New FINRA Rule 5123 Regarding Private Placements of Securities Effective December 3, 2012

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In an effort to enhance oversight and investor protection over private placement activity of firms on behalf of other issuers, new Financial Industry Regulatory Authority, Inc. (FINRA) Rule 5123 became effective on December 3, 2012. Under new FINRA Rule 5123, each FINRA member firm that sells an issuer’s securities in a private placement will be required, subject to certain exemptions (which include private offerings to most types of institutional investors, as outlined below), to either:

..file with FINRA a copy of any offering documents used to sell such private placement, such as private placement memoranda, term sheets or other offering documents; or

..indicate that no offering documents were used.

Please see full alert below for more information.

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Topics:  Commodity Pool, Exemptions, FINRA, Private Investment Funds, Private Placements, Securities

Published In: Administrative Agency Updates, Business Organization Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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