FINRA and Private Placements: FINRA Proposal Expands Member Obligations in Connection with Private Offerings Under Rule 5123

Sullivan & Cromwell LLP - June 27, 2013

On June 20, 2013, the Financial Industry Regulatory Authority submitted a proposed rule change to the Securities and Exchange Commission regarding obligations of member firms under FINRA Rule 5123 when participating in certain private placements of securities. The rule change would require member firms to file the Private Placement Form required by Rule 5123 electronically and would expand the scope of the Form to require disclosure of additional information if known to the member. These proposed additional disclosure requirements may be of particular interest to member firms that participate in covered private placements. FINRA has requested that the rule change become effective immediately upon filing.