New York Proposes New Rules to Streamline Securities Notice Filing Requirements and Impose Registration and Exam Requirements for “Finders”

April 24, 2020

On April 6, 2020, the Investor Protection Bureau of the New York State Department of Law (the “IPB”) announced proposed revisions to its current regulations that would modify the notice filing requirements for certain offerings of federal “covered securities” and impose broker-dealer registration and exam requirements for finders. The IPB believes that these new rules would modernize its registration function, harmonize New York and federal securities registration laws, and cure industry confusion as to certain registration requirements.

In the announcement, New York Attorney General Letitia James stated, “Ultimately, these rule changes will increase our use of technology, clean up decades of industry confusion, and enhance our ability to prevent exploitation of New Yorkers in the investment industry.”

This memorandum highlights certain notable aspects of the proposed notice filing requirements of certain select exemption regulations.*

Regulation D (applicable to private fund offerings under Rule 506)

Under the proposed revisions:

  • Issuers offering securities in or from the State of New York would be required to file a copy of its Form D within 15 days after the first sale to any investor;
  • Notice filings would be valid for a period of four (4) years, unless renewed;
  • An amendment filing would be required each time an issuer filed a Form D amendment with the United States Securities and Exchange Commission (the “SEC”);
  • Certain issuers would be required to file a Consent to Service of Process on Form U-2;
  • Filing fees in the following amounts would be imposed:
    • Initial and renewal filings
      • $1,200 (for offering amounts that exceeds $500,000)
      •  $300 (for offering amounts of $500,000 or less)
    • Amendment filings – $30
    • Consent to Service of Process on Form U-2 – $35
  • Form D filings and fees would be submitted electronically through the North American Securities Administrators Association Electronic Filing Depository (the “EFD”).
    Section 18(b)(2) (applicable to SEC-Registered Investment Companies):

Under the proposed revisions, the following filings and fees would be submitted through the EFD:

  • Form NF for each individual fund or portfolio offered;
  • Amendments upon any change to the information disclosed in the previous filing; and
  • A fee in the amount of $1,200.


The IPB proposed a new rule that would define the term “Finder” and require such persons to comply with broker-dealer registration and exam requirements.

“Finder” would be defined to mean “a person, firm, association, or corporation who as a part of a regular business, engages in the business of effecting transactions in securities for the account of others within or from this state, to the limited extent that such person, firm, association or corporation, receives compensation for introducing a prospective investor or investors to any broker, dealer or salesperson.”

S&K Observations

The proposed amendments were published in the New York State Register on April 15 and are subject to public comment until June 15. Seward & Kissel will monitor and keep our clients informed of developments regarding the proposal.


* The proposed Regulation A — Tier 2 filing requirements would be:

  • Uniform Notice Filing of Regulation A—Tier 2 Offering Form
  • Consent to Service of Process on Form U-2
  • Supplemental/Amendment filings each time an issuer files an amendment with the SE
  •  Filing fees in the amount of:
    • $1,200 (offering amounts over $500,000) and $300 (offering amounts of $500,000 or less)
    • $35 — Consent to Service of Process
    • $30 — Supplement/Amendment Notice