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February 03, 2020 at 10:19 AM
The Financial Industry Regulatory Authority is seeking comments on amendments to its rules on capital acquisition brokers, or CABs, to allow, among other measures, CABs to register as investment advisors.
FINRA Regulatory Notice 20-04 requests comments by March 30 on the broker-dealer regulator’s CAB rules, which provide a simplified rulebook for CABs, which engage only in limited capital advisory, corporate restructuring and private placement activities.
FINRA said its proposed amendments to the CAB rules seek “to make them more useful to CABs without reducing investor protection.”
CABs are firms that engage in a limited range of activities, essentially acting as placement agents for sales of unregistered securities to institutional investors and advising companies and private equity funds on capital raising and corporate restructuring, FINRA explains. Firms meeting the CAB criteria may elect to be governed by the CAB rules.
The current CAB rules do not allow CABs to register as investment advisors.
