Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Regulation and Compliance > Federal Regulation > FINRA

Private Placements: FINRA Guidance

By Kate McBride

X
Your article was successfully shared with the contacts you provided.

Regulatory Notice 10-22 says that although Reg. D, “provides exemptions from the registration requirements of Section 5,” of the Securities Act of 1933, these transactions are “not exempt from the antifraud provisions of the federal securities laws.”

A broker/dealer (B/D) has a duty “to conduct a reasonable investigation of securities that it recommends, including those sold in a Regulation D offering.” They must also meet suitability requirements, and SEC and FINRA supervisory and advertising rules.

The notice includes scope of responsibility for B/Ds regarding private placements and a section on “best practices.” This includes “the scope of a BD’s responsibility to conduct a reasonable investigation will necessarily depend upon its affiliation with the issuer, its role in the transaction, and other facts and circumstances of the offering, including whether the offerees are retail investors or more sophisticated institutional investors.”

Comments? Please send them to [email protected]. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.