FINRA proposes rule changes for underwriting and private placements

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.