Series 79 - Rules & Regulations,
Series 79--All FINRA Rules8
FINRA Rule 5121 - ANSWERS-A member firm w/ a conflict of interest may not participate in a
public offering unless: the nature of the conflict is prominently disclosed or the member
complies with certain net capital, discretionary account and filing information, and a QIU
participates in the offering
FINRA Rule 5122 - ANSWERS-Applies primariy to MPOs to prevent potential conflicts of interest
and require sufficient disclosures to investors
FINRA Rule 5130 - ANSWERS-Designed to protect the integrity of equity IPOs by requiring
underwriters make bona fide public offerings. The rule prohibits the sale of new issues to
"restricted persons."
FINRA Rule 5141 - ANSWERS-prohibits any broker dealer firm engaged in a fixed price offering
from selling securities to a related person at a discounted price
FINRA Rule 5150 - ANSWERS-provides for specific disclosures that must be made when fairness
opinions are provided to a company's public shareholders
SEC Rule 10b-9 - ANSWERS-issuers & broker dealers must be truthful with the public about the
type of underwriting commitment
SEC Rule 10b5-2 - ANSWERS-a duty of trust or confidence applies when 2 people have a history
of sharing sensitive information in confidence and the recipient of the information should
reasonably understand that the information should be kept confidential
, SEC Rule 13e-3 - ANSWERS-covers purchases, solicitations and TOs in which the effect is to
cause equity securities to be eligible for termination and or delisting
SEC Rule 14a - ANSWERS-Specifies the information that must be included in a proxy statement
(see page 466)
SEC Rule 14e3 - ANSWERS-During a TO, prohibits trading in the shares by anyone possessing
material non-public information obtained directly or indirectly from the offeror, issuer or
officer/director/employee acting for the offeror or issuer
SEC Rule 15c2-4 - ANSWERS-requires that broker dealers participating in all or none or mini max
offerings deposit investor funds in a separate escrow account at an independent bank or any
other QFI for the benefit of the investors
SEC Rule 101 (Regulation M) - ANSWERS-Permits certain activities by distribution participants
during the restricted period including underwriters or other persons who are participating in
the distribution
SEC Rule 102 (Regulation M) - ANSWERS-Permits certain activities by distribution participants
during the restricted period including the issuer or selling shareholders
SEC Rule 103 (Regulation M) - ANSWERS-Allows broker-dealers to engage in passive market
making transaction in Nasdaq securities.
SEC Rule 104 (Regulation M) - ANSWERS-Requires any person making a penalty bid to provide
prior notice to regulators of the principal market in which the penalty bid is imposed.
SEC Rule 105 (Regulation M) - ANSWERS-Restriction on short sales and purchases during the
restricted period and prohibits ANYONE from purchasing securities in a public offering and
simultaneously selling short the same securities. The purpose of this rule is to prevent an
Series 79--All FINRA Rules8
FINRA Rule 5121 - ANSWERS-A member firm w/ a conflict of interest may not participate in a
public offering unless: the nature of the conflict is prominently disclosed or the member
complies with certain net capital, discretionary account and filing information, and a QIU
participates in the offering
FINRA Rule 5122 - ANSWERS-Applies primariy to MPOs to prevent potential conflicts of interest
and require sufficient disclosures to investors
FINRA Rule 5130 - ANSWERS-Designed to protect the integrity of equity IPOs by requiring
underwriters make bona fide public offerings. The rule prohibits the sale of new issues to
"restricted persons."
FINRA Rule 5141 - ANSWERS-prohibits any broker dealer firm engaged in a fixed price offering
from selling securities to a related person at a discounted price
FINRA Rule 5150 - ANSWERS-provides for specific disclosures that must be made when fairness
opinions are provided to a company's public shareholders
SEC Rule 10b-9 - ANSWERS-issuers & broker dealers must be truthful with the public about the
type of underwriting commitment
SEC Rule 10b5-2 - ANSWERS-a duty of trust or confidence applies when 2 people have a history
of sharing sensitive information in confidence and the recipient of the information should
reasonably understand that the information should be kept confidential
, SEC Rule 13e-3 - ANSWERS-covers purchases, solicitations and TOs in which the effect is to
cause equity securities to be eligible for termination and or delisting
SEC Rule 14a - ANSWERS-Specifies the information that must be included in a proxy statement
(see page 466)
SEC Rule 14e3 - ANSWERS-During a TO, prohibits trading in the shares by anyone possessing
material non-public information obtained directly or indirectly from the offeror, issuer or
officer/director/employee acting for the offeror or issuer
SEC Rule 15c2-4 - ANSWERS-requires that broker dealers participating in all or none or mini max
offerings deposit investor funds in a separate escrow account at an independent bank or any
other QFI for the benefit of the investors
SEC Rule 101 (Regulation M) - ANSWERS-Permits certain activities by distribution participants
during the restricted period including underwriters or other persons who are participating in
the distribution
SEC Rule 102 (Regulation M) - ANSWERS-Permits certain activities by distribution participants
during the restricted period including the issuer or selling shareholders
SEC Rule 103 (Regulation M) - ANSWERS-Allows broker-dealers to engage in passive market
making transaction in Nasdaq securities.
SEC Rule 104 (Regulation M) - ANSWERS-Requires any person making a penalty bid to provide
prior notice to regulators of the principal market in which the penalty bid is imposed.
SEC Rule 105 (Regulation M) - ANSWERS-Restriction on short sales and purchases during the
restricted period and prohibits ANYONE from purchasing securities in a public offering and
simultaneously selling short the same securities. The purpose of this rule is to prevent an
