FAQS

Advisory professionals who participate in securities transactions andreceive transaction-based compensation are generally required tooperate through a registered broker-dealer. This commonly applies tocapital raising activities, buy and sell-side advisory, private placements, and mergers and acquisitions transactions involving securities. Affiliation with a registered broker-dealer provides the supervisory and compliance infrastructure necessary to support securities-related activities conducted in accordance with applicable laws and regulations.

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Yes.The fact that investors are accredited does not eliminate the requirement to be registered as a broker-dealer or affiliated with a FINRA registered broker-dealer.

Broker-dealer registration requirements are generally based on the activities performed and the form of compensation received, not the type of investors. In particular, transaction-based compensation is a key indicator of broker activity.

Even in private placements conducted under Regulation D, intermediaries who solicit investors, participate in negotiations, or receive success-based compensation are required to operate through a registered broker-dealer.

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The size of the transaction does not, by itself, determine whether broker-dealer registration is required.

UnderU.S. securities laws, the key considerations are the nature of theactivities performed and the type of compensation received. Inparticular, compensation that is contingent upon the successful completion of a securities transaction, often referred to astransaction-based compensation or deal-fee, is commonly viewed by regulators as an indicator of broker activity.

Accordingly, even in smaller transactions, individuals who:

• introduce or solicit investors
• Participate in negotiations or transaction structuring
• Receive compensation tied to the outcome of a securities transaction

Are likely to be required to be registered as a broker-dealer andaffiliated with a FINRA registered broker-dealer.

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Yes. Passing FINRA qualification exams (such as the SIE or representative-level exams) does not, on its own, permit an individual to engage in securities transactions.

To lawfully conduct securities-related activities and receive transaction-based compensation, an individual must be appropriately registered and affiliated with a FINRA registered broker-dealer, and act under that firm’s supervision. Registrations are maintained through a sponsoring broker-dealer and are not active on a standalone basis.

Accordingly,individuals who are no longer affiliated with a registered broker-dealer are generally not permitted to engage in securities transactions until they are properly re-affiliated and registered.

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Engaging in securities-related activities and receiving transaction-based compensation without appropriate broker-dealer registration or affiliation can result in significant regulatory,legal and economic consequences.

For the intermediary, this may include:

• Regulatory enforcement actions by the SEC, FINRA or state securities regulators
• Civil liability, including claims brought by issuers, investors or counter parties
• Disgorgement of all transaction-related compensation
• Inability to enforce fee agreements, as courts have in certain cases declined to uphold contracts involving unregistered broker activity
• Potential penalties, injunctions or restrictions on future activity
• Reputational impact, which may affect future mandates and professional standing

For issuers, the involvement of an unregistered intermediary may introduce:

• Heightened regulatory scrutiny or enforcement risk
• Potential disclosure deficiencies, particularly regarding compensation arrangements
• Transaction uncertainty, including challenges to the structure or process
• Exposure to rescission claims or investor litigation

For shareholders and investors,potential implications may include:

• Rescission rights, in certain circumstances involving securities law violations
• Litigation exposure, including claims related to improper transaction processes
• Economic uncertainty, particularly if transaction terms are challenged or revisited

Regulators and courts frequently view transaction-based compensation as a central indicator of broker activity, and enforcement actions in this area are well established.

For these reasons, professionals engaging in securities-related transactions must operate within a properly registered and supervised broker-dealer framework, where activities are conducted in accordance with applicable securities laws and regulatory standards.

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Licensing requirements depend on the nature of the securities activities conducted. Common licenses include the Series 79 Investment Banking Representative license, the Series 7 General Securities Representative license, the Series 82 Private Securities Offerings Representative license, and the Series 24 General Securities Principal license for supervisory responsibilities.Licensing requirements are reviewed during the affiliation process based on the professional’s intended activities.

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Establishing and maintaining a FINRA-registered broker-dealer requires significant capital, regulatory infrastructure, and ongoing supervisory obligations. Many experienced professionals prefer to affiliate with an established broker-dealer platform that provides the necessary regulatory framework while allowing them to focus on client relationships and transaction execution.

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Affiliation typically begins with a confidential discussion regarding the professional’s advisory practice and intended securities activities. Licensing and background requirements are reviewed,regulatory filings including Form U4 are submitted, and the professional is on boarded into AAC’s compliance and communications systems. Timing may vary depending on licensing requirements and regulatory considerations.

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Once licensing requirements and background checks are complete, the on boarding process typically takes three to four weeks.

Timing may vary depending on licensing requirements, regulatory filings, and the nature of the professional’s intended activities.

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Yes. Aspen Alpine Capital operates a white-label broker-dealer platform that allows affiliated professionals to maintain their own brand identity and advisory practice while conducting securities activities through AAC’s regulated framework.

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Affiliated professionals retain responsibility for their client relationships, advisory mandates, and business development activities. Securities transactions conducted through AAC are subject to regulatory supervision under the firm’s written supervisory procedures, allowing professionals to maintain independence while operating within a compliant regulatory structure.

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Affiliated professionals may conduct a range of securities-relatedadvisory activities through AAC, including:

• M&A advisory transactionsinvolving securities
• Private placements and capital raisingactivities
• Buy-side and sell-side advisory mandates
•Recapitalizations and minority investments
• Equity and debt financing transactions

All such activities are conducted subject to regulatory requirements and supervisory review.

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AAC provides a regulatory framework that includes supervisory review of securities-related activities, communications oversight, AML and KYC procedures, and regulatory reporting. The objective is to provide appropriate regulatory supervision while allowing experienced professionals to focus on client relationships and transaction execution.

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Cross-border transactions may be possible depending on the structure of the transaction and applicable regulatory considerations. Certain transactions may require additional review to ensure compliance with U.S. securities laws and other relevant regulatory regimes.

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