FINRA Proposed Rule Change Regarding Private Placements
The Financial Industry Regulatory Authority, Inc. (“FINRA”) (f/k/a National Association of Securities Dealers, Inc. ) has filed with the Securities and Exchange Commission a proposed rule change to adopt a new FINRA Rule which would require a member that engages in a private placement of unregistered securities issued by the member or a control entity to (1) make certain disclosures to investors in a private placement memorandum (“PPM”), (2) file the PPM with FINRA, and (3) commit that at least 85 percent of the offering proceeds will be used for the business purposes identified in the PPM.
