Corporate & Securities Law

By Jim Hamilton

California Proposes Excluding Associated Person of Issuer From Broker-Dealer Definition

As proposed by the California Department of Corporations, an "associated person of an issuer" would be excluded from the definition of "broker-dealer" under Section 25004 of the California Securities Law of 1968 if the associated person is not considered a broker-dealer under Rule 3a4-1 of the Securities Exchange Act of 1934. The California definition would model the Exchange Act definition except that in California an associated person of an issuer would not be an "employee of an issuer," and would be subject to statutory disqualification provisions. NOTE: An associated person of an issuer would not be presumed to be a broker-dealer just by participating in the offer and sale of the issuer's securities if he or she does not meet the conditions of Rule 3a4-1.

Written comments. Interested persons may submit written comments about the proposed rule to the attention of Karen Fong at the Department of Corporations, 1515 K Street, Suite 200, Sacramento, CA 95814. Comments may also be faxed to (916) 322-5878 or emailed to regulations@corp.ca.gov.

Comments must be received by 5 p.m. on July 12, 2010.

Full post as published by Jim Hamilton's World of Securities Regulation on May 06, 2010 (boomark / email).