SEC Risk Alert and FAQs to Assist with Customer Sales of Securities
Serving as guidance for broker-dealers when involved with unregistered transactions on their customers’ behalf, the Securities and Exchange Commission (“SEC”) has issued a Risk Alert and accompanying FAQs. The Risk Alert discusses deficiencies identified by the SEC’s Office of Compliance Inspections and Examinations during its review of 22 broker-dealers that engage in microcap securities sales.
In addition, the Risk Alert is supplemented with FAQs regarding customer sales of securities. Published by the SEC Division of Trading and Markets, the FAQs remind broker-dealers the requirements for abiding by the exemption.