SEC Approves New FINRA Rule 5123: Private Placement of Securities

October 01, 2012

The US Securities and Exchange Commission (SEC) recently approved a revised version of proposed Financial Industry Regulatory Authority (FINRA) Rule 5123 governing private placements of securities. The new rule requires FINRA members to file certain information with the regulator regarding covered offerings, but exempts most types of offerings from its coverage. The practical effect of the new rule will be to marginally increase the burdens on FINRA members when selling private placements, such as private funds, to certain classes of accredited investors. The new rule goes into effect on December 3, 2012.

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