As part of a retrospective review, FINRA requested comments on FINRA Rule 5250 (the "Rule"), which generally prohibits a member firm from accepting payment from an issuer or its affiliates or promoters in exchange for making a market in the issuer's securities. The rule prohibits a member or associated person from accepting payment or other considerations from an issuer or its affiliates and promoters, except for (i) payment for bona fide services, (ii) reimbursement of payments for SEC or state registration fees and listing fees imposed by a self-regulatory organization, and (iii) payment expressly provided for under the rules of a national securities exchange.
FINRA noted that the Rule was implemented to prevent conflicts of interest that may arise from payments for making a market in an issuer's securities. FINRA is seeking input in several areas, including:
Comments must be received by January 29, 2018.
FINRA issued three regulatory notices and requested comments on (i) rules governing capital raising, (ii) proposed amendments for underwriting arrangements, and (iii) a proposed limited safe harbor from research rules for desk commentary.
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