No — Regulation A does not require an issuer to sell through a registered broker-dealer. 17 CFR 230.251, Scope of exemption, imposes no intermediary condition, so a Reg-A+ offering may be self-underwritten and sold directly by the issuer. Most Reg-A+ issuers still engage a broker-dealer anyway, because state agent-licensing rules, escrow mechanics, AML and identity checks, and platform onboarding requirements narrow the self-underwritten path considerably below what the federal rule alone suggests.
The question matters because the two paths carry different cost structures, different timelines, and different failure modes. This breaks down what Reg-A actually requires, where the practical broker-dealer requirement comes from, what a broker of record does and does not cover, and how to decide which structure fits a given raise.
Reg-A has no intermediary mandate. Reg-CF does.
The contrast with Regulation Crowdfunding is the fastest way to see the point. A Reg-CF offering must be conducted exclusively through one intermediary registered with the SEC as either a broker or a funding portal — there is no self-hosted exception, as covered in our comparison of funding portals versus broker-dealers.
Regulation A contains no parallel provision. Rule 251 sets eligibility, tier limits, and offering conditions; it does not name a required intermediary. The plan of distribution is disclosed in the offering circular under 17 CFR 230.253, Offering circular, and an issuer-direct plan of distribution is a permitted disclosure, not a defect. Issuers routinely qualify Form 1-A offerings that name no underwriter at all.
The three distribution structures
| Structure | Who sells | Typical use | Main constraint |
|---|---|---|---|
| Self-underwritten (issuer-direct) | Issuer's own officers and employees | Smaller raises, strong existing audience, cost-sensitive issuers | State agent licensing; Rule 3a4-1 conditions; no built-in escrow or AML infrastructure |
| Broker-dealer of record | Issuer markets; a registered BD administers subscriptions on a best-efforts basis | The common Reg-A+ structure, including most platform-hosted raises | BD does not generate investor demand; fees layer on top of marketing costs |
| Managing broker-dealer or underwritten syndicate | BD and selling group actively solicit and allocate | Larger offerings, institutional participation, exchange-listing ambitions | Highest compensation load; FINRA corporate-financing review; limited availability for early-stage issuers |
Most Reg-A+ campaigns sit in the middle row. The issuer runs the acquisition engine and the broker of record handles subscription processing, investor onboarding checks, and funds flow — a division of labour that issuers frequently misread when budgeting.
Rule 3a4-1: when your own people can sell
If an issuer sells directly, the people doing the selling are participating in securities transactions without broker registration. The safe harbor for that is 17 CFR 240.3a4-1, Associated persons of an issuer deemed not to be brokers. It applies to a natural person who is a partner, officer, director, or employee of the issuer and who, among other conditions, is not subject to statutory disqualification, is not an associated person of a broker or dealer, and — the condition that decides most cases — "is not compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities."
The rule then requires meeting one of three alternative condition sets in paragraph (a)(4). The one most Reg-A+ issuers look to is (a)(4)(ii): the person primarily performs substantial duties for the issuer other than securities transactions, was not a broker-dealer or associated person of one in the preceding 12 months, and does not participate in selling an offering for any issuer more than once every 12 months. A third route, (a)(4)(iii), limits participation to preparing written communications approved by an officer or director, responding to investor-initiated inquiries using offering-document content, and ministerial work.
Two practitioner notes. First, paragraph (b) states that no presumption of a Section 15(a) violation arises merely because someone falls outside the safe harbor — it is a safe harbor, not the boundary of legality. Second, the compensation condition is why transaction-linked pay is the recurring problem in capital-raising engagements generally; it is the recurring structural problem in capital-raising engagements generally.
Where the practical requirement actually comes from
State broker-dealer and agent registration
Reg-A+ Tier 2 securities sold to qualified purchasers are covered securities for purposes of state registration, which is why Tier 2 avoids state-by-state qualification while Tier 1 does not. That preemption addresses registration of the securities. It does not displace state authority over broker-dealer and agent licensing or state antifraud enforcement. An issuer selling directly may still face issuer-agent registration or notice requirements that vary by state, and the analysis is jurisdiction-specific. Our breakdown of state blue sky filings and NSMIA preemption maps which layer is preempted and which is not. Engaging a broker-dealer that is already registered in the relevant states is, for many issuers, the reason the BD exists in the structure at all.
Funds handling and escrow
Reg-A does not impose the escrow architecture that Regulation Crowdfunding does. But where an offering has a minimum offering amount or otherwise conditions closing, investor funds are typically held by a bank or a broker-dealer until conditions are met. When a broker-dealer participates in that flow, 17 CFR 240.15c2-4, Transmission or maintenance of payments received in connection with underwritings, governs how promptly it must transmit or deposit payments and how contingency-offering proceeds must be held. Issuers without a broker-dealer need to arrange a bank escrow and a compliant funds-flow process themselves.
Investor onboarding checks
Broker-dealers operate customer identification and anti-money-laundering programs as a condition of their registration and FINRA membership. A self-underwriting issuer has no such program by default and must build or buy identity verification, sanctions screening, and record-keeping. For a Tier 2 raise with a large retail investor count, this is operational infrastructure, not a checkbox.
Platform onboarding
Many investor-portal technology providers require a broker-dealer in the stack — sometimes an affiliated one — before they will process subscriptions. If a specific platform is already part of the plan, its requirements may settle the question before the legal analysis does. Reviewing the platforms we work across before committing to a distribution structure avoids re-architecting mid-raise.
