Broker-Lite: FINRA Built It, But Will They Come?

September 2016

On August 18, 2016, the US Securities and Exchange Commission (SEC) approved a new Financial Industry Regulatory Authority (FINRA) rule series intended as a “lite” framework for the registration and regulation of brokers that limit their activities to certain capital raising and private placements, mergers and acquisitions (M&A) advisory, and related corporate financing.

Under the new framework, contained in a new FINRA rule series, a broker that qualifies as a capital acquisition broker (CAB), as defined below, can elect to be regulated under the new rules (CAB Rules). Both current and prospective FINRA members may opt in to the CAB Rules. FINRA will announce the CAB Rules’ effective date in a forthcoming regulatory notice.

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