On September 8, 2015, the Financial Industry Regulatory Authority (FINRA) issued a regulatory notice to provide guidance on the FINRA filing requirements and review procedures that apply to member firms participating in offerings in reliance on the exemption from SEC registration under Regulation A, which was amended in June 2015 as required by the JOBS Act.

Amended Regulation A is commonly referred to as Regulation "A+" to indicate it is an improved and modernized version of this long-standing registration exemption, which allows non-reporting companies to raise up to $50 million in "mini-public offerings" qualified by the SEC.

To learn more about amended Regulation A, see Practice Note, Regulation "A+" Offerings under Amended Regulation A.

FINRA's regulatory notice reminds member firms that the Corporate Financing Rules (FINRA Rules 5110, 2310 and 5121) require broker-dealers participating in the distribution of securities in a Regulation A+ offering to file documents and other information with FINRA's Corporate Financing Department. These documents include:

The documents must be submitted no later than one business day after they are submitted to or filed with the SEC.

In securities offerings subject to the Corporate Financing Rules, including Regulation A+ offerings, no sales may commence until FINRA has provided a "no objections" opinion.

For more on FINRA filing requirements and the FINRA review process, see Practice Note, FINRA and Securities Offerings: The Road to No Objections.

FINRA's regulatory notice also reminds member firms participating in the distribution of securities in a Regulation A+ offering that they are subject to FINRA Rule 2210, which governs firms' communications with the public and requires that those communications be fair, balanced and not misleading.

Among other things, Rule 2210 requires that an appropriately qualified registered principal of a broker-dealer approve retail communications distributed to investors prior to use. For these purposes, a retail communication is any written (including electronic) communication that is distributed or made available to more than 25 retail investors within any 30 calendar-day period. Firm communications made available to 25 or fewer retail investors within any 30 calendar-day period are referred to as correspondence and are also subject to the content standards of Rule 2210.

Depending on the type of security being offered, Regulation A+ solicitation materials may need to be filed with FINRA. Rule 2210 requires that retail communications about public direct participation programs be filed with FINRA's Advertising Regulation Department within 10 business days of first use or publication. If a member firm uses Regulation A+ solicitation materials for a direct participation program security with more than 25 retail investors, the materials must comply with Rule 2210's filing requirement and must be approved by an appropriately qualified registered principal of the firm.

To learn more about FINRA's regulation of broker-dealer communications with the public, see Practice Note, FINRA Communications with the Public Rules.

FINRA Rule 2111 governs the suitability obligations of broker-dealers when recommending investments in securities or investment strategies to customers. FINRA's regulatory notice clarifies that Rule 2111 applies to a member firm's participation in the distribution of securities in a Regulation A+ offering.

For more on the requirements of FINRA Rule 2111, see Practice Note, Broker-Dealer Suitability Obligations.