Corporate Financing Public Offering - System User Guide

Version 4.1 - July 2017

Table of Contents

Accessing the System

To access the system, use the following URL: http://www.finra.org/publicofferingsystem/login

(Google Chrome, Mozilla Firefox, and Internet Explorer 9 browsers work best with the new system)

After entering your User ID click “I Agree.” You will be asked to provide your Password and then taken to the Filing Cabinet.

Filing Cabinet

Top Line Menu Bar

The Top line menu bar contains the following components:

  1. Cabinet Views – Allows you to view filings based on unique characteristics
  2. Create Deal – Allows you create a brand new filing
  3. Transfer Deal – Allows you to initiate transfer of a filing
  4. Templates – Provides access to manage templates of filings created
  5. Resources – Provides access to system user guides

Filing Card

Display - Filings are displayed in a card based format with the following elements:

  1. Issuer Name - Identifies the entity issuing securities to the public
  2. Deal Type - Identifies whether the filing is a Corporate Offering or Investment Program
  3. Deal ID - The 5-digit sequence number assigned to each filing upon creation
  4. Filing ID - Identifies the year, month, and day the filing was submitted, along with a special 5-digit sequence number. The Filing ID becomes available when Corporate Financing accepts a filing
  5. BSS Assignee - Identifies the Compliance staff responsible for verifying and accepting the filing
  6. POR Assignees - Identifies the 1st and 2nd Reviewers responsible for filing review
  7. Version Number - Identifies the submission number of the filing
  8. Version Status - Displays the current status of each filing, which could be Draft, Submission Received, In Review, Rejected, Transferred, Dormant, Info Requested, Verbally Cleared, Withdrawn, and Cleared
  9. Status Date - Displays the date of the last submission of the filing
  10. Conditional Icons - Appear based on certain conditions associated with the filing
  11. Deal Status - Displays the current status of the filing, which could be New, Cleared, Transferred, Dormant, Info Requested, In Review, No Review Necessary, Verbally Cleared, or Withdrawn
  12. Anticipated Pricing/Eff. Date - Date when a registered offering may begin to trade
  13. Fee Info - Link to display the finance balance due (disabled for draft filings)
  14. Link to Issues/Letters - Link to access issues and letters associated with the filing
  15. Count of Issues by Status - Displays the count of issues in the open, answered, and resolved status
  16. Deal Level Actions - Drop-down menu to perform actions on the filing

Hover over text is provided on each card label to identify the data.

Issues/Letters Application View

Actions - The deal level actions on the card are as follows:

  • Submitted Deals
    • View: To view the deal form
    • Update: To update a previously submitted deal
    • Clone: To create a clone of the deal
    • Withdraw: This option is to withdraw the filing via submission of the Withdrawal Notice that is filed with the SEC. Once this option is selected, a new window is given to prompt you to input the information for the withdrawal.
    • Review Program: To submit a Review Program Request form
    • Create Template: To create a template of the deal
    • View Versions: To view other submitted versions of the deal
    • FED Wire: The function provides the ability to enter the Wire information regarding the payment for the offering
    • Fee Info: This function allows the filer to see the fees due for the offering

  • Draft Deals
    • Edit: To edit the draft deal
    • Clone: To create a clone of the deal
    • Delete: To delete the draft deal
    • Create Template: To create a template of the deal
    • View Versions: Displays all updates that have been submitted in connection with a specific filing

Withdraw Screens

Create Template/Clone – Please see the Templates/Clones section.

Filters

Filters are included on the left side of the screen to select filings for display that have certain attributes:

  1. Version Status
  2. Deal Status
  3. Review Program
  4. Deal Type
  5. POR Assignees
  6. BSS Assignee
  7. Review Type Requested
  8. Deals With Issues
  9. Status Date
  10. Anticipated Pricing/Eff. Date

The POR Assignees filter has an “AND” and “OR” toggle feature. Selecting “Clear All” resets the filters back to the original settings and display view.­ In the example below, filings with a status of “Info Requested” have been selected.

