Regulatory Notice 17-15

FINRA Requests Comment on Proposed Amendments to the FINRA Corporate Financing Rule

Comment Period Expires: May 30, 2017

FINRA seeks comment on proposed amendments to FINRA Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements) to make substantive, organizational and terminology changes to the rule. The proposal is intended to modernize Rule 5110 and to simplify and clarify its provisions. The proposal would retain the primary principle of the rule that no member firm or person associated with a member firm may participate in a public offering for which the terms and conditions, including the aggregate amount of underwriting compensation, are unfair, unreasonable or inconsistent with any FINRA rule.

The proposed rule text is available in Attachment A. The proposed rule text marked to show changes from the current rule text is available in Attachment B.

In a separate Regulatory Notice, FINRA is also requesting comment generally on its rules and programs governing the capital raising process and their effects on capital formation. In response to that Notice or this one, commenters are welcome to suggest changes to Rule 5110 beyond those proposed below.

Questions regarding this Notice should be directed to:

  • Joseph Price, Senior Vice President and Counsel, Corporate Financing/ Advertising Regulation, at (240) 386-4642;
  • Kathryn M. Moore, Associate General Counsel, Office of General Counsel (OGC), at (202) 728-8200; or
  • Jeanette Wingler, Associate General Counsel, OGC, at (202) 728-8013.