Bad-actor diligence flows through whoever solicits
Engaging a selling agent expands the population subject to Reg-A's disqualification screen. Under 17 CFR 230.262, Disqualification provisions, the covered persons include the issuer, its directors and participating officers, 20 percent voting beneficial owners, promoters, and "any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities" — plus that solicitor's general partners, managing members, and participating officers.
The practical consequence: a disqualifying event in the history of a placement agent or its participating personnel can reach the issuer's own exemption. Diligence on a selling agent is exemption diligence, and it belongs in the timeline before engagement rather than after.
What a broker of record does not do
This is where budgets break. A best-efforts broker of record administers the offering; it is not an investor-acquisition function. It does not build the audience, run the media, write the landing pages, or manage the email sequence that converts interest into subscriptions. Issuers who read the BD engagement as "distribution" and then discover, post-qualification, that no one is generating traffic lose the most valuable window in the raise — the period immediately after qualification when momentum compounds.
Treat the two as separate line items from the start: an administration and compliance layer, and an acquisition layer. Both are required for a Reg-A+ offering that reaches its target; neither substitutes for the other.
Working the decision in order
- Confirm the tier. Tier 1 keeps state qualification in scope; Tier 2 preempts securities registration but not agent licensing.
- Map the states. Ask counsel which states the offering will target and what issuer-agent or broker-dealer registration each requires for the contemplated selling method.
- Test the Rule 3a4-1 fit. Identify who would sell, how they are paid, whether they meet one of the (a)(4) condition sets, and whether the compensation structure survives the commission condition.
- Resolve funds flow. Decide who holds subscription funds, under what escrow agreement, and against what closing conditions.
- Check the platform's requirements. Confirm whether the chosen subscription technology requires a broker-dealer of record before you price the alternatives.
- Run bad-actor diligence on any paid solicitor under Rule 262 before signing.
- Budget the acquisition layer separately from the intermediary layer, and staff it before qualification rather than after.
Sources
- U.S. Electronic Code of Federal Regulations. 17 CFR § 230.251 — Scope of exemption. https://www.ecfr.gov/current/title-17/section-230.251
- U.S. Electronic Code of Federal Regulations. 17 CFR § 230.253 — Offering circular. https://www.ecfr.gov/current/title-17/section-230.253
- U.S. Electronic Code of Federal Regulations. 17 CFR § 230.262 — Disqualification provisions. https://www.ecfr.gov/current/title-17/section-230.262
- U.S. Electronic Code of Federal Regulations. 17 CFR § 240.3a4-1 — Associated persons of an issuer deemed not to be brokers. https://www.ecfr.gov/current/title-17/section-240.3a4-1
- U.S. Electronic Code of Federal Regulations. 17 CFR § 240.15c2-4 — Transmission or maintenance of payments received in connection with underwritings. https://www.ecfr.gov/current/title-17/section-240.15c2-4
Frequently Asked Questions
Do you need a broker-dealer for a Reg-A+ offering?
Not as a matter of federal law. Regulation A imposes no intermediary requirement, so an issuer may conduct a self-underwritten offering and sell directly. State agent-licensing rules, escrow and funds-handling mechanics, investor onboarding checks, and platform requirements are what lead most issuers to engage one anyway.
What is a broker-dealer of record in a Reg-A+ raise?
A broker-dealer of record is a registered firm engaged on a best-efforts basis to administer the offering — processing subscriptions, running identity and AML checks, and managing the funds flow into escrow. It is an administrative and compliance role. It does not include generating investor demand or running the marketing campaign.
Can company employees sell a Reg-A+ offering without registering as brokers?
Rule 3a4-1 provides a safe harbor under which an issuer's partners, officers, directors, or employees are not deemed brokers solely by reason of participating in the sale, provided they meet the rule's conditions. Those conditions include no statutory disqualification, no transaction-based compensation, no current association with a broker-dealer, and satisfying one of three alternative condition sets. Counsel should confirm the fit before anyone starts selling.
Does Reg-A+ Tier 2 preemption mean I can skip state broker-dealer registration?
No. Tier 2 preemption addresses state registration and qualification of the securities sold to qualified purchasers. States retain authority over broker-dealer and agent licensing and over antifraud enforcement. Whether an issuer or its personnel must register as agents in a given state is a separate, jurisdiction-specific question for counsel.
Does a Reg-A+ offering require escrow?
Regulation A does not impose the escrow structure that Regulation Crowdfunding does, but offerings with a minimum offering amount or other closing conditions typically hold investor funds at a bank or broker-dealer until those conditions are met. Where a broker-dealer handles the payments, Rule 15c2-4 governs how those funds must be transmitted or maintained.
Can a broker-dealer be paid a percentage of the capital raised?
Transaction-based compensation is generally the province of registered broker-dealers, which is precisely why the registration status of anyone paid on the raise matters. Fee arrangements should be structured with counsel, and any paid solicitor must be run through the Rule 262 bad-actor screen, since a disqualifying event in the solicitor's history can affect the issuer's own exemption.
Build the layer the broker-dealer will not cover
Whichever structure you choose, the broker-dealer question settles who administers the offering — not who fills it. Growth Turbine has provided marketing support across more than $490M in aggregate issuer-reported totals and 200+ campaigns supported across Reg-CF, Reg-D 506(c), Reg-A+, and tokenized securities offerings, and the acquisition layer is the part issuers consistently under-resource. If you are planning a Reg-A+ raise, our Reg-A+ equity crowdfunding marketing services are built to run alongside your broker of record and your chosen portal. To map a distribution structure and an investor-acquisition plan to your specific offering, contact our team.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute legal, financial, or investment advice. Always consult with qualified legal counsel and financial advisors before launching a capital raise.
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