SEC Approves Amendments to FINRA New Issue and Anti-Spinning Rules Compliance

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SEC Approves Amendments to FINRA New Issue and Anti-Spinning Rules

The SEC approved amendments to the FINRA New Issue Rule (Rule 5130) and Anti-Spinning Rule (Rule 5131) on November 5, 2019. FINRA announced on December 19, 2019 that the amendments take effect January 1, 2020.

Absent an exemption, FINRA Rule 5130 prohibits securities industry insiders–such as broker-dealers, registered representatives, owners of broker-dealers, portfolio managers and finders and fiduciaries–from purchasing IPO shares through any account in which they have a “beneficial interest.” Rule 5131 prohibits the allocation of new issues to accounts in which executive officers or directors of a public company or a “covered non-public company” have a beneficial interest. 

Read more here.

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