On January 19, 2012, the Financial Industry Regulatory Authority, Inc. (“FINRA”) filed a Partial Amendment No. 1 (the “Partial Amendment”) to proposed FINRA Rule 5123 (Private Placement of Securities) with the Securities and Exchange Commission (the “SEC”) to address concerns raised by market participants. The Partial Amendment would narrow the proposed definition of “private placement” and modify the proposed disclosure and filing requirements in private placements.

FINRA proposed Rule 5123 (the “Proposed Rule”) on October 5, 2011. Comments were due on November 18, 2011. The SEC received 16 comment letters in response to the Proposed Rule. On November 17, 2011, FINRA extended the period for the SEC to approve the Proposed Rule to January 20, 2012. The comments expressed a broad range of concerns, including concerns regarding: the scope of the definition of private placement; the broker-dealer disclosure requirements; the filing requirements; the exemptions; and whether the Proposed Rule is consistent with FINRA’s regulatory oversight and authority. FINRA responded to the comments in its Response Letter and filed the Partial Amendment to address these concerns.