On July 21, 2010, the SEC approved a proposal by FINRA to amend the fixed price offering rules, commonly known as the Papilsky rules because of the court decision with which they are commonly associated, and to replace them with Rule 5141. Rule 5141 is a new consolidated rule that will simplify and eliminate some provisions of the Papilsky rules. In addition, Rule 5141 is intended to protect the integrity of fixed priced offerings by ensuring that securities in such offerings are sold to the public at the stated public offering price or prices, thereby preventing an undisclosed better price. Like the current fixed price offering rules, Rule 5141 will prohibit the grant of certain preferences, such as discounts, in connection with fixed price offerings of securities. Rule 5141 will require some changes to underwriting agreements to reflect the new requirements.
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FINRA amends fixed price offering rules
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