On June 7, 2012, the Securities and Exchange Commission (the “SEC”) approved on an accelerated basis the Financial Industry Regulatory Authority, Inc.’s (“FINRA”) proposed FINRA Rule 5123 (Private Placement of Securities) (the “Approval Order”).1 As approved, FINRA Rule 5123 (“FINRA Rule 5123”) requires members selling securities issued by non-members in a private placement to file the private placement memorandum, term sheet or other offering documents with FINRA within 15 days of the date of the first sale of securities, or indicate that there were no offering documents used.

As detailed below, FINRA Rule 5123 has undergone a significant transformation, including several rounds of comments and three amendments, in response to industry concerns that the proposed rule was too burdensome, resulting in the new notice filing requirement only.