Cabinet Views

Several filing views are available and include:

  1. Deals Cabinet (default view) – Lists all if the filer’s filings
  2. Cleared Deals – A pre-filtered view that lists all filings that have been cleared
  3. Deals Available For Takedown – A pre-filtered view that lists all base filings from which a takedown filing can be created
  4. Deals Available For Follow-on – A pre-filtered view that lists all initial filings from which a follow-on secondary offering filing can be created
  5. Transfer Requests – A pre-filtered view that lists all filings that have a transfer request submitted
  6. Distribution Manager – A pre-filtered view that lists all filings from which a Distribution Manager Form has been created
  7. Custom View – A user created pre-filtered view based on selected filing attributes

Creating a custom view - Custom user defined views can be created by performing the following steps:

  1. Select the filters you would like to create a list of filings based on desired attributes.
  2. Select “Save” which will allow you to name the custom view.
  3. Select OK.
  4. The custom view will now appear in the cabinet view’s drop down list.

You can select the “X” next to the name of your custom view to delete the view.

When you come back to the system after exiting, you will be returned to the same view and filter selections as your last session.

Sorting

Sort By - Allows you to sort the returned filing results by attributes as indicated below:

You can also sort by ascending A to Z or descending Z to A order.

Export to Excel

Clicking on the Export to Excel icon allows you to export listed filings in the Deal Cabinet and Cleared Deals views as well as any custom views created from those views.

Full Text Search

Full text search allows you to search for filings based on text contained in the filing.

Create Deal

Details

Click on the Create Deal tab and the system builds a form requiring entry of the offering details. You will only have access to the “Details” tab until you enter the “Distribution Method” for the filing. All items proceeded by a red asterisk (*) are required.

The form expands depending on how various questions are answered. In the example below, the offering has not been filed with the SEC, therefore, no SEC information is requested. You are required to identify the “Regulatory Authority” and the “Applicable Law or Rule.” You should also attach any offering circular or memorandum that describes the offering in Non-SEC Filed Documents.

Notice the inclusion of the question “Has this offering been filed with FINRA prior to June 2012?” If you answer Yes, the screen expands and requests the entry of the COBRADesk Filing ID. If your filing is found, the Gross Proposed Maximum Aggregate Offering Price (PMAOP) will be populated. This feature will assist the Department with calculating additional filing fees payable, if the size of the offering has increased.

The selection of “Yes” to the question whether the offering has been filed with the SEC and “No” to the question whether it is an SEC confidential filing, results in the screen below. In this scenario you are required to enter information that is available in connection with an SEC filing.

You should also enter the information requested in Line D2.D (SEC/Other Reviewing Authority Information). Scroll down to add SEC/Other Reviewing Authority Information and provide the information pertinent to your filing.

After entering the offering’s SEC Registration Number, CIK Number, SEC Registration Form and Accession Number, an SEC Link to your offering document will be created. Upon completion of entering the remaining information, click “Add Row.”

D2.D should look similar to the example below, if you are submitting an SEC filing:

The text in red is a reminder that more detailed information regarding the securities offered to the public is required in the Securities tab.

The remaining items on the “Details” screen should be completed as they apply to your offering. In the example below, SEC Rule 415 does not apply.

In the following example, the screen has expanded to accommodate a “Yes” response to the “SEC Rule 415” question. You must also provide the reason Rule 415 applies to your offering.

If you are filing a WKSI, please see WKSI section of the User Guide.

Time to move to the next section? You can click “Save” and scroll to the top of the screen to select the tab you want to work in, or you can click “Next” and be taken to the Parties tab.

Parties

All participants in the offering should be entered in the “Parties” screen. The screen changes according to the radio button that has been selected. The Filer information is static, therefore, no need to save the screen.

To add additional parties to the filing, scroll down to “Add A Party To The Deal.”

After entry of each participant, click “Add Row.” A sample List of Party Members could look like the screen below. The Type column identifies the role of the participant.

Securities

The new system requires entry of securities information in two places. The Gross PMAOP appearing on line S2 was entered in the “Details” screen. The Current PMAOP and List of Securities information was entered in the “Add Securities” paragraph below.

Each security type being distributed to the public that is identified in the offering document should be included in the “Add Securities” grid. Click “Add Row” after the entry of each security type.

