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Registered Reps and Broker-Dealer Alert: Recent SEC No-Action Relief Allows B-D’s to Pay Transaction-Based Compensation to Personal Service, Pass-Through Entities Rather Than to Registered Persons, Subject to Limitations
By Erwin J. Shustak, Managing Partner of Shustak Reynolds & Partners, P.C. posted on Monday, January 19, 2026.
On November 17, 2025, the staff of the Securities and Exchange Commission (“SEC”) issued a no-action letter to the Financial Services Institute that meaningfully alters the regulatory landscape governing how registered representatives may receive transaction-based compensation. Previously, there was an absolute ban on broker-dealers paying transaction-based compensation to anyone other than the registered person generating the commissions. For the first time, however, the SEC staff stated it would not recommend enforcement action when a broker-dealer pays transaction-based compensation to an unregistered, pass-through, personal services entity wholly owned by one or more registered representatives, provided a detailed set of conditions is satisfied. Read More
California’s AB 692: Closing the Door on “Stay-or-Pay” Provisions
By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D. of Shustak Reynolds & Partners, P.C. posted on Tuesday, January 13, 2026.
Effective January 1, 2026, AB 692 marks California’s newest effort to limit employer-imposed restraints on workers by banning repayment obligations tied to separation from employment. The law builds on California’s aggressive pro-mobility statutory framework, particularly recent expansions to Business & Professions Code § 16600, and creates new compliance obligations for employers who use training-repayment agreements, “clawback” provisions, or similar contract structures. Read More
SEC Announces 2026 Examination Priorities
By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D. of Shustak Reynolds & Partners, P.C. posted on Friday, November 28, 2025.
On November 17, 2025, the SEC Division of Examinations (the “Division”) issued its annual Examination Priorities (“Exam Priorities”) for fiscal year 2026. Exam Priorities outline the key areas where the SEC intends to focus its oversight in the coming year, including heightened attention to cybersecurity, operational controls, and core investment adviser compliance obligations. Read More
Don’t Forget: Continuing Education for IARS
By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D. of Shustak Reynolds & Partners, P.C. posted on Monday, November 24, 2025.
The deadline for California-registered investment adviser representatives (“IARs”) to complete their required Investment Adviser Representative Continuing Education (“IAR CE”) hours is quickly approaching. Every IAR registered in California must comply with these requirements, regardless of whether they are associated with a state-registered or federally covered investment adviser. Read More
Future-Proofing Your Firm: Why Succession Planning Is Smart Business
By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D. of Shustak Reynolds & Partners, P.C. posted on Thursday, October 30, 2025.
Do you have a plan for your business’s future? What would happen to your business if a sudden unforeseen event made you unable to work? Would your family or estate know who to contact or how to operate the business in your absence? Planning ahead is an essential part of protecting your business, your clients, and your legacy. Read More
SEC Withdraws Several Proposed Regulations
By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D. of Shustak Reynolds & Partners, P.C. posted on Wednesday, August 6, 2025.
On June 12, 2025, the SEC withdrew fourteen regulations that were proposed over the past three years, stating they have no intent to issue final rules regarding the proposed.[1] When asked about the mass withdrawal, the SEC stated it is “getting back to [its] roots.”[2] Amongst the rules withdrawn included: Read More
FINRA Proposes Increasing Gift Limit
By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D. of Shustak Reynolds & Partners, P.C. posted on Wednesday, August 6, 2025.
Earlier this year, FINRA released its proposal to update Rule 3220, Influencing or Rewarding Employees of Others (the “Gift Rule”)[1]. The Gift Rule prohibits any member or person associated with a member, directly or indirectly, from giving or allowing to be given anything of value in excess of $100 to any person where such gift is in relation to the business of the recipient[2]. Similar to the current rule, this proposed rule would not apply to gifts from a member to its own associated persons, or gifts from a member or its associated person to an individual retail customer[3] Read More
SEC Considers Increase to the Minimum AUM Threshold for Investment Adviser Registration
By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D. of Shustak Reynolds & Partners, P.C. posted on Friday, June 6, 2025.
At the annual conference on federal and state securities cooperation, the Acting SEC Chairman, Mark T. Uyeda, announced the SEC may revisit the current minimum asset under management (“AUM”) threshold for investment advisers to registered with the SEC. The last time the AUM threshold was increased was the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”). The SEC’s goal is to sustain its focus on oversight of large investment advisers and maintain the balance between federal and state registered advisers. Read More
NASAA Updates Model Rule to Restrict Use of the Term ‘Advisor’
By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D. of Shustak Reynolds & Partners, P.C. posted on Friday, May 9, 2025.
In early April 2025, NASAA amended its model rules for Dishonest or Unethical Business Practices of Broker-Dealers and Agents (“Conduct Rule”) to limit use of the term “advisor” or “adviser” in title, purported credential, or professional designation of a broker dealer, without additionally being licensed as an investment adviser or investment adviser representative. Read More
California’s Clean Slate Act vs. Federal Disclosure Requirements for Financial Advisors
By George C. Miller, Partner of Shustak Reynolds & Partners, P.C. posted on Wednesday, May 7, 2025.
California’s Clean Slate Act, composed of Assembly Bill 1076 and Senate Bill 731, aims to expand opportunities for individuals with past criminal convictions by allowing automatic record sealing under specific conditions. While these laws provide significant relief at the state level, they do not override federal regulatory requirements—particularly for individuals pursuing licensure in federally regulated activities such as the financial services industry. Read More