The Securities and Exchange Commission recently issued Release No. 34-66203, which seeks comments on the Financial Industry Regulatory Authority’s (FINRA) Partial Amendment No. 1 (the Amendment) to proposed FINRA Rule 5123 (the Rule), which was released in October 2011. The Rule would require FINRA members that offer covered private placements to provide disclosures to investors prior to sale, describing the intended use of proceeds and the amount and type of offering expenses and compensation. The Amendment signals FINRA’s attempt to address some of the more substantial issues with the Rule, as originally proposed, regarding its scope, filing requirements, and exemptions.
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