Regulatory Notice 16-07

SEC Approval of FINRA Rule 4518 (Notification to FINRA in Connection with the JOBS Act)

Effective Date of FINRA Rule 4518 Notification Provisions: January 29, 2016; Effective Date for SEC Regulation Crowdfunding (Other Than Registration Requirements): May 16, 2016

Executive Summary

The SEC approved new FINRA Rule 4518 as part of FINRA’s proposal to establish the new Funding Portal Rules and related forms. This Notice provides further guidance on new Rule 4518, which applies to registered broker-dealer members of FINRA that contemplate acting as intermediaries in transactions involving the offer or sale of securities pursuant to the crowdfunding provisions of Title III of the JOBS Act and the SEC’s Regulation Crowdfunding. Under the new rule, registered broker-dealer members must provide notification to FINRA, as specified in the rule and as discussed further in this Notice, prior to engaging in such activities. FINRA Rule 4518 will become effective on January 29, 2016.

The text of new FINRA Rule 4518 is available in Appendix A. (As discussed further in this Notice, members of FINRA that plan to notify FINRA pursuant to the rule must do so through the FINRA Firm Gateway.)

Questions regarding this Notice should be directed to:

  • Alissa Robinson, Director, Membership Application Program, at (212) 858-4764;
  • Sandra Clarke, Associate Director, Membership Application Program, at (212) 858-4251; or
  • Adam Arkel, Associate General Counsel, Office of General Counsel, at (202) 728-6961.