contact us

Use the form on the right to contact us.

You can edit the text in this area, and change where the contact form on the right submits to, by entering edit mode using the modes on the bottom right.

         

123 Street Avenue, City Town, 99999

(123) 555-6789

email@address.com

 

You can set your address, phone number, email and site description in the settings tab.
Link to read me page with more information.

Blog

Issuer Alert - Updated FINRA Filer Form

VerifyInvestor.com

ISSUER ALERT - UPDATED FINRA FILER FORM.png

Starting May 22nd, 2021 FINRA will require Issuer to fill out an update form when filing. The new rules are based on FINRA Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities). It is very important for Issuers to familiarize themselves with the changes in order to stay compliant with the new and updated questions that are in the new Filer Form. As the new Filer Form will be required for all new filings as well as amended ones, May 22nd is a major day for all Issuers. The full breakdown of the form changes, including the actual form, and contact information for sending FINRA inquiries regarding the changes can be found on FINRA website. That being said we will summarize the announcement in this blog article.

As a requirement, companies issuing private offerings that are unregistered must file their offering documents and information with FINRA. This is required within fifteen days of the sale. Luckily as the pandemic lingers on, Issuer are able to submit these forms online via the FINRA Gateway. According to FINRA the form has these three parts, “the “Participating Member Information” section; the “Issuer Information” section; and the “Offering Information” section.” In order to increase the effectiveness of the review, new questions have been added while older questions have also been updated.

For contingency offerings these questions were added:

  • the date by which the contingency must be met;

  • whether there have been any changes to the original terms of the contingency during the course of the offering (e.g., extension of the date by which the contingency must be met); and

  • whether the subscription process involves the member receiving or transmitting investor funds in the offering. If so, there will be a follow-up question to identify what entity is acting as the escrow agent or trustee for investor funds, and to provide the name of the escrow agent if applicable.

Another huge emphasis of the changes has been made to make Issuer be more transparent about any disciplinary action that has been made against itself, and any principals or affiliates. In addition, FINRA has added questions pertaining to how the proceeds of the sale will be used. Some additional questions have been added regarding if the sale has already commenced. Anything related to Rule 505 has been removed as that exemption was removed back in 2016 anyways and no longer applies to private placements.

FINRA made these changes in order to increase transparency and increase efficiency of the Form Filing process for private placements. Private placements have always been a balancing act of staying compliant with federal law, while at the same time being efficient as well as transparent to investors regarding the offerings being sold. We at VerifyInvestor.com pride ourselves on verifying accredited investors for Rule 506(c) offerings as frictionless as possible. As you can see FINRA and the SEC take regulating private placements seriously and taking the time and effort to verify your investors properly is paramount to a successful private security offering. Ask us about the accredited investor definition if you have any questions.

Comment