FINRA's Corporate Financing Department reviews the filings of public and private offerings of securities in which FINRA member firms are participating. FINRA’s review provides firms with regulatory guidance as to what constitutes fair and reasonable underwriting arrangements and complements the SEC’s registration process for issuers.
Rule 5110: Corporate Financing Rule — Underwriting Terms and Arrangements – the principal rule regulating compensation to be received by FINRA member firms and associated persons participating in public offerings of securities. The rule obligates firms to observe high standards of commercial honor and just and equitable principles of trade while conducting business.
Rule 5121: Public Offerings of Securities With Conflicts of Interest – regulates the participation of FINRA member firms and associated persons in the distribution of a public offering of debt or equity securities if the firm and/or its associated persons, parent or affiliates have a conflict of interest that arises as a result of ownership of the issuer's common equity, preferred equity, or subordinated debt or a partnership interest.
Rule 5122: Private Placements of Securities Issued by Members – requires FINRA member firms and associated persons that engage in a private placement of the firm's securities or those of a control entity (member private offering or MPO) to comply with certain disclosure and filing requirements and limitations of the use of proceeds.
Rule 5123: Private Placements of Securities – requires each FINRA member firm that sells an issuer's securities in a private placement, subject to certain exemptions, to file with FINRA a copy of any private placement memorandum, term sheet or other offering document the firm used within 15 calendar days of the date of sale, or indicate that it did not use any such offering documents.
Rule 2310: Direct Participation Programs – applies to public offerings of direct participation programs and provides that underwriting compensation from any source may not exceed FINRA guidelines.
Firms can make the required filings through the following systems, which are available in the FINRA Firm Gateway.
Distribution Manager is used by the lead manager or book runner of a firm-commitment initial public offering (IPO) or follow-on offering to report underwriting commitments and retentions on behalf of the syndicate. The main system page offers information about the system, a list of related Rules and instructions on how to request access.
The Public Offering System facilitates filings required under FINRA's Corporate Financing Rules (Rules 5110, 5121 and 2310). The main system page offers user guides, frequently asked questions, login information and instructions on how to request access.
The Private Placement Filing System facilitates the filing of offering documents used in connection with the sale of an applicable private placement as required by FINRA Rules 5122 and 5123. The main system page offers information about the system, a list of related Rules, a user guide, frequently asked questions and instructions on how to request access.
Joseph E. Price, SVP, Corporate Financing/Advertising Regulation – (240) 386-4642
Paul M. Mathews, VP, Corporate Financing – (240) 386-4639
Lisa Toms, Director – (240) 386-4661
|Fax:||(240) 386-4654 or (240) 386-4656|
Corporate Financing Department
9509 Key West Avenue, 5th Floor
Rockville, MD 20850