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New M&A Broker Exemption From SEC Registration: Key Elements, Excluded Activities, Practical Considerations

Understanding the Exemption's Benefits, Limitations, and Impact on M&A Deals

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Wednesday, August 30, 2023

Recorded event now available

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This CLE webinar will analyze the recently enacted federal M&A broker exemption from SEC registration. The panel will discuss the benefits and limitations of the exemption, the practical considerations for complying with broker registration requirements under both federal and state securities laws, and the implications of the new exemption on M&A deals.


Congress recently amended the Securities Exchange Act of 1934 to exempt certain M&A brokers from registration as broker-dealers with the SEC. Previously, M&A brokers relied on the SEC's M&A Brokers No-Action Letter for clarity regarding broker registration. The new exemption closely follows the No-Action Letter, with some differences, including a limitation on the size of eligible privately held companies. While the exemption provides a federal exemption from SEC registration for M&A brokers, the activity of securities brokers is still regulated by individual states, some of which may also have an exemption in place.

An M&A broker is defined as a broker, and any person associated with a broker, engaged in the business of effecting securities transactions solely in connection with the transfer of ownership of an eligible privately held company, regardless of whether the broker acts on behalf of a seller or buyer, through the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business combination involving, securities or assets of the eligible privately held company. The new exemption contains an extensive list of activities that, if conducted by the M&A broker, would preclude or disqualify the broker from taking advantage of the exemption.

To be an eligible privately held company under the new exemption, the acquired company must: not have any class of securities registered with the SEC pursuant to Exchange Act Section 12 or subject to Section 15(d)'s filing obligations, and in the fiscal year prior to the engagement of the M&A broker, have earnings of less than $25 million before interest, taxes, depreciation, and amortization and/or gross revenues of less than $250 million.

Listen as our authoritative panel of M&A practitioners discusses the parameters and applicability of the new federal M&A broker exemption. The panel will also discuss the exemption's practical implications on M&A deals and the impact of state broker registration requirements.



  1. Background
  2. Key terms of the new federal statutory exemption
    1. M&A broker
    2. Eligible privately held company
    3. Control
  3. Excluded activities
  4. Disqualification
  5. State law requirements
  6. Practical considerations and next steps


The panel will review these and other key issues:

  • What is the background regarding the new federal registration exemption for M&A brokers?
  • What are the key terms, elements, and definitions of the new exemption?
  • What are the benefits and limitations of the new exemption?
  • Does the new federal exemption preempt state broker registration requirements?
  • What are the key takeaways and practical considerations of the new exemption on M&A deals?


Robertson, Daryl
Daryl B. Robertson

Hunton Andrews Kurth

Mr. Robertson’s practice focuses on business and finance transactions, entity formation, M&A, and securities...  |  Read More

Rohrer, Eden
Eden L. Rohrer

K&L Gates

Ms. Rohrer concentrates her practice in securities broker-dealer regulatory, compliance, enforcement defense,...  |  Read More

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