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Streamlining M&A transactions: Shruti Gurudanti, Rose Law Group partner & director of corporate transactions, highlights how new broker-dealer exemption benefits small businesses

By National Law Review

As a part of the Consolidated Appropriations Act of 2023, President Biden signed into law several provisions aimed at promoting private mergers and acquisitions (M&A) activity by easing the regulatory burden faced by M&A intermediaries. The new law grants additional broker-dealer registration exemptions for M&A intermediaries engaging in M&A transactions involving certain qualified privately held companies. This new exemption took effect on March 29, 2023 and represents a significant change from previous M&A intermediary qualifications in the M&A space.

For background, an M&A intermediary (or M&A advisor) is a professional or firm that facilitates and acts on behalf of companies in the process of buying, selling, merging, or acquiring other companies. M&A intermediaries can undertake a wide range of services in order to help clients navigate the various stages and strategic decisions involved in a potential M&A transaction. M&A intermediaries can take several different forms, including investment banks, boutique advisory firms, business brokers, and legal or financial consulting firms, and provide a wide range of services at various levels that can include business valuation, deal identification, deal structuring, negotiation, due diligence, regulatory compliance, and integration planning.

Before enacting the new exemption, M&A intermediaries facilitating the sale or purchase of businesses were subject to a more rigorous regulatory framework enforced by the Securities and Exchange Commission (SEC). The prior framework required M&A intermediaries to register as broker-dealers with the SEC, imposing various registration requirements, as well as various licensing and disclosure obligations. These requirements often proved to be significant impediments to engaging in M&A transactions for potential parties.


“M&A intermediaries focusing on small businesses will greatly benefit from this exemption as now they don’t have to worry about the cost and time needed to comply with the extensive federal broker-dealer registration requirements.” – Shruti Gurudanti, Rose Law Group partner & director of corporate transactions

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September 2023