SEC approves FINRA underwriting and private-placement filing amendments

What changed

The SEC approved FINRA amendments to Rule 5110 that revise valuation and exclusions for specified underwriting compensation, including qualifying debt-for-equity exchanges, DPP and unlisted-REIT capital investments, non-convertible preferred securities, and tail fees. The amendments also expand Rule 5123’s private-placement filing exemption to specified $5 million entities and family offices added to the SEC accredited-investor definition.

Who it affects

• Broker-dealers participating in public offerings or private placements
• issuers
• unlisted REITs and DPPs
• family offices
• investment advisers diligencing private offerings

What is still open

• FINRA’s announced effective date and firm-specific implementation questions

What it means for an advisor

• Update underwriting-compensation valuation, exemption, filing, offering-document, accredited-investor, private-placement supervision, and due-diligence procedures when FINRA announces effectiveness.