Experienced professionals assisting broker-dealer and registered investment adviser clients with membership applications, regulatory issues and inquiries, and compliance.
Experienced professionals assisting broker-dealer and registered investment adviser clients with membership applications, regulatory issues and inquiries, and compliance.
Did you know FINRA has amended its Capital Acquisition Broker (CAB) rules, giving these specialized firms significantly greater flexibility in private markets?
As of March 25, 2026, the amendments reflect FINRA's broader initiative to modernize its regulatory framework while keeping core investor protections firmly in place.
The amendment to the rule expands what CABs can do in several meaningful ways:
• Modified "Institutional Investor" definition - now includes eligible employees of issuer clients
• Buy- and sell-side representation permitted in sales of newly issued, unregistered securities
• Buyer and seller representation allowed in change of control transactions
• Secondary transactions now permitted - CABs may act as placement agent or finder in sales of unregistered securities between institutional investors, provided the sale qualifies for a Securities Act registration exemption
• Associated persons may now participate in private securities transactions (PSTs) under FINRA Rule 3280 standards
• Securities as compensation formally codified under new CAB Rule 511
CABs now have more flexibility to represent a wider range of parties and participate in a broader set of transactions, particularly in the private markets,
while keeping their model distinct from full-service broker-dealers. The changes reflect both industry feedback and FINRA's commitment to modernizing its regulatory
framework without undermining investor protections.
CABs and firms considering CAB registration should review their current business models and compliance programs to assess how these expanded permissions may apply.
Diles Consulting has deep experience navigating FINRA broker-dealer regulatory issues, including CAB registration, compliance program development, and ongoing supervisory
framework design. Whether you are evaluating CAB registration for the first time or assessing how these rule changes affect your existing operations, our team can help you
understand your obligations and position your firm for success. Contact us today to learn more.
Regulatory Notice 26-04 | FINRA.org