b'Chapter 26How to Legally Compensate Capital Raisers or Finders Since passage of the National Securities Markets Improvement Act of 1996 (NSMIA), in a Regulation D, Rule 506 securities offering, the issuer may sell its own securities in any state without: a) registering the securities offering, or b) being registered with the SEC or state as a broker or dealer.UndertheSecuritiesExchangeActof1934,Section3(a)(4)(A),a brokerisbroadlydefinedasanypersonengagedinthebusinessof effecting transactions in securities for the account of others. Third parties or even internal officers, directors, or employees who sell securities for a fee based on the amount they have sold generally fall within this definition. Thus,anyonewhoispaidtransaction-basedcompensationforselling securitiesonbehalfoftheissuerisnotexemptfromregistrationasa securities broker or dealer. Think of this like a real estate transaction. Most people understand that a person can sell their own real estate without a license (the proverbial FSBOfor sale by owner), but they cannot legally be compensated for selling someone elses real estate unless they have a real estate broker or sales agent license. The issuer exemption for securities offerings operates in much the same way. You can sell your own securities without a license, as long as you follow therulesforanexemption,butyoucantbepaidtransaction-based 239'