On July 15, 2021, FINRA released Regulatory Notice 21-26 announcing changes to FINRA Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities) effective October 1, 2021. The changes will require members to file retail communications that promote or recommend private placement offerings that are subject to those rules’ filing requirements.
The Financial Crimes Enforcement Network requires certain financial institutions to file a Suspicious Activities Reports (“SAR”) to report suspicious transactions, as detailed in their FinCEN SAR Electronic Filing Instructions. This blog will go over some of the important aspects of filing a Suspicious Activity Report.
The SEC recently adopted a rule change to allow for the use of electronic signatures for documents filed with the Commission. This rule change will apply to Regulation S-T, EDGAR Filer Manual, and certain other filings under the Securities Acts of 1933 and 1934 and the Investment Company Act of 1940. This long-awaited rule change was finally put into effect after the rise of COVID-19 and after the Commission received a rule making petition regarding the use of electronic signatures as the pandemic made it significantly more difficult to obtain “wet” signatures, as was originally required by Rule 302(b). Besides adding the option to use electronic signatures, the existing requirements of Rule 302(b) will be otherwise unchanged.
On October 28, 2020, FINRA filed a proposed rule change to amend Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities) that would require members to file retail communications concerning Private Placement offerings. Previously, Rules 5122 and 5123 required all offering documents to be filed with FINRA. However, they weren’t specific enough to include all documents that should have been considered offering documents, such as retail communications.