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FINRA Proposes Rule 5122 on Private Placements Issued by Members

By Jim Hamilton

The Financial Industry Regulation Authority (FINRA) formerly known as the National Association of Securities Dealers (NASD) filed a proposal rule with the SEC under Section 19(b)(1) of the Securities Exchange Act of 1934. Proposed FINRA Rule 5122 "Private Placements of Securities Issued by Members" would require a member engaging in a private placement of unregistered securities issued by a member or control entity to: (1) make certain disclosures to investors in a private placement memorandum ("PPM"); or (2) file the PPM with FINRA; and (3) commit that at least 85% of the offering proceeds will be used for the business purposes identified in the PPM.

http://www.finra.org/RulesRegulation/NoticestoMembers/2007NoticestoMembers/P019228

http://www.finra.org/RulesRegulation/NoticestoMembers/CommentsonNotice/P019228

Once the SEC publishes the rule proposal for comments in the Federal Register, it will be open for public comments.

Interested persons can submit written comments about the proposed rule by using the SEC Internet comment form at: http://www.sec.gov/rules/sro/shtml OR by sending an email to rule-comments@sec.gov, that includes File Number SR-FINRA-2008-020 on the subject line OR by sending paper comments in triplicate to Florence Harmon, Deputy Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, D.C. 20549-1090.

NOTE: All submissions should refer to File Number SR-FINRA-2008-020.

The SEC will post all comments on the abovementioned Internet web site.

Full post as published by Jim Hamilton's World of Securities Regulation on July 02, 2008 (boomark / email).