Home      Login

Abstract: 

Fund marketers reach out to potential investors to promote investments in the funds. Because of the compensation these marketers receive, they may need to register as brokers. It is important to consider the full and precise scope of a marketer’s activities and how he or she is compensated, in order to determine whether regulators will require the marketer to register as a broker and the extent to which the marketer and the fund organization for which the sales are made are vulnerable to enforcement action or civil liability for rescission. This article discusses the current legal landscape as well as some efforts now underway to synthesize the various laws, guidance, interpretations, and court opinions with a view to a more reasoned and realistic approach that will allow these intermediaries to operate without overly burdensome or duplicative regulation.

Keywords: broker(-dealer) registration; Rule 3a4-1; finder; fund marketer; SEC registration; FINRA member; Kramer; Ranieri; Anka

Affiliations:  1: Carter Ledyard & Milburn LLP; 2: Carter Ledyard & Milburn LLP.