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SEC’s Finders Exemptive Order Weakens Investor Protections, Skirts Congress

The SEC’s Proposed Order will substantially weaken critical investor protections while skirting current law to create a dangerous new loophole in broker regulation




WASHINGTON – The American Securities Association (ASA) today sent a letter to the Securities and Exchange Commission (SEC) in strong opposition to its proposed exemptive order for “finders” that would weaken investor protections and limit transparency in the private markets.

“The SEC’s Proposed Order will substantially weaken critical investor protections while skirting current law to create a dangerous new loophole in broker regulation,” said ASA CEO Chris Iacovella. 

“The ASA remains concerned over the SEC’s continued efforts to undermine the decades-old broker-dealer regulatory regime that has helped Americans reach their financial goals while allowing small businesses to access our capital markets to grow and create jobs,” Iacovella wrote in the letter.

In the letter, ASA outlined how there is no evidence of a market failure to support the exemptive order’s approval or any attempt to create an unregulated class of M&A advisors.

“The Proposed Order goes well beyond a narrow exemption as it would provide a blanket exemption for individuals that engage in the solicitation of investors and distribute offering materials on behalf of an issuer,” Iacovella wrote. “This intentionally blurs the line between exempt ‘finders’ and registered broker-dealers while creating a regulatory loophole that leaves Main Street investors vulnerable to the whims of con-artists, Ponzi schemes, and bad actors.”

“We urge the SEC to permanently shelve this initiative and focus its resources instead on protecting Main Street investors and improving transparency in the private capital markets.”



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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.

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