A 15a-6 chaperone is a registered broker-dealer that is responsible for overseeing and supervising the activities of a foreign broker-dealer in the United States. This is in accordance with Rule 15a-6 of the Securities Exchange Act of 1934, which provides conditional exemptions from broker-dealer registration for foreign broker-dealers that engage in certain specified activities involving U.S. investors.
The 15a-6 chaperone must be a registered broker-dealer with the Securities and Exchange Commission (SEC) and must have a physical presence in the United States. The chaperone is responsible for ensuring that the foreign broker-dealer complies with all applicable U.S. securities laws and regulations, including the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
The 15a-6 chaperone must also be responsible for the following:
- Effecting transactions on behalf of the foreign broker-dealer
- Issuing confirmations to customers
- Maintaining books and records
- Participating in oral communications with customers
- Obtaining certain representations and consents from customers
The 15a-6 chaperone arrangement is a way for foreign broker-dealers to access the U.S. capital markets without having to register with the SEC. This can be a cost-effective way for foreign broker-dealers to reach U.S. investors.
Here are some of the benefits of using a 15a-6 chaperone:
- It allows foreign broker-dealers to access the U.S. capital markets without having to register with the SEC.
- It can be a cost-effective way for foreign broker-dealers to reach U.S. investors.
- It provides a layer of protection for U.S. investors by ensuring that the foreign broker-dealer is complying with all applicable U.S. securities laws and regulations.
Here are some of the drawbacks of using a 15a-6 chaperone:
- The foreign broker-dealer is still subject to the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
- The 15a-6 chaperone arrangement can be complex and time-consuming to set up.
- The 15a-6 chaperone may charge a fee for its services.
Overall, the 15a-6 chaperone arrangement can be a useful tool for foreign broker-dealers that want to access the U.S. capital markets. However, it is important to carefully consider the benefits and drawbacks before deciding whether to use this arrangement.
