Month: August 2023

The U.S. capital markets are the deepest, most dynamic and most liquid in the world, offering tremendous opportunities for securities firms looking to raise capital for their clients. However, our robust securities regulations provide challenges for foreign financial institutions seeking access to the US capital markets.

The SEC and FINRA provide essential services to the US economy and our capital markets participants. In the process of providing oversight and protection, they have created rules and regulations that securities firms must comply with.

For foreign financial institutions interested in doing business in the United States, there are two options: The first option is to establish their own US broker-dealer, and the second option is to enter the US with a chaperone under SEC Rule 15a-6. The process of establishing a US broker-dealer is complex and bureaucratic, involving a significant time and financial commitment.

The SEC permits foreign financial institutions to operate in the US through a chaperone under Rule 15a-6. A 15a-6 chaperone, registered with the SEC and FINRA, oversees and supervises the activities of the foreign firm in the U.S, allowing them to remain compliant with the SEC and FINRA.

Employing a 15a-6 chaperone comes with several benefits. Most importantly, chaperones help foreign financial institutions remain compliant with all applicable U.S. laws and regulations, safeguarding them from potential legal issues. Moreover, they provide access to U.S. institutional investors, a valuable resource that may not be easily accessible to foreign firms. They also can provide expert guidance on navigating the intricacies of the U.S. capital markets.

If you are considering accessing the U.S. capital markets, you might be wondering whether your organization qualifies as a Foreign Financial Institution (FFI) under Rule 15a-6. In general, a foreign financial institution refers to any non-U.S. entity that is engaged in the business of buying and selling securities. This can include investment banks, broker-dealers, asset managers, private equity firms, insurance companies, banks, financial services firms, government entities, and other specialized financial institutions involved in securities transactions.

Marco Polo Exchange has streamlined the 15a-6 chaperoning process through our state of the art platform, MPX Passport. Passport enables foreign financial institutions to quickly and easily remain compliant by providing comprehensive regulatory and back-office solutions that ensure a smooth, compliant, and efficient experience. Passport is provided exclusively for foreign financial institutions that work within a 15a-6 chaperoning agreement with Marco Polo Securities Inc., MPX’s broker-dealer subsidiary.

The U.S. capital markets offer immense opportunities, but the path to these can be complex for foreign firms. With 15a-6 chaperoning, this journey becomes significantly easier. By ensuring regulatory compliance, providing access to institutional investors, and delivering expert insights into the U.S. capital markets, 15a-6 chaperones serve as an invaluable ally for foreign financial firms.

If your firm is a foreign financial institution with ambitions to grow in the United States, schedule a call with our team to discuss partnering with MPX and Marco Polo Securities for US chaperoning.