Broker-Dealer Registration in the Private Equity Fund Adviser Context: How Helpful Are FINRA’s New Capital Acquisition Broker Rules?

January 05, 2017

Following the U.S. SEC’s first enforcement action alleging that a private equity fund adviser acted as an unregistered broker in connection with portfolio company transactions, many in the industry have been reviewing whether they should register as broker-dealers. One new option to consider is the Financial Industry Regulatory Authority’s (FINRA’s) new Capital Acquisition Broker or “CAB” rules which are characterized as providing a lighter form of broker-dealer registration. Continue reading for a comparison of the regulatory requirements for CABs against the rules for full FINRA members.

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