New Texas M&A Broker Exemption


Effective February 16, 2015, the Texas State Securities Board adopted a new rule, Section 139.27 of Title 7 of the Texas Administrative Code (the "Rule"), that offers an exemption to certain mergers-and-acquisitions brokers from dealer registration under the Texas Securities Act.  The Rule was prompted by, and is based on, the no-action letter issued by the SEC Division of Trading and Markets issued on January 31, 2014 (and revised February 4, 2014) to permit certain mergers-and-acquisitions brokers to facilitate certain securities transactions without registering as a broker-dealer under the Section 15(b) of the Securities Exchange Act of 1934 (the "No-Action Letter").  Although the conditions to be satisfied for the exemption under the Rule are substantially the same as the conditions specified in the No-Action Letter and are stated in substantially similar language, the Rule differs from the No-Action Letter in certain important respects.  In a recent blog post on From the Sox Up, George Lee and Rick Tulli describe those differences.

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