FINRA published Regulatory Notice 14-09 (available: https://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p449586.pdf) to solicit comments regarding a series of new rules that would be applicable to firms that perform certain limited functions. FINRA is proposing to establish a new, reduced regulatory framework for firms that advise issuers on debt and equity private placements with institutional investors or provide certain advisory services. Firms that engage in these limited services and that do not maintain customer accounts, handle customer funds or securities, accept trading orders or engage in proprietary trading or market-making activities would not be subject to broker-dealer registration.
As we recently reported, the SEC provided no-action guidance in the context of M&A brokers, and, of course, FINRA has proposed a scaled regulatory framework for crowdfunding portals. This would be another modified approach to regulating another category of financial intermediary.