The comment letter generally supports the Commission’s efforts to expand the scope of activities that a foreign broker-dealer could conduct in the United States without the need for registration and the simplification of procedures and the increased direct access and interaction with U.S. investors that the Proposals envisage.

However, there are some areas where we have suggested modifications or alternative approaches to the Proposals. The letter includes comments for the Commission on the following areas:

a) Clarification of the definition of “qualified investor” to replace the existing two categories (“U.S. institutional investors” and “major U.S. institutional investors”) to ensure that it includes hedge funds and other similar entities who may invest, but not “own” securities;

b) The “foreign business” definition and 85% threshold under Exemption A(1) and the proposal of alternative tests based upon either (i) primary listing of securities [or (ii) combined customer base and volume test]; and

c) Noting the maintenance of books and records by a foreign broker-dealer under Exemption A(1) and the potential Data Protection Act 1998 issues under EU and UK law.

View Comment Letter

For the proposed rule, please visit the following page:

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