The Filing Date will pull from the “Details” screen. Click on the information to populate the field.

If the securities being offered will be exchange-traded, the screen will expand for entry of the anticipated Exchange for listing.

Proceeds for the offering can be calculated using one of three options. In the first example the proceeds will be calculated based on entry of the security price and # of Securities.

In the second example, the proceeds will be calculated based on entry of the security price and PMAOP.

In the third example, the proceeds will be calculated based on entry of the number of securities and the PMAOP.

After all pertinent information has been entered, click Add Row and the entry will feed to Line Items S2 and S3.

Click “Save” and scroll to the top of the screen to select the tab you want to work on or click “Next” to be taken to the Assoc/Affil/Conflicts tab. You can also click “Previous” to go back to the Details or Parties screens.

Assoc/Affil/Conflicts

If the answer to the Associations and Affiliations question is Yes, officers, directors, or beneficial owners of 5% or more of any class of the issuer’s securities who are associated or affiliated with any member should be identified in the “Add an Association or Affiliation” grid below.

After entering the pertinent information, click “Add Row.” The information will feed to the “List of Associations and Affiliations.”

If a Conflict of Interest exists, the nature of the conflict must be identified. This screen expands to include additional representations based on the check box or radio button that has been selected.

Each check box has been selected below to show the representations that must be made in connection with the respective conflict.

Issuer is a member participating in distributing its securities to the public.

The issuer is an affiliate of the member or its associated persons.

The member, its affiliates and associated persons, in the aggregate will receive 5% or more of the net proceeds in the offering.

If participating members will receive 5% or more of the net proceeds of the offering, the specifics should be entered in the “Add Proceeds Information” grid. You must click “Add Row” after each entry, which will enable population of the “List of Proceeds” grids.

The following representations are also required in connection with proceeds directed to a member:

If Option 4 is selected, one or more of the 3 radio buttons in Section C1.A1 must be checked.

In the event a QIU will participate in the offering, the following representations are required.

If a Conflict exists, but information is not available regarding the FINRA member that will act as the QIU, you can select the Defer radio button, and provide the information in a subsequent update.

If a Conflict exists, but no QIU is required, the following representations are required:

Click “Save” and scroll to the top of the screen to select the tab you want to work on or click “Next” to be taken to the Compensation tab. You can also click “Previous” to go back to the Details, Parties, or Securities screens.

Compensation

 

Cash Compensation

First, you must tell us whether any member will receive warrant solicitation fees.

Next, items of value to be received by FINRA members and related persons should be entered in the “Add Item of Value” section. Click “Add Row” after each item of value has been entered.

After clicking “Add Row” the “Items of Value” grid will be populated with your entries, and will look similar to the last screen in Securities section.

 

Non-Cash Compensation

If a right of first refusal will be received by a FINRA member as compensation, the following information is required

A new function has been added to the system that will allow the filer to calculate the value of securities (Acquisitions) acquired during the 180-day period preceding the filing date of the offering. Two options for calculating the value of securities are available.

If you are preparing the valuation yourself, provide the information in the grid below:

If you need to request help from the FINRA staff, contact the POR Assignee reviewing your filing.

If the acquisition meets an exception from compensation, select the appropriate exception and make the corresponding representations.

Representations must be provided in connection with the restrictions imposed on the receipt of warrants, options and convertible securities as compensation.

If compensation will be received through gifts, business entertainment, training and education, or sales incentives, the following screens will be available for entry of your information:

 

Summary

The Summary screen provides a snapshot of all Items of Value to be received by members and related persons. There are also two additional required representations that must be made in connection with Other Items of Value and a Compensation Disclosure.

WKSI Offerings

If the offering is a WKSI, you are required to represent whether the offering is or is not subject to the provisions of FINRA Rule 5121.

Not subject to the provisions of FINRA Rule 5121

Subject to the provisions of FINRA Rule 5121. (See Conflicts of Interest section of the User Guide)

Other

The “Other” screen captures additional information that may or may not be pertinent to your offering. The screen will be slightly different based on the “Distribution Method” and “Offering Type” entered in the “Parties” screen.

