On May 6, 2011, the staff of the Division of Trading and Markets of the SEC issued a no-action letter stating that it would not recommend enforcement action to the SEC against Roadshow Broadcast, LLC, or its officers, directors and employees under Section 15(a) of the Exchange Act if Roadshow Broadcast, for a flat service fee, transmits over the Internet, without registering as a broker or dealer, road shows that relate to public offerings of securities.

Roadshow Broadcast plans to provide private companies with a cost-effective method to create and stream video and audio of their road shows over the Internet. The webcasts will be accessible only to qualified institutional buyers (QIBs). The QIB status of each potential investor will be solely determined by the broker-dealer that is the client of Roadshow Broadcast.

In taking its position, the staff noted that neither Roadshow Broadcast or its personnel would:

  • provide any advice, endorsement, analysis or recommendation about the merits of the stock of any issuer for which it transmits a road show
  • receive compensation from its client broker-dealers other than a flat transmission fee and that such fee would not be made contingent upon the outcome or completion of any securities transactions, upon the size of the offering, or upon the number of prospective investors accessing the road show
  • participate in any purchase or sale negotiations between the investors and underwriters or issuers arising from any road show
  • have any role in effecting securities transactions
  • receive, transfer or hold any investor funds or securities
  • hold itself out as providing any securities broker-dealers acting as underwriters
  • In addition, the staff noted that no securities transactions or negotiations would occur by or through Roadshow Broadcast or its personnel, and that Roadshow Broadcast would not receive payments of any kind from persons accessing any road show.