On January 22, 2026, the Financial Industry Regulatory Authority, Inc. (“FINRA”) filed a proposed rule change with the Securities and Exchange Commission (“SEC”) to amend FINRA Rule 5123, which governs member filings in connection with private placements. The proposal would expand the rule’s existing accredited investor exemption to cover certain family offices and to include certain other institutional accredited investors.
Rule 5123 generally requires FINRA member firms to file private placement memoranda, term sheets and other offering documents within 15 days of the first sale in a private placement. The rule is intended to provide FINRA with some transparency into the private placement market.
The rule, however, has long included a filing exemption for offerings made solely to “accredited investors” but only for those that are covered by Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933. The proposed amendment would bring the rule in line with the amendments to the “accredited investor” definition adopted by the SEC in 2020, which added additional categories of entities. According to FINRA, the change also responds to comments received in response to FINRA Regulatory Notice 23-09. It is intended to eliminate unnecessary filings in connection with offerings made exclusively to sophisticated institutional investors. The SEC will publish the proposal in the Federal Register and accept public comments for 21 days thereafter. The proposed rule change is available here.
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