On April 12, 2017, FINRA released three regulatory notices for comment that propose amendments to various FINRA rules affecting capital formation. In connection with its release of the notices, FINRA President and CEO Robert Cook noted FINRA’s continuing commitment to assessing its regulations and their role in facilitating capital formation. This initiative is part of the comprehensive self-evaluation and improvement initiative that FINRA announced several months ago called the FINRA 360 initiative. The initiative, FINRA’s recent request for comment on its engagement efforts, and these regulatory notices certainly reflect a new tone. In all three notices, as discussed further below, FINRA specifically requests that commenters address the economic impacts of the rules, including costs and benefits, and the specific effects on the capital formation process.

Below we discuss each of the three notices briefly.

Regulatory Notice 17-14 -

As part of its FINRA 360 initiative, in Regulatory Notice 17-14, FINRA requests comments on various rules relating to capital formation. FINRA notes that there have been significant changes as a result of the JOBS Act, such as changes relating to initial public offerings and private offerings, and the introduction of securities-based crowdfunding and Regulation A. FINRA also notes that in recent years it has introduced modified regulatory frameworks for entities with limited activities, such as the rules for Capital Acquisition Brokers and the Funding Portal Rules. In soliciting comments, the FINRA Notice refers to all capital formation related rules, and specifically identifies the following...