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15a-6 chaperone

15a-6 chaperone

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.

About Impact Capital Partners

At Impact Capital Partners, our mission is to connect institutional capital with the growing impact investment market to address the world’s most pressing challenges. By utilizing impact investments, institutional investors are able to generate positive, measurable social and environmental impact alongside a financial return. We are constantly finding new impact investment opportunities in both emerging and developed markets, targeting market-rate returns. Schedule a call with us HERE if you’re interested in learning more about our impact investing strategies.

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