FINRA Rule 5110 — Should it be Modernized?

On March 8, 2017, FINRA’s Board of Governors will meet to discuss certain proposed rulemaking considerations, including proposals to streamline and modernize FINRA Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements).  FINRA Rule 5110 governs member firm participation in the public offering of securities, and imposes certain filing requirements and related compensation restrictions for members participating in a public securities offering.  Upon approval from FINRA’s Board of Governors, any formal proposal will still need to be published for comment to FINRA member firms (typically through a “Regulatory Notice” filing) and also published for review and approval by the SEC.

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