Q&As

My client is a UK brokerage firm that wants to do business with US customers. Does it have to get authorisation from any US agencies and if so, how does it go about doing this?

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Published on LexisPSL on 28/11/2013

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • My client is a UK brokerage firm that wants to do business with US customers. Does it have to get authorisation from any US agencies and if so, how does it go about doing this?
  • Requirement to register
  • Exemptions
  • Registration process
  • Consequences of failing to register
  • Consequences of registering

My client is a UK brokerage firm that wants to do business with US customers. Does it have to get authorisation from any US agencies and if so, how does it go about doing this?

Requirement to register

Generally, securities firms located outside the US that engage in a securities business with persons located in the US are required to register with the Securities and Exchange Commission (SEC) pursuant to the Securities Exchange Act 1934 (Exchange Act) unless an exemption applies. Firms also need to register with the Financial Industry Regulatory Authority (FINRA), in most cases, or another self-regulatory organisation (SRO) depending on the type of business conducted, to act as its designated examining authority and the front line regulator. Firms that do business in commodity futures and option markets in the US are required to register with the Commodity Futures Trading Commission. Firms will also have to consider the registration requirements of the individual US states. Take a look at the following Practice Notes for more information on the US system and US regulators:

  1. USA—financial services regulation essentials

  2. USA—the US regulators

Exemptions

Rule 15a-6 provides an exception exemption to registration in the US which is available in certain limited circumstances. Under the exemption a person can carry on the following types of business:

  1. effecting unsolicited securities transactions

  2. providing research reports to major US institutional investors and effect

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