Broker-Dealer Registration

KSTechLaw attorneys help companies involved in sales of digital assets, such as security tokens, in going through the U.S. federal and state registration as a broker-dealer. We assess the blockchain assets and activities, which may require registration, and provide full support in obtaining and maintaining the legal status of a broker-dealer.

Our attorneys also consult clients in exploring possible alternatives to broker-dealer registration, including cooperation with already registered broker-dealers or becoming a successor of a registered broker-dealer. 

The US Securities Exchange Act of 1934 (the “Exchange Act”) defines a broker as “any person engaged in the business of effecting transactions in securities for the account of others.” Definition of a dealer covers a person that is “engaged in the business of buying and selling securities for his own account, through a broker or otherwise” but excludes persons who buy or sell securities for their own accounts but not as part of a regular business. Entities as well as individuals may be considered broker-dealers.

Broker-dealer definition is interpreted very broadly. Any intermediaries in securities transactions, with include sales of security tokens, generally, fall within the definition of a broker and must register as a broker with the SEC. They must additionally join a self-regulatory organization (such as FINRA or a registered national securities exchange).

Every alternative trading system (ATS), crowdfunding platform, STO platform or security token issuer will face broker-dealer issues that may require registration of the company or its agents as broker-dealers. The registration process is meticulous, and a registered broker-dealer is subject to numerous due diligence and compliance requirements and obligations.

KSTechLaw attorneys advise on a broad range of broker-dealer registration issues, including:

  • Registration as a broker-dealer;
  • Possible structures alternative to broker-dealer registration;
  • Regulatory compliance of a broker-dealer, including risk assessment, supervisory and reporting requirements.

Our comprehensive broker-dealer registration services include:

  • Preparation of FINRA New Member Application (Form NMA);
  • Preparation a detailed business plan and other required operational and financial disclosures and procedures;
  • Preparation of written supervisory procedures;
  • Preparation of AML policies and procedures;
  • Training or procurement of a chief compliant officer (COO);
  • Preparation for and attending with client the pre-membership interview with FINRA;
  • Communications with the SEC;
  • Advising on the company’s capitalization;
  • Structuring relations with banks;
  • State registration and filings in all 50 states plus US territories;
  • Preparation of other forms, filings, disclosures and procedures to register an operational broker-dealer.


SEC Guide to Broker-Dealer Registration

SEC Exemptions from Broker-Dealer Registration

Registration requirements for Non-Finra Broker Dealers and Salespersons

New York State Broker-Dealer and Securities Registration Information Sheet

California Broker-Dealers, State Investment Advisers and SEC Investment Advisers

Applying for Broker-Dealer Registration in Connecticut



Advised a digital exchange sponsor and developer that launched several digital exchanges in Europe and Middle East on all the issues related to a successful ATS registration in the US, starting with broker-dealer and FINRA registration, and preparation of the Form ATS

Guided the client through the process of Broker-Dealer Registration with FINRA and the SEC, including advising the client on preparation of the business plan, FINRA New Member Application, AML handbook and procedures, written supervisory procedures, etc.

Advised a developing fundraising platform on alternatives to the broker-dealer registration, including operating as a funding portal or a donation-based crowdfunding platform

Advised client on the alternative of registration as a funding portal versus obtaining a full broker-dealer license, including limitations on activities as a funding portal, escrow agent requirements, ongoing disclosures and the associated costs

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