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Transaction-based compensation

Payment contingent on whether and how much capital closes. One of the strongest indicators that a person is acting as a broker under US securities law.

Transaction-based compensation — Payment contingent on whether and how much capital closes. One of the strongest indicators that a person is acting as a broker under US securities law.

This is the single factor regulators weight most heavily in determining broker status, and it isn't necessarily cured by simply calling an arrangement something else — conduct and compensation structure determine the legal analysis, not the label on the engagement letter.

Frequently asked questions

Is transaction-based compensation always illegal for an unregistered person?

Not automatically illegal, but it is one of the strongest indicators of broker activity requiring registration under US securities law, and arrangements built around it carry real legal risk without proper structuring and advice.

Why do introducers sometimes avoid transaction-based fees?

Precisely to reduce the risk of being treated as an unregistered broker under Exchange Act Section 15(a) — some introducers instead use flat retainers or per-introduction fees structured to avoid this specific exposure.

Nothing on this page is legal, tax, or investment advice. SeRuM is not a registered broker-dealer, not a placement agent, and not an investment adviser.

Broker dealer rules and findersRelated reading.FinderAn intermediary who introduces parties without soliciting or negotiating. The status of fi Placement agentAn intermediary engaged to raise capital for a specific offering, typically compensated as

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