FINRA proposes rule changes for underwriting and private placements

Detected February 6th, 2026

Summary

FINRA has proposed rule changes to amend Rules 5110 and 5123 concerning underwriting terms and private placements. The proposed changes aim to clarify valuation methods for underwriting compensation, introduce new exemptions, and expand existing exemptions for certain investors.

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What changed

FINRA is proposing amendments to its Corporate Financing Rule (Rule 5110) and Private Placements Rule (Rule 5123). The changes to Rule 5110 would refine the valuation of securities as underwriting compensation and codify existing staff exemptions. Rule 5123 would be amended to broaden exemptions for offerings to accredited investors, specifically including certain family offices and entities with over $5,000,000 in assets under management, aligning with SEC classifications.

These proposed changes will impact broker-dealers involved in underwriting and private placements. Firms should review the proposed amendments to understand how they affect compensation calculations and exemption eligibility. The document is a proposal, and FINRA is seeking comments from interested parties. The Federal Register notice provides details on the comment period and submission process.

Source document (simplified)

SR-FINRA-2026-002

Proposed Rule Change to Amend FINRA Rules 5110 (Corporate Financing Rule - Underwriting Terms and Arrangements) and 5123 (Private Placements of Securities)

Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rules 5110 (Corporate Financing Rule—Underwriting Terms and Arrangements) and 5123 (Private Placements of Securities). The proposed amendments to Rule 5110 would improve and clarify the valuation method for securities considered underwriting compensation, add new exclusions from underwriting compensation that codify exemptions FINRA staff has issued, and include minor changes to improve the operation of the rule. The proposed amendments to Rule 5123 would expand available exemptions to include offerings sold to investors meeting the categories of accredited investor for certain family offices and certain entities with assets under management in excess of $5,000,000, consistent with the Commission’s treatment of those categories.
| Title | Format - Size | Status |
| --- | --- | --- |
| Text of the Proposed Rule Change | PDF - 6.21 MB | |
| Federal Register Notice | PDF - 235.19 KB | |