On November 15, 2022, FINRA adopted amendments to revise the syndicate account settlement timeframe for offerings of corporate debt securities. The amendments to FINRA Rule 11880 establish a two-stage syndicate account settlement approach for public offerings of corporate debt securities. The amendments will become effective for public offerings of debt securities that commence on or after January 1, 2023, and will exclude any such offering that commences prior to January 1, 2023.
FINRA added a new paragraph (b)(2) to Rule 11880. The addition provides that the final settlement of syndicate accounts for any public offering of a corporate debt security must be effected by the syndicate manager by remitting to each syndicate member at least 70 percent of the gross amount due to such syndicate member within 30 days, with any final balance due remitted within 90 days following the syndicate settlement date. The amended timeframe is limited to public offerings of "corporate debt securities," which as defined in the rule is a "debt security that is U.S. dollar-denominated and issued by a U.S. or foreign private issuer, including a 'securitized product,' as defined by Rule 6710(m)." For purposes of Rule 11880, a "corporate debt security" does not include a "money-market instrument" as defined in Rule 6710(o). For purposes of clarification, public offerings of convertible debt securities are not within the scope of "corporate debt security" for the amendments to Rule 11880.
See amended FINRA Rule 11880 here. See FINRA Rules 6710(m) and 6710(o) here.
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe - Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.