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ARTICLE · 26 DECEMBER 2019

Changes To FINRA Rules For Equity IPOs

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FINRA's rules relating to equity IPOs, on spinning and withholding and IPO allocations, which came into effect following the dot-com bust, were recently amended.

United StatesFinance and Banking
Anna T. Pinedo
Anna T. Pinedo
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FINRA's rules relating to equity IPOs, on spinning and withholding and IPO allocations, which came into effect following the dot-com bust, were recently amended. The amendments to Rule 5130, relating to restrictions on the purchase and sale of initial equity public offerings, and Rule 5131, relating to IPO allocations and distributions, will become effective on January 1, 2020. FINRA issued Regulatory Notice 19-37 to provide guidance to member firms. The amendments, which are intended to modernize the rules and address practical and operational issues arising from the current rules, will require member firms to update their questionnaires and related policies and procedures. As detailed in the Regulatory Notice, the changes include, among other things, the following:

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