Extension of FINRA Rule 5122 to All Private Offerings

The Capital Markets Committee of SIFMA provides comments to the Financial Industry Regulatory Authority (FINRA) on a proposed amendment (Revised Rule) to extend the application of FINRA Rule 5122 to all private offerings in which a member participates, FINRA Regulatory Notice 11-04.  Specifically, a member participating in the distribution of a private offering, other than those offerings or sales exempt under the Revised Rule, will be required to file a private placement memorandum or other offering document with FINRA’s Corporate Financing Department for post-offering review.   SIFMA believes FINRA should consider amending the Revised Rule to regulate members’ participation in private offerings, rather than requiring issuers, or members to compel issuers to use a certain percentage of offering proceeds for business purposes.