Notice to Member 07-27

NASD Requests Comment on Proposed Rule 2721 to Regulate Member Private Securities Offerings

Comment Period Expired July 20, 2007

NASD is issuing this Notice to Members to solicit comments from members and other interested parties on proposed Rule 2721 pertaining to private placements of unregistered securities issued by a member (Member Private Offerings or MPOs), which would require that:

  • a private placement memorandum (PPM) be provided to each investor with information regarding risk factors, intended use of proceeds, offering expenses and any other information necessary to ensure that required information is not misleading;
  • the PPM be filed with NASD’s Corporate Financing Department at or prior to the time it is provided to any investor; and
  • at least 85 percent of the offering proceeds be used for the business purposes identified under the "use of proceeds" disclosure in the PPM.

Rule 2721 is proposed in response to problems NASD has identified in connection with the private offerings of members’ securities or those of a control entity. The proposed Rule also contains several exemptions for offerings to certain types of institutional investors, offerings under various provisions of the federal securities laws for which NASD believes the protections of the proposed rule are not necessary, and offerings in which investors otherwise would be expected to have access to sufficient information about the issuer.

The views, expressions, findings and opinions expressed in the comments on this Web page are solely those of the author(s) and FINRA accepts no responsibility for the content of the comments: 
DateCommenterFormat - Size
7/13/2007Todd AndersPDF - 34.45 KB
7/20/2007Plexus ConsultingPDF - 35.87 KB
7/20/2007Managed Funds AssociationPDF - 44.79 KB
7/20/2007MGL Consulting CorporationPDF - 37.91 KB
7/23/2007American Bar Association Committee on Federal Regulation of SecuritiesPDF - 72.41 KB
7/20/2007Lombard Securities IncorporatedPDF - 33.24 KB
7/20/2007Stephens Inc.PDF - 34.71 KB
7/20/2007Committee of Annuity InsurersPDF - 227.23 KB
7/20/2007National Futures AssociationPDF - 26.12 KB
7/20/2007Alston & Bird LLPPDF - 98.95 KB
7/19/2007Mallon & Johnson, P.C.PDF - 258.48 KB
7/20/2007PFG Distribution CompanyPDF - 274.59 KB
6/18/2007LEC Investment Corp.PDF - 47.75 KB
7/10/2007New York City Bar Committee on Futures and Derivatives RegulationPDF - 241.37 KB
7/19/2007ChoiceTradePDF - 36.35 KB