The Financial Industry Regulation Authority (FINRA) formerly known as the National Association of Securities Dealers (NASD) filed a proposal rule with the SEC under Section 19(b)(1) of the Securities Exchange Act of 1934. Proposed FINRA Rule 5122 "Private Placements of Securities Issued by Members" would require a member engaging in a private placement of unregistered securities issued by a member or control entity to: (1) make certain disclosures to investors in a private placement memorandum ("PPM"); or (2) file the PPM with FINRA; and (3) commit that at least 85% of the offering proceeds will be used for the business purposes identified in the PPM. (Link to Notice and Comments).
Commentary and musings on the complex, fascinating and peculiar world that is securities regulation
Wednesday, July 02, 2008
FINRA Proposes Rule 5122 on Private Placements Issued by Members
By James Hamilton, J.D., LL.M.
The Financial Industry Regulation Authority (FINRA) formerly known as the National Association of Securities Dealers (NASD) filed a proposal rule with the SEC under Section 19(b)(1) of the Securities Exchange Act of 1934. Proposed FINRA Rule 5122 "Private Placements of Securities Issued by Members" would require a member engaging in a private placement of unregistered securities issued by a member or control entity to: (1) make certain disclosures to investors in a private placement memorandum ("PPM"); or (2) file the PPM with FINRA; and (3) commit that at least 85% of the offering proceeds will be used for the business purposes identified in the PPM. (Link to Notice and Comments).
The Financial Industry Regulation Authority (FINRA) formerly known as the National Association of Securities Dealers (NASD) filed a proposal rule with the SEC under Section 19(b)(1) of the Securities Exchange Act of 1934. Proposed FINRA Rule 5122 "Private Placements of Securities Issued by Members" would require a member engaging in a private placement of unregistered securities issued by a member or control entity to: (1) make certain disclosures to investors in a private placement memorandum ("PPM"); or (2) file the PPM with FINRA; and (3) commit that at least 85% of the offering proceeds will be used for the business purposes identified in the PPM. (Link to Notice and Comments).