May 24, 2012

Proposed Changes to FINRA Rule 5131 Approved by the SEC

Bracewell & Giuliani LLP
Cheri L. Hoff
Robert S. Frenchman
Josephine Moon
Bracewell & Giuliani LLP
Friday, June 17, 2011
Securities & SEC
All Federal
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Please note the following developments with respect to proposed amendments to FINRA Rule 5131, as described in our previous client alert, dated May 16, 2011. 

On May 18, 2011, the Securities and Exchange Commission ("SEC") approved the Financial Industry Regulatory Authority's ("FINRA's") proposed amendments to Rule 5131 that (i) delete paragraph (b)(1), the spinning provision of the rule (which would have required members to establish, maintain and enforce policies and procedures reasonably designed to ensure that investment banking personnel have no influence in the new issue allocation of such members) and (ii) delay implementation of both paragraph (b) and Rule 5131(d)(4) (relating to the prohibition on market orders) until September 26, 2011.

The foregoing changes simplify member obligations and provide additional time for members to develop processes for reliably identifying new issues, thereby promoting members' future compliance efforts. 

© 2012 Bracewell & Giuliani LLP

About the Author

Cheri L. Hoff
Partner

Cheri Hoff is a partner in the firm's Corporate and Securities section. Her practice focuses on providing advice to private investment funds, investors and advisers. Ms. Hoff forms and represents private funds, including hedge funds, private equity funds, funds of funds, and hybrid funds, with diverse strategies and structures. She handles a variety of regulatory and transactional matters for private investment funds and investment advisers. She provides operational, restructuring and related advice to her fund clients. In addition, she advises...

cheri.hoff@bgllp.com
212-508-6175
www.bgllp.com
Robert S. Frenchman
Partner

Robert Frenchman has experience representing broker-dealer and other financial services clients in enforcement and other proceedings before the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and other securities regulators. He has played an important role in regulatory investigations involving, among other things, allocations in initial public offerings, specialist trading, Nasdaq market-making, short selling, securities lending, margin, gifts and gratuities, and research. Mr. Frenchman also has considerable experience drafting and...

robert.frenchman@bgllp.com
212.508.6184
www.bgllp.com

About the Author

Josephine Moon
Associate

Josephine Moon's practice focuses on advising private investment firms, corporations and financial institutions on mergers, acquisitions and the sale of corporate assets, private equity investments, financing arrangements, securities law compliance, corporate governance and general corporate matters in public and private takeovers, investments, restructuring and reorganizations in the U.S. and abroad.

josephine.moon@bgllp.com
212-508-6117
www.bgllp.com

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