Broker-dealers that recommend or sell private placements have additional requirements under FINRA and SEC rules. These requirements include:Filing certain offering documentsEnsuring the suitability of any investments they recommendFiling RequirementsTwo FINRA rules require firms to file certain offering documents and information about the issuer, the offering terms, and the firms selling the
SummaryIn this Notice, FINRA reminds members of their obligations when selling private placements (i.e., unregistered offerings sold pursuant to the Regulation D safe harbors under Sections 3 and 4 of the Securities Act of 1933 (Securities Act)). In Regulatory Notice 10-22 (Obligation of Broker-Dealers to Conduct Reasonable Investigations in Regulation D Offerings), FINRA reminded members of
The Reasonable Diligence for Private Placements section of the 2018 Report on Exam Findings informs member firms’ compliance programs by describing recent findings and observations from FINRA’s examinations, and, in certain cases, also providing a summary of effective practices.
Frequently asked questions about private placements.
The Corporate Financing Department assists FINRA-regulated firms in complying with FINRA rules and federal securities laws by reviewing documents related to firms' capital-raising activities and arrangements. These services provide protections to investors and issuers by regulating underwriting terms and arrangements and addressing conflicts of interest when underwriters are
The Private Placements topic of the 2025 FINRA Annual Regulatory Oversight Report (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) regulatory obligations, (2) findings and effective practices, and (3) additional resources.
The Private Placements topic of the 2024 FINRA Annual Regulatory Oversight Report (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) regulatory obligations and related considerations, (2) findings and effective practices, and (3) additional resources.
The Best Execution, Outside Business Activities and Private Securities Transactions, Private Placements, and Reg BI and Form CRS sections of the 2023 Report on FINRA’s Examination and Risk Monitoring Program (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) regulatory obligations and related considerations, (2) findings and effective practices, and (3) additional resources.
The Private Placements section of the 2022 Report on FINRA’s Risk Monitoring and Examination Activities (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) relevant regulatory obligations and related considerations, (2) exam findings and effective practices, and (3) additional resources.
As noted in Regulatory Notice 10-22 (Obligations of Broker-Dealers to Conduct Reasonable Investigations in Regulation D Offerings), as part of their obligations under FINRA Rule 2111 (Suitability) and supervisory requirements under FINRA Rule 3110 (Supervision), firms must conduct a “reasonable investigation” by evaluating “the issuer and its management; the business prospects of the issuer; the assets held by or to be acquired by the issuer; the claims being made; and the intended use of proceeds of the offering.”
