Effective February 16, 2015, the Texas State Securities Board (the “Securities Board”) adopted a new rule, Section 139.27 of Title 7 of the Texas Administrative Code (the “Rule”), that exempts certain mergers-and-acquisitions brokers from dealer registration under the Texas Securities Act. An exempt mergers-and-acquisitions broker is defined in the Rule as an “M&A Dealer.” 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”).[1] The Securities Board has (and has had) a streamlined registration or licensing process, not involving the satisfaction of any examination requirement, for a dealer that is only acting as a “business broker.”[2] In contrast, the Rule provides an exemption from any registration or licensing obligation for an M&A Dealer and its agents and does not require any filing with the Securities Board.
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