Are firms required to submit a CMA for partial ownership changes?
A4. It depends on the circumstances. If a new person or entity will end up controlling 25 percent or more of your firm, then a CMA is required. Q5. Is NASD Rule 1017 applicable if the change of ownership occurs in increments of less than 25 percent? A5. NASD Rule 1017 is not limited to changes that occur all at once. The rule is triggered when the change, whether in increments or otherwise, results in one person or entity owning or controlling 25 percent or more of the equity or partnership capital of the firm for the first time. Q6. May “control” extend to individuals or entities that are not shown as owners or managers, but who may affect the management or direction of the firm? A6. Yes. Individuals who are not owners or managers could be considered control persons. FINRA will document and explain its basis for concluding a control relationship and the applicant will be given an opportunity to respond. Q7. If a firm currently operating without a written membership agreement adds a bu
Related Questions
- Are firms (corporations and partnerships) required to provide information on changes in their management, ownership and employees as in previous renewal seasons?
- Does Atlantic Business Lenders want to take control of my company or be offered partial ownership?
- Are firms required to submit a CMA for changes in product mix?
