A law firm with a broker dealer practice typically often serves a diverse client base. Numerous entities require an attorney’s services for broker dealer formations. These include regional, national and international broker dealer firms as well as their affiliates, investment advisers, insurance companies and hedge funds.
An attorney’s role in a broker dealer formation is wide ranging. He typically offers advice on legal aspects including broker dealer regulation and the intricacies of cross border activities. In the international context of broker dealer formations, attorneys represent firms, establish rule 15a-6 relationships with domestic broker dealers and offer assistance in the acquisition of U.S. Broker dealers.
An attorney with a hands-on approach will handle all relevant registration issues including the application process of self-regulatory organizations (SROs). He’ll be intimately involved with these challenges from beginning to end. Attorneys also offer advice regarding the optimal business vehicle from a tax perspective and commercial perspective for both LLPs and LLCs at home and abroad. He’ll help to establish the structure of both ownership and income distribution in a way that optimizes tax efficiency.
Throughout the broker dealer formation, an attorney will draft an array of important documents. These include advisory agreements, operating agreements, subscription agreements, advisory agreements, administration agreements, placement agreements, underwriting agreements, registration forms, compliance manuals, engagement letters and side letters. He’ll manage the complexities of the regulatory application beginning with its filing on through to pre-membership interviews. An attorney will also prepare filings in accordance with state and federal securities laws and commodities laws. He can also provide advice regarding employee incentives, employee contracts and intellectual property rights.
Attorneys can also provide legal advice concerning the regulatory, tax, commercial and corporate facets of broker dealer formations. He’ll help to maintain the business’s continuity while ensuring a smooth regulatory process. An attorney will asses broker dealers and other candidates for acquisition through comprehensive due diligence reviews. This analysis will include an exhaustive probing of targets’ management foundation, internal controls, filings with regulators and more. Attorneys with mergers and acquisitions colleagues will be able to collaborate in an effort to advise broker dealer clients regarding the specific legal and regulatory challenges that result from the acquisition of a brokerage firm.
Broker dealer regulation is a dynamic and challenging process that requires the expertise of an attorney. He’ll stay aware of regulatory changes that have already been implemented as well as those that are pending. He’ll ensure compliance with changes and offer valuable advice regarding all relevant aspects of regulation. Attorneys understand the intricacies of authorization requirements, client classification, regulatory capital and more. Well versed broker dealer lawyers will even be able to draft, audit and reform supervisory and compliance policies and manuals.