FINRA updated the Filer Form required by FINRA Rules 5122 ("Private Placements of Securities Issued by Members") and 5123 ("Private Placements of Securities"). FINRA stated that members must use the updated Filer Form once it becomes available beginning May 22, 2021.
The Filer Form now contains new and revised questions concerning:
- contingency offerings, as to which FINRA added questions on (i) the contingency date, (ii) whether the original terms of the contingency changed over the course of the offering and (iii) whether the member receives or transmits investor funds during the subscription process;
- disciplinary history, as to which FINRA added questions on the disciplinary history of the issuer, and its principals and affiliates, as well as expanding the scope to include disciplinary actions involving any federal agency, not just FINRA or the SEC;
- intended use of proceeds; and
- private securities transactions, specifically whether the filing is for an offering that the member's associated person is selling subject to FINRA Rule 3280 ("Private Securities Transactions of an Associated Person").
FINRA stated that, during an examination, staff may request information not already provided by members in their FINRA Rule 5122 and 5123 filings, as well as information that may include offerings exempted from filing. FINRA advised that members can expect staff to request a list of private placements the member is selling or has sold and certain data pertaining to each.
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