I want to sell the company’s offering myself. Do I need to be licensed as a securities…

The Securities Exchange Act requires broker- dealers to register with the SEC.  Registration carries with it various compliance obligations and standards.  State requirements, known as blue sky laws, must also be met.

A broker is a person who’s in the business of effecting securities transactions for the account of others.  This usually includes someone selling securities via a private placement.  The JOBS Act makes an exception for private placement agents in a Rule 506 offering under Reg D without registering as a broker-dealer, under certain circumstances.

Issuers are not considered brokers because they sell securities for their own account, not for the account of others.  If you are a partner, director, officer, or employee of a company that is offering its securities for sale, and you’re not primarily engaged by the company to sell its securities, meaning that you are not being paid commissions and you have other duties for the company, you’ll be considered an “associated person of an issuer” and not be required to register as a broker dealer under the Exchange Act.

Whether you have to register as a broker-dealer depends on the specifics of your activity and your transaction, so consult an attorney before engaging in such activities, especially if you’re thinking of doing so for compensation. 

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Last Modified: May 4, 2016