FINRA's Changes To New-Issue Sales, Distribution Practices

Law360 (February 14, 2020, 4:49 PM EST) -- This article discusses recent amendments to Financial Industry Regulatory Authority Rule 5130 on restrictions on the purchase and sale of initial equity public offerings, and Rule 5131 related to new-issue allocations and distributions.

They were originally published for comment in the Federal Register on Aug. 8, 2019 and approved by the U.S. Securities and Exchange Commission on Nov. 5, 2019. The amendments became effective on Jan. 1, as discussed in the FINRA Regulatory Notice 19-37 published on Dec. 19, 2019.

The new rules broaden the categories of investors exempt from the rules’ restrictions and narrow the types of securities offerings subject...

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