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Implementation Guidance for Public Offerings Subject to FINRA Rule 5110

Participating members, as defined in Rule 5110, must comply with amended Rule 5110, beginning on September 16, 2020 (the Implementation Date).1 The amended Rule will apply notwithstanding when the offering was filed or declared effective or when a participating member received a No Objections Letter.   

Therefore, for ongoing reviews and offerings, participating members must comply with the amended Rule beginning on the Implementation Date, regardless of whether:

  • a No Objections Letter was received prior to the Implementation Date, or is received after that date; 
  • the offering has been declared effective or was qualified before the Implementation Date, or will be effective or qualified after that date;
  • a filing has been submitted to FINRA before the Implementation Date, but a No Objections Letter has not been issued;
  • the distribution began before the Implementation Date and continues after the Implementation Date; and 
  • a base shelf offering was filed with FINRA prior to the Implementation Date, but takedowns are occurring after the Implementation Date.

Public Offering Filing System Enhancements

Beginning on the Implementation Date, the Public Offering Filing System (the “System”) will reflect the amended Rule for most filings submitted prior to or after the Implementation Date.

If your firm’s filing was submitted before the Implementation Date, your firm may be required to update certain fields in the System when submitting the first update after the Implementation Date. 

We remind firms and their counsel that the amended Rule has revised the filing requirements for amendments to previously filed documents, and only those that contain changes that impact the underwriting terms and arrangements for the public offering should be filed.  

Examples of documents that impact the underwriting terms and arrangements include those that reflect an increase or decrease to the anticipated offering size, method of distribution, and changes to the participating members or the services for which members are engaged. Examples of documents that should not be filed include pricing supplements or other pre-effective or post-effective amendments filed with the SEC that do not contain changes that impact the underwriting terms and arrangements.  

The Department will continue to review the filings and updates in accordance with the amended Rule, and participating member(s) and their counsel should submit any documents or information required to be filed pursuant to the amended Rule. 

For base shelf filings submitted prior to the Implementation Date, please note that new takedown submissions will no longer be required following the Implementation Date and the base shelf filing will be considered to have been filed pursuant to amended Rule 5110(a)(4)(E).  

As noted in Regulatory Notice 20-10, the implementation date for amended Rule 5110(a)(3)(A), (a)(4)(A)(ii) and (a)(4)(A)(iii) was March 20, 2020.  The Implementation Date for all other provisions in amended Rule 5110 was September 16, 2020. The text of the amended Rule is available here.

For any questions regarding implementation, please contact the Department’s main number at (240) 386-4623 or send an email.

1 See Regulatory Notice 20-10 announcing FINRA amended Rule 5110.