On June 7, 2012, the U.S. Securities and Exchange Commission (SEC) approved a rule change filed by the Financial Industry Regulatory Authority, Inc. (FINRA) to adopt new FINRA Rule 5123 (Private Placements of Securities), which establishes filing requirements for FINRA members with respect to certain private placements of securities.

When implemented by FINRA, Rule 5123 will require that a FINRA member, or another member acting on its behalf, either submit the private placement offering document to FINRA or notify FINRA of the private placement and state that an offering document was not used, unless an exemption from the rule is available.

Rule 5123 will be implemented on a date to be announced by FINRA in a Regulatory Notice, which must be published no later than 90 days (September 5, 2012) following the date of SEC approval of the new rule. The implementation date that will be announced will be no later than 180 days (December 4, 2012) following the date of SEC approval of the new rule.

The new rule does not apply to private placements of securities that are issued by FINRA members or a “control entity” of a member, which are subject to a separate filing requirement and scheme of disclosure regulation under FINRA Rule 5122 (Private Placements of Securities Issued by Members).