FINRA Launches Review to Streamline Capital Raising Process

The Financial Industry Regulatory Authority has announced a comprehensive review of its rules and regulations, with an initial focus on improving the capital-raising process for businesses. As a self-regulatory organization, FINRA aims to modernize its oversight to benefit market participants and the broader economy.

The review stems from FINRA’s recognition that a robust capital-raising environment is crucial for business growth, job creation, and innovation. The initial focus of FINRA’s efforts will be on areas where its requirements affect member firms’ support of capital formation, including capital acquisition brokers and other “limited purpose” broker-dealer models designed to support capital formation; research analysts and research reports; and other rules, guidance, and processes impacting capital raising. In addition, FINRA will look at how member firms incorporate modern technology into their workplaces, including requirements regarding branch offices and remote work; registered representative credentialing and education; means of internal and customer communications (such as electronic delivery); and recordkeeping practices.

Through past feedback and activity, FINRA has adjusted its rules and regulatory framework.

In 2017 and 2023, FINRA published Regulatory Notices broadly requesting comment on ways to increase efficiency and reduce unnecessary costs and burdens on the capital-raising process without compromising protections for investors and issuers. In response to feedback on those notices from member firms and other interested parties, as well as institutional knowledge and changes in the law and innovations in the marketplace, FINRA revised rules, updated guidance, and revamped processes. For example, in 2021, FINRA updated its filer form regarding its private placement rules, Rules 5122 and 5123, reducing FINRA’s requests for additional information from filers. And in In 2022, FINRA amended its syndicate settlement rule, Rule 11880, accelerating payment to syndicate members in public offerings of corporate debt offerings of their earnings, freeing up capital for further underwritings.

Now, it is seeking further public comment on potential changes to rules, guidance, operations, and administrative processes – aiming to reduce unnecessary costs and burdens. According to the agency, the review underscores FINRA’s commitment to continuous improvement and its role in supporting a healthy and dynamic market.

FINRA encourages all interested parties to comment by May 19, 2025. Comments can be submitted online using one of the following methods: FINRA’s comments form, or by email or mail.

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