Securities Issuers Broker Dealer Agreement

Summary

Securities issuers generally do not require a broker-dealer agreement to sell their own securities, provided they comply with state and federal regulations. In Colorado, a digital asset backed solely by real estate appreciation could be classified as a security under the Howey Test, which considers factors like investment of money, common enterprise, expectation of profit, and efforts of others.

Full Conversation

Do securities issuers need a broker-dealer agreement to sell their own securities?
Securities issuers generally do not need a broker-dealer agreement to sell their own securities. They can sell directly to investors through exemptions like Regulation D or crowdfunding rules. However, compliance with state and federal regulations is critical.
Is there a specific situation or type of security you are concerned about?
Would a digital asset backed by the appreciation of a real estate property alone and no rental income be a security? The digital asset only moves with the appreciation of the home, and there is no management company, only the normal homeowner in the house.
In Colorado, a digital asset backed by the appreciation of a real estate property alone could be considered a security. According to the Howey Test used by the SEC, if an investment involves:
- An investment of money
- In a common enterprise
- With an expectation of profit
- Derived from the efforts of others
it may be classified as a security. Since the digital asset's value is tied to the appreciation of the property, it might meet these criteria.
Would you like more detailed information on the Howey Test or SEC regulations?