Coral Capital Partners takes a look at recent FINRA Regulatory Notice 12-40 and the underlying FINRA Rule 5123, which requires broker/dealers that participate in the private offerings of issuer securities to file a copy of the private placement memorandum and other offering documents with FIRNA. We also look at the exemptions to this requirement, and were we see areas of risk for broker/dealers participating in private placements. We also look at how we see this tying in with FINRA Regulatory Notice 10-22.
Tag: FINRA Rule 5123
FINRA Rule 5123 requires broker/dealers that sell an issuer’s (company’s) securities in a private placement to file with FINRA a copy of the private placement memorandum (PPM) as well as the term sheet or any other offering documents used by the broker/dealer with FINRA withing 15 calendar days of the of the date of the first sale, or indicate that it did not use any such offering documents. FINRA Rule 5123 took effect on December 3rd, 2012 with the launching of its new electronic private placement filing system. These filings are “notice” type filings and as a result, FINRA says that it will not respond to the filings with a comment letter or provide any form of a clearance letter.