Tag: FINRA Regulatory Notice 12-40

FINRA Regulatory Notice 12-40 issued in December of 12-40 regarding FINRA Rule 5123 which 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. This new rule is part of FINRA’s ongoing efforts to enhance the oversight and investor protection relating to investments in the private placements of securities. FINRA Rule 5123 took effect on December 3rd, 2012 with the launching of its new electronic private placement filing system.

FINRA Rule 5123 – Private Placement Filing Requirements

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.