Regulatory Alerts2025-07-23 | Regulatory Notice 25-08Added · Updated
FINRA Adopts Exemption From FINRA Rules 5130 and 5131 for Business Development Companies
FINRA amends Rule 5130(c) to add a new exemption for business development companies, as defined in Section 2(a)(48) of the Investment Company Act, allowing them to purchase and sell initial equity public offerings. The rule stipulates that this exemption applies provided the business development company was not formed or maintained specifically to permit restricted persons to invest in new issues. FINRA concurrently updates Rule 5131(b)(2) to align new issue allocation prohibitions with the expanded list of exempt accounts under Rule 5130.
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