Guidance on Regulatory Compliance: Broker Dealers, Investment - - PowerPoint PPT Presentation

Guidance on Regulatory Compliance:

Broker Dealers, Investment Advisers and Enhanced Integrity Measures

Enrique Gonzalez, Fragomen W orldwide Jeff DeCicco, CanAm Enterprises LLC John O’Shea, Global Alliance Securities Peyman Attari, AISA Investment Advisers LLC Moderator: Laurie Roberts, Civitas Capital Group 1

Panel 4B

Introduction

• Laurie Roberts – Civitas Capital Group
• Jeff DeCicco – CanAm Enterprises, LLC
• John O’Shea – Global Alliance Securities
• Peyman Attari – AISA Investment Advisers LLC
• Enrigue Gonzalez – Fragomen W orldwide

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Overview Set the Stage

• W hat is a Broker/Dealer?

− A firm that engages in the business of buying or selling securities on its own behalf or for others − License granted by Securities & Exchange Commission − Member of self regulatory organization such FINRA (Financial Industry Regulatory Authority − Individuals must pass qualifying examination and go through a background check − Firm is subject to oversight by FINRA 3

Overview Set the Stage

• W hat is Registered Investment Adviser?

‾ Individual or company who is paid for providing advice about securities to their clients ‾ Registered with Securities and Exchange Commission (SEC)

• r state securities regulator

‾ Fiduciary duty to act in the clients best interest ‾ Full disclosure and management of conflicts of interest 4

Overview Set the Stage

• How Investment Advisers (IA) and Broker/Dealers (B/D)

different?

‾ Advisers provide professional advice and receive a management fee ‾ Broker/Dealers are transaction focused and pay a commission ‾ Advisers have a fiduciary duty ‾ Broker/Dealers required to be a member of self regulatory

• rganization such as FINRA
• How are IA and BDs similar?

‾ Required to have written policies and procedures ‾ Registered and regulated ‾ Investor protection ‾ Structure for compensation

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QUESTIONS AND ANSW ERS W ITH PANELIST

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The Role of the Broker Dealer in Today’s EB-5 Market

The EB-5 investor market can be divided into 3 categories:

• 1. China
• 2. Newer Markets
• 3. US Sales

China

• Existing mature infrastructure
• Agents are VERY involved in the sales process
• Projects are heavily marketed
• Agents handle offering documents and explain projects
• Agents are registered, in most cases, with the Chinese

government for entry/exit business

• W ith the existing set up, a broker dealer would not work
• A dramatic reorganization of the business would be

required for the broker dealer structure to be put in place

2nd Tier Markets

• Markets include Russia, India, Vietnam, Brazil, etc.
• Markets are not mature yet
• There is no agent structure in place
• It is possible to put broker dealer structure in place
• Limit the role of the agent to introduction
• All “sales activity” to take place at the broker dealer level

U.S. Sales

• Any sale taking place inside the US
• Foreign students in the US, foreign persons in the US on

temporary visas

• If any part of the solicitation or sale takes place onshore,

it is a US sale

• If a commission or “finder’s fee” is paid, it can only be

paid to a broker

• These transactions MUST be run through a broker dealer

Proposed Integrity Measures

• Department of Homeland Security
• Regional Centers
• Investors

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Department of Homeland Security

• Authority to conduct criminal background checks and
• btain biometric information from individuals involved in

the regional center program

• Debar individuals, and suspend or terminate regional

centers based on non-compliance and other factors

• Deny or revoke petitions for fraud, misrepresentation, or

national security concerns

• Establish and EB-5 Integrity fund to provide rigorous
• versight, funded by regional center program

participations

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Regional Center & Investors

• New compliance and reporting requirements to ensure

regional center compliance with securities law

• Annual reporting and accounting requirements for

regional center operators

• New requirements and guidelines for 3rd party promoters
• r other affiliated with marketing or promoting regional

center investment projects

• New requirements to ensure investor’s funds are derived

from a legitimate and lawful source

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Transparency & Additional Oversight

• Provisions to ensure USCIS engages in a proper and non-

preferential way with any person or entity involved in the EB-5 program

• Government Accountability Office and Inspector General

reports required

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W rap Up & Takeway

• FINRA (Financial Industry Regulatory Authority) and SEC

(United States Securities & Exchange Commission) rules and regulations

• Broker/Dealer and Investment Advisor
• Enhance compliance measures
• Ongoing compliance management with the rules and

regulations

• Investor Protection

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Compliance Checklist

 Due Diligence=Policy & Procedures, Background Checks, Review Appropriate Documents  Full Disclosure=All Fees, W ritten Acknowledgement, Use of Proceeds, Offering Documents  Policies & Procedures=Accurate Agreements, Code of Conduct  Pay attention to “Red Flags”  Document, Document and Document Actions

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Questions?

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• Laurie Roberts:
• laurie.roberts@civitascapital.com
• http://civitascapital.com/
• Enrique Gonzalez:
• egonzalez@fragomen.com,
• http://www.fragomen.com/
• Jeff DeCicco:
• jdecicco@canamenterprises.com
• http://www.canamenterprises.com/
• John O’Shea:
• joshea@gassec.com
• http://www.globalalliancesecurities.com/
• Peyman Attari:
• p.attari@aisa.us.com
• http://aisaeb5.com/

For More Questions, Contact:

This Break is Brought to You By: Greengate Consulting LLC

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Disclaimer This presentation outline and the presentation itself are for general educational purposes only and are not intended to provide specific guidance

• r legal advice about what to do or not to do in any

particular case. You should not rely on this general information to make decisions about specific immigration matters. If you are not yourself a lawyer, you should seek the assistance

• f an immigration lawyer to help you resolve

these issues.

• Thank you.

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