branches and agencies of [[U.S. person]]s.
In adopting Rule [[15a-6]], the [[SEC]] sought “to facilitate access to foreign markets by U.S. institutional investors through [[foreign broker-dealer]]s and the research that they provide, consistent with maintaining the safeguards afforded by [[Registered broker-dealer|broker-dealer registration]],” and “to provide clear guidance to [[foreign broker-dealer]]s seeking to operate in compliance with U.S. broker-dealer registration requirements.”
Primary source is here on the Cornell University website:
Primary source is here on the Cornell University website:
[https://www.law.cornell.edu/cfr/text/17/240.15a-6 Rule 16a-6]
[https://www.law.cornell.edu/cfr/text/17/240.15a-6 Rule 15a-6]


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===Summary===
===Summary===


{{tag|Rule 15a-6}} allows a [[foreign broker-dealer]] to engage in US securities transactions without registering as a {{tag|registered broker-dealer}} in certain circumstances.  
[[Rule 15a-6]] allows a [[foreign broker-dealer]] to engage in US securities transactions without registering as a registered [[broker-dealer]] in certain circumstances.  
===Terminology===
===Terminology===
*'''US client''': a U.S. institutional investor or a major U.S. institutional investor.
*'''US client''': a U.S. institutional investor or a major U.S. institutional investor.
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<blockquote>"The Commission's goals in adopting {{tag|Rule 15a6}} at this time are (i) to facilitate access lo foreign markets by U.S. institutional investors through foreign {{tag|broker-dealer}}s and the research that they provide, consistent with maintaining the safeguards afforded by broker-dealer registration; and (ii) to provide clear guidance to foreign broker-dealers seeking to operate in compliance with U.S. broker-dealer registration requirements."</blockquote>
<blockquote>"The Commission's goals in adopting [[Rule 15a-6]] at this time are (i) to facilitate access lo foreign markets by U.S. institutional investors through foreign {{tag|broker-dealer}}s and the research that they provide, consistent with maintaining the safeguards afforded by broker-dealer registration; and (ii) to provide clear guidance to foreign broker-dealers seeking to operate in compliance with U.S. broker-dealer registration requirements."</blockquote>


<blockquote>"If foreign broker-dealers are effecting trades outside the United States with or for individual US. citizens resident abroad, but have no other contacts within the jurisdiction of the United States, the Commission generally would not expect these foreign broker-dealers to register."</blockquote>
<blockquote>"If foreign broker-dealers are effecting trades outside the United States with or for individual US. citizens resident abroad, but have no other contacts within the jurisdiction of the United States, the Commission generally would not expect these foreign broker-dealers to register."</blockquote>
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Sayeth Dorsey & Witney:
Sayeth Dorsey & Witney:


{{tag|Rule 15a-6}}, as supplemented by {{tag|SEC}} no-action letters, can be used, at the federal level, to permit contacts by representatives of a Canadian firm with “U.S. Institutional Investors” and “Major U.S. Institutional Investors” (as defined in each case) if the account is maintained by a U.S. registered broker-dealer (which can either be affiliated or unaffiliated with the Foreign firm).  
[[Rule 15a-6]], as supplemented by {{tag|SEC}} no-action letters, can be used, at the federal level, to permit contacts by representatives of a Canadian firm with “U.S. Institutional Investors” and “Major U.S. Institutional Investors” (as defined in each case) if the account is maintained by a U.S. registered broker-dealer (which can either be affiliated or unaffiliated with the Foreign firm).  


Non-U.S. dealers, including foreign affiliates of U.S. dealers, should also limit their contacts to institutional investors and registered broker-dealers, thereby benefiting from state broker-dealer registration exemptions.
Non-U.S. dealers, including foreign affiliates of U.S. dealers, should also limit their contacts to institutional investors and registered broker-dealers, thereby benefiting from state broker-dealer registration exemptions.
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