Tuesday, January 27, 2009

Proposed FINRA Rule 5122 to Impose Requirements Regarding Member Private Offerings

Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to adopt new FINRA Rule 5122. As proposed, the rule would require a member that engages in a private placement of unregistered securities issued by the member or a control entity to: (1) make certain disclosures to investors in a private placement memorandum (“PPM”): (2) file the PPM with FINRA: and (3) commit that at least 85 percent of the offering proceeds will be used for the business purposes identified in the PPM.

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