FINRA Updates Private Placement Filer Form Pursuant to FINRA Rules 5122 and 5123

FINRA has updated the form that firms must use to file offering documents and information pursuant to FINRA Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities) (Filer Form). The updated Filer Form, which became available in the FINRA Firm Gateway in May of 2017, includes new and updated questions that will facilitate review of the filed material and eliminates other questions.  Read More…

Private Placement Filing Requirements under FINRA Rule 5123

In recent years, FINRA has enacted new rules regarding private placement transactions of FINRA member firms – FINRA Rule 5122 (Private Placements of Securities Issued by Members) and FINRA Rule 5123 (Private Placement of Securities).  Each of these rules has its own filing requirements, as well as specified exemptions from such filings.  We previously touched on FINRA Rule 5122 and member private offerings.  In this entry, we will focus on FINRA Rule 5123 and the filing requirements of private placement offerings in general. Read More…

Private Placement Filing Requirements Under Rule 5122

In recent years, FINRA has enacted new rules regarding private placement transactions of FINRA member firms – Rule 5122 (Private Placements of Securities Issued by Members) and Rule 5123 (Private Placement of Securities).  Each of these rules has its own filing requirements, as well as specified exemptions from such filings.  In this entry, we will focus on Rule 5122 and the treatment of member private offerings.

Rule 5122

The offering of securities by a member firm or a control entity of the firm in a private placement can raise conflicts of interest and has been an area of regulatory concern in recent years. To address these concerns, Read More…

AML-CIP Requirements for Private Placement Transactions

The world of private placement transactions is one that is highly scrutinized by both FINRA and the SEC. It seems that with all of the Ponzi schemes and actions for misappropriation of investor monies, private placement transactions are always on the regulators’ exam priorities lists. With that in mind, it is imperative that firms participating in such offerings ensure that their compliance programs are kept current and up-to-date. However, an area that is often overlooked in such compliance preparation is the Anti-Money Laundering (“AML”) / Customer Identification Program (“CIP”) process.

As with other products sold by a firm, AML and CIP considerations must be taken into account when dealing with Read More…