SEC Requests Extension of Foreign Broker Rule 15a-6
Published Date: 2/28/2025
Notice
Summary
The SEC is asking to keep Rule 15a-6 going, which helps foreign broker-dealers work with U.S. investors without full registration, as long as certain info and records are shared. About 2,000 U.S. broker-dealers spend time and money each year making sure these rules are followed, costing around $1 million annually. This extension keeps the process smooth and protects investors while saving everyone time and hassle.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
Keeps Cross‑Border Broker Exemption
Rule 15a-6 continues to allow foreign broker-dealers to solicit and effect transactions with U.S. institutional investors through a registered U.S. broker-dealer without full U.S. broker-dealer registration, provided the U.S. broker-dealer obtains certain information, consents to service of process from foreign personnel, and maintains required records. Reliance on the exemption is voluntary, but if a foreign broker-dealer elects to rely on it, the described information collection is mandatory.
Annual Compliance Time and Cost Burden
The SEC estimates about 2,000 U.S. registered broker-dealers spend on average 2 hours of clerical time and 1 hour of managerial time each year to obtain required information under Rule 15a-6, for a total annual burden of 6,000 hours. Using hourly rates of $78 for clerical staff and $344 for managers, the staff estimate of total internal labor cost is $1,000,000 per year (about $500 per firm per year).
Record‑Retention and Service‑of‑Process Rule
Records required under Rule 15a-6 must generally be kept for the time periods set by Rule 17a-4, and consents to service of process must be retained for not less than six years after the person ceases U.S. securities activities. These retention rules apply when a foreign broker-dealer elects to rely on the Rule 15a-6 exemption.
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