WASHINGTON D.C. – September 11, 2019 – BIEF Chairperson John Zayac comments on today’s meeting. Based on my observations from today’s HFSC hearing on various bills, including our own HR 609, I believe the following points are worth noting:
Excerpt from NASAA’s written testimony before the HFSC Hearing on 9/11/19.
4. The Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act (H.R. 609)
The Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act would establish an exemption from registration requirements under federal securities laws for persons serving as brokers in certain merger and acquisition deals (“M&A brokers”). The exemption envisioned by the legislation is broadly consistent with a Model Exemption that NASAA approved in 2016, and with the de-facto federal policy that has existed since the issuance of a “no-action” letter by the Staff of the Commission on Feb. 4, 2014.44
State securities regulators share Congress’s interest in establishing a more streamlined regulatory framework for persons serving as M&A brokers in deals that involve the transfer of securities, subject to certain conditions.45 Moreover, we believe H.R. 609 appropriately balances the legitimate interests of all stakeholders, while maintaining significant safeguards for investors and small business owners.46
Further, while the framework established by H.R. 609 has been largely in place since 2014, federal legislation remains necessary due the limited legal effect of SEC staff “no-action” letters.
NASAA supports H.R. 609, and we look forward to working with Ranking Member Huizenga and other members of the Subcommittee to facilitate its consideration and passage.
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