November 11, 2020
First, I applaud your efforts. As a securities attorney, I have to explain the existing unregistered finders rules (or lack thereof) numerous times/month and I believe there a lot of people who are not observing the current restrictions, so creating a solid framework for unlicensed finders to follow is a step in the right direction.
However, why does the proposal exclude persons involved in structuring the transaction or negotiating the terms of the offering, or those that participate in preparation of sales materials? It seems that those involved in structuring an offering, which could include licensed professionals, such as attorneys and CPAs, or those preparing sales materials, such as marketing professionals would be in the best position to know potential investors whom they could refer - and who might need such investments for their portfolios. Simply because they had a hand in the offering, such people would be best equipped to understand its viability. I would like to see these restrictions removed. If the intent is to prevent crowdfunding companies from springing up, they are already excluded because they aren't natural persons. These exclusions seem over-broad, and I did not see an adequate explanation in the proposed rules as to why they are needed.
My second comment relates to whether this rule will pre-empt individual state rules regarding paying unlicensed brokers. Many states deny the Regulation D, Rule 506 safe harbor to issuers who sell securities through unlicensed brokers in their state. If adopted, the Finders rule should have a way to pre-empt those laws. Otherwise, there will be much confusion and non-compliance within the states that have those rules creating further uncertainty for issuers and Finders who operate on a nationwide basis.