Regulatory Notice 10-60

SEC Approves New FINRA Rule to Address Abuses in the Allocation and Distribution of New Issues

Effective Date: May 27, 2011

New FINRA Rule 5131 (New Issue Allocations and Distributions), which further and more specifically prohibits certain abuses in the allocation and distribution of new issues goes into effect on May 27, 2011. Among other things, the rule prohibits quid pro quo allocations and “spinning,” and addresses the conduct of member firms (and associated persons) in
the areas of book-building, new issue pricing, penalty bids, trading and waivers of lock-up agreements.

The text of the amendments can be found in the online FINRA Manual at

Questions regarding this Notice should be directed to:

  • Gary L. Goldsholle, Vice President and Associate General Counsel, Office of General Counsel (OGC), at (202) 728-8104; or
  • Racquel L. Russell, Assistant General Counsel, OGC, at (202) 728-8363.