Does the GP Need to Register as a Broker-Dealer

Just like you can’t practice law without a law license or practice medicine without a medical license, you cannot raise capital for other people, including a fund, unless you A, have a broker-deal license, or B, you can find some exemption that you fall under. The one that specifically addresses us is this, what we call this issuer exemption. Again, it doesn’t only apply to the syndicator. It’s the managers, the co-sponsors, the manager of the managers, the employees, the attorneys, the agents, anybody who’s working on behalf of the fund. I’ve distilled it to those three, but the three are the fund cannot pay somebody transaction-based compensation. That person has to be primarily working on something other than raising money. That’s sort of the time, 50% plus one, they have to spend more time doing something versus raising capital. And number three, they have to be doing quote-unquote substantial duties.