On February 14, 2014, FINRA issued immediately effective amendments to FINRA Rule 5131, which is intended to prohibit certain abuses by broker-dealers in allocating and distributing shares in IPOs. The amendments grant FINRA general authority to exempt a person unconditionally or on specified terms from any provisions of FINRA Rule 5131 if, due to exceptional and unusual circumstances and in light of all relevant factors, FINRA deems an exemption to be consistent with the protection of investors and the public interest.

Under the amendments, members may apply for relief from FINRA Rule 5131 under FINRA's Rule 9600 Series. The Rule 9600 Series sets out the requirements for applying for relief, including that the applicant must provide a detailed statement of the grounds for granting the exemption.

For more information on FINRA Rule 5131, see Legal Update, New FINRA Rule 5131 Addressing IPO Allocations, Distributions and Lock-up Agreements Now Effective.

To learn about FINRA's role in SEC-registered securities offerings, see Practice Note, FINRA and Securities Offerings: The Road to No Objections.