The SEC recently approved amendments to FINRA Rules 5130 and
5131 (new issue rules), which govern the offer and sale of
"new issue" securities (ie, equity IPOs).
Subject to certain exceptions, Rule 5130 generally prohibits a
FINRA member (or an associated person thereof) from selling new
issue securities to, or purchasing new issue securities for, an
account in which a "restricted person" (as defined in the
rule) has a beneficial interest. Subject to certain
exceptions, Rule 5131 generally prohibits the allocation of new
issue securities by FINRA members to accounts in which an executive
officer or director of public company or covered non-public company
has a beneficial interest, if such company is a current, former or
prospective investment banking client of the FINRA member.