Issues/Letters

Issues/Letters is a feature that will allow the FINRA staff to identify and communicate Compliance and Regulatory issues, and provide the external filers the ability to respond directly to any comments issued. This will eliminate any confusion regarding what comment the external filer is responding to.

Fee Calculation

The new system requires payment of the filing fee at the time an offering is submitted to FINRA. The filing fee is calculated based on the information entered in the “Securities” screen, and is displayed at the bottom of each screen. If you are submitting the filing fee by wire transfer, please include the Issuer Name and Deal ID with the payment.

Clicking on More Information will provide the detailed fee calculation and wire instructions.

Submitting Your Filing

After you have completed entry of your offering information you can click “Submit Filing” or “Check For Errors” to see if you omitted anything.

Upon the successful submission of your form, you will see the following notification, and you will have the option to print it for your records. Right mouse click to enable the print function.

Investment Programs (IP)

You are required to identify your “Offering Type” in the “Details” screen. If you select Investment Program, you are required to select the “Type of IP.” If you select Direct Participation Program, you are also required to provide the “Type of DPP.” No additional information is required if you select Unlisted Real Estate Investment Trust.

See the “Parties,” “Securities,” and “Other,” sections of the User Guide for a description of entering information in those screens.

Compensation

Distribution Arrangements

 

Affiliated Programs

In the review of affiliated programs, the filer is required to provide a reasonable allocation of the non-transaction based compensation (NTBC) for registered representatives. When a filer answers the question in an affirmative manner, the following grid is available.

The grid was designed as a worksheet to allow filers to allocate registered representative’s compensation, including that of dual employees. The registered representatives available to be selected can only be personnel who are registered with the members identified in the “Parties” screen. Upon completion of the required fields, marked by a red asterisk (*), click “Add Row” and the system will calculate the allocation and update the aggregate value in the “Underwriting Comp” screen.

The information entered in the “Add A Dual Employee” grid will feed into the List of Dual Employees.

 

Unaffiliated Programs

For filings of unaffiliated programs, the NTBC does not have to be allocated using this format. Please insert values in the “Underwriting Comp” screen.

 

Unregistered Personnel

Filers will be required to state whether unregistered officers, directors or employees of an issuer are participating in the solicitation, marketing, distribution or sales activities of an IP, and whether the individuals identified meet the safe harbor provisions of SEC Rule 3a4-1.

Click “Add Row” after each entry. The information entered will feed into the “List of Unregistered Persons” grid.

Non-Cash Compensation

Filers will be required to state whether additional non-cash arrangements are contemplated in connection with the offering. When a filer responds with an affirmative statement, the system will display a new grid for information entry, containing attestations per type of non-cash arrangement. Certain grids also allow filers to attach copies of the agendas for training and education or other documents required during the review process. All grids provide the filer with the option to choose whether the expenses are wholesaling or retailing, or both.

Depending on the selection, the aggregate values are updated in the “Summary” screen. Examples of the grids for Gifts, Business Entertainment, Training and Education, and Sales Incentives are below.

 

Gifts

 

Business Entertainment

 

Training and Education

 

Sales Incentives

Underwriting Compensation

The O & O Expenses screen has been enhanced in order to ease data population. Enhancements include: pre-population of certain expenses from data inputted from other screens, new line items such as “Non-Cash/Gifts” “Non-Cash /Business Entertainment,” and additional line items for “Other” expenses. The following grid can also be used to add items of value to the compensation screen.

When Add Row is clicked, the Item of Value and Additional Items of Value grids are populated.

Issuer Costs

Issuer Costs are added through entry in the “Add Item of Value, Issuer Costs” grid. Add Row must be clicked after each entry to feed to the “Summary of Issuer Costs” and “Additional Items of Value” grids.

Summary

The Summary compensation screen provides a snapshot of all proposed compensation, including Retailing, Wholesaling, Other Underwriting Compensation, Total Underwriting Compensation, and Issuer Costs.

