FINRA Rule Change Overhauls Rules 5110 and 5123
FINRA Regulatory Notice 26-19 amends Rules 5110 and 5123, changing the corporate financing and private placement rules while keeping offering protections.
The news: FINRA announced a rule change on October 21, 2026, in Regulatory Notice 26-19. The amendments cover two rules that govern how broker-dealers take part in securities offerings: Rule 5110, the Corporate Financing Rule on underwriting terms and arrangements, and Rule 5123, which covers private placements of securities. FINRA says the amendments make substantive, organizational and terminology changes to both rules.
Key takeaways:
- Both Rule 5110 and Rule 5123 have been amended.
- The changes are a mix of substantive edits, reorganization and updated terminology.
- FINRA says the aim is to simplify and clarify the text while keeping protections for issuers and investors in public offerings.
Why it matters: Rules 5110 and 5123 sit at the center of everyday investment banking and capital-raising work at member firms. Rule 5110 deals with the terms and arrangements of underwriting. Rule 5123 deals with private placements. Firms that sell or underwrite offerings build their compliance procedures, filing practices and deal documentation around these provisions. Even a reorganization or a change of terminology can affect how a firm’s written supervisory procedures cite and apply the rules. FINRA describes some of the edits as substantive, so compliance staff should not treat the notice as a cosmetic cleanup.
The big picture: FINRA’s framing is that clearer rules and strong protections can go together. It says the amendments maintain important safeguards for market participants, including issuers and investors in public offerings. Rewrites like this are common in self-regulatory rulebooks. Provisions that have accumulated over time are restructured so they are easier to read and apply. How well the changes work will depend on how the revised text reads in practice and on how firms interpret the substantive edits.
What’s next: Member firms should read the full text of Regulatory Notice 26-19 for the specific amendments and their effective date. Compliance and investment banking teams will then need to compare the old and new provisions and update procedures, training and checklists. Firms should also watch for any further FINRA guidance or interpretive material on the revised rules.
Prepared with AI assistance from public sources and reviewed under our editorial policy. Not investment advice.
