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ARTICLE · 24 FEBRUARY 2013

FINRA Releases FAQs On Its Public Offering Review Process

Morrison Foerster
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FINRA has recently released a set of frequently asked questions relating to its public offering process and the Corporate Financing Rule.

United StatesFinance and Banking
Nilene Evans
Nilene Evans
Justin Kamen
Justin Kamen
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FINRA recently released a set of frequently asked questions ("FAQs")1 relating to its public offering process and the Corporate Financing Rule (Rule 5110).2 The guidance provided in the FAQs is summarized below.

Underwriting Compensation

Lock-up Requirements and Exemptions

Under FINRA Rule 5110(g), unregistered securities that are excluded from the calculation of underwriting compensation3 are generally subject to a 180-day lock-up. However, FINRA has provided exemptions from the lock-up requirement for securities acquired as a result of an exercise, conversion, stock split or a pro rata rights offering of securities acquired before the review period. The FAQs set forth the facts and circumstances that FINRA staff consider when determining whether to grant an exemption:

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