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Securities Regulation

The U.S. securities markets are dynamic, complex, and energized by a diverse community of market participants that include securities brokerages, investment banks, clearing firms, alternative trading systems, securities exchanges, asset managers, transfer agents, municipal advisors, and issuers. McIntyre & Lemon draws on more than 25 years of securities regulatory expertise to assist this diverse community in navigating the complexities of the nation’s securities regulations and in responding to the distinct regulatory mandates of the U.S. Securities and Exchange Commission (SEC), separate state securities commissioners, and various self-regulatory organizations (SROs), such as, among others, the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange, and the Municipal Securities Rulemaking Board (MSRB).

We assist our broker-dealer clients with:

  • Broker-Dealer Status – The extent to which referral fee arrangements and/or participation in the chain of a securities distribution may trigger the definition of “broker” or “dealer” for purpose of the registration and licensing requirements under federal and state securities laws.
  • Registration and SRO Membership – Registration and SRO membership obligations, including compiling the necessary documentation for the approval of a diverse range of businesses that include underwriting, mutual-fund and variable-insurance distribution, institutional sales and trading, investment banking, alternative trading systems, and securities clearing.
  • Sales Practices – Sales practice compliance procedures for purposes of addressing antifraud and suitability regulations, relevant FINRA licensing and qualification requirements, FINRA rules on advertising, product distribution platforms, and the SEC’s recently enacted Regulation Best Interest.
  • Financial Responsibility Regulations – Navigating the SEC’s complex net-capital and customer-protection rules that directly affect the financing of their business and their customer relationships.
  • Trading and Distribution Platforms – The regulatory effects of the use of technology to create trading platforms, as well as negotiate on our clients’ behalf distribution and compensation agreements in connection with securities distribution platforms.
  • Purchase and Sale Transactions – We assist broker-dealers and perform related diligence and negotiation of agreements in connection with obtaining SRO approvals for acquisitions and sales of securities firms or their business lines.
  • Managing Material, Non-Public Information – The application and implementation of insider trading policies, including the creation and review of information barriers for compliance with federal securities laws’ requirements to protect material, non-public information from abuse.
  • Examinations – We assist broker-dealers through, and respond to, SEC and SRO examinations.

Asset Managers and Municipal Advisors
We draw on more than 25 years of experience advising financial planners, private equity advisers, real estate equity advisers, and alternative asset managers on compliance matters under the Investment Advisers Act of 1940 and state investment adviser laws.

We assist our investment adviser clients with:

  • Investment Adviser Status – Determining the extent to which securities investment advice is particularized and subject to registration at the federal or state level or “impersonal” or otherwise exempt from registration.
  • Registration and Ongoing Disclosure – Registering with the SEC or state securities commissions, including drafting (i) initial disclosures for filing and annual disclosure updates, (ii) Codes of Ethics, and (iii) written supervisory procedures.
  • Custody – Compliance with the SEC’s custody rule.
  • Pay-to-Play – Compliance with pay-to-play regulations.
  • Compliance Programs – The development and implementation of compliance programs and annual reviews.
  • Managing Material, Non-Public Information – The application and implementation of insider trading policies, including the creation and review of information barriers.
  • Investment Adviser Platforms – Negotiating on our adviser client’s behalf management and platform agreements.
  • Municipal Advisor Status – We advise clients on their potential status as municipal advisors or, if a municipal advisor, their membership with the MSRB and compliance with applicable MSRB rules, including the MSRB’s pay-to-play regulations.

Banks and Insurance Companies
Commercial banks and insurance companies often participate in the securities markets through affiliated broker-dealers and asset managers or by partnering with third-party broker-dealers and investment advisers. We counsel banks and insurance companies on a broad range of their securities activities. For example, we assist our clients with:

  • Regulation R – The application of statutory exclusions from SEC regulation for permissible bank securities activities and bank compliance with Regulation R.
  • Information Barriers – Managing sensitive information flow across an enterprise, including establishing, implementing, and reviewing information barriers across bank holding or insurance holding company enterprises.
  • Distribution of Variable Insurance Products – The unique intersection of state insurance and federal securities laws in connection with the distribution of variable insurance products.

Small issuers are often underrepresented in their ability to raise capital to finance their business. Our expertise focuses on smaller issuers and extends to private offerings, crowd-funded transactions in compliance with regulations under the JOBS Act, and reliance on a safe harbor enabling associated persons of issuers to engage in active securities sales outside of the federal broker-dealer regulatory regime.

With expertise gained in representing industrial operating companies, research and development companies, and finance subsidiaries, we are well positioned to assist clients with managing their balance sheets to avoid investment company status and the adverse effects of the public filing requirements and voidability of contracts that would apply to inadvertent investment companies.

For more information on how we can help you navigate the intersection of Wall Street and main street, contact us.