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FINRA Rule 5123

Requires member firms to file private placement memoranda, term sheets, and other offering documents with FINRA within 15 calendar days of the first sale, unless an exemption applies.

Rule Overview

Jurisdiction: United States

Regulator: FINRA

Topic: Regulatory Filing

Overview
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Further Reading

This rule aims to increase transparency and oversight of private placements by requiring member firms to submit offering documents and retail communications to FINRA.

The rule applies to non-public offerings of securities that rely on an exemption from registration under the Securities Act, and members must file the required documents within 15 calendar days of the first sale.

However, the rule provides exemptions for certain types of private placements, such as those sold solely to institutional accounts, qualified purchasers, or accredited investors, as well as offerings of exempted securities or those made pursuant to specific SEC rules.

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Further Reading

FINRA Guidance on Private Placements Go to https://www.finra.org/rules-guidance/key-topics/private-placements FINRA Rule 5122 and 5123 FAQs Go to https://www.finra.org/rules-guidance/guidance/faqs/finra-rules-5122-5123 SEC Rule Change Notice Go to https://www.sec.gov/files/rules/sro/finra/2021/34-91047.pdf