Suitability, Disclosure and Liquidity

The Suitability, Disclosure and Liquidity screen includes representations that the system will display depending on whether the program is an affiliated program, and whether it is listed on a national securities exchange. For an affiliated program, you would initially see the following representations, in addition to Sales to Discretionary Accounts, Disclosure, and Liquidity:

For a non-affiliated program, you will only see the following representations:

Shelf Filings

Base Filing

Your initial shelf filing should be your Base. In the “Details” screen you should answer Yes in connection with Rule 415 applying to the filing, select Shelf, and Shelf Type should be Base.

Specific representations are required in connection with a Base filing, and appear below.

Please refer to Create Deal section for instructions on entering the remainder of information for a Base filing.

Shelf Takedown

A takedown can only be submitted in connection with a cleared Base. Search for eligible Base filings, begin by clicking on the Deals Available For Takedown option in the dropdown box. You will be redirected to the cabinet in which you can begin searching for the Base, then inputting the SEC Registration number of the cleared Base Filing. Using the search bar, input the SEC Registration number of the cleared Base Filing.

Once your filing appears, click on the takedown button to begin the process.

The system will create a new filing for your Takedown transaction. Some information in the “Details” screen will be pre-populated, consistent with the information entered for the Base filing. Identify the Shelf Type as a Takedown in the “Details” screen, and populate other pertinent fields as required.

Entry of information specific to the Takedown is required in the Parties, Securities, Compensation, Suitability, Disclosure, and Liquidity, and Other screens. Please refer to Create Deal section for instructions on entering the remainder of information for a Takedown filing.

Additional representations are also required for the Takedown, and appear below.

Templates/Clones

New functionality has been added to the Public Offering filing system that allows the filer to either create a template to assist in future submissions or clone a previously submitted offering.

Creating a Template from an Existing Deal

Create Template – Listed at the top right of the screen, this option allows you create a template of an offering for future use. You can create a template from all existing deal types – including takedowns and follow-ons. Please note that all information, excluding the SEC registration number and attachments, from the previously submitted offering is carried over into the template and placed in the Template cabinet.

Select the deal that would like to create a template from. Click the Actions menu button and select Create Template.

Next, you will be prompted to create a template name. Enter the name a click OK. Note: You can change this name later on within the template at any time, so you don’t have worry about picking the perfect name now.

The system will create a template with the name you chose, and place it in the template cabinet.

Creating a Template from Scratch

You can also create a brand new template for future use. In the template cabinet, click the Create Template button.

A new template form will be created. Enter the template name, edit the template data, and click the Save Template button when finished. Templates can be edited in the same manner as a draft deal.

After saving the template, you can view it in the template cabinet.

Creating a Draft Deal from a Template

Select the template that you would like to create a new deal, and click the Create Deal button.

The system will ask you to click “Yes” or “No” for confirmation.

The newly created deal will appear in the deal cabinet.

Creating a Clone

In addition to regular deals, you can create a clone from a takedown and follow-on deal. Please note that all information, excluding the SEC registration number and attachments, from the previously submitted offering is carried over into the duplicated filing and placed in the filing cabinet.

Select the deal that you would like to clone, and click the Actions menu button. The system will ask you to click “Yes” or “No” for confirmation.

Once completed, and the cloned deal will appear in the deal cabinet with the same issuer name, but different Deal ID.

There will be a purple "C" icon next to the version status of the cloned deals to indicate that they are clones. This symbol will disappear if the deal moves to version 2 or higher. Placing your cursor over the C icon will trigger a “hover over” window that contains the Deal ID used to create the clone.

Select the Edit menu item from the Actions menu button. The cloned deal is a new draft deal that can be edited just like any other draft deal.

When the draft deal is opened, you will see all the data copied from the parent deal except the SEC registration # and attachments. You will see an amber floating indicator of this deal’s Deal ID as well as the Deal ID from which this deal was cloned. This will help you distinguish between the deals when both forms are open.

Delete All

A new Delete All button has been added to the D2.D and S3 sections of the filer form for version 1 of draft deals and templates. Clicking on this button will delete all of the data contained in that section.

Contact Information

Please contact the Corporate Financing Department Staff with any questions.

Main Line
240-386-4623

Business Systems Support
Sheena Savoy, 240-386-4645
Martrella Caudle-Sanders, 240-386-4628
Anthony Carr, 240-386-4636

Public Offering Review
240-386-4623