SEC Proposes Conditional Exemption for "Finders"

10/09/2020

On October 7, 2020, the U.S. Securities and Exchange Commission (the “SEC”) published a proposed conditional exemption for certain natural person “Finders” (the “Finders Exemption Proposal”).1 The Finders Exemption Proposal is intended to provide a non-exclusive safe-harbor from broker-dealer registration under Section 15(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to natural persons engaging in certain limited activities on behalf of issuers (“Finders”) (the “Finders Exemption”), as well as clarify the ability of Finders to engage in certain non-registrable activities with respect to private, primary offerings.

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1 Notice of Proposed Exemption Order Granting Conditional Exemption from Broker Registration Requirements of Section 15(a) of the Securities Exchange Act of 1934 for Certain Activities of Finders, Proposing Release, Rel. No. 34-90112, File No. S7-13-20, (October 7, 2020), https://www.sec.gov/rules/exorders/2020/34-90112.pdf. The Finders Exemption Proposal will be open to a thirty (30) day comment period following publication in the Federal Register.

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