Founded by Former SEC Attorneys

       The Securities Exchange Act of 1934 ("Exchange Act") is the principal law that regulates broker-dealers in the U.S. The Exchange Act governs transactions in securities markets and regulates persons who effect such transactions. The individual states also regulate broker-dealer activities within their borders under state securities or "blue sky" laws.

Federal Registration

       Broker-dealers registering with the United States Securities and Exchange Commission ("SEC") must also separately apply for membership with a self-regulatory organization ("SRO"). Most broker-dealers, with the exception of members of anational securities exchange that carry no customer accounts and transact virtually all business on that exchange, are required to become members of the National Association of Securities Dealers, Inc. ("NASD"). The Firm will apply to become a member of the NASD.

       The SEC has designed the registration process so that applicant review is essentially performed by the NASD, with SEC oversight. The Firm must satisfy the NASD through the submission of documents and in an interview that the Firm is adequately capitalized and that its principals possess the knowledge and experience to operate a broker-dealer in accordance with the Exchange Act and NASD rules.

State Registration

       SEC-registered broker-dealers also must register in each state in which they effect transactions or make offers to sell or to buy securities, unless they are exempt from registration or excluded from the definition of broker-dealer in a particular state by reason of the nature of the transactions engaged in. Persons not having a place of business in a state who effect transactions solely with institutional investors in that state generally are either excluded from the definition of broker-dealer or otherwise exempt from registration under the applicable state law.

       In addition to the registration of brokers and dealers, the various states generally require that the employees of brokers and dealers engaged in securities transactions register as agents (also known as salespersons). The definition of agent in most states, however, does not include an individual who represents an issuer solely in offerings of exempt securities or in exempt transactions.

       The determination whether the Firm or persons selling on its behalf will need to register must be made on a state-by-state basis.