How Do FINRA Member Private Offerings Work?
Chapters in this video
- 0:00 The jet ski scheme: Blake the banker as MPO issuer
- 1:58 Mandatory PPM disclosure of proceeds, expenses, and compensation
- 3:01 The 85% of gross proceeds hard cap with math
- 5:41 FINRA Corporate Financing Department notice filing, not approval
- 6:32 Institutional exemptions and the accredited-inividual trap
- 8:04 Rapid-fire exam recap
What this video covers
- When the member private offering (MPO) rule applies versus when a member is simply brokering a third-party private placement
- The three mandatory disclosures in the private placement memorandum (PPM), term sheet, or offering document: intended use of proceeds, offering expenses, and selling compensation
- How the 85% use-of-proceeds rule is calculated against gross proceeds and why it explicitly excludes offering costs, discounts, and commissions
- The timing and nature of the FINRA Corporate Financing Department filing: notice only, not clearance or approval, with amendments due within 10 days
- Which sophisticated investor categories qualify for MPO exemption (institutional accounts, qualified institutional buyers (QIBs), qualified purchasers, and non-natural-person accredited investors)
- Why selling to even one natural-person accredited investor voids the institutional exemption and triggers the full MPO regime
- How to distinguish member-issuer directionality, the most tested trap on the Series 79
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 79 course also includes adaptive practice questions and spaced-repetition flashcards.