Will there be licensing standards for M&A broker-dealers?

BVWireIssue #52-4
January 24, 2007

At last week’s 2007 winter conference of Alliance of Merger and Acquisition Advisors (AM&AA) in Las Vegas, the “hot topic in the hallways” concerned efforts by the American Bar Association (ABA) and the SEC to regulate licensure/registration for M&A advisors in the mid-marketplace. In an update to attendees, the Alliance’s Licensure Task Force announced the “urgent need to clarify and, if possible, simplify this situation for the greater benefit of members.”

In other words, “now that the SEC has determined to enact new regulation/enforcement in this area,” say AM&AA presenters, “it's time to get out in front of this train and attempt to switch it on to the best possible track.”

To this end, the Alliance “fully supports” two related initiatives: (1) the adoption of a new class of Private Placement Broker (PPB), as recommended by the ABA task force; and (2) the creation and adoption of a limited exemption from registration as a full broker/dealer or PPB, if certain lengthy conditions are met—including simplified registration and role in the sale.

To support the costly effort, the AM&AA is soliciting contributions, appealing to the profession’s desire to preserve legitimacy. “As the legal community becomes more aware of how securities law applies, there will be more adverse impact on unlicensed intermediaries as more and more attorneys [guide their clients] to use only a properly licensed intermediary.” For the Alliance’s complete statement and presentation, click here.

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